EXHIBIT 10.26
FOURTH AMENDMENT TO AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT
This Fourth Amendment to that certain Amended and Restated Loan and
Security Agreement ("AMENDMENT") is made and entered into as of this 5th day of
May, 1998 by and between Tower Air, Inc. ("BORROWER"), the financial
institutions listed on the signature pages thereof (collectively, "LENDERS") and
Xxxxxx Financial, Inc. (in its individual capacity, "Xxxxxx"), for itself as a
Lender and as Agent ("AGENT").
WHEREAS, Lender and Borrower are parties to a certain Amended and
Restated Loan and Security Agreement, dated September 1, 1997 and all amendments
thereto (the "AGREEMENT"); and
WHEREAS, an Event of Default is in existence under the Agreement as a
result of Borrower's breach of the Tangible Net Worth covenant contained in
subsection 6.1. For the months of January and February, Borrower did not
maintain Tangible Net Worth of at least $47,500,000, (the "Existing Event of
Default"), and Borrower has requested Lender waive the Existing Event of
Default; and
WHEREAS, the parties desire to further amend the Agreement as
hereinafter set forth:
NOW THEREFORE, in consideration of the mutual conditions and agreements
set forth in the Agreement and this Amendment, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Definitions. Capitalized terms used in this Amendment, unless
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otherwise defined herein, shall have the meaning ascribed to such term in the
Agreement.
2. Amendment. Subject to the conditions set forth below, the Agreement
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is amended as follows:
(a) Section 5 is amended by inserting the following new subsection
5.1(Q) immediately after subsection 5.1(P);
"5.1 (Q) Subordinated Debt and Other Indebtedness Notices Borrower shall
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deliver (1) Signed and fully executed original copy of that certain
Subordination Agreement in favor of the Lender dated April 12, 1998 and
(2) copies of all notices given or received by Borrower and any of its
subsidiaries with respect to noncompliance with any term or condition
related to any Subordinated Debt and other Indebtedness, and shall
promptly notify Lenders and Agent of any
potential or actual event of default with respect to any Subordinated
Debt or other indebtedness."
(b) Section 5 is amended by deleting subsection 5.16 in its entirety
and inserting the following in lieu thereof:
"5.16 Suppressed Availability. Borrower shall maintain Suppressed
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Availability in an amount of at least $5,000,000 at all times."
(c) Section 5 is amended by inserting the following new subsection
immediately after subsection 5.16;
"5.17. borrower shall raise proceeds of new equity by July 31,
1998, on terms satisfactory to Lender, in a minimum amount of $30,000,000, that
is committed and is available to Borrowers on demand."
(d) Section 6 is amended by deleting subsection 6.1 in its entirety and
inserting the following in lieu thereof;
"6.1 (A) Tangible Net Worth. Borrower shall maintain Tangible Net
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Worth equal to at least the amounts indicated for each period specified below:
Period Amount
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March 1998 through May 1998 $35,000,000
June 1998 $40,000,000
July 1998 $47,500,000
(B) Borrower shall maintain Tangible Net Worth equal to at least
$55,000,000 after August 1, 1998 and at all times thereafter."
(e) Section 8 is amended by deleting subsection 8.1(C) in its entirety
and substituting the following in lieu thereof:
"(C) Breach of Certain Provisions. Failure of Borrower to perform or
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comply with any term or condition contained in subsections 5.1(A), (B), (C),
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(I), (P), and (Q), 5.3, 5.5, 5.6, 5.16 or 5.17 or contained in section 6 or
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section 7; or
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3. WAIVER. Lender hereby waives the Existing Event of Default. This
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is a limited waiver and shall not be deemed to constitute a waiver of any other
Event of Default or any future breach of the Agreement or any of the other Loan
Documents.
4. CONDITIONS. The effectiveness of this Amendment is subject to the
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following conditions precedent (unless specifically waived in writing by
Lender):
(a) Borrower shall have executed and delivered such other documents
and instruments as Lender may require;
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(b) All proceedings taken in connection with the transactions
contemplated by this Amendment and all documents, instruments and other
legal matters incident thereto shall be satisfactory to Lender and its
legal counsel;
(c) No Default or Event of Default other than the Existing Event
of Default shall have occurred and be continuing;
(d) Borrower shall have paid Lender an amendment fee in the
amount of $50,000; and
(e) There shall have occurred no material adverse change in the
business, operations, financial condition, profits or prospects of
Borrower, or in the Collateral;
(f) Borrower shall provide Lender with a signed and duly
executed copy of that certain Subordination Agreement in favor Lender
dated April 12, 1998.
4. CORPORATE ACTION. The execution, delivery, and performance of this
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Amendment has been duly authorized by all requisite corporate action on the part
of Borrower and this Amendment has been duly executed and delivered by Borrower.
5. SEVERABILITY. Any provision of this Amendment held by a court of
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competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
6. REFERENCES. Any reference to the Agreement contained in any document,
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instrument or agreement executed in connection with the Agreement, shall be
deemed to be a reference to the Agreement as modified by this Amendment.
7. COUNTERPARTS. This Amendment may be executed in one or more
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counterparts, each of which shall constitute an original, but all of which
taken together shall be one and the same instrument.
8. RATIFICATION. The terms and provisions set forth in this Amendment
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shall modify and supersede all inconsistent terms and provisions of the
Agreement, and shall not be deemed to be a consent to the modification or waiver
of any other term or condition of the Agreement. Except as expressly modified
and superseded by this Amendment, the terms and provisions of the Agreement are
ratified and confirmed and shall continue in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed under seal and delivered by their respective duly authorized
officers on the date first written above.
XXXXXX FINANCIAL, INC. TOWER AIR, INC.
By: By:
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Title: Title:
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