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 this 14th 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, 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 on such term in the
Agreement.
2. AMENDMENTS. Subject to the conditions set forth below, the
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Agreement is amended as follows:
(a) Section 2 is amended by deleting subsection 2.1(A) in its entirety
and inserting the following in lieu thereof:
"(A) Revolving Loan. Subject to the terms and conditions of this
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Agreement and in reliance upon the representations and warranties of the
Borrower and the other Loan Parties set forth herein and in the other
Loan Documents, each Lender, severally agrees to lend to Borrower from
time to time its Pro Rata Share of each Revolving Advance. From and
after the Closing Date through the Termination Date, the aggregate
amount of all Revolving Loan Commitments shall not exceed the following
amounts during the following periods: (i) from and after the Closing
Date (and thereafter on each successive September 1, to and including
September 30, Twenty Million Dollars ($20,000,000), (ii) on and after
each October 1 to and including the following February 28, Twenty-Five
Million Dollars ($25,000,000), (iii) on and after each successive March
1, to and including the following May 31, Twenty Million Dollars
($20,000,000), (iv) on and after each successive June 1 to and including
the following August 31, Fifteen Million Dollars ($15,000,000),
as reduced by subsection 2.4(B); provided, however, that in the final month
prior to the Termination Date, the Amount of all Revolving Loan Commitments
shall not exceed Fifteen Million Dollars ($15,000,000). Amounts borrowed under
this subsection 2.1(A) may be repaid and reborrowed at any time prior to the
earlier of (i) the termination of the Revolving Loan commitment pursuant to
subsection 8.3 or (ii) the Termination Date. Except as otherwise provided herein
no Lender shall have any obligation to make an advance under this subsection
2.1(A) to the extent such advance would cause the Revolving Loan (after giving
effect to any immediate application of the proceeds thereof) to exceed the
Maximum Revolving Loan Amount.
Notwithstanding the foregoing, during the period from March 1, 1998
through and including May 31, 1998 only, the aggregate amount of all Revolving
Loan Commitments shall not exceed the following amounts: (i) from March 1, 1998
through and including March 31, 1998, Twenty-Five Million Dollars ($25,000,000);
(ii) from April 1, 1998 through and including April 10, 1998, Twenty-Four
Million Dollars ($24,000,000); (iii) from April 11, 1998 through and including
April 17, 1998, Twenty-Three Million Dollars ($23,000,000); (iv) from April 25,
1998 through and including April 30, 1998, Twenty-Two Million Dollars
($22,000,000); (v) from May 1, 1998 through and including May 17, 1998,
Twenty-Two Million Dollars ($22,000,000), (vi) from May 18, 1998 through and
including May 24, 1998, Twenty-One Million Dollars ($21,000,000); and (vii) from
May 25, 1998 through and including May 31, 1998, Twenty Million Dollars
($20,000,000), as reduced by subsection 2.4(B). Except as otherwise provided
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herein, no Lender shall have any obligation to make an advance under this
subsection 2.1(A) to the extent such advance would cause the Revolving Loan
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(after giving effect to any immediate application of the proceeds thereof) to
exceed the Maximum Revolving Loan Amount.
Notwithstanding the foregoing, Revolving Loan Amount shall permanently
decrease to Fifteen Million Dollars ($15,000,000) until Termination Date if the
Borrower fails to 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 Borrower on demand.
(b) 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
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Borrowers shall 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."
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(c) 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
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Suppressed Availability in an amount of at least $5,000,000 at all times."
(d) Section 6 is amended by deleting subsection 6.1 in its entirety,
effective as of January 1, 1998, 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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January 1998 through May 1998 $35,000,000
June 1998 $38,000,000
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."
3. Conditions. The effectiveness of this Amendment is subject to
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the 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;
(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) Upon the effectiveness of this agreement, no Default or
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.
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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 the 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
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document 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: /s/ Xxxxxxx Xxxxxxxx By: /s/ Xxxxxx Xxxxxxxx
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Title: Vice President Title: Chairman and CEO
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