Exhibit 4.18
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Amendment"),
dated as of March 31, 2003, is entered into by and among FOOTHILL CAPITAL
CORPORATION, a California corporation, as agent (in such capacity, "Agent") for
the Lenders (defined below), the Lenders signatory hereto, MERCURY AIR GROUP,
INC. ("Parent"), HERMES AVIATION, INC. ("New Borrower") and Parent's other
Subsidiaries signatory hereto ("Existing Borrowers" and together with Parent and
New Borrower, "Borrowers" and each sometimes referred to as a "Borrower").
RECITALS
A. Existing Borrowers, Agent and the financial institutions from time to
time party thereto (the "Lenders") have previously entered into that certain
Loan and Security Agreement, dated as of December 30, 2002, as amended by that
certain First Amendment to Loan and Security Agreement, dated as of March 12,
2003 (as amended, the "Loan Agreement"), pursuant to which the Lenders have made
certain loans and financial accommodations available to the Existing Borrowers.
Capitalized terms used herein without definition shall have the meanings
ascribed thereto in the Loan Agreement.
B. New Borrower has previously executed and delivered to Agent a Guaranty
and Security Agreement, dated as of December 30, 2002, pursuant to which New
Borrower guaranteed the obligations of the Borrowers to Agent and the Lenders
under the Loan Agreement.
C. Borrowers have requested that New Borrower be made a borrower under the
Loan Agreement and Agent and the Lenders are willing to grant such request.
D. Agent, the Lenders and Borrowers now wish to further amend the Loan
Agreement under the terms and conditions set forth in this Amendment. Borrowers
are entering into this Amendment with the understanding and agreement that,
except as specifically provided herein, none of Agent's or any Lender's rights
or remedies as set forth in the Loan Agreement is being waived or modified by
the terms of this Amendment.
AMENDMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows (initially capitalized terms used herein without definition shall have
the meanings given in the Loan Agreement):
1. Amendments to Loan Agreement.
(a) New Borrower is hereby added as a co-borrower under the Loan
Agreement with the same force and effect as if New Borrower had duly executed
and delivered the Loan Agreement as a Borrower thereunder in addition to the
Existing Borrowers. Without limiting the foregoing:
(i) The definitions of "Borrower" and "Borrowers" in the preamble
of the Loan Agreement are hereby amended to include New Borrower in addition to
the Existing Borrowers.
(ii) New Borrower and each of the Existing Borrowers shall be
jointly and severally liable for all Obligations.
(iii) To secure payment and performance of all Obligations, New
Borrower hereby grants to Lender a continuing security interest in, a lien upon,
and a right of set off against, and hereby assigns to Lender as security, all
Collateral, whether now owned or hereafter acquired or existing, and wherever
located.
(iv) New Borrower hereby represents and warrants to Agent and each
Lender the truth and accuracy of all representations and warranties applicable
to Borrowers in the Loan Agreement (after giving effect to the inclusion of New
Borrower).
(v) New Borrower hereby agrees to perform all of the covenants and
agreements applicable to Borrowers in the Loan Agreement and in all of the other
Loan Documents.
(vi) New Borrower agrees that it shall be liable for the payment
of all fees set forth in the Fee Letter and required to be paid by Borrowers
under the Loan Agreement as if New Borrower was a signatory to the Fee Letter.
(vii) Agent and, as applicable, the Lenders, shall have all of the
rights, remedies, interests and powers as against New Borrower as provided to
Agent and the Lenders in relation to Borrowers in the Loan Agreement.
(viii) All references to "Borrower" or "Borrowers" in any Loan
Document shall mean and be a reference to such terms as amended hereby.
(b) Subsection (q) of the definition of "Eligible Accounts" contained
in Section 1.1 of the Loan Agreement is hereby deleted.
(c) Section 3.2(l) of the Loan Agreement is hereby amended and restated
to read in its entirety as follows:
"(l) on or before (i) May 1, 2003, Agent shall have received
Assignments of Claims and Notices of Assignments of Claims for the government
contracts numbered SPO600-97D-5795, SPO600-98D-5889, SPO600-00D-5000,
SPO600-00D-5007, SPO600-00D-5010, SPO600-00D-5014, SPO600-01D-5101,
SPO600-01D-5102 and SPO600-02C-5211, re-executed on behalf of Maytag in as many
counterpart originals as Agent may require, and evidence (in form satisfactory
to Agent) of the delivery of such Notices of Assignments of Claim to the
respective addressees thereon and (ii) June 30, 2003, Agent shall have received
all Notices of Assignment of Claims, duly executed by or on behalf of the
parties addressed thereon; and"
2
(d) Section 6.10(b) of the Loan Agreement is hereby amended and
restated to read in its entirety as follows:
"(b) Deliver to Agent every four (4) months, with the first
such analysis completed and report delivered on or before April 18,
2003, a risk management analysis in customary form by an auditor
selected by Administrative Borrower but satisfactory to Agent in its
Permitted Discretion, with respect to Borrowers' methods and procedures
to maintain compliance with the terms of Section 6.10(a), such that in
the twelve (12) month period immediately following the Closing Date,
such methods and procedures with respect to all FBOs have been
analyzed, such analysis to be detailed in a report by such auditor,
satisfactory to Agent as to scope, methodology, format and substance,
upon which Agent is expressly permitted to rely."
2. Effectiveness of Amendment. Agent must have received the following
before this Amendment is effective, and before any Lender is required to extend
any credit to any Borrower as provided for by this Amendment:
(a) this Amendment and the attached Acknowledgement by Guarantors, each
fully executed in a sufficient number of counterparts for distribution to all
parties; and
(b) an original Amended and Restated Term Note, substantially in the
form of Exhibit A hereto, executed by each Borrower.
3. Representations and Warranties. Each Borrower represents and warrants as
follows:
(a) Authority. Each Borrowers has the requisite corporate power and
authority to execute and deliver this Amendment, and to perform its obligations
hereunder and under the Loan Documents (as amended or modified hereby) to which
it is a party. The execution, delivery and performance by each Borrower of this
Amendment have been duly approved by all necessary corporate action, have
received all necessary governmental approval, if any, and do not contravene any
law or any contractual restrictions binding on each Borrower. No other corporate
proceedings are necessary to consummate such transactions. Without in any way
limiting the foregoing, New Borrower represents and warrants that (a) it has
taken all appropriate corporate actions to consummate the transactions
contemplated by the Loan Agreement, (b) it has the requisite corporate power and
authority to become a Borrower under the Loan Agreement and to perform the
obligations required of a Borrower and (c) that its inclusion as a Borrower
under the Loan Agreement and performance of the obligations thereunder do not
contravene any law or any contractual restrictions binding on New Borrower.
(b) Enforceability. This Amendment has been duly executed and delivered
by the Borrowers. This Amendment and each Financing Agreement (as amended or
modified hereby) is the legal, valid and binding obligation of Borrowers,
enforceable against each Borrower in accordance with its terms, and is in full
force and effect.
3
(c) Representations and Warranties. The representations and warranties
contained in each Financing Agreement (other than any such representations or
warranties that, by their terms, are specifically made as of a date other than
the date hereof) are correct on and as of the date hereof as though made on and
as of the date hereof.
(d) No Default. No event has occurred and is continuing that
constitutes an Event of Default and by entering into this Amendment, Agent is
not waiving and shall not be deemed to have waived any Event of Default that may
exist.
4. Choice of Law. The validity of this Amendment, its construction,
interpretation and enforcement, the rights of the parties hereunder, shall be
determined under, governed by, and construed in accordance with the internal
laws of the State of New York governing contracts only to be performed in that
State.
5. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties and separate counterparts, each of which
when so executed and delivered, shall be deemed an original, and all of which,
when taken together, shall constitute one and the same instrument. Delivery of
an executed counterpart of a signature page to this Amendment by telefacsimile
shall be effective as delivery of a manually executed counterpart of this
Amendment.
6. Reference to and Effect on the Loan Documents.
(a) Upon and after the effectiveness of this Amendment, each reference
in the Loan Agreement to "this Agreement", "hereunder", "hereof" or words of
like import referring to the Loan Agreement, and each reference in the other
Loan Documents to "the Loan Agreement", "thereof" or words of like import
referring to the Loan Agreement, shall mean and be a reference to the Loan
Agreement as modified and amended hereby.
(b) Except as specifically amended above, the Loan Agreement and all
other Loan Documents, are and shall continue to be in full force and effect and
are hereby in all respects ratified and confirmed and shall constitute the
legal, valid, binding and enforceable obligations of each Borrower to Agent
without defense, offset, claim or contribution.
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of Agent under any of the Loan Documents, nor constitute a
waiver of any provision of any of the Loan Documents.
(d) To the extent that any terms and conditions in any of the Loan
Documents shall contradict or be in conflict with any terms or conditions of the
Loan Agreement, after giving effect to this Amendment, such terms and conditions
are hereby deemed modified or amended accordingly to reflect the terms and
conditions of the Loan Agreement as modified or amended hereby.
7. Ratification. Each Borrower hereby restates, ratifies and reaffirms each
and every term and condition set forth in the Loan Agreement, as amended hereby,
and the Loan Documents effective as of the date hereof.
4
8. Estoppel. To induce Agent and the Lenders to enter into this Amendment
and to continue to make advances to Borrowers under the Loan Agreement, each
Borrower hereby acknowledges and agrees that, after giving effect to this
Amendment, as of the date hereof, there exists no Event of Default and no right
of offset, defense, counterclaim or objection in favor of any Borrower as
against Agent or any Lender with respect to the Obligations.
[Signatures follow on next page.]
5
IN WITNESS WHEREOF, the parties have entered into this Amendment as of
the date first above written.
FOOTHILL CAPITAL CORPORATION,
a California corporation,
as Agent and as a Lender
By:
-------------------------------------------------
Title:
----------------------------------------------
ABLECO FINANCE LLC,
a Delaware limited liability company,
as a Lender
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR GROUP, INC.,
a Delaware corporation
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTERS, INC.,
a California corporation
By:
-------------------------------------------------
Title:
-----------------------------------------------
MERCURY AIR CARGO, INC.,
a California corporation
By:
-------------------------------------------------
Title:
-----------------------------------------------
6
MERCFUEL, INC.,
a Delaware corporation
By:
-------------------------------------------------
Title:
----------------------------------------------
MAYTAG AIRCRAFT CORPORATION,
a Colorado corporation
By:
-------------------------------------------------
Title:
----------------------------------------------
HERMES AVIATION, INC.,
a California corporation
By:
--------------------------------------------------
Title:
-----------------------------------------------
MERCURY AIR CENTER-BIRMINGHAM, LLC,
an Alabama limited liability company
By:
-------------------------------------------------
Title:
-----------------------------------------------
MERCURY AIR CENTER-BAKERSFIELD, INC.,
a California corporation
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER-BURBANK, INC.,
a California corporation
By:
-------------------------------------------------
Title:
----------------------------------------------
7
MERCURY AIR CENTER-FRESNO, INC.,
a California corporation
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER-LOS ANGELES, INC.,
a California corporation
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER-ONTARIO, INC.,
a California corporation
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER-SANTA XXXXXXX, INC.,
a California corporation
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER-HARTSFIELD, LLC,
a Georgia limited liability company
By:
-------------------------------------------------
Title:
----------------------------------------------
8
MERCURY AIR CENTER-PEACHTREE-
DEKALB, LLC,
a Georgia limited liability company
By:
-------------------------------------------------
Title:
-----------------------------------------------
MERCURY AIR CENTER- FT. XXXXX, LLC.,
an Indiana limited liability company
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER-JACKSON, LLC.,
a Mississippi limited liability company
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER-RENO, LLC,
a Nevada limited liability company
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER-TULSA, LLC.,
an Oklahoma limited liability company
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER-CHARLESTON, LLC.,
a South Carolina limited liability company
By:
-------------------------------------------------
Title:
----------------------------------------------
9
MERCURY AIR CENTER-XXXXX ISLAND, LLC.,
a South Carolina limited liability company
By:
-------------------------------------------------
Title:
-----------------------------------------------
MERCURY AIR CENTER-NASHVILLE, LLC.,
a Delaware limited liability company
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER-ADDISON, INC.,
a Texas corporation
By:
-------------------------------------------------
Title:
-----------------------------------------------
MERCURY AIR CENTER -- CORPUS
CHRISTI, INC.,
a Texas corporation
By:
-------------------------------------------------
Title:
-----------------------------------------------
10
ACKNOWLEDGEMENT BY GUARANTORS
Dated as of March 31, 2003
Each of the undersigned, being a Guarantor (each a "Guarantor" and
collectively, the "Guarantors") under their respective Guaranty and Security
Agreement, dated December 30, 2002 and made in favor of Agent for the benefit of
the Lenders (each a "Guaranty" and collectively, the "Guaranties"), hereby
acknowledges and agrees to the foregoing Second Amendment to Loan and Security
Agreement (the "Amendment") and confirms and agrees that its Guaranty is and
shall continue to be, in full force and effect and is hereby ratified and
confirmed in all respects except that, upon the effectiveness of, and on and
after the date of the Amendment, each reference in such Guaranty to (a) the Loan
Agreement (as defined in the Amendment), "thereunder", "thereof" or words of
like import referring to the "Loan Agreement", shall mean and be a reference to
the Loan Agreement as amended or modified by the Amendment and (b) "Borrower"
and "Borrowers" shall be deemed to include New Borrower. Although Lender has
informed Guarantors of the matters set forth above, and Guarantors have
acknowledged the same, each Guarantor understands and agrees that Lender has no
duty under the Loan Agreement, the Guaranties or any other agreement with either
Guarantor to so notify any Guarantor or to seek such an acknowledgement, and
nothing contained herein is intended to or shall create such a duty as to any
advances or transaction hereafter.
EXCEL CARGO, INC.,
a California corporation
By:
--------------------------------------------------
Title:
-----------------------------------------------
VULCAN AVIATION, INC.,
a California corporation
By:
--------------------------------------------------
Title:
-----------------------------------------------
MERCURY ACCEPTANCE CORPORATION,
a California corporation
By:
--------------------------------------------------
Title:
-----------------------------------------------
11
JUPITER AIRLINE AUTOMATION SERVICES, INC.,
a Florida corporation
By:
--------------------------------------------------
Title:
-----------------------------------------------
AEG FINANCE CORPORATION,
a Delaware corporation
By:
--------------------------------------------------
Title:
-----------------------------------------------
12
EXHIBIT A
Form of
AMENDED AND RESTATED TERM NOTE
$12,500,000 Los Angeles, California
March 31, 2003
FOR VALUE RECEIVED, MERCURY AIR GROUP, INC., a California corporation and
certain of its Subsidiaries signatories hereto (collectively, "Borrowers"),
hereby, unconditionally, jointly and severally, promise to pay to the order of
FOOTHILL CAPITAL CORPORATION, a California corporation, as Agent (in such
capacity, "Agent") for the Lenders (as defined below), at the offices of Agent
located at 0000 Xxxxxxxx Xxxxxx, Xxxxx 0000 Xxxx, Xxxxx Xxxxxx, Xxxxxxxxxx
00000, or at such other place as Agent or any holder hereof may from time to
time designate, the principal sum of TWELVE MILLION FIVE HUNDRED THOUSAND
DOLLARS ($12,500,000) in lawful money of the United States of America and in
immediately available funds as follows (commencing April 1, 2003):
Date Installment Amount
---- ------------------
Each April 1 $ 1,000,000
Each July 1 $ 500,000
Each October 1 $ 1,000,000
Each December 31 $ 500,000
together with interest on the principal amount hereunder remaining unpaid from
the date hereof until this Term Note (this "Note") is fully paid, at the rate
set forth in that certain Loan and Security Agreement, of even date herewith by
and among Borrowers, the lenders signatory thereto (the "Lenders") and Agent
(the "Loan Agreement"), such payment commencing January 1, 2003 and payable on
the first day of each month thereafter. Interest payable upon and after an Event
of Default or termination or non-renewal of the Loan Agreement shall be payable
upon demand. Initially capitalized terms used herein without definition shall
have the meanings given in the Loan Agreement.
This Note is the Term Note referred to in the Loan Agreement and is subject
to the terms of the Loan Agreement, which provide for, among other things,
certain mandatory prepayments with respect hereto and acceleration hereof. This
Note is secured by the Collateral described in the Loan Agreement and all notes,
guaranties, security agreements and other agreements, documents and instrument
now or at any time hereafter executed and/or delivered by any Borrower or any
other party in connection therewith, and is entitled to all of the benefits and
rights thereof and of the other Loan Documents, the provisions of which are
incorporated herein by this reference.
Borrowers shall jointly and severally pay all costs of collection,
including reasonable attorneys' fees and legal expenses if this Note is not paid
when due, whether or not legal proceedings are commenced.
Presentment or other demand for payment, notice of dishonor and protest are
expressly waived.
This Note amends, restates, replaces and supersedes that certain Term Note,
dated December 30, 2002, in the original principal amount of Twelve Million Five
Hundred Thousand Dollars ($12,500,000), executed by Borrowers (other than Hermes
Aviation, Inc.) to the order of Agent, which note is null, void and of no
further legal force or effect.
MERCURY AIR GROUP, INC.,
a Delaware corporation
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTERS, INC.,
a California corporation
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CARGO, INC.,
a California corporation
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCFUEL, INC.,
a Delaware corporation
By:
-------------------------------------------------
Title:
----------------------------------------------
2
MAYTAG AIRCRAFT CORPORATION,
a Colorado corporation
By:
-------------------------------------------------
Title:
----------------------------------------------
HERMES AVIATION, INC.,
a California corporation
By:
--------------------------------------------------
Title:
-----------------------------------------------
MERCURY AIR CENTER-BIRMINGHAM, LLC,
an Alabama limited liability company
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER-BAKERSFIELD, INC.,
a California corporation
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER-BURBANK, INC.,
a California corporation
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER-FRESNO, INC.,
a California corporation
By:
-------------------------------------------------
Title:
----------------------------------------------
3
MERCURY AIR CENTER-LOS ANGELES, INC.,
a California corporation
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER-ONTARIO, INC.,
a California corporation
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER-SANTA XXXXXXX, INC.,
a California corporation
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER-HARTSFIELD, LLC,
a Georgia limited liability company
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER-PEACHTREE-
DEKALB, LLC,
a Georgia limited liability company
By:
-------------------------------------------------
Title:
----------------------------------------------
4
MERCURY AIR CENTER- FT. XXXXX, LLC.,
an Indiana limited liability company
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER-JACKSON, LLC.,
a Mississippi limited liability company
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER-RENO, LLC,
a Nevada limited liability company
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER-TULSA, LLC.,
an Oklahoma limited liability company
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER-CHARLESTON, LLC.,
a South Carolina limited liability company
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER-XXXXX ISLAND, LLC.,
a South Carolina limited liability company
By:
-------------------------------------------------
Title:
----------------------------------------------
5
MERCURY AIR CENTER-NASHVILLE, LLC.,
a Delaware limited liability company
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER-ADDISON, INC.,
a Texas corporation
By:
-------------------------------------------------
Title:
----------------------------------------------
MERCURY AIR CENTER -- CORPUS
CHRISTI, INC.,
a Texas corporation
By:
-------------------------------------------------
Title:
----------------------------------------------
6
