EXHIBIT 10(30)
SIXTH AMENDMENT TO AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT
This Sixth Amendment to that certain Amended and Restated Loan and
Security Agreement ("Agreement") is made and entered into this 13th day of July,
1998 by and between Tower Air, Inc. ("Borrower"), the financial institutions
listed on the signature pages thereof (collectively called "Lenders") and Xxxxxx
Financial, Inc. (in its individual capacity, "Xxxxxx"), for itself as a Lender
and as Agent ("Agent").
WHEREAS, Agent 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, certain Events of Default are in existence under the Agreement;
WHEREAS, as Event of Default has occurred as a result of Borrower's
breach of the EBITDA covenant contained in subsection 6.2 for the trailing
twelve month period ended June 30, 1998 (the "EBITDA Default");
WHEREAS, an Event of Default under subsection 7.1 of the Agreement has
occurred as a result of the loan of $3,000,000 by Xxxxxx Xxxxxxxx to the
Borrower (the "Other Indebtedness Default");
WHEREAS, an Event of Default under subsection 8.1(B) of the Agreement
has occurred as a result of a failure to pay amounts due to (a) The Ages Group
as referred to in a letter dated July 6, 1998 from The Ages Group, (b) Hartford
Aviation Group, Inc. as referred to in a letter dated June 9, 1998 from Hartford
Aviation Group, Inc. and (c) Xxxxxx Lease Finance Corporation as referred to in
a letter dated May 8, 1998 from Xxxxxx Lease Finance Corporation (collectively,
the "Cross Default");
WHEREAS, as Event of Default has occurred under subsection 5.1Q of the
Agreement as a result of repayment of $2,000,000 of subordinated debt to Funding
Enterprises, Inc. (the "Sub-Debt Repayment Default"),
WHEREAS, Borrower has requested Agent waive the Existing Events of
Default; and
WHEREAS, the parties desire to amend the Agreement in 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 of 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.
(a) Letter Agreement shall mean the Letter Agreement
attached to this Amendment.
2. Amendments. The Agreement is amended as follows:
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(a) Section 5 is amended by deleting subsection 5.16 in its
entirety and substituting the following in lieu thereof:
"5.16 Suppressed Availability. Borrower shall maintain
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Suppressed Availability in an amount of at least $7,000,000 at
all times."
(b) Section 6 is amended by deleting subsection 6.1 (B) in
its entirety, and inserting the following in lieu thereof;
"Borrower shall maintain Tangible Net Worth equal to at least
$47,500,000 from August 1, 1998 through August 1, 1998, and
$55,000,000 on August 31, 1998 and at all times thereafter."
3. Waiver. Agent hereby waives the (a) EBITDA Default, the Cross
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Default, the Sub-Debt Repayment Default and (b) Other Indebtedness Default until
July 31, 1998, provided that Xxxxxx Xxxxxxxx enters into a letter agreement with
Agent attached hereto as Exhibit A (the "Letter Agreement"). If, on July 31,
1998, Xxxxxx Xxxxxxxx and Borrower have not entered into a subordination
agreement with Agent which subordinates $2,000,000 of the Nachtomi Debt (as
defined in the Letter Agreement) to Borrower's Obligations under the Agreement,
then an Event of Default shall be in existence. This 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
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the following conditions precedent (unless specifically waived in writing by
Agent):
(a) There shall have occurred no material adverse change in
the business, operations, financial condition, profits or prospects of Borrower,
or in the Collateral;
(b) Borrower shall have executed and delivered such other
documents and instruments as Agent may require;
(c) 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 Agent and its
legal counsel;
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(d) No Default or Event of Default under the Agreement as
amended hereby shall have occurred and be continuing;
(e) Borrower shall have paid Agent an amendment fee in the
amount of $50,000;
(f) Borrower shall provide Agent with a signed and duly
executed copy of the Letter Agreement of even date herewith between Xx. Xxxxxx
Nachtomi and Agent.
5. Corporate Action. The execution, delivery, and performance of
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this 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.
6. Severability. Any provision of this Amendment held by a court
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of 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.
7. References. Any reference to the Agreement contained in any
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notice, request, certificate, or other document executed concurrently with or
after the execution and delivery of this Amendment shall be deemed to include
this Amendment unless the context shall otherwise require.
8. 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.
9. Ratification. The terms and provisions set forth in this
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Amendment shall modify and supersede all inconsistent terms and provisions of
the Agreement and, 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.
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 X. Xxxxxxxx
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Title: Vice President Title: President, Chief Executive
Officer and Chairman of the
Board of Directors (Principal
Executive Officer)
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July 13, 1998
BY FACSIMILE: (000) 000-0000
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Xx. Xxxxxx K. Nachtomi
Tower Air, Inc.
Xxxxxx 00, X.X.X. International Airport
Xxxxxxx, XX 00000
RE: TOWER AIR, INC.
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Dear Mr. Nachtomi:
Reference is made to that certain Amended and Restated Loan and Security
Agreement between Tower Air, Inc. ("Borrower") and Xxxxxx Financial, Inc.
("Xxxxxx") dated September 1, 1997, as amended from time to time (the
"Agreement"). Unless otherwise defined herein, all capitalized terms shall have
the same meaning as in the Agreement (as defined in the Agreement).
In conjunction with (1) the Sixth Amendment to the Loan Agreement dated
July 13, 1998 and (2) your $3,000,000 loan to the Company on or about July 1,
1998 ("Nachtomi Debt") you agree to enter into (i) a Subordination Agreement
(the "Subordination Agreement") and (ii) any other related documents or
modifications to existing documents, acceptable to Xxxxxx in its sole discretion
on or before July 31, 1998.
Among other provisions, the Subordination Agreement shall provide for
the subordination of $2,000,000 of the Nachtomi Debt to the Obligations provided
that the Nachtomi Debt may be paid out of the proceeds of the $150,000,000
unsecured debt facility in which Xxxxx Xxxxxx is Agent.
Xx. Xxxxxx K. Nachtomi
July 13, 1998
Page 2.
Please indicate your agreement for the foregoing by signing below.
Very truly yours,
XXXXXX FINANCIAL, INC.
/s/ XXXXXXX XXXXXXXX
Xxxxxxx Xxxxxxxx
XXXXXX X. XXXXXXXX, INDIVIDUALLY
/s/ XXXXXX X. XXXXXXXX
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Sign Name
XXXXXX X. XXXXXXXX
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Print Name
vm
cc: Xxxx X. Xxxxxxxxx, Esq.
Xxxxxxx Nemoroff, Esq. (by facsimile)
