EXHIBIT 10.73
AMENDMENT NO. 4 TO XXXXXX BOATS & MOTORS, INC.
LOAN AND SECURITY AGREEMENT
Amendment No. 4 to Loan and Security Agreement dated as of December __,
2002, by and between TRANSAMERICA COMMERCIAL FINANCE CORPORATION ("Lender") and
the Persons listed on Schedule I attached hereto (individually, a "Borrower" and
collectively, the "Borrowers").
P R E A M B L E:
- - - - - - - -
Pursuant to that certain Loan and Security Agreement dated as of
January 28, 2000, as amended from time to time by and among Lender and Borrowers
(collectively, the "Loan Agreement"), Lender made certain financing available to
Borrowers. Borrowers have requested Lender to modify certain terms and
provisions of the Documents. Lender has agreed to do so, upon the terms and
conditions of this Amendment.
NOW, THEREFORE, in consideration of the premises which are incorporated
herein by this reference and constitute an integral part of this Amendment, the
execution and delivery of this Amendment and the mutual covenants and agreements
hereafter set forth, the parties hereto agree as follows:
1. Section 1.1(F) of the Loan Agreement is amended to read as follows:
"(F) "Borrowing Base" shall mean the sum of the following from
time to time, less any reserves as Lender in its sole
discretion elects: (i) 97% of Borrowers' then existing
Eligible Inventory A1, plus (ii) 100% of Borrowers' then
existing Eligible Inventory A2, plus (iii) 92% of Borrowers'
then existing Eligible Inventory B1, plus plus (iv) 92% of
Borrowers' then existing Eligible Inventory B2, plus (v) 75%
of Borrowers' then existing Eligible Inventory C1; plus (vi)
75% of Borrowers' then existing Eligible Inventory C2;plus
(vii) 95% of Borrowers' then existing Eligible Inventory D;
plus (viii) 90% of Borrowers' then Eligible Inventory E, plus
(ix) 75% of the NADA "low wholesale" value of Borrowers' then
Eligible Inventory F, plus (x) the lesser of (A) 50% of
Borrowers' then Eligible Inventory G; or (B) $1,100,000.00,
plus (xi) the then Eligible Inventory H Amount, plus (xii) 80%
of Borrower's Eligible Accounts Receivable."
2. Section 1.1(O) of the Loan Agreement is amended to read as follows:
"(O) "DFS" shall mean GE Commercial Distribution Finance
Corporation, and its successors and assigns."
3. Sections 1.1(V) through (Y) of the Loan Agreement are amended to
read as follows:
"(V) "Eligible Inventory" shall mean such Inventory of any
Borrower located on the Collateral Locations for such Borrower
that Lender deems in its reasonable discretion to be eligible.
Without limitation of the foregoing, unless otherwise agreed
to by the Lender, the following shall not constitute Eligible
Inventory for any Borrower: (i) Inventory which is in transit
from its manufacturer; (ii) Inventory which is not in good and
merchantable condition, or not either currently usable or
currently salable in the ordinary course of any Borrower's
business; (iii) Inventory which is obsolete; (iv) Inventory
which the Lender determines, in the exercise of its reasonable
discretion and in accordance with the Lender's customary
reasonable business practices and in good faith, to be
unacceptable due to age, type, category and/or quantity; (v)
Inventory with respect to which the Lender does not have a
first and valid fully perfected security interest; (vi)
Inventory which is stored with on a bailment, consignment,
warehouse or similar third party arrangement, unless such
bailee, consignee, warehouse Person, or other third party, as
applicable, delivers to Lender an agreement in form and
substance satisfactory to Lender; (vii) work-in-process
inventory; (viii) Inventory not located on the Collateral
Locations of such Borrower; (ix) demonstration models; and (x)
all Inventory (including, but not limited to, all watercraft,
watercraft motors and watercraft trailers) that is subject to
a Vendor Repurchase Agreement purchased on open account after
December 20, 2002.
(W) (i) "Eligible Inventory A1" shall mean such then Eligible
Inventory of any Borrower purchased from a Vendor on or before
December 20, 2002 that is up to 540 days from the date of
purchase by such Borrower which the Lender deems in its
reasonable discretion to be eligible that is manufactured by a
Vendor subject to a Vendor Repurchase Agreement. Eligible
Inventory A1 shall include returned and repossessed Inventory
that is unused, undamaged which any Borrower intends to resell
to another Person.
(ii) "Eligible Inventory A2" shall mean such then
Eligible Inventory of any Borrower purchased from a Vendor
after December 20, 2002 that is up to 540 days from the date
of purchase by such Borrower which the Lender deems in its
reasonable discretion to be eligible that is manufactured by a
Vendor subject to a Vendor Repurchase Agreement and which was
paid for directly by Lender to Vendor by the issuance of an
Inventory Loan in accordance with Section 2.3 of this
Agreement. Eligible Inventory A2 shall include returned and
repossessed Inventory that is unused, undamaged which any
Borrower intends to resell to another Person.
(X) (i) "Eligible Inventory B1" shall mean such then Eligible
Inventory of any Borrower purchased from a Vendor on or before
December 20, 2002 that is between 541 and 730 days from the
date of purchase by such Borrower which the Lender deems in
its reasonable discretion to be eligible that is manufactured
by a Vendor subject to a Vendor Repurchase Agreement. Eligible
Inventory B1 shall include returned and repossessed Inventory
that is unused, undamaged which any Borrower intends to resell
to another Person.
(ii) "Eligible Inventory B2" shall mean such then
Eligible Inventory of any Borrower purchased from a Vendor
after December 20, 2002 that is between 541 and 730 days from
the date of purchase by such Borrower which the Lender deems
in its reasonable discretion to be eligible that is
manufactured by a Vendor subject to a Vendor Repurchase
Agreement and which was paid for directly by Lender to Vendor
by the issuance of an Inventory Loan in accordance with
Section 2.3 of this Agreement. Eligible Inventory B2 shall
include returned and repossessed Inventory that is unused,
undamaged which any Borrower intends to resell to another
Person.
(Y) (i) "Eligible Inventory C1" shall mean such then Eligible
Inventory of any Borrower purchased from a Vendor on or before
December 20, 2002 that is between 731 and 1094 days from the
date of purchase by such Borrower which the Lender deems in
its reasonable discretion to be eligible that is manufactured
by a Vendor subject to a Vendor Repurchase Agreement. Eligible
Inventory C1 shall include returned and repossessed Inventory
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that is unused, undamaged which any Borrower intends to resell
to another Person.
(ii) "Eligible Inventory C2" shall mean such then
Eligible Inventory of any Borrower purchased from a Vendor
after December 20, 2002 that is between 731 and 1094 days from
the date of purchase by such Borrower which the Lender deems
in its reasonable discretion to be eligible that is
manufactured by a Vendor subject to a Vendor Repurchase
Agreement and which was paid for directly by Lender to Vendor
by the issuance of an Inventory Loan in accordance with
Section 2.3 of this Agreement. Eligible Inventory C2 shall
include returned and repossessed Inventory that is unused,
undamaged which any Borrower intends to resell to another
Person.
4. The "Documents", as defined in Section 1.1(S) of the Loan Agreement,
shall include, without limitation, the Loan Agreement, as amended by this
Amendment and any other amendments and/or restatements to the Loan Agreement and
the Guaranties, as confirmed, reaffirmed and amended by the Confirmations of
Guaranties, and as may be further confirmed, reaffirmed and amended from time to
time.
5. Section 1.1(JJ) of the Loan Agreement is amended to read as follows:
"(JJ) "General Intangibles" shall mean all general intangibles
(as such term is defined in the UCC) owned by any Borrower or
any Guarantor, including, but not limited to payment
intangibles, goodwill, software, trademarks, trade names,
licenses, patents, patent applications, copyrights,
inventions, franchises, books and records of any Borrower or
any Guarantor, designs, trade secrets, registrations, prepaid
expenses, all rights to and payments of refunds, overpayments,
rebates and return of monies, including, but not limited to,
sales tax refunds, tax refunds, tax refund claims and rights
to and payments of refunds, overpayments or over-fundings
under any pension, retirement or profit sharing plans and any
guarantee, security interests or other security held by or
granted to any Borrower or any Guarantor to secure payment by
an Account Debtor of any of the Accounts Receivable. Without
limitation of the foregoing, General Intangibles shall include
the Parent Income Tax Claim/Refund"
6. Section 1.1(VV) of the Loan Agreement is amended to read as follows:
"(vv) "Loan" shall mean individually, and "Loans" shall mean
collectively, each of the Revolving Loans and each of the Draw
Loans."
7. Section 1.1(YY) of the Loan Agreement is amended to read as follows:
"(YY) "Maximum Credit Amount" shall mean (a) commencing with
the Amendment No. 4 Closing Date and continuing through and
including March 31, 2003, $31,500,000.00 United States Funds;
and (ii) commencing on April 1, 2003 and continuing at all
times thereafter, $29,500,000.00, United States Funds."
8. Sections 1.1(RRR) and (SSS) of the Loan Agreement are amended to
read as follows:
"(RRR) "Tangible Net Worth" shall mean as of any date the sum
of the Xxxxxx Entities' (i) net worth as reflected on its last
twelve-month consolidated fiscal financial statements, plus
(ii) net earnings since the end of such fiscal year, both
after provision for taxes and with Inventory determined on a
first in, first out basis plus (iii) Subordinated Debt, and
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plus (iv) unamortized income, less the sum of the Xxxxxx
Entities' (a) intangible assets, including, without
limitation, unamortized leasehold improvements, goodwill,
franchises, licenses, patents, trade names, copyrights,
service marks, brand names, covenants not to compete and any
other asset which would be treated as an intangible under
generally accepted accounting principles; (b) prepaid expenses
(however such item shall not include prepaid inventory); (c)
franchise fees; (d) notes, Accounts Receivable and other
amounts owed to it by any guarantor, Affiliate or employee of
any Xxxxxx Entity; (e) losses since the end of such fiscal
year; (f) interest in the cash surrender value of officer's or
shareholder's life insurance policies; (g) income not earned
as of the date of any such calculation; and (h) deferred tax
benefits, whether short-term or long-term."
"(SSS) "Termination Date" shall mean April 30, 2003."
9. New Sections 1.1(UUUU) through (GGGGG) are added to the Loan
Agreement as follows:
"(UUUU) "Amendment No. 4 Closing Date" shall mean the date
upon which all of the terms and conditions of Amendment No. 4
to this Agreement have been met or fulfilled to the
satisfaction of Lender.
(VVVV) "Approval" and "Approvals" shall have the meanings set
forth in Section 2.3(A) of this Agreement. .
(WWWW) "Approval Representation" shall mean, with respect to
any request for an Approval received by Lender, a written
acknowledgement, consent and representation by Borrowers to
such Approval which shall provide, without limitation, that
Borrowers (i) approve and consent to such Approval and the
sale of the Inventory relating to such Approval by the
applicable Vendor to the specified Borrower; and (ii)
represent and warrant to Lender that such Approval does not
relate to any Inventory either (i) previously financed for or
on behalf of any of the Xxxxxx Entities at any time by any
Person, or (ii) sold at any time by any Vendor on an open
account , consignment or COD basis to any of the Xxxxxx
Entities.
(XXXX) "Collateral Assignment of Parent Income Tax
Claim/Refund" shall have the meaning set forth in Section 3.12
of this Agreement.
(YYYY) "December 2002 Overadvance" shall mean (i) as of the
Amendment No. 4 Closing Date, $596,699.00; and (ii) following
the Amendment No. 4 Closing Date, $596,699.00 minus the
mandatory principal payments by Borrowers to Lender from time
to time required to be made by Borrowers pursuant to Section
2.5 (B) of this Agreement upon the sale of any Eligible
Inventory H.
(ZZZZ) "Draw Loan" and "Draw Loans" shall have the meanings
set forth in Section 2.9 of this Agreement..
(AAAAA) "Draw Facility" shall have the meaning set forth in
Section 2.9 of this Agreement.
(BBBBB) "Eligible Inventory H" shall mean such then Eligible
Inventory of any Borrower consisting of watercraft and
watercraft motors listed on Exhibit 1.1(BBBBB) attached hereto
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that is 1095 or more days from the date of purchase by such
Borrower which the Lender deems in its reasonable discretion
to be eligible that is manufactured by a Vendor subject to a
Vendor Repurchase Agreement. Eligible Inventory H shall
include returned and repossessed Inventory that is unused,
undamaged which any Borrower intends to resell to another
Person.
(CCCCC) "Eligible Inventory H Amount" shall mean (i) through
April 30, 2003, the lesser of (a) the then amount of the
December 2002 Overdvance; or (b) 65% of Borrowers' then
existing Eligible Inventory H, and (ii) zero at all other
times;
(DDDDD) "Inventory Loan" shall mean individually and
"Inventory Loans" shall mean collectively each Revolving Loan
disbursed by Lender directly to Vendors solely for the
acquisition of Inventory subject to an Approval by Borrower
from the Vendors.
(EEEEE) "Parent Income Tax Claim/Refund" shall mean all monies
and claims from monies due and/or to become due to Parent from
the United States of America or any department or agency
thereof arising out of any application in the name of Parent
for an income tax refund for any tax year, filed or to be
filed at any time or from time to time by Parent with the
Internal Revenue Service, including, but not limited to, the
application in the name of Parent for an income tax refund for
tax year 2002.
(FFFFF) "Tracker Financing" shall mean any financing of any of
the Xxxxxx Entities done by Tracker or any Affiliate of
Tracker at any time or from time to time, including, but not
limited to, that certain financing more fully described in
that certain Loan and Security Agreement dated as of the date
of Amendment No. 4 to this Agreement by and between Parent and
Tracker, as may be amended, extended, renewed, supplemented,
replaced and/or restated from time to time.
(GGGGG) "Working Capital Loan" shall mean individually and
"Working Capital Loans" shall mean collectively, each
Revolving Loan other than an Inventory Loan made to Borrower
for working capital purposes..
10. Section 2.1 of the Loan Agreement is amended to read as follows:
"SECTION 2.1. LOAN AMOUNT. Subject to the terms and conditions
of this Agreement, on the Amendment No. 4 Closing Date, the
Lender shall make loans in the aggregate to the Borrowers on a
revolving basis (such loans being herein called individually a
"Revolving Loan" and collectively the "Revolving Loans") from
time to time in such amounts as the Borrowers may from time to
time request up to the lesser of (A) the Maximum Credit
Amount; or (B) the Borrowing Base from time to time (the
lesser of (A) or (B) shall be referred to as the "Line of
Credit"); provided, however, that (i) Eligible Inventory shall
be valued at the lower of cost or market value using the first
in, first out method of inventory accounting; and (ii) each
borrowing by any Borrower hereunder with respect to any
Revolving Loan shall be in the aggregate principal amount of
at least (a) $1,000.00 if made directly to a vendor of
Inventory subject to a Vendor Repurchase Agreement; and (b)
$1,000.00 if made directly to Borrowers; and (iii) repayments
from time to time of the Line of Credit shall be available to
be reborrowed pursuant to the terms and conditions of this
Agreement; and (iv) if the Revolving Loans outstanding at any
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time or from time to time exceeds the advance limitations
described above, Borrowers shall pay in immediately available
funds to the Lender a principal payment in such amount
necessary to eliminate such excess contemporaneously with the
delivery of any borrowing base certificate to Lender showing
any such excess and/or demand by Lender at any other time any
such excess occurs as determined by Lender; and (v)
notwithstanding anything else contained in this Agreement, (I)
upon the occurrence and continuance of any Event of Default or
any event which, with the giving of notice, the passage of
time, or both, would result in an Event of Default, and in
every such event, the Lender may, in its sole discretion,
immediately cease to make Revolving Loans; and (b) Borrowers
shall repay to the Lender on the Termination Date all
Revolving Loans, plus interest accrued to the date of
payment."
11. Section 2.3 of the Loan Agreement is amended to read as follows:
"SECTION 2.3. REQUESTS FOR REVOLVING LOANS.
(A) Lender, in its commercially reasonable
discretion, may issue approvals (individually an "Approval"
and collectively, the "Approvals") upon receipt of a request
(orally, electronically or in writing) from a Vendor
requesting Lender's confirmation that it will finance the
acquisition by Borrower of Inventory that is subject to a
Vendor Repurchase Agreement held for shipment, or shipped, to
Borrower. Upon any request for an Approval, Lender will
request Borrowers to give Lender an Approval Representation
relating to such request. Without limiting Lender's discretion
in making Inventory Loans with respect to any request for an
Approval, Lender shall not make any Inventory Loan relating to
such request for any Approval until such time as Lender
receives an Approval Representation relating to such request.
Partial shipments may be made against any Approval and Lender
may honor the related invoice without inquiry, regardless of
any apparent disproportion between (i) the quantity shipped
and the amount of the related invoice; or (ii) the amount of
the Approval and the quantity to be shipped under the
Approval. Until terminated or revoked, an Approval shall be
deemed outstanding to the extent of its face amount less the
amount of Revolving Loans made with respect to such Approval.
(B) Lender shall not be responsible for, and
Borrower's obligations to Lender shall not be affected by any
of the following with respect to any Approval: (i) performance
or non-performance by any Person other than Lender of its
obligations to Borrower; (ii) the form, sufficiency,
correctness, genuineness, authority of any Person signing,
falsification or legal effect of any documents called for
under any Approval if such document on their face appear to be
in order; (iii) acts or omissions of any Person other than
Lender; (iv) the existence, nature, quality, quantity,
condition, value or delivery of Inventory represented by
documents presented to Lender, or any difference of Inventory
from Inventory represented by documents presented to Lender;
(v) the validity, sufficiency, genuineness or collectibility
of any documents, insurance or instruments, or endorsements
thereof; (vi) any irregularity in connection with shipment;
(vii) breach of agreement between Borrower and a Vendor or any
other Person; (viii) without limiting the foregoing, any act
or omission of Lender not done or omitted in bad faith. In the
event that Borrower has a dispute with a Vendor relating to
the foregoing, Lender shall provide such documents in Lender's
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possession reasonably requested by Borrower relating to such
dispute. Borrower shall indemnify Lender against any and all
claims, losses, liabilities, costs and expenses (including,
but not limited to, reasonable attorneys' fees) resulting from
or incurred in connection with an Approval and not directly
caused by Lender's gross negligence or willful misconduct.
Lender may not enter into any settlement or other compromise
with respect to any claim covered by the indemnity set forth
in this Section without Borrower's prior written consent,
which consent shall not be unreasonably withheld, conditioned,
or delayed. If Lender obtains recovery of any of the amounts
that Borrower has paid to it pursuant to the indemnity set
forth in this section, then Lender shall promptly pay to
Borrower or offset against amounts due and owing Lender by
Borrower the amount of such recovery
(C) After Lender has issued an Approval, Lender shall
be deemed to have made an Inventory Loan to Borrower under
Section 2.1 of this Agreement as of the ship date specified in
the invoice relating to such Approval or such earlier date as
Lender shall enter such Revolving Loan as a receivable on
Lender's books. Lender shall only disburse any such Inventory
Loan directly to a Vendor, except that Lender may set off any
amount owed to Lender by such Vendor.
(D) Lender may refuse to issue an Approval or may
revoke an Approval at any time in its commercially reasonable
discretion and effective immediately upon such revocation,
Lender shall no longer be deemed to have made an Inventory
Loan (to the extent an Inventory Loan has been made) and
Borrower shall repay any such Inventory Loan immediately upon
such revocation. Borrower shall be obligated for all
obligations incurred by Lender on account of the issuance of
any Approval. Without limiting the foregoing, Borrower
acknowledges that Lender customarily revokes Approvals
approximately 30 days after issuance if Lender has not
received an invoice from the applicable Vendor relating
thereto, although it is not obligated to do so.
(E) Each request by the Borrower for any Revolving
Loan under the Line of Credit other than Inventory Loans
pursuant to Approvals shall be (A) made in writing, or by
telephone and if by telephone, shall be promptly confirmed in
writing; and (B) accompanied by a Borrowing Base Certificate
which shall contain information as of such Business Date such
request is made; and (C) shall be signed by the president or
chief financial officer or controller of Borrower. Each
Working Capital Loan shall be sent by Federal Reserve wire
transfer as directed by Borrower in writing or by EDI or
through acceptance of an ACH Debit by a Collecting Bank.
Lender shall not be required to make more than one Working
Capital Loan to Borrower on any day. The date and amount of
each Revolving Loan made by the Lender and of each repayment
of principal thereon received by the Lender shall be recorded
by the Lender in the records of the Lender and the aggregate
unpaid principal amount shown on such records shall be
rebuttable, presumptive evidence of the principal owing and
unpaid on the Revolving Loans. The failure to record any such
amount on such records shall not, however, limit or otherwise
affect the obligations of the Borrower to repay the principal
amount of the Revolving Loans together with all interest
accruing thereon."
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12. Section 2.5 of the Loan Agreement is amended to read as follows:
"SECTION 2.5. PAYMENTS AND COLLECTIONS.
------------------------
(A) General. All payments hereunder shall be made,
without setoff or counterclaim, to Lender prior to 3:00 p.m. ,
Chicago time, on the date due at its office in immediately
available funds at Chicago, Illinois or at such other place as
may be reasonably designated by Lender to Borrowers in writing
or by EDI. Any payments received after such time shall be
deemed received on the next Business Day. Whenever any payment
shall be stated to be due on a date other than a Business Day,
such payment may be made on the next succeeding Business Day,
and such extension of time shall be included in the
computation of interest, fees and charges, without penalty
other than such additional interest, fees and charges.
Notwithstanding anything to the contrary herein, all items of
payment for purposes of (i) determining the occurrence of an
Event of Default shall be deemed received upon actual receipt
by Lender at its bank, The Northern Trust Bank, Chicago,
Illinois or such bank as Lender may use as its depository bank
from time to time, unless subsequently dishonored for any
reason; (ii) calculating the Borrowing Base shall be applied
by Lender against the principal of and/or interest on any
Loans on the Business Day deemed received pursuant to this
Section by Lender at its bank, The Northern Trust Bank,
Chicago, Illinois or such bank as Lender may use as its
depository bank from time to time; and (iii) calculating
interest shall be deemed to have been applied by Lender
against the principal of and/or interest on any Loan on the
Business Day received by Lender, whether such payment is by
check, wire, ACH debit or other means. Lender may at any time
in its sole discretion change the time for payment of future
Loans or change product lines of Inventory to be financed and
the terms of such financing by giving Borrower a notice
specifying such change.
(B) Revolving Loans. Borrowers will immediately pay
Lender on each item of Collateral financed by the Lender (as
shown on the Transaction Statement identifying such
Collateral) under this Agreement (whether financed through an
Inventory Loan after the Amendment No. 4 Closing Date or
financed directly to the Borrowers at any time) on the
earliest to occur of any of the following events: (i) when
such Collateral is lost, stolen or damaged; (ii) for
Collateral financed under this Agreement, when such Collateral
is sold, transferred, rented, leased, otherwise disposed of or
no longer Eligible Inventory; (iii) in strict accordance with
any curtailment schedule for such Collateral (as shown on the
Transaction Statement identifying such Collateral); (iv) for
Collateral financed under scheduled payment program terms (as
shown on the Transaction Statement identifying such
Collateral), in strict accordance with the installment payment
schedule; (v) when otherwise required under the terms of any
financing program agreed to in writing by any Borrower and
Lender; and (vi) for any Collateral designated in writing by
Lender in order for Borrowers to repay the principal amount of
any Revolving Loans outstanding that exceed the advance
limitations for Revolving Loans as set forth in this
Agreement. Any third party discount, rebate, subsidy, bonus or
credit granted to any Borrower for any Collateral will not
reduce the Liabilities until Lender has received payment as
provided in this Agreement. Borrowers promises to pay all
amounts owing to Lender under the Line of Credit as set forth
in this Agreement and in each Transaction Statement.
Notwithstanding anything else contained in this Agreement, (a)
upon a sale of any Eligible Inventory H, the proceeds of such
sale shall be applied as a principal payment against the
December 2002 Overadvance; and (b) no amount paid by Borrowers
pursuant to clause (a) of this sentence shall be available to
be reborrowed by Borrowers at any time. Without limitation of
the foregoing, Borrowers shall repay to the Lender on the
Termination Date all Revolving Loans, plus interest accrued to
the date of payment.
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(C) Special Draws of the Line of Credit. Lender is
hereby authorized to make a Revolving Loan with the proceeds
disbursed directly to Lender to make any required payments of
principal, interest, fees and/or costs currently due and owing
by Borrowers and not yet paid pursuant to the Documents.
(D) Draw Loans. Contemporaneously with any receipt by
or on behalf of Parent at any time or from time to time of any
or all of Parent Income Tax Claim/Refund, Borrowers shall
immediately pay to Lender one-third of such amount so received
by or on behalf of Parent as a principal payment against the
Draw Facility. Borrowers shall repay to the Lender on April
30, 2003, all Draw Loans outstanding, plus interest accrued to
the date of payment
13. Section 2.8 of the Loan Agreement is amended to read as follows:
"SECTION 2.8. TERMS AND TERMINATION. The term of this
Agreement, unless sooner terminated as provided in this
Agreement, shall be until the Termination Date; provided,
however, that Lender may terminate this Agreement (A)
immediately by written notice to Borrowers in whole or only
with respect to certain Inventory if Borrower shall lose or
relinquish any right to sell or deal in any product line of
Inventory, or if Borrowers fail to pay any of the Objected
Loans due to an objection to the terms of any Transaction
Statement and Lender determines that the Transaction Statement
does not contain a bona fide error, or (B) at any time by at
least 30 days prior written notice to Borrowers. Upon
termination of this Agreement, all Liabilities to Lender (or,
if this Agreement is terminated only with respect to certain
Inventory, Liabilities to Lender relative to such Inventory)
shall become immediately due and payable without notice or
demand. Upon any termination, Borrowers shall remain liable to
Lender for all Liabilities to Lender, including without
limitation interest, fees, charges and expenses arising prior
to or after the effective date of termination, and all of
Lender's rights and remedies and its security interest shall
continue until all Liabilities to Lender are paid and all
obligations of Borrower are performed in full. No provision of
this Agreement shall be construed to obligate Lender to make
any Loans."
14. New Sections 2.9 through 2.10 are added to the Loan Agreement as
follows:
"SECTION 2.9. DRAW LOANS. Subject to the terms and conditions
of this Agreement, on the date upon which all of the terms and
conditions set forth in Amendment No. 4 to this Agreement have
been met or fulfilled to the satisfaction of Lender, the
Lender agrees to make loans in its sole discretion to Borrower
on a draw basis (such loans being herein called individually a
"Draw Loan" and collectively the "Draw Loans") from time to
time in such amounts as Borrower may from time to time request
up to the maximum principal amount of the lesser of (A)
$500,000.00; or (B) one-third (1/3) of the amount of the
Parent Income Tax Claim/Refund (the lesser of (A) or (B) shall
be referred to as the "Draw Facility"); provided, however,
that (i) each borrowing by Borrower hereunder with respect to
any Draw Loan shall be (a) in the aggregate principal amount
of at least $10,000.00; and (b) in the maximum amount of
one-third (1/3) of the total draw request made by Borrowers to
and actually advanced at such time by Lender, DFS and Tracker;
and (ii) if the Draw Loans outstanding at any time or from
time to time exceeds the advance limitations described above,
Borrower shall pay to the Lender a principal payment in such
amount necessary to eliminate such excess; and (iii)
notwithstanding anything else contained in this Agreement, (I)
9
repayments from time to time of the Draw Facility shall not be
available to be reborrowed pursuant to the terms and
conditions of this Agreement; and (II) upon the occurrence and
continuance of any Event of Default or any event which, with
the giving of notice, the passage of time, or both, would
result in an Event of Default, and in every such event, the
Lender may, in its sole discretion, immediately cease to make
Draw Loans; and (III) Borrowers shall repay to the Lender on
April 30, 2003, all Draw Loans, plus interest accrued to the
date of payment.
SECTION 2.10. USE OF DRAW LOAN PROCEEDS. The proceeds of the
Draw Loans shall be used solely for providing working capital
for Borrowers and paying for operating expenses and the fees,
costs and expenses of the Lender as provided for in this
Agreement.
15. Contemporaneously with the execution and delivery of this
Amendment, the Guarantors shall execute and deliver to Lender confirmations,
reaffirmations and amendments of their Guaranties in form and manner
satisfactory to Lender (individually, a "Confirmation of Guaranty" and
collectively, the "Confirmations of Guaranty"). All references to each Guaranty
in the Loan Agreement shall mean such Guaranty, as confirmed, reaffirmed and
amended by its applicable Confirmation of Guaranty.
16. New Section 3.12 is added to the Loan Agreement as follows:
"Section 3.12 Parent Income Tax Claim/Refund. As additional
security for the payment and performance of the Liabilities,
Parent shall (A) collaterally assign the Parent Income Tax
Claim/Refund to Lender in form and manner satisfactory to
Lender (the "Collateral Assignment of Parent Income Tax
Claim/Refund "); and (B) perform any and all acts requested by
Lender to have the Internal Revenue Service and any other
Person required by Lender to acknowledge such assignment and
pledge of the Parent Income Tax Claim/Refund to Lender."
17. New Section 4.1(V) is added to the Loan Agreement as follows:
"(V) Parent Income Tax Claim/Refund. Any of the Parent Income
Tax Claim/Refund is a legitimate claim under the Internal
Revenue Code based on Borrowers net income or losses as of the
end of any fiscal year, including, but not limited to, prior
to December 31, 2002 and has been reviewed by Borrower's
independent certified public accountants and has not been
disputed by any Person, including, but not limited to, the
Internal Revenue Service and Borrower's independent certified
public accountants."
18. Section 5.1(A)(v) of the Loan Agreement is amended to read as
follows:
"(v) on the last Business Day of each week, computed as of
such Business Day, and with each request for a Working Capital
Loan under this Agreement, computed as of the close of
business on the Business Day such request is made, and at such
times as Lender may request, computed as of the Business Day
of such request, a completed Lender's standard form borrowing
base certificate, which shall be executed by the President or
the chief financial officer of the Borrowers;
19. The period at the end of the first sentence of Section 5.1(A) is
amended to read ";" and new Sections 5.1(A)(xv) and (xvi) are added as follows:
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"(xvi) on the earlier of 20th day of each month or the first
business day after the 20th day of each month, (a) a copy of
an unaudited consolidated financial statement of the Borrowers
prepared in the same manner as the report referred to in
clause (i) above, signed by the chief financial officer or
Corporate Controller of Parent and consisting of at least a
balance sheet as at the close of such month, statements of
earnings, cash flow, income and source and application of
funds for such month and for the period from the beginning of
such fiscal year to the close of such month; and (b) a
certificate signed by the President or chief financial officer
of it providing that (I) the financial statements being
provided to Lender pursuant to clauses (ii)(a) are true and
correct and (II) no Event of Default has occurred, including,
but not limited to, no Event of Default with respect to any of
the financial covenants contained in the Documents; and (xvi)
by Monday, January 13, 2003, and each Monday thereafter, a
report of Borrowers' (i) actual cash inflows and outflows for
all weeks since December 20, 2002 through the Friday
immediately preceding the date of the report, and (ii)
projected cash inflows and outflows for the 13-weeks on and
after the date of the report, with such supporting details as
required by Lender."
20. Sections 5.1(W) through (X) of the Loan Agreement are amended to
read as follows:
"(W) Unsubordinated Debt To Tangible Net Worth Ratio. It shall
not cause, suffer or permit the ratio of (i) the Xxxxxx
Entities' total consolidated liabilities minus Subordinated
Debt to (ii) the Xxxxxx Entities' Tangible Net Worth to be
greater than 4.00 to 1.00 for the period commencing on the
Amendment No. 4 Closing Date and continuing at all times
thereafter.
(X) Tangible Net Worth. It shall not cause, suffer or permit
the Xxxxxx Entities' Tangible Net Worth to be less than the
following, all as measured at at (i) January 31, 2003; and
(ii) the end of each of its fiscal quarters:
$20,000,000.00 For the period commencing on the Amendment
No.4 Closing Date through December 31, 2002
$19,000,000.00 For the period commencing on January 1, 2003
through March 31, 2003
$20,000,000.00 For the period commencing April 1, 2003
and at all times thereafter
21. Section 5.1 (KK) of the Loan Agreement is amended to read as
follows:
"(KK) Lock Box. By no later than 45 days after the Amendment
No. 4 Closing Date, Borrowers and the financial institution at
which Borrowers have established a Lock Box Account to collect
monies solely for the Borrowers shall execute and deliver to
Lender such agreements, documents and instruments satisfactory
to Lender in order for Lender at any time, in Lender's
discretion, following the time when either an Event of Default
occurs or will occur with the giving of notice, the passage of
time or both, to require such Lock Box Account be under the
sole control of Lender and have all payments received in such
Lock Box Account to be paid to Lender."
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22. New Sections 5.1(OO) through (RR) are added to the Loan Agreement
as follows:
"(OO) Parent Income Tax Claim/Refund. Borrowers shall give
immediate written notice to Lender of any communication
(whether oral or written) or notice relating to and any
payment of all or any portion of the Parent Income Tax
Claim/Refund contemporaneously with receipt of any such
communication, notice or payment by any Borrower or any agent
of Borrower. Borrowers agrees that if any Parent Income Tax
Claim/Refund, or any portion of any Parent Income Tax
Claim/Refund, is paid to Borrowers at any time or from time to
time, Borrowers will receive and hold the same in trust for
Lender and Borrowers will forthwith upon receipt of such
Parent Income Tax Claim/Refund deliver such Parent Income Tax
Claim/Refund to Lender in the identical form of payment
received by the Borrowers.
(PP) Approvals. No request for any Approval shall be made with
respect to any Inventory either (i) previously financed for or
on behalf of any of the Xxxxxx Entities at any time by any
Person; or (ii) sold at any time by any Vendor on an open
account, consignment or COD basis to any of the Xxxxxx
Entities.
(QQ) Inventory Purchases. Commencing with purchases of
Inventory that is subject to a Vendor Repurchase Agreement by
a Borrower after December 20, 2002, (i) all such purchases
shall be paid for directly by Lender to the Vendor of such
Inventory that is subject to a Vendor Repurchase Agreement by
the issuance of an Inventory Loan in accordance with Section
2.3 of this Agreement; and (ii) no such purchases of Inventory
that is subject to a Vendor Repurchase Agreement by any
Borrower after December 20, 2002 shall be purchased on open
account."
(RR) Third Party Waivers. Borrowers shall (i) by no later than
January 2, 2003, provide Lender with a list of all locations
which Borrowers own, lease or warehouse assets; and by no
later than January 31, 2003, shall deliver to Lender Third
Party Waivers and Mortgagee Waivers executed by the lessors,
bailors, warehouse owners, mortgagees and/or operators and
consignors of or at the locations used by Borrower, all in
form and manner reasonably satisfactory to Lender "
23. New Section 6.3 is added to the Loan Agreement as follows:
"SECTION 6.3. SPECIAL CONDITIONS PRECEDENT TO EACH DRAW LOAN.
In addition to all other requirements of this Agreement,
including, but not limited to, those set forth in Sections 6.1
and 6.2 of this Agreement, Lender's obligation to make each
Draw Loan is subject to the fulfillment of each and every of
the following conditions prior to or contemporaneously with
the making of each and every such Draw Loan:
(A) Evidence that the Draw Loan shall be used for
working capital purposes.
(B) Evidence that DFS and Tracker are each making
separate cash loans to Borrowers or to Parent, each in the
principal amount of the Draw Loan simultaneously with the
making of such Draw Loan.
(C) The Parent Income Tax Claim/Refund has not been
received by or on behalf of Parent."
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24. The period at the end of Section 7.1(W) of the Loan Agreement is
amended to read ";" and new Sections 7.1(X) through (Y) are added to the Loan
Agreement as follows:
"(X) Any Borrower shall default in the performance or
observance of any term, covenant, condition or agreement on
its part to be performed or observed under Sections 5.1(OO)
through (RR) of this Agreement;
(Y) Any default or event of default (howsoever such terms are
defined) shall occur under the Tracker Financing.
25. Borrowers each represent, warrant, acknowledge, agree and confirm
that (A) the amount of the December 2002 Overadvance as of the Amendment No. 4
Closing Date is $596,699.00.
26. Borrowers hereby acknowledge that Borrowers have violated the
provisions for advance limitations in Section 2.1 of the Loan Agreement by
exceeding the Borrowing Base by $596,699.00 (the "Out-of-Formula Amount"). The
failure by Borrower to eliminate the Out-of-Formula Amount contemporaneously
with delivery of the Borrowing Base Certificate as required under Section 2.1 of
the Loan Agreement constitutes an Event of Default under the Loan Agreement.
Borrowers hereby acknowledge that Borrowers are in technical default under a
real estate loan ("Hibernia Loan") with Hibernia Bank ("Hibernia Default") for
violation of a cash flow covenant Borrowers hereby represent that Hibernia Bank
has not declared a default under the Hibernia Loan. Upon the effectiveness of
this Amendment, except for the Non-Waived Defaults (defined below) Lender waives
all Events of Default under the Loan Agreement or any agreement, document or
instrument entered into in connection with or contemplated by the Loan Agreement
and events in existence as of December 30, 2002 which with the passage of time
would become Events of Default, and all Events of Default and events which with
the passage of time would become Events of Default, other than the Non-Waived
Defaults, arising through January 30, 2002. Subject to the terms and conditions
contained herein, Lender hereby waives the Events of Default described in the
preceding sentence. As used herein, "Non-Waived Defaults" shall mean any of any
of the following Defaults under the Original Loan Agreement or any agreement,
document or instrument entered into in connection with or contemplated by the
Loan Agreement:
A. Any Event of Default arising as a result of any failure to
make any required payment to Lender or any other Person under any Third Party
Financing, including, but not limited to, any payment of principal or interest;
or
B. Any Event of Default arising as a result of any violation
of any covenant relating to minimum Tangible Net Worth as amended hereby of the
Xxxxxx Entities on a consolidated basis; or
C. Any Event of Default arising as a result of any violation
of any covenant relating to minimum Unsubordinated Debt to Tangible Net Worth
Ratio as amended hereby of the Xxxxxx Entities on a consolidated basis; or
D. Any Event of Default arising as a result of any violation
of any covenant relating to ownership, control, management, mergers,
consolidations, sale or purchase of assets or stock of any Borrower other than
as contemplated herein; or
E. Any Event of Default arising as a result of any material
violation of any representation or warranty or any violation of any
representation or warranty that causes a material adverse change in the business
of the Borrowers; or
F. Any Event of Default arising as a result of any violation
of any covenant relating to granting of liens, other than permitted liens, or
the incurrence of indebtedness, other than Permitted Indebtedness, of Borrowers
other than as contemplated herein; or
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G. Any Event of Default arising as a result of any Borrower
becoming insolvent or generally failing to pay, or admitting in writing its
inability to pay, such person's or entity's debts as they become due, or a
proceeding under any bankruptcy, reorganization, arrangement of debt,
insolvency, readjustment of debt or receivership law or statute is filed by or
against any Borrower or any Borrower makes an assignment for the benefit of
creditors; or
H. Any Event of Default arising as a result of any termination
of any Guaranty; or
I. Any Event of Default arising as a result of (i) any failure
to deliver on a timely basis as required in accordance with the terms of the
Loan Agreement or any agreement, document or instrument relating to the Loan
Agreement any borrowing base certificate or other report relating to inventory
and/or accounts receivable (other than the report of the independent auditors or
the 10K to the Securities and Exchange Commission, provided that such audit
report and 10K are delivered by January 14, 2003); or (ii) any misrepresentation
contained in any borrowing base certificate or other report relating to
inventory and/or accounts receivable; or
J. Hibernia Bank declares the Hibernia Loan to be in default
as a result of the Hibernia Default or any other event of default as contained
in any of the documents executed in connection with the Hibernia Loan.
Upon any further Event of Defaults after January 20, 2003 or upon the occurrence
of any Non-Waived Event of Defaults at any time, all rights and remedies of
Lender, whether pursuant to the Loan Agreement, the other Documents, or
available at law or equity, shall be available to Lender, including, without
limitation, the right to accelerate the Liabilities and foreclose on any or all
Collateral and/or Guarantor Collateral of any Person.
27. All representations and warranties made to the Lender in the
Documents are hereby restated to the Lender and all of such representations and
warranties remain true and correct as of the date of this Amendment.
28. All of the pledges, assignments, transfers, conveyances, mortgages
and grants of security interest of any property given to Lender by any Borrower
or any Guarantor pursuant to the Documents, including, but not limited to,
pursuant to Article Three of the Loan Agreement, have constituted and shall and
hereinafter do continue to constitute pledges, assignments, transfers,
conveyances, mortgages and grants of security interests of property to secure
the Liabilities.
29. Lender's obligation to enter into this Amendment is subject to the
fulfillment of each and every one of the following conditions prior to, or
contemporaneously with the execution and delivery of this Amendment:
A. All of the conditions precedent set forth in the Loan
Agreement shall have been met; and
B. Lender shall have received such instruments, agreements
and documents in form and manner satisfactory to Lender and its counsel as
Lender may reasonably request and where applicable, duly executed and recorded,
including, but not limited to, the following:
(i) Certificates of the Secretaries and General Partners
of Borrowers and Guarantors certifying as to (a) all
corporate and partnership actions taken and consents
made by Borrowers and Guarantors to authorize the
transactions provided for or contemplated under this
Amendment and the execution, delivery and performance
of the Documents; and (b) the names of the officers,
partners or employees of Borrowers and Guarantors
authorized to sign the Documents, together with a
sample of the true signature of each such Person.
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(Lender may conclusively rely on such certificates
until formally advised by a like certificate of any
changes therein.);
(ii) the Confirmations of Guaranties;
(iii) Certificates of good standing for Borrowers and
Guarantorsin the jurisdiction of their incorporation;
(iv) The Collateral Assignment of Parent Income Tax
Claim/Refund;
(v) Evidence of the existence, value, validity and
nonpayment of the Parent Income Tax Claim/Refund for
the fiscal periods ending on or before December 31,
2002;
(vi) Evidence that DFS and Parent have each executed and
delivered agreements, documents and instruments for
DFS to provide financing of up to one-third (1/3) of
the amount of the Parent Income Tax Claim/Refund;
(vii) Evidence that Tracker and DFS have each executed and
delivered an agreement containing substantially the
same terms of consent and waiver set forth in
paragraph 22 of this Amendment;
(viii) An intercreditor agreement with DFS and Tracker; and
(ix) Such other instruments or documents as the Lender may
reasonably request.
C. No Event of Default shall have occurred and be continuing,
may occur with the giving of notice, the passage of time or both.
30. All references to the Loan Agreement in any of the Documents shall
mean the Loan Agreement, as amended by this Amendment and as may be further
amended and/or restated from time to time.
31. Borrowers agree to pay all reasonable fees and out-of-pocket
expenses of Lender (including, but not limited to, outside counsel to Lender and
paralegals) in connection with the preparation of this Amendment and all
Documents relating to this Amendment.
32. The Loan Agreement (as amended by this Amendment), together with
the Documents, contain the entire agreement between the parties hereto with
respect to the transactions contemplated herein and supersede all prior
representations, agreements, covenants and understandings, whether oral or
written, related to the subject matter of the Loan Agreement. Except as
specifically set forth in the Agreement, Lender makes no covenants to any
Borrower, including, but not limited to, any other commitments to provide any
additional financing to any Borrower.
33. Each of the Borrowers hereby release, except in the instance of
gross negligence and wilful misconduct, the Lender and its officers, directors,
employees, agents, attorneys, personal representatives, successors, predecessors
and assigns from all manner of actions, cause and causes of action, suits,
deaths, sums of money, accounts, reckonings, bonds, bills, specialties,
covenants, controversies, agreements, promises, variances, trespasses, damages,
judgments, executions, claims and demands, whatsoever, in law or in equity, and
particularly, without limiting the generality of the foregoing, in connection
with the Documents and any agreements, documents and instruments relating to the
15
Documents and the administration of the Documents, all indebtedness, obligations
and liabilities of any of the Xxxxxx Entities to the Lender and any agreements,
documents and instruments relating to the Documents (collectively, the
"Claims"), which any of the Borrowers now have against the Lender or ever had,
or which might be asserted by their heirs, executors, administrators,
representatives, agents, successors, or assigns based on any Claims which exist
on or at any time prior to the date of this Amendment. Each Borrower expressly
acknowledges and agrees that each Borrower has have been advised by counsel in
connection with this Amendment and that each Borrower understands that this
Paragraph constitutes a general release of the Lender and that they each intend
to be fully and legally bound by the same. Each Borrower further expressly
acknowledges and agrees that this general release shall have full force and
effect notwithstanding the occurrence of a Default or Event of Default (however
such terms are defined) pursuant to any of the Documents.
34. This Amendment may be executed in any number of counterparts, each
of which counterpart, once they are executed and delivered shall be deemed to be
an original and all of which counterparts taken together shall constitute but
one in the same amendment.
35. Except as specifically amended and modified by this Amendment, (A)
the Loan Agreement shall remain in full force and effect and is hereby restated
and incorporated herein by this reference; and (B) all terms defined in the Loan
Agreement shall have the same meanings herein as therein.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK; SIGNATURE PAGES FOLLOW]
16
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the date first above written.
LENDER: TRANSAMERICA COMMERCIAL FINANCE
CORPORATION
By:_________________________________
Title: President
BORROWERS: XXXXXX BOATS & MOTORS, INC.
By:________________________________
Title: President
XXXXXX BOATING CENTER GEORGIA, INC.
By:________________________________
Title: President
XXXXXX BOATING CENTER FLORIDA, INC.
By:__________________________________
Title: President
ADVENTURE MARINE & OUTDOORS, INC.
By:__________________________________
Title: President
ADVENTURE MARINE SOUTH, INC.
By:________________________________
Title: President
17
ADVENTURE BOAT BROKERAGE, INC.
By:__________________________________
Title: President
TBC MANAGEMENT, INC.
By:__________________________________
Title: President
TBC MANAGEMENT, LTD.
By:__________________________________
Title: President
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