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EXHIBIT 10.44
AMENDMENT NO. 3 TO
LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 3, dated as of August 1, 1997, to the LOAN AND
SECURITY AGREEMENT, dated as of March 28, 1997, as amended by the FIRST
AMENDMENT dated as of April 10, 1997 and the SECOND AMENDMENT dated as of July
1, 1997 (the "Loan and Security Agreement"), between FOOTHILL CAPITAL
CORPORATION, a California corporation, with a place of business located at 00000
Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000, and
XXXXXX TRAILERS, INC., a Delaware corporation, with its chief executive offices
located at 2727 Paces Ferry Road, One Paces Ferry West, Suite 1700, Xxxxxxx,
Xxxxxxx 00000.
Preamble
The Borrower has requested Foothill to amend the Loan and
Security Agreement to (i) eliminate Eligible Accounts subject to a Contra
Obligation from the Borrowing Base, (ii) increase the amount of the term loan
and amend the amortization schedule of the term loan, (iii) increase the
concentration limit on Eligible Accounts with respect to which Ryder System Inc.
is the Account Debtor, and (iv) increase the default interest rate from 3.75
percentage points above the Reference Rate to 4.0 percentage points above the
Reference Rate. Accordingly, the Borrower and Foothill hereby agree as follows:
1. Definitions. All terms used herein which are defined
in the Loan and Security Agreement and not otherwise defined herein are used
herein as defined therein.
2. Eligible Accounts. Paragraph (h) of the definition of
the term "Eligible Accounts" in Section 1.1 of the Loan and Security Agreement
is hereby amended in its entirety to read as follows:
"(h) Accounts with respect to an Account Debtor,
whose total obligations owing to Borrower exceed 20% of all
Eligible Accounts (other than (i) from August 1, 1997 through
September 30, 1997, Accounts with respect to which the Account
Debtor is Ryder System Inc. where the total obligations owing
by Ryder System Inc. to Borrower do not exceed 40% of all
Eligible Accounts, (ii) from August 1, 1997 through October
31, 1997, Accounts with respect to which the Account Debtor is
Xxxxxxx Express, Inc. where the total obligations owing by
Xxxxxxx Express, Inc. to Borrower do not exceed 40% of all
Eligible Accounts, and (iii) prior to November 1, 1997,
Accounts with respect to which the Account Debtor is United
Parcel Service, Inc.), to the extent of the obligations owing
by such Account Debtor in excess of such percentages, provided
that, upon the request of Borrower, Foothill may waive or
increase the limitation if in its
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reasonable credit judgment, the Account Debtor is considered
credit worthy, such waiver and/or increase by Foothill not to
be unreasonably withheld or delayed;"
3. Borrowing Base. (a) Clause (x) of Section 2.1(a) of
the Loan and Security Agreement is hereby amended in its entirety to read as
follows:
"(x) the lesser of (i) (A) 80% of Eligible
Accounts other than that portion of any Eligible Accounts that
(1) is or will be satisfied by the transfer to the Borrower of
Used Trailer Inventory or (2) is subject to a Contra
Obligation, less (B) the amount, if any, of the Dilution
Reserve, and (ii) on and after June 1, 1997, an amount equal
to Borrower's Collections with respect to Accounts for the
immediately preceding 30 day period, plus"
(b) Subclause (ii)(B) of Section 2.1(a)(y) of the Loan
and Security Agreement is hereby amended in its entirety to read as follows:
"(B) 40% of the value of Eligible Used Trailer Inventory
other than U.S. Xpress Used Trailer Inventory, provided, that,
the amount of this subclause (ii) (B) shall not, without the
prior written consent of Foothill, exceed (1) $1,500,000, from
March 28, 1997 through and including November 30, 1997, (2)
$1,400,000, from December 1, 1997 through and including
December 31, 1997, (3) $1,300,000, from January 1, 1998
through and including January 31, 1998, (4) $1,200,000, from
February 1, 1998 through and including February 28, 1998, (5)
$1,100,000, from March 1, 1998 through and including March 31,
1998, and (6) $1,000,000 on and after April 1, 1998."
(c) Subclause (ii)(C) of Section 2.1(a)(y) of the Loan
and Security Agreement is hereby amended in its entirety to read as follows:
"(C) prior to January 1, 1997, 40% of the value
of U.S. Xpress Used Trailer Inventory, provided that, the
amount of this subclause (ii)(C) shall not at any time exceed
the amount obtained by multiplying the number of units of U.S.
Xpress Used Trailer Inventory at such time by $4,000, without
the prior written consent of Foothill, and"
4. Term Loan. Section 2.3 of the Loan and Security
Agreement is hereby amended in its entirety to read as follows:
"2.3 TERM LOAN. On the Closing Date, Foothill
made a term loan (the "Initial Term Loan") to Borrower in the
original principal amount of $4,000,000, of which $1,000,000
is outstanding as of August 1, 1997. On August 1, 1997,
Foothill will make an additional term loan (the "Additional
Term Loan" and together with the Initial Term Loan, the "Term
Loan") to Borrower in the original principal amount of
$1,000,000, which results in a principal amount of the Term
Loan outstanding on August 1, 1997 of $2,000,000. The
Additional Term Loan will be made upon the simultaneous
payment (which shall be from the proceeds of the
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Additional Term Loan) of $1,000,000 of Advances. The Term Loan
shall be repaid in eight (8) installments of principal in the
following amounts:
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DATE INSTALLMENT AMOUNT
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October 1, 1997 $250,000
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November 1, 1997 $250,000
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December 1, 1997 $250,000
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January 1, 1998 $250,000
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February 1, 1998 $250,000
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March, 1, 1998 $250,000
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April 1, 1998 $250,000
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May 1, 1998 $250,000
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The outstanding principal balance and all accrued and unpaid
interest under the Term Loan shall be due and payable upon the
termination of this Agreement, whether by its terms, by
prepayment, by acceleration, or otherwise. The unpaid
principal balance of the Term Loan may be prepaid in whole or
in part without penalty or premium at any time during the term
of this Agreement upon ten (10) days prior written notice by
Borrower to Foothill, all such prepaid amounts to be applied
to the installments due on the Term Loan in the inverse order
of their maturity. All amounts outstanding under the Term Loan
shall constitute Obligations."
5. Default Interest Rate. Section 2.5(c) of the Loan and
Security Agreement is hereby amended in its entirety to read as follows:
"(c) Default Rate. Upon the occurrence and during
the continuation of an Event of Default, (i) all Obligations
(except for undrawn Letters of Credit) shall bear interest at
a per annum rate equal to 4.00 percentage points above the
Reference Rate, and (ii) the Letter of Credit fee provided in
Section 2.5(b) shall be increased to 4% per annum times the
amount of the undrawn Letters of Credit that were outstanding
during the immediately preceding month."
6. Conditions. This Amendment shall become effective
only upon satisfaction in full of the following conditions precedent (the first
date upon which all such conditions have been satisfied being herein called the
"Effective Date"):
(a) The representations and warranties contained
in this Amendment and in Section 5 of the Loan and Security Agreement and each
other Loan Document shall be
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correct on and as of the Effective Date as though made on and as of such date
(except where such representations and warranties relate to an earlier date in
which case such representations and warranties shall be true and correct as of
such earlier date); no Default or Event of Default shall have occurred and be
continuing on the Effective Date or result from this Amendment becoming
effective in accordance with its terms.
(b) Foothill shall have received a counterpart
of this Amendment, duly executed by the Borrower.
(c) The Borrower shall pay to Foothill a
non-refundable amendment fee of $25,000, which fee is earned in full on the date
hereof.
(d) All legal matters incident to this Amendment
shall be satisfactory to Foothill and its counsel.
7. Representations and Warranties. The Borrower hereby
represents and warrants to Foothill as follows:
(a) The Borrower (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and (ii) has all requisite corporate power, authority and legal right
to execute, deliver and perform this Amendment, and to perform the Loan and
Security Agreement, as amended hereby.
(b) The execution, delivery and performance of
this Amendment by the Borrower, and the performance by the Borrower of the Loan
and Security Agreement, as amended hereby (i) have been duly authorized by all
necessary corporate action, (ii) do not and will not contravene its charter or
by-laws or any applicable law, and (iii) except as provided in the Loan
Documents, do not and will not result in the creation of any Lien upon or with
respect to any of its respective properties.
(c) This Amendment and the Loan and Security
Agreement, as amended hereby, constitute the legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with
its terms.
(d) No authorization or approval or other action
by, and no notice to or filing with, any Governmental Authority is required in
connection with the due execution, delivery and performance by the Borrower of
this Amendment and the performance by the Borrower of the Loan and Security
Agreement as amended hereby.
(e) The representations and warranties contained
in Section 7 of the Loan and Security Agreement and each other Loan Document are
correct on and as of the Effective Date as though made on and as of the
Effective Date (except to the extent such representations and warranties
expressly relate to an earlier date in which case such representations and
warranties shall be true and correct as of such earlier date), and no Default or
Event of Default has occurred and is continuing on and as of the Effective Date
or will result from this Amendment becoming effective in accordance with its
terms.
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8. Continued Effectiveness of the Loan and Security
Agreement and Loan Documents. The Borrower hereby (i) confirms and agrees that
each Loan Document to which it is a party is, and shall continue to be, in full
force and effect and is hereby ratified and confirmed in all respects except
that on and after the Effective Date of this Amendment all references in any
such Loan Document to "the Loan and Security Agreement", the "Agreement",
"thereto", "thereof", "thereunder" or words of like import referring to the Loan
and Security Agreement shall mean the Loan and Security Agreement as amended by
this Amendment; and (ii) confirms and agrees that to the extent that any such
Loan Document purports to assign or pledge to Foothill, or to grant a security
interest in or Lien on, any collateral as security for the obligations of the
Borrower from time to time existing in respect of the Loan and Security
Agreement and the Loan Documents, such pledge, assignment and/or grant of the
security interest or Lien is hereby ratified and confirmed in all respects.
9. Miscellaneous.
(a) This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
(b) Section and paragraph headings herein are
included for convenience of reference only and shall not constitute a part of
this Amendment for any other purpose.
(c) This Amendment shall be governed by, and
construed in accordance with, the laws of the State of California.
(d) The Borrower will pay on demand all
reasonable fees, costs and expenses of Foothill in connection with the
preparation, execution and delivery of this Amendment including, without
limitation, reasonable fees disbursements and other charges of Xxxxxxx Xxxx &
Xxxxx LLP, counsel to Foothill.
XXXXXX TRAILERS, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title: Vice President Finance
FOOTHILL CAPITAL CORPORATION,
a California corporation
By: /s/ Xxxxxxx Xxxx
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Name: Xxxxxxx Xxxx
Title: Assistant Vice President
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