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TEXTRON FINANCIAL
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Textron Financial Corporation, Subsidiary of Textron Inc.
SECOND AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
This Second Amendment to Loan and Security Agreement (the "Amendment") is
executed as of December 31, 2003 (the "Effective Date"), by and between GALAXY
NUTRITIONAL FOODS, INC., a Delaware corporation ("Borrower"), and TEXTRON
FINANCIAL CORPORATION, a Delaware corporation ("Lender").
RECITALS
A. Lender and Borrower have established a discretionary revolving credit
facility pursuant to that certain Loan and Security Agreement dated as of May
27, 2003, as may have been previously amended, modified or supplemented (the
"Agreement"). All documents, agreements and/or instruments executed in
connection with the Agreement are hereinafter collectively referred to as the
"Transaction Documents."
B. Lender and Borrower wish to amend certain provisions of the Agreement,
as provided in this Amendment.
AGREEMENT
In reliance upon the representations, warranties and covenants of Borrower
set forth in the Agreement, as hereby amended, Lender and Borrower agree as
follows:
1. Capitalized terms not defined in this Amendment shall have the
definitions given to them in the Agreement, where applicable, or the Uniform
Commercial Code of the State of Rhode Island (the "UCC"), as the same may be
amended from time to time. If there are conflicting definitions in the Agreement
and the UCC, the definition in the Agreement shall control.
2. From and after the Effective Date, the Agreement is amended to insert
"Employment Contract" as a defined term in the Definitions section as follows:
"Employment Contract" means the Second Amended and Restated Employment
Agreement effective October 13, 2003 by and between Borrower and
Xxxxxx X. Xxxxxx.
3. From and after the Effective Date, the definition of "Fixed Charge
Coverage Ratio" in the Agremeent is amended and restated in its entirety to read
as follows:
"Fixed Charge Coverage Ratio" means, for any period, the ratio of (i)
Borrower's EBITDA plus all accrued but unpaid costs associated with
the Employment Contract
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minus any and all cash payments made under the Employment Contract
minus Unfunded Capital Expenditures minus taxes actually paid by
Borrower in cash minus distributrions and dividends paid by Borrower
in cash, to (ii) Borrower's Interest Expense plus scheduled
amoritization payments (including Capitalized Lease payments) made by
Borrower, in each case for such period.
4. From and after the Effective Date, the definition of "Adjusted Tangible
Net Worth" in the Agremeent is amended and restated in its entirety to read as
follows:
"Adjusted Tangible Net Worth" means, with respect to Borrower, the sum
of (i) stockholder's equity, including preferred stock, determined in
accordance with GAAP, (ii) subordinated indebtedness (if any), and
(iii) all accrued but unpaid costs associated with the Employment
Contract, minus the sum of (a) Intangible Assets, (b) all loans or
advances to any Person, and (c) prepaid expenses.
5. From and after the Effective Date, Article 2.3 of the Agreement is
hereby amended and restated in its entirety to read as follows:
"Field Examination Fee. For each field examination of the books,
records and other assets of Borrower performed by on or more employees
or agents of Lender, Borrower shall pay to Lender a field examination
fee in an amount equal to Eight Hundred Fifty U.S. Dollars ($850.00)
(or such other amount as Lender shall establish from time to time on
notice to Borrower) for each day spent by each such employee in
performing and/or summarizing the results of such examination
(including all necessary travel time) plus all reasonable
"out-of-pocket" expenses. Field examinations shall be performed by
Lender no more frequently than quarterly, or, if Borrower is in
default, with such frequency as Lender shall determine in its sole
discretion, and each field examination fee shall be payable by
Borrower to Lender on the date on which each such field examination is
performed."
6. From and after the Effective Date, Article II of the Agreement is hereby
amended by adding the following as Article 2.9:
"Late Financial Statements Fee. Borrower shall pay to Lender a late
financial statements fee in an amount equal to Fifty U.S. Dollars
($50.00) for each and every day that Borrower fails or neglects to
perform, keep or observe any covenant contained in Article 6.1 of this
Agreement.
7. The parties to this Amendment acknowledge and agree that the
security interests created pursuant to the Agreement shall remain in full force
and effect and shall constitute the legal, valid, binding and enforceable
obligations of Borrower. Without limiting the generality of the foregoing, the
parties expressly do not intend to extinguish any security interest created by
the Agreement or the Transaction Documents.
8. Borrower hereby represents and warrants to Lender as follows: (a) except
as disclosed in that certain letter dated the date hereof from Borrower to
Lender, the Representations and Warranties contained in Article V of the
Agreement are true and correct as of the date of this Amendment; (b) the
execution, delivery and performance by Borrower of this
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Amendment have been duly authorized by all necessary corporate and other action
and do not and will not require any registration with, consent or approval of,
or notice to or action by, any third person party in order to be effective and
enforceable; and (c) the Agreement, as amended, constitutes the legal, valid and
binding obligation of Borrower, enforceable against Borrower in accordance with
its terms, without defense, counterclaim, recoupment or offset.
9. This Amendment shall not be effective until the following conditions
precedent are satisfied: (a) each party named on the signature pages of this
Amendment shall have executed and delivered a counterpart of this Amendment; and
(b) each guarantor of the obligations of Borrower to Lender shall have executed
and delivered a written Acknowledgment of Guarantor.
10. In order to induce Lender to enter into this Amendment, Borrower agree
to pay to Lender an Amendment Fee in the amount of $500 and a Documentation Fee
in the amount of $500. The Amendment Fee and the Documentation Fee shall be
earned by Lender upon the execution of this Amendment and shall be payable by
Borrower to Lender on the date thereof.
11. Except as expressly amended in this Amendment, all terms, covenants and
provisions of the Agreement are and shall remain in full force and effect
without further modification or amendment. This Amendment shall be deemed
incorporated into, and made a part of, the Agreement.
12. This Amendment, together with the Agreement, contains the entire and
exclusive agreement of the parties with reference to all matters discussed in
this Amendment, and this Amendment supersedes all prior drafts and
communications with respect thereto.
The undersigned, pursuant to due authority, have caused this Amendment to
be executed as of the date set forth above.
LENDER: BORROWER:
TEXTRON FINANCIAL CORPORATION GALAXY NUTRITIONAL FOODS, INC.
By: /s/ Xxxxx Cavallari By: /s/ Xxxxxxxxx X. Xxxxxxx
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Print Name: Xxxxx Cavallari Print Name: Xxxxxxxxx X. Xxxxxxx
Print Title: Account Executive Print Title: Chief Financial Officer
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