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EXHIBIT 10.71
AMENDMENT NO. 1 TO
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
This Amendment No. 1 to Amended and Restated Loan and Security Agreement
(this "Amendment") is entered into as of June 29, 1999, by and among XXXXXXXXX
INDUSTRIES, INC., a Delaware corporation ("BII") XXXXXXXXX INDUSTRIES, L.P., a
Texas limited partnership ("BILP"), and NBF, INC., a Georgia corporation
("NBF"), jointly and severally (collectively, the "Borrower"), with their chief
executive office located at 000 Xxxxxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxxx 00000 and
FOOTHILL CAPITAL CORPORATION, a California corporation ("Lender"), with a place
of business located at 00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000-0000, in light of the following facts:
BACKGROUND
FACT ONE: Lender and Borrower have entered into that certain Amended and
Restated Loan and Security Agreement, dated May 14, 1998 (the "Loan Agreement").
FACT TWO: Lender and Borrower desire to further modify, supplement and
amend the Loan Agreement as provided herein. Terms defined in the Loan Agreement
which are used herein shall have the same meanings as set forth in the Loan
Agreement, unless otherwise specified.
NOW, THEREFORE, Lender and Borrower hereby supplement, modify and amend the
Loan Agreement as follows:
ARTICLE I
Definitions
1.01 Capitalized terms used in this Amendment, to the extent not otherwise
defined herein, shall have the same meaning as in the Loan Agreement, as amended
hereby.
ARTICLE II
Effective Date
2.01 This Amendment shall be effective on the date (the "Effective Date")
upon which Lender has received each of the following: (a) one or more
counterparts of this Amendment duly executed by Lender and each Borrower; (b) a
consent and reaffirmation of the obligations of each Individual Guarantor and
each Corporate Guarantor under their respective guaranties, in such form as
Lender may require; and (c) the fee required to be paid by Borrower pursuant to
Section 6.03 of this Amendment.
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ARTICLE III
AMENDMENTS AND ADDITIONS TO LOAN AGREEMENT
3.01 AMENDMENTS TO SECTION 1.1 OF THE LOAN AGREEMENT. As of the Effective
Date, the definitions of "Applicable Margin" and "Change of Control" contained
in Section 1.1 of the Loan Agreement are hereby amended and restated to read in
their entirety as follows:
"'Applicable Margin' means two percent(2%)."
"'Change of Control' shall be deemed to have occurred at such time: (a) as
a "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934) becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934), directly or indirectly,
of more than twenty-five percent (25%) of the total voting power of all classes
of stock then outstanding or of partnership interests of Borrower normally
entitled to vote in the election of directors or a vote of partners; provided,
however, no Change of Control shall be deemed to occur solely as a result of
increases in the number of shares of stock or percentage of partnership
interests beneficially owned by Xxxxx X. Xxxxxxxxx or Xxxxx X. Xxxxxxxxx; or (b)
as any Senior Manager of Borrower fails for any reason to be actively involved
in the management of Borrower in a senior executive capacity and is not replaced
within sixty (60) days with a Person of comparable expertise, experience and
capabilities as determined by Foothill in the exercise of its reasonable credit
judgment."
3.02 ADDITION TO SECTION 1.1 OF THE LOAN AGREEMENT. As of the Effective
Date, the following definition of "Senior Manager" is added, in appropriate
alphabetical order, to Section 1.1 of the Loan Agreement to read in its
entirety as follows:
"'Senior Manager' means the President, Chief Executive Officer, Chief
Operating Officer, the Chief Financial Officer or Treasurer of Borrower, or
any Person charged with all or a significant portion of the duties or
responsibilities generally associated with such offices, in each case as
determined by Foothill."
3.03 AMENDMENTS TO SECTION 6.12 OF THE LOAN AGREEMENT. As of the Effective
Date, Section 6.12 of the Loan Agreement is hereby amended and restated to read
in its entirety as follows:
"6.12 FINANCIAL COVENANTS. Borrower shall maintain:
(a) Current Ratio. A ratio of Consolidated Current Assets divided by
Consolidated Current Liabilities of at least one and one-half to one
(1.50:1.0) measured on a fiscal quarter-end basis;
(b) Total Liabilities to Tangible Net Worth Ratio. At each fiscal
quarter-end following September 30, 2000, a ratio of Borrower's total
liabilities divided by Tangible Net Worth of not more than two to one
(2.00:1.00), measured in each case on a fiscal quarter-end basis; and
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(c) Tangible Net Worth. At each fiscal quarter-end set forth below, a
Tangible Net Worth in excess of the Tangible Net Worth set forth adjacent
to such fiscal quarter-end:
Fiscal Quarter-End Tangible Net Worth
------------------ ------------------
June 30, 1999 ($1,550,000)
September 30, 1999 ($1,500,000)
December 31, 1999 ($550,000)
March 31, 2000 ($750,000)
June 30, 2000 ($750,000)
September 30, 2000 ($500,000)
December 31, 2000 $500,000
March 31, 2001 $250,000
June 30, 2001 $1,000,000
September 30, 2001 $1,250,000
Each Fiscal Quarter-End Thereafter: $2,000,000"
ARTICLE IV
WAIVER
4.01 Borrower has notified Lender that one or more Events of Default have
occurred under the Loan Agreement as a result of Borrower's failure to comply
with the Total Liabilities to Tangible Net Worth Ratio set forth in Section
6.12(b) of the Loan Agreement and the Tangible Net Worth covenant set forth in
Section 6.12(c) of the Loan Agreement, in each case at the fiscal quarter ended
March 31, 1999 (collectively, the "Financial Covenant Defaults"). Having advised
Lender of the Financial Covenant Defaults, Borrower has requested that Lender
waive the Financial Covenant Defaults. In the exercise of its discretion as a
prudent lender, Lender hereby waives the Financial Covenant Defaults for the
fiscal quarter ended March 31, 1999. Except as expressly set forth in this
Section 4.01, nothing contained in this Amendment or any other communication
between Lender and Borrower shall be a waiver of any other present or future
violation or Event of Default under the Loan Agreement or any agreement,
document or instrument entered into in connection therewith (collectively, the
"Other Violations"), including without limitation, any Event of Default arising
by virtue of a violation of the covenants contained in Sections 6.12(b) and
6.12(c) of the Loan Agreement for any period after March 31,
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1999. Similarly, nothing contained in this Amendment shall directly or
indirectly in any way: (i) impair, prejudice or otherwise adversely affect
Lender's right at any time to exercise any right, privilege or remedy in
connection with the Loan Agreement or any agreement, document or instrument
entered into in connection therewith with respect to any Other Violations, or
(ii) constitute any course of dealing or other basis for altering any obligation
of Borrower under the Loan Agreement or any agreement, document or instrument
entered into in connection therewith or any right, privilege or remedy of Lender
under the Loan Agreement or any agreement, document or instrument entered into
in connection therewith with respect to any Other Violations. Nothing in this
Amendment shall be construed to be a consent by Lender to any Other Violations.
ARTICLE V
RATIFICATIONS, COVENANT AND REPRESENTATIONS AND WARRANTIES
5.01 RATIFICATIONS. Except as expressly amended and supplemented by this
Amendment, the terms and provisions of the Loan Agreement are ratified and
confirmed and shall continue in full force and effect. Borrower and Lender agree
that the Loan Agreement, as amended hereby, and each agreement and instrument
executed in connection therewith, shall continue to be legal, valid, binding and
enforceable in accordance with their respective terms.
5.02 COVENANT. Borrower covenants and agrees that within ninety (90) days
following the Effective Date, Borrower shall deliver to Lender a business plan,
including a description of the bonus plan for the Senior Managers of Borrower
and projections of cash flow and net operating income for the fiscal year to end
March 31, 2000, in such detail and with such supporting documentation as Lender
may request.
5.03 REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to Lender that: (i) the execution, delivery and performance of this
Amendment and any and all other Loan Documents executed and/or delivered in
connection herewith have been authorized by all requisite corporate power or
limited partnership power, as appropriate, on the part of BII, BILP or NBF and
will not violate the articles of incorporation, certificate of incorporation,
by-laws, organizational documents, partnership agreement, certificate of limited
partnership or any other agreement to which BII, BILP or NBF are parties, by
which any of their respective properties may be bound; (ii) the representations
and warranties contained in the Loan Agreement, as amended hereby, and any other
Loan Document are true and correct on and as of the date hereof as though made
on and as of the date hereof, except to the extent such representations and
warranties relate to an earlier date; (iii) Borrower is in full compliance with
all covenants and agreements contained in the Loan Agreement, as amended hereby
(except to the extent such violations have been heretofore waived in writing by
Lender); and (iv) Borrower has consulted with, and retained, the services of a
reputable business consultant to assist Borrower in increasing its Tangible Net
Worth.
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ARTICLE VI
MISCELLANEOUS PROVISIONS
6.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made herein and in the Loan Agreement shall survive the execution and
delivery of this Amendment, and no investigation by Lender or any closing shall
affect the representations and warranties or the right of Lender to rely upon
them.
6.02 REFERENCE TO LOAN AGREEMENT. The Loan Agreement, as amended hereby,
and all other agreements, documents or instruments now or hereafter executed and
delivered pursuant to the terms thereof are hereby amended so that any reference
in the Loan Agreement or such other agreements, documents and instruments shall
mean a reference to the Loan Agreement, as amended hereby.
6.03 EXPENSES OF LENDER AND WAIVER FEE. In consideration of the waiver
provided in Section 4.01 hereof, Borrower shall pay to Lender a waiver fee in
the amount of $25,000, which fee shall be carried by Lender and shall be due and
payable upon the execution by Lender of a counterpart of this Amendment. In
addition to such waiver fee and as provided in the Loan Agreement, Borrower
agrees to pay on demand all costs and expenses incurred by Lender in connection
with the preparation, negotiation and execution of this Amendment, including,
without limitation, the costs and fees of Lender's legal counsel, and all costs
and expenses incurred by Lender in connection with the enforcement or
preservation of any rights under the Loan Agreement, as amended hereby, or any
agreement, document or instrument executed in connection therewith.
6.04 SEVERABILITY. Any provision of this Amendment held by a court 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.
6.05 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and shall inure
to the benefit of Lender and Borrower and their respective successors and
assigns, except Borrower may not assign or transfer any of its rights or
obligations hereunder without the prior written consent of Lender.
6.06 COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.
6.07 EFFECT OF WAIVER. No consent or waiver, express or implied, by Lender
to or of any breach of or deviation from any covenant or condition by Borrower
shall be deemed a consent to or waiver of any other breach of the same or any
other covenant, condition or duty.
6.08 HEADINGS. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
6.09 APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED
PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN AND
SHALL BE GOVERNED BY AND
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CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
6.10 FINAL AGREEMENT. THE LOAN DOCUMENTS, AS AMENDED HEREBY, REPRESENT THE
ENTIRE EXPRESSION OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF ON
THE DATE THIS AMENDMENT IS EXECUTED. THE LOAN DOCUMENTS, AS AMENDED HEREBY, MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. NO MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY
PROVISION OF THIS AMENDMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED
BY BORROWER AND LENDER.
6.11 RELEASE. BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE,
COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE
WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS
LIABILITY TO REPAY THE OBLIGATIONS (AS DEFINED IN THE LOAN AGREEMENT) OR TO SEEK
AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM LENDER. BORROWER HEREBY
VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES LENDER, ITS
PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE
CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND
LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED,
SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN
EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS
EXECUTED, WHICH THE BORROWER MAY NOW OR HEREAFTER HAVE AGAINST LENDER, ITS
PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, AND
IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION
OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM ANY OBLIGATIONS (AS
DEFINED IN THE LOAN AGREEMENT), INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING
FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF
THE MAXIMUM RATE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE LOAN
AGREEMENT OR ANY AGREEMENT, DOCUMENT OR INSTRUMENT ENTERED INTO IN CONNECTION
THEREWITH.
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IN WITNESS WHEREOF, each Borrower and Lender have caused this Amendment to
be executed on the date first written above by their duly authorized officers.
FOOTHILL CAPITAL CORPORATION XXXXXXXXX INDUSTRIES, L.P.
By: Xxxxxxxxx Operating Corp., its
General Partner
By: By: /s/ XXXXX XXXXXXXXX
-------------------------------- ------------------------------
Name: Name: Xxxxx Xxxxxxxxx
Title: Title: Chief Executive officer
XXXXXXXXX INDUSTRIES, INC.
By: /s/ XXXXX X. XXXXXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
NBF, INC.
By: /s/ XXXXX X. XXXXXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
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REAFFIRMATION OF GUARANTORS
By its acceptance below this ___ day of June, 1999, the undersigned Corporate
Guarantor hereby reaffirms its Continuing Guaranty and Security Agreement dated
August 16, 1996 and consents to the above-stated terms.
XXXXXXXXX OPERATING CORP.,
a Nevada corporation
By: /s/ XXXXX X. XXXXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title:
By its acceptance below this ___ day of June, 1999, the undersigned Corporate
Guarantor hereby reaffirms its Continuing Guaranty and Security Agreement dated
August 16, 1996 and consents to the above-stated terms.
XXXXXXXXX HOLDING CORP.,
a Delaware corporation
By: /s/ XXXXX X. XXXXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
By its acceptance below this ___ day of June, 1999, the undersigned Corporate
Guarantor hereby reaffirms its Continuing Guaranty and Security Agreement dated
August 16, 1996 and consents to the above-stated terms.
C.G. PRODUCTS, INC.,
a California corporation
By: /s/ XXXXX X. XXXXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
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By his acceptance below this ______ day of June, 1999, the undersigned
Individual Guarantor hereby reaffirms its Amended and Restated Limited
Continuing Guaranty dated May 14, 1998, and consents to the above-stated terms.
/s/ XXXXX X. XXXXXXXXX
---------------------------------------
Xxxxx X. Xxxxxxxxx, an individual
By his acceptance below this _____ day of June, 1999, the undersigned
Individual Guarantor hereby reaffirms its Amended and Restated Guaranty dated
May 14, 1998, and consents to the above-stated terms.
/s/ XXXXX X. XXXXXXXXX
---------------------------------------
Xxxxx X Xxxxxxxxx, an individual
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AMENDMENT NO. 1 TO
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
This Amendment No. 1 to Amended and Restated Loan and Security Agreement
(this "Amendment") is entered into as of June 29, 1999, by and among XXXXXXXXX
INDUSTRIES, INC., a Delaware corporation ("BII") XXXXXXXXX INDUSTRIES, L.P., a
Texas limited partnership ("BILP"), and NBF, INC., a Georgia corporation
("NBF"), jointly and severally (collectively, the "Borrower"), with their chief
executive office located at 000 Xxxxxxxx Xxxxxxx, Xxxxx Xxxxxxx. Xxxxx 00000 and
FOOTHILL CAPITAL CORPORATION, a California corporation ("Lender"), with a place
of business located at 00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx,
Xxxxxxxxxx 00000-0000, in light of the following facts:
BACKGROUND
FACT ONE: Lender and Borrower have entered into that certain Amended and
Restated Loan and Security Agreement, dated May 14, 1998 (the "Loan Agreement").
FACT TWO: Lender and Borrower desire to further modify, supplement and
amend the Loan Agreement as provided herein. Terms defined in the Loan Agreement
which are used herein shall have the same meanings as set forth in the Loan
Agreement, unless otherwise specified.
NOW, THEREFORE, Lender and Borrower hereby supplement, modify and amend the
Loan Agreement as follows:
REAFFIRMATION OF GUARANTORS
By its acceptance below this _____ day of June, 1999, the undersigned Corporate
Guarantor hereby reaffirms its Continuing Guaranty and Security Agreement dated
August 16, 1996 and consents to the above-stated terms.
XXXXXXXXX OPERATING CORP.,
a Nevada corporation
By: /s/ XXXXX X. XXXXXXXXX
--------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title:
By its acceptance below this ___ day of June, 1999, the undersigned Corporate
Guarantor hereby reaffirms its Continuing Guaranty and Security Agreement dated
August 16, 1996 and Consents to the above-stated terms.
XXXXXXXXX HOLDING CORP.,
a Delaware corporation
By: /s/ XXXXX X. XXXXXXXXX
--------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title:
