EXHIBIT 10.2
AMENDMENT NO. 2
TO
THIRD AMENDED AND RESTATED ACCOUNTS RECEIVABLE MANAGEMENT AND SECURITY AGREEMENT
THIS AMENDMENT NO. 2 (this "Amendment No. 2") is entered into as of
June 6, 2002, by and between TransTexas Gas Corporation, a Delaware corporation
("Borrower") and GMAC Commercial Credit LLC ("Lender").
BACKGROUND
Borrower and Lender are parties to a Third Amended and Restated
Accounts Receivable Management and Security Agreement dated as of March 15, 2000
(as amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), pursuant to which Lender provides Borrower with certain
financial accommodations.
Borrower has requested that Lender make certain amendments to the
Credit Agreement and Lender is willing to do so on the terms and conditions
hereafter set forth.
NOW, THEREFORE, in consideration of any loan or advance or grant of
credit heretofore or hereafter made to or for the account of Borrower by Lender,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions. All capitalized terms not otherwise defined herein
shall have the meanings given to them in the Credit Agreement.
2. Amendment to Credit Agreement. Subject to satisfaction of the
conditions precedent set forth in Section 4 below, the Credit Agreement is
hereby amended as follows:
(a) The following defined terms are added to Section 1(A) in
their appropriate alphabetical order to provide as follows:
"Amendment No. 2" means Amendment No. 2 to this
Credit Agreement dated as of June 6, 2002, between
Borrower and Lender.
"Amendment No. 2 Effective Date" means the date upon
which all of the conditions precedent set forth in
Section 4 of Amendment No. 2 have been satisfied.
(b) The following defined term in Section 1(A) is amended in
its entirety to provide as follows:
"Maximum Loan Amount" at any time means $15,000,000.
(c) Sections 13(l)(ii) and (iii) are amended in their entirety
to provide as follows:
"(ii) Consolidated Net Income. Not permit
the sum of (i) Consolidated Net Income for Borrower
and its Subsidiaries on a consolidated basis plus
(ii) dividend requirements of Borrower and its
consolidated Subsidiaries (whether in cash or
otherwise (except dividends payable solely in shares
of Qualified Capital Stock)) with respect to
Preferred Stock paid, accrued, or scheduled to be
paid or accrued during each period set forth below
(in each case to the extent attributable to such
period and excluding items eliminated in
consolidation) at the end of each fiscal quarter with
respect to the immediately preceding fiscal period
set forth below (ending on the last day of such
fiscal quarter) to be less than (or if a net loss,
such net loss shall not be greater than) the amount
set forth below as corresponds to the applicable
fiscal period:
Four Quarters Ended Net Income
------------------- ----------
4/30/02 ($55,000,000)
7/31/02 ($50,000,000)
10/31/02 ($45,000,000)
1/31/03 ($40,000,000)
4/30/03 ($35,000,000)
7/31/03 ($30,000,000)
10/31/03 ($25,000,000)
1/31/04 and thereafter until ($20,000,000)
the end of the Term
(iii) Consolidated EBITDA Not permit
Consolidated EBITDA for Borrower and its Subsidiaries
on a consolidated basis at the end of each fiscal
quarter with respect to the immediately preceding
fiscal period set forth below (ending on the last day
of such fiscal quarter) to be less than the
consolidated EBITDA set forth below as corresponds to
the applicable fiscal period:
Four Quarters Ended EBITDA
------------------- ------
4/30/02 $52,500,000
7/31/02 $55,000,000
10/31/02 $57,500,000
1/31/03 $60,000,000
4/30/03 $62,500,000
7/31/03 $65,500,000
10/31/03 $67,500,000
1/31/04 and thereafter until $70,000,000
the end of the Term"
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3. Conditions of Effectiveness. This Amendment No. 2 shall become
effective upon (a) Lender's receipt of one (1) copy of this Amendment No. 2
executed by Borrower and (b) Lender's execution of this Amendment No. 2.
4. Representations and Warranties. Borrower hereby represents and
warrants as follows:
(a) This Amendment No. 2 and the Credit Agreement, as amended
hereby, constitute legal, valid and binding obligations of Borrower and are
enforceable against Borrower in accordance with their respective terms.
(b) Upon the effectiveness of this Amendment No. 2, Borrower
hereby reaffirms all covenants, representations and warranties made in the
Credit Agreement to the extent the same are not amended hereby and agrees that
all such covenants, representations and warranties shall be deemed to have been
remade as of the Amendment No. 2 Effective Date.
(c) No Event of Default or Default has occurred and is
continuing or would exist after giving effect to this Amendment No. 2.
(d) Borrower has no defense, counterclaim or offset with
respect to the Credit Agreement.
5. Effect on the Credit Agreement.
(a) Upon the effectiveness of Section 2 hereof, each reference
in the Credit Agreement to "this Agreement," "hereunder," "hereof," "herein" or
words of like import shall mean and be a reference to the Credit Agreement as
amended hereby.
(b) Except as specifically amended herein, the Credit
Agreement, and all other documents, instruments and agreements executed and/or
delivered in connection therewith, shall remain in full force and effect, and
are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment No. 2 shall not operate as a waiver of any right, power or remedy of
Lender, nor constitute a waiver of any provision of the Credit Agreement, or any
other documents, instruments or agreements executed and/or delivered under or in
connection therewith.
6. Governing Law. This Amendment No. 2 shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
and shall be governed by and construed in accordance with the laws of the State
of
New York.
7. Headings. Section headings in this Amendment No. 2 are included
herein for convenience of reference only and shall not constitute a part of this
Amendment No. 2 for any other purpose.
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8. Counterparts; Facsimile. This Amendment No. 2 may be executed by the
parties hereto in one or more counterparts, each of which shall be deemed an
original and all of which when taken together shall constitute one and the same
agreement. Any signature delivered by a party by facsimile transmission shall be
deemed to be an original signature hereto.
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IN WITNESS WHEREOF, this Amendment No. 2 has been duly executed as of
the day and year first written above.
TRANSTEXAS GAS CORPORATION
By:
---------------------------
Xx Xxxxxxx, Vice President
GMAC COMMERCIAL CREDIT LLC
By:
---------------------------
Name:
Title:
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