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EXHIBIT 10.73
FORBEARANCE AGREEMENT
PARTIES:
This Forbearance Agreement (this "Agreement") is entered into effective as
of September 13, 2000, by and among Xxxxxxxxx Industries, Inc., a Delaware
corporation ("Xxxxxxxxx"), Xxxxxxxxx Industries, L.P., a Texas limited
partnership ("Xxxxxxxxx XX"), and NBF, Inc., a Georgia corporation ("NBF" and,
together with Xxxxxxxxx and Xxxxxxxxx XX, the "Borrower"), and Foothill Capital
Corporation, a California corporation ("Lender").
REFERENCES:
Reference is made to the following items.
a. The Amended and Restated Loan and Security Agreement, dated May
14, 1998, by and among Lender and Xxxxxxxxx, Xxxxxxxxx XX and NBF, as
amended by that certain Amendment No. 1 to Amended and Restated Loan
and Security Agreement, dated June 29, 1999, between Lender and
Borrower and that certain Amendment No. 2 to Amended and Restated Loan
and Security Agreement, dated June 13, 2000, by and between Borrower
and Lender (as so amended, the "Loan Agreement").
b. All certificates, instruments, guaranties, financing statements and
other documents executed in connection with, or as security for, the
indebtedness and other obligations evidenced by, or extended pursuant
to the terms of, the Loan Agreement (together with any and all further
renewals, extensions, amendments, modifications or restatements
thereto, the "Loan Documents").
c. Capitalized terms used, and not otherwise defined in this Agreement,
shall have the meanings assigned to such terms in the Loan Agreement.
RECITALS:
a. Events of Default have occurred under each of the Loan Documents by
reason of the following facts:
(1) Pursuant to Section 2.3 of the Loan Agreement, the Borrower is
required to pay to Lender the amount of any Overadvance, which payment
is to be applied or held by Lender as collateral for the Obligations
of Borrower in accordance with Section 2.3 of the Loan Agreement. As
the date hereof, an Overadvance in the amount of $547,162 exists and
the Borrower has not paid such amount to Lender as required by the
Loan Agreement. The Borrower has received notice of such Overadvance
from Lender and informed Lender that the Borrower is unable to comply
with the
FORBEARANCE AGREEMENT--Page 1
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requirements of the Loan Agreement and will be unable to comply with
such requirements during the term of this Agreement; and
(2) The Tangible Net Worth of the Borrower is ($3,300,644) as of the most
recent fiscal quarter end, which Tangible Net Worth is less than the
Tangible Net Worth required to be maintained by the Borrower pursuant
to Section 6.12(c) of the Loan Agreement.
b. As of the date hereof, the defaults identified in Recital a remain
uncured.
c. Borrower has requested that Lender forbear temporarily from demand
immediate payment in full of the Obligations and that Lender forbear
temporarily from exercising Lender's other rights under the Loan
Agreement as a result of the continuance of the Events of Default
described in Recital a preceding.
d. Lender has agreed to forebear until October 16, 2000, as requested
above by Borrower, subject to the Borrower's strict compliance with
the terms and conditions of this Agreement.
ACKNOWLEDGEMENT:
Borrower hereby acknowledges and agrees to the accuracy of all Recitals
included in this Agreement, including (without limitation) the continuance of
the described Events of Default, the existence and magnitude of the Overadvance
and the Tangible Net Worth of the Borrower as of the most recent fiscal quarter
end.
AGREEMENTS:
Now, therefore, in consideration of the premises stated above and other
good and valuable consideration, the receipt and adequacy of which are
acknowledged and confessed hereby, the parties agree as follows:
1. Present Balance. As of the date hereof, the outstanding principal
balance of the Obligations owing by the Borrower to Lender under the Loan
Agreement is $8,209,713 (exclusive of interest, cost, fees, and expenses of
Lender).
2. Daily Payments. The Borrower shall make a daily cash payment to Lender
in an amount such that the Overadvance (as the same may be increased for
additional availability reserves or reduced advance rates in accordance with the
Loan Agreement) under the Loan Agreement as of each day from the date of this
Agreement through October 16, 2000, shall be equal to the lesser of (a) $500,000
or (b) the amount of the Overadvance specified for such day on Exhibit A
attached hereto. Each such payment to be made in accordance with the procedures
set forth in the Loan Agreement.
FORBEARANCE AGREEMENT -- Page 2
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3. Delivery of Cash Reports, Supporting Documentation and Other
Collateral Information. Borrower covenants and agrees that, so long as Lender
has any obligation under this Agreement, Borrower will deliver to Lender each of
the following items each Business Day, as soon as practicable and in any event
before 1:30 pm (Atlanta, Georgia time): (a) a daily cash report, detailing the
Borrower's cash receipts and payments received or made, as applicable, on the
immediately preceding Business Day and calendar week; (b) documentation
supporting each cash report delivered pursuant to clause (a) preceding,
including a detailed check register showing all checks or drafts written and
wires disbursed for the immediately preceding Business Day; (c) a schedule of
Accounts, sales made, credits issued, and cash received by the Borrower, in each
case for the immediately preceding Business Day; and (d) a perpetual inventory
report.
4. Forbearance to October 16, 2000. Subject to the terms and
conditions set forth in this Agreement and expressly conditioned upon the
timely satisfaction and fulfillment of each of the conditions precedent set
forth in Section 5 below, Lender agrees to forbear from demanding payment in
full of the Obligations under the Loan Agreement and to forbear from exercising
Lender's rights under the Loan Agreement for a period beginning on the date of
this Agreement and ending at 5:00 p.m., October 16, 2000; provided, however,
nothing in this Agreement shall require that Lender make an additional
Revolving Advances or other loans to, or for the account of Borrower, during
such forbearance period.
5. Conditions Precedent. The following are conditions precedent to
Lender's agreement as set forth in Section 4, above, and each such condition
precedent shall remain true and correct at all times:
a. The Borrower, each Corporate Guarantor and each Individual
Guarantor shall have executed and delivered this Agreement to Lender not later
than 5:00 p.m., October 3, 2000;
b. The Borrower shall deliver to Lender resolutions
authorizing the execution, delivery and performance of this Agreement and
otherwise finding that the transactions contemplated hereby are in the best
interests of Borrower and authorizing and directing the officers of the
Borrower to take appropriate action;
c. Borrower shall not have breached any of the terms,
conditions, representations, warranties, covenants or agreements of Borrower
under this Agreement;
d. No Event of Default under any Loan Document shall have
occurred and be continuing, unless such default has been specifically
identified and acknowledged by the Borrower pursuant to the Agreement, and no
circumstance shall exist that with the giving of notice or the passage of
time, or both, would result in an Event of Default shall have occurred and be
continuing; and
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e. Borrower shall pay to Lender a forbearance fee in the amount of
$50,000, together with all fees and expenses incurred in connection with
the preparation and negotiation of this Agreement.
6. Representations and Warranties. Borrower hereby represents and
warrants to Lender as follows (each of which representations and warranties
shall continue to be true throughout the term of this Agreement):
a. Borrower has the power and authority to execute and deliver this
Agreement and each of the other documents and instruments to which it is a
party and to consummate the transactions and perform its obligations
contemplated hereby and thereby.
b. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized by all
necessary actions of Borrower. This Agreement constitutes the legal, valid
and binding obligation of Borrower, enforceable against Borrower in
accordance with its terms. The signatory below is an authorized signatory
of Borrower, whose signature will bind Borrower.
c. The consummation of the transactions contemplated hereby will not
(i) violate any provision of the organizational documents or governing
instruments of Borrower, (ii) violate any judgment, order, ruling,
injunction, decree or award of any court, administrative agency or
governmental body against, or binding upon, Borrower, or (iii) constitute a
violation by Borrower of any law or regulation of any jurisdiction
applicable to Borrower.
d. This Agreement was reviewed by Borrower and its authorized
officer, each of whom acknowledges and agrees that he (i) understands fully
the terms of this Agreement and the consequences of the issuance hereof,
(ii) has been afforded an opportunity to have this Agreement reviewed by,
and to discuss this Agreement with, such attorneys and other persons as he
may wish, and (iii) has entered into this Agreement of its own free will
and accord and without threat or duress.
e. This Agreement and all information furnished to Lender is made
and furnished in good faith, for value and valuable consideration, and has
not been made or induced by any fraud, duress or undue influence exercised
by Lender or any other person.
7. Misrepresentation. Borrower shall indemnify and hold Lender harmless
from and against any losses, damages, costs and expenses (including attorneys'
fees) incurred by Lender as a direct or indirect result of (a) breach of any
representation or warranty contained in this Agreement, or (b) any breach or
default under any of the covenants or agreements contained in this Agreement.
8. Acknowledgments and Agreements. Borrower hereby agrees and
acknowledges as follows: (a) Borrower is well and truly indebted to Lender
pursuant to the terms of the Loan Documents; (b) Borrower shall observe, comply
with and perform all of the obligations, terms and
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conditions under or in connection with the Loan Documents; and (c) each
statement set forth under the caption "Recitals" in this Agreement is true and
correct in all respects as of the date hereof.
9. Ratification of Liens and Security Interests. Borrower hereby
acknowledges and agrees that the liens and security interests granted pursuant
to the Loan Documents are valid and subsisting liens and security interests and
are superior to all liens and security interests in the Collateral (as defined
in the Loan Agreement), except as expressly permitted by the Loan Agreement.
10. Full Force and Effect. Except as otherwise expressly modified hereby,
all terms and provisions of the Loan Documents hereby are ratified and
confirmed and shall be and shall remain in full force and effect, enforceable
in accordance with their terms.
11. Consequences of Failure to Comply with this Agreement. If all of the
covenants and conditions of the Borrower set forth in this Agreement are not
satisfied and fulfilled in a timely manner (including the continued
satisfaction of each Condition Precedent set forth at Section 5 of this
Agreement at all times), then the forbearance referred to in Section 4 of this
Agreement is void ab initio and shall be of no force or effect; and the parties
shall be relegated to the respective positions they occupied prior to the
execution of this Agreement, except to the extent expressly modified by this
Agreement. Borrower hereby acknowledges and agrees that the defaults identified
in Recital a of this Agreement are "Events of Default" under the Loan
Agreement, and, upon Borrower's failure to timely comply with any term or
provision of this Agreement: (a) the forbearance provided herein shall be
terminated without further act or deed as described above; (b) Lender may at
its discretion and without prior notice to Borrower declare any or all of the
indebtedness evidenced by the Loan Agreement to be immediately due and payable,
and shall have and may exercise any one or more of the rights and remedies
specified in the Loan Documents.
12. No Waiver. Borrower agrees that nothing contained in this Agreement
shall affect or impair the validity or priority of the liens and security
interests under any of the Loan Documents.
13. No Counterclaims. Borrower declares that Borrower does not have any
set-off, counterclaim, defense or other causes of action (together, the
"Counterclaims") against Lender arising out of the transactions evidenced by
this Agreement or the other Loan Documents, any transactions that were renewed
or extended by the Loan Documents, or any other transaction with Lender. To the
extent any Counterclaims may exist, whether known or unknown, such are waived
and released hereby by Borrower.
14. Hold Harmless. Borrower agrees to indemnify and hold Lender harmless
from any and all Counterclaims that Borrower or any other person or entity
claiming by, through, or under Borrower may at any time assert Lender. This
indemnification shall survive the execution and delivery of this Agreement, and
the payment by Borrower of all sums due hereunder.
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15. Costs and Expenses. Borrower agrees to pay to Lender all attorneys'
fees and expenses of Lender's counsel, filing and recording fees and other
reasonable expenses incurred by Lender in connection with this Agreement and
the transactions contemplated hereby.
16. No Commitment. Borrower agrees that Lender has made no commitment or
other agreement regarding the Loan documents, except as expressly set forth in
this Agreement. Specifically, Lender has not waived any Event of Default and,
unless such Event of Default shall be otherwise cured or waived by Lender, such
Events of Default shall continue. The Borrower warrants and represents that
Borrower will not rely on any waiver, further agreement to forbear or other
agreement on the part of Lender unless such commitment or agreement is in
writing and signed by Lender.
17. Survival. All representations, warranties, covenants and agreements of
the parties made in this Agreement shall survive the execution and delivery
hereof, until such time as all of the obligations of the parties hereto shall
have lapsed in accordance with their respective terms or shall have been
discharged in full.
18. Successors and Assigns. This agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
successors and assigns.
19. Modifications. No delay on the part of Lender in exercising any
rights, power or privilege hereunder, shall operate as a waiver thereof, nor
shall any waiver of any right, power or privilege hereunder operate as a
waiver of any right, power or privilege hereunder, nor shall any single
or partial exercise of any right, power or privilege hereunder preclude any
other or further exercise thereof, or the exercise of any other right, power or
privilege hereunder. All rights and remedies herein provided are cumulative
and are not exclusive of any rights or remedies which the parties hereto may
otherwise have a law or in equity. No waiver or modification, discharge or
amendment of this Agreement will be valid in the absence of the written and
signed consent of the party against which enforcement of such is sought.
20. Waivers. From and after failure to comply with the terms of this
Agreement and with respect to each Loan Document, Borrower hereby (i) waives
presentment, demand, protest and notice of protest, notice of dishonor, notice
of intention to accelerate, notice of acceleration, and all other notices other
than as expressly provided in this Agreement, (ii) agrees that no extension or
indulgence to the undersigned or release or non-enforcement of any security,
whether with or without notice, shall affect the obligations of any
accommodation party, guarantor or endorser, and (iii) agrees to reimburse Lender
for any and all costs and expenses incurred in collecting or attempting to
collect any and all principal and interest under the Loan Documents (including
but not limited to, court costs and attorney fees, whether in-house or outside
counsel is used and whether such costs and expenses are incurred in formal or
informal collection actions, federal Bankruptcy proceedings, appellate
proceedings, probate proceedings, or otherwise).
FORBEARANCE AGREEMENT--Page 6
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21. Entire Agreement. This Agreement, together with the other
documents and instruments referenced herein, contains the entire agreement
between the parties relating to the transaction contemplated hereby. All prior
or contemporaneous agreements, understandings, representations and statements,
whether written or oral, are merged herein.
22. Governing Law. This Agreement shall be construed in accordance
with the applicable laws of the State of California and applicable federal law.
In the event of a dispute involving this Agreement or any other instruments
executed in connection herewith, the undersigned irrevocably agrees that venue
for such dispute shall lie in any court of competent jurisdiction in Los Angeles
County, California.
23. Counterparts; Facsimile Signature. This Agreement may be executed
in one or more counterparts, all of which when taken together shall be deemed to
be one original. Any counterpart of this Agreement may be executed by facsimile
and such facsimile shall have the force and effect of an original signature for
all purposes.
24. Time of Essence. The parties to this Agreement have agreed
specifically with regard to the times for performance set forth in this
Agreement. Further, the parties to this Agreement acknowledge that the
agreements with regard to the times for performance are material to this
Agreement. Therefore, the parties agree and acknowledge that time is of the
essence to this Agreement.
25. RELEASE. BORROWER HEREBY ACKNOWLEDGES THAT AS OF THE DATE HEREOF
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 SUMS DUE HEREUNDER OR TO SEEK AFFIRMATIVE
RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM LENDER OR ITS AFFILIATES, OR ANY OF
ITS DIRECTORS OFFICERS, AGENTS, EMPLOYEES OR ATTORNEYS. BORROWER HEREBY
VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES LENDER, AND ITS
AFFILIATES, AND EACH OF ITS PREDECESSORS, AGENTS, OFFICERS, DIRECTORS,
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 AGREEMENT IS EXECUTED, WHICH BORROWER MAY NOW OR
HEREAFTER HAVE AGAINST LENDER, ITS PREDECESSORS, AGENTS, OFFICERS, DIRECTORS,
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 OBLIGATION OF BORROWER UNDER THE LOAN AGREEMENT
OR OTHER LOAN DOCUMENTS,
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THE EXERCISE OF ANY RIGHTS AND REMEDIES THEREUNDER, AND NEGOTIATION FOR AND
EXECUTION OF THIS AGREEMENT. BORROWER HEREBY COVENANTS AND AGREES NEVER TO
INSTITUTE ANY ACTION OR SUIT AT LAW OR IN EQUITY, NOR INSTITUTE, PROSECUTE, OR
IN ANY WAY AID IN THE INSTITUTION OR PROSECUTION OF ANY CLAIM, ACTION OR CAUSE
OF ACTION, RIGHTS TO RECOVER DEBTS OR DEMANDS OF ANY NATURE AGAINST LENDER, ITS
AFFILIATES, AND ITS SUCCESSORS, AGENTS, ATTORNEYS, OFFICERS, DIRECTORS,
EMPLOYEES, AND PERSONAL AND LEGAL REPRESENTATIVES ARISING OUT OF OR RELATED TO
LENDER'S ACTIONS, OMISSIONS, STATEMENT, REQUESTS OR DEMANDS IN ADMINISTERING,
ENFORCING, MONITORING, COLLECTION OR ATTEMPTING TO COLLECT THE INDEBTEDNESS OF
BORROWER TO LENDER, WHICH INDEBTEDNESS WAS EVIDENCED BY THE LOAN DOCUMENTS.
26. Financial Accommodation Contract. This Agreement is a contract for
financial accommodations, as contemplated under 11 U.S.C. Section 365(c), and
such, may not be assumed by Borrower or Guarantors from and after the filing of
any bankruptcy petition.
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FOOTHILL CAPITAL CORPORATION XXXXXXXXX INDUSTRIES, L.P.
By: Xxxxxxxxx Operating Corp., its
General Partner
By: /s/ XXXXX X. XXXXXXXX By: /s/ X. XXXXXXXXX
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Name: Xxxxx X. Xxxxxxxx Name: Xxxxx X. Xxxxxxxxx
Title: Vice President Title: Chief Executive Officer
XXXXXXXXX INDUSTRIES, INC.
By: /s/ X. XXXXXXXXX
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Name: Xxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
NBF, INC.
By: /s/ X. XXXXXXXXX
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Name: Xxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
FORBEARANCE AGREEMENT--Signature Page
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REAFFIRMATION OF GUARANTORS
By its acceptance below this 3rd day of October, 2000, the undersigned Corporate
Guarantor hereby reaffirms its Continuing Guaranty and Security Agreement dated
May 14, 1998 and consents to the above-stated terms.
XXXXXXXXX OPERATING CORP.,
a Nevada corporation
By: /s/ XXXXX X. XXXXXXXXX
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Name: Xxxxx X. Xxxxxxxxx
Title:
--------------------------------
By its acceptance below this 3rd day of October, 2000, the undersigned Corporate
Guarantor hereby reaffirms its Continuing Guaranty and Security Agreement dated
May 14, 1998 and consents to the above-stated terms.
XXXXXXXXX HOLDING CORP.,
a Delaware corporation
By: /s/ XXXXX X. XXXXXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title:
--------------------------------
By its acceptance below this 3rd day of October, 2000, the undersigned Corporate
Guarantor hereby reaffirms its Continuing Guaranty and Security Agreement dated
May 14, 1998 and consents to the above-stated terms.
C.G. PRODUCTS, INC.,
a California corporation
By: /s/ XXXXX X. XXXXXXXXX
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Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
FORBEARANCE AGREEMENT--Signature Page
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By his acceptance below this 3rd day of October, 2000, the undersigned
Individual Guarantor hereby reaffirms his Amended and Restated Limited
Continuing Guaranty dated May 14, 1998, and consents to the above-stated
terms.
/s/ XXXXX X. XXXXXXXXX
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Xxxxx X. Xxxxxxxxx, an individual
By his acceptance below this 3rd day of October, 2000, the undersigned
Individual Guarantor hereby reaffirms his Amended and Restated Guaranty
dated May 14, 1998, and consents to the above-stated terms.
/s/ XXXXX X. XXXXXXXXX
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Xxxxx X. Xxxxxxxxx, an individual
EXHIBIT A--DAILY CASH FLOW BUDGET
FORBEARANCE AGREEMENT--Signature Page
