EXHIBIT 10.51
Confidential Treatment Requested.
Confidential portions of this document have been redacted and filed
separately with the Commission.
December 29, 2000
TBC Management, Inc.
Attention: Xxxx Xxxxxxx
0000 Xxxxx xx xxx Xxxx Xxxxx 000
Xxxxxx, XX 00000
Dear Xxxx:
Reference is made to that certain Loan and Security Agreement by and between
Xxxxxx Boats & Motors, Inc., TBC Management Ltd., TBC Management, Inc. Xxxxxx
Boating Center Georgia, Inc., Xxxxxx Boating Center Florida, Inc., Adventure
Marine & Outdoors, Inc., Adventure Marine South, Inc., Adventure Boat Brokerage,
Inc. (collectively referred to as "Borrower") and Transamerica Commercial
Finance Corporation ("Lender") dated as of January 28, 2000 and all amendments,
program letters, agreements and other documents executed in connection therewith
(collectively, the "Agreement"). Capitalized terms used herein and not otherwise
defined shall have those meanings given to them in the Agreement. Any guarantor
of Borrower's obligations under the Agreement is hereby notified of the matters
contained herein and any other demand made upon Borrower hereunder is likewise
made upon any such guarantor.
Under Section 5.1(Y) of the Agreement, Borrower covenanted and agreed to
maintain an Interest Coverage Ratio of not less than 2.0 to 1.0. Under Section
5.1(Z) of the Agreement, Borrower covenanted and agreed to maintain a Fixed
Charge Coverage Ratio of not less than 1.50 to 1.0 starting on June 30, 2000 and
at all times thereafter. Lender hereby notifies you that Borrower failed to meet
the above referenced covenant requirements for the quarter ended September 30,
2000. Additionally Borrower has recently notified TCFC that it will be in
violation of the above referenced requirements for the quarter ending December
31, 2000. Borrower has requested that Lender waive these covenant requirements
and forbear from accelerating its indebtedness under the Agreement. Provided no
further event of default occurs and Borrower agrees and complies with all of the
terms described herein, Lender has decided to waive these covenant requirements
and forbear from exercising its remedies under the Agreement in order to give
Borrower additional time to comply with the terms as described herein.
In consideration of Lender's granting Borrower an extension of time within which
to comply with the following terms and in consideration of Lender's waiver of
these covenant requirements and forbearance in exercising its remedies, the
receipt and sufficiency of such consideration which is hereby acknowledged,
Borrower and the entities listed below as guarantors agree to the following
terms:
1. Borrower covenants and agrees to maintain an Interest Coverage Ratio of
not less than the following, all as measured at the end of each fiscal
quarter of it, as calculated for the 12 month period ending at the end
of such fiscal quarter: (i) 1.0 to 1.0 as of March 31, 2001; (ii) 1.15
to 1.0 as of June 30, 2001; and (iii) 1.6 to 1.0 as of September 30,
2001 and at all times thereafter.
2. Borrower covenants and agrees to maintain a Fixed Charge Coverage Ratio
of not less than the following, all as measured at the end of each
fiscal quarter of it, as calculated for the 12 month period ending at
the end of such fiscal quarter: (i) 1.20 to 1.0 as of March 31, 2001;
(ii) 1.35 to 1.0 as of June 30, 2001; and (iii) 1.50 to 1.0 as of
September 30, 2001 and at all times thereafter.
3. Borrower agrees to pay Lender a fee in the amount of * which will be
paid by Borrower in three equal installments of * . Borrower agrees to
pay the first installment of * by no later than March 31, 2001, the
second installment of * shall be paid by no later than April 30, 2001,
and the third and final installment of * shall be paid by no later than
May 31, 2001. If Borrower pays Lender in full for any Loans due under
the Agreement or if Lender is bought out by a third party prior to May
31, 2000 or prior to Borrower paying Lender in full and good funds the
* fee, then Borrower agrees to pay Lender immediately the remaining
amount of such * fee in full and good funds.
____________________________
*Indicates Confidential Treatment Requested. The redacted material has been
filed separately with the Commission.
Confidential Treatment Requested.
Confidential portions of this document have been redacted and filed
separately with the Commission.
4. Borrower will pay interest at a rate of * as of the date of this letter
on any and all outstanding Loans and on any and all future Loans.
5. Borrower will submit Borrowing Base Certificates to Lender no later
than 5:00 p.m. central time on the last Business Day of every week.
6. Borrower will provide to Lender financial statements as of December 31,
2000 no later than January 31, 2001 and such actual statements will not
be materially different from the projected results previously provided
by Borrower to Lender.
7. Borrower will provide to Lender on or before January 31, 2001 audited
fiscal year end (as of September 30, 2000) financial statements and
such actual statements will not be materially different from the draft
fiscal year end financial statements previously provided by Borrower to
Lender.
8. Borrower agrees to change the definition of "Eligible Inventory D" as
used in the Agreement to mean such then Eligible Inventory of any
Borrower consisting of watercraft, watercraft motors and watercraft
trailers that are up to 365 days from the date of purchase by such
Borrower that are purchased on open account by any Borrower that the
Lender deems in its reasonable discretion to be eligible. Eligible
Inventory D shall include returned and repossessed Inventory that is
unused, undamaged which any Borrower intends to resell to another
Person.
9. Borrower agrees to change the definition of "Eligible Inventory E" as
used in the Agreement to mean such then Eligible Inventory of any
Borrower consisting of watercraft, watercraft motors and watercraft
trailers that are between 366 and 730 days from the date of purchase by
such Borrower that are purchased on open account by any Borrower that
the Lender deems in its reasonable discretion to be eligible. Eligible
Inventory E shall include returned and repossessed Inventory that is
unused, undamaged which any Borrower intends to resell to another
Person.
In the event Borrower fails to comply with any terms contained herein or in the
Agreement, Lender at its option may exercise all rights and remedies available
to it under the Agreement and applicable law, including but not limited to the
right to declare the entire unpaid principal balance and all accrued and unpaid
interest and/or other charges thereon immediately due and payable.
Except as otherwise agreed to in this letter, all other terms of the above
referenced Agreement remain in full force and effect. Any default under this
letter shall constitute a default under the Agreement, and Lender shall have all
rights and remedies available to it under the Agreement, any guarantees thereof,
the Uniform Commercial Code or any other applicable law.
The foregoing is not intended, and shall not be construed, to limit any rights
and remedies available to it under the Agreement, any guarantees thereof, the
Uniform Commercial Code or any other applicable law, which rights and remedies
are cumulative and may be enforced separately or concurrently.
Waiver of these covenants shall in no way constitute a waiver of any other terms
or provisions of the Agreement or of any future requirements of Borrower and
shall in no way limit or restrict any of Lender's rights and remedies as
outlined in the Agreement.
_______________________________
*Indicates Confidential Treatment Requested. The redacted material has been
filed separately with the Commission.
Confidential Treatment Requested.
Confidential portions of this document have been redacted and filed
separately with the Commission.
Please sign this letter in acknowledgment of the terms described above and
return it to Lender. This letter may be executed in counterparts.
Sincerely,
Transamerica Commercial Finance Corporation
_________________________________________
By:
Title:
Confidential Treatment Requested.
Confidential portions of this document have been redacted and filed
separately with the Commission.
The undersigned entities hereby each acknowledge that the undersigned officer is
authorized to bind each of the below listed companies and that through his
single signature below he is signing in his capacity as Secretary of each of the
entities listed below thereby binding all of these entities to the terms and
conditions of this letter.
Borrowers:
Xxxxxx Boats & Motors, Inc. Xxxxxx Boating Center Georgia, Inc.
TBC Management, Inc. Adventure Marine & Outdoors, Inc.
TBC Management, LTD. Adventure Marine South, Inc.
Xxxxxx Boating Center Florida, Inc. Adventure Boat Brokerage, Inc.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer & Secretary
Date:
------------------------------------
The undersigned entities, which are all guarantors, hereby each acknowledge that
the undersigned officer is authorized to bind each of the below listed companies
and that through his/her single signature below he/she is signing in his/her
capacity as Secretary of each of the entities listed below thereby binding all
of these entities to the terms and conditions of this letter.
Guarantors:
Xxxxxx Xxxxxxx Marine, Inc. Xxxxxx Boating Center Arlington, Inc.
--------------------------- -------------------------------------
Falcon Marine, Inc. Xxxxxx Boating Center Beaumont, Inc.
------------------- ------------------------------------
Falcon Marine Abilene, Inc. Xxxxxx Boating Center Baton Rouge, Inc.
--------------------------- ---------------------------------------
TBC Arkansas, Inc. Xxxxxx Boating Center Louisiana, Inc.
------------------ -------------------------------------
Xxxxxx Boating Center Tennessee, Inc. Xxxxxx Boating Center Alabama, Inc.
------------------------------------- -----------------------------------
Red River Marine Arkansas, Inc. Xxxxxx Boating Center Little Rock, Inc.
------------------------------- ---------------------------------------
Xxxxxx Boating Center Mississippi, Inc. Xxxxxx Boating Center Oklahoma, Inc.
--------------------------------------- ------------------------------------
Shelby Marine Center, Inc. Shelby Marine Pickwick, LLC
-------------------------- ---------------------------
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Secretary
Date:
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