Exhibit 10.15.2
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
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SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT ("Agreement"), dated as
of May 1, 2002, by and between TRAILER BRIDGE, INC. ("Borrower") and GENERAL
ELECTRIC CAPITAL CORPORATION ("Lender").
W I T N E S S E T H:
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WHEREAS, Lender and Borrower have entered into certain financing
arrangements pursuant to the Loan and Security Agreement, dated as of December
27, 2000, by and between General Electric Capital Corporation, as Lender, and
Borrower (and as amended hereby, and as the same may have heretofore been or may
hereafter be further amended, modified, supplemented, extended, renewed,
restated or replaced, the "Loan Agreement"); and
WHEREAS, Borrower is in default under the Loan Agreement by (i) its
failure to pay certain Indebtedness when due, specifically the September 28,
2001 payments due under the June 23, 1997 Trust Indenture between Borrower and
State Street Bank and Trust Company and the December 4, 1997 Trust Indenture
between Borrower and State Street Bank and Trust Company (the "September, 2001
Bond Payment"), (ii) its failure to make its regularly scheduled payment to
Lender in respect of the Term Loan on January 1, 2002, (iii) its failure to
comply with the Fixed Charge Coverage Ratio set forth in Schedule G to the Loan
Agreement for the Fiscal Quarter ended September 30, 2001 and the Fiscal Quarter
ended December 31, 2001, (iv) its failure to comply with the Tangible Net Worth
covenant set forth in Schedule G to the Loan Agreement for the Fiscal Quarter
ended December 31, 2001, (v) its failure to comply with the Annual Capital
Expenditures limitation set forth in Schedule G to the Loan Agreement for the
Fiscal Year ended December 31, 2001, (vi) the placing of liens on certain titled
Equipment, and (vii) its sale of certain assets without the prior written
consent of Lender, in violation of Section 5 (f) of the Loan Agreement and the
failure to turn over the proceeds of such sale to Lender (collectively, the
"Existing Defaults"); and
WHEREAS, the circumstances described herein as the Existing Defaults
constitute an Event of Default under the Loan Agreement; and
WHEREAS, Borrower has requested that Lender (i) waive the Existing
Defaults, (ii) consent to the Estate Loan and the Interim Loan (both as defined
below) and consent to the issuance by Borrower of $2 million of convertible
preferred stock, (iii) continue to provide further Revolving Credit Loans and
other financial accommodations to Borrower, (iv) extend Borrower's time for the
payment of certain Obligations due in respect of the Term Loan, (v) consent to
the change in the composition of the Borrower's Board of Directors, and (vi)
agree to certain amendments to the Loan Agreement in connection therewith; and
WHEREAS, Lender is willing to agree to the foregoing, subject to the
terms and conditions specified herein; and
WHEREAS, by this Agreement, Lender and Borrower desire and intend to
evidence such waiver, amendments and consents.
NOW, THEREFORE, in consideration of the foregoing, and the respective
agreements, warranties and covenants contained herein, the parties hereto agree,
covenant and warrant as follows:
SECTION 1. DEFINITIONS
1.1 Interpretation. All capitalized terms used herein (including the
recitals hereto) shall have the respective meanings assigned thereto in the Loan
Agreement unless otherwise defined herein.
1.2 Additional Definitions. As used herein, the following terms
shall have the respective meanings given to them below:
(a) "Estate" shall mean the Estate of X.X. XxXxxx.
(b) "Estate Priority Collateral" shall mean the Estate's
first priority Lien on the Designated Equipment more
particularly set forth on Schedule A hereto, and its
second priority Lien on the Designated Headquarters
Facility, as more particularly set forth on Exhibit B
hereto.
(c) "Estate Loan" shall mean the loan made to the
Borrower by the Estate, or the Estate's affiliate,
Transportation Receivables 1992, LLC, in the amount
of $5,000,000, which loan is secured by the Estate
Collateral.
(d) "Interim Loan" shall mean the loan made to the
Borrower by Transportation Receivables 1992, LLC, in
the amount of $4,000,000, pending the completion of
the Estate Loan and the issuance by Borrower of
$2,000,000 of convertible preferred stock. The
Interim Loan is evidenced by a promissory note in the
original principal amount of $4,000,000, which note,
and any and all other obligations under the Interim
Loan, shall be terminated as of the closing of the
Estate Loan.
SECTION 2. ACKNOWLEDGMENT
2.1 Acknowledgment of Obligations. Borrower hereby acknowledges,
confirms and agrees that as of the close of business on May 1, 2002, Borrower is
indebted to Lender in respect of the Revolving Credit Loans in the principal
amount of $5,213,931.29, and the Term Loan in the amount of $10,000,000.04. All
such Loans, together with interest accrued and accruing thereon, and fees,
costs, expenses and other charges now or hereafter payable by Borrower to
Lender, are unconditionally owing by Borrower to Lender, without offset, defense
or counterclaim of any kind, nature or description whatsoever.
2.2 Acknowledgment of Security Interests. Borrower hereby acknow-
ledges, confirms and agrees that Lender has and shall continue to have valid,
enforceable and perfected
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liens upon and security interests in the Collateral heretofore granted to Lender
pursuant to the Loan Documents or otherwise granted to or held by Lender.
2.3 Binding Effect of Documents. Borrower hereby acknowledges,
confirms and agrees that: (a) each of the Loan Documents to which it is a party
has been duly executed and delivered to Lender by Borrower, and each is in full
force and effect as of the date hereof, (b) the agreements and obligations of
Borrower contained in such documents and in this Agreement constitute the legal,
valid and binding Obligations of Borrower, enforceable against it in accordance
with their respective terms, and Borrower has no valid defense to the enforce-
ment of such Obligations, and (c) Lender is and shall be entitled to the rights,
remedies and benefits provided for in the Loan Documents and applicable law.
SECTION 3. WAIVER OF CERTAIN EVENTS OF DEFAULT.
3.1 Acknowledgment of Defaults. Borrower hereby acknowledges and
agrees that the Existing Defaults have occurred and that, as of the date hereof,
the failure to make the September, 2001 Bond payment has been cured by the
Borrower and that, as of this date, the remaining Existing Defaults are
continuing, which Existing Defaults constitute Events of Default and entitles
Lender to exercise its rights and remedies under the Financing Agreements,
applicable law or otherwise.
3.2 Waiver of Existing Defaults. Lender hereby waives the Existing
Defaults.
3.3 No Other Waivers; Reservation of Rights.
(a) Except for the Existing Defaults, Lender has not waived,
is not by this Agreement waiving, and has no intention of waiving, any Events of
Default which may be continuing on the date hereof or any other Events of
Default which may occur after the date hereof, and Lender has not agreed to
forbear with respect to any of its rights or remedies concerning any Events of
Default which may have occurred or are continuing as of the date hereof or which
may occur after the date hereof.
(b) Except for the Existing Defaults, Lender reserves the
right, in its discretion, to exercise any or all of its rights and remedies
under the Loan Agreement and the other Financing Agreements as a result of any
other Events of Default which may be continuing on the date hereof or any Event
of Default which may occur after the date hereof, and Lender has not waived any
of such rights or remedies, and nothing in this Agreement, and no delay on its
part in exercising any such rights or remedies, should be construed as a waiver
of any such rights or remedies.
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SECTION 4. AMENDMENTS AND CONSENT.
4.1 Consent to the Estate Loan.
Notwithstanding any prohibition contained in the Loan
Agreement, and subject to the terms and conditions contained herein, Lender
hereby consents to the Estate Loan, provided that:
(a) The terms and provisions of the Estate Loan and the
issuance by Borrower of $2,000,000 of convertible preferred stock are acceptable
to Lender;
(b) The Interim Loan is terminated and satisfactory evidence
thereof is delivered to Lender; and
(c) Within three (3) days from the date hereof, Lender
receives from the Estate an executed Intercreditor Agreement on terms acceptable
to Lender in its sole discretion.
4.2 Consent to the Change in the Borrower's Board of Directors.
Notwithstanding any prohibition contained in the Loan
Agreement, and subject to the terms and conditions contained herein, Lender
hereby consents to the change in the composition of the Borrower's Board of
Directors, provided that the members of the new Board of Directors is as set
forth on Schedule B hereto.
4.3 Term Loan Payments.
(a) Notwithstanding anything to the contrary contained in
the Term Note, with respect to the regularly scheduled Term Loan payments due on
April 1, 2002 and July 1, 2002, respectively, Lender agrees, as an accommodation
to Borrower, that such payments shall be made in six (6) consecutive monthly
installments of $142,857.14 each, commencing on April 1, 2002 and continuing on
the first day of each of the five consecutive calendar months thereafter. Except
for such payments, all other Term Loan payments of principal shall be repaid in
accordance with the terms of the Term Note in effect on the date hereof.
(b) The failure of the Borrower to make the payments set
forth in Section 4.3(a) above by the time prescribed therein shall be an Event
of Default.
(c) The accommodations set forth in Section 4.3(a) above is
a one time accommodation by Lender to Borrower and shall not extend, modify or
defer or be deemed to extend, modify or defer, the payment of any other amounts
due under the Loan Agreement and the other Loan Documents.
4.4 Grant of Security Interest. (a) Section 6.1(a) of the Loan
Agreement is hereby amended and restated in its entirety to read as follows:
"(a) As collateral security for the prompt and complete
payment and performance of the Obligations, Borrower hereby
grants to the Lender a security interest in and Lien upon all
of its property and assets, whether real or personal, tangible
or
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intangible, and whether now owned or hereafter acquired, or
in which it now has or at any time in the future may acquire
any right, title, or interest, including all of the following
property in which it now has or at any time in the future may
acquire any right, title or interest: all Accounts; all
Deposit Accounts, other bank accounts and all funds on deposit
therein; all money, cash and cash equivalents; all Investment
Property; all Stock; all Goods (including Inventory, Equipment
and Fixtures); all Chattel Paper, Documents and Instruments;
all Books and Records; all General Intangibles (including all
Intellectual Property, contract rights, choses in action,
Payment Intangibles and Software); all Letter-of-Credit
Rights; all Supporting Obligations; the Designated Equipment
and the Designated Headquarters Facility and to the extent not
otherwise included, all Proceeds, tort claims, insurance
claims and other rights to payment not otherwise included in
the foregoing and products of all and any of the foregoing and
all accessions to, substitutions and replacements for, and
rents and profits of, each of the foregoing, but excluding in
all events Hazardous Waste (all of the foregoing, together
with any other collateral pledged to the Lender pursuant to
any other Loan Document, collectively, the "Collateral")."
(b) Section 6.1(b) of the Loan Agreement is hereby amended
by inserting the following new sentence at the end thereof:
"Borrower shall promptly, and in any event within two (2)
Business Days after the same is acquired by it, notify Lender
of any commercial tort claim (as defined in the Code) acquired
by it and unless otherwise consented by Lender, Borrower shall
enter into a supplement to this Loan Agreement granting to
Lender a Lien in such commercial tort claim."
(c) Borrower agrees to execute and deliver such documents
and agreements as Lender shall request so that on or prior to May 24, 2002,
Lender has a perfected Lien on the Designated Equipment and on the Designated
Headquarters Facility. In the event that Lender's Lien on the Designated
Equipment is not perfected by May 17, 2002 or Lender's Lien on the Designated
Headquarters Facility is not perfected by May 24, 2002, the same shall
constitute an Event of Default under the Loan Agreement.
(d) Notwithstanding anything to the contrary contained
herein or in the Loan Agreement, and provided that no Event of Default exists
(i) Lender will release its Lien on the Designated Headquarters Facility,
provided that contemporaneously with the release of its Lien on the Designated
Headquarters Facility, Lender receives, in cash, a prepayment in respect of the
Obligations in the amount of $325,000, and (ii) Lender will release its Lien on
the Designated Equipment, provided that Lender receives, in cash, a prepayment
in respect of the Obligations in the amount of $250,000, which prepayment shall
be made by the Borrower from proceeds received from any Person (other than
Lender) in connection with the payment in full or refinancing of the Estate
Loan. Notwithstanding any release of lien by Lender contemplated by this Section
4.4(d), the terms and provisions of the Intercreditor Agreement between Lender
and Transportation Receivables 1992, Inc. will remain if full force and effect.
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4.5 Supplemental Reserve. In addition to Lender's continuing right
to establish reserves, Borrower hereby expressly acknowledges and consents to
the establishment by Lender of a reserve, effective as of the date hereof, in
the amount of $2,000,000 (the "Supplemental Reserve"). Upon the establishment of
the Supplemental Reserve, Lender shall release the Fixed Charge Coverage
Reserve. Upon payment in full of the Term Loan, and provided that no Default or
Event of Default exists or is continuing at such time, Lender will release the
Supplemental Reserve.
4.6 Attorney-in-Fact. The last sentence of Section 6.3 of the Loan
Agreement is hereby deleted in its entirety and the following new sentences are
hereby inserted in lieu thereof:
"Borrower also hereby (i) authorizes Lender to file any
financing statements, continuation statements or amendments
thereto that (x) indicate the Collateral (1) as all assets of
Borrower (or any portion of Borrower's assets) or words of
similar effect, regardless of whether any particular asset
comprised in the Collateral falls within the scope of Article
9 of the Code of such jurisdiction, or (2) as being of an
equal or lesser scope or with greater detail, and (y) contain
any other information required by Part 5 of Article 9 of the
Code for the sufficiency or filing office acceptance of any
financing statement, continuation statement or amendment and
(ii) ratifies its authorization for Lender to have filed any
initial financial statements, or amendments thereto if filed
prior to the date hereof. Borrower acknowledges that it is not
authorized to file any financing statement or amendment or
termination statement with respect to any financing statement
without the prior written consent of Lender and agrees that it
will not do so without the prior written consent of Lender,
subject to Borrower's rights under Section 9-509(d)(2) of the
Code."
4.7 Definitions. (a) Each definition from Schedule A to the Loan
Agreement set forth on Schedule A hereto is hereby amended and restated in its
entirety to read as set forth on Schedule A hereto.
(b) The following defined terms are hereby added to Schedule
A to the Loan Agreement in appropriate alphabetical order:
"Deposit Accounts" means all "deposit accounts" as such term
is defined in the Code, now or hereafter held in the name of
any Person.
"Fixtures" means all "fixtures" as such term is defined in the
Code, now owned or hereafter acquired by any Person.
"Letter-of-Credit Rights" means "letter-of-credit rights" as
such term is defined in the Code, now owned or hereafter
acquired by any Person, including rights to payment or
performance under a letter of credit, whether or not such
Person, as beneficiary, has demanded or is entitled to demand
payment or performance.
"Payment Intangibles" means all "payment intangibles" as such
term is defined in the Code, now owned or hereafter acquired
by any Person.
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"Software" shall mean all "software" as such term is defined
in the Code, now owned or hereafter acquired by any Person,
other than software embedded in any category of Goods,
including all computer programs and all supporting information
provided in connection with a transaction related to any
program.
"Supporting Obligations" means all "supporting obligations" as
such term is defined in the Code, including letters of credit
and guaranties issued in support of Accounts, Chattel Paper,
Documents, General Intangibles, Instruments, or Investment
Property.
4.8 Representations and Warranties. The first sentence of Section
3.2 of the Loan Agreement is hereby deleted in its entirety and the following
new sentence is hereby inserted in lieu thereof:
"(a) Borrower's name as it appears in official filing in the
state of its incorporation or organization, (b) the type of
entity of Borrower, (c) the organizational identification
number issued by Borrower's state of incorporation or
organization or a statement that no such number has been
issued, (d) Borrower's state of organization or incorporation,
and (e) the location of Borrower's chief executive office,
corporate offices, warehouses, other locations of Collateral
and locations where records with respect to Collateral are
kept (including in each case the county of such locations) are
as set forth in Disclosure Schedule (3.2) and, except as set
forth in such Disclosure Schedule, such locations have not
changed during the preceding twelve months."
4.9 Negative Covenants. Section 5(g) of the Loan Agreement is
hereby amended and restated in its entirety to read as follows:
"(g) change (i) its name as it appears in official filings in
the state of its incorporation or organization, (ii) its chief
executive office, corporate offices, warehouses or other
Collateral locations, or location of its records concerning
the Collateral, (iii) the type of legal entity that it is,
(iv) its organization identification number, if any, issued by
its state of incorporation or organization, or (v) its state
of incorporation or organization, or acquire, lease or use any
real estate after the Closing Date without such Person, in
each instance, giving thirty (30) days' prior written notice
thereof to Lender and taking all actions deemed necessary or
appropriate by Lender to continuously protect and perfect
Lender's Liens upon the Collateral;
4.10 Disclosure Schedule 3.2. Attached hereto is Disclosure Schedule
3.2 reflecting the information required by Section 3.2 of the Loan Agreement, as
amended hereby.
4.11 Financial Covenants. Schedule G-Financial Covenants to the Loan
Agreement is hereby amended and restated in its entirety and replaced by a new
Schedule G-Financial Covenants attached hereto as Exhibit 1.
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4.12 Interest. Subsection (a) Section 1.5 Interest of the Loan
Agreement is hereby amended and restated in its entirety as follows:
"(a) Borrower shall pay interest to Lender on the aggregate
outstanding Revolving Credit Advances at a floating rate equal to the Index Rate
plus 3.75% percent per annum (the "Revolving Credit Rate"). Borrower shall pay
interest to Lender on the Term Loan at a floating rate equal to the Index Rate
plus 5% percent per annum (the "Term Loan Rate"). All computations of interest
shall be made by Lender on the basis of a three hundred sixty (360) day year, in
each case for the actual number of days occurring in the period for which such
interest or fee is payable. Each determination by Lender of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest
error. In no event will Lender charge interest at a rate that exceeds the
highest rate of interest permissible under any law that a court of competent
jurisdiction shall, in a final determination, deem applicable."
4.13 Fixed Charge Coverage Reserve. As of the date hereof, the Fixed
Charge Coverage Reserve shall be released and shall be of no further force or
effect. All references in the Loan Agreement to the Fixed Charge Coverage
Reserve, including the definition thereof in Schedule A to the Loan Agreement,
are hereby removed from the Loan Agreement.
4.14 Prepayment Fee. Notwithstanding anything to the contrary
contained in Schedule E-Fees to the Loan Agreement, and provided no Default or
Event of Default exists or is continuing at the time, (i) if the Borrower repays
in full all Obligations on or before June 30, 2002, then Lender will waive the
Prepayment Fee, and (ii) if the Borrower repays in full all amounts due and
owing under the Term Loan on or before September 30, 2002, then Lender will
waive the Prepayment Fee solely as it relates to the Term Loan.
4.15 Events of Default. Section 7.1(a)(i) of the Loan Agreement is
hereby amended and restated in its entirety as follows:
"(i) fails to make any payment of principal of, or interest on, or
Fees owing in respect of, the Loans, any of the other Obligations or any
Scheduled Principal Payments (as defined in Schedule G-Financial Covenants) when
due and payable, or"
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS
Borrower hereby represents, warrants and covenants with and to Lender
as follows:
5.1 Representations in Loan Documents. Each of the representations
and warranties made by or on behalf of Borrower to Lender in any of the Loan
Documents was true and correct when made and in all material respects is true
and correct on and as of the date of this Agreement with the same full force and
effect as if each of such representations and warranties had been made by
Borrower on the date hereof and in this Agreement.
5.2 No Event of Default. Other than the Existing Defaults, no
Event of Default exists as of the date of this Agreement.
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5.3 Bond Payment. Borrower covenants that as of the date hereof
Borrower has made that portion of the March, 2002 Bond Payment required to be
paid pursuant to Borrower's agreement with the trustee of the MARAD Title XI
Debt and agrees to provide to Lender evidence of such payment within three (3)
days of the date hereof.
5.4 Binding Effect of Documents. This Agreement and the other Loan
Documents have been duly executed and delivered to Lender by Borrower and are in
full force and effect, as modified hereby and the agreements and obligations of
Borrower contained herein constitute legal, valid and binding obligations of the
Borrower enforceable against Borrower in accordance with their terms.
5.5 Compliance. In addition to the Events of Default defined in the
Loan Documents, failure of Borrower to comply with the covenants, conditions and
agreements contained herein shall immediately, without further notice or demand
of any kind, constitute an Event of Default under the Loan Documents.
5.6 No Conflict, Etc. The execution, delivery and performance of
this Agreement by Borrower will not violate any requirement of law or
contractual obligation of Borrower and will not result in, or require, the
creation or imposition of any Lien on any of Borrower's properties or revenues,
except in favor of Lender.
SECTION 6. CONDITIONS TO EFFECTIVENESS OF CERTAIN PROVISIONS OF THIS
AGREEMENT
This Agreement shall be effective as of the date first above written,
and such effectiveness shall be subject to the receipt by Lender of each of the
following, in form and substance satisfactory to Lender:
(a) an original of this Agreement, duly authorized, executed
and delivered by Borrower;
(b) evidence that the Borrower has received the proceeds of
the Estate Loan;
(c) payment of the fees and disbursements of counsel to
Lender incurred in connection with the preparation, negotiation, execution and
delivery of this Agreement and the transactions hereunder; and
(d) any and all such further instruments and documents as
Lender may require to obtain the full benefits of this Agreement and to protect,
preserve and maintain Lender' rights in the Collateral.
SECTION 7. PROVISIONS OF GENERAL APPLICATION
7.1 Effect of this Agreement. Except as modified pursuant hereto, no
other changes or modifications to the Loan Documents are intended or implied and
in all other respects the Loan Documents are hereby specifically ratified,
restated and confirmed by all parties hereto as of the effective date hereof. To
the extent of conflict between the terms of this Agreement and
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the other Loan Documents, the terms of this Agreement shall control. The Loan
Agreement and this Agreement shall be read and construed as one agreement.
7.2 Costs and Expenses. Borrower absolutely and unconditionally
agree to pay to the Lender, on demand by the Lender at any time and as often as
the occasion therefor may require, whether or not all or any of the transactions
contemplated by this Agreement are consummated: all reasonable fees and
disbursements of any counsel to Lender in connection with the preparation,
negotiation, execution, or delivery of this Agreement and any agreements
delivered in connection with the transactions contemplated hereby and expenses
which shall at any time be incurred or sustained by the Lender or any
participant of Lender or any of their respective directors, officers, employees
or agents as a consequence of or in any way in connection with the preparation,
negotiation, execution, or delivery of this Agreement and any agreements
prepared, negotiated, executed or delivered in connection with the transactions
contemplated hereby.
7.3 Further Assurances. The parties hereto shall execute and
deliver such additional documents and take such additional action as may be
necessary or desirable to effectuate the provisions and purposes of this
Agreement.
7.4 Binding Effect. This Agreement shall be binding upon and inure
to the benefit of each of the parties hereto and their respective successors and
assigns.
7.5 Survival of Representations and Warranties. All representations
and warranties made in this Agreement or any other document furnished in
connection with this Agreement shall survive the execution and delivery of this
Agreement and the other documents, and no investigation by Lender or any closing
shall affect the representations and warranties or the right of Lender to rely
upon them.
7.6 Severability. Any provision of this Agreement held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
7.7 Governing Law. This Agreement shall be governed by, construed
and enforced in accordance with the laws of the State of New York, without
regard to conflicts of laws principles thereof.
7.8 Counterparts. This Agreement may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Agreement, it shall not be necessary
to produce or account for more than one counterpart thereof signed by each of
the parties hereto.
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IN WITNESS WHEREOF, this Agreement is executed and delivered as of the
day and year first above written.
TRAILER BRIDGE, INC.
By:______________________________________
Title:___________________________________
GENERAL ELECTRIC CAPITAL
CORPORATION
By:______________________________________
Title: Duly Authorized Signatory
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SCHEDULE A
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"Account Debtor" means any Person who is or may become obligated with respect
to, or on account of, an Account, Chattel Paper or General Intangibles
(including a Payment Intangible).
"Accounts" means all "accounts," as such term is defined in the Code, now owned
or hereafter acquired by any Person, including: (i) all accounts receivable,
other receivables, book debts and other forms of obligations (other than forms
of obligations evidenced by Chattel Paper or Instruments) (including any such
obligations that may be characterized as an account or contract right under the
Code); (ii) all of such Person's rights in, to and under all purchase orders or
receipts for goods or services; (iii) all of such Person's rights to any goods
represented by any of the foregoing (including unpaid sellers' rights of
rescission, replevin, reclamation and stoppage in transit and rights to
returned, reclaimed or repossessed goods); (iv) all rights to payment due to
such Person for Goods or other property sold, leased, licensed, assigned or
otherwise disposed of, for a policy of insurance issued or to be issued, for a
secondary obligation incurred or to be incurred, for energy provided or to be
provided, for the use or hire of a vessel under a charter or other contract,
arising out of the use of a credit card or charge card, or for services rendered
or to be rendered by such Person or in connection with any other transaction
(whether or not yet earned by performance on the part of such Person), ; (v) all
health care insurance receivables; and (vi) all collateral security of any kind
given by any Account Debtor or any other Person with respect to any of the
foregoing.
"Chattel Paper" means all "chattel paper," as such term is defined in the Code,
including electronic chattel paper, now owned or hereafter acquired by any
Person.
"Code" means the Uniform Commercial Code as the same may, from time to time, be
in effect in the State of New York; provided, that in the event that, by reason
of mandatory provisions of law, any or all of the attachment, perfection or
priority of, or remedies with respect to, Lender's Lien on any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New York, the term "Code" shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions of
this Agreement relating to such attachment, perfection, priority or remedies and
for purposes of definitions related to such provisions; provided further, that
to the extent that the Code is used to define any term herein or in any Loan
Document and such term is defined differently in different Articles or Divisions
of the Code, the definition of such term contained in Article or Division 9
shall govern.
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"General Intangibles" means all "general intangibles," as such term is defined
in the Code, now owned or hereafter acquired by any Person, including all right,
title and interest that such Person may now or hereafter have in or under any
Contract, all Payment Intangibles, customer lists, Licenses, Intellectual
Property, interests in partnerships, joint ventures and other business
associations, permits, proprietary or confidential information, inventions
(whether or not patented or patentable), technical information, procedures,
designs, knowledge, know-how, software, data bases, data, skill, expertise,
experience, processes, models, drawings, materials, Books and Records, Goodwill
(including the Goodwill associated with any Intellectual Property), all rights
and claims in or under insurance policies (including insurance for fire, damage,
loss, and casualty, whether covering personal property, real property, tangible
rights or intangible rights, all liability, life, key-person, and business
interruption insurance, and all unearned premiums), uncertificated securities,
choses in action, deposit accounts, rights to receive tax refunds and other
payments, rights to received dividends, distributions, cash, Instruments and
other property in respect of or in exchange for pledged Stock and Investment
Property, and rights of indemnification.
"Goods" means all "goods," as such term is defined in the Code, now owned or
hereafter acquired by any Person, wherever located, including embedded software
to the extent included in "goods" as defined in the Code, manufactured homes,
standing timber that is cut and removed for sale and unborn young of animals.
"Inventory" means all "inventory," as such term is defined in the Code, now
owned or hereafter acquired by any Person, wherever located, including all
inventory, merchandise, goods and other personal property that are held by or on
behalf of such Person for sale or lease or are furnished or are to be furnished
under a contract of service or that constitute raw materials, work in process,
finished goods, returned goods, or materials or supplies of any kind, nature or
description used or consumed or to be used or consumed in such Person's business
or in the processing, production, packaging, promotion, delivery or shipping of
the same, including all supplies and embedded software.
"Proceeds" means "proceeds," as such term is defined in the Code and, in any
event, shall include: (i) any and all proceeds of any insurance, indemnity,
warranty or guaranty payable to Borrower from time to time with respect to any
Collateral; (ii) any and all payments (in any form whatsoever) made or due and
payable to Borrower from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of any Collateral by any
governmental body, authority, bureau or agency (or any person acting under color
of governmental authority); (iii) any claim of Borrower against third parties
(a) for past, present or future infringement of any Intellectual Property or (b)
for past, present or future infringement or dilution of any Trademark or
Trademark License or for injury to the goodwill associated with any Trademark,
Trademark registration or Trademark licensed under any Trademark License; (iv)
any recoveries by Borrower against third parties with respect to any litigation
or dispute concerning any Collateral, including claims arising out of the loss
or nonconformity of, interference with the use of, defects in, or infringement
of rights in, or damage to, Collateral; (v) all amounts collected on, or
distributed on account of, other Collateral, including dividends, interest,
distributions and Instruments with respect to Investment Property and pledged
Stock; and (vi) any and all other amounts , rights to payment or other property
acquired upon the sale, lease, license, exchange or other disposition of
Collateral and all rights arising out of Collateral.
13
SCHEDULE B
----------
Members of Borrower's Board of Directors as of May 1, 2002
----------------------------------------------------------
Xxxxx X. Xxxxx
Xxxxxx van Reesema
Xxxxx X. Xxxxxx
Xxxx X. XxXxxx
Xxxxxxx X. Xxxxxxx, Xx.
Xxxxxx x. XxXxxx, Xx.*
Xxxxxxxx X. Xxxxxxxxxx*
X. Xxxxxxxx Xxxxxxxxx*
*Nominated to be appointed to Board by no later than May 31, 2002
14
DISCLOSURE SCHEDULE (3.2)
CHIEF EXECUTIVE OFFICE & CORPORATE NAMES
Official Name Type of Entity (e.g., corporation,
------------- partnership, limited partnership,
limited liability company)
Organization Identification Number
Issued by State of Incorporation or
Organization Or Statement that no such State of
number has been issued Incorporation or Organization
--------------------------------------- -----------------------------
Chief Executive Office County/State
---------------------- ------------
000 Xxxx 00xx Xxxxxx Xxx Xxxx county, Xxx Xxxx
Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Locations of Inventory and other Collateral County/State
------------------------------------------- ------------
[other corporate names or trade names if any]
15
Exhibit 1
---------
Schedule G
FINANCIAL COVENANTS
As used in this Agreement (including this Schedule G covenant), the following
terms shall have the following meanings:
"EBITDA" shall mean, for any period, the Net Income (Loss) of Borrower for such
period, plus interest expense, income tax expense, amortization expense,
depreciation expense, and minus gains on sale of fixed assets, in each case, of
Borrower for such period determined in accordance with GAAP to the extent
included in the determination of such Net Income (Loss).
"FUNB Mortgage" shall mean the mortgage agreement dated ______ between Borrower
and First Union National Bank..
"Funded Debt" shall mean, for any Person, all of such Person's Indebtedness
which by the terms of the agreement governing or instrument evidencing such
Indebtedness matures more than one year from, or is directly or indirectly
renewable or extendible at the option of such Person under a revolving credit or
similar agreement obligating the lender or lenders to extend credit over a
period of more than one year from, the date of creation thereof, including
current maturities of long-term debt, revolving credit, and short-term debt
extendible beyond one year at the option of such Person.
"Net Income (Loss)" shall mean with respect to any Person and for any period,
the aggregate net income (or loss) after taxes of such Person for such period,
determined in accordance with GAAP.
"Scheduled Principal Payments" shall mean the scheduled principal payment of
Indebtedness as follows in addition to any other scheduled payments resulting
from additional Indebtedness incurred after the date hereof:
Payment Due Date Creditor Amount
-----------------------------------------------------------
April 20, 2002 FUNB Mortgage $14,000.00
May 1, 2002 GE Capital $142,857.14
May 20, 2002 FUNB Mortgage $14,000.00
June 1, 2002 GE Capital $142,857.14
June 20, 2002 FUNB Mortgage $14,000.00
July 1, 2002 GE Capital $142,857.14
July 20, 2002 FUNB Mortgage $14,000.00
August 1, 2002 GE Capital $142,857.14
August 20, 2002 FUNB Mortgage $14,000.00
September 1, 2002 GE Capital $142,857.14
September 20, 2002 FUNB Mortgage $14,000.00
1
September 30, 2002 MARAD Bond $1,097,320.00
October 1, 2002 GE Capital $428,571.42
October 20, 2002 FUNB Mortgage $14,000.00
November 20, 2002 FUNB Mortgage $14,000.00
December 20, 2002 FUNB Mortgage $14,000.00
January 1, 2003 GE Capital $428,571.42
January 20, 2003 FUNB Mortgage $14,000.00
February 20, 2003 FUNB Mortgage $14,000.00
March 20, 2003 FUNB Mortgage $14,000.00
March 31, 2003 MARAD Bond $1,097,320.00
April 1, 2003 GE Capital $428,571.42
April 20, 2003 FUNB Mortgage $14,000.00
May 20, 2003 FUNB Mortgage $14,000.00
June 20, 2003 FUNB Mortgage $14,000.00
July 1, 2003 GE Capital $428,571.42
July 20, 2003 FUNB Mortgage $14,000.00
August 20, 2003 FUNB Mortgage $14,000.00
September 20, 2003 FUNB Mortgage $14,000.00
September 30, 2003 MARAD Bond $548,660.00
October 1, 2003 GE Capital $428,571.42
October 20, 2003 FUNB Mortgage $14,000.00
November 20, 2003 FUNB Mortgage $14,000.00
December 20, 2003 FUNB Mortgage $14,000.00
January 1, 2004 GE Capital $428,571.42
January 20, 2004 FUNB Mortgage $14,000.00
1. Minimum EBITDA. For each Fiscal Quarter commencing with the Fiscal
Quarter ending March 31, 2002, Borrower shall maintain an EBITDA (measured on a
cumulative quarterly basis for the period of January 1, 2002 through and
including December 31, 2002 and on a rolling twelve (12) month basis thereafter)
as of the last day of each such Fiscal Quarter, of not less than the amount set
forth below:
EBITDA
For the Fiscal Quarter ending shall not be less than
----------------------------- ----------------------
March 31, 2002 ($100,000)
June 30, 2002
($1,150,000)
September 30, 2002 ($1,9000,000)
December 31, 2002 ($2,400,000)
March 31, 2003
($2,000,000)
June 30,2003
($1,000,000)
September 30, 2003 ($250,000)
December 31,2003 $750,000
2
2. Maximum Cash Burn. For each Fiscal Quarter commencing with the Fiscal
Quarter ending March 31, 2002, Borrower shall maintain an EBITDA less Scheduled
Principal Payments less Total Interest Expense less unfinanced Capital
Expenditures (measured on a cumulative quarterly basis for the period of January
1, 2002 through and including December 31, 2002 and on a rolling twelve (12)
month basis thereafter) as of the last day of each such Fiscal Quarter, of not
more than the amount set forth below:
Cash Burn
For the Fiscal Quarter ending shall not be more than
----------------------------- -----------------------
March 31, 2002 ($1,275,000)
June 30, 2002 ($3,400,000)
September 30, 2002 ($6,400,000)
December 31, 2002 ($8,100,000)
March 31, 2003 ($8,750,000)
June 30,2003 ($7,750,000)
September 30, 2003 ($6,250,000)
December 31,2003 ($5,500,000)
3. Minimum Tangible Net Worth. Borrower shall have, at the end of each
Fiscal Quarter, commencing with the Fiscal Quarter ending March 31, 2002, a
Tangible Net Worth as of the last day of each Fiscal Quarter of not less than:
Tangible Net Worth
For the Fiscal Quarter ending shall not be less than
----------------------------- ----------------------
March 31, 2002 ($11,000,000)
June 30, 2002 ($11,500,000)
September 30, 2002 ($13,750,000)
December 31, 2002 ($15,750,000)
March 31, 2003 X1 (see below)
June 30, 2003 X2 (see below)
September 30, 2003 X3 (see below)
December 31, 2003 X4 (see below)
"X1" shall mean the actual Tangible Net Worth calculated as of December 31,
2002 plus $500,000
"X2" shall mean the actual Tangible Net Worth calculated as of December 31,
2002 plus $1,000,000
"X3" shall mean the actual Tangible Net Worth calculated as of December 31,
2002 plus $1,500,000 "X4" shall mean the actual Tangible Net Worth
calculated as of December 31, 2002 plus $2,000,000
3
For purpose of this covenant in Schedule G the following terms shall have the
meanings set forth below:
"Tangible Net Worth" shall mean, with respect to any Person, at any date,
Shareholder Equity less Intangible Assets, all as defined by, and determined in
accordance with, GAAP.
4
4. Leverage Ratio. Borrower shall have, at the end of each Fiscal Quarter,
commencing with the Fiscal Quarter ending March 31, 2002, a Leverage Ratio as of
the last day of each Fiscal Quarter of not more than:
Leverage Ratio
For the Fiscal Quarter ending shall not be more than
----------------------------- ----------------------
March 31, 2002 1.20 : 1.00
June 30, 2002 1.20 : 1.00
September 30, 2002 1.25 : 1.00
December 31, 2002 1.30 : 1.00
March 31, 2003 1.30 : 1.00
June 30, 2003 1.30 : 1.00
September 30, 2003 1.30 : 1.00
December 31, 2003 1.30 : 1.00
For purpose of this covenant in Schedule G the following terms shall have the
meanings set forth below:
"Leverage Ratio" shall mean, with respect to any Person, at any date, the ratio
of Total Liabilities to Tangible Assets, all as defined by, and determined in
accordance with, GAAP.
5. Capital Expenditures. Borrower shall not make aggregate unfinanced
(including trade-ins) Capital Expenditures in any Fiscal Year in excess of
$250,000.
5
