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EXHIBIT 10.46
AMENDMENT NO. 5 TO
LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 5, dated as of July 10, 1998, to the LOAN AND SECURITY
AGREEMENT, dated as of March 28, 1997, as amended by the FIRST AMENDMENT dated
as of April 10, 1997, the SECOND AMENDMENT dated as of July 1, 1997, the THIRD
AMENDMENT dated as of August 1, 1997 and the FOURTH AMENDMENT dated as of
November 22, 1997 (as so amended, the "Loan and Security Agreement"), between
FOOTHILL CAPITAL CORPORATION, a California corporation, with a place of business
located at 00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx
00000-0000, and XXXXXX TRAILERS, INC., a Delaware corporation, with its chief
executive offices located at 2727 Paces Ferry Road, One Paces Ferry West, Suite
1700, Xxxxxxx, Xxxxxxx 00000.
Preamble
The Borrower has requested Foothill to amend the Loan and Security
Agreement to provide for an overadvance not to exceed $2,000,000 through and
including August 31, 1998. Accordingly, the Borrower and Foothill hereby agree
as follows:
1. Definitions. All terms used herein which are defined in the Loan and
Security Agreement and not otherwise defined herein are used herein as defined
therein.
2. Section 1.1 of the Loan and Security Agreement. Section 1.1 of the
Loan and Security Agreement is hereby amended as follows:
(a) Designated Work in Process Trailer Inventory. The definition of
the term "Designated Work in Process Trailer Inventory" is hereby added to read
as follows:
""Designated Work in Process Trailer Inventory" means Inventory
consisting of work in process trailers that upon completion shall be held for
sale in the ordinary course of Borrower's business, that are located at
Borrower's premises identified on Schedule E-1, that strictly comply with each
and all of the representations and warranties respecting and applicable to work
in process Inventory made by Borrower to Foothill in the Loan Documents, and
that are and at all times continue to be acceptable to Foothill in all respects;
provided, however, that standards of eligibility may be fixed and revised from
time to time by Foothill in Foothill's reasonable credit judgment. An item of
work in process Inventory shall not be included in Designated Work in Process
Trailer Inventory if:
(a) it is not owned solely by Borrower or Borrower does not have
good, valid, and marketable title thereto;
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(b) it is not located at one of the locations set forth on Schedule
E-1;
(c) it is not located on property owned or leased by Borrower or in
a contract warehouse, in each case, subject to a Collateral Access Agreement
executed by the mortgagee, lessor, the warehouseman, or other third party, as
the case may be, and segregated or otherwise separately identifiable from goods
of others, if any, stored on the premises;
(d) it is not subject to a valid and perfected first priority
security interest in favor of Foothill;
(e) it constitutes spare parts, packaging and shipping materials,
supplies used or consumed in Borrower's business, Inventory subject to a Lien in
favor of any third Person, xxxx and hold goods, defective goods, "seconds," or
Inventory acquired on consignment; or
(f) it is subject to any licensing or similar requirements that
would limit the right of Borrower or Foothill to sell such item."
(b) Overadvance Amount. The definition of the term "Overadvance Amount"
is hereby amended in its entirety to read as follows:
""Overadvance Amount." means (i) $2,000,000, from July 1, 1998
through and including August 31, 1998, and (ii) $0.00, after August 31,
1998; provided, however, if at any time the Borrower shall hold less
than 180 units of Designated Work In Process Trailer Inventory,
Foothill may in its sole discretion reduce the Overadvance Amount in
whole or in part."
3. Borrowing Base. Clause (z) of Section 2.1(a) of the Loan and
Security Agreement is hereby amended in its entirety to read as follows and the
following subsection (aa) is added to the end of Section 2.1(a):
"(z) the aggregate amount of reserves, if any, established by
Foothill under Section 2.1(b), minus
(aa) the positive difference if any of (A) the Overadvance Amount,
minus (B) an amount equal to twenty five percent (25%) of the amount of
the credit availability created by clauses (x), (y) and (z) above."
4. Section 2.10 of the Loan and Security Agreement. Section 2.10(g) of
the Loan and Security Agreement is hereby amended in its entirety to read as
follows:
"(g) Overadvance Fee. If, on any day after August 31, 1998, an
Overadvance exists, at the election of Foothill, the Borrower will pay
Foothill a fee equal $1,000 per day for each day that an Overadvance
exists."
5. Conditions. This Amendment shall become effective only upon
satisfaction in full of the following conditions precedent (the first date upon
which all such conditions have been satisfied being herein called the "Effective
Date"):
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(a) The representations and warranties contained in this Amendment and
in Section 5 of the Loan and Security Agreement and each other Loan Document
shall be correct on and as of the Effective Date as though made on and as of
such date (except where such representations and warranties relate to an earlier
date in which case such representations and warranties shall be true and correct
as of such earlier date); no Default or Event of Default shall have occurred and
be continuing on the Effective Date or result from this Amendment becoming
effective in accordance with its terms.
(b) Foothill shall have received a counterpart of this Amendment, duly
executed by the Borrower.
(c) The Borrower shall pay to Foothill a non-refundable amendment fee
of $50,000, which fee is earned in full on the date hereof.
(d) All legal matters incident to this Amendment shall be satisfactory
to Foothill and its counsel.
6. Representations and Warranties. The Borrower hereby represents and
warrants to Foothill as follows:
(a) The Borrower (i) is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and (ii) has all
requisite corporate power, authority and legal right to execute, deliver and
perform this Amendment, and to perform the Loan and Security Agreement, as
amended hereby.
(b) The execution, delivery and performance of this Amendment by the
Borrower, and the performance by the Borrower of the Loan and Security
Agreement, as amended hereby (i) have been duly authorized by all necessary
corporate action, (ii) do not and will not contravene its charter or by-laws or
any applicable law, and (iii) except as provided in the Loan Documents, do not
and will not result in the creation of any Lien upon or with respect to any of
its respective properties.
(c) This Amendment and the Loan and Security Agreement, as amended
hereby, constitute the legal, valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with its terms.
(d) No authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority is required in connection with the
due execution, delivery and performance by the Borrower of this Amendment and
the performance by the Borrower of the Loan and Security Agreement as amended
hereby.
(e) The representations and warranties contained in Section 7 of the
Loan and Security Agreement and each other Loan Document are correct on and as
of the Effective Date as though made on and as of the Effective Date (except to
the extent such representations and warranties expressly relate to an earlier
date in which case such representations and warranties shall be true and correct
as of such earlier date), and no Default or Event of Default has occurred
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and is continuing on and as of the Effective Date or will result from this
Amendment becoming effective in accordance with its terms.
7. Continued Effectiveness of the Loan and Security Agreement and Loan
Documents. The Borrower hereby (i) confirms and agrees that each Loan Document
to which it is a party is, and shall continue to be, in full force and effect
and is hereby ratified and confirmed in all respects except that on and after
the Effective Date of this Amendment all references in any such Loan Document to
"the Loan and Security Agreement", the "Agreement", "thereto", "thereof",
"thereunder" or words of like import referring to the Loan and Security
Agreement shall mean the Loan and Security Agreement as amended by this
Amendment; and (ii) confirms and agrees that to the extent that any such Loan
Document purports to assign or pledge to Foothill, or to grant a security
interest in or Lien on, any collateral as security for the obligations of the
Borrower from time to time existing in respect of the Loan and Security
Agreement and the Loan Documents, such pledge, assignment and/or grant of the
security interest or Lien is hereby ratified and confirmed in all respects.
8. Miscellaneous.
(a) This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which shall be deemed
to be an original but all of which taken together shall constitute one and the
same agreement.
(b) Section and paragraph headings herein are included for convenience
of reference only and shall not constitute a part of this Amendment for any
other purpose.
(c) This Amendment shall be governed by, and construed in accordance
with, the laws of the State of California.
(d) The Borrower will pay on demand all reasonable fees, costs and
expenses of Foothill in connection with the preparation, execution and delivery
of this Amendment including, without limitation, reasonable fees disbursements
and other charges of Xxxxxxx Xxxx & Xxxxx LLP, counsel to Foothill.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed and delivered.
XXXXXX TRAILERS, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title: Vice-President Finance
FOOTHILL CAPITAL CORPORATION,
a California corporation
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Vice-President
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