TXP resumes normal operations, enters agreement with YA Global

By Jennifer Chiou

New York, Feb. 27 - TXP Corp. entered into an amendment to its agreement with YA Global Investments, LP under which, among other things, the company must implement a cost-cutting growth plan by Friday, according to an 8-K filing with the Securities and Exchange Commission.

The date for the plan was extended from Jan. 30.

TXP said it resumed normal operations on Feb. 20, after having resumed limited operations on Jan. 19.

Also extended to Feb. 27 were the dates by which TXP must enter into agreements with Cambridge Industries Group, where products representing at least $2 million of TXP's current and future orders will be manufactured and supplied at prices resulting in average profit margins to TXP of at least 25%. Cambridge's agreement to fund TXP's iPhotonics ONT operations was also extended.

Moreover, TXP must enter into payment arrangements and/or standstill agreements to satisfy all of its accounts payable and provide to YA Global a budget detailing the payments and arrangements by Friday instead of Feb. 10.

Other amendments include that YA Global must notify Comerica Bank that it is releasing its notice of exclusive control over TXP's accounts until YA Global notifies Comerica Bank that an event of default has occurred.

Further, the company must designate John Eger and Marcia Allen, the new co-chief restructuring officers of TXP, as the sole people authorized to direct the disposition of deposits and the opening of cash accounts at Comerica Bank.

On Feb. 20, the company also entered into an amended direction letter with YA Global and Landry, under which YA Global directed Landry Marks to purchase up to $700,000 of certain account receivables of TXP.

On Jan. 15, the company said it reached a forbearance agreement concerning a default on several securities it sold in private placements.

As previously reported, the company received a notice of default from lender YA Global in December.

Under the previous agreement, the company must repay the debentures at the rate of $250,000 per month beginning on March 20.

In addition, YA Global agreed to defer all payments that were due prior to March 20 until the earlier of the expiration of the forbearance period or March 30, 2010.

Also, the company agreed to make a $250,000 payment on June 30 and a payment equal to one-third of its gross profit from preceding year on Feb. 15 of each year, beginning in 2010.

YA Global, in turn, already agreed to forbear from exercising its rights and remedies in regards to the defaults.

In consideration for this agreement, the company agreed to reduce the exercise prices of all of YA Global's warrants to $0.01 per share from $0.20 per share.

TXP is a Richardson, Texas-based provider of pre-manufacturing services to the electronics industry.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.