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EXHIBIT 10.43
FOURTH AMENDMENT TO
REVOLVING CREDIT AND TERM LOAN AGREEMENT
THIS FOURTH AMENDMENT TO REVOLVING CREDIT AND TERM LOAN
AGREEMENT (this "Amendment") is made and entered into effective as of the 19th
day of February, 1997, by and between FALCONITE EQUIPMENT, INC. (formerly
known as Falconite, Inc.), an Illinois corporation ("Borrower"), and CITIZENS
BANK & TRUST COMPANY OF PADUCAH ("Lender").
W I T N E S S E T H:
WHEREAS, Borrower and Lender have heretofore entered into that
certain Revolving Credit and Term Loan Agreement dated October 5, 1995, as
amended by that certain First Amendment to Revolving Credit and Term Loan
Agreement dated January 5, 1996, that certain Second Amendment to Revolving
Credit and Term Loan Agreement dated June 14, 1996, and that certain Third
Amendment to Revolving Credit and Term Loan Agreement dated February 19, 1997
(as so amended, the "Loan Agreement"; all capitalized terms used and not
otherwise defined in this Amendment shall have the respective meanings ascribed
to them in the Loan Agreement as amended by this Amendment); and
WHEREAS, Borrower and Lender desire to amend the Loan
Agreement in the manner hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Borrower and Lender hereby agree as follows:
1. The definition of "Current Maturities of Debt" set
forth in Section 1.01 of the Loan Agreement is hereby deleted in its entirety
and the following substituted in lieu thereof:
""Current Maturities of Debt" shall mean, for any
period, the aggregate current portion of all principal payments
required, scheduled or anticipated to be made during such
period on account of all Debt (other than (i) principal
payments on the Revolving Credit Loans, (ii) the balloon
payment on the Term Note which is due on the Maturity Date and
(iii) principal payments on those two certain Promissory Notes
of Borrower dated December 16, 1996, and January 15, 1997,
respectively, payable to the order of Southwest Bank of St.
Louis in the aggregate principal amount of $9,744,559.49 as of
February 19, 1997) which would be reflected on a balance sheet
of Borrower prepared as of any date in accordance with
Generally Accepted Accounting Principles."
2. The definition of "Eligible Inventory" set forth in
Section 1.01 of the Loan Agreement is hereby deleted in its entirety and the
following substituted in lieu thereof:
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""Eligible Inventory" shall mean, at the time of any
determination thereof, each item of Inventory valued (in
accordance with Generally Accepted Accounting Principles) at
the lower of (i) cost minus accumulated depreciation
(determined in accordance with the following methods of
depreciation, unless otherwise approved by Lender in writing,
(A) for large (28-ton or greater) cranes (1) the 15-year
straight line depreciation method with no salvage value if
purchased prior to January 1, 1997, or (2) the 15-year
straight line depreciation method with a salvage value of
Twenty-Five Percent (25%) if purchased on or after January 1,
1997, (B) for small (less than 28-tons) cranes (1) the
15-year straight line depreciation method with no salvage
value if purchased prior to January 1, 1997, or (2) the
10-year straight line depreciation method with a salvage value
of Ten Percent (10%) if purchased on or after January 1, 1997,
(C) for large lifts, (1) the 10-year straight line
depreciation method with no salvage value if purchased prior
to January 1, 1997, or (2) the 10-year straight line
depreciation method with a salvage value of Ten Percent (10%)
if purchased on or after January 1, 1997, (D) for small lifts
and fork lifts, (1) the 10-year straight line depreciation
method with no salvage value if purchased prior to January 1,
1997, or (2) the 7-year straight line depreciation method with
a salvage value of Ten Percent (10%) if purchased on or after
January 1, 1997, (E) for dirt moving equipment, (1) the 7-year
straight line depreciation method with no salvage value if
purchased prior to January 1, 1997, or (2) the 7-year straight
line depreciation method with a salvage value of Ten Percent
(10%) if purchased on or after January 1, 1997, (F) for
vehicles and trailers, the 5-year straight line depreciation
method with no salvage value and (G) for all other types of
Inventory, (1) the 5-year straight line depreciation method
with no salvage value if purchased prior to January 1, 1997,
or (2) the 5-year straight line depreciation method with a
salvage value of Ten Percent (10%) if purchased on or after
January 1, 1997, or (ii) market, as to which the following
requirements have been fulfilled to the reasonable
satisfaction of Lender:
(i) Borrower has lawful and absolute title to such
Inventory;
(ii) such Inventory consists of new or used
machinery or equipment held for sale, lease or rent by
Borrower in the ordinary course of its business;
(iii) such Inventory is not obsolete. For the
purposes of this definition, "obsolete" shall mean Inventory
in which Borrower does not intend to sell, lease or rent
and/or cannot sell, lease or rent in the ordinary course of
business at regularly listed prices;
(iv) such Inventory is not more than five (5) years
old, except for Inventory classified as "cranes" which shall
not be more than seven (7) years old;
(v) such Inventory is not in the process of being
refurbished in a manner requiring more than forty (40) hours
of service;
(vi) such Inventory is not unacceptable to Lender due
to type, category and/or quantity;
(vii) such Inventory is located at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, one of the other
offices of Borrower listed on Exhibit A to the Security
Agreement or one of the jurisdictions listed on Exhibit
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B to the Security Agreement or such other addresses and
locations approved in writing by Lender;
(viii) such Inventory is subject to a fully
perfected first priority security interest in favor of Lender
pursuant to the Security Agreement, prior to the rights of,
and enforceable as such against, any other Person;
(ix) such Inventory is not subject to any Lien in
favor of any Person other than the Lien of Lender pursuant to
the Security Agreement; and
(x) Lender has not otherwise advised Borrower that
such Inventory is, in its sole discretion, ineligible."
3. Paragraph (d) of Section 1.02 of the Loan Agreement
is hereby deleted in its entirety and the following substituted in lieu
thereof:
"(d) Except as otherwise specified in this
Agreement, all accounting terms used in this Agreement shall be
interpreted, all accounting determinations under this Agreement
shall be made and all financial statements required to be
delivered under this Agreement shall be prepared in accordance
with Generally Accepted Accounting Principles as in effect from
time to time, applied on a basis consistent (except for changes
approved by Lender and by Borrower's independent certified
public accountants) with the most recent audited consolidated
and consolidating financial statements of Parent Guarantor and
its subsidiaries delivered to Lender. Notwithstanding the
foregoing, the financial covenants contained in this Agreement
(including, without limitation, the financial covenants
contained in Sections 9.14(a), 9.14(b), 9.14(c), 9.14(d) and
9.15 of this Agreement but excluding the financial covenant
contained in Section 9.14(e) of this Agreement) shall be
determined for Borrower only on a stand alone basis and not for
Borrower and its Subsidiaries on a consolidated basis. The
financial covenant contained in Section 9.14(e) of this
Agreement shall be determined for the Parent Guarantor and its
subsidiaries on a consolidated basis."
4. Section 9.14(a) of the Loan Agreement is hereby
deleted in its entirety and the following substituted in lieu thereof:
"(a) Minimum Tangible Net Worth. Borrower shall
not permit its Tangible Net Worth to be less than
$9,000,000.00 at any time on or after December 31, 1996."
5. Section 9.14(b) of the Loan Agreement is hereby
deleted in its entirety and the following substituted in lieu thereof:
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"(b) Maximum Indebtedness to Tangible Net Worth.
Borrower shall not permit the ratio of the Indebtedness of
Borrower, determined in accordance with Generally Accepted
Accounting Principles consistently applied, to Tangible Net
Worth to be greater than 5.50 to 1.0 at any time on or after
December 31, 1996."
6. Section 9.14(d) of the Loan Agreement is hereby
deleted in its entirety and the following substituted in lieu thereof:
"(d) Minimum Operating Cash Flow. Borrower shall
not permit its Operating Cash Flow to be less than
$8,500,000.00 for any consecutive twelve (12) month period
commencing with the consecutive twelve (12) month period ended
December 31, 1996. For the purposes of this Section,
Borrower's "Operating Cash Flow" shall be that shown on the
officer's certificate delivered with respect to the applicable
twelve (12) consecutive month period unless Lender makes an
independent, good faith determination of Operating Cash Flow
for such consecutive twelve (12) month period. If Lender's
determination of Operating Cash Flow for any consecutive (12)
month period is less than Operating Cash Flow as stated in the
applicable officer's certificate: (i) such determination by
Lender shall be, if determined in accordance with the
foregoing provision and the definition of "Operating Cash
Flow" in this Agreement, conclusive for purposes hereof and
(ii) Lender shall promptly advise Borrower of its
determination."
7. Section 9.16 of the Loan Agreement is hereby deleted
in its entirety and the following substituted in lieu thereof:
"Section 9.16. Calculation of Depreciation on
Inventory. Borrower will not change the methods or salvage
value percentages used to calculate depreciation on any of its
Inventory from the following methods and salvage value
percentages: (a) for large (28-ton or greater) cranes (i) the
15-year straight line depreciation method with no salvage
value if purchased prior to January 1, 1997, or (ii) the
15-year straight line depreciation method with a salvage value
of Twenty-Five Percent (25%) if purchased on or after January
1, 1997, (b) for small (less than 28-tons) cranes (i) the
15-year straight line depreciation method with no salvage
value if purchased prior to January 1, 1997, or (ii) the
10-year straight line depreciation method with a salvage value
of Ten Percent (10%) if purchased on or after January 1, 1997,
(c) for large lifts, (i) the 10-year straight line
depreciation method with no salvage value if purchased prior
to January 1, 1997, or (ii) the 10-year straight line
depreciation method with a salvage value of Ten Percent (10%)
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if purchased on or after January 1, 1997, (d) for small
lifts and fork lifts, (i) the 10-year straight line
depreciation method with no salvage value if purchased prior
to January 1, 1997, or (ii) the 7-year straight line
depreciation method with a salvage value of Ten Percent (10%)
if purchased on or after January 1, 1997, (e) for dirt moving
equipment, (i) the 7-year straight line depreciation method
with no salvage value if purchased prior to January 1, 1997,
or (2) the 7-year straight line depreciation method with a
salvage value of Ten Percent (10%) if purchased on or after
January 1, 1997, (f) for vehicles and trailers, the 5-year
straight line depreciation method with no salvage value and
(g) for all other types of Inventory, (1) the 5-year straight
line depreciation method with no salvage value if purchased
prior to January 1, 1997, or (ii) the 5-year straight line
depreciation method with a salvage value of Ten Percent (10%)
if purchased on or after January 1, 1997."
8. Exhibit I attached to the Loan Agreement is hereby
deleted in its entirety and the Exhibit I attached to this Amendment is
substituted in lieu thereof.
9. Exhibit O attached to the Loan Agreement is hereby
deleted in its entirety and the Exhibit O attached to this Amendment is
substituted in lieu thereof.
10. Borrower hereby agrees to pay or reimburse Lender
upon demand for all out-of-pocket costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) incurred by Lender in the
preparation, negotiation and execution of this Amendment and all other
agreements, documents and instruments relating to the amendment of Borrower's
existing credit facilities with Lender (collectively, the "Amendment
Documents"). Borrower further agrees to pay or reimburse Lender for (a) any
stamp or other taxes (excluding income or gross receipts taxes) which may be
payable with respect to the execution, delivery or recording of the Loan
Documents and (b) the cost of any filings and searches, including, without
limitation, Uniform Commercial Code filings and searches. All of the
obligations of Borrower under this paragraph shall survive the payment of the
Borrower's Obligations and the termination of the Loan Agreement.
11. All references in the Loan Agreement to "this
Agreement" and any other references of similar import shall henceforth mean the
Loan Agreement as amended by this Amendment.
12. Except to the extent specifically amended by this
Amendment, all of the terms, provisions, conditions, covenants, representations
and warranties contained in the Loan Agreement shall be and remain in full
force and effect and the same are hereby ratified and confirmed.
13. This Amendment shall be binding upon and inure to the
benefit of Borrower and Lender and their respective successors and assigns,
except that Borrower may not assign, transfer or delegate any of its rights or
obligations hereunder.
14. Borrower hereby represents and warrants to Lender
that:
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(a) the execution, delivery and performance by
Borrower of this Amendment are within the corporate powers of
Borrower, have been duly authorized by all necessary corporate
action and require no action by or in respect of, or filing
with, any governmental or regulatory body, agency or official
or any other third party;
(b) the execution, delivery and performance by
Borrower of this Amendment do not conflict with, or result in
a breach of the terms, conditions or provisions of, or
constitute a default under or result in any violation of, the
terms of the Articles of Incorporation or By-Laws of Borrower,
any applicable law, rule, regulation, order, writ, judgment or
decree of any court or governmental or regulatory agency or
instrumentality or any agreement, document or instrument to
which Borrower is a party or by which it is bound or to which
it is subject;
(c) this Amendment has been duly executed and
delivered by Borrower and constitutes the legal, valid and
binding obligation of Borrower enforceable against Borrower in
accordance with its terms; and
(d) as of the date hereof, all of the
representations and warranties of Borrower set forth in the
Loan Agreement are true and correct and no Default or Event of
Default under or within the meaning of the Loan Agreement has
occurred and is continuing.
15. In the event of any inconsistency or conflict between
this Amendment and the Loan Agreement, the terms, provisions and conditions
contained in this Amendment shall govern and control.
16. This Amendment shall be governed by and construed in
accordance with the substantive laws of the Commonwealth of Kentucky (without
reference to conflict of law principles).
IN WITNESS WHEREOF, Borrower and Lender have executed this
Fourth Amendment to Revolving Credit and Term Loan Agreement this 5th day of
March, 1997, effective as of February 19, 1997.
FALCONITE EQUIPMENT, INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Title: President
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CITIZENS BANK & TRUST COMPANY OF PADUCAH
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By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Senior Vice President
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