AMENDMENT NO. 2 TO THE AMENDED AND RESTATED INVENTORY SECURITY AGREEMENT
EXHIBIT 10.20.2
AMENDMENT NO. 2 TO THE AMENDED AND RESTATED INVENTORY SECURITY AGREEMENTThis Amendment No. 2 to the Amended and Restated Inventory Security Agreement (the “Amendment”) is entered into effective as of June 1, 2015 by and between Titan Machinery, Inc., (“Debtor”) and Agricredit Acceptance LLC (“Secured Party”) (each a “Party” and collectively the “Parties”).
The Parties entered into the Amended and Restated Inventory Security Agreement dated October 31, 2013, as amended by Amendment No. 1 to the Amended and Restated Inventory Security Agreement dated April 1, 2015 (as amended, the “Agreement”), and now desire to further amend the Agreement to revise financial covenants and definitions to the Agreement, all as set forth below.
NOW THEREFORE, INTENDING TO BE LEGALLY BOUND, and in consideration of the mutual covenants and agreements contained herein, the Parties agree as follows:
1. | Integration. Except as amended herein, the terms and conditions of the Agreement shall remain unchanged and in full force and effect. In the event of a conflict between the terms of this Amendment and the Agreement, the terms of this Amendment shall prevail. Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to them in the Agreement, as amended. |
2. | Amendment. The Agreement shall be amended as follows: |
2.1 Exhibit C, Financial Covenants, to the Agreement is hereby deleted in its entirety and replaced with the corresponding Exhibit C attached to this Amendment.
2.2 Exhibit D, Form of Compliance Certificate, to the Agreement is hereby deleted in its entirety and replaced with the corresponding Exhibit D attached to this Amendment.
3. | Miscellaneous. This Amendment may be executed in counterparts, including facsimile counterparts, each of which will constitute an original, but which collectively will form one and the same instrument. This Amendment constitutes the final agreement between the Parties and is the exclusive expression of the Parties’ agreement on the matters contained herein. All earlier and contemporaneous negotiations and agreements between the Parties on the matters contained herein are expressly merged into and superseded by this Amendment. Any modification or additions to the terms of this Amendment must be in a written agreement identified as an amendment and executed by both Parties. |
IN WITNESS WHEREOF, the parties have executed this Amendment effective as of the date first set forth above. | |||||
 | Titan Machinery, Inc. |  | Agricredit Acceptance LLC At: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | ||
Debtor | |||||
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, Treasurer | /s/ ▇▇▇▇▇▇▇ Kinent, VP | ||||
Authorized Signature | Authorized Signature | ||||
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ | 9/1/15 | ▇▇▇▇▇▇▇ Kinent 9/2/15 | |||
Print Name & Title | Date | Print Name & Title | Date | ||
EXHIBIT C
Financial Covenants
1. | Consolidated Net Leverage Ratio. As measured at the end of each fiscal quarter of Debtor, the Debt of Debtor shall not exceed the Consolidated Tangible Net Worth of Debtor by a ratio of greater than: |
Applicable Calendar Quarter(s): | Maximum Debt to Consolidated Tangible Net Worth: |
FYE January 31, 2015 | 3.00 to 1.00 |
FQE April 30, 2015 | 3.00 to 1.00 |
FQE July 31, 2015 | 2.75 to 1.00 |
FQE October 31, 2015 | 2.75 to 1.00 |
FYE January 31, 2016 and each Fiscal Quarter thereafter | 2.50 to 1.00 |
If the Debt to Consolidated Tangible Net Worth exceeds the applicable ratio set forth above, this shall constitute an Event of Default.
2. | Minimum Consolidated Fixed Charge Coverage Ratio. As measured at the end of each fiscal quarter of Debtor on a trailing twelve (12) month basis, the Consolidated Fixed Coverage Charge Ratio shall exceed: |
Applicable Calendar Quarter(s): | Minimum Consolidated Fixed Charge Coverage Ratio: |
FQE October 31, 2014 and each Fiscal Quarter thereafter | 1.25 to 1.00 |
If the Minimum Consolidated Fixed Charge Coverage Ratio is less than the applicable ratio set forth above, this shall constitute an Event of Default.
3. | Acquisitions. Debtor shall not acquire any Capital Securities in a Person, or acquire all or substantially all of the assets of a Person (including without limitation assets comprising all or substantially all of an unincorporated business unit or division of any Person) for consideration in excess of ten percent (10%) of the Debtor’s Total Assets in any single Acquisition or series of related Acquisitions and twenty percent (20%) of the Debtor’s Total Assets for all acquisitions in a fiscal year, except if approved in writing by Secured Party (any such approved acquisition or acquisitions, being a “Permitted Acquisition”). |
4. | Distributions. Debtor shall not, without the prior written consent of Secured Party, make any distributions to the shareholders of Debtor; provided, however, (a) so long as no Event of Default exists prior to or immediately following such action or otherwise results from such action, Debtor may declare or pay cash dividends to its shareholders in an amount not to exceed 50% of Debtor’s Consolidated Net Income for the then trailing four (4) quarters, and (b) in lieu of issuing stock to participants in the Debtor’s restricted stock plan, pay the associated tax liability with other stock issued. |
EXHIBIT D
Form of Compliance Certificate
TO: Agricredit Acceptance LLC (“Secured Party”), its affiliates, related parties and participants
Pursuant to that certain Amended and Restated Inventory Security Agreement dated October 31, 2013, as amended, (the “ISA”) by and between Titan Machinery Inc., a Delaware corporation (the “Debtor”), and Secured Party, the Debtor hereby:
A. Repeats and reaffirms to Secured Party each and all of the representations and warranties made by Debtor in the ISA; the Amended and Restated Wholesale Financing Plan, as amended; and the agreements related thereto, and certifies to the Secured Party that each and all of said warranties and representations are true and correct as of the date hereof; and
B. Represents, warrants and certifies that the following computations of financial covenants and tests contained in the ISA and related documents are true, correct, complete and accurate as follows:
1. | Consolidated Net Leverage Ratio. As measured at the end of each fiscal quarter, the Debt of Debtor shall not exceed the Consolidated Tangible Net Worth of Debtor by a ratio of greater than: |
Applicable Calendar Quarter(s): | Maximum Debt to Consolidated Tangible Net Worth: |
FYE January 31, 2015 | 3.00 to 1.00 |
FQE April 30, 2015 | 3.00 to 1.00 |
FQE July 31, 2015 | 2.75 to 1.00 |
FQE October 31, 2015 | 2.75 to 1.00 |
FYE January 31, 2016 and each Fiscal Quarter thereafter | 2.50 to 1.00 |
Consolidated Net Leverage Ratio Calculation: | ||
(a) Consolidated Total Liabilities, minus | $ | |
(b) Cash Equivalents that exceed $30,000,000 | $ | |
Total | $ | |
(c) Consolidated Tangible Net Worth | ||
Consolidated Net Leverage Ratio (a) minus (b), divided by (c) | = | |
2. Minimum Consolidated Fixed Charge Coverage Ratio. As measured at the end of each fiscal quarter of Debtor on a trailing twelve (12) month basis, the Consolidated Fixed Coverage Charge Ratio shall exceed:
Applicable Calendar Quarter(s): | Minimum Consolidated Fixed Charge Coverage Ratio: |
FYE January 31, 2015 and each Fiscal Quarter thereafter | 1.25 to 1.00 |
Debtor’s Minimum Consolidated Fixed Charge Ratio Calculation: | ||
(a) Consolidated EBITDAR | $ | |
(b) all payments in cash for taxes related to income | $ | |
(c) Unfinanced Capital Expenditures | $ | |
(d) Restricted Payments | $ | |
(e) Consolidated Interest Expense | $ | |
(f) Rent Expense | $ | |
(g) Interest Expense | $ | |
(h) debt payments | $ | |
(i) cash restructuring charges | $ | |
(j) Consolidated Fixed Charge Coverage Ratio | ||
((a) minus ( b) minus (c) minus ( d)), divided by (e + f + g +h + i) | = | |
C. Without diminishing or decreasing the importance of any other covenants, representations and warranties, the following covenants, representations and/or warranties are true, correct, complete and accurate:
1. | Acquisitions. Debtor has not acquired any Capital Securities in a Person, or acquired all or substantially all of the assets of a Person (including without limitation assets comprising all or substantially all of an unincorporated business unit or division of any Person) for consideration in excess of ten percent (10%) of the Debtor’s Total Assets in any single Acquisition or series of related Acquisitions and twenty percent (20%) of the Debtor’s Total Assets for all acquisitions in a fiscal year, except if approved in writing by Secured Party. |
2. | Distributions. Debtor has not, unless the action was approved in writing by Secured Party, made any distributions to the shareholders of Debtor, except that Debtor may have, (a) so long as no Event of Default existed prior to or immediately following such action or otherwise resulted from such action, declared or paid cash dividends to its shareholders in an amount not to exceed 50% of Debtor’s Consolidated Net Income for the then trailing four (4) quarters, and (b) in lieu of issuing stock to participants in the Debtor’s restricted stock plan, paid the associated tax liability with other stock issued. |
All capitalized terms not defined herein shall have the meaning ascribed to them in the ISA, as amended.
The undersigned confirms the accuracy of all statements made above as of the date set for the below.
| Titan Machinery, Inc. | |
Debtor | ||
Authorized Signature | ||
Print Name & Title | Date | |