AMENDMENT TO
AMENDED AND RESTATED AGREEMENT FOR WHOLESALE FINANCING
(Amendment No. 5)
This Amendment to Agreement for Wholesale Financing ("Amendment") is made by
and between Deutsche Financial Services Corporation ("DFS") and Featherlite,
Inc. (f/k/a Featherlite Mfg., Inc.)("Dealer").
WHEREAS, DFS and Dealer entered into that certain Amended and Restated
Agreement for Wholesale Financing dated October 6, 1997, as amended
("Agreement"); and
WHEREAS, DFS and Dealer desire to amend the Agreement as provided
herein.
FOR VALUE RECEIVED, the Agreement is amended to include the following
provisions as if they were originally set forth therein:
1. Amendment/New Motor Coach Wholesale Credit Facility. Paragraph 1 of
the Agreement is deleted and amended to readin its entirety as follows:
"1. New Motor Coach Wholesale Credit Facility. Subject to the terms of this
Agreement, DFS will extend credit to Dealer for the purpose of financing
completed motor coaches manufactured by Dealer (each a "New Motor Coach")
up to a maximum outstanding principal balance of Twelve Million Five
Hundred Thousand Dollars ($12,500,000) or such greater or lesser amount as
DFS may from time to time establish in its sole discretion ("Wholesale
Facility"). The Wholesale Facility will be subject to the following terms:
1.1 Eligible Inventory/Advance Rates. Subject to the maximum amount of the
Wholesale Facility, DFS will finance completed New Motor Coaches in an
amount not to exceed ninety percent (90%) of the actual cost to
manufacture said New Motor Coach, upon Dealer's written request in
form and substance satisfactory to DFS, and subject to DFS' review and
concurrence with such amount, less the amount of any deposit made by
the prospective purchaser of a New Motor Coach financed by DFS.
1.2 Inspection/Documentation. Prior to funding a completed New Motor
Coach, Dealer will provide documentation for the completed unit
containing details of all equipment and options. Upon receipt of such
documentation, DFS may arrange a physical inspection of the completed
unit to verify completion. Upon DFS' request, Dealer will permit DFS
to review Dealer's records to confirm the cost to manufacture New
Motor Coaches. The manufacturer's statement of origin for both the
chassis and the completed unit must be delivered to DFS prior to
funding to be retained until funding of the retail sale of the unit.
Upon funding, DFS may remit the portion of the advance allocated to
the cost of the chassis directly to the manufacturer of the chassis,
provided that the manufacturer provides a written release of its lien
in said chassis, or, if such amount is paid by Dealer, Dealer will
provide evidence of payment of all amounts due to such manufacturer
for such chassis and manufacturer's written release of its lien in
said chassis. DFS must have a first perfected security interest in
each New Motor Coach financed, including the chassis, and all proceeds
thereof.
1
1.3 Due in Full. The outstanding loan balance for each New Motor Coach
financed by DFS will be due and payable in full 365 days after the
documented date of completion of manufacture, unless payment is due
sooner as provided in Section 10.
1.4 Statement of Transaction. The applicable financing terms will be set
forth on the Statement of Transaction provided by DFS to Dealer for
each New Motor Coach financed by DFS."
2. Amendment/Used RV Inventory Revolving Credit Facility. Paragraph 2 of the
Agreement is deleted and amended to read in its entirety as follows:
"2. Used RV Inventory and New Motor Coach Revolving Credit Facility. From
time to time, DFS may provide Dealer with financing for Dealer's
inventory of Used RVs and certain New Motor Coaches on the following
terms:
2.1 Used RV and New Motor Coach Inventory Revolving Credit Facility. DFS
agrees to grant to Dealer a Used RV and New Motor Coach Inventory
Revolving Credit Facility ("Revolving Credit Facility") in an amount
equal to the lesser of: (i) Twelve Million Five Hundred Thousand
Dollars ($12,500,000) or such greater or lesser amount as DFS may from
time to time establish in its sole discretion; and (ii) the aggregate
Loan Value.
2.2 Interest. Dealer agrees to pay interest to DFS on the Daily Contract
Balance of the Revolving Credit Facility at the Prime Rate per annum.
Such interest will: (i) be computed based on a 360 day year; (ii) be
calculated each day by multiplying the Daily Revolver Rate by the
Daily Contract Balance; and (iii) accrue from the date that DFS makes
an advance under the Revolving Credit Facility until DFS receives the
full and final payment of the principal debt which Dealer owes to DFS,
subject to any applicable default interest rate.
2.3 Loans. DFS will from time to time loan to Dealer, at Dealer's request
in a written borrowing base certificate together with supporting
information, in form and substance satisfactory to DFS, such amount as
DFS, in its sole discretion, may deem advisable (subject to the
maximum amount of the Revolving Credit Facility), but in any event not
more than the aggregate Loan Value of Dealer's Used RVs and New Motor
Coaches, to the extent DFS has a first priority, fully perfected
security interest therein, that DFS deems, in its sole discretion, to
be acceptable for financing. DFS may limit the number of requests for
loans. Dealer represents and warrants that all Used RVs and New Motor
Coaches to be financed by DFS are held in Dealer's inventory, free and
clear of all liens and encumbrances (other than the subordinated lien
of U.S. Bank, National Association), in good physical and mechanical
condition, and ready for ordinary retail sale.
2
2.4 Limitations.
2.4.1 Used RVs. Used RVs for which Dealer may request a loan must be
the current model year or no more than ten (10) model years prior
to the current model year (provided, however, for the initial
advance under the Revolving Credit Facility, DFS may consider
certain older Used RVs to be eligible for loans without waiving
DFS' rights hereunder), subject to the limitations of the Loan
Value, in good physical and mechanical condition, and subject to
DFS' approval. Each Used RV for which the Dealer's acquisition
date is more than 365 days from the date of determination shall
not be eligible for use in determining the aggregate Loan Value.
DFS reserves the right to limit its advances with respect to any
Used RV for which financing is requested and to limit the
aggregate amount of advances made with respect to all Used RVs.
2.4.2 New Motor Coaches. New Motor Coaches for which Dealer may
request a loan must be at least 366 days old and no more than 720
days old, in each case as measured from the documented date of
completion of manufacture (provided, however, for the initial
advance under the Revolving Credit Facility, DFS may consider
certain older New Motor Coaches to be eligible for loans without
waiving DFS' rights hereunder). Each New Motor Coach for which
the documented date of completion of manufacture is more than 720
days from the date of determination shall not be eligible for use
in determining the aggregate Loan Value. DFS reserves the right
to limit its advances with respect to any New Motor Coach for
which financing is requested and to limit the aggregate amount of
advances made with respect to all New Motor Coaches.
2.5 Collateral Summary Report/Inventory Report. Each week Dealer shall
provide DFS with a Collateral Summary Report. The Collateral Summary
Report will contain information current as of the time period
requested by DFS. The Collateral Summary Report will include: (i) a
borrowing base certificate together with supporting information, in
form and substance satisfactory to DFS; (ii) the sales prices of each
new Motor Coach and Used RV sold by Dealer; (iii) an inventory report
in form and substance reasonably satisfactory to DFS; and (iv) such
other matters and information relating to the Used RVs and New Motor
Coaches as DFS may from time to time request. DFS may request that
Dealer provide the Collateral Summary Report on a more frequent basis,
or DFS may reduce the frequency of such reporting.
2.6 Inspection Procedures. DFS may at any time conduct a physical
inspection of all Used RVs and New Motor Coaches and the titles for
such Used RVs and New Motor Coaches. Dealer grants DFS an irrevocable
license to enter Dealer's business locations during normal working
hours without notice to Dealer to account for and inspect the Used RVs
and New Motor Coaches and their respective titles and to determine the
Applicable Valuation of the Used RVs and review Dealer's records to
confirm the cost to manufacture the New Motor Coaches. Dealer will
maintain possession of the original of the xxxx of sale or other
written evidence of the acquisition of each Used RV and the
certificate of title showing the release of all liens noted thereon.
For each New Motor Coach financed, Dealer will deliver to DFS the
manufacturer's statement of origin for both the chassis and the
completed unit prior to funding.
2.7 Paydown. Regardless of the terms of the Revolving Credit Facility, if
at any time the aggregate amount of outstanding loans under the
Revolving Credit Facility exceeds the aggregate Loan Value of the Used
RVs and New Motor Coaches, Dealer will immediately repay to DFS, as a
reduction of Dealer's outstanding loans under the Revolving Credit
Facility, the difference between (i) such aggregate amount of
outstanding loans under the Revolving Credit Facility, and (ii) the
aggregate Loan Value. Upon the effective date of termination of the
Agreement, Dealer will immediately repay to DFS all amounts due under
the Revolving Credit Facility.
3
2.8 Definitions. As used in this Agreement:
-----------
"Applicable Valuation" means:
--------------------
(a) for any Used RV, the used wholesale value as provided in the most
current edition of the N.A.D.A. Recreation Vehicle Appraisal
Guide, excluding adjustments for the value of any added
accessories, and if the Used RV is not listed in said guide, the
estimated wholesale value of said Used RV, subject to DFS' review
and concurrence with such amount;
and
(b) for New Motor Coaches, the actual cost to manufacture said New
Motor Coach, subject to DFS' review and concurrence with such
amount.
"Daily Contract Balance" means the amount of the outstanding
principal debt which Dealer owes to DFS on the Revolving Credit
Facility at the end of each day after DFS has credited
the payments which it has received on the Revolving Credit
Facility.
"Daily Revolver Rate" means the quotient of the applicable
annual rate provided herein with respect to the Revolving Credit
Facility divided by 360.
"Loan Value" means with respect to each Used RV and each New
Motor Coach, seventy percent (70%) of the Applicable Valuation.
"Prime Rate" as used in this Agreement and on any Statement of
Transaction means the highest prime, base or reference rate of
interest publicly announced from time to time (whether or not
charged in each instance) by XX Xxxxxx Chase Bank (or any
successor thereof), and such rate in effect on the last
business day of any calendar month will be the Prime Rate for
the following calendar month; provided, however, that at such
times that the Prime Rate is less than six and one-half percent
(6.5%), the Prime Rate applicable to Dealer's financing programs will
be one-fourth of one percent (0.25% or 25 basis points) higher than
the Prime Rate.
"Used RV" means a recreational vehicle, including but not
limited to, travel trailers, camping trailers, motorhomes,
mini motorhomes, truck campers and van conversions, which has
been (i) previously sold at retail, or (ii) registered or
titled in any state with the appropriate state authorities in
accordance with applicable state laws."
4
3. Amendment of Financial Covenants. Paragraph 13.1 of the Agreement is
deleted and amended to read in its entirety as follows:
"13.1 Financial Covenants.
(a) Tangible Net Worth. Dealer will achieve:
------------------
(i) as of the last day of the fiscal quarter ending
June 30, 2002, a Tangible Net Worth and Subordinated Debt in
the combined amount of not less than THIRTEEN MILLION DOLLARS
($13,000,000.00).
(ii) as of the last day of each fiscal quarter ending
September 30, 2002, through December 31, 2002, a Tangible Net
Worth and Subordinated Debt in the combined amount of not less
than FOURTEEN MILLION DOLLARS ($14,000,000.00).
(iii) as of the last day of each fiscal quarter
ending March 31, 2003, and as of the last day of each fiscal
quarter thereafter, a Tangible Net Worth and Subordinated Debt
in the combined amount of not less than FIFTEEN MILLION
DOLLARS ($15,000,000.00).
(b) Maximum Leverage. Dealer will achieve:
----------------
(i) as of the last day of the fiscal quarter ending
June 30, 2002, a ratio of Debt minus Subordinated Debt to
Tangible Net Worth and Subordinated Debt of not more than SIX
to ONE (6:1).
(ii) as of the last day of each fiscal quarter ending
September 30, 2002, and as of the last day of each fiscal
quarter thereafter, and at all times thereafter, a ratio of
Debt minus Subordinated Debt to Tangible Net Worth and
Subordinated Debt of not more than FIVE to ONE (5:1).
(c) Current Ratio. Dealer will achieve:
-------------
(i) as of the last day of the fiscal quarter ending
June 30, 2002, a ratio of Current Tangible Assets to current
liabilities of not less than ONE to ONE (1:1).
(ii) as of the last day of each fiscal quarter ending
September 30, 2002, and as of the last day of each fiscal
quarter thereafter, a ratio of Current Tangible Assets to
current liabilities of not less than ONE AND TWO-TENTHS to ONE
(1.2:1).
(d) Quarterly Net Income Projections. From June 30, 2002,
through December 31, 2002, Dealer's net income for each fiscal
quarter must equal or exceed eighty percent (80%) of the
Dealer's written projections for 2002 that were previously
delivered to DFS and summarized as follows:
5
---------------------------------------------------------------
Dealer Quarterly Net Income Projections - 2002
---------------------------------------------------------------
1st Quarter 2002 $1,548,000
January 1 - March 31
------------------------------------ --------------------------
2nd Quarter 2002 $849,000
April 1 - June 30
------------------------------------ --------------------------
3rd Quarter 2002 $861,000
July 1 - September 30
------------------------------------ --------------------------
4th Quarter 2002 $1,258,000
October 1 - December 31
---------------------------------- --------------------------
Total: $4,516,000
-----------------------------------------------------------
(e) Net Income. Dealer's net income as of the last day of each
month commencing with June 30, 2002, for the three months then
ended will be greater than zero dollars ($0).
(f) Debt Service. Dealer will not repay any indebtedness due
to Bulk Resources, Inc. prior to January 1, 2003, and after
January 1, 2003, Dealer may repay indebtedness then currently
due to Bulk Resources, Inc. (but not by reason of
acceleration) only if Dealer's net income as of December 31,
2002, is equal to or greater than $3,612,800 (i.e., 80% of
$4,516,000), so long as, both before and after giving effect
to any such payment, Dealer is not and would not be in default
under this Agreement, whether as a result of such payment or
otherwise. This debt may be converted to common stock at any
time without the consent of DFS.
For purposes of this paragraph: (i) "Tangible Net Worth" means the book
value of Dealer's assets less liabilities, excluding from such assets
all Intangibles; (ii) "Intangibles" means and includes general
intangibles (as that term is defined in the Uniform Commercial Code);
accounts receivable and advances due from officers, directors,
employees, stockholders and affiliates; leasehold improvements net of
depreciation; licenses; good will; prepaid expenses; escrow deposits;
covenants not to compete; the excess of cost over book value of acquired
assets; franchise fees; organizational costs; finance reserves held for
recourse obligations; capitalized research and development costs; and
such other similar items as DFS may from time to time determine in DFS'
sole discretion; (iii) "Debt" means all of Dealer's liabilities and
indebtedness for borrowed money of any kind and nature whatsoever,
whether direct or indirect, absolute or contingent, and including
obligations under capitalized leases, guaranties or with respect to
which Dealer has pledged assets to secure performance, whether or not
direct recourse liability has been assumed by Dealer; (iv) "Subordinated
Debt" means all of Dealer's Debt which is subordinated to the payment of
Dealer's liabilities to DFS by an agreement in form and substance
satisfactory to DFS; and (v) "Current Tangible Assets" means Dealer's
current assets less, to the extent otherwise included therein, all
Intangibles. The foregoing terms will be determined in accordance with
generally accepted accounting principles consistently applied, and, if
applicable, on a consolidated basis."
4. Amendment/Termination. Paragraph 19 of the Agreement is deleted and
amended to read in its entirety as follows:
6
"19. Termination/Right of First Refusal. Dealer may not terminate this
Agreement prior to June 30, 2004; provided, however, that Dealer may
terminate this Agreement prior to such date if Dealer provides DFS with
120 days prior written notice and pays a fee to DFS of one percent (1%)
of the maximum amount of the credit facilities provided under this
Agreement. DFS may terminate this Agreement at any time. If DFS elects
to terminate this Agreement, Dealer agrees that if Dealer: (a) is not in
default hereunder, 90 days prior notice of termination is reasonable and
sufficient (although this provision shall not be construed to mean that
shorter periods may not, in particular circumstances, also be reasonable
and sufficient); or (b) is in default hereunder, no prior notice of
termination is required. Dealer will not be relieved from any obligation
to DFS arising out of DFS' advances or commitments made before the
effective termination date of this Agreement. It is understood that
Dealer may elect to terminate this Agreement in its entirety only, no
section or lending facility may be terminated singly. DFS will retain
all of its rights, interests and remedies hereunder until Dealer has
paid all of Dealer's debts to DFS. All waivers set forth within this
Agreement will survive any termination of this Agreement."
5. Amendment/Collateral Locations. Exhibit A to the Agreement is amended
in entirety to reflect all current permanent Collateral locations and is
attached hereto and incorporated into the Agreement by this reference.
6. No Other Modifications. Except as expressly modified or amended
herein, all other terms and provisions of the Agreement shall remain
unmodified and in full force and effect and the Agreement, as hereby
amended, is ratified and confirmed by DFS and Dealer.
7. Capitalized Terms. Except as otherwise defined herein, all capitalized
terms will have the same meanings set forth in the Agreement.
IN WITNESS WHEREOF, DFS and Dealer have executed this Amendment as of
the 30th day of July, 2002.
DEUTSCHE FINANCIAL SERVICES CORPORATION
By: /s/ Xxx Xxxx
Print Name: Xxx Xxxx
Title: Director of Underwriting
FEATHERLITE, INC.
By: /s/ Xxxxxx Xxxxxxx
Print Name: Xxxxxx Xxxxxxx
Title: President & Chief Executive Officer
7
Exhibit A
Collateral Locations
Featherlite, Inc./Vantare
1550 Xxxxxxx Place (Port of Sanford)
Xxxxxxx, Xxxxxxx 00000
Featherlite/Vantare Sales and Service Center
0000 Xxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxx 00000
Featherlite, Inc./Corporate Xxxxxx
Xxx'x 00 & 0
Xxxxxx, Xxxx 00000
Featherlite, Inc./Vantare Service Center
000 Xxxxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Featherlite, Inc./Vantare Service Center
00000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxx 00000
8
