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EXHIBIT 28.1
FIFTH AMENDMENT TO FIRST AMENDED
AND RESTATED REVOLVING CREDIT LOAN AGREEMENT
THIS FIFTH AMENDMENT TO FIRST AMENDED AND RESTATED REVOLVING CREDIT LOAN
AGREEMENT (the "AMENDMENT"), dated as of December 28, 1999, is between the
Borrower (as defined below) and COMERICA BANK-TEXAS, a Texas banking association
("LENDER").
RECITALS:
Borrower and Lender have entered into that certain First Amended and
Restated Revolving Credit Loan Agreement dated as of August 19, 1993 (such
agreement as previously amended and/or extended and as may be hereafter amended
or otherwise modified from time to time, the "AGREEMENT").
Borrower and Lender desire to amend the Agreement as herein provided.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1 Definitions. Capitalized terms used in this Amendment, to the
extent not otherwise defined herein, shall have the same meanings as in the
Agreement, as amended hereby. As used herein and in the Agreement, effective as
of the date hereof, the term "BORROWER" shall mean, collectively, Bestway,
Inc., a Delaware corporation, Bestway Rental, Inc., a Tennessee corporation,
K.C. Resource Service Corporation, a Missouri corporation, and U.S.
Credit-Service Corporation, a Missouri corporation, each of which are jointly
and severally liable under all documents executed by them for the benefit of
Lender.
ARTICLE II
Amendments
Section 1 Amendment to Section 1.1. Effective as of the date hereof,
certain definitions contained in Section 1.1 of the Agreement are hereby
amended as follows:
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(a) The following definitions are hereby substituted for existing
definitions of the same identity, and such existing definitions are deleted in
their entirety:
"MAXIMUM REVOLVING CREDIT LOAN" shall mean $17,500,000.00.
"REVOLVING CREDIT NOTE" shall mean the Sixth Amended and Restated
Revolving Credit Note dated December 28, 1999, in the original principal
amount of $9,000,000, executed by the Borrower and payable to the order of
the Bank, as renewed, extended, increased and/or modified from time to
time.
"TERMINATION DATE" shall mean February 28, 2002.
(b) The following language is added as a new sentence to the definition
of "Borrowing Base" to become the last sentence therein:
Commencing the first day of the Borrower's year 2001 fiscal year and
continuing through the last day of such 2001 fiscal year, the number "four"
in part "(i)" of the preceding formula shall change to "four and three
fourths (4.75)". Commencing the first day of the Borrower's year 2002
fiscal year, and continuing at all times thereafter, the number shall
again revert to "four" in part "(i)" of such preceding formula.
(c) The following new definitions are added to Section 1.1:
"IDLE INVENTORY PERCENTAGE" shall mean that percentage resulting from
the division of (a) all Inventory which is at any time being serviced,
repaired, loaned out as a replacement for a defective product or which for
any reason is not being rented, by (b) total Inventory.
"INTEREST COVERAGE RATIO" shall mean a ratio of net income before
taxes (determined in accordance with GAAP) to interest expense (determined
in accordance with GAAP) for the twelve-month period immediately preceding
the month of determination.
Section 2 Amendment to Section 2 Generally. Effective as of the date
hereof, the reference in Section 2.1. of the Agreement to "$9,000,000" is
deleted and replaced with "$17,500,000". Additionally, any other reference in
Section 2 of the Agreement, generally, to a $9,000,000 limit for the face
amount of the Revolving Credit Note shall be deleted and $17,500,000 shall be
substituted therefor.
Section 3 Amendment to Section 2.2.4. Effective as of the date hereof,
Section 2.2.4 of the Agreement is amended so that all references therein to
"one and one-half percent (1.50%)" shall be deleted and substituted for such
wording shall be "three fourths of one percent (0.75%)."
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Section 4 Amendment to Section 6.7. Effective as of the date hereof,
Section 6.7 is amended by restating such section in its entirety to read as
follows:
6.7 Maintain Effective Tangible Net Worth. Attain, as of each of the
following respective periods an Effective Tangible Net Worth of not less
than the following respective amounts:
Period Required Minimum TNW
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As of December 31, 1999 $ 8,500,000
From January 31, 2000 through March 31, 2000 $ 9,200,000
From April 30, 2000 through June 30, 2000 $ 9,500,000
From July 31, 2000 through September 30, 2000 $ 9,800,000
From October 31, 2000 through December 31, 2000 $ 10,000,000
From January 31, 2001 through March 31, 2001 $ 10,200,000
From April 30, 2001 through June 30, 2001 $ 10,300,000
From July 31, 2001 through September 30, 2001 $ 10,500,000
From October 31, 2001 through November 30, 2001 $ 11,000,000
As of and at all times after December 31, 2001 $ 11,800,000
Section 5 Amendment to Section 6.8.
Effective as of the date hereof, parts "(a)" and "(b)" of Section
6.8 are restated in their entirety to read as follows in order to reflect new
maximum Debt Ratios:
Period Maximum Debt Ratio
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(a) As of December 31, 1999 and as of
the end of each calendar month
thereafter through July 31, 2000 1.50 to 1.0
(b) As of and at all times after August 31,
2000 2.0 to 1.0
Section 6 Deletion of Section 6.9. Effective as of the date hereof, the
existing text of Section 6.9 is deleted and is replaced by "This Section is
intentionally omitted."
Section 7 Addition of New Section 6.12. Effective as of the date hereof, a
new Section 6.12 is added to read as follows:
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6.12 Interest Coverage. Maintain, as of the end of each calendar month
commencing with December 31, 1999, an Interest Coverage Ratio of not less
than 1.20 to 1.0.
Section 8 Addition of New Section 6.13. Effective as of the date hereof, a
new Section 6.13 is added to read as follows:
6.13 Idle Inventory Coverage. Maintain, at all times an Idle Inventory
Percentage of not more than 35%.
Section 9 Addition of New Section 7.17. Effective as of the date hereof the
following new Section 7.17 is added to the Agreement:
7.17 Capital Expenditures. Make any capital expenditures (as
determined in accordance with GAAP) which would exceed the following limits
during the following periods:
Period Maximum Total Capital Expenditures
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From December 28, 1999 through July 31, 2000 $3,500,000
From August 1, 2000 through July 31, 2001 $5,250,000
At any time after August 1, 2001 $1,500,000
ARTICLE III
Conditions Precedent
The effectiveness of this Amendment is subject to the condition that Lender
shall have received as of the date hereof, in form and substance satisfactory to
Lender, (a) the modified Revolving Credit Note in the form attached hereto as
Exhibit A, (b) resolutions of the Board of Directors of the Borrower certified
by its Secretary or an Assistant Secretary which authorize the execution,
delivery, and performance by the Borrower of this Amendment, and (c) written
ratification of all existing subordination agreement from X'Xxxxxxx & Xxxxx,
X.X.
ARTICLE IV
No Waiver
Nothing contained in this Amendment shall be construed as a waiver by
Lender of any covenant or provision of the Agreement, all other loan and
collateral documents executed in connection with the Agreement, this Amendment,
or of any other contract or instrument between
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Borrower and Lender, and the failure of Lender at any time or times hereafter
to require strict performance by Borrower of any provision thereof shall not
waive, affect or diminish any right of Lender to thereafter demand strict
compliance therewith. Lender hereby reserves all rights granted under the
Agreement, all other loan and collateral documents executed in connection with
the Agreement, this Amendment and any other contract or instrument between
Borrower and Lender.
ARTICLE V
Ratifications and Other Agreements
Section 1 Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Agreement and except as expressly modified and superseded by this
Amendment, the terms and provisions of the Agreement, the Note, and all other
loan and collateral documents executed in connection with the Agreement are
hereby ratified and confirmed and shall continue in full force and effect.
Borrower and Lender agree that the Agreement as amended hereby and all other
documents executed in connection with the Agreement or this Amendment to which
Borrower is a party shall continue to be legal, valid, binding and enforceable
in accordance with their respective terms.
Section 2 Representatives and Warranties. Borrower hereby represents and
warrants to Lender that (a) the execution, delivery and performance of this
Amendment and any and all other documents executed and/or delivered in
connection herewith have been authorized by all requisite corporate action on
the part of Borrower and will no violate the articles of incorporation or
bylaws of Borrower or any agreement to which Borrower or any of its properties
is bound, (b) the representations and warranties contained in the Agreement, as
amended hereby, and any other documents executed in connection therewith or
herewith are true and correct on and as of the date hereof as though made on
and as of the date hereof, (c) except as described in Article IV, no Event of
Default has occurred and is continuing and no event or condition has occurred
that with the giving of notice or lapse of time or both would be an Event of
Default, and (d) Borrower is in full compliance with all covenants and
agreements contained in the Agreement as amended hereby. Since the date of the
Agreement, there have been no amendments to any of the respective articles of
incorporation or bylaws of the entities which collectively comprise the
Borrower.
ARTICLE VI
Miscellaneous
Section 1 Survival of Representations and Warranties. All representations
and warranties made in this Amendment or any other document executed in
connection herewith shall survive the execution and delivery of this Amendment,
and no investigation by Lender or any closing shall affect the representations
and warranties or the right of Lender to rely upon them.
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Section 2 Reference to Agreement. The Agreement, and any and all other
agreements, documents, or instruments now or hereafter executed and delivered
pursuant to the terms hereof or pursuant to the terms of the Agreement as
amended hereby, are hereby amended so that any reference in such documents to
the Agreement shall mean a reference to the Agreement as amended hereby.
Section 3 Expenses of Lender. As provided in the Agreement, Borrower
agrees to pay on demand all reasonable costs and expenses incurred by Lender in
connection with the preparation, negotiation, and execution of this Amendment
and any other documents executed pursuant hereto and any and all amendments,
modifications, and supplements thereto, including without limitation the costs
and reasonable fees of Lender's legal counsel, and all costs and expenses
incurred by Lender in connection with the enforcement or preservation of any
rights under the Agreement, as amended hereby, or any other document executed
in connection therewith, including without limitation the costs and reasonable
fees of Lender's legal counsel.
Section 4 Severability. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
Section 5 Applicable Law. This Amendment and all other documents executed
pursuant hereto shall be deemed to have been made and to be performable in
Dallas, Dallas County, Texas and shall be governed by and construed in
accordance with the laws of the State of Texas.
Section 6 Successors and Assigns. This Amendment is binding upon and shall
inure to the benefit of Lender, Borrower, and their respective successors and
assigns, except Borrower may not assign or transfer any of its rights or
obligations hereunder without the prior written consent of Lender.
Section 7 Counterparts. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.
Section 8 Effect of Waiver. No consent or waiver, express or implied, by
Lender to or for any breach of or deviation from any covenant, condition or duty
by Borrower or any obligated party shall be deemed a consent or waiver to or of
any other breach of the same or any other covenant, condition or duty.
Section 9 Headings. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
Section 10 Non-Application of Chapter 346 of Texas Finance Code. The
provisions of Chapter 346 of the Texas Finance Code, as amended are
specifically declared by the parties not to
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be applicable to this Amendment or any of the other loan and collateral
documents executed in connection with the Agreement or the transactions
contemplated hereby.
Section 11 ENTIRE AGREEMENT. THE AGREEMENT, THIS AMENDMENT AND ALL OTHER
INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH
THE AGREEMENT OR THIS AMENDMENT REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES.
Executed as of the date first written above.
BORROWER:
BESTWAY, INC.
By:
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Xxxx X. Xxxxxxx
Senior Vice President - Finance
BESTWAY RENTAL, INC.
By:
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Xxxx X. Xxxxxxx
Senior Vice President - Finance
K.C. RESOURCE SERVICE CORPORATION
By:
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Xxxx X. Xxxxxxx
Senior Vice President - Finance
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U.S. CREDIT-SERVICE CORPORATION
By:
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Xxxx X. Xxxxxxx
Senior Vice President - Finance
LENDER:
COMERICA BANK-TEXAS
By:
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Name:
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Title:
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The undersigned hereby (i) consents and agrees to this Amendment and (ii)
confirms and agrees that any subordination agreement previously executed
respectively by the undersigned for the benefit of Lender is in full force and
effect and is the legal, valid and binding obligation of the undersigned and is,
enforceable in accordance with its terms.
SUBORDINATING PARTY:
X'XXXXXXX & XXXXX, X.X.
By: X'Xxxxxxx & Masur, a general partnership
By:
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Name:
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Title:
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