AMENDMENT NO. 6 TO AMENDED AND RESTATED
REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT
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This AMENDMENT NO. 6 TO AMENDED AND RESTATED REVOLVING CREDIT, TERM
LOAN AND SECURITY AGREEMENT (the "Agreement"), dated as of April 7, 2003, is by
and among KOALA CORPORATION, a Colorado corporation, as borrower and debtor
("Borrower"), KEYBANK NATIONAL ASSOCIATION ("KeyBank"), and U.S. BANK NATIONAL
ASSOCIATION, a national banking association, as a Lender and in its capacity as
agent acting in the manner described in the Credit Agreement ("U.S. Bank" or
"Agent").
RECITALS
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A. Borrower, U.S. Bank and KeyBank are parties to that certain
Amended and Restated Revolving Credit, Term Loan and Security Agreement dated
September 26, 2001, as amended (the "Credit Agreement").
B. Borrower and the Lenders have agreed to enter into this Agreement
to amend the Credit Agreement.
C. The Lenders are willing to amend the Credit Agreement, and to
waive certain covenant defaults as set forth herein, based on the covenants,
terms and conditions set forth herein.
AGREEMENT
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1. Definitions.
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(a) Any capitalized terms used but not defined in this
Agreement shall have the meanings given to such terms in the Credit Agreement.
(b) The definition of "CONSOLIDATED LEVERAGE RATIO" in the
Credit Agreement is hereby deleted and replaced with the following definition:
"CONSOLIDATED LEVERAGE RATIO" means, as of the date of
computation thereof, the ratio of (i) Debt to (ii)
Consolidated EBITDA determined as follows: (a) for the quarter
ended June 30, 2003, Consolidated EBITDA shall be calculated
at the end of such quarter and annualized by multiplying such
calculation by four, (b) for the quarter ending September 30,
2003, Consolidated EBITDA shall be calculated at the end of
such quarter, added to Consolidated EBITDA for the previous
quarter and annualized by multiplying the resulting sum by
two, (c) for the quarter ending December 31, 2003,
Consolidated EBITDA shall be calculated at the end of such
quarter, added to Consolidated EBITDA for the previous two
quarters and annualized by multiplying the resulting sum by
1.33333, (d) for all quarters ending after December 31, 2003,
Consolidated EBITDA shall be determined on a trailing
four-quarter basis.
(c) The definition of "INTEREST COVERAGE" in the Credit Agreement
is hereby deleted and replaced with the following definition:
"INTEREST COVERAGE" means (a) Consolidated EBITDA divided by
(b) the Consolidated Interest Expense for Borrower determined
as follows: (i) for the quarter ended June 30, 2003,
Consolidated Interest Expense and Consolidated EBITDA shall be
calculated at the end of such quarter and annualized by
multiplying such items for the quarter by four, (ii) for the
quarter ending September 30, 2003, Consolidated Interest
Expense and Consolidated EBITDA shall be calculated at the end
of such quarter, added to the total Consolidated Interest
Expense and Consolidated EBITDA (as appropriate) for the
previous quarter and annualized by multiplying such sums by
two, (c) for the quarter ending December 31, 2003,
Consolidated Interest Expense and Consolidated EBITDA shall be
calculated at the end of such quarter, added to the total
Consolidated Interest Expense and Consolidated EBITDA (as
appropriate) for the previous two quarters and annualized by
multiplying such sums by 1.33333, (d) for all quarters ending
after December 31, 2003, Consolidated Interest Expense and
Consolidated EBITDA shall be determined on a trailing
four-quarter basis.
(d) The definition of "Total Revolving Credit Commitment" in the
Credit Agreement is hereby deleted and replaced with the following definition:
"TOTAL REVOLVING CREDIT COMMITMENT" means a principal amount
equal to $6,500,000."
(e) The definition of "Revolving Credit Maturity Date" in the
Credit Agreement is hereby deleted and replaced with the following definition:
"REVOLVING CREDIT MATURITY DATE" means March 15, 2004.
2. Deferral of Term Loan Repayment. Subject to Borrower taking all other
action required under this Agreement and the Credit Agreement, the quarterly
principal payments on Term Loan A and Term Loan B required by Borrower in
calendar year 2003, pursuant to Section 2.2(c) of the Credit Agreement, are
hereby deferred, and principal payments pursuant to Section 2.2(c) of the Credit
Agreement shall be paid on the following schedule:
March 15, 2004 $ 500,000
March 31, 2004 $1,000,000
June 30, 2004 $1,000,000
September 26, 2004 All remaining principal outstanding
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Nothing in this deferral relieves Borrower from any other obligation it has
under the Credit Agreement, including, but not limited to, the payment of
interest on the total outstanding principal amounts of Term Loan A and Term Loan
B.
3. Amendment of $10,000,000 Prepayment of Term Loans. Borrower and
Lenders hereby agree that the covenant set forth in Section 4 of Amendment No. 4
to Amended and Restated Revolving Credit, Term Loan and Security Agreement dated
as of August 13, 2002, relating to Borrower raising $10,000,000 in additional
financing by July 15, 2003, is hereby waived.
4. Borrowing Base Certificates. Effective April 15, 2003, Borrower
hereby agrees to deliver to Lender Borrowing Base Certificates on Tuesday of
each week, which Borrowing Base Certificates shall be prepared based upon the
most recent financial information available to Borrower. Borrower shall take all
actions necessary to allow for the most up-to-date information to be available
on a weekly basis with respect to its Eligible Accounts Receivable and
Inventory.
5. Waiver of Covenants. In consideration of the terms and conditions of
this Agreement, the Lenders hereby waive Borrower's compliance with the Maximum
Consolidated Leverage Ratio, Minimum Fixed Charge Coverage and Minimum Interest
Coverage financial covenants set forth in Section 9.12 of the Credit Agreement
for the periods ending December 31, 2002, and March 31, 2003.
6. Amendment of Financial Covenants.
(a) Paragraph 9.12(a) of the Credit Agreement is hereby deleted
and replaced with the following:
Maximum Consolidated Leverage Ratio. The Consolidated Leverage Ratio
shall not exceed the following:
Consolidated
Period Leverage Ratio
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Quarter ending 6/30/2003 28.00 : 1
Quarter ending 9/30/2003 13.60 : 1
Quarter ending 12/31/2003 and thereafter 15.20 : 1
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(b) Paragraph 9.12(b) of the Credit Agreement is hereby deleted
and replaced with the following:
Minimum Quarterly Consolidated EBITDA. Borrower's Consolidated EBITDA
calculated for each quarter of Borrower's Fiscal Year shall at no time
be less than the following:
Period Consolidated EBITDA
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Quarter ending 6/30/2003 $260,000
Quarter ending 9/30/2003 $815,000
Quarter ending 12/31/2003 and thereafter $435,000
(c) Paragraph 9.12(c) of the Credit Agreement is hereby deleted
and replaced with the following:
Minimum Interest Coverage. Borrower's Interest Coverage shall at no
time be less than the following:
Period Interest Coverage
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Quarter ending 6/30/2003 0.49: 1
Quarter ending 9/30/2003 1.03 : 1
Quarter ending 12/31/2003 and thereafter 0.96 : 1
(d) Paragraph 9.12(d) of the Credit Agreement is hereby deleted
and replaced with the following:
Maximum Unfinanced Capital Expenditures. Subject to compliance with all
other provisions of the Credit Agreement, Borrower's unfinanced capital
expenditures for Fiscal Year 2003 shall be limited to $1,750,000;
provided, however, that Borrower must project sufficient cash on hand
for full payment of all interest owed to Lenders for the succeeding
quarter prior to making any of such capital expenditures. Borrower
shall make no capital expenditures in excess of $250,000 in the
aggregate after December 31, 2003, without the prior written consent of
the Lenders.
7. Waiver and Restructure Fee. Borrower shall pay to Agent for the
benefit of the Lenders a waiver and restructuring fee as follows: a payment
shall be made on March 15, 2004, in an amount equal to one percent (1.00%) of
the sum of the Total Revolving Credit Commitment, the outstanding principal
balance of Term Loan A and the outstanding principal balance of Term Loan B as
of the date of this Agreement. This waiver and restructure fee shall be a "fee"
covered by Section 4.2(f) of the Credit Agreement.
8. Waiver of Claims. Borrower hereby agrees that this Agreement is a
reasonable agreement between the parties in connection with the current facts
and circumstances related to Borrower's business and is in keeping with the
tenor of the Credit Agreement, and Borrower hereby completely and generally
waives, releases, remises, acquits and forever discharges the Lenders and their
respective affiliates, present and past officers, directors, agents, attorneys,
predecessors, successors, insurers, parent, subsidiary and sibling corporations
and entities, and assigns (collectively, hereafter the "Bank Releasees") of and
from any and all past and present claims, damages or causes of action arising or
relating in any way to the actions of the Bank Releasees relating to the Credit
Agreement, this Agreement, the Transaction Documents or any other agreement
between the parties, which Borrower ever had or now has against the Bank
Releasees, or any of them.
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9. Miscellaneous.
(a) Borrower agrees to pay on demand all costs and expenses of
the Agent in connection with the preparation, execution, delivery,
administration, modification, and amendment of this Agreement, the other
Transaction Documents, and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and expenses of counsel for
the Agent (including the cost of internal counsel) with respect thereto and with
respect to advising the Agent as to its rights and responsibilities under the
Transaction Documents. Borrower further agrees to pay on demand all costs and
expenses of the Agent and the other Lenders, if any (including, without
limitation, reasonable attorneys' fees and expenses and the cost of internal
counsel), in connection with the enforcement (whether through negotiations,
legal proceedings, or otherwise) of this Agreement or the Transaction Documents.
(b) The Lenders and Borrower, as used herein, shall include the
successors or assigns of those parties, except that Borrower shall not have the
right to assign its rights hereunder or any interest herein.
(c) No modification, rescission, waiver, release, or amendment of
any provision of this Agreement shall be made, except by a written agreement
signed by Borrower and the Required Lenders.
(d) This Agreement may be executed in any number of counterparts,
and by the Lenders and Borrower on separate counterparts, each of which, when so
executed and delivered, shall be an original, but all of which shall together
constitute one and the same Agreement.
(e) Article and Section headings used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
(f) The terms of this Agreement and the other Transaction
Documents shall be cumulative except to the extent that they are specifically
inconsistent with each other, in which case the terms of this Agreement shall
prevail.
(g) This Agreement, the Credit Agreement, and the other
Transaction Documents constitute the entire agreement and understanding between
the parties hereto with respect to the transactions contemplated hereby and
supersede all prior negotiations, understandings, and agreements between such
parties with respect to such transactions, including, without limitation, those
expressed in any commitment letter delivered by the Lenders to Borrower.
(h) This Agreement, and the transactions evidenced hereby, shall
be governed by, and construed under, the internal laws of the State of Colorado,
without regard to principles of conflicts of law, as the same may from time to
time be in effect, including, without limitation, the Uniform Commercial Code as
in effect in the state.
(i) Borrower and the Lenders agree that any action or proceeding
to enforce, or arising out of, the Transaction Documents may be commenced in any
state or federal court of competent jurisdiction in the State of Colorado, and
Borrower and Lenders waive personal service of process and agree that a summons
and complaint commencing an action or proceeding in any such court shall be
properly served and shall confer personal jurisdiction if served by registered
or certified mail to Borrower or the Lenders, as appropriate, or as otherwise
provided by the laws of the State or the United States.
(j) Borrower and the Lenders hereby knowingly, voluntarily, and
intentionally waive any right to trial by jury borrower or lenders may have in
any action or proceeding, in law or in equity, in connection with the
Transaction Documents or the transactions related thereto. Borrower represents
and warrants that no representative or agent of the Lenders has represented,
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expressly or otherwise, that the Lenders will not, in the event of litigation,
seek to enforce this right to jury trial waiver. Borrower acknowledges that the
Lenders have been induced to enter into this Agreement by, among other things,
the provisions of this paragraph.
(k) Oral agreements or commitments to loan money, extend credit .
or to forbear from enforcing repayment of a debt, including promises to extend
or renew suchdebt, are not enforceable. To protect you (Borrower) and us
(Lenders) from misunderstanding or disappointment, any agreements we reach
covering such matters are contained in this Agreement and the Transaction
Documents, which are the complete and exclusive statement of the agreement
between us, except as we may later agree in writing to modify it.
* * * *
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
BORROWER:
KOALA CORPORATION
By:
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Name: Xxx Xxxxxxxx
Title: Chief Operating Officer
Address:
0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxxxxxx XX 00000
Attn: Xxx Xxxxxxxx, Chief Operating Officer
Phone: (000) 000-0000
Facsimile: (000) 000-0000
LENDERS:
U.S. BANK NATIONAL ASSOCIATION
By:
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Name: Xxxxxx X. Xxxxxxx
Title: Vice President
Address:
U.S. Bancorp Center BC-MN-H22A
000 Xxxxxxxx Xxxx, 00xx Xxxxx
Xxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Vice President
Phone: (000) 000-0000
Facsimile: (000) 000-0000
KEYBANK NATIONAL ASSOCIATION
By:
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Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Address:
0000 Xxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
