EXHIBIT 10.4
FIFTH AMENDMENT AND WAIVER TO
LOAN AND SECURITY AGREEMENT
This Fifth Amendment and Waiver to Loan and Security Agreement (this
"Amendment"), is made and entered into effective as of the 14th day of May, 1998
by and between FINOVA CAPITAL CORPORATION, a Delaware corporation ("Lender") and
AMERITRUCK DISTRIBUTION CORP., a Delaware corporation ("Borrower"). This
Amendment modifies and amends that certain Loan and Security Agreement, dated
May 5, 1997, between Lender and Borrower (the "Agreement"). All terms used
herein with initial capital letters, unless otherwise specifically defined
herein, shall have the same meanings as set forth in the Agreement. All
references to the Agreement shall include the Schedule.
R E C I T A L S:
WHEREAS, Borrower has informed Lender that Borrower is attempting to
obtain Twenty Million Dollars ($20,000,000) in connection with a private
placement of its capital stock or indebtedness;
WHEREAS, Borrower has also informed Lender that Events of Default
exist as a result of a breach of the Current Ratio, Net Worth, Debt Service
Coverage Ratio and Operating Ratio set forth in Section 13.14 of the Agreement
for the period ending March 31, 1998 (the "March 31 Events of Default");
WHEREAS, in connection therewith, Borrower has requested that Lender
waive the March 31 Events of Default, and Borrower and Lender desire to amend
the Agreement in certain respects;
WHEREAS, such amendments to the Agreement will provide Borrower with
additional loans;
NOW, THEREFORE, in consideration of the foregoing premises and other
valuable consideration, the parties hereto agree as follows:
1. Waiver. Lender hereby waives the March 31 Events of Default. The
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waiver of the March 31 Events of Default shall not constitute a waiver of any
other Events of Default which may exist or hereafter arise under the Agreement
or any of the other Loan Documents or an agreement by Lender to waive any other
Events of Default. Without limiting the foregoing, Borrower's failure to comply
with the covenants contained in Section 13.14 for any period ending after March
31, 1998 shall constitute an Event of Default.
2. Amendment to Schedule. Subject to the terms and conditions of
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Section 3 below, the Agreement is amended as follows:
(a) Section 18.1 of the Agreement shall be amended to add the
following definition in the appropriate alphabetical order:
"Second Additional Availability Period" means the 120 day period
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commencing on May 15, 1998 and ending on the earliest of (A) September 15,
1998, (B) the date a Qualified Private Placement is consummated and (C) the
date Borrower notifies Lender in writing of its desire to terminate the
Second Additional Availability Period.
(b) Section 18.1 of the Agreement shall be amended to amend and
restate in its entirety the definition of "Qualified Private Placement" as
follows:
"Qualified Private Placement" means any non-public sale of shares of
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any class of Borrower's capital stock or indebtedness yielding gross cash
proceeds to Borrower of at least Ten Million Dollars ($10,000,000).
(c) Section 1.1 of the Schedule to the Agreement is amended and
restated in its entirety as follows:
TOTAL FACILITY (Section 1.1): $60,000,000; provided, that during the
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Second Additional Availability Period, the
Total Facility shall be $62,500,000
(d) Section 1.2 of the Schedule to the Agreement is amended and
restated in its entirety as follows:
LOANS (SECTION 1.2):
REVOLVING LOANS: A revolving line of credit
(the "Revolving Loans") consisting of loans
against Eligible Receivables and against
Eligible Equipment in an aggregate
outstanding principal amount not to exceed
the lesser of:
(a) Total Facility
(b) the sum of:
(i) an amount equal to eighty-five
percent (85%) of the net amount
of the Eligible Receivables that
are billed; plus
(ii) an amount (not to exceed the
lesser of (A) Four Million
Dollars ($4,000,000) and (B) an
amount equal to three (3)
working days' revenue (based on
the most recent
-2-
monthly financials)) equal to
seventy percent (70%) of
Eligible Receivables that are
unbilled less than five (5)
Business Days; plus
(iii) an amount equal to the Equipment
Advance Rate multiplied by the
Orderly Liquidation Value of the
Eligible Equipment; plus
(iv) during the Second Additional
Availability Period only, an
amount equal to the product of
(A) the amount by which seventy-
five percent (75%) exceeds the
Equipment Advance Rate
multiplied by (B) the Orderly
Liquidation Value of the
Eligible Equipment; less
(v) the aggregate undrawn face
amount of all Letters of Credit
issued under Section 1.4 of this
Agreement; less
(vi) the amount of the Landlord
Reserve and such other reserves
as Lender, in its reasonable
credit judgment, deems proper
from time to time based on the
results of its examinations,
Appraisals or other credit or
collateral considerations which
indicate a deterioration in
Eligible Receivables or Eligible
Equipment from the date hereof,
such that additional reserves
for Eligible Receivables and/or
Eligible Equipment are
warranted.
Notwithstanding the foregoing, (A) the loans
against Eligible Equipment shall not exceed
$35,000,000 at any time and (B) the
availability described in clause (iv) above
shall not be available at any time other
than during the Second Additional
Availability Period. The Revolving Loans
shall be segregated into two tranches:
revolving loans under tranche A (the
"Revolving A Loans") and revolving loans
under tranche B (the "Revolving B Loans").
The maximum outstanding principal amount of
Revolving A Loans is Thirty Million Dollars
($30,000,000) and the maximum outstanding
principal amount of Revolving
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B Loans is Thirty Million Dollars
($30,000,000); provided, that during the
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Second Additional Availability Period, the
maximum outstanding principal amount of
Revolving B Loans shall be Thirty-Two
Million Five Hundred Thousand Dollars
($32,500,000). With respect to each request
for a Revolving Loan or Letter of Credit,
Borrower shall designate whether such
request is for a Revolving A Loan (or under
the tranche for Revolving A Loans in the
case of Letters of Credit) or a Revolving B
Loan (or under the tranche for Revolving B
Loans in the case of Letters of Credit).
With each request for a Revolving B Loan (or
a Letter of Credit to be issued under the
tranche for Revolving B Loans), Borrower
shall provide Lender with a certificate of
the chief financial officer of Borrower, in
form and substance satisfactory to Lender
that such Revolving B Loan or Letter of
Credit, as applicable, will not result in a
breach or violation of the Indenture, and at
the request of Lender, with an opinion of
Borrower's counsel that such Revolving B
Loan or Letter of Credit, as applicable,
will not result in a breach or violation of
the Indenture.
(e) The first section of Section 3.1(A) of the Schedule to the
Agreement is amended and restated in its entirety as follows:
INTEREST AND FEES (SECTION 3.1):
A. INTEREST.
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(i) The Revolving Loans shall bear interest
on the unpaid principal amount thereof
from the date such Revolving Loans are
made and until paid in full at one of
the following rates, as selected by
Borrower from time to time as provided
in this Section 3.1:
(a)
Base Rate Option. That portion
of the outstanding principal
balance of the outstanding
principal balance of the
Revolving Loan subject to this
option shall bear interest at a
fluctuating rate per annum equal
to (A) if the Second Additional
Availability Period has not
ended, the Base Rate plus one
and three-quarters percent
(1.75%) and (B) the Base Rate
plus three-quarters of one
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percent (0.75%) at all other
times; and
(b) LIBOR Rate Option. That portion
of the outstanding principal
balance of the Revolving Loan
subject to this option shall
bear interest at a fixed rate
per annum equal to (A) if the
Second Additional Availability
Period has not ended, the LIBOR
Rate applicable to such LIBOR
Rate Portion plus three and
three-quarters percent (3.75%)
and (B) the LIBOR Rate
applicable to such LIBOR Rate
Portion plus two and three-
quarters percent (2.75%) at all
other times.
(f) A new Section 3.1(E) is added to the Schedule to the Agreement
as follows:
E. Fees for Second Additional Availability
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Period; Waiver Fee. Borrower shall pay
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to Lender a Second Additional
Availability Facility Fee equal to One
Hundred Sixty Thousand Dollars
($160,000) which shall be payable as
follows: (i) Forty Thousand Dollars
($40,000) on the first day of the
Second Additional Availability Period,
(ii) Thirty Thousand Dollars ($30,000)
on June 15, 1998, (iii) Thirty Thousand
Dollars ($30,000) on July 15, 1998,
(iv) Thirty Thousand Dollars ($30,000)
on August 15, 1998, and (v) Thirty
Thousand Dollars ($30,000) on September
15, 1998; provided that upon
termination of this Agreement or the
Second Additional Availability Period,
the entire unpaid Second Additional
Availability Facility Fee shall be
immediately due and payable. In
addition, Borrower shall also pay to
Lender a Waiver Fee equal to Thirty
Five Thousand Dollars ($35,000) which
shall be payable on the first day of
the Second Additional Availability
Period.
3. Conditions to Effectiveness. As a condition precedent to the
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effectiveness of this Amendment, Borrower agrees to fulfill its obligations
under Section 4 below.
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4. Other Agreements. In consideration of providing the waiver set
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forth above and amending the Agreement to provide additional loans to Borrower,
Borrower agrees to (a) promptly upon the request to Lender, deliver to Lender
such documents as Lender shall require and shall have delivered to Borrower to
perfect its lien on the vehicles listed on Exhibit A and (b) cause its
subsidiary, AmeriTruck, Ltd., an Ohio corporation, to execute and deliver to
Lender a guaranty of the obligations of Borrower and a security agreement
granting a lien on substantially all of its assets to secure such guaranty.
5. Confirmation of Liens. This Amendment in no way acts as a release
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or relinquishment of any of the liens, security interests, rights or remedies
securing payment of the Loans or of the enforcement thereof. Such liens,
security interests, rights and remedies are hereby ratified, confirmed,
preserved, renewed and extended by Borrower in all respects.
6. Reaffirmation of the Loan Documents. All terms, conditions and
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provisions of the Agreement and the other Loan Documents are hereby reaffirmed
and continued in full force and effect and shall remain unaffected and unchanged
except as specifically amended hereby.
7. Representations and Warranties. Borrower represents and warrants to
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Lender that the execution and delivery by Borrower of this Amendment has been
duly and properly made and authorized. The Loan Documents and this Amendment
each constitute valid and binding obligations of Borrower, enforceable in
accordance with their respective terms.
8. Benefit of the Amendment. The terms and provisions of this
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Amendment and the other Loan Documents shall be binding upon and inure to the
benefit of Lender and Borrower and their respective successors and assigns,
except that Borrower shall not have any right to assign its rights under this
Amendment or any of the Loan Documents or any interest therein without the prior
written consent of Lender.
9. Choice of Law. The Loan Documents and this Amendment shall be
performed and construed in accordance with the laws of the State of Arizona.
10. Entire Agreement. Except as modified by this Amendment, the Loan
Documents remain in full force and effect. The Loan Documents, as modified by
this Amendment, embody the entire agreement and understanding between Borrower
and Lender, and supersede all prior agreements and understandings between said
parties relating to the subject matter thereof.
11. Counterparts; Telecopy Execution. This Amendment may be executed
in any number of separate counterparts, each of which, when taken together,
shall constitute one and the same agreement, admissible into evidence,
notwithstanding the fact that all parties have not signed the same counterpart.
Delivery of an executed counterpart of this Amendment by telefacsimile shall be
equally as effective as delivery of a manually executed
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counterpart of this Amendment. Any party delivering an executed counterpart of
this Amendment by telefacsimile shall also deliver a manually executed
counterpart of this Amendment, but the failure to deliver a manually executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
effective as of the day, month, and year first above written.
FINOVA CAPITAL CORPORATION, a Delaware
corporation
By
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Name
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Title
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AMERITRUCK DISTRIBUTION CORP., a Delaware
corporation
By
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Name
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Title
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REAFFIRMATION OF GUARANTORS
DATED MAY 14, 1998
Each of the undersigned hereby (i) confirms that it has read the
foregoing Fifth Amendment and Waiver, and (ii) reaffirms its obligations under
the Continuing Guaranty that it executed in favor of FINOVA Capital Corporation.
AMERITRUCK EQUIPMENT CORP.
AMERITRUCK LOGISTICS SERVICES, INC.
AMERITRUCK REFRIGERATED TRANSPORT, INC.
CMS TRANSPORTATION SERVICES, INC.
KTL, INC.
SCALES TRANSPORTATION CORPORATION
SCALES LEASING COMPANY, INC.
W&L SERVICES CORP.
W&L MOTOR LINES, INC.
AMERITRUCK OPERATIONS SERVICES, INC.
BEST WAY MOTOR LINES, INC.
PRO-TRANS SERVICES, INC.
By
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Name
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Title of each Guarantor
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EXHIBIT A
See Attached.
