FOURTH AMENDMENT T0 AMENDED AND RESTATED
CREDIT AND SECURITY AGREEMENT
This Fourth Amendment to the Amended and Restated Credit and Security
Agreement ("Fourth Amendment") is dated effective June 8, 1998, and is by and
between the following identified parties: Featherlite Mfg., Inc., a corporation
duly organized and validly existing under the laws of the State of Minnesota,
with its principal place of business at Xxx. 00 & 0, Xxxxxx, Xxxx 00000
('`Borrower"), Xxxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxxx, residents of Iowa,
and Xxxxx Xxxxxxx and Xxxxx Xxxxxxx, residents of Minnesota (the " Xxxxxxxx" ),
and FirstarBank Iowa, N.A., a national banking institution ("Bank").
RECITALS
A. Borrower, Xxxxxxxx and Bank entered into an Amended and Restated Credit
and Security Agreement dated as of December 30, 1996 ("Restated Agreement"),
which was amended by a First Amendment dated June 18, 1997, a Second Amendment
dated July 31, 1997 and a Third Amendment dated January 1, 1998.
B. Borrower has requested that the Bank increase the revolving line of
credit and to amend certain terms and conditions in the Restated Agreement.
C. Bank is willing to grant the request subject to the terms of this Fourth
Amendment.
The parties agree:
1. Amend Definitions and Accounting. Section 1, Definitions and Accounting,
is amended to modify the following definitions:
"Borrowing Base" means an amount equal to the sum of 80 percent of the
Eligible Receivables of Borrower outstanding plus 65 percent of the Eligible
Finished Inventory of Borrower plus 65 percent of Eligible Raw Material
Inventory of Borrower plus 85 percent of the orderly liquidation value of
machinery and equipment of Borrower located at the facilities of Borrower in
Iowa.
"Revolving Line of Credit Borrowing Limit" means an amount equal to the
lesser of: (i) $17,000,000 or (ii) the Borrowing Base."
2. Amended Negative Covenants.
(a) Section 9, Negative Covenants, subpart (b) (iv) is amended to allow up
to $23,000,000 in floor plan financing for the Vantare Division.
(b) Section 9, Negative Covenants, subpart (c) dealing with third party
liabilities is amended to allow third party liabilities as long as they are not
in excess of $25,000,000.
3. Amended Financial Covenant. Section 11, Financial Covenants of Borrower,
as follows:
a) Minimum Working Capital. This financial covenant is to be deleted in its
entirety.
b) Minimum Tangible Net Worth. Maintain at all times as Tangible Net Worth
of not less than $20,000,000.
c) Capital Expenditures. Refrain from making expenditures for fixed or
capital assets which would cause the aggregate of all such expenditures made by
Borrower to exceed $3,000,000 in any fiscal year.
d) Current Ratio. Maintain at all times a ratio of current assets to
current liabilities of not less than 1.25 to 1.
e) Leverage Ratio. Maintain at all times a ratio of total liabilities to
Tangible Net Worth of not greater then 3.75 to 1.
f) Cash Flow/Debt Service. Maintain a ratio of Operating Cash Flow to Total
Debt Service of not less than 1.5 to 1 measured quarterly based on a trailing
four-quarter average basis.
4. Representations and Warranties. All the representations and warranties
of Borrower as set forth in the Restated Agreement are true and correct in all
material respects as of the date of this Fourth Amendment.
5. Acknowledgment of Receipt. By their execution of this Fourth Amendment,
the parties acknowledge receipt of a copy of this document.
6 Savings. All other terms and conditions of the Restated Agreement, not
specifically modified by this Fourth Amendment, shall remain in full force and
effect.
7. Representation. The Borrower represents that no Event of Default has
occurred and is continuing under the Restated Agreement, as amended, and no
event or circumstance has occurred and is continuing that, with the giving of
notice, the passage of time, or both, would constitute an Event of Default under
the Restated Agreement, as amended. Further, the Borrower represents that the
representations and warranties as contained in the Restated Agreement, as
amended, continue to be true.
8. Counterparts. This Fourth Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same instrument.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AMENDMENT SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR
ORAL PROMISES NOT CONTAINED IN THIS WRITTEN AGREEMENT (EXCEPT THE RESTATED
AGREEMENT AS PREVIOUSLY AMENDED AND DOCUMENTS REFERRED TO IN THE RESTATED
AGREEMENT AS PREVIOUSLY AMENDED) MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE
TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.
FEATHERLITE MFG., INC.
BY: /S/ XXXXXX XXXXXXX
Xxxxxx Xxxxxxx, President
BY: /S/ XXXXX X. XXXXXXX
Xxxxx X. Xxxxxxx, Executive Vice President
FIRSTAR BANK IOWA, N.A.
BY: /S/ XXXXX XxXXXXX
Xxxxx XxXxxxx, Vice President
