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EXHIBIT 10.32
AGREEMENT
THIS AGREEMENT ("Agreement"), dated as of February 9, 1997, is by and
between CITICORP DEL-LEASE, INC., a Delaware corporation doing business as
CITICORP DEALER FINANCE ("Lender"), and FALCONITE, INC. ("Falconite"), an
Illinois corporation.
WITNESSETH
WHEREAS, M&M Properties, Inc. and XxXxxxx & Falconite Equipment Co.,
Inc. (jointly and severally referred to herein as "Borrower") are wholly-owned
subsidiaries of Falconite;
WHEREAS, Lender and each Borrower are parties to a Dealer Security
Agreement, each dated June 19, 1995 ( each Dealer Security Agreement being
referred to herein as the "Security Agreement"); and
WHEREAS, as a condition to Lender entering into Amendment No. 5 to the
Security Agreement, Falconite has agreed to execute and deliver this
Agreement to Lender;
NOW, THEREFORE, in consideration of the premises and for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Lender and Falconite hereby agree as follows:
1. All capitalized terms not otherwise defined in this Agreement
shall have the meanings given to them in the Security Agreement.
2. Falconite agrees that so long as any Obligations remain
outstanding Falconite shall:
(a) CONSOLIDATED LEVERAGE: maintain Consolidated Leverage
(as defined below) of not more than 3.5 to 1 measured at the end of any fiscal
quarter of Falconite. "Consolidated Leverage" means a ratio of (i) total
liabilities to (ii) tangible net worth (excluding, as an example, good will)
plus deferred taxes of Falconite and its subsidiaries on a consolidated basis;
(b) DEBT SERVICE: maintain on a combined basis with its
subsidiaries an annualized ratio, measured at the end of any fiscal quarter of
Falconite, of earnings before interest, taxes, depreciation and amortization
("EBITDA") to Debt (as defined below) of at least (i) 20% for any fiscal
quarter through June 30, 1997 and (ii) 25% for any fiscal quarter thereafter.
"Debt" means all short and long-term obligations of Falconite and its
subsidiaries on a consolidated basis, excluding accounts payable and accruals,
deferred taxes and taxes payable, which should be classified as liabilities on
the balance sheet of Falconite and its subsidiaries (including, but not limited
to, any indebtedness owed to Lender, short-term rentals, floorplan financing,
mortgages, term and other amortizing loans);
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(c) EBITDA TO REVENUE: maintain on a combined basis with its
subsidiaries a ratio, measured at the end of any fiscal quarter of Falconite,
of EBITDA to Revenue (as defined below) of at least 35%. "Revenue" means gross
sales less returns for credit and allowances, freight out, and cash discounts
allowed;
(d) QUARTERLY STATEMENTS: as soon as available, and in any event
not more than forty-five (45) days after the end of each fiscal quarter of
Falconite, to furnish to Lender copies of the consolidated and consolidating
balance sheet of Falconite and its subsidiaries and related statements of
income, retained earnings and changes in financial condition of Falconite and
its subsidiaries for such quarter, all in reasonable detail and certified by
the chief financial officer of Falconite as being true, correct and complete,
and as having been prepared in accordance with generally accepted accounting
principles consistently maintained and applied, subject to year-end
adjustments; and
(e) ANNUAL STATEMENTS: as soon as available, and in any event
not more than one hundred twenty (120) days after the end of each fiscal year
of Falconite, to furnish to Lender a copy of the annual financial statements
of Falconite (consisting of at least the consolidated and consolidating
balance sheet of Falconite and its subsidiaries and related statements of
income, retained earnings and changes in financial condition of Falconite and
its subsidiaries), all in reasonable detail and audited by a firm of public
accountants acceptable to Lender, to the effect that such statements have been
prepared in accordance with generally accepted accounting principles
consistently maintained and applied (except for changes with which such
accountants concur).
3. The validity, construction and enforceability of this Agreement
shall be governed by the internal laws of the State of New York without giving
effect to conflict of laws principles thereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
FALCONITE, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxx
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Title: President
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CITICORP DEL-LEASE, INC., d/b/a
CITICORP DEALER FINANCE
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
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Title: Vice President
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