Attached files
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| EX-99.1 - EX-99.1 - Essex Rental Corp. | v204304_ex99-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
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Date
of Report (Date of earliest event reported):
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November 24,
2010
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Essex
Rental Corp.
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(Exact
name of registrant as specified in charter)
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Delaware
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000-52459
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20-5415048
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(I.R.S.
Employer
Identification
No.)
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1110
Lake Cook Road, Suite 220, Buffalo Grove, Illinois
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60089
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number, including area
code: 847-215-6502
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(Former
name or former address, if changed since last
report.)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13a-4(c))
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Item 1.01. Entry into a
Material Definitive Agreement.
The
description of the Credit Agreement (as hereinafter defined) set forth in Item
2.03 of this Current Report on Form 8-K is incorporated herein by
reference.
Item
2.01 Completion of Acquisition or Disposition of Assets.
On November 24, 2010, CC Bidding Corp.
(“CCBC”), a Delaware corporation and an indirect wholly-owned subsidiary of
Essex Rental Corp. (“Essex”), completed the acquisition (the “Acquisition”) of
substantially all of the assets of Coast Crane Company, a Delaware corporation
(“Coast”), pursuant to the Asset Purchase Agreement (the “Purchase Agreement”)
entered into on November 12, 2010 described in the Current Report on Form 8-K
filed by Essex with the Securities and Exchange Commission on November 17,
2010. The assets acquired in the Acquisition consisted of all of
the assets used by Coast in the operation of its specialty lifting
solutions and crane rental services business, including cranes and related heavy
lifting machinery and equipment and spare parts, inventory, accounts
receivable, rights under executory contracts, goodwill, other tangible
and intangible assets and the all of the outstanding shares of capital stock of
Coast Crane Ltd., a British Columbia corporation, through which Coast conducted
its operations in Canada.
The
purchase price in the Acquisition was approximately $80 million cash plus the
assumption of approximately $12,000,000 of existing Coast
indebtedness. As additional consideration, CCBC assumed certain other
specified liabilities of Coast, including Coast's obligations under
substantially all executory contracts to which Coast was a party.
Following the completion of the
Acquisition, CCBC changed its name to “Coast Crane Company”.
Item
2.03. Creation of a Direct Financial Obligation or an Obligation under and
Off-Balance Sheet Arrangement of a Registrant.
On
November 24, 2010, CCBC and CC Acquisition Holding Corp. (“Holdings”), a
wholly-owned subsidiary of Essex and the direct parent of CCBC, entered into the
Credit Agreement (the “Credit Agreement”) by and among CCBC, Holdings, General
Electric Capital Corporation, as Agent for the several financial institutions
from time to time party to the Credit Agreement and for itself as a lender,
PNC
Bank National Association and Wells Fargo Bank, National Association, as
lenders, and the
other persons party thereto that are designated as Credit Parties
thereunder. The following description describes the material
terms of the Credit Agreement but does not purport to describe all of the terms
thereof.
The
Credit Agreement provides for a revolving loan and letter of credit facility
(the “Facility”), in the maximum aggregate principal amount of $75,000,000 with
a $2,000,000 aggregate principal sublimit for letters of credit. CCBC
may borrow, repay and reborrow under the Facility. CCBC’s ability to borrow
under the Facility is subject to, among other things, a borrowing base
calculated based on the sum of (a) 85% of eligible accounts, (b) the
lesser of 50% of eligible inventory and $5 million, (c) the lesser of 95% of the
lesser of
(x) the net orderly liquidation value
and
(y) the invoice cost, of
eligible new equipment inventory and $15,000,000 and (d) 85% of the net orderly
liquidation value of eligible other equipment, less reserves established by the
lenders and the
liquidity reserve.
Interest
accrues on the outstanding revolving loans under the Facility at either a per
annum rate equal to (a) LIBOR plus 3.75%, with a
1.50% LIBOR floor or (b)
the Base Rate plus
2.75%, at CCBC’s election. CCBC will be obligated to pay a letter of credit fee
on the outstanding letter of credit accommodations based on a per annum rate of
3.75% per annum. Interest on the revolving loans and fees on the letter of
credit accommodations will be payable monthly in arrears. CCBC will also be
obligated to pay an unused line fee on the amount by which the maximum credit
under the Facility exceeds the aggregate amount of revolving loans and letter of
credit accommodations based on a per annum rate of 0.50%.
Proceeds
of the first borrowing under the Credit Agreement were used to pay the cash
portion of the purchase price, costs, expenses and fees payable in connection
with the Acquisition and the negotiation and entry into the Credit
Agreement. Proceeds of subsequent borrowings under the loan agreement
can be used for general corporate
purposes, capital expenditures and working capital purposes of
CCBC.
The
Facility will terminate, and all outstanding principal and accrued and
outstanding interest and any other amount due under the Facility will be payable
upon the earlier of (i) November 24, 2014 and (ii) the date the
aggregate revolving loan commitment shall terminate in accordance with the
Credit Agreement.
The
Facility has several features similar to credit facilities of this nature,
including but not limited to:
Covenants. The Facility
requires that CCBC meet certain financial tests, such as a fixed charge coverage
ratio commencing with the fiscal quarter ending March 31, 2011 if a
triggering event has occurred. A “triggering event” occurs at any
time when CCBC and the other Credit Parties fail to maintain a
minimum
availability under the Facility of $8,000,000 or more.
The
Facility also contains customary covenants and restrictions binding CCBC,
Holdings and their subsidiaries,
such as limitations on:
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·
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incurring
new indebtedness or liens; provided that the Credit Parties may incur
indebtedness consisting of capital lease obligations or purchase money
indebtedness in excess of $11,000,000 in the aggregate (or
$15,000,000 if, within 120 days after the closing CCBC shall have entered
into certain financial arrangements with one of its suppliers upon terms
acceptable to the lenders party to the Credit
Agreement),
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making
acquisitions,
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making investments and loans
(other than intercompany loans among CCBC and Holdings and intercompany
loans between Coast Crane Ltd. (“Coast Canada”) and CCBC,
provided that amounts owing under
such intercompany loans by Coast Canada to CCBC (other than trade
payables) may not exceed $750,000 and trade payables owing by Coast Canada
to CCBC may not exceed
$5,000,000),
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·
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declaring and paying dividends
and other distributions (except in limited circumstances, including to pay
up to $500,000 of out-of-pocket expenses (other
than overhead costs and expenses) incurred by Essex for the direct
benefit of Holdings or
CCBC),
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redeeming prepaying and
repurchasing other
indebtedness,
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selling or otherwise disposing of
assets,
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entering into mergers or
consolidations, and
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entering into transactions with
affiliates.
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Guarantee. The indebtedness
is guaranteed by Holdings.
Collateral. CCBC and Holdings
have provided a first priority lien on all of their respective assets (including
a pledge of 100% of the stock of CCBC and a pledge of 66% of the stock of Coast
Canada) to secure their respective obligations under the loan
agreement and the guaranty provided by Holdings.
Events of Default. The
Facility specifies certain events of default, including without
limitation:
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failure to pay principal,
interest or fees when
due,
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material inaccuracy of any
representation or warranty,
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material
judgments,
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insolvency and bankruptcy
events,
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material cross defaults with
other material indebtedness and material
contracts,
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failure to maintain first
priority perfected security
interest,
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invalidity or unenforceability
any of the loan documents, including but not limited to, any subordination
provision thereof;
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change of control,
and
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the
failure of CCBC or Holdings to observe their covenants and obligations
under the Credit Agreement and related loan
documents.
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Immediately
following the closing of the acquisition on November 24, 2010, the outstanding
balance under the Facility was approximately $49,552,000.
Item
7.01 Regulation FD Disclosure.
On
November 29, 2010, Essex issued a press release announcing the completion of the
Acquisition. A copy of the press release is attached as Exhibit 99.1
hereto and is incorporated herein by reference.
Item 9.01
Financial Statements and Exhibits.
(a) The
financial statements required to be filed by Item 9.01(a) of Form 8-K are not
included in this report and will be filed by amendment to this Form 8-K no later
than February 10, 2011.
(b) The
pro forma financial information required to be filed by Item 9.01(b) of Form 8-K
is not included in this report and will be filed by amendment to this
Form 8-K no later than February 10, 2011.
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Exhibit No.
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Description
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99.1
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Press
Release, dated November 29,
2010
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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ESSEX
RENTAL CORP.
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Date: December
1, 2010
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By:
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/s/ Martin A. Kroll
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Name:
Martin A. Kroll
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Title:
Chief Financial
Officer
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