MANAGEMENT’S DISCUSSION AND ANALYSIS  (CONTINUED) limited the amount of additional funds available for working capital purposes to $5,000,000 above the approxi- mately $53,200,000 that was outstanding under the credit facility as of November 13, 2002; allowed the lenders to receive $19,200,000 from the sale of the Trencor facility (a sale which did not transpire) to pay off the $8,000,000 letter of credit that will be used to retire the industrial revenue bonds on the Trencor facility and to repay $11.2 million of debt that was advanced by the lenders to purchase the John Deere facility; required pro- ceeds from sales of lease portfolio assets to be used to repay the outstanding amounts under the credit facility; and reduced the aggregate commitment under the credit facility going forward by the amount of proceeds received by the Company for sales of assets. At December 31, 2002, the Company was not in compliance with the leverage and fixed charge coverage ratios of the amended credit facility. On March 31, 2003, the Company entered into a fifth amendment to the credit facility, which among other things, waived non-compliance with certain financial ratio covenants for the quarter ended December 31, 2002 and the quarter ended March 31, 2003; increased the maximum commitment available under the amended credit facility to $60,700,000; amended existing financial ratio covenants with which the Company was not in compliance as of December 31, 2002 and the quarter ended March 31, 2003 and added certain other financial covenants; added an excess cash-flow sweep that requires the funding of a $23,720,000 collateral account by May 31, 2003 with the amount of the collateral account increasing each month until its reaches $52,230,000 by December 31, 2003; limits fixed asset expenditures to certain agreed upon limits; and prohibits the Company from making additional loans to its customers for the purchase of equipment or entering into to equipment leases with its customers without the consent of the lenders. The Company intends to enter into a new credit facility in order to refinance the obligations under the existing credit agreement and the senior secured note and is currently in active negotiations with potential lenders regarding such a facility. In the event the Company does not enter into a new credit facility, management believes the Company will remain in compliance with the amended covenants during 2003, however, no assurances can be provided that financial ratio covenant violations under the current credit agreement will not occur in the future or, if such viola- tions occur, that the members of the Company’s banking syndicate will not elect to pursue their contractual remedies under the amended credit agreement, including requiring the immediate repayment in full of all amounts outstanding. There can also be no assurance that the Company can secure adequate or timely replacement refinancing to repay its banking syndicate in the event of an unanticipated repayment demand. The Company’s South African subsidiary, Osborn Engineered Products SA (Pty) Ltd., has available a credit facility of approximately $1,750,000 to finance short-term working capital needs and an additional $1,750,000 available to cover the short-term establishment of letter of credit performance guarantees. As of December 31, 2002, Osborn Engineered Products had no outstanding cash balance due under the credit facility, but had approximately $1,308,000 in performance and retention bonds guaranteed under the facility. The Company’s Canadian subsidiary, Breaker Technology Ltd., has available a revolving line of credit of approximately $1,000,000 to finance short-term working capital needs using their local currency. As of December 31, 2002, Breaker Technology Ltd. had no outstanding amount under the credit facility. On September 10, 2001, the Company and Astec Financial Services, Inc., entered into a note purchase agreement for $80,000,000 of senior secured notes, placed with private institutions, due September 10, 2011 at a fixed rate of interest of 7.56%. On September 10, 2005 and on each September 10 thereafter, the Company must make a principal payment of $11,428,571. Interest will be due and payable semiannually on each March 10 and September 10. As part of this agreement, the Company must maintain certain net worth and fixed charge coverage ratios. On March 12, 2002, the Company executed the first amendment to the note purchase agreement to relax cer- tain financial ratio covenants for 2002 and to provide additional security for the note holders in certain situa- tions. The first amendment to the note purchase agreement also added a 0.375% interest rate surcharge and waived the violations of financial ratios under the original agreement. The second amendment to the note pur- chase agreement, executed May 13, 2002 and effective April 1, 2002, waived the financial covenant violations as of March 31, 2002. It also included a .375% to 1.375% interest rate surcharge applied on a sliding scale based on the covenant calculation each quarter if the original covenant ratios are not met. At June 30, 2002, the Company was not in compliance with the leverage and fixed charge coverage covenants of the senior note agreement. These covenant violations were waived by a majority of the note holders as part of the third amendment to the note purchase agreement dated August 14, 2002. The rate at which the senior subordinat- ed note indebtedness accrues interest did not change from that stated in the second amendment. On November 14, 2002, the Company entered into the fourth amendment to the note purchase agreement, which relaxed through June 30, 2002 the two financial ratio covenants that were breached as of September 30, 2002; added a minimum earnings before interest expense, income tax expense, depreciation, and amortization