AMENDMENT NO. 3 TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT Dated as of December 31, 1997
EXHIBIT 10.27
AMENDMENT NO. 3 TO
THIRD AMENDED AND
RESTATED CREDIT AGREEMENT
Dated as of December 31, 1997
THIS AMENDMENT NO. 3 TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT ("Amendment") is made as of this
25th day of June, 1999 by and among SOUTH CENTRAL POOL SUPPLY, INC., a Delaware corporation (the
"Borrower"), the financial institutions listed on the signature pages hereof (the "Lenders") and LASALLE BANK
NATIONAL ASSOCIATION, formerly known as LaSalle National Bank, in its individual capacity as a Lender and in its
capacity as agent ("Agent") under that certain Third Amended and Restated Credit Agreement dated as of December
31, 1997 by and among the Borrower, the Lenders and the Agent (as amended, the "Credit Agreement") and each of
the Persons identified on the signatories hereto as a Loan Party (individually, a "Loan Party" and collectively,
the "Loan Parties"). Defined terms used herein and not otherwise defined herein shall have the meaning given to
them in the Credit Agreement.
WITNESSETH
WHEREAS, the Borrower, the Lenders and the Agent are parties to the Credit Agreement; and
WHEREAS, the Borrower, the Required Lenders and the Agent have agreed to amend the Credit Agreement on
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained
herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the Borrower, the Required Lenders and the Agent have agreed to the following amendments to the Credit Agreement.
1. Amendment to the Credit Agreement. Subject to the satisfaction of the conditions precedent set forth in
Section 2 below, the Credit Agreement is amended as follows:
1.1 Section 1.1 of the Credit Agreement is hereby amended by adding the following definition
immediately after the definition of Acquisition:
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"Acquisition Adjustment" means, as of any determination date, an amount determined
with respect to each Acquisition or other transaction or series of transactions in which
Borrower or any of its Subsidiaries acquires all or any significant portion of the assets of
another Person, equal to the product obtained by multiplying (a) the aggregate cash
consideration paid by Borrower and/or its Subsidiary in connection therewith, including closing
costs but excluding amounts paid with cash equity directly or indirectly contributed by
Holdings, by (b) (i) 75%, if such transaction was consummated in the 3 month period ending on
the determination date, (ii) 50%, if such transaction was consummated in the 6 month period
ending on the determination date, (iii) 25%, if such transaction was consummated in the 9 month
period ending on the determination date, (iv) 0%, if such transaction was consummated more than
9 months prior to the determination date."
The amount described in clause (a) above with respect to the Xxxxxx Pump Acquisition is $21,000,000.
1.2 Section 2.8(b)(i)(a) of the Credit Agreement is hereby amended by deleting such clause in its
entirety and substituting the following therefor:
"(a) with respect to Revolving Loans, the sum of (x) the average of the outstanding amounts
as of the last day of each quarter for the four quarters in the period then ended plus (y) with
respect to each calculation of Leverage Ratio, commencing March 31, 1999, the sum of the
Acquisition Adjustments for all Acquisitions or other transactions or series of transactions in
which Borrower or any of its Subsidiaries acquires all or any significant portion of the
business of another Person, if any, consummated within the 9-month period ended on the date of
calculation, but not including any Acquisitions by Holdings, Borrower or any Subsidiary of
Holdings or Borrower of any Person who was a wholly owned Subsidiary of Borrower or Holdings
immediately prior to such Acquisition; and"
1.3 Section 6.3(F) of the Credit Agreement is hereby amended by adding the following at the end of
such Section:
"(vi) Borrower may make distributions to Holdings which are used by Holdings solely to
redeem outstanding capital stock of Holdings provided all of the following conditions are
satisfied:
(a) no Default or Unmatured Default shall have occurred and be continuing at the
date of declaration or payment thereof or would result therefrom;
(b) the maximum distribution permitted during the period commencing April 1, 1999
until termination of the Commitments and payment in full of all of the Obligations (other than
contingent indemnity obligations) shall not exceed $7,322,000; and
(c) after giving effect to such distribution, Borrower is in compliance on a
proforma basis with the covenants set forth in Section 6.4, recomputed for the most recent
fiscal quarter for which financial statements are available.
1.4 Section 6.3(G) of the Credit Agreement is hereby amended by adding the following at the end of
such Section:
"Notwithstanding anything herein to the contrary, but without limiting the foregoing, Borrower
shall not, and shall not permit any of its Subsidiaries, without the prior written consent of
Agent and Required Lenders, to enter into any Acquisition or transaction or series of
transactions in which Borrower and/or any of its Subsidiaries, acquires all or any significant
portion of the assets of another Person, if the aggregate purchase price thereof (including,
without duplication, Indebtedness assumed or incurred in connection therewith and the fair
market value of any non-cash consideration thereof), (a) when combined with the aggregate
purchase price of all such transactions consummated within the same 12 month period, commencing
with the twelve month period ending March 31, 2000, exceeds $10,000,000 or (b) when combined
with the aggregate purchase price of all such transactions consummated since April 1, 1999,
exceeds $30,000,000."
1.5 Section 6.4(D) is hereby amended by deleting clause (i) in the last paragraph thereof and
substituting the following therefor:
"(i) with respect to Revolving Loans, the sum of (x) the average of the outstanding amounts
as of the last day of each quarter for the four quarters in the period then ended plus (y) with
respect to each calculation of Leverage Ratio, commencing March 31, 1999, the sum of the
Acquisition Adjustments for all Acquisitions or other transactions or series of transactions in
which Borrower or any of its Subsidiaries acquires all or any significant portion of the
business of another Person, if any, consummated within the 9-month period ended on the date of
calculation but not including any Acquisitions by Holdings, Borrower or any Subsidiary of
Holdings or Borrower of any Person who was a wholly owned Subsidiary of Borrower or Holdings
immediately prior to such Acquisition; and"
2. Conditions of Effectiveness. This Amendment shall not become effective unless the Agent shall have
received the following on or before June 30, 1999:
(1) duly executed originals of this Amendment from each of the Borrower, the Agent and the Required Lenders;
(2) the written consent of the holders of the Subordinated Intercompany Indebtedness, in form and substance
satisfactory to Agent.
3. Representations and Warranties of the Borrower. The Borrower hereby represents and warrants as follows:
(1) This Amendment and the Credit Agreement as amended hereby, constitute legal, valid and binding
obligations of the Borrower and are enforceable against the Borrower in accordance with their terms.
(2) Upon the effectiveness of this Amendment, the Borrower hereby reaffirms all covenants, representations
and warranties made in the Credit Agreement and the other Loan Documents to the extent the same are not amended
hereby, and agrees that all such covenants, representations and warranties shall be deemed to have been remade as
of the effective date of this Amendment.
(3) No Default or Unmatured Default has occurred and is continuing or would result from the execution of
this amendment or the transactions contemplated hereby.
(4) The execution, delivery and performance of this Amendment (i) has been duly authorized by all necessary
corporate action and (ii) does not conflict with, result in a breach of, or constitute (with or without notice or
lapse of time or both) a default under any Contractual Obligation of Holdings, Borrower or any of its
Subsidiaries.
4. Reference to the Effect on the Credit Agreement.
(1) Upon the effectiveness of Section 1 hereof, on and after the date hereof, each reference in the Credit
Agreement and other Loan Documents to "this Credit Agreement," "hereunder," "hereof," "herein" or words of like
import shall mean and be a reference to the Credit Agreement as amended hereby.
(2) Except as specifically amended above, the Credit Agreement and all other documents, instruments and
agreements executed and/or delivered in connection therewith, shall remain in full force and effect, and are
hereby ratified and confirmed.
(3) The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right,
power of remedy of the Agent or the Lenders, nor constitute a waiver of any provision of the Credit Agreement or
any other documents, instruments and agreements executed and/or delivered in connection therewith.
5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS
(INCLUDING 735 ILCS 105/5-1 ET SEQ. BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS) OF THE STATE
OF ILLINOIS.
6. Headings. Section headings in this Amendment are included herein for convenience of reference only and
shall not constitute a part of this Amendment for any other purpose.
7. Counterparts. This Amendment may be executed by one or more of the parties to the Amendment on any
number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and
the same instrument. This Amendment may be executed by facsimile and a facsimile transmission of a signature to
the Agent or the Agent's counsel shall be effective as though an original signature had been so delivered.
8. No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of
this Amendment and the Credit Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Amendment and the Credit Agreement as hereby amended shall be construed as if drafted jointly by the
parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of
the authorship of any provisions of this Amendment or the Credit Agreement.
9. Reaffirmation. Each of the Loan Parties as debtor, grantor, pledgor, guarantor, assignor, or in other
any other similar capacity in which such Loan Party grants liens or security interests in its property or
otherwise acts as accommodation party or guarantor, as the case may be, hereby (i) ratifies and reaffirms all of
its payment and performance obligations, contingent or otherwise, under each of the Loan Documents to which it is
a party (after giving effect hereto) and (ii) to the extent such Loan Party granted liens on or security
interests in any of its property pursuant to any such Loan Document as security for or otherwise guaranteed the
Borrower's Obligations under or with respect to the Loan Documents, ratifies and reaffirms such guarantee and
grant of security interests and liens and confirms and agrees that such security interests and liens hereafter
secure all of the Obligations as amended hereby. Each of the Loan Parties hereby consents to this Amendment and
acknowledges that each of the Loan Documents remains in full force and effect and is hereby ratified and
reaffirmed. The execution of this Amendment shall not operate as a waiver of any right, power or remedy of the
Agent or Lenders, constitute a waiver of any provision of any of the Loan Documents or serve to effect a novation
of the Obligations.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first above written.
BORROWER:
SOUTH CENTRAL POOL SUPPLY, INC.
By:/S/
Title:
AGENT AND LENDER:
LASALLE BANK NATIONAL ASSOCIATION, as Agent and as a Lender
By:/S/
Title:
THE FIRST NATIONAL BANK OF CHICAGO, as a Lender
By:/S/
Title:
HIBERNIA NATIONAL BANK, as a Lender
By:/S/
Title:
SOCIETE GENERALE, as a Lender
By:/S/
Title:
LOAN PARTIES:
SCP POOL CORPORATION
By:/S/
Title:
ALLIANCE PACKAGING INC.
By:/S/
Title:
SCP INTERNATIONAL INC.
By:/S/
Title:
