EXHIBIT 10.25
THIRD AMENDMENT TO CREDIT AGREEMENT
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THIS THIRD AMENDMENT TO CREDIT AGREEMENT (the "Amendment"), dated as of
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June 29, 1998, is entered into between MELLON BANK, N.A. (the "Bank"), with a
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place of business at 000 Xxxxx Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx
00000, and KEYSTONE AUTOMOTIVE INDUSTRIES, INC., a California corporation
("Borrower"), with its chief executive office located at 000 Xxxx Xxxxxx Xxxxxx,
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Xxxxxx, Xxxxxxxxxx 00000.
RECITAL
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A. Borrower and the Bank have previously entered into that certain Credit
Agreement dated as of March 25, 1997, as amended by that certain First Amendment
to Credit Agreement dated as of August 25, 1997 and that certain Second
Amendment to Credit Agreement dated as of March 17, 1998 (collectively, the
"Credit Agreement"), pursuant to which the Bank has made certain loans and other
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financial accommodations available to Borrower. Terms used herein without
definition shall have the meanings ascribed to them in the Credit Agreement.
B. Borrower has informed the Bank that it intends to acquire
substantially all the capital stock of Republic Automotive Parts, Inc., a
Delaware corporation ("Republic"), in exchange for certain capital stock of
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Borrower, pursuant to which, Republic will become a wholly owned Subsidiary of
Borrower (the "Republic Acquisition").
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C. In connection with the Republic Acquisition, Borrower has requested
that the Bank amend the Credit Agreement to (a) allow Borrower to incur
additional indebtedness, (b) allow Borrower to extend certain loans to
Republic's customers and (c) increase the aggregate value of assets that
Borrower is permitted to sell under the Credit Agreement.
D. The Bank is willing to give such consent and further amend the Credit
Agreement under the terms and conditions set forth in this Amendment. Borrower
is entering into this Amendment with the understanding and agreement that,
except as specifically provided herein, none of the Bank's rights or remedies as
set forth in the Credit Agreement is being waived or modified by the terms of
this Amendment.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Consent to Republic Acquisition. Subject to the terms and conditions
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of this Amendment, the Bank hereby consents to the Republic Acquisition in
accordance with the terms and conditions of that certain Agreement and Plan of
Merger dated as of February 17, 1998 among Borrower, Republic and KAI, Inc., a
wholly owned subsidiary of Borrower (together with all other agreements,
documents and instruments executed and/or delivered in connection therewith, the
"Purchase Agreement"); provided, that, as of the date hereof and after giving
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effect to the Republic Acquisition, no Event of Default, or event which with the
giving of notice
or passage of time or both would constitute an Event of Default, exists or has
occurred and is continuing.
2. Amendments to Credit Agreement.
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(a) The definition of "Guarantors" set forth in Section 1.1 of the
Credit Agreement is hereby amended in its entirety as follows:
"`Guarantors': Any material subsidiary of the Borrower, as
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determined by Bank, organized under the laws of the United States of
America or any political subdivision thereof. Without limiting the
generality of the foregoing, `Guarantors' shall include North Star
Plating Company, a Minnesota corporation, Inteuro Parts Distributors,
Inc. a Florida corporation, and Car Body Concepts, Inc., a Florida
corporation, Republic Automotive Parts, Inc., a Delaware corporation,
Republic Automotive Parts Sales, Inc., a Delaware corporation,
Republic Automotive Parts Distribution, Inc., a Delaware corporation,
and Fenders & More, Inc., a Tennessee corporation."
(b) Clause (iv) of Section 6.2(f) of the Credit Agreement, entitled
"Indebtedness", is hereby amended in its entirety as follows:
"(iv) Indebtedness of the Borrower and its Subsidiaries in an
aggregate amount outstanding at any one time not to exceed Five
Million Dollars ($5,000,000)."
(c) Section 6.2(h) of the Credit Agreement, entitled "Loans,
Investments, Secondary Liabilities", is hereby amended in its entirety as
follows:
"(h) Loans, Investments, Secondary Liabilities. Make or permit
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to remain outstanding, or permit any Subsidiary to make or permit to
remain outstanding, any loan or advance to, or guarantee, induce or
otherwise become contingently liable, directly or indirectly, in
connection with the obligations, stock or dividends of, or own,
purchase or acquire any stock, obligations or securities of or any
other interest in, or make any capital contribution to, any other
Person, or make or permit to remain outstanding loans and advances to
any of its officers, directors and shareholders or enter into or
permit to remain outstanding guarantees in connection with the
obligations of any of its officers, directors and shareholders, in an
aggregate amount outstanding at any time, collectively among the
Borrower and its Subsidiaries, in excess of Two Hundred Fifty Thousand
Dollars ($250,000) (except that during the period from the date hereof
through March 26, 1999 such aggregate amount outstanding at any time,
collectively among the Borrower and its Subsidiaries, shall not exceed
One Million Dollars ($1,000,000)), except that the Borrower and its
Subsidiaries may, without limitation as to the dollar amount of any
such transactions:
(i) own, purchase or acquire certificates of deposit issued by
the Bank, commercial paper rated Moody's P-1, municipal bonds rated
Xxxxx'x XX or
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better, direct obligations of the United States of America or its
agencies, and obligations guaranteed by the United States of America;
(ii) continue to own the existing capital stock of the
Borrower's Subsidiaries;
(iii) endorse negotiable instruments for deposit or collection
or similar transactions in the ordinary course of business; and
(iv) allow the Borrower's Subsidiaries to make or permit to
remain outstanding advances from the Borrower's Subsidiaries to the
Borrower."
(c) Section 6.2(i) of the Credit Agreement, entitled "Asset Sales", is
hereby amended in its entirety as follows:
"(i) Asset Sales. Convey, sell, lease, transfer or otherwise
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dispose of, or permit any Subsidiary to convey, sell, lease, transfer
or otherwise dispose of, during any fiscal year of the Borrower, in
one transaction or a series of transactions, outside the ordinary
course of business, assets of the Borrower or of any of its
Subsidiaries, whether now owned or hereafter acquired, having an
aggregate value in excess of Five Hundred Thousand Dollars ($500,000).
2. Effectiveness of this Amendment. Each of the following is a condition
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precedent to the effectiveness of this Amendment and to the Bank's obligation to
extend any credit to Borrower as provided for by this Amendment:
(a) Amendment, The Bank shall have received, in form and substance
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satisfactory to the Bank, this Amendment fully executed in a sufficient
number of counterparts for distribution to the Bank and Borrower.
(b) Authorizations. The Bank shall have received evidence, in form
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and substance satisfactory to the Bank, that the execution, delivery and
performance by Borrower and each Guarantor and any instrument or agreement
required under this Amendment have been duly authorized.
(c) Delivery of Guarantees. The Bank shall have received the
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continuing guarantees of Republic, Republic Automotive Parts Sales, Inc.,
Republic Automotive Parts Distributors, Inc. and Fenders & More, Inc., each
in form and substance satisfactory to the Bank.
(d) Purchase Agreement. The Bank shall have received, in form and
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substance satisfactory to the Bank, evidence that the Purchase Agreement
has been duly executed and delivered by and to the appropriate parties
thereto and the transactions contemplated under the terms of the Purchase
Agreement have been consummated.
(e) Payoff Letter. The Bank shall have received a payoff letter, in
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form and substance satisfactory to the Bank, from Comerica Bank confirming
that any financing
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arrangements with, and any security interest against Republic or any of its
Subsidiaries in favor of, such lenders shall be terminated upon receipt of
the payoff amount.
(f) Termination Letter. The Bank shall have received a termination
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letter from First American National Bank terminating that certain
Acceptance Credit Agreement dated as of January 23, 1997 from First
American Bank to Republic and the transactions contemplated thereby.
(g) Representations and Warranties. The Representations and
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Warranties set forth in the Credit Agreement must be true and correct as of
the date of this Amendment as if made as of such date.
(h) No Event of Default. As of the date hereof and after giving
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effect to the Republic Acquisition, no Event of Default, or event which
with notice or passage of time or both would constitute an Event of
Default, exists or has occurred and is continuing.
(i) Other Required Documentation. All other documents and legal
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matters in connection with the transactions contemplated by this Agreement
shall have been delivered or executed or recorded and shall be in form and
substance satisfactory to the Bank.
3. Representations and Warranties. The Borrower represents and warrants
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as follows:
(a) Authority. Borrower has the requisite corporate power and
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authority to execute and deliver this Amendment, and to perform its
obligations hereunder and under the Loan Documents (as amended or modified
hereby). The execution, delivery and performance by the Borrower of this
Amendment and each Loan Document (as amended or modified hereby) have been
duly approved by all necessary corporate action of Borrower and no other
corporate proceedings on the part of Borrower are necessary to consummate
such transactions.
(b) Enforceability. This Amendment has been duly executed and
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delivered by Borrower. This Amendment and each Loan Document (as amended
or modified hereby) is the legal, valid and binding obligation of Borrower,
enforceable against Borrower in accordance with its terms, and is in full
force and effect.
(c) Republic Acquisition.
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(i) The Purchase Agreement and the transactions contemplated
thereunder have been duly executed, delivered and performed in
accordance with their terms by the respective parties thereto in all
respects, including the fulfillment (not merely the waiver, except as
may be disclosed to the Bank and consented to in writing by the Bank)
of all conditions precedent set forth therein and after giving effect
to the terms of the Purchase Agreement and any related documents to be
executed and delivered by Republic thereunder, Borrower acquired and
has good and marketable title to all of the issued and outstanding
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shares of the capital stock of Republic, free and clear of all claims,
liens, pledges and encumbrances of any kind, except as disclosed in
writing to the Bank.
(ii) All actions and proceedings required by the Purchase
Agreement, applicable law or regulation (including, but not limited
to, compliance with the Xxxx-Xxxxx-Xxxxxx Anti-Trust Improvements Act
of 1976, as amended) have been taken and the transactions required
thereunder have been duly and validly taken and consummated.
(iii) No court of competent jurisdiction has issued any
injunction, restraining order or other order which prohibits
consummation of the transactions described in the Purchase Agreement
and no governmental or other action or proceeding has been threatened
or commenced, seeking any injunction, restraining order or other order
which seeks to void or otherwise modify the transactions described in
the Purchase Agreement.
(iv) Borrower has delivered, or caused to be delivered, to the
Bank true, correct and complete copies of the Purchase Agreement.
(d) Representations and Warranties. The representations and
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warranties contained in each Loan Document (other than any such
representations or warranties that, by their terms, are specifically made
as of a date other than the date hereof) are correct on and as of the date
hereof as though made on and as of the date hereof.
(e) No Default. As of the date hereof and after giving effect to the
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Republic Acquisition, no event has occurred and is continuing that
constitutes, or would with notice or passage of time or both would
constitute, an Event of Default.
4. Choice of Law. The validity of this Amendment, its construction,
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interpretation and enforcement, the rights of the parties hereunder, shall be
determined under, governed by, and construed in accordance with the internal
laws of the State of California governing contracts only to be performed in that
State.
5. Counterparts. This Amendment may be executed in any number of
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counterparts and by different parties and separate counterparts, each of which
when so executed and delivered, shall be deemed an original, and all of which,
when taken together, shall constitute one and the same instrument. Delivery of
an executed counterpart of a signature page to this Amendment by telefacsimile
shall be effective as delivery of a manually executed counterpart of this
Amendment.
6. Due Execution. The execution, delivery and performance of this
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Amendment are within the power of Borrower, have been duly authorized by all
necessary corporate action, have received all necessary governmental approval,
if any, and do not contravene any law or any contractual restrictions binding on
Borrower.
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7. Reference to and Effect on the Loan Documents.
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(a) Upon and after the effectiveness of this Amendment, each reference
in the Credit Agreement to "this Agreement", "hereunder", "hereof" or words
of like import referring to the Credit Agreement, and each reference in the
other Loan Documents to "the Credit Agreement", "thereof" or words of like
import referring to the Credit Agreement, shall mean and be a reference to
the Credit Agreement as modified and amended hereby.
(b) Except as specifically amended above, the Credit Agreement and all
other Loan Documents, are and shall continue to be in full force and effect
and are hereby in all respects ratified and confirmed and shall constitute
the legal, valid, binding and enforceable obligations of Borrower to the
Bank.
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of any the Bank or the Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.
(d) To the extent that any terms and conditions in any of the Loan
Documents shall contradict or be in conflict with any terms or conditions
of the Credit Agreement, after giving effect to this Amendment, such terms
and conditions are hereby deemed modified or amended accordingly to reflect
the terms and conditions of the Credit Agreement as modified or amended
hereby.
8. Ratification. Borrower hereby restates, ratifies and reaffirms each
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and every term and condition set forth in the Credit Agreement, as amended
hereby, and the Loan Documents effective as of the date hereof.
9. Estoppel. To induce the Bank to enter into this Amendment and to
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continue to make advances to Borrower under the Credit Agreement, Borrower
hereby acknowledges and agrees that, after giving effect to this Amendment, as
of the date hereof, there exists no Event of Default and no right of offset,
defense, counterclaim or objection in favor of Borrower as against the Bank with
respect to the Obligations.
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IN WITNESS WHEREOF, the parties have entered into this Amendment as of the
date first above written.
KEYSTONE AUTOMOTIVE INDUSTRIES, INC.,
a California corporation
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Chief Financial Officer
MELLON BANK, N.A.,
a national association
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Vice President
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