Exhibit 10(o)
FIRST AMENDMENT TO
FOURTH AMENDED AND RESTATED
CREDIT AGREEMENT
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This FIRST AMENDMENT TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT is
entered into this 18th day of January, 1996 by and among ADESA CORPORATION
("ADESA"), ADESA FUNDING CORPORATION ("Funding"), the BANKS PARTIES HERETO (the
"Banks") and BANK ONE INDIANAPOLIS, National Association, as Agent (the
"Agent").
WITNESSETH:
WHEREAS, ADESA, FUNDING, the Banks and the Agent are parties to that
certain Fourth Amended and Restated Credit Agreement (the "Credit Agreement")
dated July 28, 1995; and
WHEREAS, ADESA is in violation of certain of the financial covenants
set forth in the Credit Agreement and has requested that the Banks waive such
violations and amend certain of the financial covenants to more accurately
reflect ADESA's financial condition; and
WHEREAS, the Banks are willing to amend certain of the financial
covenants upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the Banks' agreement to waive
certain violations and to amend certain covenants and, for other good and
valuable considerations, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions. (a) The following definitions set forth in
Section 1 of the Credit Agreement are hereby amended to read in their entirety
as follows:
a.a. Coverage. "Coverage" means the ratio computed on a consolidated
basis (exclusive of AFC) for each period of four (4) consecutive fiscal
quarters of ADESA equal to the sum of ADESA's consolidated net income
plus depreciation, amortization expense, excluding amortization related
to any environmental liabilities, and interest expense, plus lease
expenses related to any AHC Lease Transaction, plus or minus gains or
losses from the sale of assets or other extraordinary gain or loss
items (net of any related tax benefits), plus or minus any change in
deferred income taxes, over the sum of principal payments on
unsubordinated long-term debt plus interest expense, capital
expenditures, and lease expenses related to any AHC Lease Transaction.
For purposes of this definition, capital expenditures shall mean all
capital expenditures less those amounts funded with additional
Subordinated Debt, additional equity or additional advances under the
ADESA Revolver, made or incurred during the period for which the ratio
is being calculated and provided that in no event shall capital
expenditures be reduced below zero.
dddd. Subordinated Debt. "Subordinated Debt" means the indebtedness
owed by ADESA to ADESA Holdings, Inc. In a principal amount not to
exceed $40,000,000, and any indebtedness of ADESA or a Subsidiary which
is subordinated to all of the Obligations on such terms that such
indebtedness is, in the judgment of the Required Banks, reasonably
exercised and confirmed in writing by the Agent to ADESA, the
functional equivalent of equity in relation to the Obligations.
eeee. Subordination Agreement. "Subordination Agreement" means that
certain agreement among ADESA, ADESA Holdings, Inc. and the Agent
regarding the subordination of advances from ADESA Holdings, Inc. to
ADESA to the Obligations, as such agreement may be amended from time to
time.
(b) The following definitions are added to Section 1:
pppp. ADESA Holdings, Inc. "ADESA Holdings, Inc." is a Minnesota
corporation and a wholly-owned subsidiary of Minnesota Power & Light
Company, and is a party to the Subordination Agreement.
qqqq. Senior Funded Debt. "Senior Funded Debt" means Funded Debt less
Subordinated Debt.
2. Covenant Amendments. (a) The following financial convenants set
forth in Section 6.g. of the Credit Agreement are hereby amended in their
entirety as follows:
(i) Tangible Capital Base. ADESA shall maintain its Tangible Capital
Base at levels not less than those shown in the following table for the
periods indicated:
Period Tangible Capital Base
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from January 31, 1996 until $80,000,000
fiscal year end 1996
at fiscal year end 1996 and until $85,000,000
fiscal year end 1997
at fiscal year end 1997 and at $90,000,000
all times thereafter
(iii) Coverage. For each period of four (4) consecutive fiscal
quarters, ADESA shall maintain Coverage of not less than 1.20 to 1.0
at all times.
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(iv) Funded Debt. For each period of four (4) consecutive fiscal
quarters ending during the periods designated below, ADESA shall
maintain its ratio of Funded Debt to EBITDAL at levels not greater than
those shown in the following table:
Period Funded Debt/EBITDAL
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At December 31, 1995 through March 30, 1996 7.50 to 1.0
At March 31, 1996 through June 29, 1996 7.0 to 1.0
At June 30, 1996 through September 29, 1996 6.50 to 1.0
At September 30, 1996 through December 5.75 to 1.0
30, 1996
At December 31, 1996 and at all times 4.75 to 1.0
thereafter
(b) The following financial covenant is hereby added to Section 6.g. of
the Credit Agreement:
(v) Senior Funded Debt. For each period of four (4) consecutive fiscal
quarters ending during the periods designated below, ADESA shall
maintain its ratio of Senior Funded Debt to EBITDAL at levels not
greater than those shown in the following table:
Senior Funded Debt
Period /EBITDAL
------ ------------------
At December 31, 1995 through March 30, 5.50 to 1.0
1996
At March 31, 1996 through September 4.25 to 1.0
29, 1996
At September 30, 1996 through 4.0 to 1.0
December 30, 1996
At December 31, 1996 and at all times 3.75 to 1.0
thereafter
(c) Section 7.k. of the Credit Agreement is hereby amended to increase
the amount of Subordinated Debt under Section 7.k.(iii) to $40,000,000.
(d) Notwithstanding any provision in the Credit Agreement to the
contrary, ADESA agrees to provide the monthly financial statement for
March 31, 1996 not later than April 30, 1996.
4. Conditions Precedent to Amendment. On or prior to the date of
execution of this Amendment or at such later date as set forth herein, the
following conditions precedent shall
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have been fulfilled by ADESA, unless waived or extended at the discretion and
upon the consent of all of the Banks:
(a) Not later than January 31, 1996, ADESA and ADESA Holdings, Inc.
shall have executed and delivered to the Agent an Amendment to Subordination
Agreement, together with a Substitute Subordinated Note (as defined in the
Subordination Agreement) evidencing an increase in the line of credit provided
by ADESA Holdings, Inc. to ADESA. Such Line of Credit shall be increased to not
less than $30,000,000. Further, ADESA and ADESA Holdings, Inc. shall agree that
no payments will be made on the Line of Credit prior to September 30, 1996,
notwithstanding any provisions in the Subordination Agreement or Subordinated
Note to the contrary, and then only if such payments are made in compliance with
all of the provisions of the Subordination Agreement and the Credit Agreement.
(b) Not later than January 31, 1996, ADESA shall have received not less
than $15,000,000 in additional equity and shall provide such evidence of the
receipt of equity as the Required Banks shall request.
(c) Not later than January 31, 1996, ADESA shall make a $15,000,000
principal reduction on the ADESA Revolver and no further borrowing under the
ADESA Revolver will be permitted until such time as ADESA provides a Compliance
Certificate to the Banks indicating compliance with the financial convenants in
the Credit Agreement.
(d) ADESA shall deliver to the Agent for the benefit of the Banks the
following duly executed documents with respect to each new Subsidiary formed by
ADESA since the date of the Credit Agreement at such time as any such Subsidiary
acquires any assets:
(i) Certified copies of the organizational documents of each such
Subsidiary;
(ii) Subsidiary Guaranty Agreement;
(iii) Subsidiary Security Agreement;
(iv) Intercompany Demand Note;
(v) Intercompany Security Agreement;
(vi) UCC-1 Financing Statements for the State of Indiana and all
states in which such Subsidiary does business;
(vii) Amended Pledge Agreement Schedule of ADESA, together with
original Stock Certificates and Stock Powers for all new Subsidiaries;
and
(viii) Certified Resolutions, Incumbency Certificate and Solvency
Certificate for each such Subsidiary.
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(e) ADESA shall deliver to the Agent Certified Resolutions authorizing
the execution and delivery of this Amendment, the Amendment to Subordination
Agreement and the Substitute Subordinated Note.
(f) ADESA and Minnesota Power & Light Company ("MPL") shall have
delivered a Comfort Letter with respect to MPL's agreement to take such action
as necessary to insure that ADESA is in compliance with the Senior Funded Debt
covenant in Section 6.g(v) of the Credit Agreement at March 31, 1996, and
including such other terms as shall be negotiated between MPL, ADESA, and the
Banks, together with a certified resolution of the Board of Directors of MPL
authorizing the execution and delivery of the Comfort Letter, not later than
January 31, 1996.
(g) ADESA shall deliver a Secretary's Certificate regarding the names
of the officer or officers authorized to sign the Amendment, together with a
sample of the true signature of each such officer and certifying any amendments
to the organizational documents of ADESA, together with any such amendments.
5. Waiver Fee. In consideration of the Banks' agreement to waive
certain financial covenant violations by ADESA, ADESA agrees to pay a waiver
fee, on or prior to the date of execution of this Amendment, equal to 10 basis
points on the total amount of the ADESA Revolver Commitment, the Line of Credit
Commitment and the Maximum Available Credit in effect as of the date hereof.
6. Representations and Warranties. ADESA hereby certifies that the
representations and warranties set forth in the Credit Agreement are true and
correct as if made on the date hereof and that no Event of Default or Unmatured
Event of Default has occurred or in continuing, except those which have been
specifically waived by the Required Banks. Except as hereby amended, the Credit
Agreement remains in full force and effect.
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IN WITNESS WHEREOF, the parties hereto, by their duly authorized
officers, have executed this Amendment as of the date first written above.
ADESA CORPORATION
By Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, Treasurer
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(Printed Name & Title)
ADESA FUNDING CORPORATION
By Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx, Secretary
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(Printed Name & Title)
BANK ONE, INDIANAPOLIS, National Association
By Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx, Vice President
PNC BANK, KENTUCKY, INC.
By Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx, Vice President
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(Printed Name & Title)
THE FIRST NATIONAL BANK OF BOSTON
By Xxxxxxx X. Xxxxxx, Xx.
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Xxxxxxx X. Xxxxxx, Xx. Director
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(Printed Name & Title)
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FIRST TENNESSEE BANK NATIONAL ASSOCIATION
By Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, V.P.
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(Printed Name & Title)
XXXXXX TRUST AND SAVINGS BANK
By Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx, Vice President
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(Printed Name & Title)
SOCIETY NATIONAL BANK, INDIANA
By
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(Printed Name & Title)
SS-57594-4
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