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Exhibit 10.13
AMENDMENT NO. 5 AND CONSENT
dated as of December 27, 1996
to
LOAN AND SECURITY AGREEMENT
dated as of March 31, 1995
THIS AMENDMENT NO. 5 AND CONSENT dated as of December , 1996 is made
between PROSOURCE SERVICES CORPORATION, a Delaware corporation (PROSOURCE),
BROMAR SERVICES, INC., a Delaware corporation (BROMAR), and PROSOURCE
DISTRIBUTION SERVICES LIMITED, a Canadian corporation (PROSOURCE CANADA and
together with ProSource and BroMar, the BORROWERS), the financial institutions
party from time to time to the Loan Agreement referred to below (the LENDERS),
NATIONSBANK, N.A. (SOUTH), a national banking association (NATIONSBANK), THE
FIRST NATIONAL BANK OF BOSTON, a national banking association (BANK OF BOSTON),
and FLEET CAPITAL CORPORATION, a Rhode Island corporation (FLEET), as co-agents
(each in that capacity a CO-AGENT and collectively the CO-AGENTS) and
NATIONSBANK, N.A. (SOUTH), as administrative agent for the Lenders (in that
capacity, together with any successors in that capacity, the ADMINISTRATIVE
AGENT).
Preliminary Statements
The Borrowers, the Lenders, the Co-Agents and the Administrative Agent are
parties to a Loan and Security Agreement dated as of March 31, 1995, as amended
by Amendment No. 1 dated as of December 29, 1995, Amendment No. 2 and Waiver
dated as of March 28, 1996, Amendment No. 3 and Consent dated as of September 6,
1996 and Amendment No. 4 and Consent dated as of September 26, 1996 (as so
amended and as otherwise heretofore amended, the LOAN AGREEMENT; terms defined
therein and not otherwise defined herein being used herein as therein defined).
The Borrowers have requested certain modifications to the provisions of the
Loan Agreement. The Lenders and the Administrative Agent have agreed to such
requests, upon and subject to all the terms, conditions and provisions of this
Amendment.
NOW, THEREFORE, in consideration of the Loan Agreement, the Loans made by
the Lenders and outstanding thereunder, the mutual promises hereinafter set
forth and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
Section 1. Amendments to Loan Agreement. The Loan Agreement is hereby
amended, subject to the provisions of Section 3 hereof, by
(a) amending Section 1.1 Definitions thereof by
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(i) amending the definition NET INCOME by amending clause (g) thereof in
its entirety to read as follows:
(g) any other extraordinary item, including when applied to the Borrowers,
the Restructuring Charges, Asset Impairment Charges, Termination and Amendment
Charges and any gain realized on the subsequent sale of any asset by reason of
the fact that the value of such asset shall have been written down as
"impaired".
(ii) adding thereto in proper alphabetical order the following new
definition:
TERMINATION AND AMENDMENT CHARGES means income statement charges in an
aggregate amount not greater than $17,000,000 (before taking into account any
associated tax benefit, which tax benefit will be determined based on the
Borrowers' effective tax rate for the period in which such charges are recorded,
all in accordance with GAAP) recorded by the Borrowers in Fiscal Year 1996, in
connection with prepayment charges, the write-off of deferred financing costs
and other appropriate charges in connection with the termination and/or
amendment of various agreements as to Debt of ProSource and other matters.
(b) amending Section 11.1(e) in its entirety to read as follows:
(e) Asset Impairment Charges, Restructuring Charges and Termination and
Amendment Charges. Simultaneously with the delivery of the audited year-end
financial statements for Fiscal Year 1996 pursuant to CLAUSE (b) above, a
calculation of the amount of the Asset Impairment Charges, Restructuring Charges
and Termination and Amendment Charges, as determined in accordance with GAAP at
the Borrowers' fiscal year-end, taking into account any associated tax benefit.
(c) amending Section 12.1 Financial Ratios by amending subsection (a)
thereof in its entirety to read as follows:
SECTION 12.1. Financial Ratios. Permit:
(a) Consolidated Minimum Net Worth. Consolidated Net Worth (i) on and as of
the Effective Date to be less than $48,000,000, (ii) at any time during Fiscal
Year 1995 to be less than the greater of $43,000,000 or actual Consolidated Net
Worth as of the Effective Date minus $5,000,000, or (iii) at any time during any
Fiscal Year indicated below to be less than the actual Consolidated Net Worth as
of the last day of the preceding Fiscal Year minus the amount shown opposite
such Fiscal Year:
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Permitted
Fiscal Year Decrease
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1996 The amount, not to exceed the sum of
$5,000,000 and up to $27,500,000, as
such amount may be adjusted pursuant to
Section 11.1(e) hereof (being the
after-tax impact of the sum of maximum
Restructuring Charges, Asset Impairment
Charges and Termination and Amendment
Charges, which tax impact will be
determined based on the Borrowers'
effective tax rate for the period in
which such charges are recorded or
reserves are established, all in
accordance with GAAP)
1997 and thereafter $4,000,000
PROVIDED, that as of the last day of Fiscal Year 1997 and of each succeeding
Fiscal Year, Consolidated Net Worth shall be at least $1.00 greater than
Consolidated Net Worth as of the last day of the immediately preceding Fiscal
Year.
Section 2. Consent and Waiver. The Lenders hereby (a) consent to the
Borrowers' recording Termination and Amendment Charges (as defined in the Loan
Agreement, as amended by this Amendment), of up to $17,000,000 in total in
Fiscal Year 1996 and to termination of the Interest Rate Protection Agreement(s)
entered into pursuant to Section 10.10 of the Loan Agreement, and (b) waive any
Default or Event of Default that would otherwise result from such recording or
termination, PROVIDED that on the date on which any action described in
foregoing clause (a) is taken, and after giving effect to this Amendment, no
Default or Event of Default shall have occurred and be continuing.
Section 3. Effectiveness of Amendment. Sections 1 and 2 of this Amendment
shall become effective as of December 31, 1995 upon receipt by the
Administrative Agent not later than December 27, 1996 or (a) at least ten copies
of this Amendment duly executed and delivered by each Borrower, the Co-Agents
and each Lender, and (b) a confirmation duly executed and delivered by the
Guarantor of its Unconditional Guaranty and the Pledge Agreement in the form
attached to this Amendment.
Section 4. Effect of Amendment. From and after the effectiveness of this
Amendment, all references in the Loan Agreement and in any other Loan Document
to "this Agreement," "the Loan Agreement," "hereunder," "hereof" and words of
like import referring to the Loan Agreement, shall mean and be references to the
Loan Agreement as amended by this Amendment. Except as expressly amended hereby,
the Loan Agreement and all terms, conditions and provisions thereof remain in
full force and effect and are hereby ratified and
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confirmed. 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 Lender or the Administrative Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.
Section 5. Counterpart Execution; Governing Law.
(a) Execution in Counterparts. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original and
all of which taken together shall constitute but one and the same agreement.
(b) Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Georgia.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BORROWERS:
PROSOURCE SERVICES
CORPORATION
[Corporate Seal]
Attest: By:/s/ Xxxxxxx X. Xxxxx
------------------------
Xxxxxxx X. Xxxxx
By:/s/ Xxxx X. Xxxxxx xx Xxxxxxx Executive Vice President
------------------------------
Xxxx X. Xxxxxx xx Xxxxxxx
Secretary
BROMAR SERVICES, INC.
[Corporate Seal]
Attest: By:/s/ Xxxxxxx X. Xxxxx
-------------------------
Xxxxxxx X. Xxxxx
By:/s/ Xxxx X. Xxxxxx xx Xxxxxxx Executive Vice President
------------------------------
Xxxx X. Xxxxxx xx Xxxxxxx
Secretary
PROSOURCE DISTRIBUTION
SERVICES LIMITED
[Corporate Seal]
Attest: By:/s/ Xxxxxxx X. Xxxxx
------------------------
Xxxxxxx X. Xxxxx
By:/s/ Xxxx X. Xxxxxx xx Xxxxxxx Executive Vice President
------------------------------
Xxxx X. Xxxxxx xx Xxxxxxx
Secretary
(Signatures continued on following three pages)
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ADMINISTRATIVE AGENT:
NATIONSBANK, N.A. (SOUTH)
By:/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Vice President
CO-AGENTS AND LENDERS:
NATIONSBANK, N.A. (SOUTH),
as a Lender and Co-Agent
By:/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Vice President
THE FIRST NATIONAL BANK OF BOSTON,
as a Lender and Co-Agent
By:/s/ Xxxxxxxxx X. Xxxxxx
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Name: Xxxxxxxxx X. Xxxxxx
Title: Vice President
FLEET CAPITAL CORPORATION, as a
Lender and Co-Agent
By:/s/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
Title: SVP
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XXX XXXX XX XXXX XXXXXX,
as a Lender
By:/s/ Xxxxx X. Xxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxx
Title: Relationship Manager
BANKAMERICA BUSINESS CREDIT, INC.,
as a Lender
By:/s/ M.E. Xxxxxx
-----------------------
Name: M.E. Xxxxxx
Title:V.P.
THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender
By:/s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
Title: XX
XXXXXX FINANCIAL, INC., as a Lender
By:/s/ Xxxxxxxxx Salsillo
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Name: Xxxxxxxxx Salsillo
Title: AVP
SANWA BUSINESS CREDIT CORPORATION,
as a Lender
By:/s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Vice President
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NATIONAL CITY COMMERCIAL
FINANCE, INC.,
as a Lender
By:/s/ Xxx X. Xxxxx
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Name: Xxx X. Xxxxx
Title: Vice President
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CONSENT, RELEASE AND CONFIRMATION OF GUARANTOR
The undersigned Guarantor as defined in the Loan and Security Agreement
dated as of March 31, 1995 by and among ProSource Services Corporation, BroMar
Services, Inc. and ProSource Distribution Services Limited as the Borrowers, the
financial institutions party thereto as the Lenders, NationsBank, N.A. (South)
("NationsBank'), The First National Bank of Boston and Fleet Capital Corporation
as the Co-Agents, and NationsBank as the Administrative Agent for the Lenders,
as amended to date (the "Loan Agreement"; terms defined therein, unless
otherwise defined herein, being used herein as therein defined, hereby
acknowledged receipt of the foregoing Amendment No. 5 and Consent to the Loan
Agreement and confirms for the benefit of the Administrative Agent and the
Lenders, that the Unconditional Guaranty dated as of March 31, 1995, as amended,
executed and delivered by the undersigned continues in full force and effect as
a guaranty in accordance with its terms and continues to be secured by any
collateral therefor and that the undersigned hereby waives and releases any and
all claims it may have against the Administrative Agent or any Lender or any of
their respective shareholders, directors, employees or agents arising out of any
event or circumstance existing on or prior to the date hereof and arising under
the Loan Agreement, the Unconditional Guaranty or any related document or in
connection with the transactions contemplated thereby.
PROSOURCE, INC.
[Corporate Seal]
Attest: By:/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx Chairman
By:/s/ Xxxx X. Xxxxxx xx Xxxxxxx
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Xxxx X. Xxxxxx xx Xxxxxxx
Secretary
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