Exhibit 10.1
CIT Tel: 000 000-0000
Business Credit Fax: 000 000-0000
000 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx xxx.xxx.xxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
March 28, 2005
Diamond Triumph Auto Glass, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Re: Amendment Number Ten to Financing Agreement
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Gentlemen:
Reference is made to the Financing Agreement between The CIT Group/Business
Credit, Inc., as lender thereunder ("CITBC"), and Diamond Triumph Auto Glass,
Inc., as borrower thereunder (the "Company"), dated March 27, 2000, as the same
has been and may be amended from time to time (the "Financing Agreement").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to such terms in the Financing Agreement.
The Company and CITBC wish to amend certain provisions of the Financing
Agreement, effective as of the date hereof.
Therefore, pursuant to mutual agreement, it is hereby agreed as follows:
I. The following new definitions are hereby added to Section 1 of the
Financing Agreement in proper alphabetical order:
"Fixed Charge Coverage Ratio shall mean, for any period, the quotient
(expressed as a ratio) obtained by dividing (a) EBITDA of the Company
for such period by (b) Fixed Charges of the Company for such period."
"Fixed Charges shall mean, for any period, the sum of (a) all interest
obligations (including the interest component of Capital Leases) of the
Company paid or due during such period, (b) the amount of all scheduled
fees paid to CITBC during such period, (c) the amount of principal
repaid or scheduled to be repaid on
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Indebtedness of the Company (other than the Revolving Loans or in
connection with a redemption or repurchase of Senior Unsecured Debt that
does not constitute an Event of Default hereunder) during such period,
(d) unfinanced Capital Expenditures, as incurred by the Company during
such period, and (e) all federal, state and local income tax expenses
due and payable by the Company during such period."
"Pricing EBITDA shall mean, as of any date of determination, the EBITDA
of the Company for the trailing twelve month period ending as of the end
of the then immediately prior fiscal month as set forth in the Company's
monthly Consolidated Financial Statements delivered to CITBC pursuant
hereto."
II. The definition of "Availability" set forth in Section 1 of the
Financing Agreement is hereby amendedand restated in its entirety
to read as follows:
"Availability shall mean at any time the lesser of: (I) the Line of
Credit, or (II) the excess of the sum of (a) eighty-five percent (85%)
of Eligible Accounts Receivable and (b) eighty-five percent (85%) of
Eligible Inventory, valued at the lower of cost or market, or (III) two
(2) multiplied by EBITDA of the Company for the prior rolling 12-month
period, over the sum, without duplication, of (x) the outstanding
aggregate amount of all Obligations of the Company, and (y) the
Availability Reserve."
III. The definition of "Chase Bank Rate Margin" set forth in Section 1 of the
Financing Agreement is hereby amended and restated in its entirety to read as
follows:
"Chase Bank Rate Margin shall mean one-half of one percent (0.50%)."
IV. The definition of "Libor Margin" set forth in Section 1 of the Financing
Agreement is hereby amended and restated in its entirety to read as follows:
"Libor Margin shall mean, as of any date of determination, the following
percentage corresponding to the applicable daily average of the net balances
owing by the Company to CITBC in the Company's account at close of each day
during the then immediately prior month:
Loan Balance Libor Margin
------------ ------------
1.0 x Pricing EBITDA or less 2.25%
Greater than 1.0 x Pricing EBITDA, 2.50%
but less than or equal to
1.5 x Pricing EBITDA
Greater than 1.5 x Pricing EBITDA 2.75%
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Page 3
V. Section 7, Paragraph 9 of the Financing Agreement is hereby amended and
restated in its entirety to read as follows:
"9. (a) The Company shall maintain (a) as of the end of each fiscal
month through December 31, 2005, a Fixed Charge Coverage Ratio of
not less than 1.0:1.0 for the then trailing twelve month period and
(b) as of the end of each fiscal month thereafter, a Fixed Charge
Coverage Ratio of not less than 1.1:1.0 for the then trailing twelve
month period.
(b) If the average daily Availability for any month is less than
$4,000,000, the Company shall maintain EBITDA for the trailing three
month period ending as of the end of such month of at least
$2,000,000."
VI. The third sentence of Section 8, Paragraph 1(a) of the Financing
Agreement is hereby amended and restated in its entirety to read as follows:
"In addition, the applicable Chase Bank Rate Margin and the Libor Margin
shall be determined at the end of each month, but any change thereof
shall take effect retroactively as of the first day of such month."
VII. Section 8, Paragraph 3 of the Financing Agreement is hereby amended
and restated in its entirety to read as follows:
"3. In consideration of the Letter of Credit Guaranty of CITBC, the
Company shall pay CITBC as of the end of each month a Letter of Credit Guaranty
Fee in an amount equal to the following percentage corresponding to the
applicable daily average of the net balances owing by the Company to CITBC in
the Company's account at close of each day during the then immediately prior
month on the face amount of each then outstanding Letter of Credit less the
amount of any and all amounts previously drawn under such Letters of Credit:
Loan Balance Letter of Credit Guaranty Fee
------------ -----------------------------
1.0 x Pricing EBITDA or less 1.45%
Greater than 1.0 x Pricing EBITDA, 2.00%
but less than or equal to
1.5 x Pricing EBITDA
Greater than 1.5 x Pricing EBITDA 2.25%
VII. Section 10, Paragraph 1(i) of the Financing Agreement is hereby amended
and restated in its entirety to read as follows:
"(i) without the prior written consent of CITBC, the Company (w)
amends or modifies the Senior Unsecured Debt or any Subordinated Debt, or
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Page 4
(x) makes any payment on account of any Subordinated Debt except as
permitted in the applicable Subordination Agreement, or (y) makes any
payment on account of any Senior Unsecured Debt except for regularly
scheduled payments (but no prepayments) as contemplated under the
Indenture evidencing the Senior Unsecured Debt as in effect as of the
date hereof, or (z) redeems or repurchases any Senior Unsecured Debt
(whether optional or mandatory) at any time that all of the following
conditions have not been met: (i) immediately prior to and after giving
effect to any such redemption or repurchase, Availability shall be at
least $4,000,000, (ii) no Default or Event of Default shall have
occurred and be continuing immediately prior to and after giving effect
to any such redemption or repurchase and (iii) the Company's Fixed
Charge Coverage Ratio for the twelve month period immediately prior to
and after giving effect to any such redemption or repurchase shall be at
least 1.0:1.0; or"
THIS LETTER, TOGETHER WITH THE FINANCING AGREEMENT, REPRESENTS THE FINAL
AGREEMENT BETWEEN YOU AND US WITH RESPECT TO THE RESPECTIVE SUBJECT MATTER
HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN OR ORAL AGREEMENTS BETWEEN YOU AND US.
If the foregoing is in accordance with your understanding, please so indicate by
signing and returning the enclosed copy of this letter. This Amendment may be
executed in counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument. This Amendment will
expire unless the Company executes said Amendment and returns it to CITBC (which
may be by facsimile transmission with the original received in ordinary course
thereafter) prior to at 5:00 p.m. Pacific Daylight time on March 31, 2005.
Very truly yours,
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ Xxxxxxx Xxxxxx
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Title: Assistant Vice President
Read and Agreed:
DIAMOND TRIUMPH AUTO GLASS, INC.
By: /s/ Xxxxxxx Xxxxx
---------------------------------
Title: VP - Finance
