THIRD AMENDMENT
THIRD AMENDMENT to Amended and Restated Revolving Credit, Term Loan and
Security Agreement dated as of December 26, 1995 among LASALLE BUSINESS CREDIT,
INC. ("Lender"), a Delaware corporation, QUALITY AUTOMOTIVE COMPANY ("Quality"),
a Delaware corporation and US AUTOMOTIVE MANUFACTURING, INC. ("US Auto"), a
Delaware corporation.
BACKGROUND
On December 30, 1992, Lender, Quality and US Auto entered into that certain
Amended and Restated Revolving Credit, Term Loan and Security Agreement, as
amended by a First Amendment dated as of March 9, 1993 and a Second Amendment
dated as of May 26, 1994 (as so amended and further amended, modified, restated
or supplemented from time to time, the "Loan Agreement") whereby Lender agreed
to make certain financial accommodations to Quality and US Auto. Lender, Quality
and US Auto desire to amend the Loan Agreement upon the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
herein contained, the parties hereto hereby agree as follows:
1. The following definitions are hereby added to Section 1 of the Loan
Agreement in their appropriate order:
The term "Capital Expenditure Loan" shall have the meaning set forth in
Section 2.1(c) of this Agreement.
The term "Capital Expenditure Note" shall have the meaning set forth in
Section 2.1(c) of this Agreement.
The term "Eligible Equipment" means all Equipment purchased by Borrower
after September 1, 1994 which Lender in its sole and absolute discretion
exercised in good faith, on a case-by-case basis deems eligible for financing
under the Capital Expenditure Loan pursuant to Section 2.1(c).
2. Section 1.18 ("Debt Service Coverage Ratio") is hereby amended by
deleting "after" in the second and eighth line thereof and inserting "before" in
their place.
3. Section 1.33 ("Interest Coverage Ratio") is hereby amended by deleting
"after" in the third line thereof and inserting "before" in its place.
4. Section 1.53 ("Restated Note") is hereby deleted in its entirety and the
following is inserted in its place:
The term "Restated Note" shall mean that certain Third Consolidated,
Amended and Restated Secured Promissory Term Note dated as of December __, 1995
in the principal amount of $2,150,000 from Borrower to Lender.
5. Section 2.1 of the Loan Agreement is hereby amended as follows:
(a) by deleting subsection 2.1(a)(B)(i) in its entirety and inserting the
following in its place: "(i) Four Million Dollars ($4,000,000) and".
(b) by inserting the following at the end thereof:
(c) (i) Lender shall make Capital Expenditure Loans ("Capital
Expenditure Loans") to Borrower in an aggregate amount not in excess
of $1,000,000.
(ii) The following are conditions precedent to the making of each and
every Capital Expenditure Loan to Borrower:
(a) No Event of Default shall have occurred and be continuing;
(b) Borrowing Agent has provided Lender with five (5) business
days' prior written notice (the "Cap Ex Notice") of each request
for a Capital Expenditure Loan (each such loan, a "Drawdown") The
Cap Ex Notice shall describe in detail the Equipment which is the
subject of the Drawdown and shall be accompanied by all invoices,
bills and all other documentation available to Borrower relating
to such Equipment and Lender shall have determined that such
Equipment constitutes Eligible Equipment;
(c) each Drawdown shall be in an increment of at least $100,000
but may not exceed an amount equal to 80% of the invoice price
(exclusive of all freight charges, packing costs, servicing fees
and all other associated "soft costs") of the Equipment which is
the subject of the Drawdown;
(d) Borrower shall have executed and delivered to Lender the
Capital Expenditure Note;
(e) All Warranties and Representations contained in Section 6
shall be true and accurate on the date of and after giving effect
to each Drawdown;
(f) Lender shall have obtained a first priority security interest
in all Eligible Equipment; and
(g) Lender shall have received all third party waivers and
consents which it reasonably requires in connection with
financing any Eligible Equipment.
(iii) The Capital Expenditure Loan shall be evidenced by the Capital
Expenditure Note ("Capital Expenditure Note"), a copy of which is
attached hereto as Exhibit A-2. Each Drawdown shall be repayable by
Borrower monthly on the first day of each month commencing with the
first day of the thirteenth month following the day of such Drawdown
in equal installments of one thirty-sixth (1/36) of the amount of each
such Drawdown. The outstanding principal amount of all Drawdowns under
the Capital Expenditure Loan shall be due and payable on the earlier
to occur of (a) March 28, 1998 or (b) upon such earlier date of
termination of this Agreement.
This Section, including the defined terms herein, shall be deemed effective
as of September 1, 1994.
6. Section 2.2 is hereby amended by deleting "one and one-half (1-1/2%)" in
the seventh line thereof and inserting "one (1%)" in its place.
7. Section 3 of the Loan Agreement is hereby amended as follows:
(a) Section 3.1 is amended by deleting "March 31, 1997" in the second line
thereof and inserting "March 31, 1998" in its place.
(b) Section 3.2 is amended in its entirety to read as follows:
"3.2 Notwithstanding Section 3.1, Borrower may (a) at any time after
execution of this Agreement, on five (5) business days written notice
prior to the end of any month, prepay and terminate this Agreement by
paying to Lender, in cash or by a wire transfer of immediately
available funds, all of the Obligations owed by Borrower to Lender,
together with a prepayment fee equal to:
Period of Prepayment During Percentage of Total Facility
--------------------------- ----------------------------
April 1, 1996 - March 31, 1997 1%
April 1, 1997 - March 31, 1998 0%
Notwithstanding the foregoing, in the event (i) Borrower prepays the Restated
Note in whole or in part prior to expiration of the Term but not in conjunction
with any permanent reduction in the facilities described in Sections 2.1(a) and
2.1(b) hereof or (ii) Borrower prepays the Capital Expenditure Note in whole or
in part prior to expiration of the Term, no prepayment fee with respect to any
such prepayment of the Restated Note or the Capital Expenditure Note shall be
payable to Lender hereunder."
8. Section 7.14 of the Loan Agreement is hereby amended by inserting the
words "or the Capital Expenditure Note" in the second line thereof.
9. Section 14.1(c) of the Loan Agreement is hereby amended by inserting the
words "and the Capital Expenditure Note" in the fifteenth and sixteenth lines
thereof.
10. Exhibit A-1 is hereby deleted in its entirety and replaced by Exhibit
A-1 attached hereto.
11. Exhibit A-2 is hereby inserted in the Loan Agreement in the form
attached hereto.
12. Except as expressly amended hereby, the Loan Agreement remains in full
force and effect and this Third Amendment does not and shall not be deemed to
constitute a waiver, forbearance or release of any claim, demand, action or
cause of action arising under the Loan Agreement or any other instruments,
documents or agreements executed and delivered in connection therewith or
herewith.
13. This Third Amendment shall become effective when and only when Lender
shall have received (i) four (4) copies of this Third Amendment duly executed by
each Borrower and each Guarantor, (ii) the Capital Expenditure Note duly
executed by each Borrower and (iii) the Third Consolidated, Amended and Restated
Secured Promissory Term Note duly executed by each Borrower.
14. This Third Amendment shall be governed by and construed in accordance
with the laws of the State of New York.
15. This Third Amendment may be executed in counterparts, each of which
shall be deemed an original and all of which taken together shall constitute one
agreement.
QUALITY AUTOMOTIVE COMPANY
By:/S/ XXXXXX XXXXXXXXX
---------------------
Xxxxxx Xxxxxxxxx, President
US AUTOMOTIVE MANUFACTURING, INC.
By:/S/ XXXXXX XXXXXXXXX
---------------------
Xxxxxx Xxxxxxxxx, President
LASALLE BUSINESS CREDIT, INC.
By: /S/ XXXX XXXXX XXXXX-XXXXX
---------------------------
Name:Xxxx Xxxxx Xxxxx-Xxxxx
Title: V.P.
CONSENT OF GUARANTORS:
US AUTOMOTIVE MANUFACTURING, INC.
By:/S/ XXXXXX XXXXXXXXX
---------------------
Xxxxxx Xxxxxxxxx, President
QUALITY AUTOMOTIVE COMPANY
By:/S/ XXXXXX XXXXXXXXX
---------------------
Xxxxxx Xxxxxxxxx, President
By:/S/ XXXXXX XXXXXXXXX
---------------------
Xxxxxx Xxxxxxxxx, President
