CONSENT AND AMENDMENT NO. 6 TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT Dated as of December 31, 1997
EXHIBT 10.31
CONSENT AND AMENDMENT NO. 6 TO
THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of December 31, 1997
THIS CONSENT AND AMENDMENT NO. 6 TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT ("Amendment") is made as
of the 26th day of January, 2001 by and among SCP DISTRIBUTORS LLC, a Delaware limited liability company and
successor by conversion from South Central Pool Supply, Inc. (the "Borrower"), the financial institutions listed
on the signature pages hereof (the "Lenders"), LASALLE BANK NATIONAL ASSOCIATION, in its individual capacity as a
Lender and in its capacity as agent ("Agent") under that certain Third Amended and Restated Credit Agreement
dated as of December 31, 1997 by and among the Borrower, the Lenders and the Agent (as amended, the "Credit
Agreement") and each of the Persons identified on the signature pages hereto as a Loan Party (individually, a
"Loan Party" and collectively, the "Loan Parties"). Capitalized terms used herein and not otherwise defined
herein shall have the meaning given to them in the Credit Agreement.
WITNESSETH:
WHEREAS, the Borrower, the Lenders and the Agent are parties to the Credit Agreement;
WHEREAS, Agent and the Required Lenders desire to consent to (i) the creation by Borrower of SCP
Acquisition Co. LLC, a Delaware limited liability company and wholly-owned Subsidiary of Borrower ("Acquisition
Co.") (the "Subsidiary Formation"), (ii) the acquisition by Borrower, Superior Pool Products, LLC, a Delaware
limited liability company and wholly-owned Subsidiary of Borrower ("Superior"), and Acquisition Co. of
substantially all of the assets of Xxxxxx Supply, Inc., a Florida corporation ("Xxxxxx"), Allstate Pool Supplies,
Inc., a Delaware corporation ("Allstate"), and Allstate Pool Business, L.P., a Delaware limited liability
partnership ("Pool LP"; together with Xxxxxx and Allstate, the "Seller"), in each instance, used in its business
of wholesale distribution of pool supplies, in accordance with the terms of the Asset Purchase Agreement dated
January 26, 2001 (the "Allstate Acquisition" and the assets so acquired by Acquisition Co. (and not Borrower),
the "Acquisition Co. Assets"), (iii) the execution and delivery by Acquisition Co. to Pool LP of a $25 million
promissory note payable to Pool LP (the "Note") and a security agreement (the "Security Agreement") granting Pool
LP a first-priority lien on the Acquisition Co. Assets, (iv) the execution and delivery by Borrower of a guaranty
(the "Borrower Guaranty"), and (v) the execution and delivery by Superior of a guaranty (the "Superior
Guaranty"), all on the terms and subject to the conditions set forth herein; and
WHEREAS, the Borrower, the Lenders and the Agent have agreed to amend the Credit Agreement on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and the agreements, provisions and covenants herein
contained, Borrower, Agent, and the Lenders agree as follows:
1. Consent. Subject to the terms and provisions of this Amendment, Agent and Lenders hereby
consent to the following:
a. the Subsidiary Formation;
b. the Allstate Acquisition and Borrower's use of proceeds of Revolving Loans to complete the same;
c. the execution and delivery by Acquisition Co. of the Note and the Security Agreement and the
granting of the liens on the Acquisition Co. Assets and other assets acquired by Acquisition
Co. as permitted herein, it being understood (and Borrower covenants and agrees) that (i) the
Note and the Security Agreement shall not be amended, supplemented, restated or otherwise
modified without the prior written consent of Agent and the Required Lenders, and (ii) upon
payment by Acquisition Co. of the indebtedness evidenced by the Note, Seller shall release all
liens granted under the Security Agreement and Agent shall have a first-priority lien on any
and all Acquisition Co. Assets; and
d. the execution and delivery by Borrower of the Borrower Guaranty, and the execution and delivery
by Superior of the Superior Guaranty.
2. Amendments to Credit Agreement. Agent, the Lenders, and Borrower hereby agree to amend the
Credit Agreement as follows:
1. Each of Schedule 1.1.1, Schedule 1.1.2, Schedule 1.1.3, Schedule 1.1.4 and Schedule 5.8 to the Credit
Agreement are deleted in their entirety and Schedule 1.1.1, Schedule 1.1.2, Schedule 1.1.3,
Schedule 1.1.4 and Schedule 5.8 attached hereto are substituted therefor.
2. Section 2.8(a) is amended by deleting the table therein and substituting the following therefor:
====================== ================ =================== =================== ==================
Leverage Applicable Applicable Applicable Applicable
Ratio Eurodollar Floating Rate Commitment Fee Letter of Credit
Margin Margin
---------------------- ---------------- ------------------- ------------------- ------------------
---------------------- ---------------- ------------------- ------------------- ------------------
‹ 2.00 to 1.00 0.875% 0.125% 0.25% 0.875%
---------------------- ---------------- ------------------- ------------------- ------------------
---------------------- ---------------- ------------------- ------------------- ------------------
=› 2.01 to 1.00 and 1.125% 0.125% 0.30% 1.125%
‹= 2.50 to 1.00
---------------------- ---------------- ------------------- ------------------- ------------------
---------------------- ---------------- ------------------- ------------------- ------------------
=› 2.51 to 1.00 and 1.375% 0.125% 0.35% 1.375%
‹= 3.00 to 1.00
---------------------- ---------------- ------------------- ------------------- ------------------
---------------------- ---------------- ------------------- ------------------- ------------------
=› 3.01 to 1.00 and 1.625% 0.125% 0.40% 1.625%
‹= 3.50 to 1.00
---------------------- ---------------- ------------------- ------------------- ------------------
---------------------- ---------------- ------------------- ------------------- ------------------
=› 3.51 to 1.00 and 1.875% 0.375% 0.45% 1.875%
‹= 4.00 to 1.00
---------------------- ---------------- ------------------- ------------------- ------------------
---------------------- ---------------- ------------------- ------------------- ------------------
› 4.01 to 1.00 2.125% 0.625% 0.50% 2.125%
====================== ================ =================== =================== ==================
3. Section 6.3(G) of the Credit Agreement is hereby amended by deleting the last sentence therein and
substituting the following therefor:
"Notwithstanding anything herein to the contrary, but without limiting the
foregoing, Borrower shall not, and shall not permit any of its Subsidiaries, without
the prior written consent of Agent and Required Lenders, to enter into any Acquisition
or transaction or series of transactions in which Borrower and/or any of its
Subsidiaries acquires all or any significant portion of the assets of another Person,
if the aggregate purchase price thereof (including, without duplication, Indebtedness
assumed or incurred in connection therewith and the fair market value of any non-cash
consideration thereof), (a) when combined with the aggregate purchase price of all
such transactions consummated within the same calendar year, exceeds $10,000,000
(excluding, for purpose of calculating such dollar limitation, the aggregate purchase
price paid in connection with the Allstate Acquisition) or (b) when combined with the
aggregate purchase price of all such transactions consummated since January __, 2001
through the Termination Date, exceeds $20,000,000 (excluding, for purpose of
calculating such dollar limitation, the aggregate purchase price paid in connection
with the Allstate Acquisition)."
4. Section 6.4(D) is hereby amended by deleting the last line of the Maximum Ratio table therein and
substituting the following therefor:
--------------------------------------------- ----------------------------------
Fiscal Quarter Ending Maximum Ratio
--------------------------------------------- ----------------------------------
--------------------------------------------- ----------------------------------
March 31, 2000 3.50 to 1.00
--------------------------------------------- ----------------------------------
--------------------------------------------- ----------------------------------
June 30, 2000 3.50 to 1.00
--------------------------------------------- ----------------------------------
--------------------------------------------- ----------------------------------
September 30, 2000 3.50 to 1.00
--------------------------------------------- ----------------------------------
--------------------------------------------- ----------------------------------
December 31, 2000 3.50 to 1.00
--------------------------------------------- ----------------------------------
--------------------------------------------- ----------------------------------
March 31, 2001 and thereafter 2.75 to 1.00
--------------------------------------------- ----------------------------------
5. Notwithstanding anything herein or in the Credit Agreement to the contrary, Borrower shall not, and
shall not permit any Subsidiary, to make any Investment in, or intercompany loan to,
Acquisition Co., other than such amounts Borrower may provide to Acquisition Co. for the sole
purpose of making, and not in excess of the amount of, the installment payments as and when
required to be made pursuant to terms of the Note; provided however, any such funds received by
Acquisition Co. are immediately forwarded to Pool L.P. pursuant to the terms of the Note.
6. Borrower (i) acknowledges and agrees that until payment in full of the Note and the release of all liens
granted pursuant to the Security Agreement, Inventory and Receivables owned by Acquisition Co.
shall not constitute Eligible Inventory or Eligible Receivables and (ii) covenants and agrees
to use its commercially reasonable best efforts to obtain as soon as possible, landlord
agreements in accordance with the Loan Documents with respect to all leased facilities of
Acquisition Co.
7. Borrower covenants and agrees (i) to deliver as soon as possible Phase I environmental reports with
respect to real property acquired (both fee title and leasehold interests) pursuant to the
Allstate Acquisition, (ii) to obtain and deliver to Agent as soon as reasonably possible any
other reports or assessments Agent may reasonably require with respect to such properties and
(iii) to the extent the reports described in clauses (i) and/or (ii) of this paragraph disclose
or identify any violations of any Environmental, Health or Safety Requirements of Law or
otherwise recommends remedial action, to take all necessary remedial actions in order to comply
with such Environmental, Health or Safety Requirements of Law or with such recommendations.
3. Conditions of Effectiveness. This Amendment shall not become effective unless the Agent shall
have received the following on or before January __, 2001:
8. the documents and other items identified in the Closing Checklist, a copy of which is attached hereto as
Exhibit A, all in form and substance reasonably satisfactory to Agent, Lenders and Borrower.
9. for the benefit of each Lender, a fee of .05% of the sum of such Lender's Revolving Loan Commitment,
plus the outstanding principal balances of such Lender's Term Loans as of January __, 2001.
4. Representations and Warranties of the Borrower. The Borrower hereby represents and warrants as
follows:
10. This Amendment and the Credit Agreement as amended hereby, constitute legal, valid and binding
obligations of the Borrower and are enforceable against the Borrower in accordance with their
terms.
11. Upon the effectiveness of this Amendment, the Borrower hereby reaffirms all covenants, representations
and warranties made in the Credit Agreement and the other Loan Documents to the extent the same
are not amended hereby, and agrees that all such covenants, representations and warranties
shall be deemed to have been remade as of the effective date of this Amendment.
12. After giving effect to the consents in Section 1 hereof, no Default or Unmatured Default has occurred
and is continuing or would result from the execution of this Amendment or the transactions
contemplated hereby.
13. The execution, delivery and performance of this Amendment (i) has been duly authorized by all necessary
corporate action and (ii) does not conflict with, result in a breach of, or constitute (with or
without notice or lapse of time or both) a default under any Contractual Obligation of
Holdings, Borrower or any of its Subsidiaries.
2. Reference to the Effect on the Credit Agreement.
1. Upon the effectiveness of this Amendment, on and after the date hereof, each reference in the Credit
Agreement and other Loan Documents to "this Credit Agreement," "hereunder," "hereof," "herein"
or words of like import shall mean and be a reference to the Credit Agreement as amended hereby.
2. Except as specifically amended above, the Credit Agreement and all other documents, instruments and
agreements executed and/or delivered in connection therewith, shall remain in full force and
effect, and are hereby ratified and confirmed.
3. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right,
power of remedy of the Agent or the Lenders, nor constitute a waiver of any provision of the
Credit Agreement or any other documents, instruments and agreements executed and/or delivered
in connection therewith.
5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS (INCLUDING 735 ILCS 105/5-1 ET SEQ. BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAW
PROVISIONS) OF THE STATE OF ILLINOIS.
6. Headings. Section headings in this Amendment are included herein for convenience of reference
only and shall not constitute a part of this Amendment for any other purpose.
7. Counterparts. This Amendment may be executed by one or more of the parties to the Amendment on
any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. This Amendment may be executed by facsimile and a facsimile transmission of a signature
to the Agent or the Agent's counsel shall be effective as though an original signature had been so delivered.
8. No Strict Construction. The parties hereto have participated jointly in the negotiation and
drafting of this Amendment and the Credit Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Amendment and the Credit Agreement as hereby amended shall be construed as if drafted
jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party
by virtue of the authorship of any provisions of this Amendment or the Credit Agreement.
9. Reaffirmation. Each of the Loan Parties as debtor, grantor, pledgor, guarantor, assignor, or in
other any other similar capacity in which such Loan Party grants liens or security interests in its property or
otherwise acts as accommodation party or guarantor, as the case may be, hereby (i) ratifies and reaffirms all of
its payment and performance obligations, contingent or otherwise, under each of the Loan Documents to which it is
a party (after giving effect hereto) and (ii) to the extent such Loan Party granted liens on or security
interests in any of its property pursuant to any such Loan Document as security for or otherwise guaranteed the
Borrower's Obligations under or with respect to the Loan Documents, ratifies and reaffirms such guarantee and
grant of security interests and liens and confirms and agrees that such security interests and liens hereafter
secure all of the Obligations as amended hereby. Each of the Loan Parties hereby consents to this Amendment and
acknowledges that each of the Loan Documents remains in full force and effect and is hereby ratified and
reaffirmed. The execution of this Amendment shall not operate as a waiver of any right, power or remedy of the
Agent or Lenders, constitute a waiver of any provision of any of the Loan Documents or serve to effect a novation
of the Obligations. In addition, SCP Property Co., in its capacity as holder of the Subordinated Intercompany
Indebtedness, consents to the transactions described in Section 1 of this Amendment.
[remainder of page intentionally left blank; signature pages follow]
Consent and Amendment No. 6 to Third
Amended and Restated Credit Agreement
IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first above written.
LASALLE BANK NATIONAL ASSOCIATION, as a Lender and as Agent
By: /S/
Its: ___________________________________
HIBERNIA NATIONAL BANK, as a Lender
By: /S/
Its: ___________________________________
NATIONAL CITY BANK, as a Lender
By: /S/
Its: ___________________________________
BANK ONE, N.A., formerly known as THE FIRST NATIONAL BANK OF
CHICAGO, as a Lender
By: /S/
Its: ___________________________________
AGREED AND ACKNOWLEDGED THIS
26TH Day of January, 2001
BORROWER:
SCP DISTRIBUTORS LLC, successor by
conversion from South Central Pool Supply, Inc.
By: /S/
Its: ___________________________________
LOAN PARTIES:
SCP POOL CORPORATION
By: /S/
Consent and Amendment No. 6 to Third
Amended and Restated Credit Agreement
Its: ___________________________________
ALLIANCE PACKAGING, INC.
By: /S/
Its: ___________________________________
SCP INTERNATIONAL, INC.
By: /S/
Its: ___________________________________
SUPERIOR POOL PRODUCTS, LLC
By: /S/
Its: ___________________________________
SCP PROPERTY CO.
By: /S/
Its: ___________________________________
