1
WAIVER AND FOURTH AMENDMENT
TO CREDIT AGREEMENT
This Waiver and Fourth Amendment to Credit Agreement, dated as of May
9th, 1997 (this "Agreement") by and among XXXXXX FINANCIAL, INC. ("Xxxxxx"), a
Delaware corporation with a place of business at 000 Xxxx Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, for itself, as Lender and as agent ("Agent") for all
Lenders and XXXXXXXX PBE, INC., a Delaware corporation ("Xxxxxxxx"), with its
principal place of business at 0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx xxx Xxx,
Xxxxxxxxxx 00000, and ("Borrower").
WITNESSETH:
WHEREAS, Borrower and Agent, on behalf of the Lenders, are parties to
that certain Credit Agreement dated as of January 6, 1995 (as amended from time
to time, the "Credit Agreement"; capitalized terms not otherwise defined herein
shall have the definitions provided therefor in the Credit Agreement) and to
certain other documents executed in connection with the Credit Agreement; and
WHEREAS, the parties wish to amend the Credit Agreement as provided
herein;
NOW, THEREFORE, the parties agree as follows:
1. Amendments to the Credit Agreement.
A. Subsection 2.2(A)(1) of the Credit Agreement is hereby
amended by deleting the chart in its entirety and by substituting in its place
the following:
Ratio Percentage
----- ----------
Less than 2.00 to 1.00 0.00%
2.00 to 1.00 through 2.49 to 1.00 0.50%
2.50 to 1.00 through 2.99 to 1.00 0.75%
3.00 to 1.00 through 3.49 to 1.00 1.00%
3.50 to 1.00 or higher 1.25%
B. Subsection 2.2(A)(2) of the Credit Agreement is hereby
amended by deleting the chart in its entirety and by substituting in its place
the following:
Ratio Percentage
----- ----------
Less than 2.00 to 1.00 1.50%
2.00 to 1.00 through 2.49 to 1.00 1.75%
2
2.50 to 1.00 through 2.99 to 1.00 2.00%
3.00 to 1.00 through 3.49 to 1.00 2.25%
3.50 to 1.00 or higher 2.50%
C. Subsection 6.2 of the Credit Agreement is hereby amended by
deleting the subsection in its entirety and by substituting in its place the
following:
"6.2 Total Interest Coverage. Borrower shall not permit Total
Interest Coverage for the twelve (12) month period ending on the last
day of each fiscal quarter during the periods set forth below to be less
than the amount set forth below for such period.
Period Amount
------ ------
1/1/97 through 3/31/97 2.25
4/1/97 through 6/30/97 2.25
7/1/97 and each quarter thereafter 3.00
D. Subsection 6.3 of the Credit Agreement is hereby amended by
deleting the subsection in its entirety and by substituting in its place the
following:
"6.3 Fixed Charge Coverage. Borrower shall not permit Fixed
Charge Coverage for the twelve (12) month period ending on the last day
of each fiscal quarter during the periods set forth below to be less
than the amount set forth below for such period.
Period Amount
------ ------
1/1/97 through 3/31/97 1.00
4/1/97 through 6/30/97 1.00
7/1/97 through 9/30/97 1.00
10/1/97 and each quarter thereafter 1.20
E. Subsection 6.4 of the Credit Agreement is hereby amended by
deleting the subsection in its entirety and by substituting in its place the
following:
"6.4 Senior Leverage. Borrower shall not permit the ratio of
Senior Debt as of the last day of each fiscal quarter during the periods
set forth below to Pro Forma Operating Cash Flow for the twelve (12)
month period ending on the last day of each fiscal quarter during the
periods set forth below to be greater than the ratio set forth for such
period.
2
3
Period Ratio
------ ------------
3/1/97 through 8/31/97 4.00 to 1.00
9/1/97 through 9/30/98 3.50 to 1.00
10/1/98 through 9/30/99 3.25 to 1.00
10/1/99 through 9/30/00 2.75 to 1.00
10/1/00 and each month thereafter 2.25 to 1.00"
F. Subsection 6.5 of the Credit Agreement is hereby amended by
deleting the subsection in its entirety and by substituting in its place the
following:
"6.5 Total Indebtedness Leverage. Borrower shall not permit
the ratio of total Indebtedness of Borrower and its Subsidiaries on a
consolidated basis as of the last day of each fiscal quarter during the
periods set forth below to Pro Forma Operating Cash Flow for the twelve
(12) month period ending on the last day of each fiscal quarter during
the periods set forth below to be greater than the ratio set forth for
such period:
Period Ratio
------ ------------
3/1/97 through 8/31/97 5.50 to 1.00
9/1/97 through 9/30/98 4.00 to 1.00
10/1/98 through 9/30/99 3.75 to 1.00
10/1/99 through 9/30/00 3.25 to 1.00
10/1/00 and each month thereafter 2.75 to 1.00"
2. Waiver.
Subsections 6.2, 6.3, 6.4 and 6.5 of the Credit Agreement require that
Borrower maintain certain Total Interest Coverage ratios, Fixed Charge Coverage
ratios, Senior Leverage ratios and Total Indebtedness Leverage ratios,
respectively, as provided therein. For the period ended February 28, 1997,
Borrower did not meet the required levels as set forth in subsections 6.2, 6.3,
6.4 and 6.5, respectively.
Borrower's failure to comply with each of subsections 6.2, 6.3, 6.4 and
6.5 of the Credit Agreement for the period ended February 28, 1997 constitute
Events of Default under the Credit Agreement. In response to Borrower's request,
Lenders hereby waive such Events of Default for such period; provided that
nothing set forth herein shall be deemed to constitute a waiver of any other
Default or Event of Default that may heretofore or hereafter occur or have
occurred and be continuing.
3. Representations and Warranties. To induce Lenders to enter into
this Agreement, Borrower represents and warrants to Lenders that the execution,
3
4
delivery and performance by Borrower of this Agreement are within its corporate
powers, have been duly authorized by all necessary corporate action and do not
and will not contravene or conflict with any provision of law applicable to
Borrower, the Certificate of Incorporation or Bylaws of Borrower, or any order,
judgment or decree of any court or other agency of government or any contractual
obligation binding upon Borrower; and the Credit Agreement as amended as of the
date hereof is the legal, valid and binding obligation of Borrower enforceable
against Borrower in accordance with its terms.
4. Conditions. The effectiveness of the amendments stated in this
Agreement is subject to each of the following conditions precedent or
concurrent:
(a) Fee. Borrower's payment to Lenders of a fee equal to
$50,000.
(b) Permitted Acquisitions. Borrower agrees that all
acquisitions (including Permitted Small Acquisitions) will require Requisite
Lenders' approval until such time as Borrower is in compliance with Senior
Leverage and Total Indebtedness Leverage ratios of 3.50 and 4.00, respectively.
(c) No Default. Except as set forth in Section 2 of this
Agreement, no other Default or Event of Default under the Credit Agreement, as
amended hereby, shall have occurred and be continuing.
(d) Warranties and Representations. The warranties and
representations of Borrower contained in this Agreement shall be true and
correct as of the effective date hereof, with the same effect as though made on
such date.
5. Miscellaneous.
(a) Captions. Section captions used in this Agreement are for
convenience only, and shall not affect the construction of this Agreement.
(b) Governing Law. This Agreement shall be a contract made
under and governed by the laws of the State of Illinois, without regard to
conflict of laws principles. Whenever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
(c) Counterparts. This Agreement may be executed in any number
of counterparts, and each such counterpart shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
Agreement.
4
5
(d) Successors and Assigns. This Agreement shall be binding
upon Borrower and Lenders and their respective successors and assigns, and shall
inure to the sole benefit of Borrower and Lenders and the successors and assigns
of Borrower and Lenders.
(e) References. Any reference to the Credit Agreement
contained in any notice, request, certificate, or other document executed
concurrently with or after the execution and delivery of this Agreement shall be
deemed to include this Agreement unless the context shall otherwise require.
(f) Continued Effectiveness. Notwithstanding anything
contained herein, the terms of this Agreement are not intended to and do not
serve to effect a novation as to the Credit Agreement. The parties hereto
expressly do not intend to extinguish the Credit Agreement. Instead, it is the
express intention of the parties hereto to reaffirm the indebtedness created
under the Credit Agreement which is evidenced by the Notes and secured by the
Collateral. The Credit Agreement as amended hereby and each of the other Loan
Documents remains in full force and effect.
(g) Costs, Expenses and Taxes. Borrower affirms and
acknowledges that subsection 10.1 of the Credit Agreement applies to this
Agreement and the transactions and Agreements and documents contemplated
hereunder.
(h) Required Lender Approval. As required by Section 10.3 of
the Credit Agreement, this Fourth Amendment shall become effective as of the
date first set forth above upon execution by the Borrower and Requisite Lenders
and acknowledgement hereof by Grand Distributing Corp., Xxxxxx Paint Company,
XxXxxx & Sons Auto Paint, Inc., Auto Body Supply Corporation, Automotive Paint
and Supply Company, Incorporated and Santa Xxxxx Color Service, Inc. The Lenders
identified on the signature pages hereof constitute all of the Lenders as of the
date first set forth above.
(i) Ratification. The terms and provisions set forth in this
Fourth Amendment shall modify and supersede all inconsistent terms and
provisions set forth in the Credit Agreement and, except as expressly modified
and superseded by this Fourth Amendment, the terms and provisions set forth in
the Credit Agreement are ratified and confirmed and shall continue in full force
and effect. All representations, warranties, covenants and agreements of
Borrower set forth in the Credit Agreement, as modified hereby, are hereby
restated as of the date hereof.
(j) Amendment; Assignment. This Fourth Amendment may not be
modified, altered or amended except by an instrument in writing signed in
accordance with Section 10.3 of the Credit Agreement. Borrower may not sell,
assign or transfer this Fourth Amendment or any portion thereof, including,
5
6
without limitation, any of Borrower's rights, titles, interests, remedies,
powers and/or duties hereunder or thereunder.
(k) Severability. If any provision of this Fourth Amendment or
the application thereof to any Person or circumstance is held invalid or
unenforceable, the remainder of this Fourth Amendment and the application of
such provision to other Persons or circumstances will not be affected thereby
and the provisions of this Fourth Amendment shall be severable in any such
instance.
(l) Entire Agreement. This Fourth Amendment, including all
Exhibits and other documents attached hereto or incorporated by reference
herein, constitutes the entire agreement of the parties with respect to the
subject matter hereof and supersedes all other understandings, oral or written,
with respect to same.
Delivered at Chicago, Illinois, as of the day and year first above
written.
Signature Pages to Follow
6
7
XXXXXXXX PBE, INC.
By: /s/ Xxxxxxx X'Xxxxxxx
-------------------------------
Name: Xxxxxxx X'Xxxxxxx
-----------------------------
Title: Executive Vice President and
Chief Financial Officer
----------------------------
XXXXXX FINANCIAL, INC., as Agent
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Name: Xxxxxx X. Xxxxx
-----------------------------
Title: Assistant Vice President
----------------------------
GIROCREDIT BANK
AKTIENGESELLSCHAFT DER SPARKASSSEN
By: /s/ Xxxx Xxxxxx
-------------------------------
Name: Xxxx Xxxxxx
-----------------------------
Title: Vice President
----------------------------
SANWA BUSINESS CREDIT CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxxx
-----------------------------
Title: Vice President
----------------------------
[SIGNATURES CONTINUE ON NEXT PAGE]
7
8
FLEET NATIONAL BANK
By: /s/ Xxxx X. Xxxxxx Xxx
-------------------------------
Name: Xxxx X. Xxxxxx Xxx
-----------------------------
Title: Vice President
----------------------------
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Xxxxxxx X. XxXxxx
-------------------------------
Name: Xxxxxxx X. XxXxxx
-----------------------------
Title: Vice President
----------------------------
8
9
ACKNOWLEDGEMENT
GRAND DISTRIBUTING CORP. acknowledges and consents to the terms of this
Fourth Amendment and hereby affirms, ratifies and confirms all of the terms of
its Continuing Guaranty dated January 5, 1995.
GRAND DISTRIBUTING CORP.
By: /s/ Xxxxxxxx Xxxxx
--------------------
Title: President
-----------------
9
10
ACKNOWLEDGEMENT
XXXXXX PAINT COMPANY acknowledges and consents to the terms of this
Fourth Amendment and hereby affirms, ratifies and confirms all of the terms of
its Continuing Guaranty dated February 16, 1995.
XXXXXX PAINT COMPANY
By: /s/ Xxxxxxxx Xxxxx
--------------------
Title: President
-----------------
10
11
ACKNOWLEDGEMENT
XXXXXX & SONS AUTO PAINT, INC. acknowledges and consents to the terms of
this Fourth Amendment and hereby affirms, ratifies and confirms all of the terms
of its Continuing Guaranty dated February 15, 1996.
XXXXXX & SONS AUTO PAINT, INC.
By: /s/ Xxxxxxxx Xxxxx
--------------------
Title: President
-----------------
11
12
ACKNOWLEDGEMENT
SANTA XXXXX COLOR SERVICE, INC. acknowledges and consents to the terms
of this Fourth Amendment and hereby affirms, ratifies and confirms all of the
terms of its Continuing Guaranty dated February 15, 1996.
SANTA XXXXX COLOR SERVICE, INC.
By: /s/ Xxxxxxxx Xxxxx
--------------------
Title: President
-----------------
12
13
ACKNOWLEDGEMENT
AUTO BODY SUPPLY CORPORATION acknowledges and consents to the terms of
this Fourth Amendment and hereby affirms, ratifies and confirms all of the terms
of its Continuing Guaranty dated October 4, 1996.
AUTO BODY SUPPLY CORPORATION
By: /s/ Xxxxxxxx Xxxxx
--------------------
Title: President
-----------------
13
14
ACKNOWLEDGEMENT
AUTOMOTIVE PAINT AND SUPPLY COMPANY, INCORPORATED acknowledges and
consents to the terms of this Fourth Amendment and hereby affirms, ratifies and
confirms all of the terms of its Continuing Guaranty dated April 19, 1996.
AUTOMOTIVE PAINT AND SUPPLY
COMPANY, INCORPORATED
By: /s/ Xxxxxxxx Xxxxx
--------------------
Title: President
-----------------
14
