1
EXHIBIT 10.53
THIRD AMENDMENT CREDIT AGREEMENT
This Third Amendment to Credit Agreement (this "Third Amendment"),
made as of this 30th day of September, 1996, by and among ▇▇▇▇▇▇ FINANCIAL,
INC. ("▇▇▇▇▇▇"), a Delaware corporation with a place of business at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, for itself, as Lender and as agent
("Agent") for all Lenders and ▇▇▇▇▇▇▇▇ PBE, INC., a Delaware corporation
("▇▇▇▇▇▇▇▇"), with its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and ("Borrower").
W I T N E S S E T H:
WHEREAS, the Borrower and Agent and Lenders have entered into that
certain Credit Agreement dated as of January 6, 1995 (as heretofore amended
from time to time the "Credit Agreement"); and
WHEREAS, the Borrower has requested the Lenders to amend certain
financial covenants contained in the Credit Agreement;
WHEREAS, Lenders are willing to amend the Credit Agreement pursuant
to the terms of this Third Amendment;
NOW, THEREFORE, in consideration of the promises set forth herein,
Borrower and Lenders agree as follows:
ARTICLE I
CAPITALIZED TERMS
1.1 All capitalized terms used in this Third Amendment but not
defined in this Third Amendment shall have the meanings given to them in the
Credit Agreement. In the event of a conflict between the definitions contained
in this Third Amendment and the definitions contained in the Credit Agreement,
the definitions contained in this Third Amendment shall prevail.
2
2
ARTICLE II
AMENDMENTS TO THE CREDIT AGREEMENT
2.1 The definition of "EBITDA" in subsection 1.1 of the Credit
Agreement is hereby amended to (i) delete the period at the end of said
definition and substitute a semi-colon in its place and stead; and (ii) add the
following:
PLUS (i) sales tax reserves equal to $1,800,000 recorded in
September, 1996 and deducted in the determination of Net Income; PLUS
(j) reserves related to amounts due from vendors equal to $500,000,
recorded in September, 1996 and deducted in the determination of Net
Income.
2.2 Subsection 6.4 of the Credit Agreement is hereby amended to
delete said subsection and substitute the following in its place and stead:
6.4 SENIOR LEVERAGE. Borrower shall not permit the ratio of
Senior Debt as of the last day of each month 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 month during the periods set
forth below to be greater than the ratio set forth for such period.
Period Ratio
------ -----
Closing through 9/30/96 3.50 to 1.00
10/1/96 through 2/28/97 4.00 to 1.00
3/1/97 through 5/31/97 3.75 to 1.00
6/1/97 through 8/31/97 3.75 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
2.3 Subsection 6.5 of the Credit Agreement is hereby amended to
delete said subsection and substitute the following in its place and stead:
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 month 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 month during the periods
set forth below to be greater than the ratio set forth for such
period.
Period Ratio
------ -----
Closing through 9/30/96 4.50 to 1.00
10/1/96 through 2/28/97 5.25 to 1.00
3/1/97 through 5/31/97 5.25 to 1.00
6/1/97 through 8/31/97 4.75 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
3
3
2.4 Subsection 7.1(f) of the Credit Agreement is hereby amended to
substitute the number Fifteen Million Dollars ($15,000,000) for the number Ten
Million Dollars ($10,000,000) and substitute the number Eighteen Million
Dollars ($18,000,000) for the number Twelve Million Dollars ($12,000,000).
ARTICLE III
GENERAL PROVISIONS
3.1 CONDITIONS PRECEDENT. The effectiveness of this Third Amendment
is subject to: (1) Borrower's payment to Lenders of a fee equal to $50,000;
(ii) Borrower hereby agrees not to utilize the Acquisition Loan to repurchase
its own common stock in accordance with that certain letter dated December 10,
1996, until October 1, 1997; and (iii) Borrower hereby agrees that all
acquisitions (including Permitted Small Acquisitions) will require Requisite
Lenders' approval until such time as Borrower is in compliance with the Senior
Debt and total Indebtedness ratios set forth in subsection 2.1(B)(2)(C) of the
Credit Agreement.
3.2 RATIFICATION. The terms and provisions set forth in this Third
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 Third 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 Borrowers
set forth in the Credit Agreement, as modified hereby, are hereby restated as
of the date hereof.
3.3 REFERENCE TO CREDIT AGREEMENT. The Credit Agreement and all
other agreements, documents or instruments now or hereafter executed and
delivered pursuant to the terms hereof or pursuant to the terms of the Credit
Agreement as amended hereby, are hereby amended so that any reference therein
to the Credit Agreement shall mean a reference to the Credit Agreement as
amended hereby.
3.4 AMENDMENT; ASSIGNMENT. This Third 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 Third Amendment or any portion thereof, including, without
limitation, any of Borrower's rights, titles, interests, remedies, powers and/or
duties hereunder or thereunder.
3.5 SEVERABILITY. If any provision of this Third Amendment or the
application thereof to any Person or circumstance is held invalid or
unenforceable, the remainder of this Third Amendment and the application of
such provision to other Persons or circumstances will not be affected thereby
and the provisions of this Third Amendment shall be severable in any such
instance.
4
4
3.6 COUNTERPARTS. This Third Amendment may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
3.7 HEADINGS. All headings used in this Third Amendment are for
convenience of reference only and shall not be used in interpreting this Third
Amendment.
3.8 ENTIRE AGREEMENT. This Third 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.
3.9 THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
3.10 REQUIRED LENDER APPROVAL. As required by Section 10.3 of the
Credit Agreement, this Third 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., ▇▇▇▇▇▇ Paint Company,
▇▇▇▇▇▇ & Sons Auto Paint, Inc., Auto Body Supply Corporation, Automotive Paint
and Supply Company, Incorporated and Santa ▇▇▇▇▇ Color Service, Inc. The
Lenders identified on the signature pages hereof constitute all of the Lenders
as of the date first set forth above.
IN WITNESS WHEREOF, this Third Amendment has been duly executed as
of the day and year first above written.
▇▇▇▇▇▇▇▇ PBE, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
---------------------------------
Title: President
--------------------------------
[SIGNATURES CONTINUE ON NEXT PAGE]
5
5
▇▇▇▇▇▇ FINANCIAL, INC., as Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Title: Associate Vice President
--------------------------------
GIROCREDIT BANK
AKTIENGESELLSCHAFT DER
SPARKASSEN
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Title: Vice President
--------------------------------
SANWA BUSINESS CREDIT CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇
---------------------------------
Title: Vice President
--------------------------------
FLEET BANK OF MASSACHUSETTS, N.A.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Title: Vice President
--------------------------------
UNION BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Title: Vice President
--------------------------------
6
6
ACKNOWLEDGMENT
GRAND DISTRIBUTING CORP. acknowledges and consents to the terms of
this Third Amendment and hereby affirms, ratifies and confirms all of the terms
of its Continuing Guaranty dated January 5, 1995.
GRAND DISTRIBUTING CORP.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Title: CEO
--------------------------------
7
7
ACKNOWLEDGMENT
▇▇▇▇▇▇ PAINT COMPANY acknowledges and consents to the terms of this
Third Amendment and hereby affirms, ratifies and confirms all of the terms of
its Continuing Guaranty dated February 16, 1995.
▇▇▇▇▇▇ PAINT COMPANY
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Title: President
--------------------------------
8
8
ACKNOWLEDGMENT
▇▇▇▇▇▇ & SONS AUTO PAINT, INC. acknowledges and consents to the terms
of this Third Amendment and thereby affirms, ratifies and confirms all of the
terms of its Continuing Guaranty dated February 15, 1996.
▇▇▇▇▇▇ & SONS AUTO PAINT, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Title: President
--------------------------------
9
9
ACKNOWLEDGMENT
AUTO BODY SUPPLY CORPORATION acknowledges and consents to the terms
of this Third 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/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Title: President
--------------------------------
10
10
ACKNOWLEDGMENT
AUTOMOTIVE PAINT AND SUPPLY COMPANY, INCORPORATED acknowledges and
consents to the terms of this Third 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/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Title: President
--------------------------------
11
11
ACKNOWLEDGMENT
SANTA ▇▇▇▇▇ COLOR SERVICE, INC. acknowledges and consents to the
terms of this Third Amendment and hereby affirms, ratifies and confirms all of
the terms of its Continuing Guaranty dated February 15, 1996.
SANTA ▇▇▇▇▇ COLOR SERVICE, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Title: President
--------------------------------
12