EXHIBIT 10.1.34
THIRD AMENDMENT, CONSENT AND SECOND WAIVER, dated as of October 9,
1998 (this "AMENDMENT") to the Revolving Credit, Term Loan and Guarantee
Agreement, dated as of February 2, 1998 (as heretofore amended, supplemented or
otherwise modified, the "CREDIT AGREEMENT"), among A.P.S., Inc., a Delaware
corporation and debtor-in- possession (the "BORROWER"), APS Holding Corporation,
a Delaware corporation ("HOLDING"), each of the direct and indirect Subsidiaries
of the Borrower party thereto (together with Holding, the "GUARANTORS"), each of
which Guarantors is a debtor-in-possession (the Borrower and the Guarantors,
collectively, the "DEBTORS"), the several banks and other financial institutions
from time to time party thereto (collectively, the "LENDERS"), and The Chase
Manhattan Bank, as agent for the Lenders (in such capacity, the "AGENT").
W I T N E S S E T H :
WHEREAS, the Debtors, the Lenders and the Agent are parties to
the Credit Agreement;
WHEREAS, on September 11, 1998 the Debtors filed with the Bankruptcy
Court a "Motion for Orders: (A) Approving Terms for Submission of Competing
Offers Over-Bid Procedures, Break-Up Fees and Notice Requirements; (B)
Authorizing Sale of Certain Fixtures, Inventory, Receivables, Equipment and
Other Assets Free and Clear of Liens and Encumbrances, Pursuant to Section 363
of the Bankruptcy Code; (C) Authorizing Assumption and Assignment of Certain
Non-Residential Real Property Leases and Other Executory Contracts Pursuant to
Section 365 of the Bankruptcy Code; (D) Extending Time To Assume or Reject
Non-Residential Real Property Leases Pursuant to Section 365 of the Bankruptcy
Code; (E) Approving Agreements to License Certain Trademarks and to Provide
Limited Services to Purchasers Pursuant to Section 363 of the Bankruptcy Code;
(F) Approving Lease and Sublease Agreements; (G) Approving Break-Up Fee and
Proposed Bidding Procedures; and (H) Granting Related Relief" (the "CARQUEST
SALE MOTION");
WHEREAS, pursuant to, and as more fully described in, the CarQuest
Sale Motion, the Debtors propose to sell (the "CARQUEST SALE") certain of their
assets related to the operation of nine (9) of the Debtors' regional
distribution centers and approximately 169 of the Debtors' stores associated
with such distribution centers, including without limitation, inventory,
equipment and fixtures, pursuant to an Asset Purchase Agreement dated as of
September 9, 1998 (including any non-material amendment thereof, the "GENERAL
PARTS ASSET PURCHASE AGREEMENT"), among certain of the Debtors and General
Parts, Inc. ("GENERAL PARTS"), and an Asset Purchase Agreement dated as of
September 9, 1998 (including any non-material amendment, the "BWP ASSET PURCHASE
AGREEMENT", collectively, the "ASSET PURCHASE AGREEMENTS"), among certain of the
Debtors and BWP Distributors, Inc. ("BWP");
WHEREAS, in connection with the CarQuest Sale Motion, the Borrower
has requested that the Lenders consent under the applicable subsections of the
Credit Agreement to permit the Borrower to consummate the CarQuest Sale pursuant
to the Asset Purchase Agreements;
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WHEREAS, in addition to the above-described consent, the Borrower
has also requested that the Lenders agree to waive compliance by the Debtors
with certain covenants contained in the Credit Agreement and, in connection
therewith, amend certain provisions of the Credit Agreement; and
WHEREAS, the Lenders are willing to agree to such requested consent,
waivers and amendments, but only upon the terms and conditions of this
Amendment;
NOW THEREFORE, in consideration of the premises and for other good
and valuable consideration the receipt of which is hereby acknowledged, the
Borrower, the Guarantors, the Lenders and the Agent hereby agree as follows:
1. DEFINED TERMS. Capitalized terms used herein and not otherwise
defined shall have their respective meanings set forth in the Credit Agreement.
2. CONSENT TO THE CARQUEST SALE. (a) Effective as of the date
hereof, the Lenders hereby consent under subsection 8.6 of the Credit Agreement
solely to the extent necessary to permit the Borrower to consummate the CarQuest
Sale in accordance with the terms of the Asset Purchase Agreements, PROVIDED
that the foregoing consent is conditioned upon the following: (i) within one
Business Day after the receipt of the Net Cash Proceeds of the CarQuest Sale,
the Borrower shall apply an amount equal to such Net Cash Proceeds FIRST, in
accordance with Section 2(b) of this Amendment and SECOND, in accordance with
subsection 4.8(d) of the Credit Agreement and Section 7(c) of this Amendment and
(ii) no Default or Event of Default shall then have occurred and be continuing
or would result from consummation of the CarQuest Sale.
(b) Effective as of the date hereof, the Lenders hereby consent
under subsection 4.8(d) and subsection 8.14 of the Credit Agreement solely to
the extent necessary to permit the Borrower to utilize a portion of the Net Cash
Proceeds of the CarQuest Sale to deposit up to an aggregate of $4,500,000 into
one or more segregated accounts (collectively, the "SALE ACCOUNT") to be
established and maintained by the Borrower with the Agent, which funds shall be
available for withdrawal by the Borrower for the sole purpose of satisfying its
obligations, if any, to General Parts and/or BWP in respect of potential
post-closing adjustments under Sections 2.5, 2.6, 2.7 and 2.10 of the Asset
Purchase Agreements (the "POST-CLOSING OBLIGATIONS"). The Borrower's only right
of withdrawal with respect to the Sale Account shall be to satisfy the Post-
Closing Obligations, if any, in accordance with the terms of the Asset Purchase
Agreements, the order of the Bankruptcy Court approving the CarQuest Sale and
any further order(s) of the Bankruptcy Court. The foregoing right of withdrawal
shall continue to exist notwithstanding (i) the Lien of the Agent and the
Lenders on the Sale Account and the funds from time to time on deposit therein,
(ii) any inability of the Borrower to satisfy the conditions to borrowing under
the Credit Agreement, (iii) the occurrence and continuance of a Default or Event
of Default or (iv) the occurrence of the Termination Date. In addition, and
notwithstanding any exercise of rights and remedies by the Agent and the
Lenders, the Agent and the Lenders shall not have the right to set-off against
funds on deposit in the Sale Account prior to the Borrower's satisfaction in
full of the Post-Closing Obligations, if any. All funds on deposit in the Sale
Account after the Borrower's satisfaction of the Post-Closing Obligations, if
any, shall constitute Net Cash
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Proceeds of the CarQuest Sale and shall be applied in accordance with subsection
4.8(d) of the Credit Agreement and Section 7(c) of this Amendment.
3. WAIVERS UNDER SECTION 8 (NEGATIVE COVENANTS). (a) The Lenders
hereby waive, until November 30, 1998, any Default or Event of Default arising
by reason of any failure by the Borrower to comply with subsection 8.1(a)
(EBITDA) of the Credit Agreement for the periods ending on the last day of the
September, 1998 and October, 1998 fiscal months of the Borrower.
(b) The Lenders hereby waive, until November 30, 1998, any Default
or Event of Default arising by reason of any failure by the Borrower to comply
with subsection 8.1(b) (Excess Working Capital) of the Credit Agreement during
the months of October and November, 1998, PROVIDED that such waiver is
conditioned upon Excess Working Capital not being less than (i) $90,000,000 at
any time during October, 1998 and (ii) $85,000,000 at any time during November,
1998.
4. SUBSECTION 4.7 (OPTIONAL TERMINATION OR REDUCTION OF TRANCHE A
COMMITMENT). After giving effect to the reduction of the Total Tranche A
Commitment by reason of the application of the Net Cash Proceeds of the CarQuest
Sale in accordance with subsection 4.8(d) of the Credit Agreement, the Total
Tranche A Commitment shall be further and permanently reduced on the first
Business Day after the closing of the CarQuest Sale to $20,000,000, which
reduction shall be applied on a PRO RATA basis to reduce the Tranche A
Commitment of each Lender.
5. AMENDMENTS TO SUBSECTION 1.1 (DEFINED TERMS). (a) Subsection 1.1
of the Credit Agreement is hereby amended by adding the following new defined
term in its proper alphabetical order in said subsection:
"CASH ACCOUNT": the meaning set forth in subsection 4.8(a).".
(b) Subsection 1.1 of the Credit Agreement is hereby amended by
deleting the reference to "$20,000,000" contained in the definition of the term
"Letter of Credit Sublimit" and by substituting in lieu thereof a reference to
"$3,000,000".
(c) Subsection 1.1 of the Credit Agreement is hereby further amended
by adding the phrase ", the Cash Account" immediately after the reference to
"Concentration Account" contained in the definition of the term "Excess Working
Capital".
6. AMENDMENT TO SUBSECTION 3.1 (LETTERS OF CREDIT). Subsection
3.1(a) of the Credit Agreement is hereby amended by deleting the reference to
"$10,000,000" contained in such subsection and by substituting in lieu thereof a
reference to "$3,000,000".
7. AMENDMENTS AND AGREEMENT WITH RESPECT TO SUBSECTION 4.8
(MANDATORY PREPAYMENT; COMMITMENT TERMINATION; USE OF CASH). (a) Subsection
4.8(a) of the Credit Agreement is hereby amended by deleting the reference
contained therein to "$5,000,000" and by substituting in lieu thereof a
reference to "$3,000,000".
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(b) Subsection 4.8(a) of the Credit Agreement is hereby further
amended by adding the following at the end of such subsection:
"If the remaining balance of funds on deposit in the
Concentration Account exceeds $3,000,000 after the application of funds on
deposit in the Concentration Account in accordance with clauses FIRST and
SECOND of the immediately preceding sentence, any such excess shall be
deposited in a cash collateral account (the "CASH ACCOUNT") to be
established and maintained by the Borrower with the Agent. Subject to the
terms and conditions of this Agreement, amounts on deposit in the Cash
Account shall be made available to the Borrower (after utilization and
application of the Borrower's and the Guarantor's other available cash)
for general corporate purposes and Inventory purchases until the
Termination Date. In accordance with subsection 6.2(e), the Borrower shall
utilize all funds from time to time on deposit in the Cash Account prior
to the borrowing of any Tranche A Loan. If the Borrower determines to
utilize funds on deposit in the Cash Account, the Borrower shall comply
with the notice procedures for borrowing set forth in subsection 2.2 and
shall satisfy all of the conditions for borrowing set forth in subsection
6.2 as if such drawdown on the Cash Account were a borrowing of a Tranche
A Loan. Notwithstanding subsection 8.14, funds on deposit in the Cash
Account shall not be concentrated in the Concentration Account. Any funds
on deposit in the Cash Account in excess of $5,000,000 shall constitute
Excess Amounts to be treated in accordance with subsection 4.8(d).".
(c) In accordance with the first proviso contained in subsection
4.8(d) of the Credit Agreement, but subject to subsection 4.8(e) of the Credit
Agreement (after giving effect to this Amendment) and Section 7(e) below, the
Required Tranche A Lenders hereby consent to the prepayment of the Tranche B
Loans with any Excess Amount generated from (i) the CarQuest Sale, (ii) the
Monroe Sale or any Store Sale (as such terms are defined in the Consent dated
October 8, 1998 under the Credit Agreement) and (iii) on or before November 30,
1998, funds on deposit in the Cash Account in excess of $5,000,000.
(d) Subsection 4.8(e) of the Credit Agreement is hereby amended by
(i) deleting the word "Prior" at the beginning of such subsection and by
substituting in lieu thereof the words "With respect", (b) deleting the phrase
"such Tranche B Lender shall have entered into indemnity, reimbursement and
other agreements reasonably satisfactory to the Agent (or an order of the
Bankruptcy Court shall have been entered reasonably satisfactory to the Agent)
such that" contained in the first sentence of such subsection and (iii) by
adding the following new sentence at the end of such subsection: "The obligation
of each Tranche B Lender to repay Excess Amount prepayments to the Agent in
accordance with the terms of this subsection 4.8(e) shall survive and remain in
full force and effect with respect to any Excess Amount prepayments received by
such Tranche B Lender notwithstanding any sale by such Tranche B Lender of all
or any part of its rights and obligations under this Agreement pursuant to
subsection 13.6 of this Agreement.".
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(e) By its execution of this Amendment, each Tranche B Lender
acknowledges and consents to the terms of subsection 4.8(e) (after giving effect
to this Amendment) of the Credit Agreement. If a Tranche B Lender does not
execute this Amendment, then the Agent shall hold for the account of such
Tranche B Lender, until the Tranche A Repayment Date, any Excess Amount
prepayments that would otherwise be payable to such Tranche B Lender.
8. AMENDMENT TO SUBSECTION 4.22 (SECURITY INTEREST IN CONCENTRATION
ACCOUNT AND L/C CASH COLLATERAL ACCOUNT). Subsection 4.22 of the Credit
Agreement is hereby amended by adding the phrase ", the Cash Account and any
direct investment of the funds contained therein" immediately after the phrase
"the Concentration Account and any direct investment of the funds contained
therein" contained in such subsection.
9. AMENDMENT TO SUBSECTION 5.19 (YEAR 2000 COMPLIANCE Program).
Subsection 5.19 of the Credit Agreement is hereby amended by deleting such
subsection in its entirety.
10. AMENDMENTS TO SUBSECTION 6.2 (CONDITIONS TO EACH LOAN AND EACH
LETTER OF CREDIT) AND EXHIBIT E (FORM OF BORROWING CERTIFICATE). (a) Subsection
6.2(e) (Borrowing Certificate) of the Credit Agreement and Exhibit E to the
Credit Agreement are each hereby amended by adding the phrase "(and any funds on
deposit in the Cash Account)" immediately after the phrase "after utilization
and application of the Borrower's and the Guarantors' available cash" contained
in clause (i) of such subsection and paragraph (a) of such Exhibit.
(b) Subsection 6.2(h) (Year 2000 Compliance Program) of the Credit
Agreement is hereby amended by deleting said subsection in its entirety.
11. AMENDMENTS TO SUBSECTION 7.2 (CERTIFICATES; OTHER INFORMATION ).
(a) Subsection 7.2(d) of the Credit Agreement is hereby amended by adding the
phrase "(the period of thirteen consecutive calendar weeks for each forecast
delivered after November 9, 1998)" immediately after the phrase "the period of
four consecutive calendar weeks" contained in such subsection.
(b) Subsection 7.2(f) of the Credit Agreement is hereby amended by
(i) deleting the word "and" immediately before the reference to "(iv)" contained
in such subsection and by substituting in lieu thereof ";" and (ii) by adding
the following new phrase immediately before the semi-colon at the end of such
subsection: "and (v) a report setting forth the amount of Net Cash Proceeds
applied in accordance with subsection 4.8(d) during such month and reconciled to
the amount of Net Cash Proceeds generated from any sale or other disposition of
any Collateral outside the ordinary course of business during such month".
12. AMENDMENT TO SUBSECTION 8.9 (LIMITATION ON CAPITAL
EXPENDITURES). Subsection 8.9 of the Credit Agreement is hereby amended by
deleting the reference to $7,800,000 contained in such subsection and by
substituting in lieu thereof a reference to "$2,250,000".
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13. AMENDMENT TO SUBJECTION 8.11 (LOANS AND OTHER INVESTMENTS BY
AFCO). Subsection 8.11 of the Credit Agreement is hereby amended by deleting the
references to "$2,250,000" and "$7,000,000" contained in such subsection and by
substituting in lieu thereof references to "$800,000" and "$800,000",
respectively.
14. AMENDMENT TO SUBSECTION 8.17 (USE OF PROCEEDS). Subsection 8.17
of the Credit Agreement is hereby amended by adding the phrase "or funds on
deposit in the Cash Account" immediately after the phrase "or the Tranche B
Loans" contained in such subsection.
15. AMENDMENT TO SUBSECTION 8.19 (BUSINESS PLAN). Subsection 8.19 of
the Credit Agreement is hereby amended by deleting such subsection in its
entirety and by substituting in lieu thereof the following:
"8.19. BUDGET. Fail to furnish to the Agent, with a copy for
each Lender, on or before November 9, 1998, a comprehensive receipts and
disbursements budget for the Borrower and its Restricted Subsidiaries
covering at least the one-year period commencing on October 26, 1998 and
addressing, among other things, all material expenditures proposed to be
made and projected cash flows and financial and operating performance on a
fiscal month-by-month basis, and detailing facility closures, assets
sales, cost reduction initiatives and inventory reduction initiative, all
in form and substance reasonably satisfactory to the Required Tranche A
Lenders.".
16. AMENDMENT TO SECTION 9 (EVENTS OF DEFAULT). Section 9 of the
Credit Agreement is hereby amended by adding the phrase ", the Cash Account" in
clause (iv) of paragraph A and clause (iii) of paragraph (B) of such Section.
17. AMENDMENT TO SUBSECTION 12.1 (REMEDIES; OBTAINING THE COLLATERAL
UPON DEFAULT). Subsection 12.1(c) of the Credit Agreement is hereby amended by
adding the phrase ", the Cash Account" immediately after the phrase "the
Concentration Account" contained in such subsection.
18. AMENDMENT AND AGREEMENT WITH RESPECT TO SCHEDULE 2.1 (MAXIMUM
OUTSTANDING AMOUNT OF TRANCHE A LOANS). (a) After giving effect to the required
reduction of the Maximum Outstanding Amounts in accordance with subsection
4.8(d) of the Credit Agreement by reason of the application of the Net Cash
Proceeds of the CarQuest Sale, Schedule 2.1 of the Credit Agreement is hereby
amended by deleting the information contained in such Schedule for the months of
October, November and December of 1998 and by substituting in lieu thereof the
following:
"MAXIMUM OUTSTANDING AMOUNTS
MONTH PEAK FISCAL MONTH END
----- ---- ----------------
October $12,000,000 $5,000,000
November $12,000,000 $5,000,000
December $12,000,000 $5,000,000".
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(b) Notwithstanding the amendment of Schedule 2.1 of the Credit
Agreement set forth in Section 18(a) above, if the Closing Date under, and as
defined in, the Asset Purchase Agreements occurs on or before October 15, 1998,
then the references to "$12,000,000" and "$5,000,000" contained in such Section
18(a) shall be deemed amended to be references to "$10,000,000" and "$0 (not
including up to $5,000,000 on deposit in the Cash Account)", respectively.
(c) If the aggregate outstanding amount of the Tranche A Loans as of
the last day of any fiscal month set forth on Schedule 2.1 exceeds the Maximum
Outstanding Amount for the end of such fiscal month, the Maximum Outstanding
Amount shall not be increased to the "Peak" amount for the next fiscal month
unless and until (and without prejudice to the Agent's and the Lenders' other
rights and remedies) the Borrower makes the mandatory prepayment required
pursuant to subsection 4.8(c).
19. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. After giving effect
to this Amendment, the Debtors hereby represent and warrant that all
representations and warranties contained in the Credit Agreement are true and
correct as of the date hereof (unless stated to relate to a specific earlier
date, in which case, such representations and warranties shall be true and
correct in all material respects as of such earlier date) and that no Default or
Event of Default shall have occurred and be continuing or would result from the
execution and delivery of this Amendment.
20. CONDITIONS TO EFFECTIVENESS OF THIS AMENDMENT. This Amendment
shall become effective as of the date hereof upon (a) receipt by the Agent of
counterparts of this Amendment duly executed by the Borrower, the Guarantors and
the Supermajority Tranche A Lenders and (b) the occurrence of the Closing Date
under, and as defined in, each of the Asset Purchase Agreements.
21. CONTINUING EFFECT; NO OTHER AMENDMENTS OR WAIVERS. Except as
expressly amended or waived pursuant to this Amendment, the Credit Agreement is
and shall continue to be in full force and effect in accordance with its terms,
and this Amendment shall not constitute the Lenders' consent or indicate their
willingness to consent to any other amendment, modification or waiver of the
Credit Agreement or the other Loan Documents, including without limitation, any
amendment, modification or waiver of any subsection amended or waived pursuant
to this Amendment for any other date or time period or in connection with any
other transaction.
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22. MISCELLANEOUS.
(a) This Amendment may be executed by the parties hereto on one or
more counterparts, and all of such counterparts shall be deemed to constitute
one and the same instrument. This Amendment may be delivered by facsimile
transmission of the relevant signature pages hereof.
(b) This Amendment shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed and delivered by their respective duly authorized officers as of the
date first above written.
A.P.S., INC.
By:
Title:
GUARANTORS:
APS HOLDING CORPORATION
BIG A AUTO PARTS, INC.
AUTOPARTS FINANCE COMPANY, INC.
APS SUPPLY, INC.
AMERICAN PARTS SYSTEM, INC.
A.P.S. MANAGEMENT SERVICES, INC.
INSTALLERS' SERVICE WAREHOUSE, INC.
PARTS, INC.
PRESATT, INC.
By:
Title:
THE CHASE MANHATTAN BANK, AS LENDER,
ISSUING BANK AND AGENT
By:
Title:
10
BANK ONE, N.A.
By:
Title:
BANKERS TRUST COMPANY
By:
Title:
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By:
Title:
CITIBANK, N.A.
By:
Title:
D.K. ACQUISITION PARTNERS, L.P.
BY: ▇.▇. ▇▇▇▇▇▇▇▇ & CO., ITS GENERAL
PARTNER
By:
Title:
FOOTHILL CAPITAL CORPORATION
By:
Title:
11
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.
By:
Title:
HOUR L.L.C.
BY: SUNRISE PARTNERS L.L.C.
By:
Title:
MUTUAL SHARES FUND
BY: FRANKLIN MUTUAL ADVISORS, INC.
By:
Title:
NATIONAL BANK OF CANADA
By:
Title:
By:
Title:
PPM AMERICA, INC., AS AGENT FOR
PPM AMERICA SPECIAL INVESTMENT
FUND, L.P.
By:
Title:
12
QUANTUM PARTNERS LDC
By:
Title:
SOCIETE GENERALE
By:
Title:
SPS TRADES
By:
Title:
UBS AG, LONDON BRANCH
By:
Title:
By:
Title:
WAYLAND INVESTMENT FUND LLC
BY: CFSC WAYLAND ADVISERS, INC., ITS MANAGER
By:
Title:
13
▇▇▇▇▇ FARGO BANK (TEXAS), NATIONAL
ASSOCIATION
By:
Title: