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Exhibit 10.52
SECOND AMENDMENT CREDIT AGREEMENT
This Second Amendment to Credit Agreement (this "Second Amendment"),
made as of this 31st day of July, 1996, by and among ▇▇▇▇▇▇ FINANCIAL, INC.
("▇▇▇▇▇▇"), a Delaware corporation with a place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, for itself, as Lender and as agent ("Agent")
for the Lenders signatory hereto 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, Borrower, Agent and Lenders have entered into that certain
Credit Agreement dated as of January 6, 1995 (as heretofore amended, the
"Credit Agreement"); and
WHEREAS, Borrower has requested that Lenders restructure the lending
arrangements under the Credit Agreement to increase the aggregate amount of
Lenders' Commitments under the Credit Agreement; and
WHEREAS, the increased amount of credit would be used to provide
additional working capital under the Revolving Loan and additional funds to
assist Borrower in Making Permitted Acquisitions under the Acquisition Loan;
and
WHEREAS, Lenders are willing to restructure the terms of the Credit
Agreement and provide additional credit to the Borrower pursuant to the terms
of this Second Amendment;
NOW, THEREFORE, in consideration of the promises set forth herein,
Borrower and Lenders agree as follows:
ARTICLE I
1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 Modifications and Additions to Certain Definitions
All capitalized terms used in this Second Amendment but not defined in
this Second Amendment shall have the meanings given to them in the Credit
Agreement. In the event of a conflict between the definitions contained in
this Second Amendment and the definitions contained in the Credit Agreement,
the definitions contained in this Second Amendment shall prevail. As of the
date hereof, the following terms are added to the Credit Agreement in their
proper alphabetical order, having the following meanings and/or modified as
follows:
"Second Amendment" means that certain Second Amendment to Credit
Agreement dated as of the 31st day of July 1996.
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"Second Amendment Effective Date" means the first date to the
effectiveness of which the conditions precedent set forth in the Second
Amendment have been satisfied to the satisfaction of Agent and Lenders.
Clause (a) of the first sentence of the defined terms of (i)
"Acquisition Loan Commitment," (ii) "Revolving Loan Commitment," and
(iii) "Term Loan A Commitment," shall respectively be modified to
reflect the new commitments of each Lender as set forth on the signature
page of the Second Amendment opposite such Lender's signature.
1.2 Subsection 2.1(A) of the Credit Agreement is hereby amended by
deleting subsection 2.1(A) in its entirety and inserting the following in its
place and stead:
(A) Term Loan A. Subject to the terms and conditions of the
Credit Agreement and in reliance upon the representation and warranties
of Borrower contained in the Second Amendment and the Credit Agreement,
each lender agrees, severally and not jointly, to lend to Borrower on
the Second Amendment Effective Date its Pro Rata Share of Term Loan A.
The aggregate amount of Term Loan A shall be Thirty Million Dollars
($30,000,000) and shall be comprised of the sum of (i) the aggregate
amount of advances heretofore advanced by each Lender under the
Acquisition Loan, the principal amount of which remains unpaid as of the
Second Amendment Effective Date plus (ii) the aggregate amount advanced
by each Lender under Term Loan A on the Closing Date of the Credit
Agreement, the principal amount of which remains unpaid as of the Second
Amendment Effective Date plus (iii) to the extent necessary for Term
Loan A to equal $30,000,000, the Pro Rata Share of any amounts
heretofore advanced by each Lender under the Revolving Loan, the
principal amount of which remains unpaid as of the Second Amendment
Effective Date. The original amount of Term Loan A was funded on the
Closing Date and the balance shall be funded in one drawing on the
Second Amendment Effective Date. Amounts borrowed under this
subsection 2.1(A) and repaid may not be reborrowed. Borrower shall make
principal payments in the amounts of the applicable Scheduled
Installments (or such lesser principal amount of Term Loan A as shall be
outstanding) on the dates and in the amounts set forth below.
"Scheduled Installment: means, for each date set forth below,
the amount set forth opposite such date.
Date Amount
---- ------
The last day of each calendar quarter $500,000
commencing September of 1996 and ending
June of 1997
The last day of each calendar quarter $750,000
commencing September of 1997 and
ending June of 1998
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The last day of each calendar quarter $1,250,000
commencing September of 1998 and ending
June of 1999
The last day of each calendar quarter $1,500,000
commencing September of 1999 and
ending June of 2000
The last day of each calendar quarter $1,750,000
commencing September of 2000 and ending
March of 2002
The last day of July 2002 $1,750,000
1.3 Subsection 2.1(B) of the Credit Agreement is hereby amended by
deleting subsection 2.1(B) in its entirety up to 2.1(B)(1) and inserting the
following in its place and stead:
(B) Acquisition Loan. Subject to the terms and conditions
of the Credit Agreement and in reliance upon the representations and
warranties of Borrower contained in the Second Amendment and the Credit
Agreement, each Lender agrees, severally and not jointly, to lend to
Borrower on each Acquisition Date occurring on or before the second
anniversary of the Second Amendment Effective Date its Pro Rata Share of
the portion of the Acquisition Loan requested by Borrower on such
Acquisition Date. The Proceeds of the Acquisition Loan shall be used
solely to fund Permitted Acquisitions and Permitted Small Acquisitions
and related fees and expenses. The aggregate amount of advances made
under the Acquisition Loan shall be Twenty-Seven Million Dollars
($27,000,000). No advances will be made under the Acquisition Loan
after the second anniversary of the Second Amendment Effective Date.
Amounts borrowed under this subsection 2.1(B) and repaid may not be
reborrowed. On each date set forth below, Borrower shall repay a portion
of the principal amount of the Acquisition Loan which is outstanding on
the second anniversary of the Second Amendment Effective Date, which
portion will be equal to the percentage thereof which is set forth for
such date (each such payment being referred to herein as a "Scheduled
Installment")."
Date Percentage
---- ----------
The last day of each calendar quarter 3.75%
commencing September of 1998 and ending
June of 1999
The last day of each calendar quarter 5.00%
commencing September of 1999 and
ending June of 2000
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The last day of each calendar quarter 7.5%
commencing September of 2000 and
ending June of 2001
The last day of each calendar quarter 8.75%
commencing September of 2001 and
ending March of 2002
The last day of July 2002 8.75%
1.4 Subsection 2.1(C) of the Credit Agreement is hereby amended by
deleting subsection 2.1(C) in its entirety up to 2.1(C)(1) and inserting the
following in its place and stead:
(C) Revolving Loan. Subject to the terms and conditions of
the Second Amendment and the Credit Agreement and in reliance upon the
representations and warranties of Borrower contained in the Second
Amendment and the Credit Agreement, each Lender agrees, severally and
not jointly, to lend to Borrower from time to time during the period
from the Second Amendment Effective Date to and excluding the Expiry
Date, its Pro Rata Share of the Revolving Loan. The aggregate amount of
all Revolving Loan Commitments shall be Eighteen Million Dollars
($18,000,000), as reduced from time to time pursuant to subsection 2.4.
Amounts borrowed under this subsection 2.1(C) may be repaid and
reborrowed at any time prior to the Expiry Date. No Lender shall have
any obligation to make advances under this subsection 2.1(C) to the
extent any requested advance would cause the principal balance of the
Revolving Loan then outstanding to exceed the Maximum Revolving Loan
Amount.
1.5 Subsection 2.1(D)(1) of the Credit Agreement is hereby amended
by deleting subsection 2.1(D)(1) in its entirety and inserting the following in
its place and stead:
"(l) Maximum Amount. The aggregate amount of Lender Guaranty
Liability with respect to all Lender Letters of Credit and Lender Guaranties
outstanding at any time shall not exceed Five Million Dollars ($5,000,000)."
1.6 Subsection 2.5 of the Credit Agreement is hereby amended by
deleting clause (b) of the first sentence thereof and substituting the
following in its place
"(b) July 31, 2002 (the "Termination Date"), and the Commitments
shall (unless earlier terminated) terminate concurrently on the
Termination Date."
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1.7 Subsection 6.1 of the Credit Agreement is hereby amended by
deleting subsection 6.1 in its entirety and inserting the following in its
place and stead:
6.1 Capital Expenditure Limits. The aggregate amount of all
Capital Expenditures of Borrower and its Subsidiaries for the Fiscal
Years set forth below will not exceed the amount set forth below for
such Fiscal Year. The amounts set forth below are exclusive of the
capital costs related to the purchase and installation of the Borrower's
new information system, which costs shall not exceed $2,000,000.
Fiscal Year Amount
----------- ------
1996 $2,200,000
1997 $3,000,000
1998 and each Fiscal Year thereafter $4,000,000
Notwithstanding the foregoing, in the event Borrower does not in any
Fiscal Year use the permitted amount of Capital Expenditures for such Fiscal
Year, Borrower may carry forward to the immediately succeeding Fiscal Year
fifty percent (50%) of the unused portion of such permitted amount. All Capital
Expenditures shall first be applied to reduce the carry forward from the
previous year, if any, and then to reduce the applicable limit for the then
current Fiscal Year.
1.8 Subsection 6.3 of the Credit Agreement is hereby amended by
deleting subsection 6.3 in its entirety and inserting the following in its
place and stead:
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 month during the periods set forth below to be less than the
amount set forth below for such period.
Period Amount
------ ------
Each month after the Second Amendment 1.2 to 1
Effective Date
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ARTICLE II
GENERAL PROVISIONS
2.1 Conditions Precedent. The effectiveness of this Second
Amendment is subject to the satisfaction of the following conditions precedent
(unless specifically waived in writing by Agent and Lenders): (a) there shall
have occurred no material adverse change in the business, operations, financial
condition, profits or prospects, or in the Collateral of Borrower; (b) Borrower
shall have executed and delivered such other documents and instruments as Agent
may require; (c) all corporate proceedings taken in connection with the
transactions contemplated by the Second Amendment and all documents, instruments
and other legal matters incident thereto shall be satisfactory to Agent and its
legal counsel; (d) execution and delivery of all Notes to each of Lenders
representing their Pro Rata Share of new Commitments; (e) after giving effect to
the payment of, or the creation of a reserve for, all costs, fees and expenses
related to the closing of the Second Amendment, Borrower shall have a minimum of
Ten Million Dollars ($10,000,000) available to draw under the Revolving Loan on
the Second Amendment Effective Date; (f) the conditions of Section 2.11 of the
Second Amendment shall have been satisfied to Agent's satisfaction; and (g)
Borrower shall have paid or shall pay when due to ▇▇▇▇▇▇, individually and as
Agent, in addition to Interest and other charges, the following fees:
(i) Closing Fee: The amount of $96,563.00 will be due and
payable on the Second Amendment Effective Date;
(ii) Commitment Affirmation Fee: A commitment affirmation
fee in the amount of $61,563.00 will be due and payable on the Second
Amendment Effective Date;
(iii) Certain Fees: Borrower shall pay to ▇▇▇▇▇▇,
individually and as Agent, such fees in the amounts and at the times
specified in that certain letter agreement of even date herewith between
Borrower and ▇▇▇▇▇▇
2.2 Ratification. The terms and provisions set forth in the Second
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Credit Agreement and, except as expressly modified and superseded
by the Second 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.
2.3 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.
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2.4 Amendment; Assignment. This Second Amendment may not be
modified, altered or amended except by an instrument in writing signed by
Borrowers and Lender. Borrowers may not sell, assign or transfer this Second
Amendment or any portion thereof, including, without limitation, any of
Borrower's rights, titles, interests, remedies, powers and/or duties hereunder
or thereunder.
2.5 Severability. If any provision of this Second Amendment or the
application thereof to any Person or circumstance is held invalid or
unenforceable, the remainder of this Second Amendment and the application of
such provision to other Persons or circumstances will not be affected thereby
and the provisions of this Second Amendment shall be severable in any such
instance.
2.6 Counterparts. This Second 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. An executed facsimile
of this Second Amendment shall be deemed to be a valid and binding agreement
between the parties hereto.
2.7 Headings. All headings used in this Second Amendment are for
convenience of reference only and shall not be used in interpreting this Second
Amendment.
2.8 Entire Agreement. This Second 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.
2.9 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.
2.10 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
EACH BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE COUNTY OF ▇▇▇▇, STATE OF ILLINOIS AND IRREVOCABLY AGREES
THAT, SUBJECT TO AGENT'S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN
SUCH COURTS. EACH BORROWER ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT, SUCH NOTE, SUCH OTHER
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LOAN DOCUMENT OR SUCH OBLIGATION. BORROWER DESIGNATES AND APPOINTS CT
CORPORATION SYSTEM AND SUCH OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY
BORROWER WHICH IRREVOCABLY AGREE IN WRITING TO SO SERVE AS ITS AGENT TO RECEIVE
ON ITS BEHALF SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT,
SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY BORROWER TO BE EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT. A COPY OF ANY SUCH PROCESS SO SERVED SHALL BE MAILED
BY REGISTERED MAIL TO BORROWER AT ITS ADDRESS PROVIDED IN SUBSECTION 10.5
EXCEPT THAT UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL
SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT
APPOINTED BY BORROWER REFUSES TO ACCEPT SERVICE, BORROWER HEREBY AGREES THAT
SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN
SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
SHALL LIMIT THE RIGHT OF AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.
2.11 Required Lender Approval. As required by Section 10.3 of the
Credit Agreement, this Second Amendment shall become effective as of the date
first set forth above upon execution by the Borrower and each of the Lenders,
satisfaction of the conditions precedent set forth herein and acknowledgment
hereof by Grand Distributing Corp., ▇▇▇▇▇▇ Paint Company, ▇▇▇▇▇▇ & Sons Auto
Paint, Inc. 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 Second Amendment has been duly executed as of
the day and year first above written.
▇▇▇▇▇▇▇▇ PBE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Title: EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
--------------------------------
[SIGNATURES CONTINUE ON THE NEXT PAGE]
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Revolving Loan Commitment: ▇▇▇▇▇▇ FINANCIAL, INC., as Agent
$4,560,000.00
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Term Loan A Commitment: ------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
$7,600,000.00 ------------------------------
Title: VP
Acquisition Loan Commitment: ------------------------------
$6,840,000.00
Revolving Loan Commitment: GIROCREDIT BANK
AKTIENGESELLSCHAFT DER SPARKASSEN
$2,160,000.00
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
Term Loan A Commitment: ------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
$3,600,000.00 -------------------------------
Title: Vice President
Acquisition Loan Commitment: ------------------------------
$3,240,000.00
Revolving Loan Commitment: SANWA BUSINESS CREDIT CORPORATION
$4,560,000.00
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Term Loan A Commitment: ------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
$7,600,000.00 ------------------------------
Title: Vice President
Acquisition Loan Commitment: ------------------------------
$6,840,000.00
[SIGNATURES CONTINUE ON THE NEXT PAGE]
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Revolving Loan Commitment: FLEET BANK OF MASSACHUSETTS, N.A.
$4,560,000.00
By: /s/ ▇▇▇▇▇ COPOULIS
Term Loan A Commitment: ------------------------------
Name: ▇▇▇▇▇ Copoulis
$7,600,000.00 ------------------------------
Title: Vice President
Acquisition Loan Commitment: ------------------------------
$6,840,000.00
Revolving Loan Commitment: UNION BANK
$2,160,000.00
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Term Loan A Commitment: ------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
$3,600,00.00 ------------------------------
Title: VP
Acquisition Loan Commitment: ------------------------------
$3,240,000.00
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ACKNOWLEDGMENT
GRAND DISTRIBUTING CORP. acknowledges and consents to the terms of this
Second Amendment and hereby affirms, ratifies and confirms all of the terms of
its Continuing Guaranty dated January 5, 1995.
GRAND DISTRIBUTING CORP.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
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Title: CEO
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ACKNOWLEDGMENT
▇▇▇▇▇▇ PAINT COMPANY acknowledges and consents to the terms of this
Second Amendment and hereby affirms, ratifies and confirms all of the terms of
its Continuing Guaranty dated February 16, 1995.
▇▇▇▇▇▇ PAINT COMPANY
By: /s/ ▇▇▇▇ ▇▇▇▇▇
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Title: President
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ACKNOWLEDGMENT
▇▇▇▇▇▇ & SONS AUTO PAINT, INC. acknowledges and consents to the terms of
this Second Amendment and hereby affirms, ratifies and confirms all of the terms
of its Continuing Guaranty dated February 15, 1996.
▇▇▇▇▇▇ & SONS AUTO PAINT, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
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Title: President
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ACKNOWLEDGMENT
SANTA ▇▇▇▇▇ COLOR SERVICE, INC. acknowledges and consents to the terms
of this Second 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/ ▇▇▇▇ ▇▇▇▇▇
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Title: President
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