SIXTH AMENDMENT OF
CREDIT AGREEMENT
THIS SIXTH AMENDMENT OF CREDIT AGREEMENT (this "Amendment"),
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dated as of May 6, 1996, by and among E&B MARINE INC., a Delaware
corporation, CENTRAL MARINE SUPPLY INC., a New Jersey
corporation, E & B MARINE SUPPLY, INC., a New Jersey corporation,
E & B MARINE SUPPLY, INC., a Maryland corporation, E&B MARINE
SUPPLY (FLORIDA) INC., a Delaware corporation, JAMES BLISS & CO.,
INC., a Massachusetts corporation, GOLDBERGS' MARINE
DISTRIBUTORS, INC., a Delaware corporation, SEA RANGER MARINE
INC., a Delaware corporation and KRISTA CORPORATION, a Delaware
corporation (collectively, the "Companies"; individually, a
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"Company"), and UNITED JERSEY BANK (successor in interest to
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United Jersey Bank/Central, N.A.) (the "Bank").
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W I T N E S S E T H:
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A. The Companies and the Bank entered into a Credit
Agreement dated as of June 6, 1994, as amended by the First
Amendment of Credit Agreement, Security Agreement and Pledge
Agreement dated as of September 12, 1994, the Second Amendment of
Credit Agreement dated as of March 8, 1995, the Third Amendment
of Credit Agreement dated as of October 27, 1995, a letter
agreement dated November 13, 1995 and the Fifth Amendment of
Credit Agreement (the "Fifth Amendment") dated as of December 22,
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1995 (collectively, and as further amended, supplemented or
otherwise modified, the "Credit Agreement");
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B. Pursuant to the Credit Agreement, the Bank agreed
to provide certain financial accommodations to the Companies,
including, without limitation, to make revolving credit loans to
the Companies from time to time in an aggregate principal amount
at any one time outstanding not to exceed $17,000,000, all upon
the terms and subject to the conditions set forth in the Credit
Agreement;
C. The Companies have requested the Bank to (i)
increase the maximum permitted aggregate principal amount of the
revolving credit loans from $17,000,000 to $20,000,000 until only
July 31, 1996, (ii) increase the Borrowing Base (as defined in
the Credit Agreement) to 60% until only July 31, 1996 and (iii)
modify certain of the financial condition covenants contained in
the Credit Agreement in connection therewith, all as more
specifically provided below in this Amendment; and
D. The Bank is willing to so increase the maximum
permitted aggregate principal amount of the revolving credit
loans and the Borrowing Base until July 31, 1996 and to modify
certain of the financial covenant conditions contained in the
Credit Agreement in connection therewith, all upon the terms and
subject to the conditions set forth below.
NOW, THEREFORE, in consideration of the premises and for
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree
as follows:
Capitalized terms used in this Amendment shall have the
same meanings given them in the Credit Agreement, unless
otherwise defined herein.
Subsection 2.1 of the Credit Agreement is hereby amended to
increase the maximum amount of the Revolving Loans Commitment
from $17,000,000 to $20,000,000 during only the period commencing
on the date of this Amendment and ending on July 31, 1996 (as
such amount is reduced from time to time pursuant to subsection
5.7 of the Credit Agreement). The maximum amount of the
Revolving Loans Commitment shall be automatically decreased from
$20,000,000 to $17,000,000 (as such amount is reduced from time
to time pursuant to subsection 5.7 of the Credit Agreement) on
August 1, 1996 and, without limiting any provision of the Credit
Agreement, the provisions of paragraphs 5.7(d) and 5.7(f) shall
apply. The Companies shall execute and deliver to the Bank a
promissory note, substantially in the form of Exhibit A to this
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Amendment, to evidence the Revolving Loans, with appropriate
insertions therein, payable to the order of the Bank and
representing the joint and several obligation of each Company to
pay the aggregate unpaid principal amount of all Revolving Loans
made by the Bank, with interest thereon as prescribed in
subsection 5.1 of the Credit Agreement (the "Amended and Restated
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Revolving Note"). The Amended and Restated Revolving Note
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supersedes and replaces the Revolving Note dated June 6, 1994
executed by the Companies in favor of the Bank (the "Original
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Revolving Note"). All references in the Credit Agreement and any
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other Credit Document to the Revolving Note shall be deemed to
refer to the Amended and Restated Revolving Note. The Original
Revolving Note shall be marked cancelled and shall be returned to
the Companies by the Bank.
3. Paragraph 8.2(e) is hereby amended and restated in its
entirety as follows:
"(e) within 5 Business Days of the last Business Day
of each week of each month, a Borrowing Base Certificate, in
each case reflecting the amount of Eligible Inventory as of
the last Business Day of such week;"
4. Subsection 9.1 of the Credit Agreement is hereby amended as
follows:
(a) Paragraph 9.1(b) is hereby amended to decrease the
minimum Consolidated Tangible Net Worth as of the last day of the
Companies' Second Quarter 1996 from $11,000,000 to $10,500,000.
(b) Paragraph 9.1(c) is hereby amended to decrease the
minimum Debt Service Coverage Ratio for the Companies' four
fiscal quarters ending as of the last day of the Companies'
Second Quarter 1996 from 1.3:1 to 1.2:1.
(c) Paragraph 9.1(d) is hereby amended to (i) delete
the word "less" on the fifth line of paragraph 9.1(d) and to
insert the word "greater" in lieu thereof and (ii) increase the
maximum ratio of Consolidated Total Liabilities to Consolidated
Tangible Net Worth as of the last day of the Companies' Second
Quarter 1996 from 3.2:1 to 3.5:1.
5. Notwithstanding Schedule IX to the Credit Agreement, the
Borrowing Base during the period commencing on the date of this
Amendment and ending on July 31, 1996 shall be increased to 60%
of Eligible Inventory. Commencing on August 1, 1996, the
Borrowing Base shall automatically be decreased to the amount set
forth on Schedule IX to the Credit Agreement for the then current
period, and without limiting any provision of the Credit
Agreement, the provisions of paragraphs 5.7(d) and 5.7(f) shall
apply. Thereafter, the Borrowing Base shall be determined in
accordance with Schedule IX to the Credit Agreement.
6. In order to induce the Bank to enter into this Amendment,
each Company hereby represents and warrants to the Bank that:
(a) no Default or Event of Default has occurred and is
continuing on and as of the date hereof;
(b) each of the Credit Documents, after giving effect to this
Amendment and the transactions contemplated hereby, continues to
be in full force and effect and to constitute the legal, valid
and binding obligation of each Company that is a party thereto,
enforceable against each Company in accordance with its terms;
(c) the representations and warranties made by each Company in
or pursuant to the Credit Documents, or which are contained in
any certificate, document or financial or other written statement
furnished at any time under or in connection herewith or
therewith, are each true and correct in all material respects on
and as of the date hereof as though made as of such date (unless
any such representation or warranty speaks as of a particular
date, in which case it shall be deemed repeated as of such date);
(d) when the Credit Agreement dated as of June 6, 1994 was
executed, the Companies each contemplated that the amount of the
Loans could be increased and that any such increase, if made,
would be secured by the Collateral;
(e) no Company has amended any of its Governing Documents
subsequent to the Closing Date, except as set forth in Schedule 3
to the Fifth Amendment; and
(f) the Companies have furnished a complete and correct copy
of theAgreement and Plan of Merger, dated April 2, 1996, among West
Marine, Inc., WM Merger Sub, Inc. and E&B Marine and all
amendments thereto, waivers relating thereto and any side letters
or other agreements relating thereto (collectively, the "Merger
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Agreements"). None of the Merger Agreements have been amended or
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supplemented in any material respect, nor have any of the
provisions thereof been waived in any material respect. The
Merger Agreements are in full force and effect. E&B Marine is
not, and to the best of the knowledge of each Company each other
party to any Merger Agreement is not, in default under any of its
obligations thereunder.
7. This Amendment shall become effective upon the satisfaction
of the following conditions:
(a) the Bank shall have received a copy hereof, duly executed
and delivered on behalf of each Company;
(b) the Bank shall have received the Amended and Restated
Revolving Note, substantially in the form of Exhibit A hereto,
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duly executed and delivered on behalf of each Company;
(c) the Bank shall have received the Fourth Amendment of
Mortgage and Security Agreement, substantially in the form of
Exhibit B hereto, duly executed and delivered by E & B Marine
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Supply, Inc., a New Jersey corporation (the "Fourth Mortgage
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Amendment", and together with this Amendment and the Amended and
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Restated Revolving Note, the "Amendment Documents");
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(d) the Bank shall have received a favorable opinion, dated as
of the date of this Amendment, of Haythe & Curley, counsel to the
Companies, in form and content reasonably satisfactory to the
Bank;
(e) the Bank shall have received an amendment fee in the amount
of $10,000;
(f) the Bank shall have received a certificate of the Secretary
or an Assistant Secretary of each Company, dated the date of this
Amendment, as to the incumbency and signature of each officer
signing each of the Amendment Documents to which such Company is
a party and any other certificate or other document to be
delivered pursuant thereto, together with evidence of the
incumbency of such Secretary or Assistant Secretary;
(g) the Bank shall have received a certificate of the Secretary
or an Assistant Secretary of each Company, dated as of the date
of this Amendment, certifying the Governing Documents of each
Company;
(h) the Companies shall have paid all expenses of the Bank,
including, without limitation, reasonable counsel fees, in
connection with the preparation, execution and delivery of this
Amendment and all other documents and instruments to be executed
and delivered pursuant hereto or in connection herewith, and the
transactions contemplated hereby; and
(i) all legal and other matters in connection with this
Amendment and the transactions contemplated hereby shall be
reasonably satisfactory to the Bank and its counsel.
8. E&B Marine and the other Companies shall use their best
efforts to take, or cause to be taken, all actions, and do, or
cause to be done, and to assist and cooperate with the other
parties to the Merger Agreements in doing, all things necessary,
proper or advisable to consummate the transactions contemplated
under the Merger Agreements (the "Merger"). Without limiting any
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obligations of the Companies under the Credit Documents, the
Companies shall furnish to the Bank (i) prompt written notice of
any circumstances that could delay beyond July 5, 1996 or
adversely affect the consummation of the Merger and (ii) any
other information regarding the Merger as may be reasonably
requested by the Bank. E&B Marine and the other Companies shall
not commit a breach or default under any of the Merger Agreements
that results in a termination thereof.
9. Nothing contained in this Amendment or otherwise shall be
construed or deemed to be (i) a consent, approval or acquiescence
by the Bank to the Merger Agreements or the Merger, (ii) a waiver
of any of the covenants or other obligations of the Companies
under the Credit Documents (including, without limitation, the
provisions of Section 9 of the Credit Agreement) or (iii) a
waiver of any of the rights and remedies the Bank may have under
the Credit Documents, at law, in equity or otherwise (whether or
not the Merger is consummated). Nothing shall obligate the Bank
to extend the period of the increases in the Revolving Loans
Commitment or the Borrowing Base contemplated hereunder beyond
August 1, 1996 or to otherwise modify any of the terms and
conditions of the Credit Documents.
10. From and after the effectiveness hereof, and without
limiting the generality of the Credit Documents, the Obligations
secured by the Collateral pursuant to the Security Documents
shall include, among other things, the Revolving Loans as
increased hereby.
11. This Amendment may be executed in several counterparts, each
of which, when executed and delivered, shall be deemed an
original, and all of which together shall constitute one
agreement.
12. This Amendment shall be governed by and construed and
interpreted in accordance with the laws of the State of New
Jersey, without giving effect to principles of conflicts law.
13. Except as amended and otherwise modified hereby and by the
other Amendment Documents, the Credit Agreement and the other
Credit Documents shall remain in full force and effect in
accordance with their respective terms.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above
written.
E&B MARINE INC., a Delaware corporation
By: /s/Walfrido A. Martinez
___________________________
Name: Walfrido A. Martinez
Title: Senior Vice President and
Chief Financial Officer
CENTRAL MARINE SUPPLY INC., a New Jersey
corporation
By: /s/Walfrido A. Martinez
___________________________
Name: Walfrido A. Martinez
Title: Vice President and Chief
Financial Officer
E & B MARINE SUPPLY, INC., a New Jersey
corporation
By: /s/Walfrido A. Martinez
___________________________
Name: Walfrido A. Martinez
Title: Vice President and Chief
Financial Officer
E & B MARINE SUPPLY, INC., a Maryland
corporation
By: /s/Walfrido A. Martinez
___________________________
Name: Walfrido A. Martinez
Title: Vice President and Chief
Financial Officer
E&B MARINE SUPPLY (FLORIDA) INC., a
Delaware corporation
By: /s/Walfrido A. Martinez
___________________________
Name: Walfrido A. Martinez
Title: Vice President and Chief
Financial Officer
JAMES BLISS & CO., INC., a Massachusetts
corporation
By: /s/Walfrido A. Martinez
___________________________
Name: Walfrido A. Martinez
Title: Vice President and Chief
Financial Officer
GOLDBERGS' MARINE DISTRIBUTORS, INC., a
Delaware corporation
By: /s/Walfrido A. Martinez
___________________________
Name: Walfrido A. Martinez
Title: Vice President and Chief
Financial Officer
SEA RANGER MARINE INC., a Delaware
corporation
By: /s/Walfrido A. Martinez
___________________________
Name: Walfrido A. Martinez
Title: Vice President and Chief
Financial Officer
KRISTA CORPORATION, a Delaware
corporation
By: /s/Walfrido A. Martinez
___________________________
Name: Walfrido A. Martinez
Title: Vice President and Chief
Financial Officer
UNITED JERSEY BANK
By: /s/Robert Williams
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Name: Robert Williams
Title: Vice President