EXHIBIT 10.56
WAIVER AND AMENDMENT
WAIVER AND AMENDMENT, dated as of March 26, 1999 (this
"AMENDMENT"), to the Amended and Restated Credit Agreement, dated as of March
6, 1998 (as amended, supplemented or otherwise modified from time to time,
the "AGREEMENT"), among AFTERMARKET TECHNOLOGY CORP., a Delaware corporation
(the "BORROWER"), the several banks and other financial institutions from
time to time parties thereto (the "LENDERS") and THE CHASE MANHATTAN BANK, a
New York banking corporation, as agent (in such capacity, the "AGENT").
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders and the Agent are
parties to the Agreement;
WHEREAS, the Borrower has requested that the Lenders and
the Agent agree to amend or waive certain provisions of the Agreement, and
the Lenders and the Agent are agreeable to such request upon the terms and
subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual
agreements contained herein, and for other valuable consideration the receipt
of which is hereby acknowledged, the Company, the Lenders and the Agent
hereby agree as follows:
1. DEFINITIONS. All terms defined in the Agreement
shall have such defined meanings when used herein unless otherwise defined
herein.
2. AMENDMENT OF SUBSECTION 1.1. Subsection 1.1 of
the Agreement is hereby amended as follows:
(a) The first paragraph of the definition of "APPLICABLE
MARGIN" is hereby deleted (up to clause (a) thereof) and replaced with the
following new paragraph:
""APPLICABLE MARGIN": from and after March 26, 1999, 1.25% in
the case of ABR Loans and 2.25% in the case of Eurodollar
Loans (it being understood that prior thereto the Applicable
Margin shall be as provided in this Agreement prior to the
effectiveness of the Waiver and Amendment hereto dated as of
March 26, 1999); PROVIDED that, such Applicable Margin will be
adjusted on each Adjustment Date to the applicable rate per
annum set forth under the heading "ABR Applicable Margin" or
"Eurodollar Applicable Margin" on Schedule A which corresponds
to the Leverage Ratio determined based on the financial
statements and Compliance Certificate relating to the end of
the four fiscal quarters of the Borrower immediately
2
preceding such Adjustment Date; PROVIDED FURTHER, that,
notwithstanding the foregoing, for the period from March
26, 1999 until the first Adjustment Date to occur after
delivery of the Borrower's financial statements for the
fiscal quarter ended June 30, 1999 pursuant to Section
7.1(b), the Applicable Margin in respect of Loans shall not
be less than the initial Applicable Margin set forth above;
and PROVIDED, FURTHER, that in the event that the financial
statements required to be delivered pursuant to subsection
7.1(a) or 7.1(b), as applicable, and the related Compliance
Certificate required to be delivered pursuant to subsection
7.2(b), are not delivered when due, then".
(b) The definition of "CONSOLIDATED CAPITAL EXPENDITURES" is
amended by inserting at the end thereof the following proviso:
"; PROVIDED that, in calculating Consolidated Capital
Expenditures for any test period of four consecutive fiscal
quarters that includes any of the fiscal quarters ending March
31, 1999, June 30, 1999, September 30, 1999 or December 31,
1999 for purposes of determining compliance with Subsection
8.1(b) (but not the purposes of subsection 8.9 or any other
purpose), the portion of "J.D. Edwards implementation" costs
that would otherwise be included in such Consolidated Capital
Expenditures, in amount and nature not materially different
from those items presented to the Lenders at their meeting
with the Borrower on March 10, 1999, may be subtracted from
Consolidated Capital Expenditures so long as the aggregate
amount of such costs so subtracted in calculating Consolidated
Capital Expenditures for all such four quarter test periods
does not exceed $18,000,000".
(c) The definition of "CONSOLIDATED EBITDA" is amended by (i)
inserting at the end of each of clause (d), (e) and (f) the parenthetical
"(subject, in the case of any thereof constituting Special Charges, to the
limits set forth in the definition thereof)" and (ii) adding the following new
clause (g) after the existing clause (f):
"and (g) for any calculation of Consolidated EBITDA for the
purpose of determining the Applicable Margin or compliance
with subsections 8.1(a) or 8.1(b), in each case for any test
period
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that includes the fiscal quarter ended December 31, 1998,
the amount of Special Charges".
(d) The following new definition is added in appropriate
alphabetical order:
"SPECIAL CHARGES": (a) extraordinary losses, special
charges and non-cash charges recorded in the fiscal quarters
ended June 30, 1998 and December 31, 1998, in amount and
nature not materially different from those items presented to
the Lenders at their meeting with the Borrower on March 10,
1999, and in any case in an aggregate amount not to exceed
$36,700,000, PROVIDED that the items included therein
described as a $5,170,000 cash charge resulting from core
returns by Chrysler and a $2,400,000 cash charge for
additional state tax liabilities may exceed such figures by
amounts that, when added together, are not greater than
$2,500,000 in the aggregate for both such items, and in such
event the foregoing $36,700,000 limit may be increased to the
extent of such excess to an amount not to exceed $39,200,000,
and (b) severance and restructuring charges recorded in any
fiscal quarter ending in 1999, in amount and nature not
materially different from those items presented to the Lenders
at their meeting with the Borrower on March 10, 1999, and in
any case in an aggregate amount not to exceed $4,000,000."
3. WAIVER OF CERTAIN REPRESENTATIONS. Any breach of the
representations and warranties of the Borrower (i) set forth in the first
sentence of Subsection 5.2 (no material adverse change since December 31, 1996),
the first sentence of Subsection 5.4 (to the extent addressing the legal right
to borrow) and Subsection 5.7 (no default), and (ii) made or deemed made
pursuant to Subsection 6.2 or the Waiver, dated as of January 6, 1999, to the
Credit Agreement, to the extent that by virtue of such Subsection 6.2 or such
Waiver the Borrower made or was deemed to have made the representations
described in the foregoing clause (i), is hereby waived to the extent, and only
to the extent, that such representation and warranty was made or deemed made
prior to the date hereof and was or may have been incorrect solely by virtue of
or to the extent of facts or circumstances specifically presented to the Lenders
at their meeting with the Borrower on March 10, 1999.
4. WAIVER OF SUBSECTION 6.2(e) AND 7.2(f). The requirements of
Subsections 6.2(e) and 7.2(f) of the Agreement are hereby waived to the extent,
and only to the extent, that prior to the time hereof the Borrower may have
failed to deliver, on one or more occasions, complete certificates required by
Subsection 6.2(e) or 7.2(f), as applicable.
5. WAIVER OF SUBSECTION 7.2(c). The requirements of Subsection
7.2(c) of the Agreement are hereby waived to the extent, and only to the extent,
that a certificate with respect to projections for the 1999 fiscal year has not
been delivered within the period set forth therein, so long as such certificate
is delivered on or prior to March 26, 1999,
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it being understood that the projections provided for 1999 by the Borrower to
the Lenders at their meeting on March 10, 1999 shall constitute the
projections required by Subsection 7.2(c).
6. WAIVER OF SUBSECTION 8.1(a). The requirements of Subsection
8.1(a) of the Agreement are hereby waived to the extent, and only to the extent,
that the Leverage Ratio on the last day of the Borrower's fiscal quarter ended
December 31, 1998 exceeded 4.00 to 1.0, so long as the Leverage Ratio as of such
date did not exceed 4.50 to 1.00 after giving effect to this Amendment.
7. WAIVER OF SUBSECTION 8.1(b). The requirements of Subsection
8.1(b) of the Agreement are hereby waived to the extent, and only to the extent,
that the interest coverage ratio calculated in accordance with Section 8.1(b) of
the Agreement for the period of four consecutive fiscal quarters ended December
31, 1998 was less than 2.00 to 1.0 before giving effect to this Amendment, so
long as such ratio for such period was not less than 2.00 to 1.0 after giving
effect to this Amendment.
8. AMENDMENT OF SUBSECTION 4.1(a). Subsection 4.1(a) of the
Agreement is hereby amended by inserting at the end thereof the following
proviso:
"PROVIDED FURTHER, that, notwithstanding the foregoing, for
the period from March 26, 1999 until the first Adjustment Date
to occur after delivery of the Borrower's financial statements
for the fiscal quarter ended March 31, 1999 pursuant to
Section 7.1(b), the commitment fee rate shall be .500%."
9. AMENDMENT OF SUBSECTION 6.2(e). Subsection 6.2(e) of
the Agreement is hereby amended by:
(a) deleting the clause "the sum of (i) the aggregate unpaid
principal amount of the Term Loans and (ii)" from the second line of existing
Subsection 6.2(e);
(b) deleting the words "Extensions of Credit"from the ninth
line of existing Subsection 6.2(e) and inserting in lieu thereof "Revolving
Credit Exposures of all Lenders"; and
(c) inserting the clause "or (z) the Agent shall have received
a certificate of a Responsible Officer of the Borrower, dated the requested
Borrowing Date, demonstrating that the incurrence of such Extensions of Credit
is permitted under provisions of Section 4.11 of the Indenture other than
subsections 4.11(a) or 4.11(f)" at the end of Subsection 6.2(e),
such that Subsection 6.2(e), as amended, reads as follows:
"(e) DEBT INCURRENCE COMPLIANCE CERTIFICATE. If, on
any requested Borrowing Date, the aggregate Revolving Credit
Exposures of all Lenders, after
5
giving effect to the Extensions of Credit requested to be
made on such Borrowing Date, exceeds 90% of the Borrowing
Base (as such term is defined in the Indentures) as
determined in the most recent calculation thereof delivered
pursuant to subsection 7.2(f), the Agent shall have
received a calculation of the Borrowing Base as at such
requested Borrowing Date, together with a certificate of a
Responsible Officer of the Borrower, dated the requested
Borrowing Date, demonstrating that the aggregate Revolving
Credit Exposures of all Lenders after giving effect to the
Revolving Credit Loans requested to be made on such
Borrowing Date will not exceed the Borrowing Base
calculated as at such date, PROVIDED that if the foregoing
would not be sufficient to demonstrate that such Extensions
of Credit can be made in compliance with the applicable
terms of the Indentures, such Borrowing Base calculation
and certificate shall not be so required, so long as (x)
the total amount of such requested Extensions of Credit,
when added to the total amount of any other Extensions of
Credit and the total amount of Indebtedness and
Disqualified Capital Stock (each as defined in the
Indenture) incurred after the date of the latest
calculation of the Total Incurrence Amount (as defined in
subsection 7.2(f)), does not exceed 90% of such Total
Incurrence Amount or (y) the Agent shall have received a
certificate of a Responsible Officer of the Borrower, dated
the requested Borrowing Date, demonstrating that the
applicable Consolidated Coverage Ratio (as such term is
defined in the Indentures) of the Borrower after giving
effect to such Extensions of Credit as set forth in the
Indentures satisfies the relevant terms thereof or (z) the
Agent shall have received a certificate of a Responsible
Officer of the Borrower, dated the requested Borrowing
Date, demonstrating that the incurrence of such Extensions
of Credit is permitted under provisions of Section 4.11 of
the Indenture other than subsections 4.11(a) or 4.11(f)."
10. AMENDMENT OF SUBSECTION 8.1(a). Subsection 8.1(a) of the
Agreement is hereby amended by deleting the permitted maximum Leverage Ratios
listed therein for the last day of the Borrower's fiscal quarters ending
December 31, 1998, March 31, 1999, June 30, 1999, September 30, 1999 and
December 31, 1999 and inserting in lieu thereof the following permitted maximum
Leverage Ratios:
"December 31, 1998 4.50 to 1.0
March 31, 1999 5.50 to 1.0
June 30, 1999 5.75 to 1.0
September 30, 1999 5.25 to 1.0
December 31, 1999 4.00 to 1.0".
11. AMENDMENT OF SUBSECTION 8.1(b). Subsection 8.1(b) of the
Agreement is hereby amended by deleting the minimum permitted interest coverage
ratios listed therein for the Borrower's four consecutive fiscal quarters ending
March 31, 1999, June 30, 1999,
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September 30, 1999 and December 31, 1999 and inserting in lieu thereof the
following interest coverage ratios:
"March 31, 1999 1.25 to 1.0
June 30, 1999 1.25 to 1.0
September 30, 1999 1.40 to 1.0
December 31, 1999 1.85 to 1.0".
12. AMENDMENT OF SUBSECTION 8.4(f). Subsection 8.4(f) of the
Agreement is hereby amended by deleting the existing clause (f) and inserting in
lieu thereof the following new clause:
"(f) Guarantee Obligations in respect of letters of credit
issued for the account of the Borrower or any of its
Subsidiaries in the ordinary course of business in an
aggregate face amount not to exceed $10,000,000 at any time."
13. AMENDMENT OF SUBSECTION 8.7. Subsection 8.7 of the
Agreement regarding permissible Consolidated Lease Expenses is hereby amended by
deleting the words "and $10,000,000 for each fiscal year thereafter" and
inserting in lieu thereof "and $15,000,000 for each fiscal year thereafter."
14. AMENDMENT OF SUBSECTION 8.9. Subsection 8.9 of the
Agreement is hereby amended by deleting the permitted levels of capital
expenditures listed therein for fiscal years 1999 through 2003 and inserting in
lieu thereof the following permitted levels of capital expenditures:
"1999 $28,000,000
2000 $30,000,000
2001 $30,000,000
2002 $30,000,000
2003 $30,000,000".
15. AMENDMENT TO SUBSECTION 8.10(J). Subsection 8.10(j) of the
Agreement is hereby amended by:
(a) deleting "$30,000,000" from clause (v) and inserting
in lieu thereof "$15,000,000"; and
(b) adding the following new clause (vi) after existing
clause (v):
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"and (vi) the aggregate consideration for all such
acquisitions after the Closing Date shall not exceed
$25,000,000."
16. AMENDMENT OF SUBSECTION 8.13. Subsection 8.13 of the
Agreement is hereby amended inserting at the end thereof the following proviso:
"PROVIDED that, notwithstanding the foregoing, the Borrower or
any of its Subsidiaries may enter into arrangements in the
ordinary course of business pursuant to which it purchases
equipment or similar property and, within 180 days of such
purchase, conveys such property to another Person, for cash
consideration at least equal to the consideration paid by it
in such purchase, and concurrently enters into a lease of such
property from such Person, in each case so long as such
transactions (including, without limitation, the amount of any
such lease) are permitted by the other applicable provisions
of this Agreement and no Default or Event of Default exists or
would result therefrom."
17. AMENDMENT OF SCHEDULE A. Schedule A to the Agreement is
hereby amended by deleting such Schedule A and replacing it with the Schedule A
attached hereto.
18. REPRESENTATIONS; NO DEFAULT. On and as of the date hereof,
and after giving effect to this Amendment, the Company confirms, reaffirms and
restates that the representations and warranties set forth in Section 5 of the
Agreement and in the other Loan Documents are true and correct in all material
respects, provided that the references to the Agreement therein shall be deemed
to be references to this Amendment and to the Agreement as amended by this
Amendment.
19. CONDITIONS TO EFFECTIVENESS. This Amendment shall become
effective on and as of the date that the Agent shall have received:
(a) counterparts of this Amendment, duly executed and
delivered by a duly authorized officer of each of the Borrower, the Agent, and
the Required Lenders, along with the written consent of each Subsidiary
Guarantor in the form attached hereto;
(b) an executed certificate of an officer of the Borrower in
form satisfactory to the Agent as to the accuracy of the Borrower's
representations and warranties set forth in Section 5 of the Agreement and in
the other Loan Documents, the absence of any Default or Event of Default after
giving effect to this Amendment, and calculations in reasonable detail
demonstrating that the Term Loans, at the time of incurrence thereof, could be
incurred under subsection 4.11(a) of the Senior Subordinated Indenture in
accordance with the provisions thereof and as to such other customary matters as
the Agent may reasonably request;
(c) an executed legal opinion of each of (i) internal counsel
to the Borrower with respect to authorization and absence of conflict with
contracts or laws in respect of this
8
Amendment and the Credit Agreement as amended hereby and (ii) Gibson, Dunn &
Crutcher LLP, in each case in form satisfactory to the Agent; and
(d) an amendment fee for the account of each Lender executing
this Amendment and delivering its executed signature page to the Agent prior to
5:00 p.m. on March 26, 1999, in the amount equal to 0.125% of the sum of such
Lender's Aggregate Outstanding Extensions of Credit and its unutilized
Commitments as of such date.
20. LIMITED WAIVER AND AMENDMENT. Except as expressly waived
and amended herein, the Agreement shall continue to be, and shall remain, in
full force and effect. This Amendment shall not be deemed to be a waiver of, or
consent to, or a modification or amendment of, any other term or condition of
the Agreement or any other Loan Document or to prejudice any other right or
rights which the Lenders may now have or may have in the future under or in
connection with the Agreement or any of the instruments or agreements referred
to therein, as the same may be amended from time to time.
21. COSTS AND EXPENSES. The Company agrees to pay or reimburse
the Agent for all its reasonable and customary out-of-pocket costs and expenses
incurred in connection with the preparation, negotiation and execution of this
Amendment, and the consummation of the transactions contemplated hereby,
including, without limitation, the reasonable fees and disbursements of its
counsel.
22. COUNTERPARTS. This Amendment may be executed by one or
more of the parties hereto in any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument.
23. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS 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.
AFTERMARKET TECHNOLOGY CORP.
By: /s/ Joseph Salamunovich
----------------------------
Name: Joseph Salamunovich
Title: Vice President
THE CHASE MANHATTAN BANK, as
Agent and as a Lender
By: /s/ Julie S. Long
----------------------------
Name: Julie S. Long
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: Steven T. Standbridge
----------------------------
Name: Steven T. Standbridge
Title: Senior Vice President
BANK OF NOVA SCOTIA
By: /s/ P.C.H. Ashby
----------------------------
Name: P.C.H. Ashby
Title: Senior Manager-Loan
Operations
10
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Glenn A. Currin
----------------------------
Name: Glenn A. Currin
Title: Vice President
FIRST UNION NATIONAL BANK
By: /s/ Leo G. Leitner
----------------------------
Name: Leo G. Leitner
Title: Managing Director/Senior
Vice President
HARRIS TRUST & SAVINGS BANK
By: /s/ Melissa A. Witson
----------------------------
Name: Melissa A. Witson
Title: Vice President
LASALLE NATIONAL BANK
By: /s/ James J. Hess
----------------------------
Name: James J. Hess
Title: Assistant Vice President
NATIONAL CITY BANK
By: /s/ Matthew R. Klinger
----------------------------
Name: Matthew R. Klinger
Title: Assistant Vice President
11
BANK OF NEW YORK
By: /s/ John M. Lokay, Jr.
----------------------------
Name: John M. Lokay, Jr.
Title: Vice President
CREDIT AGRICOLE INDOSUEZ
By: /s/ W. Leroy Startz
----------------------------
Name: W. Leroy Startz
Title: First Vice President
By: /s/ Kathryn L. Abbott
----------------------------
Name: Kathryn L. Abbott
Title: First Vice President
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CONSENT
Each of the undersigned Guarantors hereby consents and agrees to the
provisions of the foregoing Amendment, and hereby affirms that upon the
effectiveness of the foregoing Amendment, each Loan Document to which it is a
party shall continue to be, and shall remain, in full force and effect.
AFTERMARKET TECHNOLOGY CORP.
By: /s/ Joseph Salamunovich
----------------------------
Name: Joseph Salamunovich
Title: Vice President
AARON'S AUTOMOTIVE PRODUCTS, INC.
By: /s/ Joseph Salamunovich
----------------------------
Name: Joseph Salamunovich
Title: Vice President
ACI ELECTRONICS HOLDING CORP.
By: /s/ Joseph Salamunovich
----------------------------
Name: Joseph Salamunovich
Title: Vice President
ACI ELECTRONICS INVESTMENT CORP.
By: /s/ Joseph Salamunovich
----------------------------
Name: Joseph Salamunovich
Title: Vice President
ATC ELECTRONICS & LOGISTICS, L.P.
By: ACI ELECTRONICS HOLDING CORP.,
its General Partner
By: /s/ Joseph Salamunovich
----------------------------
Name: Joseph Salamunovich
Title: Vice President
13
ATC DISTRIBUTION GROUP, INC.
By: /s/ Joseph Salamunovich
----------------------------
Name: Joseph Salamunovich
Title: Vice President
ATS REMANUFACTURING, INC.
By: /s/ Joseph Salamunovich
----------------------------
Name: Joseph Salamunovich
Title: Vice President
COMPONENT REMANUFACTURING SPECIALISTS, INC.
By: /s/ Joseph Salamunovich
----------------------------
Name: Joseph Salamunovich
Title: Vice President
AUTOCRAFT REMANUFACTURING CORP.
By: /s/ Joseph Salamunovich
----------------------------
Name: Joseph Salamunovich
Title: Vice President
AUTOCRAFT INDUSTRIES, INC.
By: /s/ Joseph Salamunovich
----------------------------
Name: Joseph Salamunovich
Title: Vice President
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SCHEDULE A
Pricing Grid
- --------------------------------------------------------------------------------------------------------------
Commitment Eurodollar ABR
Leverage Ratio Fee Rate Applicable Margin Applicable Margin
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Greater than 5.0:1.00 .500% 2.50% 1.50%
- --------------------------------------------------------------------------------------------------------------
Less than or equal to 5.00:1.00, and .500% 2.25% 1.25%
greater than 4.50:1.00
- --------------------------------------------------------------------------------------------------------------
Less than or equal to 4.50:1.00, and .500% 2.00% 1.00%
greater than 4.00:1.00
- --------------------------------------------------------------------------------------------------------------
Less than or equal to 4.00:1.00, and .375% 1.25% .25%
greater than 3.50:1.0
- --------------------------------------------------------------------------------------------------------------
Less than or equal to 3.50:1.00, and .375% 1.00% 0%
greater than 2.50:1.00
- --------------------------------------------------------------------------------------------------------------
Less than or equal to 2.50:1.00, and .300% .875% 0%
greater than 2.00:1.00
- --------------------------------------------------------------------------------------------------------------
Less than or equal to 2.00:1.00 .250% .750% 0%
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------