SECOND AMENDMENT TO CREDIT AGREEMENT June 1, 2005
SECOND
AMENDMENT TO
June 1,
2005
LKQ
Corporation
000 Xxxxx
XxXxxxx Xxxxxx
Xxxxx
0000
Xxxxxxx,
Xxxxxxxx 00000
Ladies
and Gentlemen:
Reference
is made hereby to that certain Credit Agreement dated as of February 17,
2004 among LKQ Corporation, a Delaware corporation ("Borrower"), the financial
institutions from time to time a party thereto ("Lenders"), Bank of America,
N.A., as Administrative Agent for the Lenders ("Administrative Agent"), LaSalle
Bank National Association, as Syndication Agent for the Lenders, XX Xxxxxx Xxxxx
Bank National Association (successor by merger to Bank One, NA (Illinois)), as
Documentation Agent for the Lenders, National City Bank of the Midwest (f/k/a
National City Bank), as Co-Agent for the Lenders and Banc of America Securities
LLC, as Arranger for the Lenders, as amended to date (the "Credit Agreement").
Unless otherwise defined herein, capitalized terms used herein shall have the
meanings provided to such terms in the Credit Agreement.
Borrower
has requested that Lenders agree to amend the Credit Agreement in certain
respects and Lenders have agreed to such amendments, on the terms, and subject
to the conditions, contained herein.
Therefore,
Borrower and Lenders hereby agree as follows:
1. Amendments. The
Credit Agreement is hereby amended as follows:
(a) Section 1
of the Credit Agreement is hereby amended by amending and restating the
definition of "Aggregate Commitment" as follows:
"Aggregate
Commitment" means the combined Commitments of the Lenders, in the aggregate
principal amount of One Hundred Thirty-Five Million Dollars ($135,000,000), as
such amount may be increased pursuant to Section 2.17 or reduced from time to
time pursuant to Section 2.5.
(b) Section 1
of the Credit Agreement is hereby further amended by amending and restating the
definition of "Applicable Margin" as follows:
"Applicable
Margin" means at any time (a) with respect to the unpaid principal amount
of each IBOR Loan, the applicable percentage set forth below in the column
entitled "Applicable Margin for IBOR Loans" opposite the Total Funded Debt to
EBITDA Ratio in effect at such time; (b) with respect to the unpaid
principal amount of each Base Rate Loan, the applicable percentage set forth
below in the column entitled "Applicable Margin for Base Rate Loans" opposite
the Total Funded Debt to EBITDA Ratio in effect at such time; (c) with
respect to the unpaid principal amount of each Optional Floating Rate Loan, the
applicable percentage set forth below in the column entitled "Applicable Margin
for Optional Floating Rate Loans" opposite the Total Fund Debt to EBITDA Ratio
in effect at such time; and (d) with respect to the non-use fees described
in subsection 2.10(b), the applicable percentage set forth below in the column
entitled "Applicable Margin for Non-Use Fees" opposite the Total Funded Debt to
EBITDA Ratio in effect at such time, as follows:
Level |
Total
Funded Debt
to
EBITDA Ratio |
Applicable
Margin For IBOR Loans |
Applicable
Margin For Base Rate Loans |
Applicable
Margin For Optional Floating Rate Loans |
Applicable
Margin For Non-Use Fees |
1
|
Less
than or equal to 1.0 : 1.0
|
0.875%
|
0%
|
0.875%
|
0.20%
|
2
|
Greater
than 1.00 : 1.0 but less than or equal to 1.50 : 1.0
|
1.000%
|
0%
|
1.000%
|
0.25%
|
3
|
Greater
than 1.50 : 1.0 but less than or equal to 2.00 : 1.0
|
1.250%
|
0%
|
1.250%
|
0.30%
|
4
|
Greater
than 2.00 : 1.0 but less than or equal to 2.75 : 1.0
|
1.375% |
0% |
1.375% |
0.35% |
5
|
Greater
than 2.75 : 1.0
|
1.625% |
0% |
1.625% |
0.40% |
The
initial Applicable Margin for IBOR Loans, Base Rate Loans, Optional Floating
Rate Loans, and Non-Use Fees shall be set at Level 2 in the above table and each
initial Applicable Margin shall remain in effect until the delivery of the
Company's financial statements, and related Compliance Certificate, with respect
to the fiscal quarter ending June 30, 2005. Thereafter, the Applicable
Margin shall be based on the Total Funded Debt to EBITDA Ratio in effect as set
forth in the Compliance Certificate most recently delivered by the Company to
the Administrative Agent. Changes in the Applicable Margin resulting from a
change in the Total Funded Debt to EBITDA Ratio shall become effective upon
delivery by the Company to the Administrative Agent of a new Compliance
Certificate pursuant to subsection 6.2(b). If the Company shall fail to deliver
a Compliance Certificate within 45 days after the end of any fiscal quarter (or
within 60 days after the end of any fiscal quarter that is the last fiscal
quarter in any fiscal year) as required pursuant to subsection 6.2(b), the
Applicable Margin from and including the 46th day after the end of such fiscal
quarter (or the 61st day after the end of such fiscal quarter for any fiscal
quarter that is the last fiscal quarter in any fiscal year), to but not
including the date the Company delivers to the Administrative Agent a Compliance
Certificate shall conclusively be presumed to equal the highest Applicable
Margin specified in the above chart for the type of loan or fee. Whenever a
change in the Total Funded Debt to EBITDA Ratio results in an adjustment to the
Applicable Margin, the Company shall deliver to the Administrative Agent,
together with the required Compliance Certificate, a Pricing Change
Certificate.
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(c) Section 1
of the Credit Agreement is hereby further amended by amending and restating the
definition of "EBITDA" as follows:
"EBITDA"
means, for any period, for any Person, determined for such Person and its
Subsidiaries on a consolidated basis and in accordance with GAAP, the sum of
(a) the net income (or net loss) for such period, plus
(b) all amounts treated as expenses for depreciation and the amortization
of intangibles of any kind to the extent included in the determination of such
net income (or loss), plus
(c) all amounts treated as expenses for interest to the extent included in
the determination of such net income (or loss), plus
(d) all accrued taxes on or measured by income to the extent included in
the determination of such net income (or loss), plus
(e) the effect of financial accounting standard 142 related to goodwill,
plus
(f) non-cash compensation expenses related to the application of financial
accounting standard 123R related to share-based payments, plus
(g) non-cash charges other than those described in clauses (e) and (f)
above, in an aggregate amount not in excess of $5,000,000 in any period, or such
greater amount as Administrative Agent shall have approved in its reasonable
judgment; provided,
however, that
net income (or loss) shall be computed for these purposes without giving effect
to extraordinary losses or extraordinary gains; provided,
further, that
EBITDA of the Company and its Subsidiaries for any period shall include pro
forma EBITDA, for such period, of the target of any Permitted Acquisition
consummated during such period, including any add-backs and adjustments to
EBITDA listed on Schedule 1.1(a) and any
other add-backs and adjustments to EBITDA approved by all Lenders.
(d) Section 1
of the Credit Agreement is hereby further amended by amending and restating
clause (vii) of the definition of "Permitted Acquisition" as
follows:
(vii) if
Borrower's Total Funded Debt to EBITDA, determined as of the most recent
calendar quarter and showing the effect of such Acquisition on a pro forma
basis, including the prior 12 months' EBITDA of the Person who is to be acquired
or whose Property is to be acquired in such Acquisition (based on the most
recent monthly financial statements for such Person) is greater than 2.50 to
1.00, the Majority Lenders shall have consented in writing to such
Acquisition;
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(e) Section 1
of the Credit Agreement is hereby further amended by amending and restating the
definition of "Revolving Loan Maximum Amount" as follows:
"Revolving
Loan Maximum Amount" means One Hundred Thirty-Five Million Dollars
($135,000,000), which is the Aggregate Commitment, as such amount may be
increased pursuant to Section 2.17 or reduced from time to time pursuant to
Section 2.5.
(f) Clause
(iii) of the first sentence of Section 2.8 of the Credit Agreement is hereby
amended and restated as follows:
(iii) June 1,
2010
(g) Section
2.10(a) of the Credit Agreement is hereby amended and restated as
follows:
(a) Fee
Letter.
The
Company shall pay to the Administrative Agent for its own account certain fees
in the amounts and at the times set forth in a certain letter agreement among
the Company, the Administrative Agent and Banc of America Securities LLC dated
May 13, 2005 (the "Fee Letter").
(h) The first
sentence of Section 2.17 of the Credit Agreement is hereby amended and restated
as follows:
From and
after June 1, 2005, the Company shall have the right to notify the
Administrative Agent and the Lenders in writing that it wishes to increase (an
"Increase") the Aggregate Commitment by an aggregate amount of up to Fifteen
Million Dollars ($15,000,000), in increments of not less than Five Million
Dollars ($5,000,000).
(i) Section
7.11(f) of the Credit Agreement is hereby amended and restated as
follows:
(f) so long
as no Event of Default or Default is then in existence or would be caused
thereby, (i) declare and pay dividends in respect of its Securities or
(ii) purchase, redeem or otherwise acquire its Securities, in an aggregate
amount for both clauses (i) and (ii) hereof not to exceed $5,000,000 in any
calendar year.
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(j) Section
7.12 of the Credit Agreement is hereby amended and restated as
follows:
7.12 Net
Worth.
The
Company's Net Worth, as of the last day of any fiscal quarter commencing on
June 30, 2005, shall not be less than the sum of 90% of the Company's Net
Worth on the Closing Date.
(k) Section
7.14 of the Credit Agreement is hereby amended and restated as
follows:
7.14 Senior
Funded Debt to EBITDA Ratio.
The
Senior Funded Debt to EBITDA Ratio, on the last day of any fiscal quarter
commencing on June 30, 2005, shall not exceed 3.00:1.00.
(l) Section
7.15 of the Credit Agreement is hereby amended and restated as
follows:
7.15 Total
Funded Debt to EBITDA Ratio.
The Total
Funded Debt to EBITDA Ratio, on the last day of any fiscal quarter commencing on
June 30, 2005, shall not exceed 3.75:1.00.
(m) Schedule
2.1 to the Credit Agreement is hereby amended and restated as set forth on
Exhibit A attached hereto.
2. Scope. Except
as amended hereby, the Credit Agreement remains unchanged and in full force and
effect.
3. Effectiveness. This
Second Amendment to Credit Agreement shall be effective on June 1, 2005
upon the satisfaction of the following conditions on or before June 1,
2005:
(a) delivery
to Administrative Agent of this Second Amendment to Credit Agreement, executed
by Lenders and agreed to by Borrower, together with duly executed Second Amended
and Restated Revolving Notes (the "Notes") and reaffirmations by each guarantor
of the Obligations, all in form and substance satisfactory to Administrative
Agent;
(b) delivery
to Administrative Agent of a fully executed Secretary's Certificate of Borrower,
certifying to the resolutions of Borrower's board of directors approving
execution, delivery and performance of the Second Amendment to Credit Agreement
and the Notes, in form and substance reasonably satisfactory to Administrative
Agent, together with a copy of Borrower's Certificate of Incorporation and good
standing certificate, each recently certified by the Secretary of State of
Delaware;
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(c) payment
to Administrative Agent of an amendment fee equal to 15 basis points of the
Aggregate Commitment ($202,500), which fee shall be shared pro rata by
Lenders;
(d) no Event
of Default or Default shall be in existence; and
(e) since
December 31, 2004, there shall not have occurred an event that has had a
Material Adverse Effect.
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4. Counterparts. This
Second Amendment to Credit Agreement may be executed in one or more
counterparts, each of which shall constitute an original, but all of which taken
together shall be one and the same instrument.
Very
truly yours,
BANK
OF AMERICA, N.A.,
as
Administrative Agent
By
/s/ Xxxxx X. Xxxxxxx
Its
Vice President
BANK
OF AMERICA, N.A., as a Lender
By
/s/ Xxxxx X. XxXxxxx
Its
Senior Vice President
LASALLE
BANK NATIONAL ASSOCIATION,
as
Syndication Agent and as a Lender
By
/s/
Xxxxxx X. Xxxxx
Its
Senior
Vice President
XX
XXXXXX XXXXX BANK,
NATIONAL
ASSOCIATION,
(Successor
by merger to Bank One, NA, (Illinois))
as
Documentation Agent and as a Lender
By
/s/
Xxxxx X. Xxxxxxx
Its
Assistant
Vice President
NATIONAL
CITY BANK OF THE MIDWEST
(F/K/A National City Bank), as
Co-Agent and as a Lender
By
/s/
Xxxxxxx Xxxxxxxx
Its
Senior
Vice President |
Acknowledged
and Agreed to
this
1st
day of June, 2005
LKQ
CORPORATION
By
/s/
Xxxxx X. Xxxxxx
Its
Vice
President - Finance and Controller |
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