EXHIBIT 10.45
March 27, 2009
The Coast Distribution System,
Inc.
350 Woodview Avenue
Morgan Hill, California 95037
Re: Fourth Amendment and
Waiver
Gentlemen:
The Coast Distribution System, Inc.,
a Delaware corporation ( “Coast Delaware” ),
United Sales & Warehouse of Texas, Inc., a Texas
corporation ( “United Sales” ), C/P Products
Corp., an Indiana corporation ( “C/P” ), Mohawk
Trailer Supply, Inc., a New York corporation (
“Mohawk” ), and Les Systemes De
Distribution Coast (Canada) Inc. The Coast Distribution System
(Canada) Inc., a corporation organized under the laws of the
Province of Quebec ( “Coast Canada” ) (Coast
Delaware, United Sales, C/P, Mohawk, and Coast Canada are referred
to individually as “Borrower ” and collectively
as “Borrowers” ), and Bank of America, NA., as
successor by merger to LaSalle Bank Midwest National Association (
“US Lender” ), acting by and through Bank of
America, N.A., a national banking association, as successor by
merger to LaSalle Business Credit, LLC, a Delaware limited
liability company, as Agent for US Lender (
“Agent” ) and Bank of America, N.A. (acting
through its Canada branch) ( “Canadian Lender”
), (US Lender, acting through Agent, and Canadian Lender are
referred to collectively as “Lender” ), have
entered into that certain Third Amended and Restated Loan and
Security Agreement dated August 30, 2005 (the
“Security Agreement” ). From time to time
thereafter, Borrowers and Lender may have executed various
amendments (each an “Amendment” and collectively
the “Amendments” ) to the Security Agreement
(the Security Agreement and the Amendments hereinafter are referred
to, collectively, as the “Agreement” ).
Borrowers and Lender now desire to further amend the Agreement as
provided herein, subject to the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of
the foregoing recitals, the mutual covenants and agreements set
forth herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:
1. The Agreement hereby is amended as
follows:
(a) The following definitions in Section 1 of
the Agreement are hereby deleted: Applicable Margin, Canadian
Bankers’ Acceptances,
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Inc.
March 27, 2009
Page 2
Draft, Drawing, Drawing Date, Drawing Fee,
Drawing Notice, Drawing Purchase Price, Face Amount, Reference
Discount Rate.
(b) The following definitions in Section 1 of
the Agreement are hereby amended and restated in their entirety as
follows:
“Approved
Bank” shall mean
with respect to Deposit Accounts, Bank of America, N.A.
“Canadian Inventory Advance
Sublimit” shall
mean (i) an amount up to the lesser of Two Million Five
Hundred and No/100 Dollars ($2,500,000.00) or fifty percent
(50%) of the value of Eligible Inventory owned by Coast
Canada; provided , however , that in no event shall
the Inventory advances under the Canadian Inventory
Advance Sublimit plus the advances under the US Inventory
Advance Sublimit exceed Seventeen Million Five Hundred Thousand and
No/100 Dollars ($17,500,000.00);, provided further that, Lender may
reduce the lending formula with respect to Coast Canada Eligible
Inventory in its Permitted Discretion.
“Canadian Maximum Loan
Sublimit” shall
mean an amount up to Eight Million and No/100 Dollars
($8,000,000.00), except as such amount may be increased or
decreased by Canadian Lender in its Permitted Discretion,
minus the FX Reserve (if any), provided that Coast Canada
may, upon three (3) days prior notice, request that the
Canadian Maximum Loan Sublimit be increased or decreased in
increments of Five Hundred Thousand and No/100 Dollars
($500,000.00). Coast US acknowledges that any request by Coast
Canada to increase the Canadian Maximum Loan Sublimit shall
constitute a corresponding request to Coast US to reduce the US
Maximum Loan Sublimit by a like amount. Borrowers acknowledge that
the amount of the Canadian Maximum Loan Sublimit as of the date
hereof is Five Million and No/100 Dollars ($5,000,000.00) and the
amount of the US Maximum Loan Sublimit as of the date hereof is
Twenty Million and No/100 Dollars ($20,000,000.00). Borrowers
further acknowledge that the amount of the Canadian Maximum Loan
Sublimit plus the amount of the US Maximum Loan Sublimit shall in
no event exceed Twenty Five Million and No/100 Dollars
($25,000,000.00).
“Canadian Prime Based
Rate” shall mean
the Canadian Prime Rate plus two and one quarter percent
(2.25%) per annum.
“Canadian Prime
Rate” shall mean
the rate of interest publicly announced from time to time by the
Canadian Lender as its reference rate of interest for loans made in
Canadian Dollars and designated as its “prime” rate.
The prime rate is a rate set by Canadian Lender based upon various
factors, including Canadian Lender’s costs and desired
return, general economic conditions and other factors and is used
as
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Inc.
March 27, 2009
Page 3
a reference point for pricing some loans. Any
change in the prime rate announced by the Canadian Lender shall
take effect at the opening of business on the day specified in the
public announcement of such change. Each interest rate based on the
Prime Rate hereunder, shall be adjusted simultaneously with any
change in the prime rate. In the event that the Canadian Lender
(including any successor or assignor) does not at any time publicly
announce a prime rate, the “Prime Rate” shall mean the
“prime rate” publicly announced by a Schedule 1
chartered bank in Canada selected by the Canadian
Lender.
“Canadian Revolving Credit
Outstandings” shall
mean the total amount of all monetary obligations, liabilities and
indebtedness under revolving credit facilities or credit
undertakings made available to, or for the benefit of, Coast Canada
hereunder that are outstanding on the date a determination of such
amount is made, including, but not limited to, the aggregate then
outstanding amount of all Loans or other advances made to, or on
behalf of, Coast Canada, the then face amount of all drawn and
unreimbursed or undrawn Letters of Credit issued for the account of
Coast Canada calculated without duplication.
“Canadian US Base
Rate” means, for
any day, the rate of interest in effect for such day as publicly
announced from time to time by the Canadian Lender in Toronto,
Ontario as its “base rate” (the “base rate”
being a rate set by the Canadian Lender based upon various factors
including the Canadian Lender’s costs and desired return,
general economic conditions and other factors, and used as a
reference point for pricing some loans in US Dollars). Any change
in the “base rate” announced by the Canadian Lender
shall take effect at the opening of business on the day specified
in the public announcement of such change. Each Interest Rate based
upon the Base Rate shall be adjusted simultaneously with any change
in the base rate. In the event that the Canadian Lender (including
any successor or assignor) does not at any time publicly announce a
“base rate”, then “Base Rate” shall mean
the “base rate” publicly announced by a Schedule 1
chartered bank in Canada selected by the Canadian
Lender.
“Canadian US Based
Rate” shall mean
the Canadian US Base Rate in effect from time to time plus two and
one quarter percent (2.25%) per annum.
“Eligible
Inventory” shall
mean any and all current and saleable Inventory of a Borrower as
determined by Lender in its sole discretion for lending purposes
including, without limitation, Inventory which meets the following
requirements (provided that Lender shall give such Borrower written
notice of any eligibility criteria established by Lender and not
set forth herein):
(i) it is owned by a Borrower, such
Borrower has the right to subject it to a security interest in
favor of Lender and it is subject to a first priority
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Inc.
March 27, 2009
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perfected security interest in favor of Lender
and to no other claim, lien, security interest or encumbrance
whatsoever, other than Permitted Liens;
(ii) it is located on one of the
premises listed on Exhibit A hereto (or other locations of
which Lender has been advised in writing pursuant to subsection
12(b)(i) hereof), such locations are within the United States
and Canada and is not in transit except between such locations set
forth on Exhibit A;
(iii) if held for sale or lease or
furnishing under contracts of service, it is (except as Lender may
otherwise consent in writing) new and unused and free from defects
which would, in Lender’s sole discretion determined in good
faith, affect its market value;
(iv) it is not stored with a bailee,
consignee, warehouseman, processor or similar party unless Lender
has given its prior written approval and such Borrower has caused
any such bailee, consignee, warehouseman, processor or similar
party to issue and deliver to Lender, in form and substance
acceptable to Lender, such Uniform Commercial Code financing
statements, warehouse receipts, waivers and other documents as
Lender shall require;
(v) Lender has determined in good
faith, in accordance with Lender’s customary business
practices, that it is not unacceptable due to age, type, category
or quantity;
(vi) it is not Inventory (A) with
respect to which any of the representations and warranties
contained in this Agreement are untrue; or (B) which violates any
of the covenants of Borrowers contained in this Agreement;
and
(vii) it does not consist of Slow
Moving Inventory; provided that, without out limitation of anything
contained herein, as of the date hereof, (A) Lender shall deem
Three Million Five Hundred Thousand and No/100 Dollars
($3,500,00.00) of the Inventory of Coast US to be Slow Moving
Inventory, which amount shall increase or decrease in an amount to
be determined by Lender in its Permitted Discretion on the first
day of each month thereafter and (B) Lender shall deem Five Hundred
Thousand and No/100 Dollars ($500,000.00) of the Inventory of Coast
Canada to be Slow Moving Inventory, which amount shall increase or
decrease in an amount determined by Lender in its Permitted
Discretion.
“FX
Reserve” shall mean
an amount determined by Canadian Lender in its Permitted
Discretion.
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Inc.
March 27, 2009
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“Indebtedness”
shall mean (i) all obligations
of Borrowers for borrowed money; (ii) all monetary obligations
of Borrowers evidenced by bonds, debentures, notes, or other
similar instruments and all reimbursements or other obligations of
Borrowers in respect of letters of credit, letter of credit
guaranties, interest rate swaps, controlled disbursement accounts,
or other financial products; (iii) all monetary obligations
under capitalized leases of Borrowers; (iv) all monetary
obligations or liabilities of others secured by a lien or security
interest on any asset owned by Borrowers, irrespective of whether
such obligation or liability is assumed; and (v) any monetary
obligation of Borrowers guaranteeing or intended to guaranty
(whether guaranteed, endorsed, co-made, discounted, or sold with
recourse to a Borrower) any indebtedness, lease, dividend, letter
of credit, or other obligation of any other Person. In each case
the amount of such obligations and liabilities that comprise
Indebtedness shall be calculated without duplication.
“Interest
Type” shall mean
the distinction between advances bearing interest at the LIBOR
Based Rate, Canadian Prime Rate, Canadian US Base Rate and the US
Prime Rate.
“LIBOR Based
Rate” shall mean
the LIBOR Rate plus four hundred (400) basis points per
annum.
“LIBOR
Rate” shall mean
(i) for any Libor Rate Loan made by U. S. Lender to Coast US.,
for any lnterest Period with respect to a LlBOR Rate Loan, the per
annum rate of interest (rounded up, if necessary, to the nearest
1/8th of 1%), determined by Lender at approximately 11:00 a.m.
(London time) two Business Days prior to commencement of such
Interest Period, for a term comparable to such Interest Period,
equal to (a) the British Bankers Association Libor (“BBA
LIBOR”), as published by Reuters (or other commercially
available source designated by Lender); or (b) if BBA LIBOR is not
available for any reason, the interest rate at which Dollar
deposits in the approximate amount of the LlBOR Rate Loan would be
offered by Lender’s London branch to major banks in the
London interbank Eurodollar market. If the Board of Governors
imposes a Reserve Percentage with respect to LlBOR deposits, then
the LlBOR Rate shall be the foregoing rate, divided by 1 minus the
Reserve Percentage and (ii) for any Libor Rate Loan made by
Canadian Lender to Coast Canada, for the Interest Period of each
such Libor Rate Loan Loan, the rate of interest per annum equal to
the annual rates applicable to Canadian Dollar Bankers’
Acceptances having an identical or comparable term as the proposed
Libor Rate Loan displayed and identified as such on the display
referred to as the “CDOR Page” (or any display
substituted therefor) of Reuter Monitor Money Rates Service as at
approximately 10:00 A.M. Eastern time on such day (or, if such day
is not a Business Day, as of 10:00 A.M. Eastern time on the
immediately preceding Business Day), plus five (5) basis
points, provided that if such rates do not appear on the CDOR Page
at such time on such date,
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Inc.
March 27, 2009
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the rate for such date will be the annual
discount rate (rounded upward to the nearest whole multiple of
1/100 of 1%) as of 10:00 A.M. Eastern time on such day at which a
Canadian chartered bank listed on Schedule 1 of the Bank Act
(Canada) as selected by Canadian Lender is then offering to
purchase Canadian Dollar Bankers’ Acceptances accepted by it
having such specified term (or a term as closely as possible
comparable to such specified term), plus five (5) basis
points.
“Maximum Loan
Limit” shall mean
an amount not to exceed Twenty Five Million and No/100 Dollars
($25,000,000.00).
“US Inventory Advance
Sublimit “ shall
mean the lesser of Fifteen Million and No/100 Dollars
($15,000,000.00) or fifty percent (50%) of the value of
Eligible Inventory owned by Coast US; provided ,
however , that in no event shall the Inventory advances
under the US Inventory Advance Sublimit plus advances under
the Canadian Inventory Advance Sublimit exceed Seventeen Million
Five Hundred Thousand and No/100 Dollars ($17,500,000.00), provided
further that US Lender may reduce the lending formula with respect
to Coast US’ Eligible Inventory in its Permitted
Discretion.
“US Maximum Loan
Sublimit” shall
mean an amount up to Twenty Five Million and No/100 Dollars
($25,000,000.00), except as such amount may be increased or
decreased by Lender in it’s Permitted Discretion, provided
that Coast US may, upon three (3) days prior notice, request
that the US Maximum Loan Sublimit be increased or decreased in
increments of Five Hundred Thousand and No/100 Dollars
($500,000.00). Coast Canada acknowledges that any request by Coast
US to increase the Coast US Maximum Loan Sublimit shall constitute
a corresponding request to Coast Canada to reduce the Canadian
Maximum Loan Sublimit by a like amount. Borrowers acknowledge that
the amount of the US Maximum Loan Sublimit as of the date hereof is
Twenty Million and No/100 Dollars ($20,000,000.00) and the amount
of the Canadian Maximum Loan Sublimit as of the date hereof is Five
Million and No/100 Dollars ($5,000,000.00). Borrowers further
acknowledge that the amount of the US Maximum Loan Sublimit plus
the amount of the Canadian Maximum Loan Sublimit shall in no event
exceed Twenty Five Million and No/100 Dollars
($25,000,000.00).
“US Prime Based
Rate” shall mean
the US Prime Rate in effect from time to time plus two and one
quarter percent (2.25%) per annum.
“US Prime
Rate” shall mean
shall mean the rate of interest announced by Agent from time to
time as its prime rate. Such rate is set by Agent on the basis of
various factors, including its costs and desired return, general
economic conditions and other factors, and is used as a reference
point for pricing some loans, which may be priced at, above or
below such rate. Any change in such rate announced
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Inc.
March 27, 2009
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by Agent shall take effect at the opening of
business on the day specified in the public announcement of such
change.
(c) The first clause prior to clause (i) of the
definition of Eligible Account is hereby amended and restated in
its entirety as follows:
“Eligible
Account” shall mean
an Account owing to a Borrower as determined by Lender in its sole
discretion for lending purposes including, without limitation,
Accounts which meet the following requirements (provided that
Lender shall give such Borrower written notice of any eligibility
criteria established by Lender and not set forth
herein):
(d) Section 1 is herby amended to add the following
definitions in their proper alphabetical order:
“Pre Tax
Profit” shall mean
net income before taxes but excluding extraordinary gains, gains on
asset sales, gain on investments and any other non operating income
or the non-recurring income as determined by Lender in its sole
discretion.
“Slow Moving
Inventory” shall
mean Inventory in excess of one (1) years supply.
(e) Subsection 2(a) of the Agreement is hereby
amended and restated in its entirety as follows:
(a) US Revolving Loans.
Subject to the terms and conditions
of this Agreement, during the Original Term and any Renewal Term,
Agent shall, absent the existence of an Event of Default, make
revolving loans and advances (the “US Revolving
Loans” ) to Coast US on behalf of US Lender, or cause US
Lender to make such loans and advances in an amount up to the sum
of the following sublimits (the “US Borrowing Base
Availability” ):
(i) an amount equal to up to eighty
percent (80%) of the face amount of Coast US’ Eligible
Accounts, (provided that Agent may reduce the lending formula with
respect to Coast US’ Eligible Accounts in Agent’s
Permitted Discretion; plus
(ii) the US Inventory Advance
Sublimit; minus
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Inc.
March 27, 2009
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(iii) such reserves as Agent elects,
in its Permitted Discretion, to establish from time to time,
including, without
