THIRD AMENDED AND RESTATED CREDIT AGREEMENT
BY AND BETWEEN
DORMAN PRODUCTS, INC.
(formerly known as R&B, INC.)
AND
WACHOVIA BANK, NATIONAL ASSOCIATION
FOR ITSELF AND AS AGENT
AS OF
JULY 24, 2006 ARTICLE IDEFINITIONS AND ACCOUNTING TERMS 1
Section 1.01 Certain Defined Terms
1 Section 1.02 Accounting Terms
13 ARTICLE IITHE REVOLVING CREDIT FACILITIES
13 Section 2.01 Amount and Nature of Revolving Credit Facilities
13 Section 2.02 Revolving Credit Notes.
14 Section 2.03 Making of Revolving Credit Advances
15 Section 2.04 Interest On Revolving Credit Balance
15 Section 2.05 Issuance of Letters of Credit
16 Section 2.06 Participation in Letters of Credit
16 Section 2.07 Use of Proceeds
17 ARTICLE IIIINTEREST RATE ELECTIONS AND INTEREST PERIODS
17 Section 3.01 Interest Rate Elections
17 Section 3.02 Interest Periods
18 Section 3.03 Procedures Applicable to Interest Rates
18 ARTICLE IVCALCULATION OF ADJUSTED LIBOR RATE
19 Section 4.01 Adjusted LIBOR Rate
19 Section 4.02 Special Provisions for LIBOR Loans
20 Section 4.03 Default Rate
23 ARTICLE VREPAYMENTS AND PREPAYMENTS; GENERAL MATTERS WITH RESPECT TO THE CREDIT FACILITIES
23 Section 5.01 Optional Principal Repayments
23 Section 5.02 Mandatory Repayments of Credit Facilities.
24 Section 5.03 Computation of Interest
24 Section 5.04 General Provisions as to Payments and Prepayments
24 Section 5.05 Payment on Non Business Day
24 Section 5.06 Independent Certified Public Accountants
24 Section 5.07 Reference to Time
24 ARTICLE VIFEES AND INDEMNIFICATIONS 24 Section 6.01 Unused Facility Fee
24 Section 6.02 Letters of Credit Fee
25 Section 6.03 Other Fees and Reimbursements
25 ARTICLE VIICONDITIONS OF LENDING 25 Section 7.01 Execution of Principal Loan Documents
26 Section 7.02 Ancillary Loan Documents.
26 Section 7.03 Financial Information
27 Section 7.04 Advances and Letters of Credit
27 ARTICLE VIIIREPRESENTATIONS AND WARRANTIES
27 Section 8.01 Organization and Authority
27 Section 8.02 Authorization and Binding Nature of Loan Documents
28 Section 8.03 No Conflicts
28 Section 8.04 Consents
29 Section 8.05 Financial Information
29 Section 8.06 Absence of Certain Developments
29 Section 8.07 Material Leases and Contracts
29 Section 8.08 ERISA Matters
30 Section 8.09 Litigation; Compliance with Law
32 Section 8.10 Tax and Other Returns and Reports
32 Section 8.11 Absence of Undisclosed Liabilities
33 Section 8.12 Affiliate Agreements
33 Section 8.13 Real Property
33 Section 8.14 Intellectual Property
34 Section 8.15 Environmental Protection and Other Matters
34 Section 8.16 Insurance
35 Section 8.17 Adequacy of Assets
35 Section 8.18 Regulation U
35 Section 8.19 SEC Filings and Reports
35 Section 8.20 Full Disclosure
36 ARTICLE IXAFFIRMATIVE COVENANTS 36 Section 9.01 Corporate Existence, Properties, Etc
36 Section 9.02 Payment of Indebtedness, Taxes, Etc
37 Section 9.03 Statements, Reports and Certificates to be Delivered by Borrower
37 Section 9.04 Other Reports and Notices
39 Section 9.05 ERISA Reports
39 Section 9.06 SEC Filings and Reports
40 Section 9.07 [RESERVED] 40 Section 9.08 Additional Guaranties
40 Section 9.09 Ranking with Note Purchase Agreements; Collateral
40 Section 9.10 Subordinated Debt
40 ARTICLE XNEGATIVE COVENANTS 41 Section 10.01 Consolidated Funded Debt to EBITDA
41 Section 10.02 Indebtedness
41 Section 10.03 Contingent Liabilities
41 Section 10.04 Negative Pledge
41 Section 10.05 Corporate Reorganizations
42 Section 10.06 Disposition of Assets
43 Section 10.07 Loans, Investments, Etc
43 Section 10.08 Limitation on Sales and Leasebacks
44 Section 10.09 Payments to Affiliates
44 Section 10.10 Employee Plans.
45 Section 10.11 Disposal of Ownership of a Subsidiary
45 Section 10.12 Priority Debt
46 Section 10.13 Maintenance of Consolidated Net Worth
46 Section 10.14 Business of Borrower
46 Section 10.15 Material Foreign Subsidiary
46 ARTICLE XIDEFAULT AND REMEDIES 46 Section 11.01 Default
46 Section 11.02 Remedies
48 Section 11.03 Remedies Cumulative
49 Section 11.04 Remedies Not Waived
49 ARTICLE XIITHE AGENT 49 Section 12.01 Appointment and Authority of Agent
49 Section 12.02 Responsibilities of Agent.
51 Section 12.03 Indemnification of Agent
52 Section 12.04 Sharing of Set Offs
53 Section 12.05 Option to Purchase
53 Section 12.06 Settling Payments in Ordinary Course
54 Section 12.07 Special Provisions for Settling Payments
55 Section 12.08 Suspension of Settling Payments
55 Section 12.09 Alternate Procedures
55 ARTICLE XIIIMISCELLANEOUS 56 Section 13.01 Right of Set Off
56 Section 13.02 No Discharge
56 Section 13.03 Amendment; Waiver
56 Section 13.04 Severability
57 Section 13.05 Borrower Assignees
57 Section 13.06 Bank Assignees; Participations; Withdrawals
57 Section 13.07 Confession of Judgment
58 Section 13.08 Governing Law
58 Section 13.09 Jurisdiction and Venue
58 Section 13.10 Arbitration
58 Section 13.11 Headings
59 Section 13.12 Notices
59 Section 13.13 Survival of Agreement
60 Section 13.14 Counterparts
60 Section 13.15 Canceled Notes
60 Section 13.16 Conflicts Among Loan Documents
60
1
EXHIBITS I
2.01
2.02
2.03
2.05A
2.05B
3.01
7.01(d)
8.01
8.03
8.04
8.07
8.08
8.09
8.10
8.11
8.12
8.13
8.14
8.15
8.16
8.17
9.03
10.04
10.08 -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- -
- - Noteholders
Banks and Ratable Shares
Seventh Amended and Restated Revolving Credit Note
Credit Report
Master Letter of Credit Agreement
Outstanding Letters of Credit
Interest Rate Election Notice
- -Surety Agreement
Good Standing Certificates; Investments
No Conflicts
Required Consents and Status Thereof
Material Leases and Contracts
Borrower Plans and ERISA Matters
Litigation
Tax and Other Returns and Reports
Liabilities
Affiliates
Interest in Personal Property
Interest in Real Property
Intellectual Property Rights
Environmental Protection and Other Matters
Insurance
Compliance Certificate
Existing Liens
Existing Tennessee Valley Authority Sale/Leaseback
2
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT (the " Agreement" ) is dated as of the 24 day of July, 2006 by and between DORMAN PRODUCTS, INC. (formerly known as R & B, INC.), a Pennsylvania corporation, as its legal name may change from time to time (referred to herein as the " Borrower" ) and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association (" Wachovia" ), as successor to First Union National Bank., a national banking association (" First Union" ), for itself and as agent hereunder (the " Agent" ), and any and all banks subsequently added hereto, if any, as set forth on Exhibit 2.01 attached hereto (Wachovia and all such banks each referred to herein as a " Bank," or collectively, the " Banks" ) and amends and restates the Second Amended and Restated Credit Agreement dated as of August 21, 1998, as amended March 25, 1999, May 4, 2000, November 30, 2000, March 26, 2001, March 6, 2004, August 2, 2004, and May 23, 2005, by and among the Borrower, First Union, and National City Bank of Pennsylvania (the " Original Credit Agreement" ).
W I T N E S S E T H:
WHEREAS, as of May 23, 2005 National City Bank of Pennsylvania assigned all if its interest in and to the Original Credit Agreement to Wachovia; and
WHEREAS, the Borrower has requested certain modifications to the Original Credit Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein contained, the parties, intending to be legally bound, hereby agree that the Original Credit Agreement is hereby amended and restated in its entirety to read in full as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 Certain Defined Terms . As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
" Adjusted LIBOR Market Index Rate" means the LIBOR Market Index Rate plus the Applicable Margin.
" Adjusted LIBOR Rate" has the meaning given to such term in Section 4.01 hereof.
" Affiliate" means, as to any specified Person, any Person that directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified.
" Agent" means Wachovia Bank, National Association in its capacity as agent for the Banks hereunder, its successors and assigns, and any other Person acting as agent hereunder.
" Agreement" or " Credit Agreement" means this Third Amended and Restated Credit Agreement as the same may be amended, modified or supplemented from time to time.
" Ancillary Credit Documents" has the meaning set forth in Section 9.08.
" Applicable Margin" has the meaning given to such term in Section 4.01 hereof.
" Asset Disposition" means any Transfer except:
(a) any Transfer from a Subsidiary to Borrower or a Wholly-Owned Subsidiary;
(b) any Transfer from the Borrower to a Wholly-Owned Subsidiary; or
(c) any Transfer made in the ordinary course of business and involving only property that is either (i) inventory held for sale or (ii) equipment, fixtures, supplies or other property no longer required in the operation of the business of Borrower or any of its Subsidiaries or that is obsolete.
" Bank" means Wachovia Bank, National Association, and any other Bank becoming party to this Agreement, and the successors and assigns of the foregoing.
" Borrower Plan" means any Plan maintained or contributed to by the Borrower and/or a Related Party now or prior to the termination of the Loans, or any Plan under which Borrower or any Related Party has an obligation now or prior to the termination of the Loans to any Person (including current and former employees), including without limitation, those Plans listed on Exhibit 8.08.
" Business Day" means any day except a Saturday, Sunday or any other day on which commercial banks in Philadelphia, Pennsylvania are authorized or required by law to close and, if the applicable day relates to a LIBOR Loan, a LIBOR Market Index Rate Loan, LIBOR Interest Period or a LIBOR Market Index Rate Interest Period or notice with respect to a LIBOR Loan or a LIBOR Market Index Rate Loan, a day on which dealings in Dollar deposits are also carried on in the London Interbank Market and banks are open for business in London.
" Cash Proceeds" has the meaning given to such term in the Uniform Commercial Code.
" Closing" means the consummation of the transactions contemplated hereby.
" Closing Date" means the date on which the Closing is held.
" Code" means the Internal Revenue Code of 1986, as amended.
" Commission" means the Federal Securities and Exchange Commission.
" Compliance Certificate" means a certificate in the form attached hereto as Exhibit 9.03, to be given to each Bank by the Borrower to certify compliance with the terms hereof.
" Consolidated Assets" means, at any time, the total assets of Borrower and its Subsidiaries which would be shown as assets on a consolidated balance sheet of Borrower and its Subsidiaries as of such time prepared in accordance with GAAP, after eliminating all amounts properly attributable to minority interests, if any, in the stock and surplus of Subsidiaries.
" Consolidated Funded Debt" means, at any date, all debt of Borrower and Subsidiaries on a consolidated basis in accordance with GAAP, after eliminating all intercompany transactions, which under the provisions applicable thereto matures, or which is otherwise payable or unpaid more than one (1) year from, or may be directly or indirectly, renewed or extended by the Borrower to a date more than one year from the date of its creation, and which constitutes (a) indebtedness for borrowed money which the Borrower or any Subsidiary has directly or indirectly incurred; (b) indebtedness secured by any encumbrance on property owned by the Borrower or any Subsidiary, whether or not the Borrower or any Subsidiary has assumed or become liable for the payment of such debt; (c) indebtedness with respect to which the Borrower or any Subsidiary has become directly or indirectly liable and which represents or has been incurred to finance the purchase price (or a portion thereof) of any property or services or business acquired by the Borrower or any Subsidiary, whether by purchase, consolidation, merger or otherwise; and (d) indebtedness of entities other than Borrower or any Subsidiary with respect to which the Borrower or any Subsidiary has become liable by way of a guaranty, agreement to advance funds or similar undertaking, including, without limitation, letters of credit.
" Consolidated Net Earnings" means, with reference to any period, the net income (or loss) of Borrower and its Subsidiaries for such period (taken as a cumulative whole), as determined in accordance with GAAP, after eliminating all offsetting debits and credits between Borrower and its Subsidiaries and all other items required to be eliminated in the course of the preparation of consolidated financial statements of Borrower and its Subsidiaries in accordance with GAAP, provided that there shall be excluded:
(a) the income (or loss) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with Borrower or a Subsidiary, and the income (or loss) of any Person, substantially all of the assets of which have been acquired in any manner, realized by such other Person prior to the date of acquisition,
(b) the income (or loss) of any Person (other than a Subsidiary) in which Borrower or any Subsidiary has an ownership interest, except to the extent that any such income has been actually received by Borrower or such Subsidiary in the form of cash dividends or similar cash distributions,
(c) the undistributed earnings of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Subsidiary,
(d) any restoration to income of any contingency reserve, except to the extent that provision for such reserve was made out of income accrued during such period,
(e) any aggregate net gain (but not any aggregate net loss) during such period arising from the sale, conversion, exchange or other disposition of capital assets (such term to include, without limitation, (i) all non-current assets and, without duplication, (ii) the following, whether or not current: all fixed assets, whether tangible or intangible, all inventory sold in conjunction with the disposition of fixed assets, and all securities),
(f) any gains resulting from any write-up of any assets (but not any loss resulting from any write-down of any assets),
(g) any net gain from the collection of the proceeds of life insurance policies,
(h) any gain arising from the acquisition of any security, or the extinguishment, under GAAP, of any Debt, of Borrower or any Subsidiary,
(i) any net income or gain (but not any net loss) during such period from (i) any change in accounting principles in accordance with GAAP, (ii) any prior period adjustments resulting from any change in accounting principles in accordance with GAAP, (iii) any extraordinary items, or (iv) any discontinued operations or the disposition thereof,
(j) any deferred credit representing the excess of equity in any Subsidiary at the date of acquisition over the cost of the investment in such Subsidiary,
(k) in the case of a successor to Borrower by consolidation or merger or as a transferee of its assets, any earnings of the successor corporation prior to such consolidation, merger or transfer of assets, and
(l) any portion of such net income that cannot be freely converted into United States Dollars.
" Consolidated Net Worth" means, at any time, shareholders' equity of Borrower and its Subsidiaries as of such time determined on a consolidated basis in accordance with GAAP, after deduction of all amounts properly attributable to minority interests, if any, in the stock or other equity interests of Subsidiaries.
" Consolidated Total Capitalization" means the sum of Consolidated Funded Debt and Consolidated Net Worth.
" Credit Facilities" means the maximum aggregate credit facilities of Thirty Million Dollars ($30,000,000) made available under this Agreement pursuant to the Revolving Credit Facilities as the same may be reduced pursuant to Section 2.01(e) herein.
" Credit Request" has the meaning given in Section 2.03 hereof and shall be substantially in the form of Exhibit 2.03 hereto with respect to Revolving Credit Advances.
" Current Maturities of Funded Debt" means, at any time and with respect to any item of Funded Debt, the portion of such Funded Debt outstanding at such time which by the terms of such Funded Debt or the terms of any instrument or agreement relating thereto is due on demand or within one year from such time (whether by sinking fund, other required prepayment or final payment at maturity) and is not directly or indirectly renewable, extendible or refundable at the option of the obligor under an agreement or firm commitment in effect at such time to a date one year or more from such time.
" Debt" means, with respect to any Person, without duplication.
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business but including, without limitation, all liabilities created or arising under any conditional sale or other title retention agreement with respect to any such property);
(c) its Capital Lease Obligations;
(d) all liabilities for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed or otherwise become liable for such liabilities); and
(e) any Guaranty of such Person with respect to liabilities of a type described in any of clauses (a) through (d) hereof.
The amount of any Debt shall be determined in accordance with GAAP; provided that Debt of any Person shall include all obligations of such Person of the character described in clauses (a) through (e) to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is deemed to be extinguished under GAAP.
" Default" has the meaning given to such term in Section 11.01 hereof.
" Default Rate" means the interest rate set forth in Section 4.03 hereof.
" Distributable Share" of any Bank means the percentage obtained by dividing the dollar amount of the Obligations owing to such Bank (as a Bank or as Agent) in connection with this Agreement or the Master Letter of Credit Agreement by the dollar amount of all such Obligations owing to all of the Banks (as a Bank or as Agent).
" Disposition Value" means, at any time, with respect to any property
(a) in the case of property that does not constitute Subsidiary Stock, the book value thereof, valued at the time of such disposition in good faith by Borrower, and
(b) in the case of property that constitutes Subsidiary Stock, an amount equal to that percentage of book value of the assets of the Subsidiary that issued such Subsidiary Stock as is equal to the percentage that the book value of such Subsidiary Stock represents of the book value of all of the outstanding capital stock or other equity interests of such Subsidiary (assuming, in making such calculations, that all agreements and investments convertible into such capital stock or other equity interests are so converted and giving full effect to all transactions that would occur or be required in connection with such conversion) determined at the time of the deposition thereof, in good faith by Borrower.
" DOL" means the United States Department of Labor.
" Domestic Subsidiary" means any Subsidiary of Borrower which is incorporated under the laws of any state of the United States or of the District of Columbia.
" Dorman KY" shall mean Dorman Products of America, Ltd., a Kentucky limited partnership and a wholly-owned Subsidiary of Borrower.
" EBITDA" means, at any time, earnings before interest, taxes, depreciation and amortization.
" Effective Date" means the date of disbursement of a Loan, or, if the Loan has already been disbursed, the date the Borrower designates as the date on which a Prime Rate Interest Period, a LIBOR Market Index Rate Interest Period, or a LIBOR Interest Period is to commence, all as provided in Article III hereof.
" ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time.
" Event of Default" means any event which would, with the giving of notice or expiration of time periods, become a Default if uncured.
" Fair Market Value" means, at any time and with respect to any property, the sale value of such property that would be realized in an arm' s-length sale at such time between an informed and willing buyer and an informed and willing seller (neither being under a compulsion to buy or sell).
" Financial Statements" means the consolidated balance sheets, statements of income, statements of changes in shareholders' equity, and statements of cash flows of the Borrower for its fiscal year ended December 31, 2005 (audited).
" Foreign Subsidiary" means any Subsidiary of Borrower that is not a Domestic Subsidiary.
" Funded Debt" means, with respect to any Person, all Debt of such Person which by its terms or by the terms of any instrument or agreement relating thereto matures, or which is otherwise payable or unpaid, one year or more from, or is directly or indirectly renewable or extendible at the option of the obligor in respect thereof to a date one year or more (including, without limitation, an option of such obligor under a revolving credit or similar agreement obligating the lender or lenders to extend credit over a period of one year or more) from, the date of the creation thereof, provided that Funded Debt shall include, as at any date of determination, Current Maturities of Funded Debt, and further provided that Funded Debt shall not include Debt outstanding under a revolving credit agreement or similar agreement on the date of determination to the extent that for a period of not less than thirty (30) consecutive days during the immediately preceding three hundred sixty-five (365) days, such agreement was in full force and effect but no Debt was outstanding under such agreement.
" GAAP" means generally accepted accounting principles, consistently applied.
" Governmental Authority" means any federal, state, or local agency, board, commission, department or other authority.
" Guaranty" means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any Indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such Indebtedness or obligation or any property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of such Indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such Indebtedness or obligation;
(c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such Indebtedness or obligation of the ability of any other Person to make payment of the Indebtedness or obligation; or
(d) otherwise to assure the owner of such Indebtedness or obligation against loss in respect thereof.
In any computation of the Indebtedness or other liabilities of the obligor under any Guaranty, the Indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor.
" Indebtedness" means, without duplication:
(a) all items which should in conformity with GAAP be classified as liabilities and as such should be included on the consolidated balance sheet of Borrower and its Subsidiaries, including without limitation, (i) current liabilities, (ii) long term indebtedness, (iii) deferred taxes and reserves, (iv) indebtedness, obligations and liabilities for borrowed money or for the deferred purchase price of property, (v) lease obligations that, in conformity with GAAP, have been or should be capitalized on such balance sheet, and (vi) all indebtedness, obligations and liabilities secured by any lien, mortgage, charge, encumbrance or security interest on any property owned by Borrower or any Subsidiary even though it has not assumed or otherwise become liable for the payment thereof;
(b) all guarantees (whether by discount or otherwise), endorsements (other than for collection or deposit in the ordinary course of business) and other contingent obligations of Borrower or any Subsidiary in respect of, or to purchase or otherwise acquire or become liable upon, indebtedness, obligations or liabilities of others, including without limitation surety bonds; and
(c) all obligations or liabilities of Borrower or any Subsidiary under or pursuant to any letter of credit.
" Instruments" has the meaning given to such term in the Uniform Commercial Code.
" Intellectual Property" means all intellectual property and related rights of Borrower or any Subsidiary (whether or not currently being used in its business), including without limitation, patents and applications therefor, confidential or proprietary information, know-how, trade secrets, secret formulas, technical information, computer software, programs, source code, object code, tapes, disks and related materials, business and marketing plans, customer lists, registrations and applications therefor, copyrights registrations and applications therefor, trademarks, service marks, trade names and all names and slogans used or usable by Borrower or any Subsidiary in connection with its business or any of its activities, products or services, and all goodwill related to the foregoing.
" Intercreditor Agreement" means the Intercreditor Agreement dated August 21, 1998 by and among the Banks and the Noteholders.
" Interest Period" has the meaning given to such term in Section 3.02 hereof.
" Interest Rate" means a Prime Rate, an Adjusted LIBOR Rate or an Adjusted LIBOR Market Index Rate.
" Interest Rate Election Notice" means a notice substantially in the form of Exhibit 3.01 hereto duly executed by an officer of Borrower, or any Person designated by Borrower in a written certificate as a Person authorized to deliver such a notice, acting on behalf of Borrower.
" IRS" means the Internal Revenue Service.
" Letter of Credit Balance" has the ...
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