**Exhibit 10.31**

 

FIRST AMENDMENT (this “Amendment”),dated as of December 12, 2003, to the CREDIT AGREEMENT dated as of February 8,2002 (the “Credit Agreement”), among AFTERMARKET TECHNOLOGY CORP., aDelaware corporation (the “Borrower”), the several banks and financialinstitutions parties thereto (the “Lenders”), JPMORGAN CHASE BANK, a NewYork banking corporation, as administrative agent for the Lenders (in suchcapacity, the “Administrative Agent”), J.P. MORGAN SECURITIES INC. andCREDIT SUISSE FIRST BOSTON, as joint advisors, joint lead arrangers and jointbookrunners, and CREDIT SUISSE FIRST BOSTON, as syndication agent.

 

W I T N E S S E T H:

 

WHEREAS, pursuant to theCredit Agreement, the Lenders have agreed to make, and have made, certain loansand other extensions of credit to the Borrower;

 

WHEREAS, the Borrower hasrequested that certain provisions of the Credit Agreement be amended as setforth herein; and

 

WHEREAS, the Lenders arewilling to agree to such amendments on the terms set forth herein;

 

NOW THEREFORE, inconsideration of the premises and mutual covenants contained herein, theundersigned hereby agree as follows:

 

I.              Defined Terms.  Terms defined in the Credit Agreement andused herein shall have the meanings given to them in the Credit Agreement.

 

II.            Amendment toSection 1.1.  Section 1.1 of theCredit Agreement is hereby amended by inserting the following defined terms intheir appropriate alphabetical order:

 

““Aurora StockPurchase Agreement”: the Stock Purchase Agreement, to be entered into bythe Borrower and Aurora after the First Amendment Effective Date and prior tothe date of the Public Tender Offer, pursuant to which Aurora shall agree tosell and the Borrower shall agree to purchase the common stock of the Borrowerin an aggregate amount not to exceed $18,443,000 at a price per share equal tothe price per share of the Tendered Shares.

 

“Aurora UK Asset SaleRepurchase Amount”:  an aggregateamount not to exceed 30.74% of the UK Asset Sale Retained Amount; providedthat such amount shall be applied in accordance with the provisions of Section8.8(v).

 

“First Amendment”:  the First Amendment, dated as of December12, 2003, to this Agreement.

 

“First AmendmentEffective Date” the effective date of the First Amendment.

 

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“Public Tender Offer”a tender offer made by the Borrower to Persons other than Aurora commencedafter the First Amendment Effective Date and completed prior to February 29,2004, for its common stock, in an aggregate amount not to exceed $41,557,000; providedthat the aggregate amount of such tender offer may be increased by an amountequal to 69.26% of the UK Asset Sale Retained Amount; provided, further,that the Borrower shall have complied with the provisions of Section 8.6(h)prior to effecting such increase.

 

“Tendered Shares”the aggregate amount of shares purchased by the Borrower pursuant to the PublicTender Offer.

 

“UK Asset Sale”the sale of (i) all the outstanding capital stock of Borrower’s subsidiaryAftermarket Technology (UK) Holdings Ltd., (ii) all the outstanding capitalstock of Aftermarket Technology (UK) Holdings Ltd.’s subsidiary AutomotiveDevelopments Limited, or (iii) substantially all the operating assets of thesubsidiaries of Automotive Developments Ltd.

 

“UK Asset SalePrepayment Amount” 50% of any Net Cash Proceeds received pursuant to the UKAsset Sale.

 

“UK Asset SaleRetained Amount” a portion of the Net Cash Proceeds received pursuant tothe UK Asset Sale equal to the UK Asset Sale Prepayment Amount, providedthat there shall be no UK Asset Sale Retained Amount unless and until the UKAsset Sale Prepayment Amount shall have been applied in accordance with theprovisions of Section 8.6(h).”

 

III.           Amendment ofDefinition of Consolidated EBITDA. The definition of Consolidated EBITDA in Section 1.1 of the CreditAgreement is hereby amended by adding at the end thereof the following newsentence: “Solely for purposes of determining compliance by the Borrower withthe covenants set forth herein, “Consolidated EBITDA” shall be defined to add-back,without duplication and to the extent reflected as a charge in the statement ofsuch Consolidated Net Income, charges not described in the preceding sentenceincurred during the applicable period but prior to June 30, 2004 in anaggregate amount not to exceed $10,300,000; provided that such chargesshall not be added back to Consolidated EBITDA for purposes of determining theApplicable Margin.”

 

IV.           Amendment ofDefinition of Consolidated Net Worth. The definition of Consolidated Net Worth in Section 1.1 of the CreditAgreement is hereby amended by adding at the end thereof the following newclause (iii): “plus (iii) an amount equal to the lesser of (x) theaggregate amount of cash Restricted Payments made in accordance with theprovisions of Section 8.8(a)(iv) and (y) $60,000,000”

 

V.            Amendment ofDefinition of Pricing Grid.  Theleverage ratios set forth in the definition of Pricing Grid in Section 1.1 ofthe Credit Agreement are hereby amended by (a) deleting “Greater than or equalto 2.50:1.00” and inserting in lieu thereof “Greater than or equal to2.00:1.00” and (b) deleting “Less than 2.50:1.00, and greater than or equal to1.50:1.00” and inserting in lieu thereof “Less than 2.00:1.00, and greater thanor equal to 1.50:1.00”.

 

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VI.           Amendment to Section4.5.  Section 4.5 of the CreditAgreement is hereby amended by deleting clause (b) in its entirety andsubstituting in lieu thereof the following new clause (b):

 

“(b)         If, subsequent to the ClosingDate, the Borrower or any of its Subsidiaries shall receive Net Cash Proceedsfrom any Asset Sale, then 100% (or in the case of the UK Asset Sale, the UKAsset Sale Prepayment Amount) of such Net Cash Proceeds shall be applied on thefirst Business Day after receipt thereof toward prepayment of the Term Loansand reduction of the Revolving Commitments as set forth in subsection 4.5(f); providedthat such Net Cash Proceeds (other than the UK Asset Sale Prepayment Amountwhich shall be applied toward prepayment of the Term Loans and reduction of theRevolving Commitments as set forth in subsection 4.5(f)) shall not be requiredto be so applied to the extent the Borrower delivers to the AdministrativeAgent a certificate that it intends to use such Net Cash Proceeds to acquirefixed or capital assets for the Borrower or any of its Subsidiaries within 330days of receipt of such Net Cash Proceeds, it being expressly agreed that anyNet Cash Proceeds not so reinvested shall be applied to prepay the Loans andpermanently reduce the Commitments on the date 330 days after the receiptthereof; and provided, further that such Net Cash Proceeds (otherthan the UK Asset Sale Prepayment Amount which shall be applied towardprepayment of the Term Loans and reduction of the Revolving Commitments as setforth in subsection 4.5(f)) shall not be required to be so applied until suchNet Cash Proceeds not applied hereunder exceed $2,500,000 in the aggregate, atwhich time all of such unapplied Net Cash Proceeds shall be applied as setforth in subsection 4.5(f).”.

 

VII.          Amendment to Section8.1.  Section 8.1 of the CreditAgreement is hereby amended by

 

(a)           deleting the dates andratios for March 31, 2004 through September 30, 2005 in clause (a) thereof andsubstituting in lieu thereof the following:

 

| “March 31, 2004 | 3.00 to 1.00        |
|----------------------|---------------------|
|                 |                |
| June 30, 2004        | 3.00 to 1.00        |
|                 |                |
| September 30, 2004   | 2.75 to 1.00        |
|                 |                |
| December 31, 2004    | 2.50 to 1.00        |
|                 |                |
| March 31, 2005       | 2.25 to 1.00        |
|                 |                |
| June 30, 2005        | 2.25 to 1.00        |
|                 |                |
| September 30, 2005   | 2.25 to 1.00”, |

 

(b)           deleting paragraph (c)thereof in its entirety and substituting the following new paragraph (c) inlieu thereof :

 

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“(c)         Maintenance of NetWorth.  Permit the Consolidated NetWorth of the Borrower at any time to be less than the sum of $175,000,000 plus50% of the cumulative sum of Consolidated Net Income for each fiscal quarter(if positive) beginning after the First Amendment Effective Date and ended ator prior to such time less the aggregate writeoff of intangible assetsconstituting goodwill after the First Amendment Effective Date to the extentreflected in accordance with GAAP on the financial statements of the Borrowerdelivered pursuant to Section 7.1 for fiscal periods ending after the FirstAmendment Effective Date.” and

 

(c)           deleting any referencesto “December 30” in Section 8.1 and substituting, in each instance, in lieuthereof a reference to “December 31”.

 

VIII.        Amendment to Section8.6.  Section 8.6 of the CreditAgreement is hereby amended by deleting the word “and” at the end of paragraph(f) thereof, deleting the period at the end of paragraph (g) thereof andsubstituting in lieu thereof “; and” and adding at the end of such Section thefollowing new paragraph (h) to read in its entirety as follows:

 

“(h)         the UK Asset Sale; providedthat the UK Asset Sale Prepayment Amount shall be applied on the first BusinessDay after receipt thereof toward prepayment of the Term Loans and reduction ofthe Revolving Credit Commitments in accordance with subsection 4.5(f).”.

 

IX.           Amendment to Section8.8.  Section 8.8(a) of the CreditAgreement is hereby amended by deleting the word “and” at the end of clause(ii) thereof and substituting a comma in lieu thereof, deleting the period atthe end of clause (iii) thereof and substituting in lieu thereof “and” andadding at the end of such Section the following new clause (iv) to read in itsentirety as follows:

 

“(iv) make cashRestricted Payments to repurchase the Borrower’s common stock prior to February29, 2004, pursuant to (i) the Public Tender Offer and (ii) the Aurora StockPurchase Agreement; provided that (x) such repurchase is funded fromavailable cash other than proceeds of Indebtedness, including proceeds from anyRevolving Credit Loan, (y) immediately after giving effect to such repurchasethere shall be at least $35,000,000 of unused Revolving Credit Commitments and(z) any available cash not used prior to February 29, 2004 in connection withsuch repurchase shall not be available for additional repurchases after suchdate other than in accordance with the provisions of Sections 8.8(a)(i) and8.8(a)(ii).

 

(v) make cash RestrictedPayments to repurchase the Borrower’s common stock after the First AmendmentEffective Date and prior to June 30, 2005, pursuant to (A) open marketpurchases of such common stock by the Borrower in an aggregate amount not toexceed the UK Asset Sale Retained Amount minus the aggregate amount ofthe Aurora UK Asset Sale Repurchase Amount used to repurchase the common stockof the Borrower from Aurora in accordance with the terms of this Section8.8(a)(v) and (B) the purchase from Aurora of the common stock of the Borrowerin an aggregate amount not to exceed the Aurora UK Asset Sale RepurchaseAmount; provided that (w) the UK Asset Sale has occurred, (x) suchrepurchase is funded solely from the UK Asset Sale Retained Amount and is notfunded from any proceeds of Indebtedness, including proceeds from any RevolvingCredit Loan, (y) immediately after giving effect to such repurchase there shallbe at least $35,000,000 of unused Revolving Credit

 

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Commitments and (z) theBorrower shall have complied with the provisions of Section 8.6(h) prior toeffecting any such repurchase”.

 

X.            Effective Date.  This Amendment shall become effective on thedate (the “Effective Date”) on which (a) the Borrower, theAdministrative Agent and the Required Lenders under the Credit Agreement shallhave duly executed and delivered to the Administrative Agent this Amendment,(b) the Administrative Agent shall have received opinions of outside andin-house counsel to the Borrower in form satisfactory to the AdministrativeAgent, (c) the Administrative Agent shall have received an executed certificateof officers of the Borrower in form satisfactory to the AdministrativeAgent  as to such matters as theAdministrative Agent may request, (d) the Administrative Agent shall havereceived all fees required to be paid in connection herewith, including, forthe benefit of each Required Lender who shall have duly executed and deliveredto the Administrative Agent this Amendment, an amendment fee in an amount equalto 0.20% of such Lender’s Commitment Percentage immediately after giving affecthereto and (e) each of the repayment and the reduction described in Articles XIand XII, respectively, shall concurrently be effected.

 

XI.           Repayment of TermLoans.  Immediately upon theEffective Date, the Borrower shall prepay $20,000,000 in aggregate principalamount of Term Loans, to be applied in accordance with the provisions ofSection 4.5(f) of the Credit Agreement.

 

XII.         Reduction of RevolvingCredit Commitment.  Immediately uponthe Effective Date, the Revolving Credit Commitments shall automatically bereduced on such date by $10,000,000, such reduction to be made, and any relatedactions to be performed, in accordance with the provisions of the secondsentence of Section 4.5(f) of the Credit Agreement.

 

XIII.        Representations andWarranties.  The Borrower herebyrepresents and warrants that (a) each of the representations and warranties inSection 5 of the Credit Agreement shall be, after giving effect to thisAmendment, true and correct in all material respects as if made on and as ofthe Effective Date (unless such representations and warranties are stated torelate to a specific earlier date, in which case such representations andwarranties shall be true and correct in all material respects as of suchearlier date) and (b) after giving effect to this Amendment, no Default orEvent of Default shall have occurred and be continuing.

 

XIV.        No Other Amendments;Confirmation.  Except as expresslyamended hereby, the provisions of the Credit Agreement are and shall remain infull force and effect.

 

XV.         Governing Law.  This Amendment and the rights andobligations of the parties hereto shall be governed by, and construed andinterpreted in accordance with, the laws of the State of New York.

 

XVI.        Counterparts.  This Amendment may be executed by one ormore of the parties hereto on any number of separate counterparts, and all ofsaid counterparts taken together shall be deemed to constitute one and the sameinstrument.  This Amendment may bedelivered by facsimile transmission of the relevant signature pages hereof.

 

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IN WITNESS WHEREOF, theundersigned have caused this Amendment to be executed and delivered by theirduly authorized officers as of the date first above written.

 
|   | AFTERMARKET  TECHNOLOGY CORP.                                  |
|--------|----------------------------------------------------------------|
|   |                                                           |   |
|   |                                                           |   |
|   | By:                                                            |   | /s/ Barry C.  Kohn |   |
|   | Name:                                                          | Barry C.  Kohn |
|   | Title:                                                         | Chief  Financial Officer |
|   |                                                           |   |
|   |                                                           |   |
|   | JPMORGAN  CHASE BANK, as  Administrative Agent and as a Lender |
|   |                                                           |   |
|   |                                                           |   |
|   | By:                                                            |   | /s/ Robert P. Kellas |   |
|   | Name:                                                          | Robert P.  Kellas |
|   | Title:                                                         | Vice President |
|        |                                                                |  |  |  |  |

 

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