EXECUTION COPY
AMENDMENT NO. 5
to
SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 5 is entered into as of August 10, 2001 by and among
▇▇▇▇▇▇▇ TIRE GROUP, INC., a Delaware corporation, THE SPEED MERCHANT, INC., a
California corporation, CALIFORNIA TIRE COMPANY, a California corporation (the
"Borrowers"), the financial institutions party from time to time to the Loan
Agreement (as hereinafter defined) (the "Lenders"), and FLEET CAPITAL
CORPORATION, a Rhode Island corporation, as administrative agent (the
"Administrative Agent") for the Lenders.
Preliminary Statement
The Borrowers, the Lenders and the Administrative Agent are parties to
the Second Amended and Restated Loan and Security Agreement dated as of March 6,
2000, as amended by Amendment No. 1 dated as of July 20, 2000, Amendment No. 2
dated as of February 2, 2001, Amendment No. 3 dated as of February 14, 2001 and
Amendment No. 4 dated as of March 30, 2001 (the "Loan Agreement"; terms defined
therein, unless otherwise defined herein, being used herein as therein defined).
The Borrowers have requested that the Lenders agree to include as
"Eligible" certain additional Inventory and amend the Loan Agreement as
hereinafter set forth and the Lenders have agreed so to amend the Loan
Agreement, upon and subject to the terms and conditions of this Amendment.
Statement of Agreement
NOW, THEREFORE, in consideration of the Loan Agreement, the Loans
outstanding thereunder, the mutual covenants set forth therein and herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
Section 1. Amendment to Loan Agreement. Subject to the provisions
of SECTION 2, the Loan Agreement is hereby amended by:
(a) amending Section 1.1 Definitions by
(i) adding thereto in appropriate alphabetical order, a
new definition to read as follows:
"Eligible B/F Inventory" means items of Inventory (a)
that would be Eligible Inventory but for the fact that they
are subject to a Vendor Lien in favor of
Bridgestone/Firestone, Inc. (or a division or Subsidiary
thereof), (b) to the extent the Vendor Lien on such Inventory
has been subordinated to the Security Interest on terms and
conditions satisfactory to Administrative Agent and the
Lenders and (c) bearing a brand other than a "Firestone"
brand (or any brand incorporating the word "Firestone").
(ii) amending clause (b) of the definition "Borrowing
Base" in its entirety to read as follows:
(b) an amount equal to
(i) 85% (or such lesser percentage as
the Administrative Agent may in its reasonable credit
judgment determine from time to time) of the face
value of Eligible Receivables due and owing at such
time, PLUS
(ii) the lesser of
(A) the sum of (1) 65% (or
such lesser percentage as the Administrative
Agent may in its reasonable credit judgment
determine from time to time) of the lesser
of cost determined on a FIFO (or
first-in-first-out) accounting basis and
fair market value of Eligible Inventory
consisting of tires at such time, PLUS (2)
the lesser of (x) 65% (or such lesser
percentage as the Administrative Agent may
in its reasonable credit judgment determine
from time to time) of the lesser of cost
determined on a FIFO (or first-in-first-out)
accounting basis and fair market value of
Eligible B/F Inventory consisting of tires
at such time, and (y) $8,000,000, and
(B) $100,000,000, PLUS
(iii) the lesser of
(A) 50% (or such lesser percentage
as the Administrative Agent may in its
reasonable credit judgment determine from
time to time) of the lesser of cost
determined on a FIFO (or first-in-first-out)
accounting basis and fair market value of
Eligible Inventory other than tires, at such
time, and
(B) $40,000,000, MINUS
(iv) the sum of
(A) the Letter of Credit
Reserve, PLUS
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(B) the Rent Reserve, PLUS
(C) the Dilution Reserve, PLUS
(D) the Minimum Availability
Reserve, PLUS
(E) any Additional Reserves.
Section 2. Effectiveness of Amendment. The provisions of SECTION
1 of this Amendment shall become effective as of the date hereof on the date
(the "Amendment Effective Date") on which the Administrative Agent shall have
received (1) a subordination agreement, executed and delivered by
Bridgestone/Firestone, Inc. (or an Affiliate thereof acceptable to the
Administrative Agent), with respect to the Vendor Lien in favor of
Bridgestone/Firestone, Inc., containing terms and conditions acceptable to the
Lenders and the Administrative Agent, (2) counterparts of this Amendment signed
by each Loan Party and each Lender and (3) certificate of the president or chief
financial officer of ▇▇▇▇▇▇▇ stating that, to the best of his knowledge and
based on an examination sufficient to enable him to make an informed statement,
after giving effect to the Amendment, (i) all of the representations and
warranties made or deemed to be made under the Loan Agreement are true and
correct in all material respects on and as of the Amendment Effective Date, and
(ii) no Default or Event of Default exists (and the Administrative Agent shall
be satisfied as to the truth and accuracy thereof).
Section 3. Representations and Warranties. Each Borrower hereby
makes the following representations and warranties to the Administrative Agent
and the Lenders, which representations and warranties shall survive the delivery
of this Amendment and the making of additional Loans under the Loan Agreement as
amended hereby:
(a) Authorization of Agreements. Each Borrower has the right and
power, and has taken all necessary action to authorize it, to execute, deliver
and perform this Amendment and each other agreement contemplated hereby to which
it is a party in accordance with their respective terms. This Amendment and each
other agreement contemplated hereby to which it is a party has been duly
executed and delivered by the duly authorized officers of such Borrower and each
is, or each when executed and delivered in accordance with this Amendment will
be, a legal, valid and binding obligation of such Borrower, enforceable in
accordance with its terms.
(b) Compliance of Agreements with Laws. The execution, delivery
and performance of this Amendment and each other agreement contemplated hereby
to which such Borrower is a party in accordance with their respective terms do
not and will not, by the passage of time, the giving of notice or otherwise,
(i) require any Governmental Approval or violate any
Applicable Law relating to such Borrower or any of its Subsidiaries,
(ii) conflict with, result in a breach of or constitute a
default under the articles or certificate of incorporation or by-laws
or any shareholders' agreement of such Borrower or any of its
Subsidiaries, any material provisions of any indenture, agreement
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or other instrument to which such Borrower, any of its Subsidiaries or
any of such Borrower's or such Subsidiaries' property may be bound or
any Governmental Approval relating to such Borrower or any of its
Subsidiaries, or
(iii) result in or require the creation or imposition of
any Lien upon or with respect to any property now owned or hereafter
acquired by such Borrower other than the Security Interest.
Section 4. Effect of Amendment. From and after the Amendment
Effective Date, all references in the Loan Agreement and in any other Loan
Document to "this Agreement," "the Loan Agreement," "hereunder," "hereof" and
words of like import referring to the Loan Agreement, shall mean and be
references to the Loan Agreement as amended by this Amendment. Except as
expressly amended hereby, the Loan Agreement and all terms, conditions and
provisions thereof remain in full force and effect and are hereby ratified and
confirmed. The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of the Administrative Agent and the Lenders under any of the
Loan Documents, nor constitute a waiver of any provision of any of the Loan
Documents.
Section 5. Counterpart Execution; Governing Law.
(a) Execution in Counterparts. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same agreement. Delivery of an executed signature page of any party hereto by
facsimile transmission shall be as effective as delivery of a manually delivered
counterpart thereof.
(b) Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to conflicts of law principles thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
BORROWERS:
▇▇▇▇▇▇▇ TIRE GROUP, INC.
[CORPORATE SEAL]
Attest: By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇.▇▇▇▇▇▇▇
/s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Title: President & Chief
---------------------- Executive Officer
[Assistant] Secretary
THE SPEED MERCHANT, INC.
[CORPORATE SEAL]
Attest: By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ -----------------------
---------------------- Title: Chairman
[Assistant] Secretary ----------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Title: Vice President
----------------------
CALIFORNIA TIRE COMPANY
[CORPORATE SEAL]
Attest: By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ -----------------------
---------------------- Title: Chairman
[Assistant] Secretary ----------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Title: Vice President
----------------------
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FLEET CAPITAL CORPORATION, as
Administrative Agent and as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President
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BANK OF AMERICA, N.A., as Syndication
Agent and as a Lender
By: /s/ ▇▇▇▇▇ ▇. Love
--------------------------------
Name: ▇▇▇▇▇ ▇. Love
-------------------------
Title: Assistant Vice President
------------------------
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FIRST UNION NATIONAL BANK, as
Documentation Agent and as a Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
Title: Vice President
-----------------------
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MICHIGAN NATIONAL BANK, as a Lender
(as successor in interest to Mellon
Bank, N.A,)
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
------------------------
Title: Vice President
-----------------------
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PNC BANK, NATIONAL ASSOCIATION, as a
Lender
By: /s/ ▇▇▇▇ ▇.▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
Title: Vice President
-----------------------
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GUARANTORS:
Acknowledged and consented to this
10 day of August 2001:
T.O. ▇▇▇▇ TIRE COMPANY, INC.
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Name: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------
Title: Vice President
----------------------
T.O. ▇▇▇▇ HOLDING CO., INC.
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Name: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------
Title: Vice President
----------------------
▇▇▇▇ INVESTMENT COMPANY
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Name: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------
Title: Vice President
----------------------
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