1
EXHIBIT 10.4.1
LOAN MODIFICATION AGREEMENT
PTC-4
2-26-97
THIS LOAN MODIFICATION AGREEMENT (this "Agreement") is made and entered
into as of this 20th day of February, 1997, by and among Automotive One Parts
Stores, Inc. ("Automotive One"), A.P.S., Inc. ("APS") and Autoparts Finance
Company, Inc. ("AFCO").
WHEREAS, On or about December 17, 1993, Automotive One and APS entered
into that certain Continuing Credit Agreement and Security Agreement, that
certain Guaranty of Account executed by ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III and Ms.' ▇▇▇▇▇
G '. ▇▇▇▇▇▇▇ and certain other documents executed in connection therewith
(collectively, the-"Open Account Documents"), whereby Automotive One was allowed
to purchase, on open Account, merchandise supplied by APS and to be paid for in
accordance with specified terms and secured by certain collateral, as more
specifically set forth therein; and
WHEREAS, On or about October 25, 1995, Automotive One executed that
certain Promissory Note in favor of APS evidencing a loan in the original
principal amount of $2,450,000 (the "APS NOTE"), the obligations of which are
secured by that certain Security Agreement dated October 25, 1995, by and
between Automotive One and APS, that certain Guaranty executed by ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, III and certain other documents executed in connection therewith
(collectively, the "APS SECURITY DOCUMENTS" and that certain Mortgage Deed dated
October 25, 1995, by and among Automotive One, APS and AFCO (the "MORTGAGE DEED"
recorded in the real property records of Orange, Seminole and Brevard Counties,
Florida; and
WHEREAS, On or about October 25, 1995, Automotive One executed that
certain Promissory Note in favor of AFCO evidencing a loan in the original
principal amount of $2,500,000 (the "AFCO NOTE"), the obligations of which are
secured by that certain Security Agreement dated October 25, 1995, by and
between Automotive One and AFCO, that certain Guaranty executed by ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, III and certain other documents executed in connection therewith
(collectively, the "AFCO SECURITY DOCUMENTS") and the Mortgage Deed; and
WHEREAS, On or about October 25, 1995, Automotive One, APS and AFCO
entered into that certain Loan Agreement (the "LOAN AGREEMENT"), in the form
attached to hereto as EXHIBIT "A" governing the rights and obligations of the
parties with respect to, among other things, the APS Note and the AFCO Note; and
WHEREAS, On or about October 25, 1995, Automotive One and APS entered
into that certain Product Purchase Agreement (the "PRODUCT PURCHASE AGREEMENT")
requiring, among other things, Automotive One to purchase, and APS to supply,
merchandise; and
WHEREAS, Automotive One is currently in default of its obligations with
respect to the APS Indebtedness, the AFCO Indebtedness and the Open Account
Indebtedness (each as hereinafter defined), in each case, by, among other
things, failing to make the required payments
2
due thereon. As a result, APS and AFCO have certain rights under the various
Loan Documents including, but not limited to, the right to foreclose the
Mortgage Deed, foreclose its security interest, cancel the right of Automotive
One to purchase from APS, etc., any one of which would have a material adverse
effect on Automotive One and its business; and
WHEREAS, Automotive One has requested that APS and AFCO defer
exercising any of such rights and further agree to certain modifications of the
APS Indebtedness, the AFCO Indebtedness and the Open Account Indebtedness for
the purpose, among other things, of allowing Automotive One a grace period
within which to raise funds sufficient to pay the Indebtedness in full and
continue to have the right to purchase from APS on the credit terms as set forth
in this Agreement. Such requests include a deferral of interest, a postponement
of the maturity date and other accommodations; and
WHEREAS, APS and AFCO are each willing to enter into certain
modifications of the APS Indebtedness, the AFCO Indebtedness and the Open
Account Indebtedness upon the terms and conditions set forth herein. As a
result, APS and AFCO are deferring their right to exercise remedies available to
them, including the right to foreclose on certain real and personal property of
Automotive One, and to further permit Automotive One to continue to purchase
from APS. In addition, APS and AFCO are willing to defer the payment of
principal and interest for a limited period of time and under certain
circumstances to waive default interest in its entirety in an effort to assist
Automotive One in its business.
NOW, THEREFORE, in consideration of the mutual premises herein
contained, the parties do hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1. I DEFINED TERMS. In addition to other terms defined herein,
as used in this Agreement:
AFCO INDEBTEDNESS means any and all obligations and amounts
owing or to be owing by Automotive One to AFCO in connection with
the AFCO Note, the AFCO Security Documents, the Mortgage Deed and
the Loan Agreement, (which would include by definition, current and
continuing interest).
APS INDEBTEDNESS means any and all obligations and amounts
owing or to be owing by Automotive One to APS in connection with the
APS Note, the APS Security Documents, the Mortgage Deed and the Loan
Agreement, (which would include by definition, current and
continuing interest).
2
3
FILING DATE means May 30, 1997.
INDEBTEDNESS means, collectively, the APS Indebtedness, the
AFCO Indebtedness and the Open Account Indebtedness and other
amounts due under this Agreement such as Closing Costs (as defined
below) (which would include by definition, current and continuing
interest).
LOAN DOCUMENTS means, collectively, the Open Account
Documents, the APS Note, the APS Security Documents, the AFCO Note,
the AFCO Security Documents, the Mortgage Deed, the Loan Agreement
and the Product Purchase Agreement.
NOTICE OF DEFAULT means the letter dated October 4, 1996, from
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ of Akerman, Senterfitt & ▇▇▇▇▇▇, P.A., to
Automotive One regarding notice of default and accelerating and
demanding payment of the principal amounts outstanding under the APS
Indebtedness, the AFCO Indebtedness and the Open Account
Indebtedness, together with accrued interest and default charges.
MATURITY DATE means the earlier to occur of (i) the date of
receipt by Automotive One of the proceeds of a public offering of
shares of its common stock which are registered with the Securities
Exchange Commission and (ii) July 31, 1997.
OPEN ACCOUNT INDEBTEDNESS means any and all obligations and
amounts owing or to be owing by Automotive One to APS in connection
with the Open Account Documents and the Product Purchase Agreement,
including all amounts currently due for product purchases made by
Automotive One from APS and amounts hereafter due for additional
product purchases from APS, (which would include by definition,
current and continuing interest).
PRODUCT RETURN CREDIT shall mean a credit due Automotive One
for the return to APS of certain automotive parts which have
previously been purchased by Automotive One from APS, and which
return and credit are in compliance with the product return policy
of APS.
REAL PROPERTY means the parcels of real property in which APS
and AFCO currently has a mortgage interest pursuant to the Mortgage
Deed (as defined below) and those parcels of real
3
4
property set forth on EXHIBIT "B" hereto in which APS and AFCO will
have a mortgage interest pursuant to a modification of the Mortgage
Deed (the "MORTGAEE DEED MODIFICATION") to be executed
contemporaneously with this Agreement.
Section 1.2 OTHER DEFINED PROVISIONS. All terms defined in this
Agreement, whether or not defined in Section 1.1, have the meanings provided
herein when used herein or in the documents attached hereto as Exhibits or in
any other document, certificate or instrument made or delivered pursuant hereto
or thereto, unless otherwise defined therein.
ARTICLE II
AMOUNTS OUTSTANDING
Section 2.1 Outstanding Balances. As of the dates indicated below,
subject to any Product Return Credit as set forth in Section 2.4 below, the
following amounts are outstanding on each indebtedness described below:
PRINCIPAL ACCRUED & UNPAID ACCRUED & UNPAID
BALANCE INTEREST AT NON- INTEREST AT
DEFAULT RATE DEFAULT RATE
APS Indebtedness $2,243,995.73 $304,743.21 $132,455.11
(01/31/97)
AFCO Indebtedness $2,465,467.67 $191,190.16 $ 13,339.83
(01/31/97)
Open Account Indebtedness $1,947,533.57 N/A $ 72,367.70
(01/25/97)
In addition to the foregoing amounts, there shall continue to be due and owing
to APS (with respect to the APS Indebtedness and the Open Account Indebtedness),
and AFCO (with respect to the AFCO Indebtedness), from and after the date
hereof, additional interest and other amounts as may accrue from time to time
under the Loan Documents pertaining to each; PROVIDED, HOWEVER, that no
additional advances of principal will be allowed under the APS Note or the AFCO
Note. There shall be further added to the foregoing indebtedness (to be secured
by the Mortgage Deed) any and all costs and expenses associated with the
transaction contemplated by this Agreement including, but not limited to, all
costs and attorneys' fees of APS and AFCO and any recording or similar expenses
associated wit ' h the Mortgage Deed or acquiring a mortgage on the additional
parcels of real property (the "CLOSING COSTS"). Said Closing Costs shall, if not
previously paid, be paid on the Maturity Date and shall be secured by the
Mortgage Deed. Interest shall not accrue on the Closing Costs PROVIDED, HOWEVER
if the Closing Costs are not paid by the Maturity Date then interest will accrue
on the Closing Costs at the default rate from and after the Maturity Date.
4
5
Section 2.2 COSTS AND ATTORNEY'S-FEES. To the extent Automotive One
does not comply with the terms of this Agreement or the other documents executed
in connection herewith, additional costs and attorneys' fees may be incurred by
APS or AFCO as a result of enforcing their rights under the Loan Documents, this
Agreement or the other documents executed in connection herewith. The parties
hereby agree that any such costs an . d fees shall be paid by Automotive One to
APS or AFCO, to the extent incurred by each, on or before the Maturity Date. All
such amounts shall be further secured by the Mortgage Deed.
Section 2.3 AMOUNTS DUE, NO DEFENSES OR SET-OFFS. Automotive One hereby
agrees as follows:
(a) That the amounts set forth in Section 2.1 as being due and
owing by Automotive One are absolutely and unconditionally due and
owing to APS and AFCO, as applicable, in accordance with the terms
of the Loan Documents, as modified hereby.
(b) That each and all of the Loan Documents, and the rights
and remedies granted to APS or AFCO thereunder, are fully binding
upon and enforceable against Automotive One in accordance with their
respective terms.
(c) That, subject to any Product Return Credit as set forth in
Section 2.4 below, (and which Product Return Credit is only
applicable to the Open Account Indebtedness), Automotive One is not
now entitled to any claim, counterclaim, defense, affirmative
defense, or right of set-off or recoupment whatsoever against APS or
AFCO or either of their successors or assigns with regard to the
payment of any or all of the amounts described in Section 2.1 or the
enforcement of any of the rights and remedies of APS or AFCO under
any of the Loan Documents, and Automotive One does hereby release,
waive and surrender any and all claims, counterclaims, defenses,
affirmative defenses, and rights of set-off or recoupment
whatsoever, whether known or unknown, relating to acts, events,
conduct or any other matter occurring at or prior to the execution
and delivery of this Agreement that Automotive One might otherwise
have been entitled to assert or allege against APS or AFCO for any
reason, including, without limitation, any matter related to,
connected with, arising out of or regarding the payment of the
amounts described in Section 2.1 to APS or AFCO, or the enforcement
of any provision of any of the Loan Documents.
5
6
The provisions set forth in this Section 2.3 and Section 2.4 below are a
material inducement for each of APS's and AFCO's willingness to enter into this
Agreement. Without the agreement of Automotive One to this provision, neither
APS nor AFCO would have been willing to execute this Agreement and each would
have proceeded with the collection of the APS Indebtedness, the AFCO
Indebtedness and the Open Account Indebtedness, as applicable, and the
enforcement of each of their respective rights and remedies under the Loan
Documents, free of the conditions and restrictions set forth herein.
Section 2.4 PRODUCT RETURN CREDIT. Automotive One hereby agrees as
follows in regard to Product Return Credit:
(a) If and to the extent Automotive One is entitled to any
Product Return Credit, it shall serve as a credit only against the
Open Account Indebtedness, and shall not serve as a credit against
the APS Indebtedness or the AFCO Indebtedness.
(b) Any Product Return Credit shall only be for the return to
APS by Automotive One of automotive parts which were previously
purchased by Automotive One from APS. Automotive One shall not be
entitled to any other credits whatsoever except for Product Return
Credits. Further, for Automotive One to be entitled to any such
credit for the return of automotive parts, the return must be in
strict compliance with APS's policy for accepting the return of
automotive parts and issuing a credit.
(c) In regard to all automotive parts returned by Automotive
One to APS on or prior to December 25, 1996, Automotive One
acknowledges that it has received all Product Return Credits, and
Automotive One is not entitled to any further Product Return Credits
for automotive parts returned to APS prior to December 25, 1996.
Accordingly, the only Product Return Credits that Automotive One
will be entitled to, if any, are for automotive parts returned to
APS after December 25, 1996.
It is the intent of this Section to enable Automotive One to agree to the
amounts outstanding in Section 2.1 above in regard to Open Account Indebtedness,
as the parties are currently processing returns and credits and cannot as of any
particular recent date agree as to the amount absolutely and unconditionally
owing on the Open Account Indebtedness. It is only because of those product
returns and requests for credits that said absolute amount cannot be agreed to.
Accordingly, this Section 2.4 has been added to make available to Automotive One
in strict compliance with APS's product return policy credits, but only for
product which has been returned to APS by Automotive One after December 25,
1996. As such, Automotive One shall not be entitled to any credits whatsoever
for any purpose whatsoever in regard to product return or any other matters
occurring prior to December 26, 1996.
6
7
Automotive One may obtain change over credits (which are not Product
Return Credits) to the Open Account Indebtedness pursuant to that certain letter
dated February 25, 1997 from ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ of APS to Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇
of Automotive One.
ARTICLE III
PAYMENT OF INDEBTEDNESS
Section 3.1 Automotive One hereby agrees to pay to APS and AFCO, as
appropriate, the Indebtedness as follows:
APS Indebtedness: Non-default rate interest as set forth in
the APS Note shall continue to accrue on the
past due principal balance amount set forth
in Section 2.1; however, no payments of
interest shall be required until the
Maturity Date, at which time the entire
outstanding principal balance plus accrued
interest shall be due and payable in full.
AFCO Indebtedness: Non-default rate interest as set forth in
this AFCO Note shall continue to accrue on
the outstanding principal balance; HOWEVER,
no payments of interest or principal shall
be required until the Maturity Date, at
which time the entire outstanding principal
balance plus accrued interest shall be due
and payable in full.
Open Account
Indebtedness: Between the date of this Agreement and the
Maturity Date, Automotive One shall pay
before the close of business on Monday (or,
if Monday is a holiday, then on the next
succeeding business day) of each week, an
amount equal to the total of the immediately
preceding week's purchases of merchandise
from APS. Also, during such period, any
credits to which Automotive One may be
entitled from APS with respect to
merchandise returns shall be credited by APS
against the outstanding past due balance
owed by Automotive One on the Open Account
Indebtedness. Any credits to which
Automotive One may be entitled from APS with
respect to cores and defects shall be
credited by APS against the outstanding
current balance owed by Automotive One on
the Open Account Indebtedness. On the
Maturity Date, Automotive One shall pay so
much of the outstanding balance on the Open
Account Indebtedness as is necessary to
cause Automotive One to have fully paid for
all purchases from APS plus any interest or
other service charges and deferred amounts
associated therewith other than those
7
8
occurring within the monthly pay period in
which the Maturity Date occurs.
Section 3.2 DEFAULT STATUS. Automotive One acknowledges receipt of the
Notice of Default. Subject to the proviso in the following sentence, by their
execution of this Agreement, APS and AFCO each agree to withhold any actions
they may be entitled to take under the Loan Documents as a result of default by
Automotive One. Provided Automotive One strictly complies with all of its duties
and obligations under this Agreement, the other documents executed in connection
herewith and the Loan Documents, as modified hereby, then the Notice of Default
shall be withdrawn. If, however, a nonmonetary default should occur under this
Agreement or the other documents executed in connection herewith, or any
additional or future defaults should occur under the Loan Documents, as modified
hereby, and Automotive One fails to cure said default within twenty (20)
business days after written notice of said default has been give to Automotive
One then the Notice of Default shall automatically be reinstated as to the
notice of default provided therein and any agreement by APS or AFCO to withhold
any actions either may be entitled to take under the Loan Documents, this
Agreement or the other documents executed in connection herewith shall no longer
be effective and each shall be entitled immediately to exercise any and all of
its remedies under the Loan Documents, this Agreement or the other documents
executed in connection herewith without any further notice to Automotive One. If
Automotive One should fail to make any payment required under this Agreement or
the other documents executed in connection herewith, or under the Loan
Documents, as modified hereby, then Automotive One shall have five (5) business
days following receipt of written notice from APS or AFCO of such failure to pay
within which such failure before a default shall have occurred, PROVIDED,
HOWEVER, no notice of default is required to be given and no grace or cure
period is applicable with respect to payments due on the Maturity Date. Upon the
occurrence of such default, any argument by APS or AFCO to withhold any actions
either may be entitled to take under the Loan Documents, this Agreement or the
other documents executed ion connection herewith shall no longer be effective
and each shall be entitled immediately to exercise any and all of its remedies
under the Loan Documents, this Agreement or the other documents executed in
connection herewith without any further notice to Automotive One.
Section 3.3 DEFAULT INTEREST. The parties hereby agree:
(a)Provided Automotive One timely makes all payments required
of it under Section 3.1, APS and AFCO each agree to waive the Default
Interest (as defined below) to which it is entitled as set forth in
Section 2.1 with respect to the APS Indebtedness and the AFCO
Indebtedness. For purposes of this provision, "DEFAULT INTEREST" shall
mean only that additional interest that is based on the default rate
set forth in the Loan Documents, and includes the Default Interest set
forth in Section 2.1 above as well as future Default Interest that may
accrue prior to the Maturity Date. Default Interest does not include
interest that has accrued and continues to accrue at the non-default
rate set forth in the Loan Documents.
8
9
(b) If Section 3.3 (a) is not applicable due to Automotive
One's default under this Agreement, any other document executed in
connection herewith or the Loan Documents, as modified hereby, neither APS
nor AFCO shall be deemed to have waived the Default Interest to which each
is entitled, and all Default Interest shall be due and owing to each as of
the date of such default.
Section 3.4 FAILURE TO MAKE REQUIRED PAYMENTS. If Autom6tive One should
fail to make any of the payments required by Section 3.1 after any applicable
notice and cure period, Automotive One shall immediately be in default of this
Agreement. At such time, Automotive One shall no longer be entitled to any
rights or privileges under this Agreement, the Notice of Default shall
immediately be reinstated as to the notice of default provided therein and APS
and AFCO each shall be entitled to exercise any and all remedies available to it
under the Loan Documents, this Agreement or the other documents executed in
connection herewith.
Section 3.5 ADDITIONAL COLLATERAL. As additional collateral to secure
the Indebtedness and obligations of Automotive One under this Agreement, the
other documents executed in connection herewith and the Loan Documents, as
modified hereby, Automotive One (or such other party as may have an interest
therein) shall grant to APS and AFCO a mortgage interest in the parcels of real
property described on Exhibit B attached hereto (the "ADDITIONAL REAL PROPERTY")
and shall take any and all further actions and execute such other documents as
may be appropriate or necessary to vest in APS and AFCO such mortgage interest,
including, without limitation, the transfer of title to any such Additional Real
Property ' if not held by Automotive One prior to the filing of the Mortgage
Deed Modification. Any filing fees, taxes and other costs (including, without
limitation, attorney's fees) incurred by APS or AFCO associated with the grant
of such mortgage interest (i.e. a Closing Cost) shall be at the sole cost and
expense of Automotive One and, if not immediately paid by Automotive One, shall
be added to the indebtedness owed and shall be secured by the mortgage deed and
paid by no later than the Maturity Date. As set forth in Section 2.1 above,
interest will not accrue on any Closing Cost provided that the Closing Costs are
paid by the Maturity Date. Additionally, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III and ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, his wife, shall further execute and deliver to APS and AFCO their
continuing, absolute and unconditional guaranty for all obligations of
Automotive One with respect to the APS Note, all obligations of Automotive One
with respect to the AFCO Note, and all amounts currently owed or which may
hereafter be owed under the Open Account Indebtedness, the form of which
guaranty is attached hereto as Exhibit C (the "GUARANTY").
Section 3.6 NO OBLIGATION TO PURSUE COLLATERAL.
(a) Notwithstanding the past, present or future granting of
additional collateral to APS or AFCO to secure the Indebtedness,
neither APS nor AFCO shall be under any duty or obligation first to
pursue or proceed against any collateral or any person liable for the
payment of any portion of the Indebtedness in the event of a default by
Automotive One under this Agreement, the other documents executed in
connection herewith or the Loan Documents, as modified hereby, but may
proceed immediately against any collateral securing, or obligor or
guarantor of, the Indebtedness. In the event of a default by
9
10
Automotive One, the rights of APS and AFCO shall be cumulative
and each may, in its sole discretion,, elect to exercise any one or
more of the rights granted to it by this Agreement, the documents
executed in connection herewith, the Loan Documents or under applicable
law, all of which rights shall be cumulative.
(b) Automotive One does hereby state that its obligation for
payment of the Indebtedness is absolute and unconditional and that APS
and AFCO may each release, discharge or substitute any collateral
whatsoever or release or modify the obligations of any party liable for
payment of any or all of the Indebtedness upon such terms and
conditions as it may, in its sole discretion, wish, without notice to
Automotive One. Neither APS nor AFCO shall be under any obligation to
perfect any security interest in or otherwise preserve any collateral
granted to it at any time for purposes of securing the Indebtedness.
ARTICLE IV
FORECLOSURE; APPOINTMENT OF A RECEIVER, ETC.
Section 4.1 FORECLOSURE. The parties hereto agree that, upon the
occurrence of a default by Automotive One under this Agreement, the documents
executed in connection herewith or the Loan Documents, as modified hereby, after
the date hereof, APS and AFCO shall each be entitled promptly to institute a
judicial foreclosure action against the Real Property or any portion thereof in
the Circuit Court of Orange, Seminole or Brevard Counties Florida, as
applicable. Automotive One agrees that service of process upon it with regard to
such action may be legally and validly effectuated by mailing copies of the
summons and foreclosure complaint to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
President
AUTOMOTIVE ONE PARTS STORES, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
who shall accept service of process on behalf of Automotive One, and who is
hereby appointed irrevocably by Automotive One to accept said service. In
accordance with the provisions of Section 2.3, Automotive One further agrees and
acknowledges that it is not entitled to, and will not assert, any claim,
counterclaim, defense, affirmative defense or right of set-off or recoupment
whatsoever against APS or AFCO, or their successors or assigns, in such
foreclosure action or otherwise relating to any act, event, conduct or other
matter whatsoever occurring at or prior to the execution and delivery of this
Agreement and shall, upon the request of either APS or AFCO, consent to the
entry of a final judgment of foreclosure in favor of APS or AFCO in such action,
which final ji4ogment shall, among other things, fix the amount of the debt as
stated in Article 11, determine that APS's or AFCO's mortgage lien, as
applicable, is superior to any rights of Automotive One in the Real Property,
and shall order the sale of such Real Property and application of the proceeds
thereof, if any, to the Indebtedness.
10
11
Section 4.2 APPOINTMENT OF A RECEIVER. By its execution hereof,
Automotive One agrees that it shall, upon the request of either APS or AFCO,
consent to the appointment of a receiver in the foreclosure action referenced in
Section 4.1, which receiver shall be responsible for the operation of the Real
Property and for the collection of all rents arising therefrom, if any. Should
Automotive One fail to consent to the appointment of any such receiver, then it
agrees, by its execution hereof, that APS and AFCO shall each be entitled, upon
request made in any such action, to the immediate appointment of a receiver on
an ex parte basis, without regard to the solvency or insolvency of Automotive
One or the value of any parcel of the Real Property. In such action, if
Automotive One is in monetary default, Automotive One further agrees to a bond
of $100.00. This Section relates only to the Mortgage Deed as it relates to the
Real Property and does not relate to any personal property of Automotive One.
Section 4.3 RELIEF FROM STAY. Automotive One is entering into this
Agreement with the express understanding that Automotive One will not hereafter
voluntarily file and seek the entry of an order for relief in any case under the
Bankruptcy Code of 1978, as amended (the "Bankruptcy Code") or consent to the
entry of an order for relief in any involuntary case under the Bankruptcy Code.
If Automotive One does file a voluntary case or does consent to any such
involuntary case under the Bankruptcy Code, Automotive One agrees that APS's and
AFCO's mortgage, security or other interest in the Real Property and other
personal property assets of Automotive One will not be adequately protected and
that APS and AFCO, upon request, shall each be entitled to immediate ex parte
relief from the automatic stay under Section 362 (d) (1) of the Bankruptcy Code
and that it shall not object to or in any other manner seek to forestall the
grant of such relief to APS or AFCO.
Section 4.5 EFFECT OF PERFORMANCE BY AUTOMOTIVE ONE. Provided all of
the following conditions are met and have occurred, APS and AFCO shall cause to
be released, at the sole cost and expense of Automotive One, each of their
mortgage interests in the Real Property and each of their interests in the other
personal property assets of Automotive One securing the APS Indebtedness and the
AFCO Indebtedness. Nothing herein shall be construed as requiring APS to release
its interest in the personal property assets of Automotive One securing the Open
Account Indebtedness, which the parties acknowledge and agree shall remain to
secure Automotive One's continuing obligations with respect to such Open Account
Indebtedness. The conditions are the following:
(a) Automotive One has timely paid all amounts due under
Section 3.1; and
(b) Automotive One is not at said time in default with
-respect to any obligation set forth in this Agreement, the documents
executed in connection herewith or the Loan Documents, as modified
hereby.
Nothing in this Section 4.5 shall be deemed or construed as a release or waiver
by APS of any obligations owed by Automotive One under the Open Account
Documents or the Product Purchase Agreement, which shall remain in full force
and effect irrespective of the meeting of the above conditions by Automotive
One.
11
12
ARTICLE V
MISCELLANEOUS
Section 5.1 RATIFICATION OF LOAN DOCUMENTS. The parties hereby confirm
and ratify the terms and conditions of the Loan Documents and agree that the
Loan Documents are in full force and effect, enforceable in accordance with
their terms, except as otherwise expressly set forth in this Agreement.
Section 5.2 TIME OF ESSENCE; GOVERNING LAW. Time is of the essence of
this Agreement. This Agreement shall be construed in accordance with, and
governed by, the law of the State of Florida.
Section 5.3 COSTS AND ATTORNEY'S FEES. In the event of any default
under this Agreement, the documents executed in connection herewith or the Loan
Documents, as modified hereby, Automotive One shall be obligated for and shall
pay all costs and attorneys' fees incurred by APS and AFCO in any proceeding
upon this Agreement, the documents executed in connection herewith or the Loan
Documents. As used herein, costs and attorneys' fees shall include costs and
attorneys' fees incurred in any proceeding including any appeal therefrom.
Section 5.4 AUTHORITY OF AUTOMOTIVE ONE. Automotive One hereby
represents and warrants to APS and AFCO that Automotive One has all requisite
corporate power and authority to execute and deliver this Agreement and that
this Agreement constitutes, and the documents executed by Automotive One in
connection with this Agreement constitute, the valid and legally binding
obligation of Automotive One, enforceable in accordance with their respective
terms and conditions. In addition, Automotive One shall further pay on or before
the Maturity Date to APS and AFCO all costs, expenses and attorneys' fees
incurred by APS and AFCO in connection with the transactions contemplated by
this Agreement.
Section 5.5 NON-CONTRAVENTION. Neither the execution and delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will violate any law to which Automotive One is subject, any provision of the
charter, bylaws or other organizational documents of Automotive One or conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, or require any notice or consent under, any agreement,
contract, lease, license, instrument or other arrangement to which Automotive
One is a party or by which it may be bound.
Section 5.6 CROSS-DEFAULT AND CROSS-COLLATERALIZATION. To the extent
not already provided in the Loan Documents, Automotive One hereby acknowledges
and agrees that any default under its obligations with respect to any one of the
APS Indebtedness, the AFCO Indebtedness or the Open Account Indebtedness shall
also constitute a default with respect to the other two. A default under the
Loan Agreement (as modified by this Agreement) shall also constitute a default
under each other obligation owing from Automotive One to APS or AFCO. Similarly,
to the extent not already provided in the Loan Documents, any collateral pledged
or to
12
13
be pledged to secure the obligations of Automotive One with respect to any one
of the APS Indebtedness, the AFCO Indebtedness or the Open Account Indebtedness
shall secure all obligations of Automotive One to APS and AFCO, including all
obligations under the Loan Agreement as modified by this Agreement.
Section 5.7 GUARANTORS. By their individual execution of this
Agreement, ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III and ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, his wife, each a
shareholder of Automotive One, hereby each agrees to execute the Guaranty and
acknowledges this Agreement and the obligations of APS and AFCO as set forth
herein as due and valid consideration therefor. Each Guarantor confirms that the
Guaranty is in full force and effect and is not subject to any claim,
counterclaim, defense, or other right of offset.
Section 5.8 WAIVER OF JURY TRIAL. THE PARTIES HERETO KNOWINGLY9
VOLUNTARILY AND INTENTIONALLY, AFTER CAREFUL CONSIDERATION AND AN OPPORTUNITY TO
SEEK LEGAL ADVICE, EACH WAIVES ITS RIGHT TO HAVE A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION ARISING OUT OF OR IN ANY WAY CONNECTED WITH ANY OF THE PROVISIONS
OF THIS AGREEMENT OR ANY OTHER DOCUMENTS EXECUTED IN CONNECTION HEREWITH.
Section 5.9 REAL ESTATE COLLATERAL. Automotive One has granted or
caused to be granted and will further grant or cause to be granted to APS and
AFCO by virtue of this Agreement a mortgage on all the real property owned by or
used by Automotive One in its business except for (i) real property leased from
unaffiliated third parties and (ii) a parcel referred to as the Roanoke parcel,
which is located at Roanoke, Virginia. Automotive One represents to APS and AFCO
that they will have a mortgage lien on all real property owned or used by
Automotive One except for (i) real property leased from unaffiliated third
parties, and (ii) the Roanoke parcel. Further, to the extent any of said parcels
are subject to a prior mortgage, Automotive One will keep current and not
default under said prior mortgage. Automotive One will execute such further
documents as may be necessary so as to grant to APS and AFCO a mortgage lien on
all such real property except.
Section 5.10 LOAN COVENANTS. In regard to the financial covenants set
forth in paragraphs 6(d), (e) and (f) of the Loan Agreement, compliance with
those financial covenants by Automotive One is hereby waived until the Maturity
Date, PROVIDED, HOWEVER, that if Automotive One fails to meet the covenant in
the following sentence, then Automotive One will be required to comply with such
financial covenants commencing as of June 1, 1997. Automotive One further
covenants and agrees that it will file with the Securities and Exchange
Commission a registration statement under the Securities Act of 1933, as
amended, for an initial public offering of its shares by no later than the
Filing Date. Automotive One shall keep APS and AFCO advised as to the status of
said filing and furnish APS and AFCO with copies of the filings as and when
made.
13
14
Section 5.11 STATUS OF MATURITY DATE/EXTENSION. The parties in
negotiating this Agreement discussed the status of the Maturity Date and have
agreed to the Maturity Date as defined above. APS and AFCO have reviewed a
request by Automotive One for an arrangement by which the Maturity Date could be
extended and, after discussion, the parties have agreed that there will be no
procedure or right for an extension of the Maturity Date. APS and AFCO will
consider any requests for an extension of the Maturity Date but APS and AFCO are
not under any duty or obligation to agree to any such extension. If Automotive
One requests an extension of the Maturity Date, it shall do so in writing and
set forth the reason(s) for the extension (e.g. Automotive One has a commitment
to take out APS and AFCO and additional time is needed to close on said
commitment, the public offering by Automotive One has been filed but is not yet
effective, etc.). Any extension of the Maturity Date will only be made in a
written agreement signed by APS and AFCO which is in their discretion. Thus,
absent any such written extension, the Indebtedness shall absolutely come due
and payable on the Maturity Date.
Section 5.12 RELEASE OF COLLATERAL. Provided no condition of default
then exists under this Agreement, any of the other documents executed in
connection herewith, or any of the Loan Documents, then, in that event, at such
time as the AFCO Indebtedness, the APS Indebtedness and all Closing Costs are
all paid-in-full as expressly set forth above (which includes all accrued
interest even if not yet due), APS and AFCO will release all Real Property
secured by the Mortgage Deed. The Open Account Indebtedness will remain secured
by the personal property under the Open Account Documents. Further, if
Automotive One from time to time desires to sell any of the Real Property, and
APS and AFCO agree to said transaction (which APS and AFCO are under no
obligation to do but may refuse to do so in their absolute discretion), then APS
and AFCO will agree to release said parcel from the mortgage deed provided that
the entire net proceeds of such sale are paid to APS and AFCO for application on
the indebtedness and APS and AFCO have reviewed and approved all of the expenses
of said transaction. Automotive One has also requested the right to obtain
parcel releases based upon reduction in payments, but no such releases are
agreed to and APS and AFCO are under no obligation to grant any partial
releases.
Section 5.13 COMPLETE AGREEMENT. This Agreement constitutes the entire
understanding among the parties with respect to the subject matter hereof and
incorporates all prior agreements and representations, if any. It may not be
amended or modified except by a writing signed by the party(ies) to be charged
by such amendment or modification.
14
15
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
AUTOMOTIVE ONE PARTS STORES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III,
President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III,
Guarantor
By: /s/ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇,
Guarantor
A.P.S., INC.
By: /s/ E. ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
E. ▇▇▇▇▇▇ ▇▇▇▇▇▇,
President
AUTOPARTS FINANCE COMPANY, INC.
By: /s/ E. ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
E. ▇▇▇▇▇▇ ▇▇▇▇▇▇,
Vice President
15