EXHIBIT 10.1
WAIVER AND
AMENDMENT NO. 8
to
SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
THIS WAIVER AND AMENDMENT NO. 8 is entered into as of August 22, 2002,
by and among AMERICAN TIRE DISTRIBUTORS, INC., formerly known as HEAFNER TIRE
GROUP, INC., a Delaware corporation ("American Tire"), THE SPEED MERCHANT,
INC., 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,
Amendment No. 4 dated as of March 30, 2001, Amendment No. 5 dated as of August
10, 2001, Amendment No. 6 dated as of November 13, 2001 and Amendment No. 7
dated as of March 27, 2002 (the "Loan Agreement"; terms defined therein, unless
otherwise defined herein, being used herein as therein defined).
An Event of Default under the Loan Agreement has occurred and is
continuing, and the Borrowers have requested a waiver of such Event of Default
from the Lenders. The Lenders are willing to waive such Event of Default
subject to the terms and conditions contained herein, including the amendment
of certain provisions of the Loan Agreement.
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. Limited Waiver of Default. An Event of Default has
occurred and currently exists under the Loan Agreement as a result of the
Borrowers' breach of Section 11.1(b) and Schedule 11.1(b) of the Loan Agreement
(the "Designated Default"). The Designated Default exists because of the
failure by Borrowers to maintain a minimum fixed charge coverage ratio of 1.10
to 1 for the four Fiscal Quarters ending June 29, 2002. Borrowers represent and
warrant that the Designated Default is the only Default or Event of Default
that exists under the Loan Agreement and the other Loan Documents as of the
date hereof. Subject to the provisions of SECTION 3 hereof, each Lender hereby
waives the Designated Default in existence on the date hereof. In no event
shall such waiver be deemed to constitute a waiver of
(a) any Default or Event of Default other than the Designated Default in
existence on the date hereof or (b) each Borrower's obligation to comply with
all of the terms and conditions of the Loan Agreement and the other Loan
Documents from and after the date hereof. Notwithstanding any prior, temporary
mutual disregard of the terms of any contracts between the parties, each
Borrower hereby agrees that it shall be required strictly to comply with all of
the terms of the Loan Documents on and after the date hereof.
Section 2. Amendments to Loan Agreement. Subject to the
provisions of SECTION 3 hereof, the Loan Agreement is hereby amended as
follows:
(a) By deleting the reference to "pursuant to Section 11.4" from
subsection (b)(iii) of the definition of "Debt" that is contained in Section
1.1 of the Loan Agreement.
(b) By amending the definition of "Leverage Ratio" that is
contained in Section 1.1 of the Loan Agreement to read as follows:
"Leverage Ratio" means as of any specified date, the ratio of
(a) the sum of (without duplication) (i) total Debt of Heafner and its
Consolidated Subsidiaries on a consolidated basis as of such date,
including the aggregate principal amount of the Notes, as defined in
and included in the Vendor Transaction Documents, PLUS (ii) the Letter
of Credit Obligations, to (b) EBITDA - Heafner Group for the period of
four consecutive Fiscal Quarters ended on or most recently before such
date.
(c) By deleting the definition of "Purchase Price" that is
contained in Section 1.1 of the Loan Agreement and by substituting the
following new definition in lieu thereof:
"Purchase Price" means an amount equal to the total
consideration paid for such Acquisition, including all cash
payments (whether classified as purchase price, noncompete
payments, consulting payments, "earn out" or otherwise and
without regard to whether such amount is paid in whole or in
part at the closing of the Acquisition or over time
thereafter, but excluding any finance charges attributable to
deferred payments and excluding any salary or other
employment compensation paid to a seller for the purpose of
retaining such seller's services as an active employee of a
Borrower or a Subsidiary), the principal amount of all
Acquired Debt and of any Subordinated Debt owing to the
seller, and the value (as determined by the board of
directors of Heafner, including pursuant to the applicable
purchase agreement between the relevant Borrower and the
seller, in the case of any property, the fair value of which
is not readily ascertainable) of all other property, other
than capital stock of Heafner, transferred by Heafner to the
seller.
(d) By deleting from the preamble of Section 11.6 of the Loan
Agreement the phrase "Declare or make any Restricted Distribution or Restricted
Payment in any Fiscal Year which, when added to all other Restricted
Distributions and Restricted Payments made in the same Fiscal Year of Heafner,
would exceed $2,000,000;" and by substituting therefor the phrase
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"Declare or make any Restricted Distribution or Restricted Payment", and by
adding the following new subsection (c) to Section 11.6 that reads as follows:
(c) any dividend or distribution with respect to the KS
Preferred, provided, however, that at no time shall any such
dividends or distributions exceed $1,000,000 in the aggregate
in any Fiscal Year.
Section 3. Effectiveness of Waiver and Amendment. (a) The
provisions of SECTION 1 and SECTION 2 of this Waiver and Amendment shall become
effective on the date (the "Waiver and Amendment Effective Date") on which the
Administrative Agent shall have received (1) a waiver and amendment fee in the
amount of $25,000, in immediately available funds (the "Waiver and Amendment
Fee"), to be distributed by Administrative Agent as provided below, and (2) the
following documents, each of which shall be satisfactory in form and substance
to the Administrative Agent and in sufficient copies for each Lender (terms
defined in the Loan Agreement, as amended by this Waiver and Amendment, being
used in this SECTION 2 as so defined):
(i) this Waiver and Amendment duly executed by the Borrowers, the
Subsidiary Guarantors and the Lenders;
(ii) a certificate of the president or chief financial officer of
American Tire 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 Waiver and Amendment,
(A) 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 Waiver and Amendment Effective
Date, and
(B) no Default or Event of Default exists;
and the Administrative Agent shall be satisfied as to the truth and accuracy
thereof; and
(iii) such other documents and instruments as the Administrative
Agent may reasonably request.
The Waiver and Amendment Fee shall be distributed by Administrative
Agent to each Lender who executes this Waiver and Amendment in an amount equal
to such Lender's Commitment Percentage; provided, that the denominator of such
Commitment Percentage shall be the aggregate amount of all Commitments less the
Commitment amount of any non-signing Lender.
Section 4. Representations and Warranties. Each Loan Party
hereby makes the following representations and warranties to the Administrative
Agent and the Lenders, which representations and warranties shall survive the
delivery of this Waiver and Amendment and the making of additional Loans under
the Loan Agreement as amended hereby:
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(a) Authorization of Agreements. Each Loan Party has the right
and power, and has taken all necessary action to authorize it, to execute,
deliver and perform this Waiver and Amendment and each other agreement
contemplated hereby to which it is a party in accordance with their respective
terms. This Waiver and Amendment and each other such agreement contemplated
hereby to which it is a party has been duly executed and delivered by the duly
authorized officers of such Loan Party and each is, or each when executed and
delivered in accordance with this Waiver and 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 Waiver and Amendment in accordance with its terms does
not and will not, by the passage of time, the giving of notice or otherwise,
(i) require any Governmental Approval (that has not been
obtained) or violate any Applicable Law relating to such Loan Party 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 Loan Party or any of its
Subsidiaries, any material provisions of any indenture, agreement or
other instrument to which such Loan Party, any of its Subsidiaries or
any of such Loan Party's or such Subsidiaries' property may be bound
or any Governmental Approval relating to such Loan Party 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 Loan Party.
Section 5. Effect of Waiver and Amendment. From and after the
Waiver and 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 Waiver
and 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 Waiver and 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 6. Counterpart Execution; Governing Law.
(a) Execution in Counterparts. This Waiver and 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.
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(b) Governing Law. This Waiver and 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.
[Remainder of page left intentionally blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Waiver and
Amendment to be executed and delivered by their respective officers thereunto
duly authorized as of the date first above written.
BORROWERS:
AMERICAN TIRE DISTRIBUTORS, INC.
(formerly known as Heafner Tire Group, Inc.)
[CORPORATE SEAL]
Attest: By: /s/ William E. Berry
---------------------------------------
Name: William E. Berry
/s/ J. Michael Gaither Title: Executive Vice President & CFO
- --------------------------
[Assistant] Secretary
THE SPEED MERCHANT, INC.
[CORPORATE SEAL]
Attest: By: /s/ William E. Berry
---------------------------------------
Name: William E. Berry
/s/ Laurie C. Heavner Title: Vice President & Treasurer
- ----------------------
[Assistant] Secretary
By: /s/ J. Michael Gaither
---------------------------------------
Name: J. Michael Gaither
Title: Vice President & Secretary
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FLEET CAPITAL CORPORATION, as
Administrative Agent and as a Lender
By: /s/ Stephen Y. McGehee
---------------------------------------
Stephen Y. McGehee
Senior Vice President
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WACHOVIA BANK, NATIONAL ASSOCIATION,
formerly known as FIRST UNION NATIONAL BANK,
as Documentation Agent and as a Lender
By: /s/ John T. Trainor
---------------------------------------
Name: John T. Trainor
Title: Director
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TRANSAMERICA BUSINESS CAPITAL CORPORATION,
as a Lender
By: /s/ Dennis C. Snyder
---------------------------------------
Name: Dennis C. Snyder
Title: Senior Vice President
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STANDARD FEDERAL BANK NATIONAL ASSOCIATION,
formerly known as MICHIGAN NATIONAL BANK,
as successor in interest to Mellon Bank,
N.A., as a Lender
By: LaSALLE BUSINESS CREDIT, INC.,
its agent
By: /s/ Patrick Aarons
------------------------------------
Name: Patrick Aarons
Title: Vice President
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THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender
By: /s/ John Thomas
---------------------------------------
Name: John Thomas
Title: Account Executive
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SUBSIDIARY GUARANTORS:
Acknowledged and consented to this 22nd day
of August 2002:
T.O. HAAS TIRE COMPANY, INC.
By: /s/ J. Michael Gaither
---------------------------------------
Name: J. Michael Gaither
Title: Vice President & Secretary
T.O. HAAS HOLDING CO., INC.
By: /s/ J. Michael Gaither
---------------------------------------
Name: J. Michael Gaither
Title: Vice President & Secretary
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