FOURTH AMENDMENT TO CREDIT AGREEMENT
Exhibit
10
FOURTH
AMENDMENT TO CREDIT AGREEMENT
This
Fourth Amendment to Credit Agreement (“Fourth Amendment”) dated as of February
8, 2007, is entered into among Titan International, Inc. (the “Company”), the
financial institutions that are or may from time to time become parties to
the
Credit Agreement hereinafter described (collectively, the “Lenders”) and LaSalle
Bank National Association (“LaSalle”), both individually as a Lender and as
Administrative Agent. Capitalized terms used herein without definition shall
have the same meanings herein as ascribed to such terms in the Credit
Agreement.
WITNESSETH:
WHEREAS,
the Company and LaSalle were among the parties to that certain Credit Agreement
dated as of July 23, 2004 (together with all amendments, exhibits, schedules,
attachments and appendices thereto, the “Credit Agreement”); and
WHEREAS,
all of the parties to the Credit Agreement entered into a First Amendment
to
Credit Agreement dated as of February 16, 2005, whereby certain terms and
conditions of the Credit Agreement were modified and revised (the “First
Amendment”); and
WHEREAS,
the Company and the then existing lenders (collectively the “Existing Lenders”)
entered into a Second Amendment to Credit Agreement dated as of October 21,
2005
(the “Second Amendment”), the Third Amendment to Credit Agreement dated June 28,
2006 (as amended by the First Amendatory Agreement to the Third Amendment
to
Credit Agreement dated July 31, 2006, the “Third Amendment”) whereby certain
other changes in the terms and conditions of the Credit Agreement were agreed
upon and made (as used herein, Credit Agreement shall mean the Credit Agreement
as modified and amended by the First Amendment, the Second Amendment and
the
Third Amendment); and
WHEREAS,
the Existing Lenders recently consented to a $200,000,000 debt issuance by
the
Company and an accordion reduction in the Revolving Commitment to $125,000,000
(the “Consent”), which Consent required that the Company thereafter execute and
enter into an acceptable amendment to the Credit Agreement; and
WHEREAS,
certain of the Existing Lenders (the “Withdrawing Lenders”) are now being paid
in full and are withdrawing from the Credit Agreement and certain new Lenders
are now becoming parties to the Credit Agreement; and
WHEREAS,
the parties now desire to amend the Credit Agreement consistent with the
terms
of the Consent and as the Company has otherwise requested;
WHEREAS,
the Lenders are willing to so amend the Credit Agreement pursuant to the
terms
and conditions of this Fourth Amendment, subject to and effective upon the
compliance with the other conditions set forth hereinbelow (the “Amendment
Effective Date”).
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, Company and Lenders hereby agree to the
following, as of the Amendment Effective Date:
1. The
following definitions set forth in Section
1.1
of the
Credit Agreement are hereby amended in their entirety to be and to read as
follows:
“Base
Rate Margin”
means
the rate per annum in effect and subject to adjustment from time to time
as set
forth in the Pricing Grid.
“Borrowing
Base”
means
an amount equal to the total of (a) 75% of the book value of all Eligible
Accounts, plus
(b) 50%
of the book value of all Eligible Inventory, plus
(c) 80%
of the Orderly Liquidation Value of Equipment. Upon the request of the Company
and the receipt by Lenders of acceptable field exams, Lenders may, in their
sole
discretion, increase such advance rates.
“Debt
Offering”
means
the Company’s issuance in December, 2006 of $200,000,000 of Senior Unsecured
Notes due 2012.
“L/C
Fee Rate”
means
the rate per annum in effect and subject to adjustment from time to time
as set
forth in the Pricing Grid.
“LIBOR
Margin”
means
the rate per annum in effect and subject to adjustment from time to time
as set
forth in the Pricing Grid.
“Revolving
Commitment”
means
$125,000,000, as reduced from time to time pursuant to Section
6.1;
provided, however, at any time during the term hereof upon the written election
of the Company to Administrative Agent, the Company may request, from time
to
time, that the Revolving Commitment be increased up to an amount not in excess
of $250,000,000 (less any mandatory reductions required under Section
6.1.2
from and
after the Amendment Effective Date). In the event of such a request by the
Company, the Administrative Agent shall use commercially reasonable efforts
to
arrange for lenders to provide such increased Revolving Commitment; provided,
however, that in no event shall any of the Lenders, including LaSalle, be
required to increase their respective Commitments hereunder.
“Termination
Date”
means
October 20, 2009.
2. Section
1.1
of the
Credit Agreement is hereby amended by inserting the following definitions
in
their proper alphabetical order:
“Adjusted
Borrowing Base”
shall
mean the Borrowing Base less the portion thereof attributable to the Orderly
Liquidation Value of Equipment.
“Availability
Percentage”
shall
mean the numerical percentage equivalent of the fraction, the numerator of
which
is the Revolving Outstandings and the denominator of which is the Adjusted
Borrowing Base based upon, and determined as of the date of, the most recent
Borrowing Base Certificate furnished by the Company to the Administrative
Agent
from time to time and as of the date of any request by Company for a Revolving
Loan.
“Pricing
Grid”
shall
mean the pricing set forth below based on the Availability
Percentage:
|
Availability
|
Base
Rate
|
LIBOR
|
L/C
|
|
Percentage
|
Margin
|
Margin
|
Fee
Rate
|
|
Less
than or equal to 20%
|
0%
|
1.00%
|
1.00%
|
|
Greater
than 20% and less than or equal to 40%
|
.25%
|
1.25%
|
1.25%
|
|
Greater
than 40% and less than or equal to 60%
|
.50%
|
1.50%
|
1.50%
|
|
Greater
than 60% and less than or equal to 80%
|
.75%
|
1.75%
|
1.75%
|
|
Greater
than 80%
|
1.00%
|
2.00%
|
2.00%
|
3. Section
10.1.5
of the
Credit Agreement is hereby amended in its entirety to be and read as
follows:
“10.1.5 Borrowing
Base Certificates.
Within
thirty (30) days of the end of each Fiscal Quarter of each Fiscal Year, a
Borrowing Base Certificate dated as of the end of such Fiscal Quarter and
executed by a Senior Officer of the Company on behalf of the Company (provided
that (a) the Company shall deliver a Borrowing Base Certificate within
twenty-five (25) days after the end of each calendar month if during such
month
the average daily balance of the Revolving Outstandings exceeded $100,000,000,
(b) at any time an Event of Default exists, the Administrative Agent may
require
the Company to deliver Borrowing Base Certificates more frequently than
quarterly), (c) the Company may, but is not required to, deliver a Borrowing
Base Certificate as of the date of any request by Company for a Revolving
Loan,
and (d) the Borrowing Base Certificate for each Fiscal Quarter shall be based
on
the Company’s unaudited financial statements. In the event the Company fails to
timely deliver a Borrowing Base Certificate as set forth hereinabove, then,
in
addition to all other remedies set forth herein, the Base Rate Margin, LIBOR
Margin and L/C Fee Rate shall be automatically adjusted at the highest rates
set
forth in the Pricing Grid, until such Borrowing Base Certificate is
delivered.”
4. Section
10.6
of the
Credit Agreement is hereby amended in its entirety to be and read as
follows:
“10.6 Use
of
Proceeds.
Use the
proceeds of the Loans, and the Letters of Credit, solely to refinance existing
debt of the Company; to fund and pay for acquisitions approved by the Required
Lenders, for working capital purposes, for Capital Expenditures and for other
general business purposes; and not use or permit any proceeds of any Loan
to be
used, either directly
or indirectly, for the purpose, whether immediate, incidental or ultimate,
of
‘purchasing or carrying’ any Margin Stock.”
5. Section
11.14.1
of the
Credit Agreement is hereby deleted in its entirety.
6. Section
11.14.2
of the
Credit Agreement is hereby amended in its entirety to be and read as
follows:
“11.14.2
Fixed
Charge Coverage Ratio.
In the
event the average daily balance of the Revolving Outstandings exceeds
$100,000,000 during any 30 day period ending during any Fiscal Quarter, not
permit the Fixed Charge Coverage Ratio for the Computation Period ending
on the
last day of such Fiscal Quarter to be less than 1.0 to 1.0.”
7. Section
15.1.1
of the
Credit Agreement is hereby amended in its entirety to be and to read as follows:
“15.1.1.
Waivers
and Amendments.
No
delay on the part of Agent, or any Lender in the exercise of any right, power
or
remedy shall operate as a waiver thereof, nor shall any single or partial
exercise by any of them of any right, power or remedy preclude other or further
exercise thereof, or the exercise of any other rights, power or remedy. No
amendment, modification or waiver of, or consent with respect to, any provision
of this Agreement or the other Loan Documents shall in any event be effective
unless the same shall be in writing and acknowledged by Lenders having aggregate
Pro Rata Shares of not less than the aggregate Pro Rata Shares expressly
designated herein with respect thereto or, in the absence of such designation
as
to any provision of this Agreement, by the Required Lenders, and then any
such
amendment, modification, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. No amendment,
modification, waiver or consent shall (a) extend or increase the Commitment
or
Pro Rata Share of any Lender without the written consent of such Lender,
(b)
extend the date scheduled for payment of any principal (excluding mandatory
prepayments) of or interest on the Loans or any fees payable hereunder without
the written consent of each Lender directly affected thereby, (c) reduce
the
principal amount of any Loan, the rate of interest thereon or any fees payable
hereunder, without the consent of each Lender directly affected thereby;
(d)
change the definition of Required Lenders, any provisions of this Section
15.1
or reduce the aggregate Pro Rata Share required to effect an amendment,
modification, waiver or consent; or (e) release all or any substantial part
of
any Accounts or Inventory which are included within the Collateral, without,
in
each case, the written consent of all Lenders. No provision of Sections 6.2.2
or
6.3 with respect to the timing or application of mandatory prepayments of
the
Loans shall be amended, modified or waived without the consent of the Required
Lenders. No party may be released from its obligations under the Guaranty
nor
may all or any substantial part of the Collateral granted under the Collateral
Documents (which is not otherwise addressed by Section
15.1.1(e)
above)
be released, without, in each case, the written consent of the Required Lenders.
No provision of Section 15 or other provision of this Agreement affecting
the
Agent in its capacity as such shall be amended, modified or waived without
the
consent of the Agent. No provision of this Agreement relating to the rights
or
duties of
the
Issuing Lender in its capacity as such shall be amended, modified or waived
without the consent of the Issuing Lender.”
8. Amended
Schedules 11.1 and 11.2 each in the form attached to this Fourth Amendment
as
Schedules 11.1 and 11.2, respectively, are hereby made part of the Credit
Agreement in substitution and replacement of their counterparts which were
originally attached hereto.
9. Amended
Annex “A”, Exhibit “B” and Exhibit “C” each in the form attached to this Fourth
Amendment as Annex “A”, Exhibit “B” and Exhibit “C”, respectively, are hereby
made a part of the Credit Agreement in substitution and replacement of their
counterparts which were originally attached hereto.
10. The
effectiveness of this Fourth Amendment is subject to the satisfaction of
all of
the following conditions precedent:
|
(a)
|
Lenders
shall have accepted this Fourth Amendment in the spaces provided
for that
purpose below.
|
| (b) | The Guaranty and Collateral Agreement shall have been reaffirmed by the existing Guarantors and Grantors. |
|
(c)
|
The
Company shall pay to the Administrative Agent on or before the
Amendment
Effective Date the amendment fees set forth in that certain fee
letter
from Administrative Agent to the Company dated February 7,
2007.
|
|
(d)
|
The
Lenders shall have received from the Company new Notes in the amount
of
$125,000,000 executed in connection with this Fourth
Amendment.
|
|
(e)
|
The
Obligors shall be in full compliance with the terms of the Loan
Documents
and no Event of Default or Default shall have occurred or be continuing
before or after giving effect to this Fourth
Amendment.
|
|
(f)
|
The
Withdrawing Lenders shall be paid in full by the Company (through
payment
to the Administrative Agent) pursuant to pay-off letters to be
executed
and delivered by the Withdrawing
Lenders.
|
|
(g)
|
The
Administrative Agent shall have received such legal opinions as
Administrative Agent may reasonably
request.
|
|
(h)
|
All
other legal matters incident to the execution and delivery hereof
or
contemplated hereby, including the delivery of all additional or
ancillary
documentation reasonably requested by Agent, shall be completed
and
satisfactory to the Lenders and their respective counsel.
|
Upon
the
Amendment Effective Date, the Existing Lenders shall cancel and return to
the
Company the Notes which were originally delivered to them by the Company
at the
closing of the Third Amendment to the Credit Agreement. If the Amendment
Effective Date shall not have occurred
on or before February 28, 2007 this Fourth Amendment shall be null and void
and
of no further effect.
11. In
order
to induce the Lenders to execute and deliver this Fourth Amendment, the Company
hereby represents to the Lenders that immediately after giving effect to
this
Fourth Amendment, each of the representations and warranties by Company set
forth in Section 9 of the Credit Agreement as amended hereby (except those
representations that relate expressly to an earlier date) are and shall be
true
and correct (except that the representations contained in Section 9.4 shall
be
deemed to refer to the most recent financial statements of the Company delivered
to Lenders pursuant to Section 10.1 of the Credit Agreement) in all material
respects and that Company and the Subsidiaries are and shall be in full
compliance with the terms of the Credit Agreement as so amended and the Loan
Documents and that no Event of Default or Default shall be continuing or
shall
result after giving effect to this Fourth Amendment.
12. This
Fourth Amendment may be executed in any number of counterparts and by different
parties hereto on separate counterparts, each of which when so executed shall
be
an original but all of which shall constitute one and the same instrument.
Except as specifically waived or amended hereby, all of the terms and conditions
of the Credit Agreement shall stand and remain unchanged and in full force
and
effect. The Credit Agreement, as amended hereby and all rights and powers
created thereby and thereunder or under any other Loan Documents are in all
respects ratified and confirmed. No reference to this Fourth Amendment need
be
made in any note, instrument or other document making reference to the Credit
Agreement, any reference to the Credit Agreement in any such note, instrument
or
other document (including, without limitation, the Loan Documents) to be
deemed
to be a reference to the Credit Agreement as amended hereby.
13. This
Fourth Amendment shall be binding upon and enure to the benefit of the Lenders
and the Company and their successors and assigns.
14. This
Fourth Amendment shall be construed and governed by and in accordance with
the
laws of the State of Illinois (without regard to principles of conflicts
of
laws).
