SECOND AMENDMENT TO CREDIT AGREEMENT
EXHIBIT
10
SECOND
AMENDMENT TO CREDIT AGREEMENT
This
Second Amendment to Credit Agreement (“Second Amendment”) dated as of October
21, 2005, 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 and LaSalle Bank National Association,
both individually as a Lender and as Administrative Agent (collectively,
the
“Lenders”). 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, the Lenders and General Electric Capital Corporation, as Co-Agent
and a Lender (“GE Capital”) are party 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,
the Company, GE Capital and the Lenders 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”) (as used
herein the Credit Agreement shall mean the Credit Agreement as modified and
amended by the First Amendment); and
WHEREAS,
the Company has requested that the Credit Agreement again be amended,
inter
alia,
to (i)
increase the amount of the Revolving Commitment from $100,000,000 to
$200,000,000; (ii) add Titan Tire Corporation of Freeport, an Illinois
corporation, as a Domestic Subsidiary of the Company thereunder; (iii) delete
GE
Capital as a party thereto as a result of the assignment of its interest
therein
to LaSalle Bank National Association; and (iv) add new Lenders as a result
of
the assignment by LaSalle Bank National Association of a portion of its interest
therein to such Lenders; and
WHEREAS,
the Lenders are willing to so amend the Credit Agreement pursuant to the
terms
and conditions of this Second Amendment.
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, Company and Lenders hereby agree as
follows:
1. From
and
after the date hereof, GE Capital is removed as a party to the Credit Agreement
and all references to GE as a Lender, Co-Agent or Collateral Agent are deleted
hereby and are stricken from the Credit Agreement. The Lenders executing
this
Second Amendment are added, as of the date hereof, as Lenders and as additional
parties to the Credit Agreement.
2. The
definitions of “Agents”, “Co-Agent”, “Commitment Letter”, “Existing Term Loan”,
“Senior Debt” and “Subordinated Notes” as set forth in Section 1.1 of the Credit
Agreement are hereby deleted in their entirety and all reference thereto
are
stricken from the Credit Agreement.
3. 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:
“Capital
Expenditures”
means
all expenditures which, in accordance with GAAP, would be required to be
capitalized and shown on the consolidated balance sheet of the Company,
including expenditures in respect of Capital Leases, but excluding expenditures
made in connection with (a) the Goodyear Acquisition; (b) the purchase of
the
Brownsville Facility for a purchase price not in excess of $18,000,000; and
(c)
the replacement, substitution or restoration of assets to the extent financed
(i) from insurance proceeds (or other similar recoveries) paid on account
of the
loss of or damage to the assets being replaced or restored or (ii) with awards
of compensation arising of the taking by eminent domain or condemnation of
the
assets being replaced.
“Commitment”
means,
as to any Lender, such Lender’s commitment to make Loans and to issue or
participate in Letters of Credit under this Agreement. The amount of each
Lender’s Commitment to make Loans is set forth on Annex A attached hereto as may
be amended, if at all, and attached hereto from time to time.
“Domestic
Subsidiaries”
means
collectively, Titan Tire Corporation, an Illinois corporation, Titan Tire
Corporation of Freeport, an Illinois corporation, Titan Wheel Corporation
of
Illinois, an Illinois corporation and Titan Wheel Corporation of Virginia,
a
Virginia corporation and any Subsidiary formed in compliance with this Agreement
after the Closing Date.
“Eligible
Inventory”
means
Inventory of the Company or any Domestic Subsidiary which meets each of the
following requirements:
(a) it
(i) is
subject to a perfected, first priority Lien in favor of the Agent and (ii)
is
not subject to any other assignment, claim or Lien;
(b) it
is
salable and not obsolete or discontinued;
(c) it
is not
Inventory produced in violation of the Fair Labor Standards Act and subject
to
the “hot goods” provisions contained in Title 29 U.S.C. §215;
(d) it
is not
subject to any agreement or license which would restrict the Agent’s ability to
sell or otherwise dispose of such Inventory;
(e) it
is
located in the United States or in any territory or possession of the United
States that has adopted Article 9 of the Uniform Commercial Code;
(f) it
does
not materially breach any of the representations, warranties or covenants
pertaining to Inventory set forth in the Loan Documents; and
(g) it
has a
value not in excess of $30,000,000 in the aggregate if it is stored outside
of
the Mortgaged Real Property, the Freeport Facility (but only after the closing
of the Goodyear Acquisition, if such closing occurs), the Brownsville Facility
and that facility currently occupied by Titan Wheel Corporation of Virginia
as
its principal place of business; provided, however, that Inventory at the
Brownsville Facility shall be excluded from such cap only in the event
Administrative Agent has received with respect thereto a Landlord’s Waiver in a
form acceptable to Administrative Agent or, in the event the Brownsville
Facility is acquired by Borrower and encumbered by a mortgage, Administrative
Agent has received a Mortgagee’s Waiver in a form acceptable to it.
Inventory
which is at any time Eligible Inventory but which subsequently fails to meet
any
of the foregoing requirements shall forthwith cease to be Eligible
Inventory.
“Funded
Debt”
means,
as to any Person, all Debt of such Person that matures more than one year
from
the date of its creation (or is renewable or extendible, at the option of
such
Person, to a date more than one year from such date) but excluding therefrom
the
Senior Convertible Notes, the IRB and the Debt Offering (provided such exclusion
shall apply to the Debt Offering only at such time as, and to the extent
that,
the Net Cash Proceeds of the Debt Offering are used to prepay the
Loans).
“Loan
Documents”
means
this Agreement, the Notes, the Letter of Credit, the Master Letter of Credit
Agreement, the Letter of Credit Applications, the Fee Letter, the Collateral
Documents, the Subordination Agreements and all amendments, modifications,
restatements, replacements or substitutions thereof along with all documents,
instruments and agreements delivered in connection with any of the foregoing.
“Mortgage”
means a
mortgage, deed of trust or similar instrument granting the Administrative
Agent
a Lien on real property owned by the Company in Quincy, Illinois, by Titan
Tire
Corporation in Des Moines, Iowa, and, if purchased by a Loan Party who finances
said purchase by a Loan made pursuant hereto, on the Brownsville Facility,
but
excluding the Freeport Facility and all other real estate owned by any Loan
Party.
“Mortgaged
Real Property”
means
the real property of the Company identified in the Mortgages and located
in
Quincy, Illinois and Des Moines, Iowa, together with the Brownsville Facility,
if purchased by a Loan Party who finances said purchase through a Loan made
pursuant hereto.
“Non-Use
Fee Rate”
means
one-quarter of one percent (.25%).
“Revolving
Commitment”
means
$200,000,000, as reduced from time to time pursuant to Section
6.1.
“Revolving
Loan Availability”
means
that the lesser of (i) the Revolving Commitment, and (ii) the Borrowing Base;
provided,
however, until (x) the closing of the Goodyear Acquisition pursuant to the
terms
of the Asset Purchase Agreement (as in effect on the Effective Date or as
amended with approval of the Administrative Agent), or (y) the closing of
such
other acquisition as is consented to by Required Lenders, the Revolving Loan
Availability shall not exceed one hundred million dollars
($100,000,000.00).
“Senior
Convertible Notes”
means
the original offering of $115,000,000 Senior Convertible Notes due 2009 issued
by the Company in 2004.
“Subordinated
Debt”
means
the Senior Convertible Notes, the Foreign Affiliate Note and any other unsecured
consensual Debt of the Company, including the Debt Offering, which has
subordination terms, covenants, pricing and other terms which have been approved
in writing by the Required Lenders.
“Termination
Date”
means
the earlier to occur of (a) three (3) years from the Effective Date; or (b)
such
other date on which the Commitments terminate pursuant to Section
6
or
13.
4. Section
1.1 of the Credit Agreement is hereby amended by inserting the following
definitions in its proper alphabetical order:
“Agent”
means
LaSalle and any successor thereto in such capacity.
“Brownsville
Facility”
means
the land, building and improvements located at 0000 Xxxxxxx Xxxx Xxxx,
Xxxxxxxxxxx, Xxxxx leased to Titan Tire Corporation of Texas.
“Debt
Offering”
means
the Company’s proposed issuance of either (i) up to $150,000,000 (one hundred
fifty million U.S. dollars) of senior unsecured debt offering; or (ii) such
greater amount, i.e. more than $150,000,000 (one hundred fifty million U.S.
dollars) of senior unsecured debt offering as may be approved by the Required
Lenders.
“EBIT”
means,
for any period, Consolidated Net Income for such period plus all amounts
deducted in arriving at such Consolidated Net Income amount for such period
for
Interest Expense and for foreign, federal, state and local income tax
expense.
“Equity
Offering”
means
the Company’s proposed issuance of shares of its common capital stock of up to
$100,000,000 (one hundred million U.S. dollars) in capital plus “green shoe” not
in excess of $15,000,000 (fifteen million U.S. dollars).
“Fee
Letter”
means
the fee letter dated May 25, 2005 between the Administrative Agent and the
Company.
“Freeport
Facility”
means
the real estate, building, warehouse and improvements in Freeport, Illinois
owned or leased by Goodyear Tire and to be acquired or leased, as the case
may
be, by Titan Tire Corporation as part of the Goodyear Acquisition.
“Goodyear
Acquisition”
means
the acquisition by Titan Tire Corporation of certain assets including, but
not
limited to, the Freeport Facility upon the terms and conditions set forth
in
that certain Asset Purchase Agreement, as amended, between Titan Tire
Corporation and Goodyear Tire dated February 28, 2005 (the “Asset Purchase
Agreement”). Immediately following the closing of the Goodyear Acquisition,
Titan Tire Corporation shall transfer all assets acquired from Goodyear Tire
to
Titan Tire Corporation of Freeport.
“Goodyear
Tire”
means
Goodyear Tire & Rubber Company, a Delaware corporation, and its subsidiaries
Goodyear Canada, Inc., Goodyear Servicios Comerciales, S. De X.X. De C.V.,
and
The Kelly-Springfield Tire Corporation.
5. The
Credit Agreement is amended by changing each and every reference in the Credit
Agreement (after giving effect to Sections 1, 2 and 4 of this Second Amendment)
to “Agents” to hereinafter be “Administrative Agent”.
6. Section
2.1.3(a) of the Credit Agreement is hereby amended in its entirety to be
and to
read as follows:
(a)
the
aggregate Stated Amount of all Letters of Credit shall not at any time exceed
$40,000,000.00.
7. The
third
sentence of Section 2.2.1 of the Credit Agreement is hereby amended in its
entirety to be and to read as follows:
Base
Rate
Loans and LIBOR Loans may be outstanding at the same time, provided that
not
more then ten (10) different Groups of LIBOR Loans shall be outstanding at
any
time.
8. Section
5.3 of the Credit Agreement is hereby amended in its entirety to be and to
read
as follows:
“5.3
Administrative
Agent’s Fees.
The
Company agrees to pay the Administrative Agent the fees as are set forth
in the
Fee Letter.”
9. The
Credit Agreement is amended by deleting Sections 5.4 and 5.5 entirely
therefrom.
10. Section
6.1.2 of the Credit Agreement is hereby amended in its entirety to be and
to
read as follows:
“6.1.2 Mandatory
Reductions of Revolving Commitment.
On the
date of a Mandatory Prepayment Event under Section
6.2.2(a)(iii)
hereof,
the Revolving Commitment shall be reduced by the amount of such mandatory
prepayment; provided, however, such reduction shall not exceed $100,000,000.00.
In the event of a Mandatory Prepayment Event under Section
6.2.2(a)(i) or (ii)
hereof,
the Revolving Commitment shall not be reduced by any amount.”
11. Sections
6.2.2(a)(ii) and (iii) are hereby amended in their entirety to be and read
as
follows:
(ii)
Concurrently with the receipt by any Loan Party of any Net Cash Proceeds
from
any issuance of Capital Securities of any Loan Party (excluding (x) any issuance
of Capital Securities pursuant to any employee or director option program,
benefit plan or compensation program; (y) any issuance by a Subsidiary to
the
Company or another Subsidiary to the Company or another Subsidiary or (z)
if
waived by the Required Lenders, any issuance of Capital Securities in connection
with a Change of Control of any Loan Party), in an amount equal to 100% of
such
Net Cash Proceeds (except to the extent such proceeds are intended to be,
and in
fact are, reinvested within 180 days from such date of issuance).
(iii)
Concurrently with the receipt by any Loan Party of any Net Cash Proceeds
from
any issuance of any Debt of any Loan Party (excluding Debt permitted by
Section
11.1(a)
through
(j) and (l) hereof), in an amount equal to 100% of such Net Cash Proceeds
to the
extent not used for acquisitions by a Loan Party within one hundred eighty
(180)
days thereafter.
12. The
reference to “Collateral Agent” in Section 7.4 of the Credit Agreement shall be
deleted and in Section 11.11 of the Credit Agreement the references to
“Collateral Agent” shall be deleted and replaced with “Administrative
Agent”.
13. Section
7.5 of the Credit Agreement is hereby amended in its entirety to be and read
as
follows:
7.5 Proration
of Payments.
If any
Lender shall obtain any payment or other recovery (whether voluntary,
involuntary, by application of offset or otherwise), on account of (a) principal
of or interest on any Loan, but excluding (i) any payment pursuant to Section
5,
Section 8.7 or 15.6, (ii) payments of interest on any Affected Loan or, (iii)
payments to LaSalle with respect to the letter of credit supporting an existing
IRB or (b) its participation in any Letter of Credit in excess of its applicable
Pro Rata Share of payments and other recoveries obtained by all Lenders on
account of principal of and interest on the Loans (or such participation)
then
held by them, then such Lender shall purchase from the other Lenders such
participations in the Loans (or sub-participations in Letters of Credit)
held by
them as shall be necessary to cause such purchasing Lender to share the excess
payment or other recovery ratably with each of them; provided that if all
or any
portion of the excess payment or other recovery is thereafter recovered from
such purchasing Lender, the purchase shall be rescinded and the purchase
price
restored to the extent of such recovery.
14. Section
9.15 of the Credit Agreement is hereby amended in its entirety to be and
to read
as follows:
9.15 Environmental
Matters.
The
on-going operations of each Loan Party comply in all respects with all
Environmental Laws, except such non-compliance which could not (if enforced
in
accordance with applicable law) reasonably be expected to result, either
individually or in the aggregate, in a Material Adverse Effect. Each Loan
Party
has obtained, and maintained in good standing, all licenses, permits,
authorizations, registrations and other approvals required under any
Environmental Law and required for their respective ordinary course operations,
and for their reasonably anticipated future operations, and each Loan Party
is
in compliance with all terms and conditions thereof, except where the failure
to
do so could not reasonably be expected to result in material liability to
any
Loan Party and could not reasonably be expected to result, either individually
or in the aggregate, in a Material Adverse Effect. No Loan Party or any of
its
properties or operations is subject to, or reasonably anticipates the issuance
of, any written order from or agreement with any Federal, state or local
governmental authority, nor subject to any judicial or docketed administrative
or other proceeding, respecting any Environmental Law, Environmental Claim
or
Hazardous Substance. There are no Hazardous Substances or other conditions
or
circumstances existing with respect to any property, except for the Freeport
Facility, arising from operations prior to the Closing Date, or relating
to any
waste disposal, of any Loan Party that would reasonably be expected to result,
either individually or in the aggregate, in a Material Adverse Effect. Except
for Titan Tire Corporation (only with respect to the Freeport Facility after
the
closing of the Goodyear Acquisition, if such closing occurs), no Loan Party
has
any underground storage tanks that are not properly registered or permitted
under applicable Environmental Laws or, to the best of Company’s knowledge, have
released, leaked, disposed of or otherwise discharged Hazardous
Substances.
15. Section
9.23 of the Credit Agreement is hereby amended in its entirety to be and
to read
as follows:
9.23 Subordinated
Debt.
The
Subordination provisions of the Subordinated Debt are enforceable against
the
holders of the Subordinated Debt by the Administrative Agent and the
Lenders.
16. Section
10.1.5(a) of the Credit Agreement is hereby amended in its entirety to be
and to
read as follows:
(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 $175,000,000.00;
17. Section
10.6 of the Credit Agreement is hereby amended in its entirety to be and
to read
as follows:
10.6 Use
of
Proceeds.
Use the
proceeds of the Loans, and the Letters of Credit, solely to pay off GE Capital
and to refinance existing debt of the Company; to fund and to pay for the
Goodyear Acquisition or other 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.
18. Section
10.1.8 of the Credit Agreement is hereby amended in its entirety to be and
read
as follows:
10.1.8 Debt
Notices.
Promptly following receipt, copies of any notices (including notices of default
or acceleration) received from any holder or trustee of, under or with respect
to any Debt in excess of $2,000,000.00.
19. Section
10.14 of the Credit Agreement is hereby amended in its entirety to be and
to
read as follows:
10.14 Subsidiaries’
Assets.
Not
permit any Subsidiaries other than a Foreign Subsidiary or a Domestic Subsidiary
to own assets having an aggregate book value which is greater than 130% of
that
aggregate amount expressed in Schedule 9.24.
20. Section
11.1 of the Credit Agreement is hereby amended by (i) changing the amount
“$3,000,000.00” in Section 11.1(b) and Section 11.1(j) to “$6,000,000.00” and
(ii) inserting the following Sections (k) and (l) at the end
thereof:
(k)
the
Debt Offering.
(l)
Debt
incurred in connection with the acquisition of the Brownsville Facility for
a
purchase price not in excess of $18,000,000.
21. Section
11.2 of the Credit Agreement is hereby amended by: (i) amending the introductory
paragraph of said Section 11.2 in its entirety to be and read as
follows:
“11.2
Liens.
Not,
and not permit any other Loan Party to, create or permit to exist any Lien
on
any of its real or personal properties, assets or rights of whatsoever nature
(whether now owned or hereafter acquired) including without limitations the
Freeport Facility, except:”
(ii) changing
the amount “$3,000,000.00” as set forth in Section 11.2(b)(i) thereof to
“$6,000,000.00”; and
(iii) inserting
the following Section 11.2(i) at the end of such Section 11.2:
|
“(i)
|
a
Lien on the Brownsville Facility in connection with the Debt described
in
Section 11.1 (l) hereof.”
|
22. Section
11.3 of the Credit Agreement is hereby amended in its entirety to be and
to read
as follows:
“11.3 Operating
Leases.
Not
permit the aggregate amount of all rental payments under Operating Leases
made
(or scheduled to be made) by the Loan Parties (on a consolidated basis) to
exceed $12,000,000.00 in any Fiscal Year, except in any Fiscal Year when
prepayment described in Section
11.4(e)(vi)
may
occur.”
23. Section
11.4 of the Credit Agreement is hereby amended by (i) amending Section (b)
thereof in its entirety to be and read as follows: “purchase or redeem any of
its Capital Securities in excess of $2,000,000.00 in the aggregate in any
Fiscal
Year”; (ii) amending in its entirety (iii) in the last sentence of Section 11.4
to be and to read as follows: “(iii) the Company may pay in whole or in part any
IRB at any time” and (iii) inserting the following sentence immediately after
the last sentence of Section 11.4: “Notwithstanding the foregoing, at any time
when, and as long as: (x) after giving effect to the actions described in
Sections (a) through (e) above, the Revolving Outstandings are less than
$100,000,000.00, and (y) no Default or Event of Default has occurred and
is
continuing, then the Company may make restricted payments as set forth in
Sections (a) through (e) above in an amount not in excess of $50,000,000.00
in
the aggregate during the term hereof.”
24. Section
11.5 of the Credit Agreement is hereby amended by: (i) deleting the word
“Agents’” in Section 11.5(b) thereof and replacing it with the words “Required
Lenders’”; and (ii) adding the following sentence to the end of Section 11.5 of
the Credit Agreement to be and read as follows:
“The
Goodyear Acquisition is expressly permitted but only in accordance with the
terms and conditions of the Asset Purchase Agreement and provided that
Administrative Agent shall have received evidence at or before such closing
that
the assets to be acquired are free of all material liens or encumbrances.
The
Administrative Agent shall have the right to approve any material amendments
to
the Asset Purchase Agreement from and after the Effective Date and shall
receive
from Borrower, as soon as practical and in any event prior to the disbursement
of any Revolving Loans to fund the Goodyear Acquisition, a copy of all
amendments to the Asset Purchase Agreement.”
25. Section
11.7 of the Credit Agreement is hereby amended in its entirety to be and
to read
as follows:
“11.7 Transactions
with Affiliates.
Not,
and not permit any other Loan Party to, enter into, or cause, suffer or permit
to exist any transaction, arrangement or contract with any of its other
Affiliates (other than the Loan Parties) other than in the ordinary course
of
business and which is on fair and reasonable terms which are no less favorable
than are obtainable from any Person which is not one of its Affiliates. In
addition, if any such transaction or series of related transactions involves
payments in excess of $2,000,000.00
in the
aggregate, the terms of these transactions if not previously disclosed in
Schedule
11.7
must be
disclosed in advance to Agents. All such transactions existing as of the
date
hereof are described on Schedule
11.7.
No Loan
Party shall enter into any lending or borrowing transaction with any employees
of any Loan Party, except loans to their respective employees on an arm’s-length
basis in the ordinary course of business consistent with past practices for
travel expenses, relocation costs and similar purposes and stock option
financing up to a maximum of $500,000.00 in the aggregate at any one time
outstanding.”
26. Section
11.10 of the Credit Agreement is hereby amended in its entirety to be and
to
read as follows:
“11.10 Business
Activities; Issuance of Equity.
Not, and
not permit any other Loan Party to, engage in any line of business other
than
the businesses engaged on the date hereof and businesses reasonably related
thereto and shall not and not permit any other Loan Party to change its business
objectives, purchases, or operations if such activities could in any way
adversely effect the repayment of the Loans or any other Debt or could
reasonably be expected to result in a Material Adverse Effect. Not, and not
permit any other Loan Party to, issue any Capital Securities other than (a)
the
Equity Offering; (b) any issuance of shares of the Company’s common Capital
Securities pursuant to any employee or directors option program, benefit
plan or
compensation program; (c) any issuance by a Subsidiary to the Company or
another
Subsidiary in accordance with Section
11.4;
(d) the
issuance of any other Capital Securities as set out in this Agreement (e.g.
the
Senior Convertible Notes conversion to common Capital Securities); or (e)
for a
merger or acquisition with the prior written consent of the Administrative
Agent, which shall not be unreasonably withheld.”
27. Section
11.12 of the Credit Agreement is hereby amended in its entirety to be and
to
read as follows:
“Section
11.12
Restriction
of Amendments to Certain Documents.
Not
amend or otherwise modify, or waive any rights under, the IRB, the Foreign
Affiliate Loan, or Senior Convertible Notes if, in any case, such amendment,
modification or waiver could be adverse to the interests of the
Lenders.”
28. Section
11.14.1 of the Credit Agreement is hereby amended in its entirety to be and
read
as follows:
“11.14.1
Minimum
Book Value.
Not
permit the aggregate book value of Eligible Accounts and Eligible Inventory
to:
(a) be less than $75,000,000.00 at any time; or (b) be less than $100,000,000.00
at any time during any 30 day period in which the average daily balance of
the
Revolving Outstandings for such period exceeds $100,000,000.00.”
29. Section
11.14.2 of the Credit Agreement is hereby amended in its entirety to be and
to
read as follows:
“11.14.2 Fixed
Charge Coverage Ratio.
In the
event the average daily balance of the Revolving Outstandings exceeds
$175,000,000.00 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.”
30. Section
11.14.3 of the Credit Agreement is hereby amended in its entirety to be and
to
read as follows:
“11.14.3 Collateral
Coverage.
Not
permit (a) the sum of the Borrowing Base, plus
the
unrestricted cash of all Obligors; divided
by (b)
the Revolving Outstandings, to be less than one and one-quarter
(1.25).”
31. Section
11.17 of the Credit Agreement is hereby amended in its entirety to be and
to
read as follows:
“11.17 Inventory.
From
and after December 31, 2005, not permit Inventory having an aggregate book
value
exceeding Sixty Million and No/100 Dollars ($60,000,000.00) at any time to
be in
a location or locations other than the Mortgaged Real Property, the Brownsville
Facility, the Freeport Facility (after the closing of the Goodyear Acquisition,
if such closing occurs), and that facility currently occupied by Titan Wheel
Corporation of Virginia as its principal place of business; provided, however,
that Inventory at the Brownsville Facility shall be excluded from such cap
only
in the event Administrative Agent has received with respect thereto a Landlord’s
Waiver in a form acceptable to Administrative Agent or, in the event the
Brownsville Facility is acquired by Borrower and encumbered by a mortgage,
Administrative Agent has received a Mortgagee’s Waiver in a form acceptable to
it.”
32. Section
13.1.13 of the Credit Agreement is hereby amended in its entirety to be and
to
read as follows:
“Section
13.1.13 Intentionally Omitted.”
33. Section
15.1 of the Credit Agreement is hereby amended in its entirety to be and
to read
as follows:
“15.1
Waivers,
Amendments and Replacement of Lenders.
15.1.1.
Waivers
and Amendments.
No
delay on the part of any 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
an 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 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;
or (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, 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 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 be released, without, in
each
case, the written consent of the Required Lenders. No provision of Section
14 or
other provision of this Agreement affecting any Agent in its capacity as
such
shall be amended, modified or waived without the consent of the such 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.
15.1.2.
Replacement
of Dissenting Lenders.
In the
event any Lender does not agree to any amendment, modification, waiver, or
consent that was otherwise duly approved pursuant to the terms of this Agreement
(the “Dissenting Lenders”), then the Company and/or Administrative Agent may
designate one or more financial institution, which may or may not be a Lender,
which is acceptable to the Company, Administrative Agent and the Issuing
Lender
in their reasonable discretion (such other bank being called a “New Lender”) to
purchase the Loans of such Dissenting Lenders and such Dissenting Lender’s
rights hereunder, without recourse to or warranty by, or expense to, such
Dissenting Lender, for a purchase price equal to the outstanding principal
amount of the Loans payable to such Dissenting Lender plus any accrued but
unpaid interest on such Loans and all accrued but unpaid fees owed to such
Dissenting Lenders and any other amounts payable to such Dissenting Lenders
under this Agreement, and to assume all the obligations of such Dissenting
Lenders hereunder, and, upon such purchase and assumption (pursuant to an
Assignment Agreement), such Dissenting Lenders shall no longer be a party
hereto
or have any rights hereunder (other than rights with respect to indemnities
and
similar rights applicable to such Dissenting Lenders prior to the date of
such
purchase and assumption) and shall be relieved from all obligations to the
Company hereunder, and the New Lenders shall succeed to the rights and
obligations of such Dissenting Lenders hereunder. Each Dissenting Lender
shall
sell its Loan as set forth in this Section 15.1 and use reasonable efforts
to
cooperate therewith. An existing Lender who is not a Dissenting Lender shall
be
an acceptable New Lender.”
34. The
last
sentence of Section 15.9 of the Credit Agreement is hereby amended by deleting
therefrom the phrase “; provided that GE Capital may not be referenced in any
such advertising materials without GE Capital’s prior written
consent”.
35. Amended
Schedules 9.8, 9.16, 9.17, 9.21, 9.24, 11.1 and 11.2 each in the form attached
to this Second Amendment as Schedules 9.8, 9.16, 9.17, 9.21, 9.24, 11.1 and
11.2, respectively, are hereby made a part of the Credit Agreement in
substitution of their counterparts which were originally attached
hereto.
36. Amended
Annex “A”, Annex “B”, Exhibit “A”, Exhibit “B” and Exhibit “C” each in the form
attached to this Second Amendment as Annex “A”, Annex “B”, Exhibit “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.
37. The
effectiveness of this Second Amendment is subject to the satisfaction of
all of
the following conditions precedent:
(a) Lenders
shall have accepted this Second Amendment in the spaces provided for that
purpose below.
(b) The
Guaranty and Collateral Agreement shall have been (i) amended by the parties
thereto to (x) add, but only after the closing of the Goodyear Acquisition,
if
such closing occurs, Titan Tire Corporation of Freeport as a Grantor and
Guarantor; and (y) delete GE as a party thereto, and (ii) reaffirmed by the
Grantors.
(c) The
Lenders shall have received from the Company new Notes in the amount of
$200,000,000.00 executed in connection with this Second Amendment.
(d) The
Company and the Loan Parties 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 after giving effect to this Second Amendment.
(e) All
other
legal matters incident to the execution and delivery hereof contemplated
hereby
and to the transactions contemplated hereby (including the delivery of ancillary
documentation requested by Agent as set forth in the Closing Checklist delivered
to the Company on or before the date hereof except for those deliveries relating
to the Goodyear Acquisition that need only be delivered to the Agent upon
the
closing thereof, if such closing occurs) shall be satisfactory to the Lenders
and their respective counsel.
Upon
the
date all of the foregoing conditions precedent have been satisfied, this
Second
Amendment shall take effect (the “Effective Date”). Thereupon, the LaSalle Bank
National Association shall cancel and return to the Company the Notes which
were
originally delivered to it and GE Capital by the Company at the Closing of
the
Credit Agreement.
38. In
order
to induce the Lenders to execute and deliver this Second Amendment, the Company
hereby represents to the Lenders: (a) that immediately after giving effect
to
this Second 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) 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 Second Amendment; and (b) that the negative EBIT of Goodyear Tire’s farm
tire division based at the Freeport Facility (calculated without a charge
or
deduction for pension costs or the expense of retiree medical benefits) for
its
most recently ended fiscal year did not exceed $20,000,000; provided, however,
that this representation shall only be deemed to have been made if the Goodyear
Acquisition closes.
39. As
further consideration for the Lenders to execute and deliver this Second
Amendment, the Company hereby represents, warrants and agrees that Lenders
and
Administrative Agent are in full compliance with all of the terms of the
Credit
Agreement and other Loan Documents as of the date hereof and hereby waives
any
claims of any kind that it may now possess or which otherwise relate to any
act
or omissions of the Lenders or Administrative Agent at any time prior to
the
date hereof.
40. This
Second 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 such other documents are in all respects
ratified and confirmed. No reference to this Second 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.
This
Second Amendment shall be binding upon and enure to the benefit of the Lenders
and the Company and their successors and assigns.
This
Second 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).
