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EXHIBIT 10.4.2
SECOND AMENDMENT TO
LOAN AGREEMENT
THIS SECOND AMENDMENT TO LOAN AGREEMENT (the "Second Amendment") made
and entered into as of the 31st day of July, 1997 by and between:
AUTOMOTIVE ONE PARTS STORES, INC., a Florida corporation, whose mailing
address is 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000 (hereinafter
referred to "Automotive One")
and
A.P.S., INC., a Delaware corporation, and AUTOPARTS FINANCE COMPANY,
INC., a Delaware corporation, each of whose mailing address is 15710
Xxxx X. Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 (hereinafter
respectively referred to as "APS and AFCO")
WITNESSETH
WHEREAS, on or about February 20, 1997, Automotive One, APS and AFCO
entered into a certain Loan Modification Agreement (the "INITIAL LOAN
AGREEMENT") dated February 20, 1997 pursuant to which APS and AFCO renewed,
reinstated and extended to Automotive One certain existing indebtedness
(collectively, the "INDEBTEDNESS") as described in the Initial Loan Agreement.
The Initial Loan Agreement, along with other Loan documents (as defined in the
Initial Loan Agreement) were executed at that time to provide relief to
Automotive One through July 31, 1997 (the "MATURITY DATE") at its request and
as an alternative to APS and AFCO exercising one or more of its creditor rights
or remedies in connection with the indebtedness; and
WHEREAS, Automotive One for one or more reasons in not able to pay off
the Indebtedness by the Maturity Date and has requested additional time in
order to raise the necessary funds to pay off the Indebtedness in full.
Accordingly, Automotive One has requested APS and AFCO to extend the Maturity
Date of July 31, 1997 to December 31, 1997 (the "EXTENDED MATURITY DATE").
Automotive One is also requesting that in regard to the Delinquent Amount
(hereinafter defined), that Automotive One not be required to pay that Amount
at this
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time but that said Delinquent Amount be added to the Open Account Indebtedness
and, in effect, be paid on or before the Extended Maturity Date. APS and AFCO
are prepared to agree to said requests by Automotive One pursuant to the terms
and conditions of this Second Amendment.
NOW, THEREFORE, for and in consideration of the above premises and the
mutual covenants and agreements contained herein, Automotive One, APS and AFCO
agree as follows:
1. DEFINITIONS.
(a) Unless defined or re-defined in this Second Amendment,
capitalized terms contained herein shall have the meanings defined and
set forth in the Initial Loan Agreement.
(b) The term "DELINQUENT AMOUNT" shall mean the delinquent
portion of the Open Account Indebtedness.
2. AMENDMENT OF EXISTING DEFINITIONS. The following definitions set forth
in Section 1.01 of the Initial Loan Agreement are hereby amended as follows:
(a) "MATURITY DATE" shall mean 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 or (ii) December 31, 1997.
3. AMENDMENTS TO INITIAL LOAN AGREEMENT. The Initial Loan Agreement
is hereby amended as follows:
(a) In regard to Section 2.1, the following sets forth as
of the dates set forth below the following amounts due on each
Indebtedness described below:
TOTAL
ACCRUED & UNPAID ACCRUED & UNPAID
PRINCIPAL INTEREST AT NON- INTEREST AT
BALANCE DEFAULT RATE DEFAULT RATE
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APS Indebtedness $2,434,995.73 $425,492.32 $349,803.50
(as of 7/31/97)
AFCO Indebtedness $2,465,467.67 $318,667.96 $39,065.77
(as of 7/31/97)
Open Account Indebtedness
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(i) Outstanding Past Due $ 438,759.55 To be determined To be determined
Balance(1)
(ii) Delinquent past due $ 450,041.34 To be determined To be determined
balance (i.e. the
"DELINQUENT
AMOUNT")(as of
9/2/97)(2)
(iii) Outstanding Current $ 121,657.00 N/A $ 99,679.31
Balance(3)
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TOTALS $5,910,921.29 $ 744,160.28(4) $ 488,548.78(5)
(1) This represents the amount of the Open Account Indebtedness which
was due and owing as of January 25, 1997 less payments and credits
which have been applied to said Indebtedness from January 25, 1997 to
July 31, 1997.
(2) This represents the amount which Automotive One owes to APS as of
September 2, 1997 for the purchase of product and which has not been
paid and is in default. Under Section 3.1 of the Initial Loan
Agreement, Automotive One was required on a weekly basis to pay to
APS the amount due for the immediately preceding weeks purchase of
merchandise from APS. This amount represents said purchases for
which payment is past due as of September 2, 1997 and has not been
made and is inclusive of all credits which may be charged against
said amount. This is the amount referred to above as the Delinquent
Amount.
(3) This represents what is referred to as the current portion of the
Open Account Indebtedness and represents the amounts due for
merchandise purchases for the period beginning August 13, 1997.
This amount must be paid as set forth in Section 3.1 of the Initial
Loan Agreement, i.e. on a weekly basis.
(4) This does not include additional interest which is to be determined
and is to be added to these Totals as set forth in the above Table.
As set forth in Section 5 below, Automotive One reaffirms Section 2.3 of the
Initial Loan Agreement as to the foregoing amounts due and agrees that said
amounts are now absolutely and unconditionally due and owing to APS and AFCO in
accordance with the terms of the loan documents, as modified hereby, and are not
subject to any claim, counterclaim, or other right of off-set.
(b) In regard to Section 2.4, said Section is reaffirmed and so that
there will be no misunderstanding, Automotive One understands and agrees the
following in regard to Product Return Credit:
(i) In regard to any such Credits arising with respect to
cores and defects, said Credits shall be credited by APS first
against the Outstanding Current
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Balance which, as set forth above, is the amount due on a weekly basis
PROVIDED, HOWEVER, if Automotive One again becomes delinquent in paying the
Outstanding Current Balance then, in that event, APS may apply any such
Credits to such of the Open Account Indebtedness as it determines in its
discretion.
(ii) In regard to any other Product Return Credits (i.e. such Credits
arising from a return of merchandise other than cores and defects), such
Credits shall be applied as follows:
A. First to the Delinquent Amounts (which, as set forth in
subparagraph 3(a) above is the amount of $450,041.34).
B. Next to the Outstanding Past Due Balance.
C. Last to the Outstanding Current Balance.
Again, Automotive One understands and agrees that in regard to any Product
Return Credit, any such return and resulting credit must be in strict
compliance with the product return policy of APS.
(iii) In Section 2.4 of the Initial Loan Agreement, it sets forth in
subsection (c) the date of December 25, 1996, which is an acknowledgement
by all parties that all Product Return Credits have been processed for
returns received from Automotive One on or prior to said date. The Parties
now agree that said date of "DECEMBER 25, 1996" is amended to read "JUNE
25, 1997").
(c) Section 2.4 of the Initial Loan Agreement also provides that
Automotive One is available to receive certain change over credits ("CHANGE
OVER CREDITS") in accordance with that certain letter dated February 25,
1997 from Xx. Xxxxxxx X. Xxxxxxx of APS to Mr. Xxxxx Xxxxxx of Automotive
One. In regard to these Change Over Credits, provided Automotive One is not
in default, and otherwise fulfills all its duties and obligations under the
Loan Documents, as modified by the Initial Loan Agreement and this Second
Amendment. APS agrees to extend to January 2, 1998 the time period within
which Automotive One may apply for Change Over Credits. If,
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however, Automotive One defaults under the Loan Documents, as modified by
the Initial Loan Agreement and this Second Amendment (and said default is
not cured within any applicable grace or notice period), then unless waived
by APS, Automotive One shall not be entitled to receive any further Change
Over Credits including any Change Over Credits for which Automotive One has
by said date made application for but not yet received. Automotive One
acknowledges that, as of the date of this Second Amendment, APS has issued
a credit of $22,572.13 in respect of Change Over Credits.
(d) Default interest shall remain subject to the provisions of Section
3.3. If the indebtedness is paid by Automotive One in accordance with
Section 3.1, then APS and AFCO agree to waive any right to default
interest.
(e) In regard to payments to be made by Automotive One for the
purchase of merchandise (under Open Account Indebtedness) under Section 3.1
of the Initial Loan Agreement, all payments shall continue to be made in
accordance with the procedure set forth in the Initial Loan Agreement
provided, however, in the event any check furnished by Automotive One
should be returned for non-payment due to any reason whatsoever, then, in
that event, all future payments at the election of AFCO or APS shall be
made by cashier checks.
4. REAFFIRMATION OF REMEDIES. In connection hereto, Automotive One has
reviewed (with the advice of counsel) the provisions of Article IV of the
Initial Loan Agreement and fully understands the provisions of all said
Sections. Based upon said review, Automotive One specifically and expressly
reaffirms and ratifies all of the provisions of said Article IV. APS and AFCO
have requested this specific paragraph, in addition to the provisions set forth
in paragraph 3(a) above, as APS and AFCO have agreed to the extensions requested
of Automotive One as set forth in this Second Amendment in express reliance upon
the provisions set forth in Article IV, and elsewhere in the Initial Loan
Agreement.
5. AMOUNTS OWING ON INDEBTEDNESS. Automotive One does hereby state and
agree with APS and AFCO that the amounts set forth in paragraph 3(a) of this
Second Amendment are absolutely and unconditionally due and owing to APS and
AFCO as of the date hereof or the date described above, as applicable, and that
said amounts are not subject to any claims, counterclaims, defenses or other
right of off-sets whatsoever, PROVIDED, HOWEVER, Automotive One shall be
entitled to Product Return Credits and Change Over Credits as expressly
permitted under the terms of the Initial Loan Agreement and this Second
Amendment. To the extend Automotive One does have any claim, counterclaim,
defense or other right of off-
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set (again, other than for Product Return Credits and Change Over Credits),
Automotive One does hereby (after consultation with counsel) expressly and
unconditionally waive any such claim, counterclaim, defense or other right of
off-set not only against the Indebtedness set forth above, but as to any and
all other matters involving APS and AFCO. Automotive One understands and
acknowledges that, among other provisions of this Second Amendment, APS and
AFCO would not have agreed to the requested extensions by Automotive One if
Automotive One was unwilling to reaffirm the Indebtedness and provide for the
waivers as set forth in this paragraph.
6. LOAN AGREEMENT. From and after the date of this Second
Amendment, the term "LOAN AGREEMENT", shall mean the Initial Loan Agreement as
modified by this Second Amendment. Further, to the extent applicable, all Loan
Documents shall be deemed hereof to be automatically amended so as to refer to
and reflect the transactions contemplated by the Initial Loan Agreement and
this Second Amendment. This Second Amendment shall be deemed to be a permitted
amendment to the Initial Loan Agreement and, accordingly, shall be deemed to be
a Loan Document.
7. GURANTORS. By their individual execution of this Agreement,
Xx. Xxxxxx X. Xxxxxx, III and Xxxxxx Xxx Xxxxxx, his wife, each a shareholder
of Automotive One, do hereby execute this Second Amendment for the following
purposes:
(a) To acknowledge and agree that the obligations
of APS and AFCO as set forth herein are due and owing as set
forth in this Second Amendment.
(b) To confirm and ratify each Loan Document.
(c) To confirm that the Guaranty is in full force
and effect and is not subject to any claim, counterclaim,
defense, or other right of off-set.
8. COSTS AND ATTORNEYS' FEES. In regard to the cost and
attorneys' fees incurred by APS and AFCO in connection with the matters
contemplated by the Initial Loan Agreement as well as by this Second Amendment,
those costs and attorneys' fees will be added to the Indebtedness. As such,
the indebtedness does not include costs and attorneys' fees occurred by APS and
APCO either in connection with the Initial Loan Agreement or this Second
Amendment, all of which will be added to the indebtedness.
9. RATIFICATION. Except as set forth in this Second Amendment,
Automotive One does hereby ratify and confirm the Initial Loan Agreement, and
all other Loan Documents.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Second
Amendment to be executed, sealed and delivered, as applicable, by their duly
authorized officers on the day and year first above written.
AUTOMOTIVE ONE PARTS STORES, INC.
By:/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, III
President
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, III, Individually
Guarantor
/s/ Xxxxxx Xxx Xxxxxx
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Xxxxxx Xxx Xxxxxx, Individually
Guarantor
A.P.S., INC.
By:/s/ E. Xxxxxx Xxxxxx
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E. Xxxxxx Xxxxxx,
Vice President
AUTOPARTS FINANCE COMPANY, INC.
By:/s/ E. Xxxxxx Xxxxxx
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E. Xxxxxx Xxxxxx,
Vice President
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