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EXHIBIT 10.4
LOAN AGREEMENT
THE STATE OF FLORIDA )
) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF ORANGE )
This Loan Agreement (the "AGREEMENT") dated as of October 25, 1995, is between
AUTOMOTIVE ONE PART STORES, INC. AKA AUTOMOTIVE ONE PARTS STORES, INC., a
Florida corporation, (the "BORROWER") and AUTOPARTS FINANCE COMPANY, INC., a
Delaware corporation, and A. P. S., INC., a Delaware corporation, (both
separately and collectively the "LENDERS").
The Borrower desires to borrow from the Lenders the amount of money set forth in
the promissory notes hereinafter described and credit for purchases of
merchandise on an open account basis and the Lenders are willing, subject to and
upon the terms and conditions herein set forth and in such other documents as
Borrower may execute for the benefit of Lenders, to lend such amount and to
provide open account credit to the Borrower.
Now, therefore, it is mutually agreed:
1. LOAN CLOSING DATE.
Subject to and upon the terms and conditions herein set forth, including the
definitions contained herein, the Lenders shall lend to the Borrower and the
Borrower shall borrow from the Lenders the sum of Four Million Nine Hundred
Fifty Thousand and No/100 Dollars ($4,950,000.00) evidenced by two (2)
promissory notes, one in the principal amount of Two Million Five Hundred
Thousand and No/100 Dollars ($2,500,000.00) and the other in the principal
amount of Two Million Four Hundred Fifty Thousand and No/100 Dollars
($2,450,000.00). Such borrowing is being made simultaneously with the execution
of this Agreement at Orange County, Florida, on October 25, 1995, (the "Closing
Date").
The borrowing shall be evidenced by two (2) Promissory Notes, payable to the
order of Lenders in the forms annexed hereto as EXHIBITS "A-1" AND "A-2" (the
"NOTES"), which shall be dated the Closing Date, duly executed by the Borrower
with blanks appropriately filled in conformity herewith. The Notes shall mature
on October 25, 2010 and October 24, 1996, respectively unless earlier matured by
acceleration or as hereinafter described. The foregoing notwithstanding, the
Notes shall immediately become due and payable upon the sale of any assets of
Borrower not in the ordinary course of business or the
EXHIBIT A
transfer, assignment, sale, gift or other conveyance by any stockholder of
Borrower of any equity or debt security of Borrower to any person or entity
which is not a stockholder of Borrower on the date of the execution hereof.
The Notes shall bear interest from the date thereof to maturity on the unpaid
principal balance thereon at the rates specified therein.
2. SECURITY AND GUARANTEE
As security for and to guarantee the full and timely payment of the principal
and interest on the Notes, open account credit for the purchase of merchandise,
and all other indebtedness, sums due, expenses, advances or
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liabilities of the Borrower to the Lenders, whether now existing, created hereby
or hereafter arising (individually and collectively the "INDEBTEDNESS"):
a. The Borrower shall duly execute and deliver, or have executed and
delivered, to the Lenders, Security Agreements in the forms attached hereto as
EXHIBITS "B-1", "B-2" AND "B-3" (the "SECURITY AGREEMENTS") and a sufficient
quantity of Financing Statements pursuant to the Uniform Commercial Code, each
in form and substance satisfactory to the Lenders and its counsel, covering all
of the assets of Borrower more specifically described thereon, wherever located
and whether now owned or hereafter acquired by the Borrower and any proceeds
thereof, and shall additionally deliver to Lenders mortgages each in form and
substance satisfactory to Lenders or their counsel, executed by Borrower, upon
the real property set forth on EXHIBIT "C" hereto (the "Mortgages").
b. The Borrower shall cause to be duly executed and delivered to the
Lenders guarantees of the Borrower's Indebtedness to the Lenders and the
performance of all agreements, covenants, representations and warranties
hereunder and under any other agreement or understanding between Lenders and
Borrower (including but not limited to a Product Purchase Agreement dated
October 25, 1995 (the "Product Purchase Agreement") , a copy of which is
attached hereto as EXHIBIT "D".
c. The Lenders will, at Borrower's sole cost and expense, cause all
instruments and documents given as security pursuant to this Agreement to be
duly recorded and/or filed in all places necessary, in the reasonable opinion of
the Lenders or Lenders' counsel, to perfect and protect the Notes, any liens,
Mortgages or security interests of the Lenders in the property covered thereby.
The Borrower hereby authorizes the Lenders to file any financing statement in
respect of any security interest created pursuant to the Agreement which may at
any time be required or which, in the reasonable opinion of the Lenders, may at
any time be desirable although the same may have been executed only by the
Lenders, or, at the option of the Lenders, to sign such financing statement on
behalf of the Borrower and file the same, and the Lenders hereby irrevocably
designates the Lenders, its agent, representative, and designee as agent and
attorney-in-fact for the Borrower for this purpose. In the event that any
re-recording or refiling thereof (or the filing of any statements of
continuation or assignment of any financing statement) is required to protect
and preserve such Notes, liens, Mortgages or security interests, the Lenders
shall, at Borrower" s cost and expense, cause the same to be recorded and/or
refiled at the time and in the manner required by the Lenders.
e. The Borrower shall deliver to Lenders within thirty (30) days of
closing, waivers of landlords liens all in a form satisfactory to counsel for
Lenders.
f. The Borrower shall deliver to Lenders at closing a subordination
agreements of the forms set forth in EXHIBITS "E-1" AND "E-2" hereto.
3. CONDITIONS PRECEDENT
The effectiveness of this Agreement and the obligation of the Lenders to
consummate any of the transactions contemplated hereby shall, unless waived in
writing by Lenders, be subject to the satisfaction of each, every and all of the
following conditions precedent, at or prior to the time of the Closing Date.
a. The Lenders shall have received all the instruments, documents and
property then required to be delivered pursuant to Section 2 hereof or
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pursuant to the instruments and documents referred to in Section 2 hereof, and
the same shall be in full force and effect.
b. The Lenders shall have received a duly executed Notes in accordance
with Section 1 hereof.
c. All representations and warranties contained herein or otherwise
made to the Lenders in connection herewith, shall be true and correct.
d. There shall exist no Event of Default as defined in Section 7 hereof
and no condition, event or act which, with notice or lapse of time, or both,
would constitute an Event of Default.
e. All corporate and legal proceedings and all documents and
instruments in connection with the borrowing and pursuant to Section 2 and
Section 3 shall be satisfactory in form and substance to the Lenders and to
Lenders' counsel; the Lenders and their counsel shall have received all
information and copies of all documents, including records of corporate
proceedings, which the Lenders or their counsel may have reasonably required in
connection therewith, such documents where required by the Lenders or their
counsel to be certified by appropriate corporate or government authorities.
4. USE OF PROCEEDS
The Borrower agrees that the proceeds of the borrowing hereunder shall be used
to refinance existing indebtedness with the Lenders and to pay off certain other
existing indebtedness for which Borrower will deliver to the Lenders at closing
duly executed Pay Proceeds Letter(s).
5. REPRESENTATION AND WARRANTIES OF BORROWER
Borrower represents and warrants to the Lenders the following, all of which
representations and warranties shall survive the closing hereof.
a. Borrower (i) is a corporation duly organized, validly existing and
in good standing under the laws of the State of Florida, has not amended or
altered its Articles of Incorporation since its date of incorporation, and (ii)
is entitled to own or lease its properties and to carry on it's business at the
place(s) where such properties are now owned, leased or operated.
b. The financial statement of the Borrower attached hereto and marked
EXHIBIT "F" is complete and has been prepared in accordance with generally
accepted accounting principles. Such financial statement fairly presents the
financial condition of the Borrower at the date of such statement, and since
such date there has been no material change in the financial condition of the
Borrower.
c. There are no judicial, quasi-judicial or administrative proceedings
of any kind or nature now pending or threatened before any court or
administrative body in any manner involving Borrower, the Guarantors or any
properties of Borrower or the Guarantors, except as noted on EXHIBIT "G" hereto.
d. The execution, delivery and performance of this Agreement by
Borrower or the execution, delivery and performance of any documents,
contemplated herein or in the Notes, Security Agreements, Mortgages and other
documents executed contemporaneously herewith, shall not constitute a default
under any written or oral agreement to which Borrower or any Guarantor is a
party, nor the order of any court or any governmental or quasi-governmental body
or agency.
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e. This Agreement, the Notes, the Security Agreements, the Mortgages
and any other documents or agreements and actions contemplated herein have been
validly authorized by the Borrower, and its Board of Directors and Stockholders.
6. COVENANTS OF BORROWERS
As long as any part of the Indebtedness secured hereby remains unpaid, Borrower
covenants and represents to Lenders the following:
a. The Borrower shall maintain insurance in responsible companies in
such amounts as are reasonably requested by Lenders and against such risks as is
customarily carried by owners of similar businesses and properties. All such
insurance policies shall contain loss payable clauses payable to Borrower and
Lenders as their interests may appear, and all insurance policies and renewals
thereof shall be delivered to Lenders immediately upon issuance thereof,
together with receipts showing payment of all premiums thereon. Lenders shall
have the right to collect and receive all money that may become payable and
collectible on all such policies (whether through loss or damage, or otherwise)
and apply all or any part of the same, less a reasonable collection expense, as
a credit on the Indebtedness, even though such Indebtedness may not be due
according to its terms. At its option, Lenders may use any part of such money
for the replacement and restoration of any part of the damaged or destroyed
property. Any such money held by Lenders for replacement or restoration shall be
held without payment or allowance of interest. This provision shall not create
any duty on the part of the Lenders to collect insurance proceeds and the
Lenders shall not be responsible for the failure to collect the same regardless
of the cause of such failure.
b. The Borrower shall not further mortgage, pledge or voluntarily
subject to any lien or encumbrance any property or assets now owned or
hereinafter acquired by it without having first received the prior written
consent of the Lenders.
c. The Borrower shall-not sell or otherwise dispose of any of its
property or assets now owned or hereinafter acquired by it, except in the
ordinary course of trade and business without the prior written approval of the
Lenders.
d. The Borrower shall maintain a net working capital of at least
$1,625,000.00.
e. The Borrower shall maintain a ratio of current assets to current
liabilities of at least two to one.
f. The Borrower shall maintain a net worth of at least $1,350,000.00.
g. Borrower shall allow Lenders or their representatives access at all
reasonable times to their books and records for the purpose of making an audit
thereof.
h. On or before 20 days following the end of each calendar month the
Borrower shall furnish to Lenders a balance sheet and income statement, and if
Borrower has any parents, subsidiaries or affiliates, consolidating and
consolidated balance sheets and income statements reflecting their respective
financial conditions as of the end of such fiscal month.
7. DEFAULT
Upon the occurrence of any of the following events, (hereinafter called "Events
of Default") at the option of the Lenders, the entire balance of
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principal and accrued interest on the Notes and all other Indebtedness then
owing by the Borrower to the Lenders shall forthwith become due and payable on
demand of the Lenders without presentment, demand for payment, notice of
dishonor, protest, or notice of protest of any kind, all of which are hereby
expressly waived by Borrower and by each Guarantor.
a. If default is made in any payment, partial or whole, when due, of
any of the Notes, or any part thereof, or any extension, renewal or
rearrangement of the same.
b. If default is made by the Borrower in the payment of any
Indebtedness or with respect to the provisions of any, evidence of Indebtedness
or any agreement relating thereto other than as to Lenders, which default shall
continue and remain unwaived by the creditor for more than the period of grace,
if any, therein specified unless the debt is subject to a bona fide dispute.
c. If a petition for receivership or in bankruptcy (voluntary or
involuntary) or insolvency shall be filed by or against Borrower or any one or
all of the Guarantors, or if Borrower or any one or all of the Guarantors shall
make an assignment for the benefit of their creditors.
d. If any written warranty or representation made by Borrower to the
Lenders should prove to be untrue.
e. If Borrower or the Guarantors shall fail to perform any of the
covenants or agreements contained herein, the Notes , the Security Agreements,
the Mortgages or the Product Purchase Agreement.
f. If any assets of Borrower are sold other than in the ordinary course
of business without the prior written consent of the Lenders.
g. If there is any breach of any term of the Security Agreements.
h. If there is any breach of any term of the Notes.
i. If there is any breach of any term of this Agreement.
j. If there is any breach of any term of the Product Purchase
Agreement.
k. If there is any breach of any term of the Mortgages.
l. If any additional equity securities or debt securities are issued by
Borrower.
m. If any current stockholder of Borrower shall sell, assign, transfer,
give or convey any of his/her shares herein other than to a person who is a
stockholder on the date of this Agreement.
8. LIMITATION OF LIABILITY
Lenders shall not be liable for taking any action, or for omitting to take any
action, pursuant to this Agreement, or for any other actions except Lenders,
willful misconduct.
9. ATTORNEY'S FEES
Should Borrower or any Guarantor default as provided for in Section 7 hereof or
should Borrower default in any provision of any document contemplated hereby
including but not limited to the Notes, the Security Agreements, the
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Product Purchase Agreement and the Mortgages, Borrower shall be liable for and
shall pay all of Lenders' attorney's fees, including but not limited to costs of
court, court reporter fees, and paralegal fees regardless of whether the matter
of the default is brought to judgment, settled or compromised plus any interest
thereon as called for in the Security Agreements or the Notes.
10. ADDITIONAL DOCUMENTS
Borrower shall execute and cause the Guarantors and shareholders of Borrower to
execute any and all additional documents which in the opinion of Lenders are
reasonably necessary to cause the Indebtedness secured hereby to be secured and
remain secured.
11. SEVERABILITY PROVISION
Any provision of this instrument prohibited by or invalid under the laws of any
jurisdiction in which this document is to be enforced shall, as to that
jurisdiction, be ineffective to the extent of such prohibition or invalidity
without invalidating the remaining provisions of this instrument.
Whenever any words are used herein in masculine gender they shall be
construed as though they were also used in feminine gender in all cases where
they would so apply and whenever any words are used herein in the singular form,
they shall also be construed as though they were also used in the plural form in
all cases where they would also apply.
12. NOTICE
Every provision for notice, demand or request required in this Agreement or by
applicable law shall be deemed fulfilled by written notice, demand or request,
mailed or personally served on the party entitled thereto or on its successors
or assigns. If mailed, such notice, demand or request shall be made by certified
or registered mail, and deposited in any post office station or letter-box,
enclosed in a postage paid envelope addressed to such party at its address set
forth below, or such other address as either party hereto shall direct by like
written notice and shall be deemed to have been made on the fourth (4th) day
following posting as aforesaid and, if personally. served, notice shall be given
on the date notice is served. For the purposes herein, notices shall be sent to
Borrower and Lenders as follows:
Borrower: Automotive One Part Stores, Inc.
AKA Automotive One Parts Stores, Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 328D2
Attn: Xxxxxx H, Xxxxxx, III, President
With a copy to: Xxxx Xxxxxx, Esquire
0000 X. Xxxxxxx 00-00
Xxxx Xxxx, Xxxxxxx 00000
Lenders: Autoparts Finance Company, Inc.
00000 Xxxx X. Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Director of Credit
and: A. P. S., Inc.
15710 Xxxx X. Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Vice President & General Counsel
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13. EXHIBIT AND SCHEDULES
Each and every exhibit and schedule recited herein and annexed to this Agreement
are by this reference made a party hereof as though set forth verbatim in the
body hereof.
14. INTERPRETATION; CONSTRUCTION
This Agreement shall be interpreted and construed in accordance with the laws of
the State of Florida without regard to any conflicts of laws.
BORROWER:
ATTEST: AUTOMOTIVE ONE PARTS STORES, INC.
/s/ By: /s/
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LENDER:
ATTEST: AUTOPARTS FINANCE COMPANY, INC.
/s/ By: /s/
-------------------------------- -------------------------------------
LENDER:
ATTEST: A. P. A., INC.
/s/ By: /s/
-------------------------------- -------------------------------------
STATE OF FLORIDA )
)
COUNTY OF _________________)
BEFORE ME, the undersigned Notary Public in and for said County and
State, on this day personally appeared _______________________ , ___________
_______________ of Automotive One Part Stores, Inc., AKA Automotive One Parts
Stores, Inc., known to me to be the person whose name is subscribed to the
foregoing instrument and acknowledged to me that he
executed the same for the purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this ______________ day of
____________, 1995.
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Notary Public
My Commission Expires:
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STATE OF TEXAS )
)
COUNTY OF XXXXXX )
BEFORE ME, the undersigned Notary Public in and for said County and
State, on this day personally appeared ________________________________,
________________________________ of Autoparts Finance Company, Inc., known to me
to be the person whose name is subscribed to the foregoing instrument and
acknowledged to me that he executed the same for the purposes and consideration
therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this _______________ day of
______________, 1995.
-----------------------------------
Notary Public
My Commission Expires:
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STATE OF TEXAS )
)
COUNTY OF XXXXXX )
BEFORE ME, the undersigned Notary Public in and for said County and
State, on this day personally appeared ___________________________________,
_______________________ of A. P. S., Inc., known to me to be the person whose
name is subscribed to the foregoing instrument and acknowledged to me that he
executed the same for the purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this _______________ day of
___________________, 1995.
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Notary Public
My Commission Expires:
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