Document:

Exhibit 4.11

 

FIRST
AMENDMENT TO SHAREHOLDERS AGREEMENT

 

This first
amendment to the Shareholders Agreement (as defined below), dated as of March 19,
2004 (this “Amendment”), is made among Asbury Automotive Group, Inc., a
Delaware corporation (the “Company”), Asbury Automotive Holdings L.L.C., a
Delaware limited liability company (“AAH”) and the other stockholders listed on
the signature pages hereto.

 

RECITALS

 

WHEREAS, the
Company, AAH and the Specified Shareholders (as defined in the Shareholders
Agreement) entered into the Shareholders Agreement, dated as of March 1,
2002 (the “Shareholders Agreement”);

 

WHEREAS, the
Company, AAH and Specified Shareholders holding a majority of the shares of
common stock, par value $0.01 per share, of the Company held by Specified
Shareholders wish to amend the definition of “Shares” set forth in the
Shareholders Agreement; and

 

WHEREAS, the
Company, AAH, Specified Shareholders holding a majority of the shares of common
stock, par value $0.01 per share, of the Company held by Specified Shareholders
and the Shareholders to be released as parties to the Shareholders Agreement
pursuant to this Amendment wish to release certain parties to the Shareholders
Agreement from their rights and obligations thereunder.

 

NOW THEREFORE,
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

 

1.                                       Each Shareholder
listed on Schedule I shall be released from its obligations under the
Shareholders Agreement from the date of this Amendment and shall no longer be a
party thereto as of the date hereof upon the effectiveness of this Section 1
with respect to such Shareholder as provided in Section 5.  Upon the effectiveness of this Section 1
with respect to such a Shareholder, the definition of “Shareholders” as set
forth the Shareholders Agreement shall be amended by removing such Shareholder.

 

2.                                       The definition
of “Shares” set forth in Section 1.01(a) of the Shareholders
Agreement is hereby amended to read in its entirety as follows:

 

“‘Shares’ shall mean, with respect to a Shareholder, the shares
of Common Stock owned by such Shareholder or any Subsidiary Holder as of the
consummation of the initial public offering of the common stock, par value
$0.01 per share, of the Company on March 19, 2002.”

 

3.                                       Capitalized
terms used but not defined herein shall have the meanings ascribed to them in
the Shareholders Agreement.

 

 

4.                                       Except as
specifically amended hereby, the other terms and conditions of the Shareholders
Agreement shall remain in full force and effect.

 

5.                                       This Amendment
shall become effective as of the date first written above on the date that the
Company shall have received counterparts of this Amendment that, when taken
together, bear the signatures of the Company, AAH and Specified Shareholders
holding a majority of all Shares held by Specified Shareholders, provided,
however, that Section 1 hereof shall only become effective with
respect to a Shareholder listed on Schedule I hereto when the Company shall
have received, in addition to counterparts of this Amendment executed by the
Company, AAH and Specified Shareholders holding a majority of all Shares held
by Specified Shareholders, a counterpart of this Amendment executed by such
Shareholder.  The failure of Section 1
to become effective with respect to any Shareholder listed on Schedule I
as provided in this Section 5 shall have no effect on the effectiveness of
the rest of this Amendment, including the effectiveness of Section 1 with
respect to any other Shareholder listed on Schedule I that duly delivers
to the Company an executed counterpart to this Amendment..

 

6.                                       This Amendment
may be executed in one or more counterparts, all of which shall be considered
one and the same agreement.  Delivery of
an executed counterpart of a signature page of this Amendment by facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof.

 

7.                                       THIS AMENDMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF DELAWARE APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES OF SUCH
STATE.

 

2

 

IN WITNESS
WHEREOF, the parties hereto have caused this Amendment to be duly executed as
of the day and year first above written.

 

	
   

  	
  ASBURY AUTOMOTIVE GROUP, INC.,

  
	
   

  	
   

  
	
   

  	
  by:

  	
  /s/ Kenneth B. Gilman

  	
   

  
	
   

  	
   

  	
    Name: Kenneth B. Gilman

  
	
   

  	
   

  	
    Title:  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  ASBURY AUTOMOTIVE HOLDINGS L.L.C..,

  
	
   

  	
   

  
	
   

  	
  by:

  	
  /s/ Ian K. Snow

  	
   

  
	
   

  	
   

  	
    Name:  Ian K. Snow

  
	
   

  	
   

  	
    Title: Vice President

  
	
   

  	
   

  
	
   

  	
  C.V. NALLEY, III

  
	
   

  	
   

  
	
   

  	
  /s/ C. V. Nalley, III

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE 2004 NALLEY ANNUITY TRUST U/A

  1/7/04,

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  C. V. Nalley, III

  	
   

  
	
   

  	
   

  	
    Name: C.V. Nalley, III

  
	
   

  	
   

  	
    Title: Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LUTHER W. AND BLANCHE B. COGGIN 2003

  TRUST,

  
	
   

  	
   

  
	
   

  	
  by:

  	
  /s/ Charles B. Tomm

  	
   

  
	
   

  	
   

  	
    Name: Charles B. Tomm

  
	
   

  	
   

  	
    Title: Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TRACYE C. HAWKINS 1999 ATT TRUST,

  
	
   

  	
   

  
	
   

  	
  by:

  	
  /s/ Luther W. Coggin

  	
   

  
	
   

  	
   

  	
    Name: Luther W. Coggin

  
	
   

  	
   

  	
    Title: Trustee

  

 

3

 

	
   

  	
  CHRISTY C. HAYDEN 1999 ATT TRUST,

  
	
   

  	
   

  
	
   

  	
  by:

  	
  /s/ Luther W. Coggin

  	
   

  
	
   

  	
   

  	
    Name: Luther W. Coggin

  
	
   

  	
   

  	
    Title: Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CINDY S. COGGIN 1999 ATT TRUST,

  
	
   

  	
   

  
	
   

  	
  by:

  	
  /s/ Luther W. Coggin

  	
   

  
	
   

  	
   

  	
    Name: Luther W. Coggin

  
	
   

  	
   

  	
    Title: Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CHARLES (C.B.) TOMM AND ANITA

  DESAUSSURE TOMM, TENANTS BY THE

  ENTIRETIES,

  
	
   

  	
   

  
	
   

  	
  by:

  	
  /s/ Charles B. Tomm

  	
   

  
	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
    Title

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CNC AUTOMOTIVE GROUP, LLC,

  
	
   

  	
   

  
	
   

  	
  by:

  	
  /s/ Michael Kearney

  	
   

  
	
   

  	
   

  	
    Name:  Michael Kearney

  
	
   

  	
   

  	
    Title:  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JOHN R. CAPPS,

  
	
   

  	
   

  
	
   

  	
  /s/ John R. Capps

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JIW FUND I, LLC,

  
	
   

  	
   

  
	
   

  	
  by:

  	
  /s/ Jeffrey I. Wooley

  	
   

  
	
   

  	
   

  	
    Name:  Jeffrey I. Wooley

  
	
   

  	
   

  	
    Title:  Manager

  

 

	
   

  	
  JIW ENTERPRISES, INC.

  
	
   

  	
   

  
	
   

  	
  by:

  	
  /s/ Jeffrey I. Wooley

  	
   

  
	
   

  	
   

  	
    Name:  Jeffrey I. Wooley

  
	
   

  	
   

  	
    Title:  President

  

 

4

 

	
   

  	
  DMCD AUTOS IRVING, INC.,

  
	
   

  	
   

  
	
   

  	
  by:

  	
  /s/ Ben David McDavid

  	
   

  
	
   

  	
   

  	
    Name:  Ben David McDavid

  
	
   

  	
   

  	
    Title:  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DMCD AUTOS HOUSTON, INC,

  
	
   

  	
   

  
	
   

  	
  by:

  	
  /s/ Ben David McDavid

  	
   

  
	
   

  	
   

  	
    Name:  Ben David McDavid

  
	
   

  	
   

  	
    Title:  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ROBERT E. GRAY

  
	
   

  	
   

  
	
   

  	
  /s/ Robert E. Gray

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LUTHER W. COGGIN

  
	
   

  	
   

  
	
   

  	
  /s/ Luther W. Coggin

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THOMAS F. MCLARTY, III

  
	
   

  	
   

  
	
   

  	
  /s/ Thomas F. McLarty, III

  	
   

  

 

5

 

SPECIFIED
SHAREHOLDERS RELEASED FROM

SHAREHOLDERS
AGREEMENT

 

Mark C.
McLarty

 

The Franklin
H. McLarty Irrevocable Trust

 

The Caldwell
Family Limited Partnership

 

River Ridge
Investments, LLC

 

The L. M.
Humphries Irrevocable Trust

 

The M. B.
Humphries Irrevocable Trust

 

Rob Feron

 

Todd Shores

 

Phillip H.
Mayfield

 

Richard A.
Caracello

 

Kevin Delaney

 

Mitchell W.
Legler and Harriette D. Legler, Tenants by the Entireties

 

Linda L.
Marlette

 

Charles L.
McIntosh

 

Thomas G. Roets, Jr.

 

John M. Rooks

 

Todd Seth

 

Jeff King

 

Joseph
Umbriano

 

Paula Tabar

 

Estate of
Brian Kendrick

 

Robert Dennis

 

Thomas F.
GilmanEXHIBIT
10(b)

 

 

AMENDMENT
NO. 5 TO LOAN AND SECURITY AGREEMENT

 

THIS AMENDMENT NO. 5 TO LOAN AND SECURITY
AGREEMENT (this “Amendment”), dated as of February 2,
2005, is made and entered into by and among WELLS FARGO
FOOTHILL, INC., a California corporation (“Lender”), EARL SCHEIB, INC., a Delaware corporation (“Parent”),
and EARL SCHEIB REALTY CORP., a California
corporation (“ES Realty”) (Parent and ES Realty are referred to
hereinafter collectively, jointly and severally, as the “Borrower”).  Capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed to them in that
certain Loan and Security Agreement entered into as of August 4, 2003
between Lender and Borrower (the “Original Agreement”), as amended as of
August 29, 2003 (the “First Amendment”), February 19, 2004
(the “Second Amendment”), April 6, 2004 (the “Third Amendment”)
and June 24, 2004 (the “Fourth Amendment”) (the Original Agreement,
the First Amendment, the Second Amendment, the Third Amendment and the Fourth
Amendment, collectively, the “Agreement”).

 

WHEREAS, Lender and Borrower desire to enter
into this Amendment to amend the Agreement as set forth herein, all in
accordance with Sections 15 and 16.6 of the Original Agreement.

 

NOW, THEREFORE, in
consideration of the foregoing and of the mutual promises contained herein and
for other valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Lender and Borrower hereby amend the Agreement as follows:

 

1.             Section 1.1. Section 1.1 of the Original
Agreement is amended by amending and restating the definition of “Advances” in
its entirety as follows:

 

“Advances”
means all amounts advanced to Borrower hereunder, including without limitation,
Revolving Advances, Term Loan Subline Advances, unreimbursed L/C Disbursements
as provided in Section 2.10(a), and all interest, fees and other
amounts charged to Borrower’s Loan Account pursuant to Section 2.5(d).

 

2.             Section 1.1.  Section 1.1
of the Original Agreement is further amended by amending and restating the
definition of “Borrowing Base” in its entirety as follows:

 

“Borrowing Base”
means, as of any date of determination, the lesser of:

 

(a)           $11,500,000 and

 

(b)           the result of:

 

(i)            70% multiplied by

 

(ii)           the Quick Sale Value of all Eligible Real
Property, minus

 

(iii)          the sum of

 

(A)          outstanding Advances made to Borrower,

 

(B)           the Contingent Reserve,

 

1

 

(C)           the Environmental Reserve,

 

(D)          in the event that the outstanding
Advances equal or exceed $7,000,000, the Additional Reserve, and

 

(E)           the aggregate amount of reserves (if any)
established by Lender under Section 2.1(c).

 

3.             Section 1.1. Section 1.1 of the Original
Agreement is further amended by deleting “$10,000,000” in the definition of “Maximum
Revolver Amount” and replacing it with “$10,200,000”.

 

4.             Section 1.1.  Section 1.1
of the Original Agreement (as amended in the Fourth Amendment) is further
amended by adding a new subsection (f) of the definition of “Permitted
Dispositions” as follows:

 

and (f) sales or
other dispositions of the Real Property of Borrower or the Guarantors located
at 921 Texas Avenue, El Paso, Texas 79901; 5001 Dyer Street, El Paso, Texas
79930; and 7470 S. State Street, Midvale, Utah 84047.

 

5.             Section 1.1.  Section 1.1
of the Original Agreement is further amended by inserting the following
definitions in such Section in the appropriate alphabetical order:

 

“Axion”
means Axion Solutions, Inc., a California corporation.

 

“Axion
Agreements” means, collectively, that certain (a) End User License
Agreement between Parent and Axion, dated as of December 27, 2004, as
amended, and all schedules and exhibits thereto, and (b) Services Agreement
between Parent and Axion, dated as of January 5, 2005, and all schedules
and exhibits thereto.

 

“Maximum
Facility Amount” means the sum of the Maximum Revolver Amount plus the Maximum Term Loan Subline Amount.

 

“Maximum Term
Loan Subline Amount” means $1,300,000.

 

“Minnihan
Insurance Policy” means that certain key man life insurance policy issued
on May 1, 1987, naming Borrower as beneficiary, insuring the life of Jack
Minnihan, Vice President of Finance of Borrower, issued by Connecticual Mutual
Life Insurance Company, policy number 4663849.

 

“Revolving
Advances” means all Advances made to Borrower under Section 2.1(a)
other than the Term Loan Subline Advances.

 

“Subline Base
Rate Margin” means 1.5 percentage points.

 

2

 

“System”
has the meaning set forth in Section 2.2(a).

 

“Term Loan Subline”
has the meaning set forth in Section 2.1(b).

 

“Term Loan
Subline Advances” means Advances made to Borrower under the Term Loan
Subline pursuant to Section 2.1(b).

 

6.             Section 2.1.  Section 2.1
of the Original Agreement is amended by amending and restating Section 2.1
in its entirety as follows:

 

2.1 Advances

 

(a)           Subject to the terms and conditions of
this Agreement, and during the term of this Agreement, Lender agrees to make
Advances to Borrower in an amount at any one time outstanding not to exceed an
aggregate amount equal to the lesser of (i)
the Maximum Facility Amount less the Letter of Credit Usage, or (ii) the
Borrowing Base less the Letter of Credit Usage. 
In addition to the foregoing limitations, in no event shall, at any one
time in the aggregate, (y) the Term Loan Subline Advances exceed the Maximum
Term Loan Subline Amount, or (z) the Revolving Advances exceed the Maximum
Revolver Amount.

 

(b)           Subject to the terms and conditions of
this Agreement, beginning January 3, 2005 and through December 31,
2005, Lender agrees to make loans (collectively, the “Term Loan Subline”)
to Borrower in an aggregate amount not to exceed the Maximum Term Loan Subline
Amount.  The outstanding unpaid principal
balance and all accrued and unpaid interest under the Term Loan Subline shall
be due and payable on the date of termination of this Agreement, whether by its
terms, by prepayment, or by acceleration. 
All amounts outstanding under the Term Loan Subline shall constitute
Obligations.

 

(c)           Anything to the contrary in this Section 2.1
notwithstanding, Lender shall have the right to establish reserves in such
amounts, and with respect to such matters, as Lender in its Permitted
Discretion shall deem necessary or appropriate, against the Borrowing Base,
including reserves with respect to (i) sums that Borrower is required to pay
(such as taxes, assessments or insurance premiums) and has failed to pay under
any Section of this Agreement or any other Loan Document, and (ii) amounts
owing by Borrower or its Subsidiaries to any Person to the extent secured by a
Lien on, or trust over, any of the Collateral (other than any Permitted Lien
set forth on Schedule P-1 which is specifically identified thereon
as entitled to have priority over the Lender’s Liens), which Lien or trust, in
the Permitted Discretion of Lender, likely would have a priority superior to
the Lender’s Liens (such as Liens or trusts in favor of landlords,
warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or
Liens or trusts for ad valorem, excise, sales, or

 

3

 

other taxes where
given priority under applicable law) in and to such item of the Collateral.

 

(d)           Lender shall have no obligation to make
additional Advances hereunder to the extent such additional Advances would
cause the Revolver Usage to exceed the Maximum Facility Amount.

 

(e)           Amounts borrowed as Revolver Advances
pursuant to this Section 2.1 may be repaid and, subject to the
terms and conditions of this Agreement, reborrowed at any time during the term
of this Agreement.

 

(f)            Amounts borrowed as Term Loan Subline
Advances pursuant to this Section 2.1 and prepaid or repaid may not
be reborrowed.

 

7.             Section 2.2.  Section 2.2
of the Original Agreement is amended by amending and restating Section 2.2(a)
in its entirety as follows:

 

(a)  Procedure for Borrowing.  Each Borrowing shall be made by an
irrevocable written request by an Authorized Person delivered to Lender (which
notice must be received by Lender no later than 10:00 a.m. (California time) on
a Business Day) specifying (i) the amount of such Borrowing, which, in the case
of the Term Loan Subline, shall not exceed the amount of the invoice or other
evidence submitted pursuant to subsection (iii) of this Section 2.2(a),
(ii) the requested Funding Date, which shall be a Business Day and (iii) in the
case of a Term Loan Subline Advance, shall be accompanied by an invoice or
other evidence acceptable to Lender reasonably identifying (x) the amount then
due and payable to Axion or any other third-party vendor providing products or
services related to the implementation or execution of an integrated
point-of-sale system made by PeopleSoft, Inc. and contemplated by the Axion
Agreements (the “System”), (y) the date such payment is due, and
(z)  the products or services provided to
Borrower in exchange for such payment.  At Lender’s election, in lieu of
delivering the above-described written request, but only with respect to a
Revolving Advance, any Authorized Person may give Lender telephonic notice of
such request by the required time.  In
such circumstances, Borrower agrees that any such telephonic notice will be
confirmed in writing within 24 hours of the giving of such notice and the
failure to provide such written confirmation shall not affect the validity of
the request.

 

8.             Section 2.3.  Section 2.3
of the Original Agreement is amended by amending and restating Section 2.3(b)(i)
in its entirety as follows:

 

(A)          first, to pay any Lender Expenses then due to Lender under
the Loan Documents, until paid in full,

 

(B)           second, to pay any fees then due to Lender under the Loan
Documents until paid in full,

 

4

 

(C)           third, to pay interest due in respect of the Term Loan
Subline Advances until paid in full,

 

(D)          fourth, to pay interest due in respect of the Revolver
Advances until paid in full,

 

(E)           fifth, so long as no Event of Default has occurred and is
continuing, to pay the principal of all Advances until paid in full,

 

(F)           sixth, if an Event of Default has occurred and is
continuing, ratably (i) to pay the principal of all Advances until paid in
full, and (ii) to Lender, to be held by Lender as cash collateral in an amount
up to 105% of the then extant Letter of Credit Usage until paid in full,

 

(G)           seventh, if an Event of Default has occurred and is
continuing, to pay any other Obligations, and

 

(H)          eighth, to Borrower (to be wired to the Designated Account)
or such other Person entitled thereto under applicable law.

 

9.             Section 2.5.  Section 2.5
of the Original Agreement is amended by amending and restating Section 2.5(a)
in its entirety as follows:

 

(a)  Interest Rates.  Except as provided in clause (c) below, all
Obligations (except for reimbursement obligations relating to undrawn Letters
of Credit) that have been charged to the Loan Account pursuant to the terms
hereof shall bear interest on the Daily Balance thereof at a per annum rate
equal to: (i) in the case of the Revolver Advances, the Base Rate plus the Base Rate Margin; and (ii) in the case of Term Loan
Subline Advances, the Base Rate plus the
Subline Base Rate Margin.

 

10.           Section 2.5. Section 2.5 of the Original
Agreement is further amended by amending and restating the first sentence of Section 2.5(d)
in its entirety as follows:

 

(d)  Payment.  Interest (including accrued interest on the
Revolver Advances and the Term Loan Subline Advances), Letter of Credit fees,
and all other fees payable hereunder shall be due and payable, in arrears, on
the first day of each month at any time that Obligations or obligation to
extend credit hereunder are outstanding.

 

11.           Section 2.5. Section 2.5 of the Original
Agreement is further amended by amending and restating the last sentence of Section 2.5(d)
in its entirety as follows:

 

Any interest not paid when due shall be
compounded by being charged to Borrower’s Loan Account and shall thereafter
constitute Advances hereunder and shall accrue interest at the per annum rate
equal to the Base Rate plus the Base
Rate Margin.

 

5

 

12.           Section 2.9.  Section 2.9(a)(i)
of the Original Agreement is amended by deleting “Maximum Revolver Amount” and
replacing it with “Maximum Facility Amount” in that Section.

 

13.           Section 2.10.  Section 2.10(a)(iii)
of the Original Agreement is amended by deleting “Maximum Revolver Amount” and
replacing it with “Maximum Facility Amount” in that Section.

 

14.           Section 2.10.  Section 2.10(a)
of the Original Agreement is further amended by amending and restating the
third sentence of the paragraph following Section 2.5(a)(iii) in its
entirety as follows:

 

If Lender is
obligated to advance funds under a Letter of Credit, Borrower immediately shall
reimburse such L/C Disbursement to Lender by paying to Lender an amount equal
to such L/C Disbursement not later than 11:00 a.m., California time, on the
date that such L/C Disbursement is made, if Borrower shall have received
written or telephonic notice of such L/C Disbursement prior to 10:00 a.m.,
California time, on such date, or, if such notice has not been received by
Borrower prior to such time on such date, then not later than 11:00 a.m.,
California time, on the Business Day that Borrower receives such notice, if
such notice is received prior to 10:00 a.m., California time, on the date of
receipt, and, in the absence of such reimbursement, the L/C Disbursement
immediately and automatically shall be deemed to be an Advance hereunder and,
thereafter, shall accrue interest at the per annum rate equal to the Base Rate plus the Base Rate Margin.

 

15.           Section 2.10.  Section 2.10(e)
of the Original Agreement is amended by amending and restating the first
sentence of the paragraph following Section 2.5(e)(ii) in its entirety as
follows:

 

and the result of
the foregoing is to increase, directly or indirectly, the cost to Lender of
issuing, making, guaranteeing, or maintaining any Letter of Credit or to reduce
the amount receivable in respect thereof by Lender, then, and in any such case,
Lender may, at any time within a reasonable period after the additional cost is
incurred or the amount received is reduced, notify Borrower, and Borrower shall
pay on demand such amounts as Lender may specify to be necessary to compensate
Lender for such additional cost or reduced receipt, together with interest on
such amount from the date of such demand until payment in full thereof at the
per annum rate equal to the Base Rate plus the Base
Rate Margin; provided, however, that Lender shall be entitled to payments from
Borrower pursuant to this Section 2.10(e) only if it makes a
similar demand on, and receives similar payments from, its borrowers generally.

 

16.           Section 3.4.  Section 3.4
of the Original Agreement is amended by amending and restating the first
sentence of Section 3.4 in its entirety as follows:

 

6

 

This Agreement
shall continue in full force and effect for a term ending on August 6,
2008 (the “Maturity Date”).

 

17.           Section 7.1.  Section 7.1
of the Original Agreement is amended by deleting the word “and” at end of Section 7.1(h),
amending and restating Section 7.1(i) in its entirety, and adding a new Section 7.1(j)
as follows:

 

(i) Indebtedness
of Borrower to Axion or any other third-party vendor providing products or
services related to the implementation or execution of the System, and

 

(j) Indebtedness
not included in (a) through (i) above, including Subordinated Debt, which does
not exceed, at any time, in the aggregate, the sum of $250,000.

 

18.           Section 7.9.  Section 7.9
of the Original Agreement is amended by adding the following after the last
sentence of Section 7.9:

 

Notwithstanding
the foregoing, Borrower may make payments to any record owner of 100 or fewer
shares of Borrower’s Stock (in the aggregate, of all classes combined) to fund
the redemption of such Stock, provided that all such payments in the aggregate
to such Persons may not exceed $100,000 during the term of this Agreement,.

 

19.           Section 7.14.  Section 7.14
of the Original Agreement is amended by adding the following after the last sentence
of Section 7.14:

 

Notwithstanding the foregoing, the Term Loan
Subline Advances shall be used by Borrower only to fund payments owing to Axion
or any other third-party vendor providing products or services related to the
implementation or execution of the System.

 

20.           Section 7.15.  Section 7.15(b)
of the Original Agreement is amended by amending and restating the first
sentence of Section 7.15(b)(i) as follows:

 

Excluding Capital
Expenditures made for the purposes set forth in Section 7.15(b)(ii),
Capital Expenditures in any fiscal year in excess of the amount set forth in
the following table for the applicable period:

 

21.           Section 7.15.  Section 7.15(b)
of the Original Agreement is further amended by adding the following as a new Section 7.15(b)(ii):

 

(ii)           Additional Capital
Expenditures.  Capital Expenditures in an aggregate
amount during the term of this Agreement in excess of $1,500,000 for the
purchase and implementation of the System.

 

22.           Section 7.16.  Section 7.16
of the Original Agreement is amended by adding the following after the last
sentence of Section 7.16:

 

7

 

Notwithstanding
the foregoing, so long as: (a) no Default or Event of Default shall have
occurred and be continuing on the date of such payment, nor shall result from
the making thereof; and (b) Borrower shall have Availability equal to no less
than $1,000,000 after giving effect to the making of such payment, Borrower may
make a single, lump-sum payment to Jack K. Minnihan upon his retirement from
his position as Vice President of Finance of Borrower, in an amount not to
exceed the “Gross Cash Surrender Value” (equal to the Cash Surrender Value
before any related outstanding loans and interest thereon) of the Minnihan
Insurance Policy as of such retirement date.

 

23.           Amendment Fee. 
In consideration for and in connection with this Amendment, Borrower
hereby agrees to pay an amount equal to One Hundred Forty Thousand Dollars
($140,000) (the “Amendment Fee”) to Lender.  Borrower shall pay the Amendment Fee to
Lender in the manner set forth in the Loan Agreement.

 

24.           Loan Documents. 
Borrower hereby (a) reaffirms and admits the validity and enforceability
of each Loan Document to which it is a party and all of its obligations
thereunder, (b) agrees and admits that it has no defense to or offset against
any such obligations, and (c) certifies that on the date of execution hereof
and immediately after giving effect to this Amendment, (i) there exists and
shall exist no Default or Event of Default, (ii) its representations and
warranties contained in the Loan Documents shall be true and correct with the
same effect as though such representations and warranties had then been made,
and (iii) it is and shall be in compliance with all of the terms, covenants and
conditions of the Loan Documents to which it is a party.

 

25.           Reference to and Effect Upon the Amended
Original Agreement.  All of the provisions of this Amendment shall
be deemed to be incorporated in, and made a part of, the Agreement; and the
Original Agreement, as supplemented and amended by the First Amendment, the
Second Amendment, the Third Amendment, the Fourth Amendment and this Amendment,
shall be read, taken and construed as one and the same agreement.  Except as expressly modified herein, the
Original Agreement, the First Amendment, the Second Amendment, the Third
Amendment and the Fourth Amendment shall remain in full force and effect and
are hereby ratified.

 

26.           Governing Law. 
This Amendment shall be governed by and construed in accordance with the
laws of the State of California without regard to its conflict of laws
principles.

 

27.           Counterparts. 
This Amendment may be executed in any number of counterparts, or
facsimile counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same instrument.

 

28.           Titles and Subtitles. 
The titles and subtitles used in this Amendment are used for convenience
and are not to be considered in construing or interpreting this Amendment.

 

[Signature page to
follow.]

 

8

 

IN WITNESS WHEREOF, the parties have caused this
Amendment to be duly executed effective as of the day and year first written
above.

 

 

	
  BORROWER

  	
   

  	
  LENDER

  	
   

  
	
   

  	
   

  
	
  EARL SCHEIB, INC.,

  	
  WELLS FARGO FOOTHILL, INC.,

  
	
  a Delaware corporation

  	
  a California corporation

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  EARL SCHEIB REALTY CORP.,

  	
   

  
	
  a California corporation 

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	 

	
  Title:

  	
   

  	
   

  	
   

  	 

										

 

9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00080-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00080-of-00352.parquet"}]]