EXHIBIT 10.13.2
SECOND AMENDMENT TO CREDIT AGREEMENT
(Acquisition Revolving Line of Credit)
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated
effective as of December 1, 2000, is by and between LITHIA MOTORS, INC., an
Oregon corporation ("Borrower"), whose address is 000 Xxxx Xxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxx 00000, and FORD MOTOR CREDIT COMPANY, a Delaware corporation
("Lender"), whose address is 00000 X.X. 00xx Xxxxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxxxxxx 00000 ("Lender's Address").
WHEREAS, pursuant to the terms of a certain Credit Agreement dated
November 23, 1998, as amended by that certain Amendment to Credit Agreement
dated February 24, 2000 (as amended, the "Agreement"), Lender made a loan to
Borrower in the original principal amount of $75,000,000.00 (the "Original Loan
"); and
WHEREAS, the Original Loan is evidenced by a certain Promissory Note
dated November 23, 1998, made by Borrower to the order of Lender in the original
principal amount of $75,000,000.00, as amended and restated by that certain
Amended & Restated Promissory Note dated February 24, 2000, made by Borrower
to the order of Lender in the principal amount of $115,000,000.00 (the "Original
Note"); and
WHEREAS, Borrower has requested an increase in the principal balance of
the Original Loan to $130,000,000.00 to provide financing for Borrower's
Permitted Acquisition of Dealership Guarantors (as defined herein) and a renewal
of the Original Loan, pursuant to the terms of a certain Amended &Restated
Promissory Note in the principal amount of $130,000,000.00 dated as of even date
herewith and made by Borrower to the order of Lender (the "Amended Note" and
with the Original Note collectively referred to as the "Note"); and
WHEREAS, Lender is willing to increase the Original Loan if and only if
(i) Borrower executes this Amendment and the Amended Note, (ii) each Dealership
Guarantor reaffirms its obligations under its Dealership Guaranty and Dealership
Security Agreement and under the Contribution Agreement (each as defined in the
Agreement), (iii) the Loan continues to be cross-collateralized and
cross-defaulted with other Indebtedness of Borrower and Dealership Guarantors,
and (iii) Lithia Real Estate, Inc. executes a security agreement in favor of
Lender.
NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Agreement is hereby amended as follows:
1. Except as modified herein, all capitalized terms used herein and in
the foregoing recitals have the meanings set forth in the Agreement and the
Note. The following amendments are effective as of December 1, 2000.
2. The term "Loan" shall mean the Original Loan as amended by this
Amendment.
1
3. Section 1.1 (g) of the Agreement, entitled "Applicable Commercial
Paper Rate" is hereby deleted in its entirety and the following is substituted
therefore:
"(g) "Applicable LIBOR Rate" means the LIBOR Rate plus two and seventy
five hundredths (2.75%)per annum."
4. Section 1.1 (x) of the Agreement, entitled "Commercial Paper Rate"
is hereby deleted in its entirety and the following is substituted therefore:
"(x) "LIBOR Rate" means, for any given calendar month, the per annum
interest rate reported on the first Business Day of the particular calendar
month under the Money Rates Column of The Wall Street Journal as the three month
London Interbank Offered Rate on the last Business Day of the preceding calendar
month, or, if The Wall Street Journal is unavailable for any reason, as
published in such other publication as the Lender may designate."
5. Section 1.1(z) of the Agreement, entitled "Commitment" is hereby
deleted in its entirety and the following is substituted therefor:
"(z) "Commitment" means the lesser of (i) $130,000,000.00 minus the
amount of any Decision Reserve in effect from time to time or (ii) any lower
amount Borrower may have elected pursuant to Section 2.3 hereof."
6. Section 1.1 (aa) of the Agreement, entitled "Consolidated Net Worth"
is hereby deleted in its entirety and the following is substituted therefore:
"(aa) "Consolidated Net Worth" means, at a particular date, the amount
by which the total consolidated assets (other than amounts for Equipment granted
as security to a lender other than Lender, and amounts for real estate mortgaged
to a lender other than Lender) of the Borrower and its consolidated Subsidiaries
exceeds the total consolidated liabilities (other than liabilities for Equipment
and liabilities for real estate mortgaged to a lender other than Lender)."
7. Section 1.1(rrr) of the Agreement, entitled "Note" is hereby deleted
in its entirety and the following is substituted therefor:
"(rrr) "Note" means collectively, that certain Promissory Note dated
November 23, 1998, from Borrower to the order of Lender in the principal amount
of $75,000,000.00, as amended by the Amended & Restated Promissory Note
dated February 24 2000 in the principal amount of $115,000,000.00, as amended by
the Amended & Restated Promissory Note dated as of December 1, 2000, in the
principal amount of $130,000,000.00 as it may be amended, restated or otherwise
modified and in effect from time to time."
8. Section 1.1(vvvv) of the Agreement, entitled "Termination Date" is
hereby deleted in its entirety and the following is substituted therefor:
2
"(vvvv) "Termination Date" means the earlier of (a) December 1, 2003 or
(b) the date of termination of the Commitment pursuant to either of Section 2.3
or Section 7.1 hereof."
9. Section 2.4 of the Agreement is hereby amended and restated in its
entirety as follows:
"2.4 Method of Borrowing. The Borrower shall give the Lender
irrevocable notice in substantially the form of Exhibit B hereto (a "Borrowing
Notice") not later than 10:00 a.m. (Eastern Standard Time) on the business day
preceding the Borrowing Date of each Advance, specifying: (i) the Borrowing Date
(which shall be a business day) of such Advance; (ii) the aggregate amount of
such Advance; (iii) the use of proceeds of such Advance, and (iv) the account or
accounts into which the Advances should be funded. Not later than 2:00 p.m.
(Eastern Standard Time) on each Borrowing Date, the Lender shall make available
its Advance, in funds immediately available to the Borrower at such account or
accounts as shall have been notified to the Lender. Each Advance shall bear
interest from and including the date of the making of such Advance to (but not
including) the date of repayment thereof at the Applicable LIBOR Rate, changing
when and as the underlying LIBOR Rate changes, which such interest shall be
payable in accordance with Section 2.9(B)."
10. Section 2.6 of the Agreement is hereby amended and restated in its
entirety as follows:
"2.6 Default Rate; Late Payment Fee. After the occurrence and during
the continuance of an Event of Default, at the option of the Lender, the
interest rate(s) applicable to the Advances shall be equal to the Applicable
LIBOR Rate plus three percent (3.0%) per annum. If any of the principal balance
or interest on the Note or other sum due thereunder is not paid within ten (10)
days of when due, Borrower shall pay to Lender a late charge payment equal to
five percent (5%) of the amount of such installment or the maximum rate
permitted by law, whichever is less."
11. Section 2.9 (b) (i) of the Agreement is hereby amended and restated
in its entirety as follows:
"(i) Interest payable on Advances. Interest accrued on each Advance
shall be payable on each Payment Date, commencing with the first such date to
occur after the date hereof and at maturity (whether by acceleration or
otherwise). On each Payment Date, the Borrower shall pay interest at the
Applicable LIBOR Rate on each Advance outstanding on such date."
12. Schedule 4.8 attached hereto (i) contains a description as of the
date of this Amendment of the corporate structure of the Borrower and its
Subsidiaries and any other Person in which the Borrower or any of its
Subsidiaries holds an Equity Interest; and (ii) accurately sets forth as of the
date of this Amendment (A) the correct legal name, the jurisdiction of
incorporation or formation and the jurisdictions in which each of the Borrower
and the Subsidiaries of the Borrower is qualified to transact business as a
foreign corporation or other foreign entity and (B) a summary of the direct and
indirect partnership, joint venture, or other Equity Interests, if any, of the
Borrower and each Subsidiary of the Borrower in any Person that is not a
corporation.
3
13. Borrower hereby reaffirms each representation and warranty made in
the Agreement and represents that no Event of Default or Unmatured Default
exists.
14. The security interest granted by Borrower to Lender under the
Borrower Security Agreement and the terms and conditions of the Borrower
Security Agreement shall apply equally to the indebtedness evidenced by the
Note, and the covenants of the Borrower Security Agreement and the Agreement, as
amended by this Amendment shall remain in full force and effect until the
Principal Balance of the Note and interest thereon is paid in full and all of
the obligations of Borrower to Lender under the Agreement, as amended, and the
Note are fully performed and observed. Except as otherwise amended in this
Amendment, the terms and conditions of the Agreement shall remain in full force
and effect in accordance with the provisions thereof. The Loan may be further
renewed or extended only upon such terms and conditions and at such rate of
interest as the parties hereby may agree upon in writing. Furthermore, Borrower
hereby reaffirms its obligations under the Borrower Guaranty.
NOTICE: UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS
MADE BY US AFTER OCTOBER 3, 1989, CONCERNING LOANS AND OTHER CREDIT
EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR
SECURED SOLELY BY THE BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS
CONSIDERATION AND BE SIGNED BY US TO BE ENFORCEABLE.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
4
IN WITNESS WHEREOF, Borrower and Lender have executed this Amendment as
of the date set forth above intending to be legally bound hereby.
FORD MOTOR CREDIT COMPANY,
a Delaware corporation
By:/s/ X. X. Xxxxx
--------------------------------
X. X. Xxxxx
National Account Manager
LITHIA MOTORS, INC.,
an Oregon corporation
By:/s/ M. L. Xxxx Xxxxxxx
-------------------------------
M. L. Xxxx Xxxxxxx
President
Attest: /s/ Xxxxxx X. XxXxxx
-------------------------------
Xxxxxx X. XxXxxx
Secretary
5
EXHIBIT 10.14.2
SECOND AMENDMENT TO CREDIT AGREEMENT
(Used Vehicle Revolving Line of Credit)
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated
effective as of December 1, 2000, is by and between LITHIA MOTORS, INC., an
Oregon corporation ("Borrower"), whose address is 000 Xxxx Xxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxx 00000, and FORD MOTOR CREDIT COMPANY, a Delaware corporation
("Lender"), whose address is 00000 X.X. 00xx Xxxxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxxxxxx 00000 ("Lender's Address").
WHEREAS, pursuant to the terms of a certain Credit Agreement dated
November 23, 1998, as amended by that certain Amendment to Credit Agreement
dated February 24, 2000 (as amended, the "Agreement"), Lender made a loan to
Borrower in the original principal amount of $60,000,000.00 (the "Original
Loan"); and
WHEREAS, the Original Loan is evidenced by a certain Promissory Note
dated November 23, 1998, made by Borrower to the order of Lender in the original
principal amount of $60,000,000.00, as amended and restated by that certain
Amended & Restated Promissory Note dated February 24, 2000, made by Borrower
to the order of Lender in the principal amount of $85,000,000.00 (the "Original
Note"); and
WHEREAS, Borrower has requested an increase in the principal balance of
the Original Loan to $150,000,000.00 to provide financing for Borrower's
Permitted Acquisition of Dealership Guarantors (as defined herein) and a renewal
of the Original Loan, pursuant to the terms of a certain Amended & Restated
Promissory Note in the principal amount of $150,000,000.00 dated as of even date
herewith and made by Borrower to the order of Lender (the "Amended Note" and
with the Original Note collectively referred to as the "Note"); and
WHEREAS, Lender is willing to increase the Original Loan if and only if
(i) Borrower executes this Amendment and the Amended Note, (ii) each Dealership
Guarantor reaffirms its obligations under its Dealership Guaranty and Dealership
Security Agreement and under the Contribution Agreement (each as defined in the
Agreement), (iii) the Loan continues to be cross-collateralized and
cross-defaulted with other Indebtedness of Borrower and Dealership Guarantors,
and (iii) Lithia Real Estate, Inc. executes a security agreement in favor of
Lender.
NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Agreement is hereby amended as follows:
1. Except as modified herein, all capitalized terms used herein and in
the foregoing recitals have the meanings set forth in the Agreement and the
Note. The following amendments are effective as of December 1, 2000.
2. The term "Loan" shall mean the Original Loan as amended by this
Amendment.
1
3. Section 1.1 (g) of the Agreement, entitled "Applicable Commercial
Paper Rate" is hereby deleted in its entirety and the following is substituted
therefore:
"(g) "Applicable LIBOR Rate" means the LIBOR Rate plus two and fifty
five hundredths (2.55%)per annum."
4. Section 1.1 (y) of the Agreement, entitled "Commercial Paper Rate"
is hereby deleted in its entirety and the following is substituted therefore:
"(x) "LIBOR Rate" means, for any given calendar month, the per annum
interest rate reported on the first Business Day of the particular calendar
month under the Money Rates Column of The Wall Street Journal as the three month
London Interbank Offered Rate on the last Business Day of the preceding calendar
month, or, if The Wall Street Journal is unavailable for any reason, as
published in such other publication as the Lender may designate."
5. Section 1.1(aa) of the Agreement, entitled "Commitment" is hereby
deleted in its entirety and the following is substituted therefor:
"(aa) "Commitment" means the lesser of (i) $150,000,000.00 minus the
amount of any Decision Reserve in effect from time to time or (ii) any lower
amount Borrower may have elected pursuant to Section 2.3 hereof."
6. Section 1.1 (bb) of the Agreement, entitled "Consolidated Net Worth"
is hereby deleted in its entirety and the following is substituted therefore:
"(aa) "Consolidated Net Worth" means, at a particular date, the amount
by which the total consolidated assets (other than amounts for Equipment granted
as security to a lender other than Lender, and amounts for real estate mortgaged
to a lender other than Lender) of the Borrower and its consolidated Subsidiaries
exceeds the total consolidated liabilities (other than liabilities for Equipment
and liabilities for real estate mortgaged to a lender other than Lender)."
7. Section 1.1(rrr) of the Agreement, entitled "Note" is hereby deleted
in its entirety and the following is substituted therefor:
"(rrr) "Note" means collectively, that certain Promissory Note dated
November 23, 1998, from Borrower to the order of Lender in the principal amount
of $60,000,000.00, as amended by the Amended & Restated Promissory Note
dated February 24 2000 in the principal amount of $85,000,000.00, as amended by
the Amended & Restated Promissory Note dated [_________________], 2000, in
the principal amount of $150,000,00.00 as it may be amended, restated or
otherwise modified and in effect from time to time."
8. Section 1.1(vvvv) of the Agreement, entitled "Termination Date" is
hereby deleted in its entirety and the following is substituted therefor:
2
"(vvvv) "Termination Date" means the earlier of (a) December 1, 2003 or
(b) the date of termination of the Commitment pursuant to either of Section 2.3
or Section 7.1 hereof."
9. Section 2.4 of the Agreement is hereby amended and restated in its
entirety as follows:
"2.4 Method of Borrowing. The Borrower shall give the Lender
irrevocable notice in substantially the form of Exhibit B hereto (a "Borrowing
Notice") not later than 10:00 a.m. (Eastern Standard Time) on the business day
preceding the Borrowing Date of each Advance, specifying: (i) the Borrowing Date
(which shall be a business day) of such Advance; (ii) the aggregate amount of
such Advance; (iii) the use of proceeds of such Advance, and (iv) the account or
accounts into which the Advances should be funded. Not later than 2:00 p.m.
(Eastern Standard Time) on each Borrowing Date, the Lender shall make available
its Advance, in funds immediately available to the Borrower at such account or
accounts as shall have been notified to the Lender. Each Advance shall bear
interest from and including the date of the making of such Advance to (but not
including) the date of repayment thereof at the Applicable LIBOR Rate, changing
when and as the underlying LIBOR Rate changes, which such interest shall be
payable in accordance with Section 2.9(B)."
10. Section 2.6 of the Agreement is hereby amended and restated in its
entirety as follows:
"2.6 Default Rate; Late Payment Fee. After the occurrence and during
the continuance of an Event of Default, at the option of the Lender, the
interest rate(s) applicable to the Advances shall be equal to the Applicable
LIBOR Rate plus three percent (3.0%) per annum. If any of the principal balance
or interest on the Note or other sum due thereunder is not paid within ten (10)
days of when due, Borrower shall pay to Lender a late charge payment equal to
five percent (5%) of the amount of such installment or the maximum rate
permitted by law, whichever is less."
11. Section 2.9 (b) (i) of the Agreement is hereby amended and restated
in its entirety as follows:
"(i) Interest payable on Advances. Interest accrued on each Advance
shall be payable on each Payment Date, commencing with the first such date to
occur after the date hereof and at maturity (whether by acceleration or
otherwise). On each Payment Date, the Borrower shall pay interest at the
Applicable LIBOR Rate on each Advance outstanding on such date."
12. Schedule 4.8 attached hereto (i) contains a description as of the
date of this Amendment of the corporate structure of the Borrower and its
Subsidiaries and any other Person in which the Borrower or any of its
Subsidiaries holds an Equity Interest; and (ii) accurately sets forth as of the
date of this Amendment (A) the correct legal name, the jurisdiction of
incorporation or formation and the jurisdictions in which each of the Borrower
and the Subsidiaries of the Borrower is qualified to transact business as a
foreign corporation or other foreign entity and (B) a summary of the direct and
indirect partnership, joint venture, or other Equity Interests, if any, of the
Borrower and each Subsidiary of the Borrower in any Person that is not a
corporation.
3
13. Borrower hereby reaffirms each representation and warranty made in
the Agreement and represents that no Event of Default or Unmatured Default
exists.
14. The security interest granted by Borrower to Lender under the
Borrower Security Agreement and the terms and conditions of the Borrower
Security Agreement shall apply equally to the indebtedness evidenced by the
Note, and the covenants of the Borrower Security Agreement and the Agreement, as
amended by this Amendment shall remain in full force and effect until the
Principal Balance of the Note and interest thereon is paid in full and all of
the obligations of Borrower to Lender under the Agreement, as amended, and the
Note are fully performed and observed. Except as otherwise amended in this
Amendment, the terms and conditions of the Agreement shall remain in full force
and effect in accordance with the provisions thereof. The Loan may be further
renewed or extended only upon such terms and conditions and at such rate of
interest as the parties hereby may agree upon in writing. Furthermore, Borrower
hereby reaffirms its obligations under the Borrower Guaranty.
NOTICE: UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS
MADE BY US AFTER OCTOBER 3, 1989, CONCERNING LOANS AND OTHER CREDIT
EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR
SECURED SOLELY BY THE BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS
CONSIDERATION AND BE SIGNED BY US TO BE ENFORCEABLE.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
4
IN WITNESS WHEREOF, Borrower and Lender have executed this Amendment as
of the date set forth above intending to be legally bound hereby.
FORD MOTOR CREDIT COMPANY,
a Delaware corporation
By:/s/ X. X. Xxxxx
--------------------------------
X. X. Xxxxx
National Account Manager
LITHIA MOTORS, INC.,
an Oregon corporation
By:/s/ M. L. Xxxx Xxxxxxx
-------------------------------
M. L. Xxxx Xxxxxxx
President
Attest: /s/ Xxxxxx X. XxXxxx
-------------------------------
Xxxxxx X. XxXxxx
Secretary
5
EXHIBIT 10.15.1
ADMENDMENT TO LOAN AGREEMENT
Dated as of: March 6, 2000
Parties: LITHIA FINANCIAL CORPORATION ("LFC")
LITHIA MOTORS, INC. ("LMI")
LITHIA SALMIR, INC. ("LSI")
And: U.S. BANK NATIONAL ASSOCIATION ("Lender")
This agreement amends the loan agreement between the parties dated as
of September 20, 1999 ("Loan Agreement").
For valuable consideration, the parties agree as follows:
1. Sections 13.1, 13.2, and 13.10 of the Loan Agreement are amended by
deleting "it" at the beginning of each such section and replacing it with "LFC".
2. Section 13.4 of the Loan Agreement is amended (a) by deleting "it"
at the beginning thereof and replacing it with "LFC", and (b) by deleting
therefrom "except, with respect to LMI, for Permitted Acquisitions".
3. The following is hereby added to the Loan Agreement as Section 10.13
thereof:
Year 2000. Borrower has reviewed and assessed its business
operations and computer systems and applications to address the "year
2000 problem" (that is, that computer applications and equipment used
by Borrower, directly or indirectly through third parties, may have
been or may be unable to properly perform date-sensitive functions
before, during and after January 1, 2000). Borrower represents and
warrants that the year 2000 problem has not resulted in and will not
result in a material adverse change in Borrower's business condition
(financial or otherwise), operations, properties or prospects or
ability to repay Lender. Borrower agrees that this representation and
warranty will be true and correct on and shall be deemed made by
Borrower on each date Borrower request any advance under this Agreement
or any Note or delivers any information to Lender. Borrower will
promptly deliver to Lender such information relating to this
representation and warranty as Lender requests from time to time.
4. Capitalized terms used herein without definition shall have the
meanings given to such terms in the Loan Agreement.
5. Each Loan Party hereby reaffirms the representations and warranties
in each of the existing Loan Documents and agrees that (a) except as amended
previously or herein, each Loan Document is and shall remain valid and
enforceable in accordance with its terms and (b) such Loan Party has no
defenses, setoffs, and counterclaims or claims for recoupment against the
indebtedness and obligations represented by the Notes, Guaranty and other Loan
Documents.
6. Disclosure.
UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY
LENDERS AFTER OCTOBER 3, 1989, CONCERNING LOANS AND OTHER CREDIT EXTENSIONS
WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY
THE BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED
BY THE LENDER TO BE ENFORCEABLE.
LITHIA FINANCIAL CORPORATION
By:
---------------------------------
Title:
---------------------------------
LITHIA MOTORS, INC.
By:
---------------------------------
Title:
---------------------------------
LITHIA SALMIR, INC.
By:
---------------------------------
Title:
---------------------------------
U.S. BANK NATIONAL ASSOCIATION
By:
---------------------------------
Title:
---------------------------------
EXHIBIT 10.15.3
THIRD AMENDMENT TO LOAN AGREEMENT
Dated as of:
-----------------------------
Parties: LITHIA FINANCIAL CORPORATION ("LFC")
LITHIA MOTORS, INC. ("LMI")
LITHIA SALMIR, INC. ("LSI")
LITHIA AIRCRAFT, INC. ("LAI")
And: U.S. BANK NATIONAL ASSOCIATION ("Lender")
RECITALS
A. The parties hereto have entered into a Loan Agreement dated as of
September 20, 1999, as amended by amendments dated as of March 6, 2000 and July
26, 2000 (collectively, "Loan Agreement").
B. The parties hereto have agreed to amend the Loan Agreement as set
forth herein.
For valuable consideration, the parties agree as follows:
1. Definitions. The definitions of Maximum Revolving Loan Amount and Revolving
Loan Termination Date in Section 1.1 of the Loan Agreement are hereby deleted
and replaced with the following:
"Maximum Revolving Loan Amount" means, as of any date of determination,
an amount equal to $27,500,000 minus the then outstanding aggregate
principal balance of the Term-Out Notes.
"Revolving Loan Termination Date" means December 31, 2002.
2. Term Out Loans.
2.1 The last sentence of Section 3.4.1 of the Loan Agreement is deleted
and replaced with the following:
The sum of the principal balance of the New Revolving Note plus the
aggregate principal balance of all Term-Out Notes shall at no time
exceed $27,500,000.
2.2 The last sentence of Section 3.4.4 of the Loan Agreement is deleted
and replaced with the following:
1
Notwithstanding the foregoing, no Term-Out Note shall have a final
maturity date which is later than December 31, 2007.
3. Leased Collateral. Sections 8.1.3(b) and 8.1.3(c) were inadvertently deleted
from the Loan Agreement by the Second Amendment to Loan Agreement. To correct
this error, Sections 8.1.3(b) and 8.1.3(c) are hereby restored to the Loan
Agreement in their original form.
4. Financial Covenants. Sections 11.1.5 and 11.1.6 of the Loan Agreement are
deleted and replaced with the following:
11.1.5 Minimum Tangible Net Worth. The sum of (a) LFC's Tangible Net
Worth plus the principal balance, up to a maximum of $4,500,000, of
loans made by LFC to its affiliates (excluding any amounts owed by such
affiliates to LFC under leases between LFC and such affiliates) shall
not be less than $4,500,000.
11.1.6 LFC Fixed Charge Coverage Ratio. LFC shall maintain, as of the
last day of each fiscal quarter, an LFC Fixed Charge Coverage Ratio of
at least 1.0 to 1.0.
5. Exhibit A. Exhibit A to the Loan Agreement is replaced with the Exhibit A
attached hereto and hereby incorporated herein.
6. Defined Terms. Capitalized terms used herein without definition shall have
the meanings given to such terms in the Loan Agreement.
7. Reaffirmation. Each Loan Party hereby reaffirms the representations and
warranties in each of the existing Loan Documents and agrees that (a) except as
amended previously or herein, each Loan Document is and shall remain valid and
enforceable in accordance with its terms and (b) such Loan Party has no
defenses, setoffs, counterclaims or claims for recoupment against the
indebtedness and obligations represented by the Notes, Guaranties and other Loan
Documents.
8. Conditions to Effectiveness. The effectiveness of this Agreement is subject
to execution of this Agreement and satisfaction of the following conditions:
8.1 Execution and delivery to Lender of a new New Revolving Note and
Commercial Security Agreement.
8.2 Receipt by Lender of all documents and information Lender may
request relating to the authority for and validity of this Agreement and the
other Loan Documents, and to any other related matters, each in form and
substance satisfactory to Lender.
8.3 Execution of such documents and satisfaction by each Loan Party of
such additional requirements as Lender reasonably requires.
9. Recitals. The Recitals are hereby incorporated herein.
2
10. Disclosure.
UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY
LENDERS AFTER OCTOBER 3, 1989, CONCERNING LOANS AND OTHER CREDIT EXTENSIONS
WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY
THE BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED
BY THE LENDER TO BE ENFORCEABLE.
LITHIA FINANCIAL CORPORATION
By:
---------------------------------
Title:
---------------------------------
LITHIA MOTORS, INC.
By:
---------------------------------
Title:
---------------------------------
LITHIA SALMIR, INC.
By:
---------------------------------
Title:
---------------------------------
U.S. BANK NATIONAL ASSOCIATION
By:
---------------------------------
Title:
---------------------------------
LITHIA AIRCRAFT, INC.
By:
---------------------------------
Title:
---------------------------------
3
EXHIBIT A
---------
PROMISSORY NOTE
$27,500,000 Dated as of:
------------------------
LITHIA FINANCIAL CORPORATION ("LFC")
LITHIA AIRCRAFT, INC. ("LAI")
U.S. BANK NATIONAL ASSOCIATION ("Lender")
1. Type of Credit. This note is given to evidence LFC'S and LAI's obligation to
repay all sums which Lender may from time to time advance to LFC and LAI
("Advances") under a revolving line of credit. No Advances shall be made which
create a maximum amount outstanding at any one time which exceeds the maximum
amount shown in Section 2. However, Advances hereunder may be borrowed, repaid
and reborrowed, and the aggregate Advances loaned hereunder from time to time
may exceed such maximum amount.
2. Principal Balance. The unpaid principal balance of all Advances outstanding
under this note ("Principal Balance") at one time shall not exceed $27,500,000
minus the aggregate outstanding principal balance of the Term-Out Notes (as
defined in the Loan Agreement between LFC, LAI, Lender and certain other
parties, dated as of September 20, 1999, as amended from time to time).
3. Promise to Pay. For value received, LFC and LAI (individually and
collectively, "Borrower") jointly and severally promise to pay to Lender or
order at XX Xxx 0000, Xxxxxxxx, XX, 00000 or such other address as Lender may
designate, the Principal Balance of this note, with interest thereon at the
rate(s) specified in Sections 4 and 11 below.
4. Interest Rate. The interest rate on the Principal Balance outstanding may
vary from time to time pursuant to the provisions of this note. Subject to
Sections 4(b)(iii), 4(b)(iv) and 11, interest shall accrue on the Principal
Balance of this note from time to time at a per annum rate equal to the LIBOR
Borrowing Rate.
(a) Definitions. The following terms shall have the following meanings:
"Business Day" means any day other than a Saturday, Sunday, or other
day that commercial banks in Portland, Oregon, Minneapolis, Minnesota, Seattle,
Washington or New York City are authorized or required by law to close;
provided, however that when used in connection with the LIBOR Rate, such term
shall also exclude any day on which dealings in U.S. dollar deposits are not
carried on in the London interbank market.
"LIBOR Rate" means, for any day, (the "Current Day"), the average
offered rate for deposits in United States Dollars (rounded upwards to the
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nearest 1/16 of 1%) for delivery of such deposits on the Current Day for the
one-month period commencing on the Current Day, which appears on Telerate Page
3750 as of 11:00 a.m. London time (or such other time as of which such rate
appears) on the day that is two Business Days preceding the Current Day; or the
rate for such deposits determined by Lender at such time based on such other
published service of general application as shall be selected by Lender for such
purpose; provided that in lieu of determining the rate in the foregoing manner,
Lender may determine the rate based on the rates offered to Lender for deposits
in United States Dollars (rounded upwards to the nearest 1/16 of 1%) in the
interbank eurodollar market at such time for delivery on the Current Day for the
one-month period commencing on the Current Day; and provided, further, that in
any case the LIBOR Rate shall be adjusted to take into account the maximum
reserves required to be maintained for Eurocurrency liabilities by banks as
specified in Regulation D of the Board of Governors of the Federal Reserve
System or any successor regulation. The LIBOR Rate for any day which is not a
Business Day shall be the LIBOR Rate in effect on the immediately preceding
Business Day. When the LIBOR Rate is applicable, the interest rate hereunder
shall be adjusted without notice effective on the day the LIBOR Rate changes,
but in no event shall the rate of interest be higher than allowed by law.
"Prime Rate" means the rate of interest which Lender from time to time
establishes as its prime or reference rate and is not, for example, the lowest
rate of interest which Lender collects from any borrower or class of borrowers.
When the Prime Rate is applicable, the interest rate hereunder shall be adjusted
without notice effective on the day the Prime Rate changes, but in no event
shall the rate of interest be higher than allowed by law.
"Prime Borrowing Rate" means a variable per annum rate equal to the
Prime Rate.
"Telerate Page 3750" means the display designated as such on the Bridge
Telerate, Inc. service or any successor service (or such other page as may
replace page 3750 on such service for the purpose of displaying London interbank
offered rates of major banks for United States Dollar deposits).
(b) The LIBOR Borrowing Rate.
(i) The LIBOR Borrowing Rate is a variable per annum rate equal to the
LIBOR Rate plus 1.75%.
(ii) Any request for an Advance shall be made in accordance with the
provisions of Section 14.
(iii) If at any time the LIBOR Rate is unascertainable or unavailable
to Lender or if LIBOR Rate loans become unlawful, the LIBOR Borrowing Rate shall
terminate automatically and immediately, and unless the Default Rate is
applicable, the Prime Borrowing Rate automatically shall become effective upon
such termination.
(iv) If at any time after the date hereof (A) any revision in or
adoption of any applicable law, rule, or regulation or in the interpretation or
administration thereof (i) shall subject Lender or its Eurodollar lending office
to any tax, duty, or other charge, or change the basis of taxation of payments
to Lender with respect to any loans bearing interest based on the LIBOR Rate, or
(ii) shall impose or modify any reserve, insurance, special deposit, or similar
requirements against assets of, deposits with or for the account of, or credit
extended by Lender or its Eurodollar lending office, or impose on Lender or its
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Eurodollar lending office any other condition affecting any such loans, and (B)
the result of any of the foregoing is (i) to increase the cost to Lender of
making or maintaining any such loans or (ii) to reduce the amount of any sum
receivable under this note by Lender or its Eurodollar lending office, Borrower
shall pay Lender within 15 days after demand by Lender such additional amount as
will compensate Lender for such increased cost or reduction. The determination
hereunder by Lender of such additional amount shall be conclusive in the absence
of manifest error. If Lender demands compensation under this Section 4(b)(iv),
Borrower may, upon payment of such additional amount, unless the Default Rate is
applicable, elect to have the Prime Borrowing Rate apply to the Principal
Balance of this note.
(v) If the LIBOR Borrowing Rate is in effect, Borrower shall pay
interest based on such rate, plus any other applicable taxes or charges
hereunder, even though Lender may have obtained the funds loaned to Borrower
from sources other than the London interbank market. Lender's determination of
the LIBOR Borrowing Rate and any such taxes or charges shall be conclusive in
the absence of manifest error.
5. Computation of Interest. All interest on this note will be computed at the
applicable rate based on a 360-day year and applied to the actual number of days
elapsed.
6. Payment Schedule
(a) Principal. Principal shall be paid on December 31, 2002.
(b) Interest. Interest shall be paid on the 1st day of each month beginning with
the month after the date this note is dated, and at maturity.
7. Prepayment. Prepayments may be made at any time without penalty. Principal
prepayments will not postpone the date of or change the amount of any regularly
scheduled payment. At the time of any principal prepayment, all accrued
interest, fees, costs and expenses shall also be paid.
8. Change in Payment Amount. Each time the interest rate on this note changes
the holder of this note may, from time to time, in holder's sole discretion,
increase or decrease the amount of each of the installments remaining unpaid at
the time of such change in rate to an amount holder in its sole discretion deems
necessary to continue amortizing the Principal Balance at the same rate
established by the installment amounts specified in Section 6(a), whether or not
a "balloon" payment may also be due upon maturity of this note. Holder shall
notify the undersigned of each such change in writing. Whether or not the
installment amount is increased under this Section 8, Borrower understands that,
as a result of increases in the rate of interest the final payment due, whether
or not a "balloon" payment, shall include the entire Principal Balance and
interest thereon then outstanding, and may be substantially more than the
installment specified in Section 6.
9. Alternate Payment Date. Notwithstanding any other term of this note, if in
any month there is no day on which a scheduled payment would otherwise be due
(e.g. February 31), such payment shall be paid on the last banking day of that
month.
10. Payment by Automatic Debit.
Borrower hereby authorizes Lender to automatically deduct the amount of
all principal and interest payments from account number 153600740853 with
Lender. If there are insufficient funds in the account to pay the automatic
deduction in full, Lender may allow the account to become overdrawn, or Lender
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may reverse the automatic deduction. Borrower will pay all the fees on the
account which result from the automatic deductions, including any overdraft and
non-sufficient funds charges. If for any reason Lender does not charge the
account for a payment, or if an automatic payment is reversed, the payment is
still due according to this note. If the account is a Money Market Account, the
number of withdrawals from that account is limited as set out in the account
agreement. Lender may cancel the automatic deduction at any time in its
discretion.
Provided, however, if no account number is entered above, Borrower does
not want to make payments by automatic debit.
11. Default.
(a) Any Event of Default under the Loan Agreement between Borrower, Lender and
Lithia Motors, Inc. dated September 20, 1999, and any amendments, modifications,
supplements, renewals, substitutions and replacements thereof or therefor, shall
be an event of default hereunder.
(b) Without prejudice to any right of Lender to require payment on demand, upon
the occurrence of an event of default, Lender may terminate all commitments to
lend, cease making Advances and declare the entire unpaid Principal Balance on
this note and all accrued unpaid interest immediately due and payable, without
notice; provided, however, that if any proceeding under any bankruptcy or
insolvency laws is commenced by or against Borrower, all commitments to lend
shall be immediately terminated without notice and the entire Principal Balance
and all accrued, unpaid interest shall, without notice, become immediately due
and payable. Upon default, including failure to pay upon final maturity, Lender,
at its option, may also, if permitted under applicable law, increase the
interest rate on this note by 2% per annum ("Default Rate"). The interest rate
will not exceed the maximum rate permitted by applicable law. In addition, if
any payment of principal or interest is 19 or more days past due, Borrower will
be charged a late charge of 5% of the delinquent payment.
12. Evidence of Principal Balance; Payment on Demand. Holder's records shall, at
any time, be conclusive evidence of the unpaid Principal Balance and interest
owing on this note. Notwithstanding any other provisions of this note, in the
event holder makes Advances hereunder which result in an unpaid Principal
Balance on this note which at any time exceeds the maximum amount specified in
Section 2, Borrower agrees that all such Advances, with interest, shall be
payable on demand.
13. Demand Note. If this note is payable on demand, Borrower acknowledges and
agrees that (a) Lender is entitled to demand Borrower's immediate payment in
full of all amounts owing hereunder and (b) neither anything to the contrary
contained herein or in any other loan documents (including but not limited to,
provisions relating to defaults, rights of cure, default rate of interest,
installment payments, late charges, periodic review of Borrower's financial
condition, and covenants) nor any act of Lender pursuant to any such provisions
shall limit or impair Lender's right or ability to require Borrower's payment in
full of all amounts owing hereunder immediately upon Lender's demand.
14. Requests for Advances.
(a) Any Advance may be made upon the request of Borrower (if an individual), any
of the undersigned (if Borrower consists of more than one individual), any
person or persons authorized in subsection (b) of this Section 14, and any
person or persons otherwise authorized to execute and deliver promissory notes
to Lender on behalf of Borrower.
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(b) Borrower hereby authorizes any one of the following individuals to request
Advances:
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(c) All Advances shall be disbursed by deposit directly to Borrower's account
number 153600740853 with Lender, by cashier's check issued to Borrower, or by
payment to any Seller.
(d) Borrower agrees that Lender shall have no obligation to verify the identity
of any person making any request pursuant to this Section 14, and Borrower
assumes all risks of the validity and authorization of such requests. In
consideration of Lender agreeing, at its sole discretion, to make Advances upon
such requests, Borrower promises to pay holder, in accordance with the
provisions of this note, the Principal Balance together with interest thereon
and other sums due hereunder, although any Advances may have been requested by a
person or persons not authorized to do so.
15. Periodic Review. Lender will review Borrower's credit accommodations
periodically. At the time of the review, Borrower will furnish Lender with any
additional information regarding Borrower's financial condition and business
operations that Lender requests. This information may include but is not limited
to, financial statements, tax returns, lists of assets and liabilities, agings
of receivables and payables, inventory schedules, budgets and forecasts. If upon
review, Lender, in its sole discretion, determines that there has been a
material adverse change in Borrower's financial condition, Borrower will be in
default. Upon default, Lender shall have all rights specified herein.
16. Notices. Any notice hereunder may be given by ordinary mail, postage paid
and addressed to Borrower at the last known address of Borrower as shown on
holder's records. If Borrower consists of more than one person, notification of
any of said persons shall be complete notification of all.
17. Attorney Fees. Whether or not litigation or arbitration is commenced,
Borrower promises to pay all costs of collecting overdue amounts. Without
limiting the foregoing, in the event that holder consults an attorney regarding
the enforcement of any of its rights under this note or any document securing
the same, or if this note is placed in the hands of an attorney for collection
or if suit or litigation is brought to enforce this note or any document
securing the same, Borrower promises to pay all costs thereof including such
additional sums as the court or arbitrator(s) may adjudge reasonable as attorney
fees, including without limitation, costs and attorney fees incurred in any
appellate court, in any proceeding under the bankruptcy code, or in any
receivership and post-judgment attorney fees incurred in enforcing any judgment.
18. Waivers; Consent. Each party hereto, whether maker, co-maker, guarantor or
otherwise, waives diligence, demand, presentment for payment, notice of
non-payment, protest and notice of protest and waives all defenses based on
suretyship or impairment of collateral. Without notice to Borrower and without
diminishing or affecting Lender's rights or Borrower's obligations hereunder,
Lender may deal in any manner with any person who at any time is liable for, or
provides any real or personal property collateral for, any indebtedness of
Borrower to Lender, including the indebtedness evidenced by this note. Without
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limiting the foregoing, Lender may, in its sole discretion: (a) make secured or
unsecured loans to Borrower and agree to any number of waivers, modifications,
extensions and renewals of any length of such loans, including the loan
evidenced by this note; (b) impair, release (with or without substitution of new
collateral), fail to perfect a security interest in, fail to preserve the value
of, fail to dispose of in accordance with applicable law, any collateral
provided by any person; (c) xxx, fail to xxx, agree not to xxx, release, and
settle or compromise with, any person.
19. Joint and Several Liability. All undertakings of the undersigned Borrowers
are joint and several and are binding upon any marital community of which any of
the undersigned are members. Holder's rights and remedies under this note shall
be cumulative.
20. Governing Law. This note shall be governed by and construed and enforced in
accordance with the laws of the State of Oregon without regard to conflicts of
law principles; provided, however, that to the extent that Lender has greater
rights or remedies under Federal law, this provision shall not be deemed to
deprive Lender of such rights and remedies as may be available under Federal
law.
21. Renewal Note. This note renews, increases the amount of and modifies the
terms of the promissory note executed by Borrower dated July 26, 2000 in the
principal amount of $20,000,000, but shall not be deemed to be a replacement for
or to constitute a novation of such note.
22. Disclosure.
UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY
LENDERS AFTER OCTOBER 3, 1989, CONCERNING LOANS AND OTHER CREDIT EXTENSIONS
WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY
THE BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED
BY THE LENDER TO BE ENFORCEABLE.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS
DOCUMENT.
LITHIA FINANCIAL CORPORATION
By:
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Title:
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LITHIA AIRCRAFT, INC.
By:
---------------------------------
Title:
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