EXHIBIT 10.40
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDED AND RESTATED CREDIT AGREEMENT is dated as of August 14,
1998, between CAPITAL AUTOMOTIVE L.P., a Delaware limited partnership (the
"COMPANY"), and NATIONSBANK, N.A. (the "BANK").
RECITALS:
A. The Company and the Bank are parties to that certain Credit Agreement
dated as of February 19, 1998 as amended by that certain First Amendment to
Credit Agreement dated as of May 6, 1998 (the "Credit Agreement").
B. The Company and the Bank have agreed to increase the Loan from
$10,000,000 to $13,500,000 and to modify and amend the Credit Agreement pursuant
to the terms and conditions hereof. Capitalized terms used herein and not
otherwise defined herein.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which is hereby acknowledge, the Bank and the Company hereby amend and restate
the Credit Agreement as follows:
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDED AND RESTATED CREDIT AGREEMENT is dated as of February
19, 1998, between CAPITAL AUTOMOTIVE L.P., a Delaware limited partnership (the
"COMPANY"), and NATIONSBANK, N.A. (the "BANK").
The parties hereto hereby agree as follows:
ARTICLE 1.
DEFINITIONS
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Section 1.1 Defined Terms. As used in this Agreement, the following
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terms have the following meanings:
"Agreement": this Credit Agreement, as amended, supplemented or otherwise
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modified from time to time.
"Appraised Value": the fair market value of all or such portion of the Real
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Property as has been determined by an appraiser engaged by the Bank, at the
Company's expense based upon a written appraisal that has been accepted by the
Bank in accordance with FIRREA, other applicable laws and regulations and
policies of the Bank.
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"Business Day": any day except a Saturday, Sunday or other day on which
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commercial banks in Virginia or New York are authorized by law to close.
"CAR": Capital Automotive REIT, a Maryland real estate investment trust.
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"Code": the Internal Revenue Code of 1986, as amended from time to time.
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"Commonly Controlled Entity": an entity, whether or not incorporated, which
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is under common control with the Company within the meaning of Section 414(b),
(c), (m) or (n) of the Code.
"Contingent Obligation": as to any Person, any obligation of such Person
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guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (a) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (b) to advance or supply funds (i) for the purchase
or payment of any such primary obligation or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (d) otherwise to assure or hold harmless the owner of such primary
obligation against loss in respect thereof; provided, however, that the term
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Contingent Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business.
"Contractual Obligation": as to any Person, any provision of any security
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issued by such Person or of any agreement, instrument or undertaking to which
such Person is a party or by which it or any of its property is bound.
"Debt Service Coverage Ratio": the consolidated ratio for the Company and
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CAR, calculated at the end of any fiscal quarter as an average of that quarter
and the immediately preceding three quarters, by dividing (A) the sum of (i) net
profit, (ii) depreciation, (iii) amortization and (iv) interest expense, minus
the sum of (i) distributions, (ii) non-recurring gains and (iii) charges to
equity, by (B) the sum of (i) interest expense, (ii) prior year current
maturities of long term debt and (iii) prior year current maturities of capital
leases.
"Default": any of the events specified in Article VII, whether or not any
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requirement for the giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.
"Environmental Indemnity Agreement": the Environmental Indemnity Agreement
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dated as of February 19, 1998 from the Company to the Bank, as it may be
amended, supplemented or otherwise modified from time to time.
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"ERISA": the Employee Retirement Income Security Act of 1974, as amended
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from time to time.
"Event of Default": any of the events specified in Article VII, provided
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that any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"FIRREA" the Financial Institution Reform, Recovery and Enforcement Act, 12
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U.S.C. (S) 1811, et seq.
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"GAAP": Generally Accepted Accounting Principles in the United States of
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America in effect from time to time.
"Governmental Authority": any nation or government, any state or other
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political subdivision thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled (through stock or
capital ownership or otherwise) by any of the foregoing.
"Guarantee": the collective reference to (i) the guarantees of the Loan
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dated as of February 19, 1998, from the Guarantors to the Bank in the form
attached hereto as Exhibit B-1 for CAR, as Exhibit B-2 as to the Xxxxxx
Guarantors and Exhibit B-3 as to the Xxxxxxxxx Guarantors, as such Guarantee may
be amended, supplemented or otherwise modified from time to time, and (ii) the
guarantees of the Loan delivered to the Bank by the Other Guarantors, in form
and substance satisfactory to the Bank in order to satisfy the conditions of
Section 4.2(d)(i) hereof.
"Guarantors": CAR, the Xxxxxx Guarantors and the Xxxxxxxxx Guarantors and
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the Other Guarantors.
"Indebtedness": as to any Person, at a particular time, (a) all
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indebtedness for borrowed money or for the deferred purchase price of property
or services in respect of which such Person is liable, contingently or
otherwise, as obligor, guarantor or otherwise, or in respect of which such
Person otherwise assures a creditor against loss, including, without limitation,
accounts payable, accrued expenses and other current liabilities, and inter-
company accounts, (b) all liabilities secured by any Lien on any property owned
by such Person even though such Person has not assumed or otherwise become
liable for the payment thereof, and (c) capitalized lease obligations of such
Person.
"Libor Rate": for any day, the fluctuating interest rate per annum obtained
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by dividing the three month London Interbank Offered Rate quoted in the "Money
Rates" section of "The Wall Street Journal" by (ii) an amount equal to 1 minus
the "Floating Libor Reserve Requirement" for such day. "Floating Libor Reserve
Requirement" means the rate at which reserves (including, without limitation,
any marginal, supplemental or emergency reserves) are required to be
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maintained by the Bank by any applicable Governmental Authority, on the date for
which interest is being calculated, against U. S. dollar non-personal time
deposits in the United States with a term equal to one month, expressed as a
decimal.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
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arrangement, encumbrance, lien (statutory or other), or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable law of any jurisdiction).
"Loan": the loan to be made to the Company by the Bank pursuant to Section
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2.1, evidenced by the Note.
"Loan Documents": the collective reference to this Agreement, the Note, the
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Guarantee, the Security Documents and all other documents which have been
executed and delivered by the Company in connection with the Loans;
individually, a "Loan Document".
"Multiemployer Plan": a Plan which is a multiemployer plan as defined in
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Section 4001(a)(3) of ERISA.
"Note": as defined in Section 2.1.
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"Other Guarantors": the collective reference to any Person that has
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executed and delivered a Guarantee to the Bank in order to satisfy the
conditions of Section 4.2(d)(i) hereof.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant to
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Subtitle A of Title IV of ERISA or any entity succeeding to any or all of its
functions under ERISA.
"Person": an individual, a partnership, a corporation, a real estate
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investment trust, a limited liability company, a business trust, a joint stock
company, a trust, an unincorporated association, a joint venture, a Governmental
Authority or any other entity of whatever nature.
"Plan": at any time an employee pension benefit plan which is covered by
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Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code and is either (i) maintained by a member of the Commonly Controlled
Entity for employees of a member or members of the Commonly Controlled Entity,
or (ii) maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Commonly Controlled Entity is then making or accruing an
obligation to make contributions or has within the preceding five years made
contributions.
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"Real Property": at any time, the parcels of real property owned by the
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Company securing the Loan from time to time and conveyed by the $10,000,000 Deed
of Trust, as more particularly described therein.
"Reportable Event": any of the events set forth in Section 4043(b) of ERISA
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or the regulations thereunder.
"Requirement of Law": as to any Person, the partnership agreement, the
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Certificate or Articles of Incorporation and Bylaws, or Articles of
Organization, or Declaration of Trust, or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its properties or
to which such Person or any of its property is subject.
"Responsible Officer": the Vice President-Chief Financial Officer of the
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Company, or the Vice President-Chief Financial Officer of CAR or, with respect
to financial matters, the chief financial officer of a Person or the chief
accounting officer of a Person.
"Xxxxxxxxx Guarantors": Xxxxxx X. Xxxxxxxxx, Xxxxxx Xxxxxxxxx, Xxxxxx
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Xxxxxxxx, Xxxx Xxxxxxx and Xxxxx Xxxxxxxxx.
"Security Documents": the $10,000,000 Deed of Trust, the $3,500,000 Deed of
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Trust and any other instruments or documents executed by the Company or others
as security for the Note, as they may be amended, supplemented or otherwise
modified from time to time.
"Xxxxxx Guarantors": Xxxxxxx X. Xxxxxx and Xxxxx X. Xxxxxx.
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"Subsidiary": as to any Person, a corporation of which shares of stock
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having ordinary voting power (other than stock having such power only by reason
of the happening of a contingency) to elect a majority of the board of directors
or other managers of such corporation are at the time owned, or the management
of which is otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by such Person.
"Tangible Net Worth": at a particular date, all amounts which would, in
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conformity with GAAP, be included under shareholders' equity on a balance sheet
of a Person at such date; provided, however, such amounts are to be net of
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amounts carried on the books of such Person for (a) any write-up in the book
value of any assets of such Person resulting from a revaluation thereof, (b)
treasury stock, (c) unamortized debt discount and expense, (d) any cost of
investments in excess of net assets acquired at any time of acquisition by such
Person, (e) patents, patent applications, copyrights, trademarks, trade names,
and other like intangibles and (f) goodwill, experimental or organizational
expenses and other like intangibles.
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"$10,000,000 Deed of Trust ": the collective reference to the Deeds of
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Trust and/or Mortgages securing the $10,000,000 Note dated as of the date hereof
or after to be executed and delivered by the Company, conveying the Real
Property to certain trustees for the benefit of the Bank, which are to be
recorded in the jurisdictions in which the Real Property is located, as any of
them may be amended, supplemented or otherwise modified from time to time.
"$10,000,000 Note": as defined in Section 2.1.
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"Termination Date": November 19, 1998.
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"$3,500,000 Deed of Trust ": the collective reference to the Deeds of Trust
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and/or Mortgages securing the $3,500,000 Note dated as of the date hereof or
after to be executed and delivered by the Company, conveying the Real Property
to certain trustees for the benefit of the Bank, which are to be recorded in the
jurisdictions in which the Virginia Real Property is located, as any of them may
be amended, supplemented or otherwise modified from time to time.
"$3,500,000 Note": as defined in Section 2.1.
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"Total Liabilities": at a particular date, the total liabilities of a
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Person, determined in accordance with GAAP.
"Unfunded Vested Liabilities": with respect to any Plan at any time, the
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amount (if any) by which (i) the present value of all vested nonforfeitable
benefits under the Plan exceeds (ii) the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most recent valuation
date for such Plan, but only to the extent that such excess represents a
potential liability of a member of the Commonly Controlled Entity to the PBGC or
the Plan under Title IV of ERISA.
"Virginia Real Property": at any time, the parcels of real property located
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in the Commonwealth of Virginia owned by the Company securing the Loan from time
to time and conveyed by the $10,000,000 Deed of Trust, as more particularly
described therein.
"Withdrawal Liability": at a particular date, the aggregate liability of
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the Company or any Commonly Controlled Entity (regardless of the date of
payment) to any Multiemployer Plans pursuant to (S) 4201 of ERISA if, on such
date, the Company or any Commonly Controlled Entity were to withdraw (partially
or completely) from such Plans.
Section 1.2 Other Definitional Provisions.
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(a) All terms defined in this Agreement shall have the defined
meanings when used in the Note, the other Loan Documents, and in any certificate
or other document made or delivered pursuant hereto or thereto, unless otherwise
defined therein.
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(b) As used herein and in the Note, and any certificate or other
document made or delivered pursuant hereto, accounting terms not defined in
Section 1.1, and accounting terms partly defined in Section 1.1 to the extent
not defined, shall have the respective meanings given to them under GAAP.
ARTICLE 2.
AMOUNT AND TERMS OF LOAN
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Section 2.1 The Loan. Subject to the terms and conditions hereof, and
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until the Termination Date, the Bank agrees to make revolving loans to the
Company in an amount up to $13,500,000 (the "Loan"). The Loan shall be evidenced
by two (2) revolving notes of the Company (collectively, the "Note") and payable
to the order of the Bank, one dated as of February 19, 1998, in the maximum
original principal amount of $10,000,000 (the "$10,000,000 Note") and the other,
of even date herewith, in the amount of $3,500,000 (the "$3,500,000 Note"). The
Note shall bear interest from the date thereof on the unpaid principal amount
thereof at a rate per annum equal to the Libor Rate plus 1.5%. Interest only on
the Note shall be payable monthly in arrears, on the first day of each month,
beginning on the first such date to occur after the date hereof. The Note shall
mature on the Termination Date. The Note shall be in the form attached hereto
as Exhibit A. The Bank is authorized to endorse the date and amount of each
Loan of the Bank and each payment of principal with respect thereto on the
schedule annexed to and constituting a part of the Note, which endorsement shall
constitute prima facie evidence of the accuracy of the information endorsed.
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Subject to the terms and conditions hereof, the Company may borrow, repay and
reborrow the Loan. The Note shall be secured by the Security Documents.
Section 2.2 Default Interest; Late Charges. After any amount on the
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Note becomes due and payable, (whether at the stated maturity, by acceleration
or otherwise) the Note shall bear interest at a rate per annum equal to three
percent (3%) above the rate otherwise applicable until paid in full (both before
and after judgment). In the event the Company fails to pay any installment of
principal and/or interest or otherwise fails to repay the Note within fifteen
(15) days of its due date, the Company will pay the Bank on demand a late charge
of 5% of the overdue payment.
Section 2.3 Prepayments. The Company may, at its option, from time to
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time, prepay the Loans in whole or in part without premium or penalty at any
time or times. All prepayments shall be applied against the balance outstanding
on the $3,500,000 Note until the balance on such note shall be reduced to $0 and
then to the $10,000,000 Note.
Section 2.4 Computation of Interest and Fees. Interest and fees shall
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be calculated on the basis of a 360-day year for the actual days elapsed.
Section 2.5 Notice of Borrowing; Disbursements and Payments. The
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Company shall give the Bank notice of a requested advance under the Loan before
1:00 p.m., on the day prior to
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the requested Borrowing Date, specifying a Business Day on which the Loan is to
be made and the amount of such Loan. All proceeds of the Loans shall be
disbursed by the Bank to the Company first under the $10,000,000 Note until
fully funded and then under the $3,500,000 Note. Each payment by the Company on
account of principal, interest and fees with respect to the Loans shall be made
to the Bank. All payments (including prepayments) by the Company on account of
principal, interest and fees shall be made without set-off or counterclaim to
the Bank at the office of the Bank in lawful money of the United States of
America and in immediately available funds. If any payment hereunder or on the
Note becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day, and, with respect
to payments of principal or interest thereon shall be payable at the then
applicable rate during such extension.
Section 2.6 Use of Proceeds. The proceeds of the Loan shall be used by
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the Company for working capital.
Section 2.7 Fee. On the date hereof, the Company shall pay to the Bank
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a fee of $7,500.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
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In order to induce the Bank to enter into this Agreement and to make the
loans herein provided for, the Company hereby represents and warrants to the
Bank that as of February 19, 1998:
Section 3.1 Financial Condition. The pro-forma consolidated financial
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statements of the Company and CAR provided to the Bank by the Company, fairly
present the financial position of the Company and CAR purported to be shown
thereon at the dates stated therein (management believes that the assumptions
underlying the pro-forma adjustments are reasonable and such pro-forma
--- ----- --- -----
adjustment have been properly applied to the historical amounts in the
compilation of the information) and the consolidated financial statements of the
Company and CAR delivered, from time to time, to the Bank pursuant to Section
5.1 of this Agreement accurately reflect the financial condition of the Company
and CAR on the dates stated therein.
Section 3.2 No Change. Since the date of the most recent consolidated
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financial statements of the Company and CAR provided to the Bank, there has been
no material adverse change in the business, operations, assets or financial or
other condition of the Company and/or CAR.
Section 3.3 Loan to Value Ratio. The Appraised Value of the Real
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Property is at least 133% of the aggregate amount of the Loans outstanding
hereunder at a particular time.
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Section 3.4 Partnership Existence; Compliance with Law. The Company (a)
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is duly organized, validly existing and in good standing as a limited
partnership under the laws of Delaware, (b) has the partnership power and
authority to own and operate its property, to lease the property it leases and
to conduct the business in which it is currently engaged, (c) is duly qualified
as a limited partnership and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business required such qualification, and (d) is in compliance with all
Requirements of Law, except to the extent that the failure to comply therewith
could not, in the aggregate, have a material adverse effect on the business,
operations, property or financial or other condition of the Company and could
not materially adversely affect the ability of the Company to perform its
obligations under this Agreement, the Note, and the Security Documents and to
effectuate the transactions contemplated hereby and thereby.
Section 3.5 Partnership Power; Authorization; Enforceable Obligations.
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The Company has the partnership power and authority to make, deliver and perform
the Loan Documents to which it is a party, to borrow hereunder and to effectuate
the transactions contemplated hereby and has taken all necessary action to
authorize the borrowings on the terms and conditions of this Agreement and the
Note, to grant the mortgage liens and security interests pursuant to the
Security Documents and to authorize the execution, delivery and performance of
the Loan Documents to which it is a party. No consent or authorization of,
filing with, or other act by or in respect of any Person or any Governmental
Authority, is required or advisable in connection with the borrowings hereunder
or with the execution, delivery, performance, validity or enforceability of the
Loan Documents to which it is a party. The Loan Documents to which the Company
is a party have been duly executed and delivered on behalf of the Company and
constitute the legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
general principles of equity regardless of whether applied in a proceeding in
equity or at law, the discretion of the court before which any action or
proceeding may be brought and other applicable laws which may limit the
enforceability of certain of the remedial or procedural provisions contained in
the Loan Documents.
Section 3.6 No Legal Bar. The execution, delivery and performance of
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the Loan Documents and the borrowings hereunder, the use of the proceeds thereof
and the granting of the security interests pursuant to the Security Documents
will not violate any Requirement of Law applicable to the Company or any
Contractual Obligation of the Company, and will not result in, or require, the
creation or imposition of any Lien on any of its properties or revenues pursuant
to any Requirement of Law or Contractual Obligation except as permitted in
Section 5.2 hereof.
Section 3.7 No Material Litigation. No litigation, investigation or
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proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Company, threatened by or against the Company, any of
its employee benefit programs, policies or Plans or against any of its
properties or revenues (a) with respect to the Loan Documents or
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any of the transactions contemplated thereby, or (b) which would have a material
adverse effect on the business, operations, property or financial or other
condition of the Company.
Section 3.8 No Default. The Company is not in default under or with
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respect to any material Contractual Obligation in any respect which would be
materially adverse to the business, operations, property or financial or other
condition of the Company, or which could materially adversely affect the ability
of the Company to perform its obligations under the Loan Documents. No Default
or Event of Default has occurred and is continuing.
Section 3.9 Ownership of Property; Liens. The Company has good record
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and marketable title in fee simple to all its real property owned by it, and
good title to all other property owned by it, and none of such property is
subject to any Lien, except as permitted in Section 5.2 hereof.
Section 3.10 No Burdensome Restrictions. To the knowledge of the
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Company, no Contractual Obligation of the Company and no Requirement of Law
materially adversely affects, or insofar as the Company may reasonably foresee
may so affect, the business, operations, property or financial or other
condition of the Company.
Section 3.11 Taxes. The Company has filed or caused to be filed all tax
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returns which to the knowledge of the Company are required to be filed, and has
paid all taxes shown to be due and payable on said returns or on any assessments
made against it or any of its property and all other taxes, fees or other
charges imposed on it or any of its property by any Governmental Authority; and
no tax liens have been filed and, to the knowledge of the Company, no claims are
being asserted with respect to any such taxes, fees or other charges, unless and
to the extent that such taxes, assessments, fees or other changes are contested
in good faith and by appropriate procedure, such taxes, assessments, fees or
charges are not subject to any liens other than Permitted Liens, and adequate
reserves therefor have been established as required by GAAP.
Section 3.12 Federal Regulations. The Company is not engaged and will
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not engage, principally or as one of its important activities, in the business
of extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms under
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect. No part of the proceeds of any loans
hereunder will be used for "purchasing" or "carrying" "margin stock" as so
defined or for any purpose which violates, or which would be inconsistent with,
the provisions of the Regulations of such Board of Governors.
Section 3.13 Compliance with ERISA; Prohibited Transactions. Each member
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of the Commonly Controlled Entity has fulfilled its obligations under the
minimum funding standards of ERISA and the Code with respect to each Plan and is
in compliance in all material respects with provisions of ERISA and the Code and
published regulations presently applicable to each Plan. No member of the
Commonly Controlled Entity has incurred any liability, or has entered
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into any transaction that is likely to cause any liability to be incurred to the
PBGC or any Plan under Title IV of ERISA. No Lien has been attached and no
Person has threatened to attach a Lien on any property of the Company as a
result of the Company's failure to comply with ERISA. None of the Plans is a
Multiemployer Plan. With respect to each Plan, the Plan has not at any time:
(a) engaged in any "prohibited transaction," as such term is defined
in Section 4975 of the Code or in Section 406 of ERISA;
(b) incurred any "accumulated funding deficiency," as such term is
defined in Sections 302(a)(2) and 4243 of ERISA, whether or not waived; or
(c) been terminated in a manner which could result in the imposition
of a Lien on the property of the Company pursuant to Section 4068 of ERISA.
Section 3.14 Investment Company Act. The Company is not an "investment
----------------------
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
Section 3.15 Subsidiaries. There are no Subsidiaries of the Company.
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Section 3.16 Operations and Business. The Company has engaged in no
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business other than the business currently being conducted by the Company.
Section 3.17 Patents, Copyrights, Permits, Licenses, Trademarks and
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Leases. The Company owns all of the patents, trademarks, permits, service
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marks, trade names, copyrights and licenses, or rights necessary for the
operation of its business and has obtained, or shall have obtained, all
assignments of all leases and other rights of whatever nature, necessary for the
present and planned future conduct of its business, without any known conflict
with the rights of others which would result in a material adverse effect on the
business, operations, property or financial or other condition of the Company.
Section 3.18 The Security Documents. Upon the due execution and delivery
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thereof pursuant to this Agreement and upon the recording thereof of the
appropriate jurisdiction where Real Property is located, the provisions of the
Security Documents will be effective to create in favor of the Bank, a legal,
valid and enforceable security interest in all right, title and interest of the
Company in the collateral described therein. When Uniform Commercial Code
financing statements have been filed in the offices in the jurisdictions listed
in Schedule 1, the Security Documents shall constitute fully perfected security
interests in all right, title and interest of the Company in such collateral
superior in right to any Liens, existing or future, which the Company or any
third Person may have against such collateral or interests therein, except as
permitted by Section 5.2 below or specifically consented to by the Bank.
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ARTICLE IV
CONDITIONS PRECEDENT
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Section 4.1 Conditions to First Loan. The obligation of the Bank to
------------------------
make its first Loan hereunder is subject to the satisfaction of the following
conditions precedent:
(a) Note. The Bank shall have received the $10,000,000 Note
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conforming to the requirements hereof, duly executed and delivered by a duly
authorized officer of the Company.
(b) Legal Opinion of Counsel. The Bank shall have received the
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executed legal opinion of (i) Xxxxxx, Xxxxxx & Xxxxxxxxx as counsel for Company
and CAR, and (ii) Charapp, Deese & Xxxxx, LLP, as counsel to the Xxxxxxxxx
Guarantors, and (iii) Surovell, Xxxxxxx, Xxxxxx & Xxxxx, P.C., as counsel to the
Xxxxxx Guarantors, each dated the date of the making of the initial Loan
hereunder and addressed to the Bank, covering such matters incidental to the
transactions contemplated hereby as the Bank may reasonably require and
satisfactory in form and substance to the Bank.
(c) Partnership Proceedings. The Bank shall have received a copy of
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the resolutions (in form and substance satisfactory to the Bank) of the Company
authorizing (i) the execution, delivery and performance of the Loan Documents to
which it is a party, (ii) the consummation of the transactions contemplated
thereby and (iii) the borrowings herein provided for and the granting of the
mortgage liens and security interests pursuant to the Security Documents,
certified by the general partner of the Company on the date of the making of the
initial Loan hereunder. Such certificate shall state that the resolutions set
forth therein have not been amended, modified, revoked or rescinded as of the
date of such certificate.
(d) Incumbency Certificate of Company. The Bank shall have received a
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certificate of the Company, dated the date of the making of the initial Loan
hereunder, as to the incumbency and signature of the representatives of the
general partner of the Company executing the Loan Documents and any certificate
or other document to be delivered pursuant hereto or thereto.
(e) Proceedings of CAR. The Bank shall have received a copy (in form
------------------
and substance satisfactory to the Bank) of the resolutions of CAR, certified by
a Responsible Officer of CAR on the date of the making of the initial advance
hereunder, authorizing CAR's execution, delivery and performance of the Loan
Documents to which it is a party. Such certificate shall state that the
resolutions set forth therein have not been amended, modified, revoked or
rescinded as of the date of such certificate.
(f) Incumbency Certificate of CAR. The Bank shall have received a
-----------------------------
certificate of CAR, dated the date of the making of the initial advance
hereunder, as to the
12
incumbency and signature of the Responsible Officer authorized to sign the Loan
Documents to which it is a party and any other certificate or other document to
be delivered pursuant thereto.
(g) Guarantees. The Bank shall have received the Guarantees other
----------
than those of the Other Guarantors, duly executed and delivered by such
Guarantors and dated the date hereof.
(h) Security Documents. The Bank shall have received the $10,000,000
------------------
Deed of Trust, each duly executed and delivered by a duly authorized Responsible
Officer of the Company.
(i) Filings, Registrations and Recordings. Any documents (including,
-------------------------------------
without limitation, the Deed of Trust and Uniform Commercial Code financing
statements) required to be filed, registered or recorded in order to create, in
favor of the Bank, a perfected Lien on the collateral described in the Security
Documents shall have been properly filed, registered or recorded in each office
in each jurisdiction in which such filings, registrations and recordations are
required; the Bank shall have received acknowledgment copies of all such
filings, registrations and recordations stamped by the appropriate filing,
registration or recording officer (or, in lieu thereof, other evidence
satisfactory to the Bank that all such filings, registrations and recordations
have been made); and the Bank shall have received evidence that all necessary
filing, subscription and inscription fees and all recording and other similar
fees, and all taxes and other expenses related to such filings, registrations
and recordings have been paid in full by or on behalf of the Company.
(j) No Proceedings or Litigation. To the knowledge of the Company, no
----------------------------
action, suit or proceeding before any arbitrator or any Governmental Authority
shall have been commenced, no investigation by any Governmental Authority shall
have been threatened, against the Company or any Guarantor or any of the
officers or representatives of the Company or any Guarantor, seeking to
restrain, prevent or change the transactions contemplated by the Loan Documents,
in whole or in part, or questioning the validity or legality of the transactions
contemplated by the Loan Documents or seeking damages in connection with such
transactions.
(k) Insurance. The Bank shall have received evidence satisfactory to
---------
it that the Company or other appropriate party has obtained the policies of
insurance required by the Security Documents and Section 5.5 of this Agreement.
(l) Consents, Licenses, Approvals, etc. The Bank shall have received
----------------------------------
certified true copies of all consents, licenses and approvals required or
advisable in connection with the execution, delivery, performance, validity and
enforceability of the Loan Documents, and such consents, licenses and approvals
shall be in full force and effect and be satisfactory in form and substance to
the Bank.
13
(m) No Default or Event of Default. No Default or Event of Default
------------------------------
shall have occurred and be continuing hereunder or after giving effect to the
making of the Loans hereunder.
(n) Initial Public Offering. CAR shall have completed an initial
-----------------------
public offering in which at least $225,000,000 of equity capitalization was
raised from the public and contributed it to the equity of the Company.
(o) Appraised Value. The Appraised Value of the Real Property is no
---------------
less than $18,000,000.
(p) Additional Information. The Bank shall have received such
----------------------
additional information as it shall have reasonably requested, including, without
limitation, copies of any debt agreements, security agreements and other
material contracts.
(q) Additional Matters. All corporate and other proceedings and all
------------------
other documents and legal matters in connection with the transactions
contemplated by the Loan Documents shall be satisfactory in form and substance
to the Bank and its counsel.
Section 4.2 Conditions to All Loans. The obligation of the Bank to make
-----------------------
any Loan hereunder on any date is subject to the satisfaction of the following
conditions precedent:
(a) Representations and Warranties. The representations and
------------------------------
warranties made by the Company or any Guarantor in the Loan Documents to which
any of them is a party, or which are contained in any certificate, document or
financial or other statement furnished at any time under or in connection
herewith or therewith, shall be correct in all material respects on and as of
the date of such Loan as if made on and as of such date.
(b) No Default or Event of Default. No Default or Event of Default
------------------------------
shall have occurred on or before such date and/or after giving effect to the
Loan to be made on such date.
(c) Real Property. With respect to the Real Property:
--------------
(i) The Bank shall have received the Deed of Trust, or an
amendment or supplement thereto, conveying the Real Property to secure the Loan,
in form and substance satisfactory to the Bank and such document shall have been
duly recorded in all jurisdictions where the Real Property is located.
(ii) The Bank shall have received an ALTA lender's policy of title
insurance, containing no exceptions (including exceptions as to unfiled
mechanics' and materialmen's liens and matters of survey) unacceptable to the
Bank, insuring the Bank that the Deed of Trust is a valid and first lien on the
Real Property and containing such endorsements as the Bank may reasonably
require.
14
(iii) The Bank shall have received a Phase 1 environmental
assessment report from a qualified environmental consultant acceptable to the
Bank with respect to the Real Property and any existing improvements, which
report shall be satisfactory in form and substance to the Bank, and shall
include, without limitation, historical research into prior ownership and use,
review of governmental records, review of available aerial photographs and
topographical maps, on-site visual inspection and review of surrounding land
use.
(iv) The Bank shall have received a certificate from an
engineering firm qualified in such matters and approved by the Bank to the
effect that the existing improvements on the Real Property have been inspected
for asbestos and other hazardous or toxic building materials and either (i) no
asbestos or other hazardous or toxic building materials were detected or (ii)
asbestos or other hazardous or toxic building materials were detected and any
potential risk to human health arising therefrom was abated.
(v) The Bank shall have received evidence acceptable to the
Bank that the Real Property and the improvements thereon comply with all
applicable local, state and federal laws, rules, regulations and/or
requirements.
(vi) The Bank shall have received written evidence that the Real
Property is not located in a flood plain, as shown upon the appropriate Flood
Area Map prepared by the Federal Insurance Administration of the United States
Department of Housing and Urban Development or, if the Real Property is located
in a flood plain, flood insurance satisfactory in all respects to the Bank.
(vii) The Bank shall have received current plats of survey of the
Real Property prepared and certified by a surveyor qualified in such matters and
approved by the Bank, certified to the Bank and the title insurance company,
showing (A) the dimensions of the Real Property, (B) the dimensions and location
of the buildings and improvements constructed thereon, (c) the dimensions of the
parking areas as well as the total number of on-site parking spaces, (D) all
recorded easements encumbering the Real Property and identifying the same by
book and page number, (E) any recorded building restrictions and building
setback lines applicable to the Real Property, and (F) the means of ingress and
egress to the Real Property, together with a certificate from the surveyor to
the Bank relating to such matters as the Bank may require.
(d) Advances Outstanding Exceeding $10,000,000. With respect to
------------------------------------------
advances outstanding exceeding $10,000,000, the Bank shall have received (A)
the duly executed $3,500,000 Note, and (B) an amendment to the Guarantee
executed by CAR increasing the amount guarantied to $13,500,000 in form and
substance satisfactory to the Bank.
15
(e) Guarantees from Other Guarantors. The Bank shall have received
--------------------------------
the following:
(i) sufficient Guarantees from Other Guarantors such that the
aggregate amount of the Loan outstanding hereunder at such date, after giving
effect to such Loan, shall not exceed the sum of (A) $5,100,000 plus (B) the
aggregate face amount of each Guarantee held by the Bank (remaining outstanding,
and not withdrawn) that has been delivered to the Bank by the Other Guarantors
as at such date;
(ii) an executed legal opinion of counsel to each of the Other
Guarantors whose Guarantee is included in the determination made at such date in
the preceding subsection, each of which counsel shall be reasonably acceptable
to the Bank, each of which opinion shall be dated the date of delivery to the
Bank of such Guarantee and addressed to the Bank, and shall cover such matters
incidental to the transactions contemplated hereby as the Bank may reasonably
require and satisfactory in form and substance to the Bank;
(iii) in the case of each Other Guarantor that is not an
individual and whose Guarantee is included in the determination made at such
date in subsection (a) above, a copy of the resolutions or other document of
consent, in form and substance satisfactory to the Bank (whether such guarantor
be a corporation, partnership, limited liability company or other entity)
authorizing the execution, delivery and performance of each such Other
Guarantor's Guarantee.
(f) Satisfaction of Conditions. Each borrowing by the Company under
--------------------------
this Agreement shall constitute a representation and warranty by the Company as
of the date of each such borrowing that the conditions contained in the
foregoing paragraphs (a) through (e) of this Section 4.2 have been satisfied.
ARTICLE V
AFFIRMATIVE COVENANTS
---------------------
The Company hereby agrees that, so long as the Note remains
outstanding and unpaid or any other amount is owing to the Bank hereunder, the
Company shall:
Section 5.1 Financial Statements. Furnish to the Bank:
--------------------
(a) as soon as available, but in any event within ninety (90) days
after the end of each fiscal year of the Company, a copy of the audited
financial statements of the Company prepared on a consolidated and consolidating
basis with CAR in accordance with GAAP as at the end of such year, including a
balance sheet and statements of income and retained earnings and paid-in capital
and changes in financial position, setting forth in each case in comparative
form the figures for the previous year, certified without a "going concern" or
like qualification or exception, or qualification arising out of the scope of
the audit, by independent certified public
16
accountants of nationally recognized standing acceptable to the Bank, and
certified by a Responsible Officer of the Company as being true and correct in
all material respects;
(b) as soon as available, but in any event not later than forty-five
(45) days after the end of each accounting quarter of the Company internally
prepared financial statements of the Company prepared on a consolidated and
consolidating basis with CAR in accordance with GAAP as at the end of such
quarter, including a balance sheet and statements of income and retained
earnings and paid-in capital and changes in financial position, certified by a
Responsible Officer;
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except in the case of interim statements, excluding notes thereto and
normal year-end adjustments).
Section 5.2 Certificates; Other Information. Furnish to the Bank:
-------------------------------
(a) concurrently with the delivery of the financial statements
referred to in Sections 5.1(a) and (b) above, a certificate of a Responsible
Officer of the Company (i) stating that, to the best of such officer's
knowledge, the Company during such period has observed or performed all of its
covenants and other agreements, and satisfied every condition, contained in the
Loan Documents to be observed, performed or satisfied by them, and that such
officers have obtained no knowledge of any Default or Event of Default except as
specified in such certificate, and (ii) showing in detail in form and substance
satisfactory to the Bank, the calculations supporting such statement in respect
of Section 5.9 hereof;
(b) within five days after the same are sent, copies of all financial
statements and reports which the Company sends to partners, and within five days
after the same are filed, copies of all financial statements and reports, which
the Company or CAR may make to, or file with, the Securities and Exchange
Commission or any successor or analogous Governmental Authority;
(c) furnish to the Bank by January 31 of each year an estimate of the
Withdrawal Liability as of the end of the Plan year occurring in the preceding
year for each Plan that is a Multiemployer Plan; and
(d) promptly, such additional financial and other information as the
Bank may from time to time reasonably request.
Section 5.3 Payment of Obligations. Pay, discharge or otherwise satisfy
----------------------
at or before maturity or before they become delinquent, as the case may be, all
its Indebtedness and other obligations of whatever nature, except, in the case
of such other obligations, when the amount or validity thereof is currently
being contested in good faith by appropriate proceedings and
17
reserves in conformity with GAAP with respect thereto have been provided on the
books of the Company.
Section 5.4 Conduct of Business and Maintenance of Existence. Engage in
------------------------------------------------
business of the same general type as now conducted by the Company, and preserve,
renew and keep in full force and effect its partnership existence and take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business; comply with all Contractual
Obligations and Requirements of Law except to the extent that the failure to
comply therewith would not, in the aggregate, have a material adverse effect on
the business, operations, property or financial or other condition of the
Company.
Section 5.5 Maintenance of Property, Insurance. Keep all property
----------------------------------
useful and necessary in its business in good working order and condition, normal
wear and tear excepted; maintain or cause to be maintained by the lease of any
property, with financially sound and reputable insurance companies insurance on
all its property, including the Real Property, in at least such amounts and
against at least such risks as are usually insured against in the same general
area by companies engaged in the same or a similar business, designating the
Bank as loss payee, provided that, in any event, the Company shall maintain or
-------- ---- -- --- -----
cause to be maintained by the lease of any property, insurance at all times on
its tangible personal property and real property in an amount equal to the
replacement cost of such property at such time and shall maintain extended
coverage for vandalism and malicious mischief; and furnish to the Bank, upon
written request, full information as to the insurance carried.
Section 5.6 Inspection of Property; Books and Records; Discussions.
----------------------------------------- -----------
Keep proper books of record as reasonably required in the ordinary course of
business and account in which full, true and correct entries in conformity with
GAAP and all Requirements of Law shall be made of all material dealings and
transactions in relation to its business and activities as reasonably required
in the ordinary course of business; and permit representatives of the Bank to
visit and inspect any of its properties and examine and make abstracts from any
of its books and records at any reasonable time and as often as may reasonably
be desired, and to discuss the business, operations, properties and financial
and other condition of the Company with officers and employees of the Company
and with its independent certified public accountants.
Section 5.7 Notices. Promptly give notice to the Bank:
-------
(a) of the occurrence of any Default or Event of Default of which the
Company has knowledge;
(b) of any (i) default or event of default under any Contractual
Obligation of the Company or (ii) litigation, investigation or proceeding which
may exist at any time between the Company and any Governmental Authority, which
in either case would have a material adverse effect on the business, operations,
property or financial or other condition of the Company;
18
(c) of any litigation or proceeding affecting the Company, or any of
its employee benefit programs, policies or plans in which the amount sued for is
$500,000 or more and not fully covered by insurance or in which injunctive or
similar relief is sought and of any material adverse development in such
litigation or proceeding;
(d) of the following events, as soon as possible, and in any event no
later than the date the Company gives or is required to give notice to the PBGC
of (i) the occurrence of any Reportable Event with respect to any Plan which
might constitute grounds for a termination of such Plan under Title IV of ERISA,
or knows the Plan Administrator of any Plan has given or is required to give
notice of any such Reportable Event given or required to be given to the PBGC,
or (ii) the institution of proceedings or the taking or expected taking of any
other action by PBGC or the Company to terminate any Plan, and in addition to
such notice, deliver to the Bank whichever of the following may be applicable
(A) a certificate of the chief financial officer of the Company setting forth
details as to such Reportable Event and the action that the Company or Commonly
Controlled Entity proposes to take with respect thereto, together with a copy of
any notice of such Reportable Event that may be required to be filed with PBGC,
or (B) any notice delivered by PBGC evidencing its intent to institute such
proceedings to terminate the Plan or to appoint a trustee to administer the Plan
or any notice to PBGC that such Plan is to be terminated, as the case may be, or
(iii) any member of the Commonly Controlled Entity receives notice of complete
or partial withdrawal liability under Title IV of ERISA; and
(e) of a material adverse change in the business, operations, property
or financial or other condition of the Company.
Each notice pursuant to this Section shall be accompanied by a statement of
the chief executive officer or chief financial officer of the Company setting
forth details of the occurrence referred to therein and stating what action the
Company proposes to take with respect thereto. For all purposes of clause (d) of
this Section 5.7, the Company shall be deemed to have all knowledge of all facts
attributable to the administrator of such Plan.
Section 5.8 Further Assurances. Execute and file all such further
------------------
instruments, and perform such other acts, as the Bank may determine are
necessary or advisable.
Section 5.9 Financial Covenants. Maintain, on a consolidated basis with
-------------------
CAR:
(a) a Debt Service Coverage Ratio of no less than 2.50 to 1.0;
(b) a ratio of Total Liabilities to Tangible Net Worth of not more
than .35 to 1.0, measured at the end of each fiscal quarter of the Company; and
(c) a minimum Tangible Net Worth of $200,000,000, plus 80% of the net
cash proceeds from any future equity offerings.
19
ARTICLE VI
NEGATIVE COVENANTS
------------------
The Company hereby agrees that, so long as the Note remains outstanding and
unpaid or any other amount is owing to the Bank hereunder, the Company shall
not, directly or indirectly, without the Bank's consent:
Section 6.1 Indebtedness. Create, incur, assume or suffer to exist any
------------
Indebtedness (other than current trade and other current accounts payable in the
ordinary course of business in accordance with customary trade terms), except:
(a) Indebtedness in respect of the Note;
(b) Indebtedness to the Bank;
(c) Indebtedness expressly consented to by the Bank in writing; and
(d) Other Indebtedness so long as such Indebtedness is not secured by
Liens upon the Real Property or the leases or rents therefrom.
Section 6.2 Limitation on Liens. Create, incur, assume or suffer to
-------------------
exist, any Lien upon any of the Real Property or the leases or rents therefrom.
Section 6.3 Limitation on Contingent Obligations. Agree to, or assume,
------------------------------------
guarantee, endorse or otherwise in any way, be or become responsible or liable
for, directly or indirectly, any Contingent Obligation other than Indebtedness
permitted under Section 6.1 hereof.
Section 6.4 Prohibition of Fundamental Changes. Enter into any
----------------------------------
transaction of merger or consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), convey, sell, lease,
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or substantially all of its business or assets, whether now
owned or hereafter acquired (including, without limitation, receivables and
leasehold interests but excluding obsolete or worn out property, or Inventory
disposed of in the ordinary course of business), or acquire by purchase or
otherwise all or substantially all the business or assets of, or stock or other
evidence of beneficial ownership of, any Person, or make any material change in
its present method of conducting business.
Section 6.5 INTENTIONALLY DELETED.
---------------------
Section 6.6 Investments. Except as otherwise specifically permitted
-----------
hereunder, make or commit to make, any advance, loan, extension of credit or
capital contribution to, or purchase of any stock, bonds, note, debentures or
other securities of, or make any other investment in, any Person (all such
transactions being herein called "investments") except:
20
(a) investments in accounts, contract rights and chattel paper (as
defined in the Uniform Commercial Code), arising or acquired in the ordinary
course of business;
(b) investments in bank certificates of deposit, open market
commercial paper maturing within one year having the highest rating of either
Standard & Poor's Corporation or Xxxxx'x Investors Service, Inc., U.S. Treasury
Bills and other short term obligations issued or guaranteed by the U.S.
Government or any agency thereof;
(c) to CAR in accordance with Section 6.7;
(d) to Persons in connection with the acquisition of real property in
the ordinary course of business of the Company;
(e) to Persons in connection with the construction, renovation,
expansion or improvement of real property acquired or to be acquired by the
Company in the ordinary course of business;
(f) pursuant to redemption granted to holders of Units of Partnership
Interest of the Company ("Units");
(g) pursuant to the grant of exercise of options or warrants for Units
of the Company; and
(h) subsidiaries of the Company in accordance with Section 6.7.
Section 6.7 Transactions with Affiliates and Officers. (i) Enter into
-----------------------------------------
any transactions, including, without limitation, the purchase, sale or exchange
of property or the rendering of any services, with any Affiliate, or enter into,
assume or suffer to exist any employment or consulting contract with any
Affiliate or any officer thereof, except a transaction or contract which is in
the ordinary course of the Company's business and which is upon fair and
reasonable terms no less favorable to the Company than it would obtain in a
comparable arm's length transaction with a Person not an Affiliate or (ii) make
any advance or loan in excess of $500,000, in the aggregate, to any Affiliate of
the Company other than CAR or to any officer or employee thereof or of the
Company or to any trust of which any of the foregoing is a beneficiary, or to
any Person on the guarantee of any of the foregoing except for loans
specifically permitted by this Agreement, or (iii) pay any fees, costs or
expenses to, or reimburse or assume any obligation for the reimbursement of any
expenses, fees or costs incurred by any Affiliate except in the ordinary course
of business.
Section 6.8 Compliance with ERISA. (a) Terminate any Plan so as to
---------------------
result in any material liability to PBGC or any material Withdrawal Liability,
(b) engage in or permit any Person to engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan
which would subject the Company to any material
21
tax, penalty or other liability, (c) incur or suffer to exist any material
"accumulated funding deficiency" (as defined in Sections 302(a)(2) and 4243 of
ERISA), whether or not waived, involving any Plan, except for contingent
Withdrawal Liability not in excess of $500,000, or (d) allow or permit to exist
any event or condition which presents a material risk of incurring a material
liability to PBGC.
Section 6.9 No Subsidiaries. Directly or indirectly form or hold any
---------------
Subsidiaries, other than subsidiaries organized to own real property of the
Company in the ordinary course of business.
Section 6.10 Exception to Negative Covenants. Notwithstanding anything
-------------------------------
in this Article VI of this Agreement, the Company and CAR may take such actions
(including without limitation, the making of distributions) that are necessary
to assure that CAR continues to qualify as a real estate investment trust under
the Code and that the Company is treated as a partnership for tax purposes under
the Code so long as such actions do not further encumber the Real Property or
have a material adverse effect on the value of the Real Property, the leases
thereof or the rental income therefrom.
ARTICLE VII
EVENTS OF DEFAULT
-----------------
Upon the occurrence of any of the following events:
(a) The Company shall fail to pay any principal or interest on the
Note when due, and such failure shall continue for ten (10) days or the Company
shall fail to pay any other amount payable hereunder in accordance with the
terms hereof, or
(b) Any representation or warranty made or deemed made by the Company
herein or in any other Loan Document, or by any Guarantor in any Loan Document
to which it is a party or in any certificate, document or financial or other
statement furnished at any time under or in connection with any Loan Document
shall prove to have been incorrect in any material respect on or as of the date
made or deemed made; or
(c) The Company shall default in the observance or performance of any
agreement contained in Section 5.5 or Article VI hereof and such default shall
not have been cured within a period of 30 days; or
(d) Any of the Guarantors shall default under or breach the terms of
the Guarantee and such default shall not have been cured within a period of 30
days; or
(e) The Company or any Guarantor shall default in the observance or
performance of any other covenant or agreement contained herein for a period of
thirty (30) days after written notice shall have been given by the Bank to the
Company; or the Company or any
22
Guarantor shall default in the observance or performance of any other covenant
or agreement contained in any other Loan Document and such default is not
remedied within the applicable period of grace (if any) provided in such Loan
Document; or
(f) Any Loan Document shall cease, for any reason, to be in full force
and effect in accordance with its terms or any party thereto shall so assert in
writing; or any Security Document shall cease, for any reason, to grant to the
Bank a legal, valid and enforceable Lien on any of the collateral described
therein or shall cease, for any reason, to have the priority purport ed to be
created thereby at the time of the execution thereof; or any party to any Loan
Document shall default in the observance or performance of any of the covenants
or agreements contained therein and such default shall not have been cured
within a period of 30 days; or
(g) Any default or event of default shall occur and remain uncured
beyond any applicable grace period under any note, security documents,
guarantees, agreements, documents or other instruments (other than the Loan
Documents) between the Bank and (i) CAR, (ii) the Company or (iii) any Affiliate
of CAR or the Company; or
(h) The Company, shall (i) default in any payment of principal of or
interest on any Indebtedness or in the payment of any Contingent Obligation,
beyond the period of grace, if any, provided in the instrument or agreement
under which such Indebtedness or Contingent Obligation was created; or (ii)
default in the observance or performance of any other agreement or condition
relating to any such Indebtedness or Contingent Obligation or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur, the effect of which default or other event is (A) to cause
such Indebtedness to become due prior to its stated maturity or such Contingent
Obligation to become payable, or (B) to allow the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Contingent Obligation (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries), to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or such Contingent
Obligation to become payable; or
(i) (i) The Company shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for it, or for all or any
substantial part of its assets, or the Company shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced against the
Company any case, proceeding or other action of a nature referred to in clause
(i) above which is not dismissed within sixty (60) days or which results in the
entry of an order for relief or any such adjudication or appointment which shall
not have been vacated, discharged or stayed or bonded pending appeal within
sixty (60) days from the entry thereof; or (iii) there shall be commenced
against the Company any case, proceeding or other action seeking issuance of a
23
warrant of attachment, execution, distraint or similar process against all or
any substantial part of its assets, which results in the entry of an order for
any such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or (iv) the
Company, shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause (i), (ii)
or (iii) above; or (v) the Company shall generally not, or shall be unable to,
or shall admit in writing its inability to, pay its debts as they become due; or
(j) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) any "accumulated funding deficiency" (as defined in Sections 302(a)(2) and
4243 of ERISA), whether or not waived, shall exist with respect to any Plan,
(iii) a Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Plan, which Reportable Event or institution of
proceedings is, in the reasonable opinion of the Bank, likely to result in the
termination of such Plan for purposes of Title IV of ERISA and, in the case of a
Reportable Event, the continuance of such Reportable Event unremedied for ten
days after the earlier of the date when the Company obtains actual knowledge of
the Reportable Event or the date when notice of such Reportable Event pursuant
to Section 4043(a), (c) or (d) of ERISA is given or the continuance of such
proceedings for ten days after commencement thereof, as the case may be, (iv)
any Plan shall terminate for purposes of Title IV of ERISA, (v) if on any date,
the Withdrawal Liability exceeds $100,000, or (vi) any other event or condition
shall occur or exist and in each case in clauses (i) through (vi) above, such
event or condition, together with all other such events or conditions, if any,
could subject the Company to any tax, penalty or other liabilities which in the
aggregate would result in a material adverse change to the business, operations,
property or financial or other condition of the Company; or
(k) One or more final judgments or decrees shall be entered against
the Company which are not insured and which involve more than $500,000 and such
judgments or decrees shall not have been vacated, discharged, or stayed within
60 days from the entry thereof;
Then, and in any such event, (a) if such event is an Event of Default
specified in paragraph (i) above and such Event of Default shall be continuing,
automatically the obligation of the Bank to make Loans hereunder shall
immediately terminate and the Loans hereunder (with accrued interest thereon)
and all other amounts owing under this Agreement and the Note shall immediately
become due and payable, and (b) if such event is any other Event of Default and
such Event of Default shall be continuing and has not been cured within any
applicable grace period, (i) the Bank may, by notice to the Company, terminate
its obligation to make Loans hereunder, whereupon it shall immediately
terminate; and/or (ii) the Bank may, by notice of default to the Company,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the Note to be due and payable forthwith,
whereupon the same shall immediately become due and payable. Except as
expressly provided above in this
24
Section, presentment, demand, protest and all other notices of any kind are
hereby expressly waived.
ARTICLE VIII
MISCELLANEOUS
-------------
Section 8.1 Amendments and Waivers. No provision of any Loan Document may
----------------------
be amended or modified in any way, nor may non-compliance therewith be waived,
except pursuant to a written instrument executed by the Bank and the Company.
In the case of any waiver, the Company and the Bank shall be restored to their
former position and rights hereunder and under the outstanding Note, the
Guarantee and the Security Documents, and any Default or Event of Default waived
shall be deemed to be cured and not continuing; but no such waiver shall extend
to any subsequent or other Default or Event of Default, or impair any right
consequent thereon.
Section 8.2 Notices. All notices, requests and demands to or upon the
-------
respective parties hereto to be effective shall be in writing or by telefax and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered by hand, or when deposited in the mail, postage
prepaid, or, in the case of telefaxed notice, when sent, or in the case of
private courier, when delivered to such courier, addressed as follows or to such
address as may be hereafter notified by the respective parties hereto and any
future holders of the Note:
The Company: Capital Automotive L.P.
Attn: Xxxxxx X. Xxxxxx
0000 Xxxxxx Xxxx Xxxx
Xxxxx 000
XxXxxx, Xxxxxxxx 00000
The Bank: NationsBank, N.A.
Dealer Financial Services
Attn: Xxxxxxx X. Xxxxxxx, Vice President
0000 Xxx Xxxxxxxx Xxxxx, Xxxxx 000
XxXxxx, Xxxxxxxx 00000
provided that any notice, request or demand to or upon the Bank shall not be
effective until received.
Section 8.3 No Waiver; Cumulative Remedies. No failure to exercise and no
------------------------------
delay in exercising, on the part of the Bank, any right, remedy, power or
privilege hereunder or under any Loan Document, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder or thereunder preclude any other or further exercise thereof
or the exercise of any other right, remedy, power or privilege. The rights,
remedies,
25
powers and privileges herein or therein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
Section 8.4 Survival of Representations and Warranties. All
------------------------------------------
representations and warranties made under any Loan Document and in any document,
certificate or statement delivered pursuant thereto or in connection therewith
shall survive the execution and delivery of such Loan Document.
Section 8.5 Payment of Expenses and Taxes. The Company agrees (a) to pay
-----------------------------
or reimburse the Bank for all of its reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to the Loan Documents and any other
documents prepared in connection therewith, and the consummation of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to the Bank, (b) to pay or
reimburse the Bank for all its reasonable costs and expenses incurred in
connection with the enforcement or preservation of any rights under the Loan
Documents and any such other documents, including, without limitation,
reasonable fees and disbursements of counsel to the Bank, (c) to pay, indemnify,
and to hold the Bank harmless from, any engineering fees, any and all recording
and filing fees and taxes and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other taxes, if any, which
may be payable or determined to be payable in connection with the execution and
delivery and recordation of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of the Loan Documents, and any such other
documents, and (d) to pay, indemnify, and hold the Bank harmless from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of the Loan Documents or any transaction financed
in whole or in part directly or indirectly with the proceeds of any loans made
under this Agreement (all the foregoing, collectively, the "indemnified
liabilities"), provided, that the Company shall have no obligation hereunder
--------
with respect to indemnified liabilities arising from (i) the gross negligence or
willful misconduct of the Bank or (ii) legal proceedings commenced against the
Bank by any security holder or creditor thereof arising out of and based upon
rights afforded any such security holder or creditor solely in its capacity as
such or (iii) a breach of this Agreement by the Bank. The agreements in this
Section shall survive repayment of the Note and all other amounts payable
hereunder.
Section 8.6 Successors and Assigns. This Agreement shall be binding upon
----------------------
and inure to the benefit of the Company and the Bank, all future holders of the
Note and their respective successors and assigns, except that the Company may
not assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of the Bank.
26
Section 8.7 Setoff.
------
(a) The Company agrees that the Bank shall have the right to set off
and apply against all amounts owing to the Bank by the Company under the Note or
any other Loan Document any amount owing to the Company from the Bank.
(b) In addition to any rights and remedies of the Bank provided by
law, the Bank shall have the right, without prior notice to the Company, any
such notice being expressly waived by the Company to the extent permitted by
applicable law, upon the filing of a petition under any of the provisions of the
federal bankruptcy act or amendments thereto, by or against; the making of an
assignment for the benefit of creditors by; the application for the appointment,
or the appointment of any receiver of, or of any of the property of; the
issuance of any execution against any of the property of; the issuance of a
subpoena or order, in supplementary proceedings, against or with respect to any
of the property of; or the issuance of a warrant of attachment against any of
the property of; the Company, to set off and apply against all amounts owing to
the Bank by the Company under the Note or any other Loan Documents, and against
any other Indebtedness, whether matured or unmatured, of the Company to the
Bank, any amount owing from the Bank to the Company, at or at any time after the
happening of any of the above-mentioned events, and the aforesaid right of set
off may be exercised by the Bank against the Company or against any trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
receiver, or execution, judgment or attachment creditor of the Company, or any
of them, or against anyone else claiming through or against the Company or such
trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set off shall not have been
exercised by the Bank prior to the making, filing or issuance, or service upon
the Bank of, or of notice of, any such petition; assignment for the benefit of
creditors; appointment or application for the appointment of a receiver; or
issuance of execution, subpoena or order or warrant.
Section 8.8 Counterparts. This Agreement may be executed by one or more
------------
of the parties to this Agreement on any number of separate counterparts and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Company and the Bank.
Section 8.9 Governing Law. The Loan Documents and the rights and
-------------
obligations of the parties thereunder shall be governed by, and construed and
interpreted in accordance with, the law of the Commonwealth of Virginia, except
to the extent that the law of other states governs creation and perfection of
security interests in collateral located in such states.
Section 8.10 Arbitration. Any controversy or claim between or among the
-----------
parties hereto including but not limited to those arising out of or relating to
the Note, this Agreement or any related agreements or instruments, including any
claim based on or arising from an alleged tort, shall be determined by binding
arbitration in accordance with the Federal Arbitration Act (or
27
if not applicable, the applicable state law), the Rules of Practice and
Procedure for the Arbitration of Commercial Disputes of Judicial Arbitration and
Mediation Services, Inc. (J.A.M.S.), and the "Special Rules" set forth below.
In the event of any inconsistency, the Special Rules shall control. Judgment
upon any arbitration award may be entered in any court having jurisdiction. Any
party to this Agreement may bring an action, including a summary or expedited
proceeding, to compel arbitration of any controversy or claim to which this
Agreement applies in any court having jurisdiction over such action.
(a) Special Rules The arbitration shall be conducted in the city of
-------------
the Company's domicile at time of this Agreement's execution and administered by
J.A.M.S.; if J.A.M.S. is unable or legally precluded from administering the
arbitration, then the American Arbitration Association shall administer such
arbitration. All arbitration hearings will be commenced within 90 days of
demand for arbitration; further, the arbitrator shall only, upon a showing of
cause, be permitted to extend the commencement of such hearing for an additional
60 days.
(b) Reservation of Rights Nothing in this Agreement shall be deemed
---------------------
to (A) limit the applicability of any otherwise applicable statutes of
limitation or repose and any waivers contained in this Agreement; or (B) be a
waiver by the Bank of the protection afforded to it by 12 U.S.C. (S) 91 or any
substantially equivalent state law; or (c) limit the right of any party hereto
to exercise self-help remedies such as (but not limited to) setoff, or to
foreclose against any real or personal property collateral, or to obtain from a
court provisional or ancillary remedies such as (but not limited to) injunctive
relief or the appointment of a receiver. Any party may exercise such self-help
rights, foreclose upon such property, or obtain such provisional or ancillary
remedies before, during or after the pendency of any arbitration proceeding
brought pursuant to this Agreement. At the Bank's option, foreclosure under a
deed of trust or mortgage may be accomplished by either the exercise of power of
sale under the deed of trust or mortgage, or by judicial sale under the deed of
trust or mortgage, or by judicial foreclosure. Neither exercise of self-help
remedies nor the institution or maintenance of an action for foreclosure or
provisional or ancillary remedies shall constitute a waiver of the right of any
party, including the claimant in any such action, to arbitrate the merits of the
controversy or claim occasioning resort to such remedies.
Section 8.11 Waiver of Jury Trial. THE COMPANY AND THE BANK EACH WAIVE
--------------------
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT
BY EITHER PARTY AGAINST THE OTHER ON ANY MATTER ARISING OUT OF THIS AGREEMENT,
THE NOTE, THE SECURITY DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY.
Section 8.12 Rights of Company. In addition to any other rights of the
-----------------
Company contained herein and notwithstanding anything to the contrary contained
herein and as of February 19, 1998, the Company shall have the following rights
hereunder:
28
(a) The Company may sell, lease, convey, assign, pledge, encumber, or
transfer all or any part of the assets of the Company other than the Real
Property without the consent of the Bank; provided however that, the result of
any such transaction may not cause the Company on a consolidated basis with CAR
to violate any of the financial covenants contained in Section 5.9 hereto.
(b) The Company may voluntarily sell, pledge, encumber, assign or
transfer, by operation of law or otherwise, any interest in the Company without
the consent of the Bank; except for the withdrawal or admission to the Company
of any general partner, which withdrawal or admission shall require to prior
written consent of the Bank.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly signed, sealed and delivered by their properly and duly authorized officers
as of the day and year first above-written.
CAPITAL AUTOMOTIVE L.P.
By: CAPITAL AUTOMOTIVE REIT,
General Partner
By: /s/ Xxxxx X. Xxx
-------------------------------[Seal]
Title: V.P., C.F.O. & Secretary
----------------------------
NATIONSBANK, N.A.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------[Seal]
Title: V.P.
--------------------------------
29
