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EXHIBIT 10.42
[UNION BANK LETTERHEAD]
October 16, 1997
Central Financial Acceptance Corporation
0000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxx, Chief Executive Officer
Re: Proposed Junior Subordinated Deferrable Interest Debentures
Dear Xxxx:
Reference is made to (a) that certain Revolving Loan Agreement dated as
of June 13, 1997 among Central Financial Acceptance Corporation, a Delaware
corporation ("Borrower"), the Lenders party thereto, and Xxxxx Fargo Bank,
National Association, as the Agent (the "Loan Agreement") and (b) the draft
Amendment No. 1 to Loan Agreement attached hereto (the "Draft Amendment").
Capitalized terms used but not defined herein are used with the meanings
specified for such terms in the Loan Agreement or the Draft Amendment, as
applicable.
Borrower has advised Union Bank of California, N.A. that it has formed
(or is about to form) a Delaware business trust ("CFAC Capital I") for the
purpose of facilitating a public subordinated debt offering (the "Offering"). In
connection with the proposed Offering, Xxxxxxxx has submitted to the Agent and
the Lenders, among other documents, drafts of an "Indenture," "CFAC Capital
Trust Agreement" and "CFAC Guaranties" (as such terms are defined in the Draft
Amendment) (collectively, together with all other documents and instruments
relating thereto, the "Subordinated Debt Documents"). Xxxxxxxx has requested
that the Lenders consent to the transactions described in the Subordinated Debt
Documents and, specifically, to the issuance by Borrower and CFAC Capital I of
certain junior subordinated debt and trust securities as more particularly
described in the Subordinated Debt Documents (the "Junior Subordinated Debt").
Xxxxx Fargo has advised Union Bank of California, N.A. that it has
conditioned its consent to the transactions described in the Subordinated Debt
Documents such that upon Xxxxxxxx's receipt of any proceeds in connection with
the Offering, (a) all amounts owed to Xxxxx Fargo, as a
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Central Financial Acceptance Corporation
October 16, 1997
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Lender, under the Loan Agreement and the other Loan Documents shall be repaid in
full, and (b) Xxxxx Fargo's Pro Rata Share of the Commitment shall be reduced to
0.00% and Xxxxx Fargo shall cease to be a Lender under and with respect to the
Loan Agreement and the other Loan Documents (collectively, the "Xxxxx Fargo
Conditions").
Subject to the conditions set forth below, this letter confirms that
Union Bank of California, N.A., in its capacity as a Lender under the Loan
Agreement, consents to (a) the Offering and to the issuance of the Junior
Subordinated Debt and (b) the Xxxxx Fargo Conditions, provided that (i) the
terms related to the Junior Subordinated Debt are not amended, modified or
waived in any material manner from the terms set forth with respect thereto in
the draft Subordinated Debt Documents dated as of September 17, 1997, and (ii)
upon Xxxxxxxx's receipt of any proceeds in connection with such Offering,
Borrower, the Remaining Lenders and the Agent shall have executed and entered
into an amendment to the Loan Agreement substantially in the form of the Draft
Amendment, with all blanks filled in and other conforming modifications made
thereto.
Except as expressly provided herein, all terms and conditions of the
Loan Agreement and the other Loan Documents shall continue in full force and
effect, without waiver or modification, and Union Bank of California, N.A.
reserves all of its rights, privileges and remedies in connection therewith.
Union Bank of California, N.A. acknowledges and agrees that Wells Fargo may
continue to act as Agent until such time as it resigns (whether voluntarily or
at the request of the Requisite Lenders) pursuant to the terms of Section 10.8
of the Loan Agreement.
UNION BANK OF CALIFORNIA, N.A.
By: /s/ XXXXXX X. XXXXX
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Xxxxxx X. Xxxxx
Vice President
