Exhibit 10.2.25
TERM LOAN AND BORROWING
BASE CREDIT LINE LOAN AGREEMENT
I. THE PARTIES
This Term Loan and Borrowing Base Credit Line Loan Agreement (the "Loan
Agreement") is made effective the 7th day of April, 1993, by and between General
Motors Acceptance Corporation, a New York corporation with a branch operations
office located at 000 Xxxxxxxx Xxxxxxxx, Xxxxxxx Xxxx, Xxx Xxxxxx 00000 ("GMAC")
and DiFeo-EMCO Management Partnership, a New Jersey general partnership with its
principal administrative office located at 000 Xxxxx 000, Xxxxxx Xxxx, Xxx
Xxxxxx 00000 ("Borrower").
II. THE RECITALS
A. WHEREAS, GMAC is in the business of providing, among other things, various
credit accommodations to motor vehicle dealers for use in the purchase,
sale, lease, rental, and servicing of motor vehicles ("Dealership
Financing"); and
B. WHEREAS, beginning on or after October 1, 1992, GMAC provided Dealership
Financing to the 27 separate entities listed on the attached Schedule A,
and GMAC may, in the future, provide Dealership Financing to other
entities, and GMAC is also willing to include and consider DiFeo Leasing
Partnership, a New Jersey general partnership, as similarly situated for
purposes of this Loan Agreement (the "Dealers"). In every instance, the
Borrower and each and every Dealer are affiliates of one another, having
substantially similar and common financial, ownership, and management
interests with one another including, without limitation, the direct or
indirect ownership interest of EMCO Motor Holdings, Inc., a Delaware
corporation, and Xxxxxx X. XxXxx and his brother Xxxxxx X. XxXxx, both of
whom are residents of New Jersey (the "Dealer Group"); and
C. WHEREAS, the Dealers have hired and retained the Borrower for the purpose
of coordinating, managing, and supervising various business, financial,
organizational, management, and operational matters for each and every
Dealer.
D. WHEREAS, the best interests of the Dealer Group warrants that the Dealers
replace certain of their Dealership Financing with loans and revolving
lines of credit and in furtherance of this objective, have requested
Borrower to borrow money and procure extensions of credit for and on behalf
of itself and each and every Dealer (the "Group Loans"); and
E. WHEREAS, Borrower has requested and GMAC is willing to provide certain
credit and finance accommodations as Group
Loans but only in accordance with the terms and conditions of this Loan
Agreement.
III. THE AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual promises herein
contained, the sufficiency of which is hereby acknowledged, GMAC and Borrower
hereby agree as follows:
1. Two Types of Group Loans. Subject to all of the terms and conditions of
this Loan Agreement, GMAC shall make two separate and distinct types of
credit and finance accommodations to Borrower as follows:
(a) TERM LOAN. GMAC shall loan to Borrower the amount of Two Million
Dollars ($2,000,000.00) (the "Term Loan").
(b) LINE OF CREDIT. GMAC hereby establishes a revolving line of credit,
not to exceed Ten Million Dollars ($10,000,000.00) (the "Line of
Credit").
(The Term Loan and Line of Credit are hereinafter referred to as "Group
Loans.")
(c) THE PURPOSE. The Group Loans shall be used by the Borrower as working
capital in connection with the lawful business, investment, and
financial operations of Borrower and the Dealers.
(d) PURCHASE MONEY LOAN. Borrower acknowledges that the fundamental
nature and character of the Group Loans is a purchase money loan in
that the existence and use of the credit accommodations will enable
and facilitate the acquisition of Used Motor Vehicles and service
parts and accessories merchandise as inventory for Borrower and all of
the Dealers.
2. THE TERM LOAN.
(a) THE ADVANCE. GMAC shall advance to the Borrower the full amount of
the Term Loan as of the date of this Loan Agreement.
(b) ISSUANCE OF NOTE. To further evidence the Term Loan, Borrower shall
execute and deliver a promissory note payable to the order of GMAC,
substantially in the form of Exhibit 2(b) hereto with the appropriate
insertions (the "Term Loan Note"). The Term Note shall be subject to
the terms and conditions of this Loan Agreement.
(c) INTEREST. The Term Loan shall earn interest from time to time on the
unpaid principal balance beginning the date of this Loan Agreement
through the date of payment in full of all amounts owing hereunder.
The interest
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shall accrue and be payable in accordance with the Term Loan Note.
(d) PERMISSIVE PREPAYMENT OF THE TERM LOAN. The Term Loan may be prepaid
in whole or in part at the option of Borrower and without premium or
penalty; provided, however, that any partial prepayment shall be in
multiple amounts of one thousand dollars and shall be applied to
instalments of principal due under the Term Loan Note in inverse order
of maturity thereunder.
(e) MANDATORY PAYMENT OF THE TERM LOAN. Unless voluntarily prepaid in
full or accelerated due to an Event of Default, the Term Loan shall be
repaid in sixty (60) consecutive monthly instalments as set forth in
the Term Loan Note, beginning one month from the date of this Loan
Agreement.
3. THE LINE OF CREDIT.
(a) ADVANCES. Upon request made to GMAC by Borrower from time to time,
GMAC will loan and advance money directly to Borrower or its designee
under the Line of Credit ("Advance"). Such request shall be in
writing and presented to GMAC substantially in the form of Exhibit
3(a) hereto with the appropriate insertions (the "Request for Credit
Line Advance"). The first Advance made on or after the date of this
Loan Agreement shall be in an amount and shall be so used to fully pay
the total principal amount outstanding under the used vehicle
floorplan financing accommodations between the Dealers and GMAC. The
aggregate principal amount of all Advances remaining unpaid from time
to time are deemed "Credit Line Advances."
(b) LIMITATION. Credit Line Advances shall at no time and in no event
exceed the lesser of Ten Million Dollars ($10,000,000.00) or the
Collateral Formula Amount, as that term is defined in subparagraph
3(g)(i); provided, however, that if it does, the excess amount shall
be deemed to be part of the Line of Credit for all intents and
purposes under this Loan Agreement.
(c) ACCOUNT STATED. Each Advance shall be charged to the Borrower's
account on GMAC's books and records. GMAC will render to Borrower a
statement at least once each month of the Borrower's account which, in
the absence of manifest error, shall constitute an account stated and
shall be deemed to be correct and accepted by and binding upon
Borrower and constitute conclusive evidence as to the existence and
amounts of the Credit Line Advances, unless GMAC receives a written
statement of the Borrower's exceptions thereto within thirty (30) days
after such statement is rendered to the Borrower.
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(d) ISSUANCE OF A NOTE. Borrower shall repay the Credit Line Advances to
GMAC together with all accrued and unpaid interest, and applicable
costs and expenses as hereinafter set forth, and in any event, on or
before two (2) years from the date of this Loan Agreement. To further
evidence the Line of Credit, Borrower shall execute and deliver a
promissory note payable to the order of GMAC, substantially in the
form of Exhibit 3(d) hereto with the appropriate insertions (the "Line
of Credit Note"). The Line of Credit Note shall be subject to the
terms and conditions of this Loan Agreement.
(e) PRINCIPAL REPAYMENT. In addition to the other amounts Borrower is
obligated to pay GMAC as herein set forth, Borrower shall promptly and
forthwith repay to GMAC the Credit Line Advances, as follows:
(i) PERMISSIVE PREPAYMENT. The Credit Line Advances may be prepaid
in whole or in part at the option of Borrower and without premium
or penalty; provided, however, that any partial prepayment shall
be in multiple amounts of ten thousand dollars.
(ii) MANDATORY REPAYMENT OF CREDIT LINE ADVANCES.
[A] The full amount of the Credit Line Advances must be paid:
[X] immediately upon the occurrence of an Event of Default
as hereinafter set forth;
[Y] immediately upon the effective date of termination
under paragraph 12 of this Loan Agreement.
[B] So much of the Credit Line Advances must be paid from time
to time to ensure the Line of Credit limitation of paragraph
3(b) is not exceeded.
(f) INTEREST. The Credit Line Advances shall bear interest on the
principal amount of and from the date of each Advance to the date of
repayment in full of the Credit Line Advances. Only one interest rate
will apply to the Credit Line Advances at any given time. The
interest rate on each Credit Advance will be determined from time to
time at the Prime Rate plus one percent per annum. The "Prime Rate"
shall mean the rate of interest publicly announced as being in effect
from time to time by a majority of the twelve largest commercial banks
operating in the United States (the
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"Banks") as the "prime" or "base" rate for computing interest on loans
for borrowers of the highest credit standing. In determining the
Prime Rate hereunder, GMAC's determination of the Banks and their
publicly announced prime or base rates shall be conclusive. No change
will be made in the Prime Rate unless there is a single rate of
interest which is publicly announced by at least seven of the Banks as
their prime or base rate. The Prime Rate as of the date of this
Agreement is Six Percent (6.00%). Interest shall be calculated on the
basis of a 360-day year for the number of actual days outstanding.
Interest shall be billed by GMAC monthly and shall be due and payable
immediately upon receipt. The parties hereto intend to comply with
applicable usury laws and the aforesaid interest rate is to be
construed in accordance with this intent. The parties acknowledge
that these laws may change from time to time. If acceleration or
other events cause the interest contracted for, charged or received to
be in excess of the lawful maximum, Borrower will receive credits so
that the interest will comply with the law and in no event will the
interest contracted for, charged or received exceed the legal maximum.
(g) SPECIAL DEFINITIONS.
(i) COLLATERAL FORMULA AMOUNT. The Collateral Formula Amount shall
be the aggregate of the following amounts, as hereinafter
described, as of the date of this Loan Agreement, as adjusted
from time to time, and as certified in the Certification Report
required to be submitted to GMAC by Borrower pursuant to
paragraph 7(f) hereof; provided that the actual Collateral
Formula Amount shall at no time be less than (i) the amount
represented in the Monthly Certification Report or (ii) the
Credit Line Advances, whichever is less:
[A] Eighty-Five Percent (85%) of the lesser of (I) the actual
and reasonable acquisition cost (plus actual and reasonable
reconditioning expenditures) or (II) the current listed
wholesale value as provided in the current, local edition of
a used car guide of national repute of all Used Motor
Vehicles owned by Borrower or any Dealer.
[B] Fifty Percent (50%) of the original acquisition cost of all
new and unused or rebuilt service parts and accessories held
in inventory and owned by Borrower or any Dealer, which are
free from security interests, liens, and encumbrances not
otherwise arising in favor of GMAC.
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(ii) "Used Motor Vehicles" shall mean any and all motor vehicles,
cars, vans, passenger vehicles, and light trucks which
[A] are then owned and held in inventory for sale, lease, or
rental by Borrower or any Dealer; and
[B] have been owned and held in inventory for not more than 120
days from original acquisition from outside the Group or,
for motor vehicles owned as of the date of this Loan
Agreement, 120 days from that date; and
[C] have been previously used and titled under any state title
certificate law (except if such use and titling was for the
exclusive purpose of utilizing it as a demonstrator in
promoting the sale, lease, or rental of Dealer merchandise);
and
[D] were originally acquired by Dealer or Borrower, exclusive of
reconditioning expenditures, for not less than Three
Thousand Dollars per motor vehicle; and
[E] are of any make, type, model, or age; and
[F] are not otherwise customarily regarded by GMAC in the
ordinary course of its business as a new motor vehicle; and
[G] are free from any other lien, security interest, or
encumbrance, except in favor of GMAC in connection with this
Loan Agreement; and
[H] includes all parts, accessories, instruments, or equipment
installed thereon.
4. SECURITY INTEREST AND COLLATERAL ASSIGNMENT. To secure (i) the prompt and
complete payment of the Group Loans, (ii) the performance of any and all
obligations and duties of Borrower or any Dealer pursuant to this Loan
Agreement, and (iii) the payment and performance of any and all other
debts, obligations or duties of Borrower or any Dealer to GMAC now existing
or hereafter arising by this Loan Agreement, any guaranty in favor of GMAC
or otherwise, Borrower hereby pledges, assigns and grants to GMAC a
security interest in the following described property of Borrower, now
existing or hereafter acquired and wherever located, and any and all
proceeds thereof, in whatever form (the "Collateral"):
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(a) inventory of all types and kinds including new and used motor
vehicles, chassis, trailers, cars and trucks, service parts and
accessories.
(b) equipment of all types and kinds including fixtures, tools, signs,
furniture, electronic and computer devices, software programs, hoists,
analyzers, and goods.
(c) all types and kinds of general intangibles, contract rights, accounts
receivable, rebates, refunds, open accounts, bank and depository
accounts, certificates of deposit, reserve accounts, chattel paper,
franchise rights, cash, instruments, goodwill, accounts, documents,
and contracts.
Borrower shall execute and deliver to GMAC one or more agreements,
documents, and financing statements, in form and substance satisfactory to
GMAC, as may be required by GMAC to grant and maintain a valid, perfected
first lien or security interest in the Collateral; provided, however, that
the interest of GMAC shall be secondary to the extent of the interest of
other persons having a purchase money security interest in non-inventory
personal property perfected in conformity with Section 9-312 of the Uniform
Commercial Code.
5. With respect to the Collateral, Borrower shall ensure that Borrower and the
Dealers:
(a) maintain, secure and protect it from diminution in value; and
(b) except for purchase money security interests granted in connection
with Indebtedness permitted under subparagraph 8(e) of this Loan
Agreement, keep it free and clear of the claims, liens, mortgage,
pledge, encumbrance, security interests and rights of all others; and
(c) hold, control and dispose of the Used Motor Vehicles only for the
purpose of storing and exhibiting it for retail sale or lease in the
ordinary course of business; and
(d) permit GMAC full and complete access to it in order to inventory,
inspect and audit it, including review of Borrower and all Dealer
books and records; and
(e) insure it against all risks in such amounts and with a carrier and
deductibles acceptable to GMAC. Such insurance policy shall name GMAC
as loss payee, to the extent of its interests therein and shall
contain a
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cancellation provision only upon thirty (30) days prior written notice
to GMAC.
6. REPRESENTATIONS AND WARRANTIES. In recognition that they will be relied
upon by GMAC and in order to induce GMAC to enter into this Loan Agreement
and make Advances as herein provided, Borrower represents and warrants to
GMAC as follows:
(a) FINANCIAL STATEMENTS. The balance sheet and the statement of profit
and loss and surplus of the Borrower and any Dealer heretofore
furnished to GMAC are correct and complete and fairly represent the
financial condition of the subject thereof as of the relevant dates
thereof and the results of its operations for the fiscal periods ended
on such dates. Since the latest of such dates, there has been no
material adverse change in the properties or financial condition of
Borrower or any Dealer.
(b) ABSENCE OF CONFLICTING OBLIGATIONS. The execution of this Loan
Agreement and compliance with its terms or the issuance of the
promissory notes as herein contemplated will not result in a breach of
any of the terms and conditions of, or result in the imposition of any
lien, charge or encumbrance upon any property of Borrower or any
Dealer pursuant to, or constitute a default under, any indenture or
other agreement or instrument under or to which Borrower or any Dealer
is a party or its property is bound.
(c) TAXES. All tax returns and reports of Borrower and any Dealer
required to be filed by it have been timely filed or proper extensions
have been obtained, and all taxes, assessments, fees, amounts required
to be withheld and paid to a governmental agency or regulatory
authority, and other governmental charges upon them or their
properties, assets, income and franchises which are due and payable
have been paid when due and payable. Borrower does not know of any
proposed, asserted, or assessed tax deficiency against it that would
be material to the condition (financial or otherwise) of Borrower or
any Dealer, is not a party to, bound by, or obligated under any tax
sharing or similar agreement.
(d) ABSENCE OF MATERIAL LITIGATION. Neither Borrower nor any Dealer is a
party to any litigation or administrative proceeding, nor is any
litigation or administrative proceeding threatened against any of
them, which in either case would, if adversely determined, cause any
material adverse change in the properties or financial condition of
any of them. Borrower shall furnish to GMAC promptly upon the
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commencement thereof, written notice of any litigation, including
arbitration, where the amount claimed exceeds $50,000 and of any
proceedings before any governmental agency which would, if successful,
materially, adversely affect Borrower or any Dealer, except that where
the claimed amount is subject to a fully enforceable contract of
insurance or indemnification and the insurer or indemnitor has
acknowledged its obligation under such contract, the said notice shall
not be required.
(e) RECORDS. The records concerning all of the Collateral are kept at the
local office of Borrower or Dealer, as the case may be. Such records
shall not be moved from such location without prior written notice to
GMAC.
(f) ORGANIZATION/AUTHORIZATION. Borrower and Dealers are general
partnerships duly organized, validly existing and in good standing
under the laws of the state where originally formed, and have all
requisite power and authority to own and operate their properties, to
carry on their business as now conducted and proposed to be conducted.
Borrower has all requisite power and authority to enter into this Loan
Agreement, to issue any promissory notes and to carry out the
transactions contemplated under this Loan Agreement. Borrower and
Dealers possess all franchises, certificates, licenses, permits and
other authorizations from governmental or regulatory authorities, free
from burdensome restrictions, that are necessary in any material
respects for the ownership, maintenance and operation of their
properties and assets and conduct of their business as now conducted
and proposed to be conducted, and are not in violation of them in any
material respect.
(g) GOOD TITLE. Borrower and Dealer has and will have good and marketable
title to all Collateral free from all liens, encumbrances, security
interests and claims except as granted to GMAC hereby.
7. AFFIRMATIVE COVENANTS. While this Loan Agreement remains in effect or any
of the Group Loans remain unpaid, unless waived in writing by GMAC:
a. FINANCIAL STATUS. Borrower, in aggregation with all Dealers (the
"Group") shall at all times maintain (i) a Tangible Net Worth in the
amount of at least Ten Million Five Hundred Thousand Dollars
($10,500,000) and (ii) a ratio of Total Liabilities of Group to
Tangible Net Worth of Group of no greater than nine (9) to one (1).
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As used herein, the term "Tangible Net Worth" shall mean the Group's
paid-in capital, contributions, or investment, plus paid-in surplus,
plus retained earnings and LIFO reserve, minus any intangible assets
(including, but not limited to goodwill, patents, copyrights, leases,
licenses, franchise rights, trade names, organization cost, debt
expense, and customer lists), as defined and computed in accordance
with generally accepted accounting principles applicable to the Group.
As used herein, the term "Total Liabilities" shall mean with respect
to the Group all obligations for borrowed money (including, without
limitation, all notes payable and drafts accepted representing
extensions of credit, commercial paper, all obligations evidenced by
bonds, debentures, notes or other similar instruments and all
obligations upon which interest charges are customarily paid), all
obligations under conditional sale or other title retention
agreements, all obligations issued or assumed as full or partial
payment for property (whether or not any such obligations represent
obligations for borrowed money), all capitalized lease obligations,
and all indebtedness secured by any lien existing on property owned or
acquired by the Group subject to any such lien whether or not the
obligations secured thereby shall have been assumed.
(b) INSURANCE. Borrower shall maintain and furnish GMAC with proof of
insurance required pursuant to paragraph 5(e) herein. The receipt by
GMAC of any insurance proceeds shall not release Borrower from payment
of its obligations hereunder, except to the extent of such proceeds.
(c) EXISTENCE AND BUSINESS OBLIGATIONS. Except as provided in
subparagraph 10(d), Borrower and all Dealers shall maintain and
continue its present business and maintain their existence in good
standing, shall preserve and keep in full force and effect any
franchise rights and trade names, and shall pay, before the same
become delinquent and before penalties accrue thereon, all taxes,
assessments, and other governmental charges against them or its
property, and any and all other liabilities, except to the extent, and
so long as the same are being contested in good faith by appropriate
proceedings, with adequate reserves provided for such payments.
(d) ACCOUNTING RECORDS; REPORTS. The Group shall maintain a standard and
modern system for accounting in accordance with generally accepted
accounting principles consistently applied throughout all accounting
periods and furnish to GMAC such information respecting its business,
assets and financial condition
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as GMAC may reasonably request and, Borrower without request, shall
furnish to GMAC:
(i) as soon as available and in any event within one hundred twenty
days after the close of each fiscal year of the Group, a copy of
unqualified audited financial statements of the Group, in form
and prepared by a Certified Public Accountant selected by
Borrower and satisfactory to GMAC, to the effect that the same
fairly presents the financial condition of the Group, and the
results of its operations as of the relevant dates thereof;
(ii) as soon as available, and in any event within thirty days after
the end of each month, a consolidated financial statement for the
Group to include a balance sheet and a statement of operations
(income and expenses) with an accompanying spreadsheet showing
the same information by Dealer. Individual Dealer operating
reports in the format supplied to the vehicle manufacturer will
be provided to GMAC upon request;
(iii) within one hundred twenty (120) days after the end of each fiscal
year of the Group a schedule showing all insurance policies which
the Group had in force with respect to the Collateral as of the
end of such fiscal year, signed by the Group;
(iv) within thirty (30) days of each period beginning April 15, 1993,
and every six (6) months thereafter, and more frequently upon
request by GMAC, a detailed and comprehensive schedule of the
disbursement, loan, transfer, deposit, investment, payment, or
other direct or indirect distribution by Borrower to and amongst
the Dealers of any and all proceeds from Group Loans. This
provision shall not be deemed to restrict Borrower from making
such disbursements, loans, etc. in its sound and absolute
discretion;
(v) as soon as available and in any event by August 14 of each year,
a report by the Borrower's certified public accountant on the
results of applying procedures satisfactory to GMAC for the parts
and accessories inventory which would include, but not be limited
to, the following: observation of physical inventories or test
counts of physical inventories and a review of the reconciliation
to the general ledger for reasonableness at selected dealerships
representing at least 50% of the Dealer's total average value of
parts and accessories inventory; and an analytic review for
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all Dealer locations of the outstanding balance of the parts and
accessories inventory, parts inventory aging by aged category and
obsolescence or other reserves for the parts and accessories
inventory at June 30 as compared to the prior June 30 review and
December 31 audited balance. The results of a physical count of
the parts and accessories inventory taken at each Dealer location
by a reputable inventory service at each year-end will be audited
by the certified public accountant and serve as the basis for the
parts and accessories inventory amount stated in the annual
certified audit report.
(vi) from time to time, such other information as GMAC may reasonably
request concerning Borrower and any Dealer.
(e) INSPECTIONS. Borrower irrevocably authorizes representatives of GMAC
to inspect and audit the Collateral and to visit and enter the
premises of Borrower and any Dealer to audit, inspect, review,
examine, copy (by electronic or other means) and abstract any of the
books and accounting and records of them, and to discuss the affairs,
business, finances and accounts of them with its officers and
employees, at any reasonable time and as often as may be reasonably
desired.
(f) MONTHLY CERTIFICATION REPORTS. Borrower shall furnish GMAC within
fifteen days of the fifteenth and last day of each month a report
certified by the chief executive officer or the chief financial
officer of Borrower, in the form attached as Exhibit 7(f), detailing
the Group's Collateral Formula Amount as of the reporting date
("Monthly Certification Report"). The Monthly Certification Report
submitted as of a month-end date shall have attached to it a complete
and detailed listing of all Used Motor Vehicles, in the form attached
to Exhibit 7(f). GMAC may, in its sole discretion, increase the
frequency of such reports and demand such a report at any time.
(g) PROPERTIES IN GOOD CONDITION. Borrower shall keep its respective
properties in good repair, working order and condition and, from time
to time, make all needful and proper repairs, renewals, replacements,
additions and improvements thereto, so that the business carried on
may be properly and advantageously conducted at all times in
accordance with prudent business management.
(h) APPLICATION TO FUTURE AFFILIATED DEALERS. Any motor vehicle
dealership entity which comes into existence, is not listed on the
attached Schedule A, and has
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substantially similar and common financial, ownership, and management
interests as the Group shall, upon execution of the Guaranty referred
to in paragraph 9 of this Loan Agreement and documents evidencing a
new vehicle floorplan financing agreement with GMAC, be deemed to be a
"Dealer" within the meaning of this Loan Agreement for all intents and
purposes.
8. NEGATIVE COVENANTS. While this Loan Agreement remains in effect, or any of
the Group Loans remain unpaid, no member of the Group shall, without the
prior written consent of GMAC:
(a) MERGERS, CONSOLIDATIONS, DISPOSITION OF ASSETS. Merge or consolidate
with or into any other corporation or entity, except if Borrower or
Dealer remains the surviving entity, or sell, lease, transfer or
otherwise dispose of all or any substantial part of the property,
assets or business of the Borrower or Dealer.
(b) INVESTMENTS. Make any loans or advances to, or investments in, other
persons, corporations or other entities, except
(i) investments in (A) bank certificates of deposit and savings
accounts; (B) obligations of the United States; and (C) prime
commercial paper maturing within ninety (90) days of the date of
acquisition by Borrower or Dealer; (D) those existing loans to
other Dealers which are disclosed on the financial statements
referenced in paragraph 6(a) of this Loan Agreement; and (E) any
Dealer or subsidiaries of Borrower or Dealer; and
(ii) loans or advances to (A) affiliates of Borrower or Dealer other
than affiliates whose principal business is the sale and service
of new and used motor vehicles; (B) employees of Dealer; (C)
customers of Dealer in the ordinary course of Dealer's business;
and (D) any Dealer or subsidiaries of Borrower or Dealer.
(c) CONTINGENT LIABILITIES. Guarantee or become a surety or otherwise
contingently liable for any obligations of others, except (i) pursuant
to the deposit and collection of checks and similar items in the
ordinary course of business; and (ii) for transactions in the ordinary
course of business; and (iii) contingent obligations owing by Dealer
to GMAC pursuant to the bulk sale of chattel paper.
(d) EXPENDITURES. Make any substantial or unusual disbursement of funds
or expend sums for the
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acquisition of capital assets exceeding One Million Two Hundred
Thousand Dollars ($1,200,000) in any one calendar year, excluding
present construction commenced or planned to commence in 1993, as set
forth on the attached Exhibit 8(d).
(e) RESTRICTION ON INDEBTEDNESS. Create, incur, assume or have
outstanding any indebtedness for borrowed money except:
(i) the amount due GMAC hereunder;
(ii) indebtedness for current borrowings (maturing in twelve (12)
months or less, including renewals available at the option
of the Dealer), all of which indebtedness must be completely
paid up for a period of not less than sixty (60) consecutive
days in each calendar year;
(iii) indebtedness incurred in the ordinary course of Borrower's
or Dealer's business for necessary warranty, extended
service contracts, materials, supplies, etc. (e.g., trade
creditors), all of which shall be due not more than ninety
(90) days from the date of obligation or invoice and none of
which shall be past due;
(iv) other indebtedness (not including current indebtedness as
described in (e)(ii) of this paragraph) which was
outstanding on the date of this Loan Agreement and is shown
on the financial statements of Borrower or Dealer referenced
in paragraph 6(a) of this Loan Agreement including, but not
limited to, fully subordinated loans aggregating up to six
million dollars made to any member of the Group by EMCO
Motor Holdings, Inc., a Delaware corporation and/or DiFeo
Partnership, Inc., a Delaware corporation, and including any
refinancing, extension, or renewal thereof on substantially
similar terms and conditions; and
(v) for any other circumstance not otherwise set forth in
subparagraphs 8(e)(i)-(iv) above, the aggregate amount of
$500,000.
(f) Borrower will not create, incur, or suffer any lien, mortgage, pledge,
assignment, or other encumbrance on or security interest in the
Collateral.
9. CONDITIONS PRECEDENT TO MAKING THE GROUP LOANS. The Group Loans shall be
made or available to Borrower only upon the fulfillment of each of the
following conditions:
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(a) Execution and delivery to GMAC of an amendment to Unconditional,
Continuing Guaranty of Payment dated October 1, 1992, as amended
February 8, 1993, by a First Amendment thereto (the "Guaranty"), to
and in favor of GMAC by each of the parties thereto, substantially in
the form of Exhibit 9(a) hereto.
(b) GMAC shall have received a certified copy of all partnership action
taken by Borrower authorizing the execution, delivery, and performance
of this Loan Agreement, and all other notes, documents, agreements,
instruments, and obligations attendant thereto.
(c) GMAC shall have received an opinion of counsel to Borrower, in form
and substance satisfactory to counsel to GMAC as to the matters
referred to in subparagraph 6(f) and further to the effect that this
Loan Agreement and all attendant notes, documents, etc. have legal,
valid, binding, and enforceable agreements of Borrower and other
signatories thereto (excepting GMAC).
(d) Execution and delivery to GMAC of all agreements, notes, documents,
and instruments referred to and contemplated by this Loan Agreement.
10. EVENT OF DEFAULT. An Event of Default shall include one or more of the
following: (a) a default by Borrower or any Dealer in the payment,
performance or observance of any obligation or covenant under this Loan
Agreement or under any other agreement now or hereafter entered into with
GMAC; (b) the institution of a proceeding in bankruptcy, receivership or
insolvency by or against Borrower or any Dealer or its property [provided
that Dealer shall have sixty days to obtain an order of dismissal of any
involuntary petition in bankruptcy filed against it unless such petition
was initiated by GMAC]; (c) an assignment by Dealer for the benefit of
creditors; (d) the failure of Dealer to maintain, in good standing, its
present franchise, dealer, or sales and service agreement, provided that
this subsection (d) shall not apply to the voluntary sale, transfer or
surrender of any such agreement where the one disposed of represents not
more than ten percent (10%) of total gross sales volume in dollars over the
prior immediate twelve-month period; (e) the imposition of a tax or any
other nonconsensual lien against any of the Borrower's or any Dealer's
property other than (A) for taxes not overdue or challenged in good faith
or (B) liens not discharged or bonded within 60 days of any protest or
notice of filing; (f) a misrepresentation by Dealer for the purpose of
obtaining credit or an extension of credit; (g) if GMAC shall deem itself
insecure based on its knowledge of any event, occurrence, circumstance or
fact not directly caused by GMAC, which in the reasonable judgment of GMAC
will have a material adverse effect on the Collateral, or on the
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collection by GMAC under any guaranty of the obligations of Borrower or any
Dealer hereunder; (h) if any material representation, warranty or other
statement of fact given herein or in any writing, certificate, report or
statement at any time furnished to GMAC by Borrower or any Dealer or its
agents pursuant to or in connection with this Loan Agreement, or otherwise,
shall be false or misleading in any material respect when given; (i)
exceeding the Line of Credit Limitations set forth in paragraph 3(b); (j)
the failure of any Dealer in the Group to offer and make available to GMAC
all of its floorplan financing needs, provided the Dealer is creditworthy
and GMAC is customarily providing such finance accommodations; and (k) the
termination of any guaranty of payment of the Group Loans provided to GMAC
by any member of the Dealer Group, or any of its owners, shareholders,
officers, affiliates, parents, or subsidiaries.
11. RIGHTS AND REMEDIES OF GMAC. Upon the occurrence of an Event of Default as
set forth in Paragraph 10 herein or if any substantial portion of
Collateral is in danger of misuse, loss, seizure or confiscation, GMAC may
take immediate possession of Collateral without demand or further notice
and without legal process. In furtherance thereof, Borrower shall, if GMAC
so requests, assemble Collateral and make it available to GMAC at a
reasonable, convenient place designated by GMAC. GMAC shall have the
right, and Borrower hereby authorizes and empowers GMAC, to enter upon the
premises wherever Collateral may be and remove same. In addition, GMAC
shall have the right to exercise one or more of the following remedies:
(a) institute proceedings to collect all or a portion of the Group Loans
and to recover a judgment for the same and to collect upon such
judgment out of any property of the Borrower wherever situated;
(b) to offset and apply any monies, credits or other proceeds of property
of Borrower that has or may come into possession or under the control
of GMAC against any amount owing by Borrower to GMAC;
(c) with respect to accounts, contract rights, chattel paper, tax refunds
and general intangibles constituting Collateral herein, GMAC
(i) may settle, adjust and compromise all present and future
claims arising thereunder or in connection therewith,
(ii) may sell, assign, pledge or make any other agreement with
respect thereto or the proceeds thereof;
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(iii) may notify all such account, contract right, etc., debtors
of GMAC's interest therein and require direct payment to
GMAC of such obligations;
(iv) may receive, sign, endorse, and deliver in its name or the
name of the Borrower any and all notes, instruments,
documents, titles, negotiable instruments and the like
necessary and appropriate to effect the collection of such
intangibles, and Borrower hereby waives notice of
presentment, protest and nonpayment of any instrument so
endorsed.
(v) is hereby constituted and appointed by Borrower as
Borrower's attorney-in-fact with power to accept and to
receipt and endorse Borrower's name upon any notes,
acceptances, checks, drafts, money orders or other evidences
of payment or Collateral that may come into GMAC's
possession; to notify the Post Office authorities to change
the address for delivery of mail addressed to Borrower to
such address as GMAC may designate; to do all other acts and
things necessary to carry out this Agreement. All acts of
said attorney or designee are hereby ratified and approved,
and said attorney or designee shall not be liable for any
acts of omission or commission, nor for any error of
judgment or mistake of fact or law; this power being coupled
with an interest is irrevocable while any of the Group Loans
remain unpaid.
(d) sell or lease the Collateral, or any portion thereof, after five days'
written notice at public or private sale for the account of the
Borrower.
Borrower agrees that the sale by GMAC of any new or unused property
repossessed by GMAC to the Seller thereof, or to any person designated by
such Seller at the invoice cost thereof to Borrower less any credits
granted to Borrower with respect thereto and reasonable costs of
transportation and reconditioning, shall be deemed to be a commercially
reasonable means of disposing of the same. Borrower further agrees that if
GMAC shall solicit bids from three or more other dealers in the type of
property repossessed by GMAC hereunder, any sale by GMAC of such property
in bulk or in parcels to the bidder submitting the highest cash bid
therefor also shall be deemed to be a commercially reasonable means of
disposing of the same. Notwithstanding the foregoing, it is expressly
understood that such means of disposal shall not be exclusive, and that
GMAC shall have the right to dispose of any property repossessed hereunder
by any commercially reasonable means. GMAC's remedies hereunder are
cumulative and may be enforced successively or concurrently. Borrower
shall pay all expenses and reimburse
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GMAC for any expenditures, including reasonable attorney fees and legal
expenses, in connection with GMAC's exercise of any of its rights and
remedies under this Loan Agreement. Upon the occurrence of an Event of
Default, in addition to the rights specified herein, all the rights and
remedies afforded GMAC by applicable law shall apply.
12. TERMINATION. This Loan Agreement shall terminate upon the earliest of the
following: (a) two years from the date of this Loan Agreement; (b) the
declaration by GMAC of any Event of Default; or (c) ninety (90) days after
written notice to terminate provided by Borrower to GMAC. The Line of
Credit Loan shall be immediately due and payable upon termination of this
Loan Agreement. The Term Loan shall continue in full force and effect in
accordance with the terms and conditions of the Promissory Note upon
termination of this Loan Agreement except following an Event of Default, in
which case the Term Loan shall also become immediately due and payable.
All rights and remedies of GMAC or duties and obligations of Borrower
extant upon termination of this Loan Agreement shall continue in full force
and effect until all Group Loans are paid in full.
13. SUSPENSION. GMAC may, in its sole and absolute discretion and judgment,
suspend its obligation to make Advances under the Line of Credit Loan due
to material, adverse changes in Dealer's financial condition, material
adverse change in Dealer's business or the discovery of any information
which appears to constitute an Event of Default. GMAC shall provide Dealer
with written notice of its decision to suspend its lending obligation as
soon as is practicable, but in no event more than three (3) business days
after effecting such a decision.
14. CONSENT AND WAIVER. Borrower recognizes that GMAC has ongoing business
relationships with others including certain shareholders and related
entities of Borrower or Dealers. GMAC's dealings with these others may
require it to act in providing and administering credit different than its
dealings with Borrower or Dealer. Borrower hereby acknowledges, consents
to, and waives any claim or defense it may have with respect to such
differences.
15. NOTICES. All notices, requests, and demands shall be in writing and be
given to or made upon the respective parties at the addresses set forth in
Section I of this Agreement, or to such other address as either party shall
designate for itself in writing to the other party. Notice shall be deemed
given when received by the addressee and may include hand delivery,
overnight courier, certified mail, or electronic written transmission by
public or private means.
16. ADOPTION AND RATIFICATION. Any and all acts, disclosures, notices,
executions, and deliveries which may have been made
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by Borrower to or in favor of GMAC prior to the execution of this Loan
Agreement is hereby ratified and adopted as the legal, valid, and binding
act of the Borrower as though authorized and empowered as of such act, etc.
17. RIGHTS AND REMEDIES NOT WAIVED. No course of dealing between the Borrower
and GMAC or any failure or delay on the part of GMAC in exercising any
rights or remedies hereunder shall operate as a waiver of any rights or
remedies of GMAC and no single or partial exercise of any rights or
remedies hereunder shall operate as a waiver or preclude the exercise of
any other rights or remedies hereunder.
18. COMPLETE AGREEMENT. Except as otherwise provided or referred to herein,
there are no other agreements or understandings, either oral or in writing,
between the parties affecting this Loan Agreement or relating to any of the
subject matters covered by this Loan Agreement. No agreement between GMAC
and Borrower which relates to matters covered herein, and no change in,
addition to (except the filling in of blank lines), or erasure of any
printed portion of this Loan Agreement will be binding unless it is
approved in a written agreement executed by a duly authorized
representative of each party.
19. BINDING EFFECT. This Agreement shall be binding upon the parties'
successors and assigns provided, however, that Borrower shall have
absolutely no right of assignment absent prior written consent of GMAC.
20. SEVERABILITY. Any provision hereof prohibited by law shall be ineffective
to the extent of such prohibitions without invalidating the remaining
provisions hereof.
21. GOVERNING LAW. This Loan Agreement shall be construed in accordance with
and governed by the laws of New Jersey.
21. CAPTIONS. The captions of the various sections and paragraphs of this Loan
Agreement have been inserted only for the purposes of convenience; such
captions are not a part of this Loan Agreement and shall not be deemed in
any manner to modify, explain, enlarge or restrict any of the provisions of
this Loan Agreement.
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IN WITNESS WHEREOF, each of the parties has caused this Loan Agreement to be
executed by its duly authorized representative this 7th day of April, 1993.
DIFEO-EMCO MANAGEMENT PARTNERSHIP GENERAL MOTORS ACCEPTANCE
a New Jersey General Partnership CORPORATION
By_____________________________ By______________________
Xxxx Xxxxx for XxXxx Partnership, Xxxxxxx X. Xxxx,
Inc., a Delaware Corporation, Vice President
as General Partner National Accounts
and
By:____________________________
Xxxxxx X. XxXxx for various DiFeo
Corporate Entities, as General
Partners
and
By:_____________________________
Xxxxxx X. XxXxx for various DiFeo
Corporate Entities, as General
Partners
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SCHEDULE A to Term Loan and Borrowing
Base Credit Line Loan Agreement Between
GMAC and DiFeo-EMCO Management
Partnership, dated April 7, 1993 (the
"Loan Agreement")
Dealer Name Status Address
----------- ------ -------
County Auto Group Partnership NJ General 000 Xxxxx 00
t/a County Toyota Partnership Xxxxx, XX 00000
Rockland Motors Partnership NJ General 00 Xxxxx Xxxxxxxx Xxxxxx
t/a Rockland Mitsubishi Partnership X.X. Xxx 000
Xxxxx, XX 00000
Somerset Motors Partnership NJ General Route 22 East
t/a DiFeo Lexus Partnership X.X. Xxx 000
Xxxxx Xxxxx, XX 00000
DiFeo Oldsmobile Partnership NJ General Route 22 East
t/a DiFeo Volkswagen of Partnership X.X. Xxx 000
Xxxxxxxxxxx Xxxxx Xxxxx, XX 00000
Fair Motors Partnership NJ General 000 Xxxxxxx Xxxx
t/a Fair Mitsubishi Partnership Xxxxxxx, XX 00000
Fair Chevrolet-Geo Partnership NJ General 000 Xxxxxxx Xxxx
Xxxxxxxxxxx Xxxxxxx, XX 00000
Fair Hyundai Partnership NJ General 000X Xxxxxxx Xxxx
t/a Fair Suzuki Partnership Xxxxxxx, XX 00000
Fair Infiniti Partnership NJ General 000X Xxxxxxx Xxxx
Xxxxxxxxxxx Xxxxxxx, XX 00000
Fair Imports Partnership NJ General 000X Xxxxxxx Xxxx
t/a Fair Acura Partnership Xxxxxxx, XX 00000
Danbury-Mt. Kisco Saturn NJ General 000X Xxxxxxx Xxxx
Partnership t/a Saturn Partnership Xxxxxxx, XX 00000
of Danbury and t/a
Saturn of Watertown
Fair Cadillac-Oldsmobile- NJ General 000 Xxxxxxx Xxxx
Isuzu Partnership Partnership Xxxxxxx, XX 00000
Danbury Auto Partnership NJ General 000X Xxxxxxx Xxxx
t/a Fair Honda Partnership Xxxxxxx, XX 00000
DiFeo Nissan Partnership NJ General 000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxx Xxxxxx Xxxx, XX 00000
Schedule A/Page of 2
Dealer Name Status Address
----------- ------ -------
DiFeo Chrysler-Plymouth NJ General 000 Xxxxxxxxx Xxx.
Jeep-Eagle Partnership Partnership Xxxxxx Xxxx, XX 00000
DiFeo Autocenter Partnership NJ General Xxxxxx Mall & Route 440
t/a DiFeo Mazda Partnership Xxxxxx Xxxx, XX 00000
DiFeo Subaru Partnership NJ General 000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx Xxxxxx Xxxx, XX 00000
DiFeo Chevrolet-Geo NJ General 000 Xxxxxxxxx Xxx.
Partnership Partnership Xxxxxx Xxxx, XX 00000
DiFeo Hyundai Partnership NJ General Xxxxxx Xxxx & Xxxxx 000
Xxxxxxxxxxx Xxxxxx Xxxx, XX 00000
DiFeo Buick-Pontiac-GMC NJ General 000 Xxxxxxxxxx Xxxxxx
Truck Partnership Partnership Xxxxxx Xxxx, XX 00000
DiFeo BMW Partnership NJ General 000 Xxxxxx Xxxx
Xxxxxxxxxxx Xxxxxxx, XX 00000
DiFeo Imports Partnership NJ General 000 Xxxxxxxxxx Xxxxxx
t/a Jersey City Mitsubishi Partnership Xxxxxx Xxxx, XX 00000
J & F Oldsmobile-Isuzu NJ General 000 Xxxxxxxxx Xxxxxx
Partnership Partnership Xxxxx 000
Xxxxxx Xxxx, XX 00000
Xxxxxx Motors Partnership NJ General 000 Xxxxx 000
t/a Xxxxxx Toyota Partnership Xxxxxx Xxxx, XX 00000
J & S Ford Partnership NJ General 000 Xxxxx 000
TO BE FORMED Partnership Xxxxxx Xxxx, XX 00000
DiFeo Volkswagen Partnership NJ General 000 Xxxxx 000
Xxxxxxxxxxx Xxxxxx Xxxx, XX 00000
Fair Chrysler Plymouth NJ General 000 X Xxxxxxx Xxxx
Xxxxxxxxxxx Xxxxxxxxxxx Xxxxxxx, XX 00000
t/a Fair Chrysler Plymouth
North Jersey Manhattan Saturn NJ General 943 Communipaw
Partnership Partnership Xxxxxx Xxxx, XX 00000
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