1
EXHIBIT 10.2
EXECUTION COPY
================================================================================
$40,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
among
ANC RENTAL CORPORATION,
as Borrower,
The Several Lenders
from Time to Time Parties Hereto,
XXXXXX BROTHERS INC.,
as Arranger
and
XXXXXX COMMERCIAL PAPER INC.,
as Syndication Agent and
as Administrative Agent
Dated as of June 30, 2000
================================================================================
2
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS ........................................................1
1.1 Defined Terms.........................................................1
1.2 Other Definitional Provisions........................................25
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS....................................26
2.1 Revolving Credit Commitments.........................................26
2.2 Procedure for Revolving Credit Borrowing.............................26
2.3 Conversion of Revolving Credit Loans to Term Loans...................27
2.4 Repayment of Loans; Evidence of Debt.................................27
2.5 Commitment Fees, etc.................................................28
2.6 Termination or Reduction of Revolving Credit Commitments.............28
2.7 Optional Prepayments.................................................29
2.8 Mandatory Prepayments and Commitment Reductions......................29
2.9 Conversion and Continuation Options..................................30
2.10 Minimum Amounts and Maximum Number of Eurodollar Tranches...........30
2.11 Interest Rates and Payment Dates....................................31
2.12 Computation of Interest and Fees....................................31
2.13 Inability to Determine Interest Rate................................32
2.14 Pro Rata Treatment and Payments.....................................32
2.15 Requirements of Law.................................................34
2.16 Taxes...............................................................35
2.17 Indemnity...........................................................37
2.18 Illegality..........................................................37
2.19 Change of Lending Office............................................38
SECTION 3. REPRESENTATIONS AND WARRANTIES.....................................38
3.1 Financial Condition..................................................38
3.2 No Change............................................................39
3.3 Corporate Existence; Compliance with Law.............................39
3.4 Corporate Power; Authorization; Enforceable Obligations..............39
3.5 No Legal Bar.........................................................40
3.6 No Material Litigation...............................................40
3.7 No Default...........................................................40
3.8 Ownership of Property; Liens.........................................40
3.9 Intellectual Property................................................40
3.10 Taxes...............................................................41
3.11 Federal Regulations.................................................41
3.12 Labor Matters.......................................................41
3.13 ERISA...............................................................41
3.14 Investment Company Act; Other Regulations...........................42
-i-
3
3.15 Subsidiaries........................................................42
3.16 Use of Proceeds.....................................................42
3.17 Environmental Matters...............................................42
3.18 Accuracy of Information, etc........................................43
3.19 Security Documents..................................................44
3.20 Solvency............................................................45
3.21 Regulation H........................................................45
3.22 Customer and Trade Relations........................................45
SECTION 4. CONDITIONS PRECEDENT...............................................45
4.1 Conditions to Closing Date...........................................45
4.2 Conditions to Initial Extension of Credit............................46
4.3 Conditions to Each Loan..............................................50
SECTION 5. AFFIRMATIVE COVENANTS..............................................51
5.1 Financial Statements.................................................51
5.2 Certificates; Other Information......................................52
5.3 Payment of Obligations...............................................53
5.4 Conduct of Business and Maintenance of Existence, etc................53
5.5 Maintenance of Property; Insurance...................................53
5.6 Inspection of Property; Books and Records; Discussions...............54
5.7 Notices..............................................................54
5.8 Environmental Laws...................................................55
5.9 Additional Collateral, etc...........................................55
5.10 Further Assurances..................................................57
SECTION 6. NEGATIVE COVENANTS.................................................57
6.1 Financial Condition Covenants........................................57
6.2 Limitation on Indebtedness...........................................59
6.3 Limitation on Liens..................................................61
6.4 Limitation on Fundamental Changes....................................63
6.5 Limitation on Disposition of Property................................64
6.6 Limitation on Restricted Payments....................................65
6.7 Limitation on Capital Expenditures...................................66
6.8 Limitation on Investments............................................66
6.9 Limitation on Optional Payments and Modifications of
Debt Instruments, etc................................................68
6.10 Limitation on Transactions with Affiliates..........................69
6.11 Limitation on Sales and Leasebacks..................................70
6.12 Limitation on Changes in Fiscal Periods.............................70
6.13 Limitation on Negative Pledge Clauses...............................70
6.14 Limitation on Restrictions on Subsidiary Distributions..............71
6.15 Limitation on Lines of Business.....................................71
6.16 Limitation on Amendments to Certain Instruments.....................71
6.17 Subordinated Notes..................................................71
6.18 Further Assurances..................................................71
-ii-
4
SECTION 7. EVENTS OF DEFAULT..................................................72
SECTION 8. THE AGENTS.........................................................75
8.1 Appointment..........................................................75
8.2 Delegation of Duties.................................................75
8.3 Exculpatory Provisions...............................................75
8.4 Reliance by Agents...................................................75
8.5 Notice of Default....................................................76
8.6 Non-Reliance on Agents and Other Lenders.............................76
8.7 Indemnification......................................................77
8.8 Agent in Its Individual Capacity.....................................77
8.9 Successor Administrative Agent.......................................77
8.10 Authorization to Release Liens and Guarantees.......................78
8.11 The Arranger........................................................78
SECTION 9. MISCELLANEOUS......................................................79
9.1 Amendments and Waivers...............................................79
9.2 Notices..............................................................80
9.3 No Waiver; Cumulative Remedies.......................................80
9.4 Survival of Representations and Warranties...........................81
9.5 Payment of Expenses..................................................81
9.6 Successors and Assigns; Participations and Assignments...............82
9.7 Adjustments; Set-off.................................................84
9.8 Counterparts.........................................................85
9.9 Severability.........................................................85
9.10 Integration.........................................................85
9.11 GOVERNING LAW.......................................................85
9.12 Submission To Jurisdiction; Waivers.................................86
9.13 Acknowledgments.....................................................86
9.14 Confidentiality.....................................................87
9.15 Release of Collateral and Guarantee Obligations.....................87
9.16 Accounting Changes..................................................88
9.17 Delivery of Lender Addenda..........................................88
9.18 WAIVERS OF JURY TRIAL...............................................88
-iii-
5
SCHEDULES:
1.1(a) Mortgaged Property (Spin-Off Date)
1.1(b) Consolidated EBITDA Adjustments
1.1(c) Excluded Indebtedness
3.4 Consents, Authorizations, Filings and Notices
3.6 Material Litigation
3.8 Material Real Property
3.15 Subsidiaries
3.19(a)-1 UCC Filing Jurisdictions
3.19(a)-2 UCC Financing Statements to Remain on File
3.19(a)-3 UCC Financing Statements to be Terminated
3.19(b) Mortgage Filing Jurisdictions (Spin-Off Date)
6.2(d) Existing Indebtedness
6.3(f) Existing Liens
6.5(k) Permitted Dispositions
6.8 Existing Investments
6.18 Post-Closing Deliveries
EXHIBITS:
A Form of Compliance Certificate
B Form of Closing Certificate
C Form of Assignment and Acceptance
D Form of Note
E Form of Exemption Certificate
F Form of Lender Addendum
G Form of Borrowing Notice
-iv-
6
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 30,
2000, among ANC RENTAL CORPORATION, a Delaware corporation (the "Borrower"), the
several banks and other financial institutions or entities from time to time
parties to this Agreement (the "Lenders"), XXXXXX BROTHERS INC., as advisor,
lead arranger and book manager (in such capacity, the "Arranger"), and XXXXXX
COMMERCIAL PAPER INC., as syndication agent (in such capacity, the "Syndication
Agent") and as administrative agent (in such capacity, the "Administrative
Agent").
W I T N E S S E T H:
WHEREAS, AutoNation, Inc., a Delaware corporation
("AutoNation"), intends to distribute to its shareholders through a tax-free
spin-off (the "Spin-Off") 100% of the shares of common stock of the Borrower;
WHEREAS, after giving effect to the Spin-Off, the Borrower
will need financing to provide for the repayment of certain existing
indebtedness of the Borrower and to provide for the Borrower's ongoing working
capital and general corporate needs; and
WHEREAS, to provide such financing, the Borrower entered into
a Credit Agreement, dated as of May 26, 2000 (the "Existing Credit "Agreement"),
among the Borrower, the lenders from time to time parties thereto, Xxxxxx
Brothers Inc., as arranger, Xxxxxx Commercial Paper Inc., as syndication agent
and as administrative agent;
WHEREAS, the parties to the Existing Credit Agreement have
agreed to amend and restate the Existing Credit Agreement in its entirety;
NOW, THEREFORE, in consideration of the premises and the
agreements hereinafter set forth, the parties hereto hereby agree to amend and
restate the Existing Credit Agreement in its entirety as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed
in this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"Administrative Agent": as defined in the preamble hereto
"Affiliate": as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition, "control"
of a Person means the power, directly or indirectly, either to
-1-
7
(a) vote 10% or more of the securities having ordinary voting power
for the election of directors (or persons performing similar
functions) of such Person or (b) direct or cause the direction of the
management and policies of such Person, whether by contract or
otherwise; provided that, for purposes of this Agreement (other than
Section 6.10), AutoNation and its Affiliates (after giving effect to
the Spin-Off) shall not be deemed Affiliates of the Loan Parties.
"Agents": the collective reference to the Syndication Agent
and the Administrative Agent.
"Aggregate Exposure": with respect to any Lender at any time,
an amount equal to the amount of such Lender's Revolving Credit
Commitment at such time or, if the Revolving Credit Commitments have
been terminated, the amount of such Lender's Outstanding Extensions of
Credit.
"Aggregate Exposure Percentage": with respect to any Lender at
any time, the ratio (expressed as a percentage) of such Lender's
Aggregate Exposure at such time to the sum of the Aggregate Exposures
of all Lenders at such time.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Applicable Margin": (a) 3.50%, in the case of Base Rate Loans
and (b) 4.50% in the case of Eurodollar Loans; provided, that the
Applicable Margin with respect to each Type of Loan shall increase an
additional .50% on the first day of each January, April, July and
October, commencing October 1, 2000.
"Arranger": as defined in the preamble hereto.
"Assignee": as defined in Section 9.6(c).
"Assignor": as defined in Section 9.6(c).
"Attributable Debt": in respect of a sale and leaseback
transaction, at the time of determination, the present value
(discounted at the rate of interest implicit in such transaction,
determined in accordance with GAAP) of the obligation of the lessee for
net rental payments during the remaining term of the lease included in
such sale and leaseback transaction (including any period for which
such lease has been extended).
"AutoNation": as defined in the recitals hereto.
"AutoNation Subordinated Debt": Indebtedness of the Borrower
to AutoNation pursuant to the AutoNation Support Agreement or the
General Motors Letters of Credit Documentation and permitted by Section
6.2(i).
-2-
8
"AutoNation Support Agreement": the AutoNation Support
Agreement and the related Subordination Agreement to be entered into by
the Borrower and AutoNation on or before the Spin-Off Date,
substantially in the forms of such agreements delivered to the Agents
on the Closing Date pursuant to Section 4.1, as the same may be
amended, supplemented or otherwise modified in accordance with Section
6.9.
"Available Revolving Credit Commitment": with respect to any
Lender at any time, an amount equal to the excess, if any, of (a) such
Lender's Revolving Credit Commitment then in effect over (b) such
Lender's Outstanding Extensions of Credit then outstanding.
"Base Rate": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 2 of 1%. For purposes hereof: "Prime Rate" shall mean the
rate of interest per annum publicly announced from time to time by the
Reference Lender as its prime or base rate in effect at its principal
office in New York City (the Prime Rate not being intended to be the
lowest rate of interest charged by the Reference Lender in connection
with extensions of credit to debtors); "Base CD Rate" shall mean the
sum of (a) the product of (i) the Three-Month Secondary CD Rate and
(ii) a fraction, the numerator of which is one and the denominator of
which is one minus the C/D Reserve Percentage and (b) the C/D
Assessment Rate; and "Three-Month Secondary CD Rate" shall mean, for
any day, the secondary market rate for three-month certificates of
deposit reported as being in effect on such day (or, if such day shall
not be a Business Day, the next preceding Business Day) by the Board
through the public information telephone line of the Federal Reserve
Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day), or, if such rate shall not be so
reported on such day or such next preceding Business Day, the average
of the secondary market quotations for three-month certificates of
deposit of major money center banks in New York City received at
approximately 10:00 A.M., New York City time, on such day (or, if such
day shall not be a Business Day, on the next preceding Business Day) by
the Reference Lender from three New York City negotiable certificate of
deposit dealers of recognized standing selected by it. Any change in
the Base Rate due to a change in the Prime Rate, the Base CD Rate or
the Federal Funds Effective Rate shall be effective as of the opening
of business on the effective day of such change in the Prime Rate, the
Three-Month Secondary CD Rate or the Federal Funds Effective Rate,
respectively.
"Base Rate Loans": Loans for which the applicable rate of
interest is based upon the Base Rate.
"Benefitted Lender": as defined in Section 9.7(a).
-3-
9
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrower": as defined in the preamble hereto.
"Borrowing Base": as defined in the Borrowing Base Credit
Agreement.
"Borrowing Base Credit Agreement": the Amended and Restated
Credit Agreement, dated as of June 30, 2000, among the Borrower, the
lenders from time to time parties thereto, Xxxxxx Brothers Inc., as
arranger, Xxxxxx Commercial Paper Inc., as syndication agent, and
Congress Financial Corporation (Florida), as administrative agent, in
respect to the Borrowing Base Credit Facility, as the same may be
amended, supplemented or otherwise modified from time to time.
"Borrowing Base Credit Facility": the $175,000,000 credit
facility to be provided to the Borrower pursuant to the Borrowing Base
Credit Facility Documentation, and any refinancings, renewals, or
extensions thereof (without any increase in the principal amount
thereof or any shortening of the maturity of any principal amount
thereof).
"Borrowing Base Credit Facility Documentation": the Borrowing
Base Credit Agreement, together with all instruments and other
agreements in form and substance reasonably satisfactory to the Agents,
to be entered into by the Borrower and certain of its Subsidiaries in
connection with the Borrowing Base Credit Facility, as the same may be
amended, supplemented or otherwise modified from time to time.
"Borrowing Base Extensions of Credit": at any time, the Total
Revolving Extensions of Credit under and as defined in the Borrowing
Base Credit Agreement.
"Borrowing Date": any Business Day specified by the Borrower
as a date on which the Borrower requests the relevant Lenders to make
Loans hereunder.
"Borrowing Notice": with respect to any request for borrowing
of Revolving Credit Loans hereunder, a notice from the Borrower,
substantially in the form of, and containing the information prescribed
by, Exhibit G, delivered to the Administrative Agent.
"Business Day": (a) for all purposes other than as covered by
clause (b) below, a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by
law to close and (b) with respect to all notices and determinations in
connection with, and payments of principal and interest on, Eurodollar
Loans, any day which is a Business Day described in clause (a) and
which is also a day for trading by and between banks in Dollar deposits
in the interbank eurodollar market.
"Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures by such Person for the
acquisition or leasing (pursuant to a capital
-4-
10
lease) of fixed or capital assets or additions to equipment (including
replacements, capitalized repairs and improvements during such
period) which are required to be capitalized under GAAP on a balance
sheet of such Person, other than expenditures by such Person for the
acquisition of Vehicles with the proceeds of Vehicle Debt.
"Capital Lease Obligations": with respect to any Person, the
obligations of such Person to pay rent or other amounts under any lease
of (or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to
be classified and accounted for as capital leases on a balance sheet of
such Person under GAAP; and, for the purposes of this Agreement, the
amount of such obligations at any time shall be the capitalized amount
thereof at such time determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants, rights or options
to purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of
the United States, in each case maturing within one year from the date
of acquisition; (b) certificates of deposit, time deposits, eurodollar
time deposits or bankers' acceptances having maturities of one year or
less from the date of acquisition and overnight bank deposits (or with
respect to foreign banks, similar instruments) issued by any Lender or
by any commercial bank having combined capital and surplus of not less
than $500,000,000 (or the foreign equivalent thereof) and whose
long-term debt is rated at the time of the acquisition thereof at least
A or the equivalent thereof by Standard & Poor's Ratings Services
("S&P") or at least A or the equivalent thereof by Xxxxx'x Investors
Service, Inc. ("Moody's") (or the foreign equivalents thereof); (c)
commercial paper of an issuer rated at least A-2 by S&P or P-2 by
Moody's, or carrying an equivalent rating by a nationally recognized
rating agency, if both of the two named rating agencies cease
publishing ratings of commercial paper issuers generally, and maturing
within one year from the date of acquisition; (d) repurchase
obligations of any Lender or of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not
more than 60 days with respect to securities described in clauses (a)
and (b); (e) securities with maturities of one year or less from the
date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least A by S&P or
A by Moody's; (f) securities with maturities of one year or less from
the date of acquisition backed by standby letters of credit issued by
any Lender or any commercial bank satisfying the requirements of clause
(b) of this definition; (g) shares of money market mutual or similar
-5-
11
funds which invest exclusively in assets satisfying the requirements of
clauses (a) through (f) of this definition; and (h) Investments with
maturities of one year or less made by Excluded Foreign Subsidiaries in
accordance with their normal investment practices for cash management,
provided that those instruments are rated at least P-2 by Moody's or
A-2 by S&P (or, in their absence, an equivalent rating from another
nationally recognized securities rating agency).
"C/D Assessment Rate": for any day, the annual assessment rate
in effect on such day that is payable by a member of the Bank Insurance
Fund maintained by the Federal Deposit Insurance Corporation (the
AFDIC@) classified as well-capitalized and within supervisory subgroup
AB@ (or a comparable successor assessment risk classification) within
the meaning of 12 C.F.R. ss 327.4 (or any successor provision) to the
FDIC (or any successor) for the FDIC's (or such successor's) insuring
time deposits at offices of such institution in the United States.
"C/D Reserve Percentage": for any day, that percentage
(expressed as a decimal) which is in effect on such day, as prescribed
by the Board, for determining the maximum reserve requirement for a
Depositary Institution (as defined in Regulation D of the Board as in
effect from time to time) in respect of new non-personal time deposits
in Dollars having a maturity of 30 days or more.
"Change of Control": the occurrence of any of the following:
(a) the sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the assets of the
Borrower and its Subsidiaries, taken as a whole, to any "person" (as
such term is defined in Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"));
(b) the adoption of a plan relating to the liquidation or
dissolution of the Borrower other than in a transaction permitted under
Section 6.4;
(c) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that
any "person" (as defined above) becomes the "beneficial owners" (as
such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange
Act), directly or indirectly, of more than (i) 35%, at any time on or
prior to the first anniversary of the Closing Date, or (ii) 50% at any
time after the first anniversary of the Closing Date, in each case of
the total of the Voting Stock of the Borrower (measured by voting power
rather than number of shares);
(d) the first day on which a majority of the members of the
board of directors of the Borrower are not Continuing Directors;
(e) the Borrower consolidates with, or merges with or into,
any Person, or sells, assigns, conveys, transfers, leases or otherwise
disposes of all or substantially all of its
-6-
12
assets to any Person, or any Person consolidates with, or merges
with or into, the Borrower, in any such event pursuant to a
transaction in which any of the outstanding Voting Stock of the
Borrower is converted into or exchanged for cash, securities or other
property, other than any such transaction where the Voting Stock of
the Borrower outstanding immediately prior to such transaction is
converted into or exchanged for Voting Stock of the surviving or
transferee Person constituting a majority of the outstanding shares
of such Voting Stock of such surviving or transferee Person
(immediately after giving effect to such issuance); or
(f) a Specified Change of Control.
For avoidance of doubt, the Spin-Off shall not constitute a Change of
Control under this Agreement.
"Closing Date": the date on which the conditions precedent set
forth in Section 4.1 shall have been satisfied, which date shall be not
later than July 31, 2000.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all Property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Commitment Fee Rate": (a) 1.00% per annum for the period from
the Closing Date through December 31, 2000 and (b) 1.50% per annum for
the period from January 1, 2001 through the Revolving Credit
Termination Date.
"Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with the Borrower within the
meaning of Section 4001 of ERISA or is part of a group that includes
the Borrower and that is treated as a single employer under Section 414
of the Code.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer, substantially in the form of Exhibit A.
"Confidential Information Memorandum": the Confidential
Information Memorandum (and all appendices thereto) to be furnished to
the initial Lenders in connection with the syndication of the
Facilities.
"Consolidated Adjusted EBITDA": for any period, Consolidated
EBITDA for such period, plus, without duplication, the following
adjustments (made in the manner specified on Schedule 1.1(b)): (a)
charges incurred as a result of the implementation of the Borrower's
1999 restructuring plan, (b) non-recurring charges incurred as a result
of (i) asset impairments in respect of Vehicles and (ii) employee
retention payments, (c) estimated operating savings to be realized from
the implementation of the Borrower's
-7-
13
1999 restructuring plan assuming such plan were completed as of
January 1, 1999, (d) estimated reduction of Consolidated EBITDA for
the 1999 fiscal year of the Borrower due to the implementation of
the Odyssey computer operating system, (e) increases in operating
reserves and non-recurring accruals during the 1999 fiscal year of
the Borrower and (f) any other extraordinary charges resulting from
the implementation of the Borrower's 1999 restructuring plan.
"Consolidated Adjusted Funded Debt": on any date, the sum of
(a) Consolidated Funded Debt (excluding Vehicle Debt), plus (b) the
aggregate outstanding face amount of all Vehicle Letters of Credit on
such date.
"Consolidated Adjusted Funded Debt Ratio": as at the last day
of any period of four consecutive fiscal quarters of the Borrower, the
ratio of (a) Consolidated Adjusted Funded Debt on such day to (b)
Consolidated Adjusted EBITDA of the Borrower and its Subsidiaries for
such period.
"Consolidated EBITDA": of any Person for any period,
Consolidated Net Income of such Person and its Subsidiaries for such
period plus, without duplication and to the extent reflected as a
charge in the statement of such Consolidated Net Income for such
period, the sum of (a) income tax expense, (b) Consolidated Interest
Expense of such Person and its Subsidiaries, amortization or writeoff
of debt discount and debt issuance costs and commissions, discounts and
other fees and charges associated with Indebtedness, (c) depreciation
and amortization expense (excluding any such expense attributable to
Vehicle Debt), (d) amortization of intangibles (including, without
limitation, goodwill) and organization costs, (e) any extraordinary,
unusual or non-recurring expenses or losses (including, whether or not
otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, losses on sales of assets
outside of the ordinary course of business) and (f) any other non-cash
charges, and minus, to the extent included in the statement of such
Consolidated Net Income for such period, the sum of (x) interest income
(except to the extent deducted in determining Consolidated Interest
Expense), (y) any extraordinary, unusual or non-recurring income or
gains (including, whether or not otherwise includable as a separate
item in the statement of such Consolidated Net Income for such period,
gains on the sales of assets outside of the ordinary course of
business) and (z) any other non-cash income, all as determined on a
consolidated basis; provided, that for purposes of calculating
Consolidated EBITDA of the Borrower and its Subsidiaries for any
period, (i) the Consolidated EBITDA of any Person acquired by the
Borrower or its Subsidiaries during such period shall be included on a
pro forma basis for such period (assuming the consummation of such
acquisition and the incurrence or assumption of any Indebtedness in
connection therewith occurred on the first day of such period) if the
consolidated balance sheet of such acquired Person and its consolidated
Subsidiaries as at the end of the period preceding the acquisition of
such Person and the related consolidated statements of income and
stockholders' equity and of cash flows for the period in respect of
which Consolidated EBITDA is to be calculated (A) have been previously
provided to
-8-
14
the Administrative Agent and (B) either (1) have been reported on
without a qualification arising out of the scope of the audit by
independent certified public accountants of nationally recognized
good standing or (2) have been found reasonably acceptable to the
Administrative Agent and (ii) the Consolidated EBITDA of any Person
Disposed of by the Borrower or its Subsidiaries during such period
shall be excluded for such period (assuming the consummation of such
Disposition and the repayment of any Indebtedness in connection
therewith occurred on the first day of such period). For purposes of
determining the pro forma effect of any acquisitions and Dispositions
referred to in clauses (i) and (ii) of the foregoing proviso,
Consolidated EBITDA may be determined to give pro forma effect to
expense and cost reductions, provided that such calculations are
done on a basis that is permitted by Regulation S-X under the
Securities Act of 1933, as amended.
"Consolidated Fixed Charge Coverage Ratio": for any period,
the ratio of (a) Consolidated Adjusted EBITDA of the Borrower and its
Subsidiaries for such period, minus 50% of the aggregate amount
actually paid by the Borrower and its Subsidiaries in cash during such
period on account of Capital Expenditures to (b) Consolidated Fixed
Charges for such period.
"Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense of the Borrower and
its Subsidiaries for such period, (b) provision for cash income taxes
made by the Borrower or any of its Subsidiaries on a consolidated basis
in respect of such period and (c) scheduled payments made during such
period on account of principal of Indebtedness (other than Vehicle Debt
and the repayment in full of the Excluded Indebtedness) of the Borrower
or any of its Subsidiaries.
"Consolidated Funded Debt": on any date, the amount of Funded
Debt of the Borrower and its Subsidiaries on such date, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Interest Coverage Ratio": for any period, the
ratio of (a) Consolidated Adjusted EBITDA of the Borrower and its
Subsidiaries for such period to (b) Consolidated Interest Expense of
the Borrower and its Subsidiaries for such period.
"Consolidated Interest Expense": of any Person for any period,
total cash interest expense (including that attributable to Capital
Lease Obligations) of such Person and its Subsidiaries for such period
with respect to all outstanding Indebtedness (other than Vehicle Debt)
of such Person and its Subsidiaries (including, without limitation, all
commissions, discounts and other fees and charges owed by such Person
with respect to letters of credit and bankers' acceptance financing and
net costs of such Person under Hedge Agreements in respect of interest
rates to the extent such net costs are allocable to such period in
accordance with GAAP), other than any such cash interest expense in
respect of fees with respect to the Interim Loan Facility and the
Facilities.
-9-
15
"Consolidated Net Income": of any Person for any period, the
consolidated net income (or loss) of such Person and its Subsidiaries
for such period, determined on a consolidated basis in accordance with
GAAP; provided, that in calculating Consolidated Net Income of the
Borrower and its consolidated Subsidiaries for any period, there shall
be excluded (a) the income (or deficit) of any Person accrued prior to
the date it becomes a Subsidiary of the Borrower or is merged into or
consolidated with the Borrower or any of its Subsidiaries, (b) the
income (or deficit) of any Person (other than a Subsidiary of the
Borrower) in which the Borrower or any of its Subsidiaries has an
ownership interest, except to the extent that any such income is
actually received by the Borrower or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings
of any Subsidiary of the Borrower to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary is not
at the time permitted by the terms of any Contractual Obligation (other
than under any Loan Document) or Requirement of Law applicable to such
Subsidiary.
"Consolidated Total Debt": at any date, the aggregate
principal amount of all Indebtedness of the Borrower and its
Subsidiaries at such date, determined on a consolidated basis in
accordance with GAAP.
"Continuing Directors": the directors of the Borrower on the
Spin-Off Date, after giving effect to the Spin-Off and the other
transactions contemplated hereby, and each other director of the
Borrower, if, in each case, such other director's nomination for
election to the board of directors of the Borrower is recommended by at
least a majority of the then Continuing Directors.
"Continuing Obligations": means all obligations of the
Borrower and its Subsidiaries, currently existing or entered into in
the future, including reimbursement, indemnification and loan
obligations, to AutoNation and any of its subsidiaries, as a result of
payments made by AutoNation and any of its subsidiaries under (a) the
Credit Agreement, as amended and restated on March 26, 1999, among
Republic Industries Autovermietung GmbH, Commerzbank AG, Bremen Branch
and the other parties thereto, (b) the Loan Note Instrument, dated
October 15, 1997, by Republic Industries (UK) PLC, with respect to
Floating Rate Guaranteed Unsecured Loan Notes 2003, (c) the leases,
dated as of July 8, 1997, between Value Rent-A-Car, Inc., as tenant,
and Mitsubishi Motor Sales of America, Inc., as landlord, (d) the Motor
Vehicle Lease Agreement, dated as of July 1997, between Mitsubishi
Motor Sales of America, Inc., Value Rent-A-Car, Inc., Alamo Rent-A-Car,
Inc., National Car Rental System, Inc., Spirit Rent-A-Car, Inc. and
Republic Industries, Inc. and (e) the General Motors Letter of Credit,
each as amended through and as in effect on the date of this Agreement.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any
of its Property is bound.
-10-
16
"Control Investment Affiliate": as to any Person, any other
Person that (a) directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person and (b) is organized
by such Person primarily for the purpose of making equity or debt
investments in one or more companies. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, to
direct or cause the direction of the management and policies of such
Person, whether by contract or otherwise.
"Default": any of the events specified in Section 7, whether
or not any requirement for the giving of notice, the lapse of time,
or both, has been satisfied.
"Derivatives Counterparty": as defined in Section 6.6.
"Disposition": with respect to any Property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other
disposition thereof; and the terms "Dispose" and "Disposed of" shall
have correlative meanings.
"Distribution Documentation": collectively, (a) the Form 10
Registration Statement, (b) the Separation and Distribution Agreement,
(c) the Transitional Services Agreement, (d) the Tax Sharing Agreement,
and all schedules, exhibits, annexes and amendments thereto and all
material side letters and agreements affecting the terms thereof or
entered into in connection therewith, in each case, as amended,
supplemented or otherwise modified from time to time.
"Dollars" and "$": lawful currency of the United States.
"Domestic Subsidiary": any Subsidiary of the Borrower
organized under the laws of the United States, any state thereof or the
District of Columbia.
"Environmental Laws": any and all laws, rules, orders,
regulations, statutes, ordinances, published and legally binding
guidelines, codes, decrees, or other legally enforceable requirements
(including, without limitation, common law) of any international
authority, foreign government, the United States, or any state, local,
municipal or other governmental authority, regulating or imposing
liability or standards of conduct concerning protection of the
environment or of human health, or employee health and safety, as has
been, is now, or may at any time hereafter be, in effect.
"Environmental Permits": any and all permits, licenses,
approvals, registrations, notifications, exemptions and other
authorizations required under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
-11-
17
"Eurocurrency Reserve Requirements": for any day, the
aggregate (without duplication) of the maximum rates (expressed as a
decimal fraction) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and
emergency reserves) under any regulations of the Board or other
Governmental Authority having jurisdiction with respect thereto dealing
with reserve requirements prescribed for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of
the Board) maintained by a member bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period, the rate per annum determined on the basis of the rate
for deposits in Dollars for a period equal to such Interest Period
commencing on the first day of such Interest Period appearing on Page
3750 of the Telerate screen (rounded upwards, if necessary, to the next
one-tenth (1/10) of one (1%) percent) as of 11:00 A.M., London time,
two Business Days prior to the beginning of such Interest Period. In
the event that such rate does not appear on Page 3750 of the Telerate
screen (or otherwise on such screen), the "Eurodollar Base Rate" for
purposes of this definition shall be determined by reference to such
other comparable publicly available service for displaying eurodollar
rates as may be selected by the Administrative Agent.
"Eurodollar Loans": Loans for which the applicable rate of
interest is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period, a rate per annum determined for such day in accordance
with the following formula (rounded upward to the nearest 1/100th of
1%):
Eurodollar Base Rate
-----------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all of which
begin on the same date and end on the same later date (whether or not
such Loans shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 7,
provided, that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
"Excluded Foreign Subsidiaries": any Foreign Subsidiary in
respect of which (a) no election has been made by the Borrower to treat
such Foreign Subsidiary as a branch for United States tax purposes or
(b) total net assets of such Foreign Subsidiary (as shown on the most
recent balance sheet of such Foreign Subsidiary delivered to the
Agents) aggregates an equivalent of $5,000,000 or less. Any Foreign
Subsidiary which
-12-
18
is owned by another Subsidiary that constitutes an Excluded Foreign
Subsidiary pursuant to clause (a) of the foregoing sentence shall be an
Excluded Foreign Subsidiary.
"Excluded Indebtedness": Indebtedness of the Borrower and its
Subsidiaries set forth on Schedule 1.1(c).
"Facilities": the collective reference to the Revolving Credit
Facility and the Term Loan Facility.
"Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds
brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Reference Lender from
three federal funds brokers of recognized standing selected by it.
"Finance Companies": the collective reference to Republic
Industries Funding Corp., National Car Rental Financing Corp., National
Car Rental Financing LP, Car Temps Financing, LLC, Snappy Fleet Finance
Corp., Snappy Funding Corp., Snappy Funding, LP, Alamo Financing, LP,
Alamo Financing, LLC, ARG Funding Corporation, ANC Financial
Corporation, ANC Financial GP Corporation, CarTemps Financing, LP,
Spirit Leasing, Inc. and any of their respective successors and any
finance Subsidiary of the Borrower established in the future.
"Foreign Subsidiary": any Subsidiary of the Borrower that is
(a) not a Domestic Subsidiary or (b) a Domestic Subsidiary whose only
asset is the Capital Stock of one or more Foreign Subsidiaries.
"Form 10 Registration Statement": the Borrower's Registration
Statement on Form 10 (Registration No. 1-15421) as filed with the SEC,
as amended through Amendment No. 6 filed with the SEC on May 23, 2000.
"FQ1", "FQ2", "FQ3", and "FQ4": when used with a numerical
year designation, means the first, second, third or fourth fiscal
quarters, respectively, of such fiscal year of the Borrower (e.g., FQ2
2000 means the second fiscal quarter of the Borrower's 2000 fiscal
year, which fiscal quarter ends June 30, 2000).
"Funded Debt": with respect to any Person, all Indebtedness of
such Person of the types described in clauses (a) through (e) of the
definition of Indebtedness in this Section.
"Funding Office": the office specified from time to time by
the Administrative Agent as its funding office by notice to the
Borrower and the Lenders.
-13-
19
"GAAP": generally accepted accounting principles in the United
States of America as in effect from time to time.
"General Motors Letter of Credit": the letters of credit, in
the aggregate face amount of $60,000,000, issued by Deutsche Bank and
West LB for the benefit of The Bank of New York, as trustee.
"General Motors Letter of Credit Documentation": collectively,
the General Motors Letter of Credit, the AutoNation Support Agreement,
and all schedules, exhibits, annexes and amendments thereto and all
material side letters and agreements affecting the terms thereof or
entered into in connection therewith, in each case, in form and
substance reasonably satisfactory to the Administrative Agent, as
amended, supplemented or otherwise modified from time to time in
accordance with Section 6.9.
"GM": General Motors Corporation and its successors and
assigns.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement to be executed and delivered by the Borrower and
each Subsidiary Guarantor, in form and substance reasonably
satisfactory to the Administrative Agent, as the same may be amended,
supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit), if to induce the creation of such obligation of such other
Person the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case guaranteeing or
in effect guaranteeing any Indebtedness, leases, dividends or other
obligations (the "primary obligations") of any other third Person (the
"primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing
person, whether or not contingent, (i) to purchase any such primary
obligation or any Property constituting direct or indirect security
therefor, (ii) to advance or supply funds (A) for the purchase or
payment of any such primary obligation or (B) to maintain working
capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii) 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 (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person
-14-
20
shall be deemed to be the lower of (a) an amount equal to the stated
or determinable amount of the primary obligation in respect of which
such Guarantee Obligation is made and (b) the maximum amount for
which such guaranteeing person may be liable pursuant to the terms
of the instrument embodying such Guarantee Obligation, unless such
primary obligation and the maximum amount for which such guaranteeing
person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing
person's maximum reasonably anticipated liability in respect thereof
as determined by the Borrower in good faith.
"Hedge Agreements": all interest rate or currency swaps, caps
or collar agreements, foreign exchange agreements, commodity contracts
or similar arrangements entered into by the Borrower or its
Subsidiaries providing for protection against fluctuations in interest
rates, currency exchange rates, commodity prices or the exchange of
nominal interest obligations, either generally or under specific
contingencies.
"Inactive Subsidiary": each Subsidiary of the Borrower that
has total net assets (as shown on the most recent balance sheet of such
Subsidiary delivered to the Agents) of $100,000 or less.
"Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money,
(b) all obligations of such Person for the deferred purchase price of
Property or services (other than trade payables incurred in the
ordinary course of such Person's business), (c) all obligations of such
Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to
Property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such Property), (e) all Capital
Lease Obligations of such Person, (f) all obligations of such Person,
contingent or otherwise, as an account party or applicant under
acceptance, letter of credit or similar facilities, (g) all obligations
of such Person, contingent or otherwise, to purchase, redeem, retire or
otherwise acquire for value any Capital Stock of such Person, (h) all
Guarantee Obligations of such Person in respect of obligations of the
kind referred to in clauses (a) through (g) above; (i) all obligations
of the kind referred to in clauses (a) through (h) above secured by (or
for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Lien on Property
(including, without limitation, accounts and contract rights) owned by
such Person, whether or not such Person has assumed or become liable
for the payment of such obligation and (j) for the purposes of Section
7(e) only, all obligations of such Person in respect of Hedge
Agreements.
"Indemnified Liabilities": as defined in Section 9.5.
"Indemnitee": as defined in Section 9.5.
-15-
21
"Initial Funding Date": the date on which the conditions
precedent set forth in Section 4.2 shall have been satisfied and the
initial extensions of credit under this Agreement shall have been made.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Insurance Companies": International Automotive Group
Insurance Company, Ltd. and its successors and any other captive
insurance Subsidiary of the Borrower established in the future.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or
otherwise, including, without limitation, copyrights, copyright
licenses, patents, patent licenses, trademarks, trademark licenses,
technology, know-how and processes, and all rights to xxx at law or in
equity for any infringement or other impairment thereof, including the
right to receive all proceeds and damages therefrom.
"Intercreditor Agreement": the Intercreditor Agreement to be
executed by the Administrative Agent and the administrative agent under
the Borrowing Base Credit Facility, in form and substance reasonably
satisfactory to the Agents, as the same may be amended, supplemented or
otherwise modified from time to time.
"Interest Payment Date": (a) as to any Base Rate Loan, the
last day of each calendar month to occur while such Loan is outstanding
and the final maturity date of such Loan, (b) as to any Eurodollar
Loan, the last day of the relevant Interest Period and the date of any
repayment or prepayment made in respect thereof, (c) the date, if any,
prior to the Revolving Credit Termination Date, on which the Revolving
Credit Commitments shall terminate and (d) the Term Loan Maturity Date.
"Interest Period": as to any Eurodollar Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the case
may be, with respect to such Eurodollar Loan and ending one month
thereafter; and (b) thereafter, each period commencing on the last day
of the next preceding Interest Period applicable to such Eurodollar
Loan and ending one month thereafter; provided, that, all of the
foregoing provisions relating to Interest Periods are subject to the
following:
(i) if any Interest Period would otherwise end on a
day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest
-16-
22
Period into another calendar month in which event such
Interest Period shall end on the immediately preceding
Business Day;
(ii) any Interest Period that would otherwise extend
beyond the Revolving Credit Termination Date shall end on the
Revolving Credit Termination Date, and, if on the Revolving
Credit Termination Date, the Outstanding Extensions of Credit
are converted to Term Loans pursuant to Section 2.3, any
Interest Period that would otherwise extend beyond the Term
Loan Maturity Date shall end on the Term Loan Maturity Date;
and
(iii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest
Period.
"Interim Facility Loan Agreement": the Amended and Restated
Senior Loan Agreement, dated as of June 30, 2000, entered into by the
Borrower in connection with the Interim Loan Facility, as the same may
be amended, supplemented or otherwise modified from time to time in
accordance with Section 6.9.
"Interim Facility Loan Documentation": the Interim Facility
Loan Agreement, together with all instruments and other agreements
entered into by the Borrower and certain of its Subsidiaries in
connection therewith, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with Section 6.9.
"Interim Loan Facility": the $225,000,000 credit facility to
be provided to the Borrower pursuant to the Interim Facility Loan
Documentation, and any refinancings, refundings, renewals or extensions
thereof (without any increase in the principal amount thereof or any
shortening of the maturity of any principal amount thereof), including,
without limitation, any such refinancing with the issuance of senior
notes (which may be sold in a public offering or private placement) or
other refinancing, in each case, on terms no less favorable to the
Lenders than the terms under the Interim Facility Loan Agreement.
"Investments": as defined in Section 6.8.
"Xxxxxx Entity": any of Xxxxxx Commercial Paper Inc. or any of
its affiliates (including Syndicated Loan Funding Trust).
"Lender Addendum": with respect to any initial Lender, a
Lender Addendum, substantially in the form of Exhibit F, to be executed
and delivered by such Lender on the Initial Funding Date as provided in
Section 9.17.
"Lenders": as defined in the preamble hereto.
-17-
23
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any 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 and any capital lease having substantially the same
economic effect as any of the foregoing).
"Loan": any loan made, or deemed to be made, by any Lender
pursuant to this Agreement.
"Loan Documents": this Agreement, the Security Documents, the
Syndication Letter Agreement, the Intercreditor Agreement and the
Notes.
"Loan Parties": the Borrower and each Subsidiary of the
Borrower that is a party to a Loan Document.
"Loan Percentage": as to any Lender at any time, the
percentage which such Lender's Revolving Credit Commitment then
constitutes of the Total Revolving Credit Commitments (or, at any time
after the Revolving Credit Commitments shall have expired or have been
terminated, the percentage which the Outstanding Extensions of Credit
of such Lender then outstanding constitutes of the Total Outstanding
Extensions of Credit.
"Material Adverse Effect": a material adverse effect on (a)
the business, assets, property, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole; (b)
the validity or enforceability of this Agreement or any of the other
Loan Documents or the rights or remedies of the Agents or the Lenders
hereunder or thereunder; (c) the legality, validity, enforceability,
perfection or priority of the Liens of the Administrative Agent on the
Collateral taken as a whole; (d) the Collateral or the value of the
Collateral taken as a whole; or (e) the ability of the Borrower to
repay the Obligations or perform its obligations under this Agreement
or any of the other Loan Documents.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products, polychlorinated biphenyls, urea-formaldehyde insulation,
asbestos, pollutants, contaminants, radioactivity, and any other
substances of any kind, whether or not any such substance is defined as
hazardous or toxic under any Environmental Law, that is regulated
pursuant to or could give rise to liability under any Environmental
Law.
"Mortgaged Properties": (a) the real properties listed on
Schedule 1.1(a), as to which the Administrative Agent for the benefit
of the Lenders shall be granted a Lien pursuant to one or more
Mortgages and (b) any other parcel of real property owned by the
Borrower or any Subsidiary Guarantor which is acceptable to the Agents
and as to which
-18-
24
the Administrative Agent for the benefit of the Lenders shall be
granted a Lien pursuant to a Mortgage.
"Mortgages": each of the mortgages and deeds of trust to be
made by any Loan Party in favor of, or for the benefit of, the
Administrative Agent for the benefit of the Lenders, in the form and
substance reasonably satisfactory to the Agents, as the same may be
amended, supplemented or otherwise modified from time to time.
"Multiemployer Plan": a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Non-Excluded Taxes": as defined in Section 2.16(a).
"Non-U.S. Lender": as defined in Section 2.16(d).
"Note": as defined in Section 2.4(e).
"Obligations": the unpaid principal of and interest on
(including, without limitation, interest, fees and expenses accruing
after the maturity of the Loans and interest, fees and expenses
accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding,
relating to the Borrower, whether or not a claim for post-filing or
post-petition interest, fees and expenses is allowed in such
proceeding) the Loans and all other obligations and liabilities of the
Borrower to the Administrative Agent or to any Lender, whether direct
or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in
connection with, this Agreement, any other Loan Document, any Specified
Hedge Agreement or any other document made, delivered or given in
connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees, charges and disbursements of
counsel to any Agent or to any Lender that are required to be paid by
the Borrower pursuant hereto) or otherwise.
"Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or
similar levies arising from any payment made hereunder or from the
execution, delivery or enforcement of, or otherwise with respect to,
this Agreement or any other Loan Document.
"Outstanding Extensions of Credit": as to any Lender at any
time, an amount equal to (a) the aggregate principal amount of all
Revolving Credit Loans made by such Lender then outstanding or (b) the
aggregate principal amount of all Term Loans deemed made by such Lender
then outstanding, as applicable.
"Participant": as defined in Section 9.6(b).
-19-
25
"Payment Office": the office specified from time to time by
the Administrative Agent as its payment office by notice to the
Borrower and the Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Acquisition": as defined in Section 6.8(i).
"Permitted Joint Venture": as defined in Section 6.8(k).
"Permitted Stock Acquisition": as defined in Section 6.8(j).
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan that
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Pro Forma Balance Sheet": as defined in Section 3.1(a).
"Property": any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible
or intangible, including, without limitation, Capital Stock.
"Reference Lender": Deutsche Bank, New York Branch, together
with its successors and assigns.
"Register": as defined in Section 9.6(d).
"Regulation H": Regulation H of the Board as in effect from
time to time.
"Regulation U": Regulation U of the Board as in effect from
time to time.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .22, .23, .27, .28, .29, .30,
.31, .32, .34 or .35 of PBGC Reg. ss 4043.
-20-
26
"Required Lenders": at any time, the holders of more than 50%
of the Total Revolving Credit Commitments then in effect or, if the
Revolving Credit Commitments have been terminated, the Total Extensions
of Credit then outstanding.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws 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 Property or to which such Person or any of its Property is
subject.
"Responsible Officer": the chief executive officer, president,
chief financial officer or treasurer of the Borrower, but in any event,
with respect to financial matters, the chief financial officer or
treasurer of the Borrower.
"Restricted Payments": as defined in Section 6.6.
"Revolving Credit Commitment": as to any Lender, the
obligation of such Lender, if any, to make Revolving Credit Loans in an
aggregate principal amount not to exceed the amount set forth under the
heading "Revolving Credit Commitment" opposite such Lender's name on
Schedule 1 to the Lender Addendum delivered by such Lender, or, as the
case may be, in the Assignment and Acceptance pursuant to which such
Lender became a party hereto, as the same may be changed from time to
time pursuant to the terms hereof. The original aggregate amount of the
Total Revolving Credit Commitments is $40,000,000.
"Revolving Credit Commitment Period": the period from and
including the Closing Date to the Revolving Credit Termination Date.
"Revolving Credit Facility": the Revolving Credit Commitments
and the extensions of credit made thereunder.
"Revolving Credit Loans": as defined in Section 2.1(a).
"Revolving Credit Termination Date": May 31, 2001.
"Risk Management Subsidiary": each of Post Retirement
Liability Management, Inc., a Florida corporation, and Rental Liability
Management, Inc., a Florida corporation.
"SEC": the Securities and Exchange Commission (or successors
thereto or an analogous Governmental Authority).
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Mortgages and all other
security documents hereafter delivered to the
-21-
27
Administrative Agent granting a Lien on any Property of any Person to
secure the obligations and liabilities of any Loan Party under any
Loan Document.
"Separation and Distribution Agreement": the Separation and
Distribution Agreement to be entered into by the Borrower and
AutoNation on or before the Spin-Off Date, substantially in the form of
such agreement delivered to the Agents on the Closing Date pursuant to
Section 4.1, as the same may be amended, supplemented or otherwise
modified in accordance with Section 6.16.
"Service Vehicles": passenger buses, vans, tow trucks and
other vehicles owned by the Borrower or a Subsidiary Guarantor and not
subject to any Lien in favor of any Person other than the
Administrative Agent, for the benefit of the Lenders.
"Single Employer Plan": any Plan that is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Solvent": with respect to any Person, as of any date of
determination, (a) the amount of the "present fair saleable value" of
the assets of such Person will, as of such date, exceed the amount of
all "liabilities of such Person, contingent or otherwise," as of such
date, as such quoted terms are determined in accordance with applicable
federal and state laws governing determinations of the insolvency of
debtors, (b) the present fair saleable value of the assets of such
Person will, as of such date, be greater than the amount that will be
required to pay the liability of such Person on its debts as such debts
become absolute and matured, (c) such Person will not have, as of such
date, an unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they
mature. For purposes of this definition, (i) "debt" means liability on
a "claim," and (ii) "claim" means any (x) right to payment, whether or
not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal,
equitable, secured or unsecured or (y) right to an equitable remedy for
breach of performance if such breach gives rise to a right to payment,
whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
"Specified Change of Control": a "Change of Control," or like
event, as defined in any indenture or other agreement pursuant to which
any securities are issued to refinance the Interim Loan Facility.
"Specified Collateral": as defined in the Guarantee and
Collateral Agreement.
"Specified Hedge Agreement": any Hedge Agreement entered into
by the Borrower or any of its Subsidiaries and any Lender or any
affiliate thereof, as counterparty.
-22-
28
"Spin-Off": as defined in the recitals hereto.
"Spin-Off Date": the date, on or before July 31, 2000, on
which the Spin-Off occurs and the conditions set forth in Section 4.2
are satisfied.
"Subordinated Notes": (a) the unsecured intercompany
promissory notes, in form and substance reasonably satisfactory to the
Agents, initially payable by Alamo Rent-A-Car, LLC to the Risk
Management Subsidiaries in an aggregate principal amount of
approximately $260,000,000, which shall be assumed by ANC Financial, LP
in accordance with Section 6.17, the payment of which shall be
subordinated to the Obligations and which, in any event, shall not
permit (i) any payment of principal thereof prior to the date which is
91 days after repayment in full of all amounts outstanding hereunder
and termination of all Commitments and (ii) the payment of interest
thereon after the occurrence and during the continuance of an Event of
Default and (b) the unsecured intercompany revolving credit agreements,
in form and substance reasonably satisfactory to the Agents, between
each Risk Management Subsidiary, as borrower, and initially Alamo
Rent-A-Car, LLC, as lender, which shall be assigned to ANC Financial,
LP in accordance with Section 6.17 and the loans under which shall be
subordinated to the Obligations.
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or
other ownership interests having ordinary voting power (other than
stock or such other ownership interests 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, partnership
or other entity 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. Unless otherwise qualified,
all references to a "Subsidiary" or to "Subsidiaries" in this Agreement
shall refer to a Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower other
than any Excluded Foreign Subsidiary, any Inactive Subsidiary, any
Finance Company, any Insurance Company and, as of the Initial Funding
Date, any Risk Management Subsidiary.
"Syndication Date": the date on which the Syndication Agent
completes the syndication of the Revolving Credit Facility and the
entities selected in such syndication process become parties to this
Agreement.
"Syndication Letter Agreement": the letter agreement, dated as
of May 26, 2000, between the Borrower and the Syndication Agent and the
Arranger relating to the syndication of the Revolving Credit Facility.
"Tax Refund": as defined in Section 2.16(f).
-23-
29
"Tax Sharing Agreement": the Tax Sharing Agreement to be
entered into by the Borrower and AutoNation on or before the Spin-Off
Date, substantially in the form of such agreement delivered to the
Agents on the Closing Date pursuant to Section 4.1, as the same may be
amended, supplemented or otherwise modified in accordance with Section
6.16.
"Term Loan Facility": the Term Loans deemed made pursuant to
Section 2.3.
"Term Loan Maturity Date": May 31, 2003.
"Term Loans": as defined in Section 2.3.
"Total Borrowing Base Commitments": the Total Revolving Credit
Commitments under and as defined in the Borrowing Base Credit
Agreement.
"Total Borrowing Base Extensions of Credit": at any time, the
Total Revolving Extensions of Credit under and as defined in the
Borrowing Base Credit Agreement.
"Total Outstanding Extensions of Credit": at any time, the
aggregate amount of the Outstanding Extensions of Credit of the Lenders
outstanding at such time.
"Total Revolving Credit Commitments": at any time, the
aggregate amount of the Revolving Credit Commitments then in effect.
"Transferee": as defined in Section 9.4.
"Transitional Services Agreement": the Transitional Services
Agreement to be entered into by the Borrower and AutoNation on or
before the Spin-Off Date, substantially in the form of such agreement
delivered to the Agents on the Closing Date pursuant to Section 4.1, as
the same may be amended, supplemented or otherwise modified in
accordance with Section 6.16.
"Type": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"United States": the United States of America.
"Vehicle": any motor vehicle used by the Borrower and its
Subsidiaries in the ordinary course of their motor vehicle rental
businesses.
"Vehicle Debt": Indebtedness of the Subsidiaries of the
Borrower incurred to finance, refinance or lease, directly or
indirectly, Vehicles (but only to the extent actually used to finance,
refinance or lease Vehicles).
-24-
30
"Vehicle Letters of Credit": letters of credit issued for the
account of any of the Borrower's Subsidiaries to ensure the repayment
of Vehicle Debt.
"Voting Stock": of any Person as of any date, the Capital
Stock of such Person that is at the time entitled to vote in the
election of the board of directors of such Person.
"Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying
shares required by law) is owned by such Person directly and/or through
other Wholly Owned Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
(b As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrower and its Subsidiaries 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.
(c The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(e All calculations of financial ratios set forth in Section
6.1 shall be calculated to the same number of decimal places as the relevant
ratios are expressed in and shall be rounded upward if the number in the decimal
place immediately following the last calculated decimal place is five or
greater. For example, if the relevant ratio is to be calculated to the hundredth
decimal place and the calculation of the ratio is 5.126, the ratio will be
rounded up to 5.13.
(f Unless otherwise specified herein or therein, any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document,
as from time to time amended, supplemented or modified (subject to any
restrictions on such amendments, supplements or modifications contained herein).
-25-
31
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, the Lenders severally agree to make revolving credit loans
("Revolving Credit Loans") to the Borrower from time to time during the
Revolving Credit Commitment Period in an aggregate principal amount at any one
time outstanding which does not exceed for all Lenders in the aggregate the
Total Revolving Credit Commitments; provided, that after giving effect to the
making of each Revolving Credit Loan and the immediate application of the
proceeds thereof, (i) the Total Outstanding Extensions of Credit, when added to
the Total Borrowing Base Extensions of Credit, shall not exceed the Total
Borrowing Base Commitments and (ii) the Outstanding Extensions of Credit of any
Lender shall not exceed the Revolving Credit Commitment of such Lender. During
the Revolving Credit Commitment Period, the Borrower may use the Revolving
Credit Commitments by borrowing, prepaying the Revolving Credit Loans in whole
or in part, and reborrowing, all in accordance with the terms and conditions
hereof. The Revolving Credit Loans may from time to time be Eurodollar Loans or
Base Rate Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.2 and 2.9; provided, that no
Revolving Credit Loan shall be made as a Eurodollar Loan after the day that is
one month prior to the Revolving Credit Termination Date.
(b The Borrower shall repay all outstanding Revolving Credit
Loans on the Revolving Credit Termination Date.
2.2 Procedure for Revolving Credit Borrowing. (a) The Borrower
may borrow under the Revolving Credit Commitments on any Business Day during the
Revolving Credit Commitment Period, provided, that the Borrower shall deliver to
the Administrative Agent a Borrowing Notice (which Borrowing Notice must be
received by the Administrative Agent prior to 1:00 P.M., New York City time, (a)
three Business Days prior to the requested Borrowing Date, in the case of
Eurodollar Loans, or (b) one Business Day prior to the requested Borrowing Date,
in the case of Base Rate Loans). Any Revolving Credit Loans made on the Spin-Off
Date shall initially be Base Rate Loans. Each borrowing of Revolving Credit
Loans under the Revolving Credit Commitments shall be in an amount equal to (x)
in the case of Base Rate Loans, $1,000,000 or a whole multiple thereof (or, if
the then aggregate Available Revolving Credit Commitments are less than
$1,000,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$5,000,000 or a whole multiple of $1,000,000 in excess thereof. Upon receipt of
any such Borrowing Notice from the Borrower, the Administrative Agent shall
promptly notify each Lender thereof. Each Lender will make its Loan Percentage
of the amount of each borrowing of Revolving Credit Loans available to the
Administrative Agent for the account of the Borrower at the Funding Office prior
to 1:00 P.M., New York City time, on the Borrowing Date requested by the
Borrower in funds immediately available to the Administrative Agent. Such
borrowing will then be made available to the Borrower by the Administrative
Agent in like funds as received by the Administrative Agent.
-26-
32
(b) With respect to any request for Base Rate Loans, in lieu
of delivering the above-described Borrowing Notice, the Borrower may give the
Administrative Agent telephonic notice of such request by the required time,
with such telephonic notice to be confirmed in writing within 24 hours of the
giving of such notice, provided, however, that the Administrative Agent shall be
entitled to rely on the telephonic notice in making such Revolving Credit Loans.
Any Borrowing Notice (or telephonic notice in lieu thereof) shall be irrevocable
and the Borrower shall be bound to borrow the funds requested therein in
accordance therewith. The Administrative Agent shall not incur any liability to
the Borrower as a result of acting upon any Borrowing Notice, which notice the
Administrative Agent believes in good faith to have been given by an officer
duly authorized by the Borrower to request Revolving Credit Loans on its behalf
or for otherwise acting in good faith, and the crediting of Revolving Credit
Loans to the Borrower's deposit account, or transmittal to such Person as the
Borrower shall direct, shall conclusively establish the obligations of Borrowers
to repay such Revolving Credit Loans as provided herein.
2.3 Conversion of Revolving Credit Loans to Term Loans. (a)
The aggregate principal amount of the Revolving Credit Loans outstanding on the
Revolving Credit Termination Date shall be converted into, and the Lenders shall
be deemed to have made, term loans to the Borrower on the Revolving Credit
Termination Date in an aggregate principal amount equal to the aggregate
principal amount of the Revolving Credit Loans so converted (the "Term Loans").
The Term Loans may from time to time be Eurodollar Loans or Base Rate Loans, as
determined by the Borrower and notified to the Administrative Agent in
accordance with Section 2.9.
(b) The Borrower shall repay all outstanding Term Loans on the
Term Loan Maturity Date.
2.4 Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of the appropriate Lender, (i) the then unpaid principal amount of each
Revolving Credit Loan of such Lender on the Revolving Credit Termination Date
(or on such earlier date on which the Loans become due and payable pursuant to
Section 7) and (ii) the then unpaid principal amount of the Term Loans of such
Lender on the Term Loan Maturity Date (or on such earlier date on which the
Loans become due and payable pursuant to Section 7). The Borrower hereby further
agrees to pay interest on the unpaid principal amount of the Loans from time to
time outstanding from the date hereof until payment in full thereof at the rates
per annum, and on the dates, set forth in Section 2.11.
(b Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
-27-
33
(c) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 9.6(d), and a subaccount therein for
each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Note evidencing such Loan, the Type of such Loan and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to Section 2.4(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
the Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will promptly execute and
deliver to such Lender a promissory note of the Borrower evidencing any Loans of
such Lender, substantially in the form of Exhibit D (a "Note"), with appropriate
insertions as to date and principal amount; provided, that delivery of Notes
shall not be a condition precedent to the occurrence of the Spin-Off or the
making of Loans on the Spin-Off Date.
2.5 Commitment Fees, etc. (a) The Borrower agrees to pay to
the Administrative Agent for the account of each Lender a commitment fee for the
period from and including the Closing Date to the last day of the Revolving
Credit Commitment Period, computed at the Commitment Fee Rate on the average
daily amount of the Available Revolving Credit Commitment of such Lender during
the period for which payment is made, payable quarterly in arrears on the last
day of each March, June, September and December and on the Revolving Credit
Termination Date, commencing on the first of such dates to occur after the date
hereof.
(b) The Borrower agrees to pay to the Syndication Agent the
fees in the amounts and on the dates previously agreed to in writing by the
Borrower and the Syndication Agent.
(c) The Borrower agrees to pay to the Administrative Agent the
fees in the amounts and on the dates from time to time agreed to in writing by
the Borrower and the Administrative Agent.
2.6 Termination or Reduction of Revolving Credit Commitments.
The Borrower shall have the right, upon not less than three Business Days'
notice to the Administrative Agent, to terminate the Revolving Credit
Commitments or, from time to time, to reduce the aggregate amount of the
Revolving Credit Commitments; provided that no such termination or reduction of
Revolving Credit Commitments shall be permitted if after giving effect thereto
and to any prepayments of the
-28-
34
Revolving Credit Loans made on the effective date thereof, the Total Outstanding
Extensions of Credit would exceed the Total Revolving Credit Commitments. Any
such reduction shall be in an amount equal to $1,000,000, or a whole multiple
thereof, and shall reduce permanently the Revolving Credit Commitments then in
effect.
2.7 Optional Prepayments. The Borrower may at any time and
from time to time prepay the Loans, in whole or in part, without premium or
penalty, upon irrevocable notice delivered to the Administrative Agent at least
three Business Days prior thereto in the case of Eurodollar Loans and at least
one Business Day prior thereto in the case of Base Rate Loans, which notice
shall specify the date and amount of such prepayment and whether such prepayment
is of Eurodollar Loans or Base Rate Loans; provided, that if a Eurodollar Loan
is prepaid on any day other than the last day of the Interest Period applicable
thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.17;
provided, further that if Term Loans shall be prepaid pursuant to this Section
2.7 on or prior to the second anniversary of the Revolving Credit Termination
Date, such prepayment shall be accompanied by a premium in an amount equal to
(i) 3.00% of the principal amount of such prepayment if such prepayment occurs
on or prior to the first anniversary of the Revolving Credit Termination Date or
(ii) 1.50% of the principal amount of such prepayment if such prepayment occurs
subsequent to the first anniversary of the Revolving Credit Termination Date.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each relevant Lender thereof. If any such notice is given, the amount specified
in such notice shall be due and payable on the date specified therein, together
with (except in the case of Revolving Credit Loans that are Base Rate Loans)
accrued interest to such date on the amount prepaid. Partial prepayments of
Loans shall be in an aggregate principal amount of $1,000,000 or a whole
multiple thereof.
2.8 Mandatory Prepayments and Commitment Reductions. (a) If,
at any time during the period from the Closing Date through and including the
Revolving Credit Termination Date, the lesser of (i) the Borrowing Base and (ii)
the Total Borrowing Base Commitments exceeds the Borrowing Base Extensions of
Credit, the Borrower shall, without notice or demand, prepay the Loans in an
aggregate principal amount equal to such excess, together (except in the case of
Revolving Credit Loans which are Base Rate Loans) with interest accrued to the
date of such payment or prepayment.
(b) [Reserved]
(c) [Reserved]
(d) [Reserved]
(e) Upon the occurrence of a Change of Control, the Borrower
shall, without notice or demand, immediately prepay all Loans in full, whereupon
all Revolving Credit Commitments, if in effect, shall be terminated.
-29-
35
(f) Any reduction of the Revolving Credit Commitments pursuant
to this Section shall be accompanied by prepayment of the Revolving Credit Loans
to the extent, if any, that the Total Outstanding Extensions of Credit exceed
the amount of the Total Revolving Credit Commitments as so reduced; provided
that any prepayment of the Loans that are Eurodollar Loans pursuant to this
Section shall be made on the last day of the Interest Period with respect
thereto in which the relevant prepayment is required.
(g) Each prepayment of Term Loans under this Section shall be
accompanied by accrued interest to the date of such prepayment on the amount
prepaid. Amounts prepaid on account of the Term Loans may not be reborrowed.
2.9 Conversion and Continuation Options. (a) The Borrower may
elect from time to time to convert Eurodollar Loans to Base Rate Loans by giving
the Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may be made
only on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert Base Rate Loans to Eurodollar Loans by
giving the Administrative Agent at least three Business Days' prior irrevocable
notice of such election (which notice shall specify the length of the initial
Interest Period therefor), provided that no Base Rate Loan may be converted into
a Eurodollar Loan (i) when any Event of Default has occurred and is continuing
and the Administrative Agent has, or the Required Lenders have, determined in
its or their sole discretion not to permit such conversions or (ii) after such
date that is one month prior to the Revolving Credit Termination Date or, if the
Revolving Credit Loans are converted pursuant to Section 2.3, the Term Loan
Maturity Date. Upon receipt of any such notice the Administrative Agent shall
promptly notify each Lender thereof.
(b) The Borrower may elect to continue any Eurodollar Loan as
such upon the expiration of the then current Interest Period with respect
thereto by giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to such
Loans, provided that no Eurodollar Loan may be continued as such (i) when any
Event of Default has occurred and is continuing and the Administrative Agent
has, or the Required Lenders have, determined in its or their sole discretion
not to permit such continuations or (ii) after such date that is one month prior
to the Revolving Credit Facility Termination Date or, if the Revolving Credit
Loans are converted pursuant to Section 2.3, the Term Loan Maturity Date, and
provided, further, that if the Borrower shall fail to give any required notice
as described above in this paragraph or if such continuation is not permitted
pursuant to the preceding proviso, such Loans shall be converted automatically
to Base Rate Loans on the last day of such then expiring Interest Period. Upon
receipt of any such notice the Administrative Agent shall promptly notify each
relevant Lender thereof.
2.10 Minimum Amounts and Maximum Number of Eurodollar
Tranches. Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions, continuations and optional
-30-
36
prepayments of Eurodollar Loans and all selections of Interest Periods shall be
in such amounts and be made pursuant to such elections so that, (a) after giving
effect thereto, the aggregate principal amount of the Eurodollar Loans
comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole
multiple of $1,000,000 in excess thereof and (b) no more than six Eurodollar
Tranches shall be outstanding at any one time.
2.11 Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin in effect for such day.
(b) Each Base Rate Loan shall bear interest for each day on
which it is outstanding at a rate per annum equal to the Base Rate in effect for
such day plus the Applicable Margin in effect for such day.
(c) (i) If all or a portion of the principal amount of any
Loan shall not be paid when due (whether at the stated maturity, by acceleration
or otherwise), all outstanding Loans (whether or not overdue) (to the extent
legally permitted) shall bear interest at a rate per annum that is equal to the
rate that would otherwise be applicable thereto pursuant to the foregoing
provisions of this Section plus 2%, and (ii) if all or a portion of any interest
payable on any Loan or any commitment fee or other amount payable hereunder
shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum equal to
the rate then applicable to Base Rate Loans plus 2%, in each case, with respect
to clauses (i) and (ii) above, from the date of such non-payment until such
amount is paid in full (to the extent not prohibited by law, after as well as
before judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided, that to the extent the rate of interest applicable to
any Loan pursuant to Section 2.11(a) or (b), as applicable, exceeds 14%, such
excess may, at the option of the Borrower, be capitalized as principal and
thereby added on each Interest Payment Date to the aggregate outstanding
principal amount of such Loan; provided, further, that interest accruing
pursuant to paragraph (c) of this Section shall be payable from time to time on
demand.
2.12 Computation of Interest and Fees. (a) Interest, fees and
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to Base Rate
Loans on which interest is calculated on the basis of the Prime Rate, the
interest thereon shall be calculated on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the Borrower and the Lenders of each
determination of a Eurodollar Rate. Any change in the interest rate on a Loan
resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of the effective date and the
amount of each such change in interest rate.
-31-
37
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the Borrower,
deliver to the Borrower a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to Section
2.11(a).
2.13 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Required Lenders that the Eurodollar Rate determined or to be
determined for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such
Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans requested to be made on the first day
of such Interest Period shall be made as Base Rate Loans, (y) any Loans that
were to have been converted on the first day of such Interest Period to
Eurodollar Loans shall be continued as Base Rate Loans and (z) any outstanding
Eurodollar Loans shall be converted, on the last day of the then current
Interest Period with respect thereto, to Base Rate Loans. Until such notice has
been withdrawn by the Administrative Agent, no further Eurodollar Loans shall be
made or continued as such, nor shall the Borrower have the right to convert
Loans to Eurodollar Loans.
2.14 Pro Rata Treatment and Payments. (a) Each borrowing by
the Borrower from the Lenders hereunder, each payment by the Borrower on account
of any commitment fee, and any reduction of the Commitments of the Lenders,
shall be made pro rata according to the respective Loan Percentages of the
Lenders.
(b) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Loans shall be made pro rata
according to the respective outstanding principal amounts of the Loans then held
by the Lenders.
(c) The application of any mandatory payment of Loans shall be
made, first, to Base Rate Loans and, second, to Eurodollar Loans. The
application of any optional payment of Loans pursuant to Section 2.7 shall be at
the direction of the Borrower. Each payment of the Loans (except in the case of
Revolving Credit Loans that are Base Rate Loans) shall be accompanied by accrued
interest to the date of such payment on the amount paid.
-32-
38
(d) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 2:00 P.M., New York City time, on the due date thereof to the Administrative
Agent, for the account of the relevant Lenders, at the Payment Office, in
Dollars and in immediately available funds. Any payment made by the Borrower
after 2:00 P.M., New York City time, on any Business Day shall be deemed to have
been on the next following Business Day. The Administrative Agent shall
distribute such payments to the Lenders promptly upon receipt in like funds as
received. If any payment hereunder (other than payments on the Eurodollar Loans)
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day. If any payment on a Eurodollar
Loan becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day unless the result
of such extension would be to extend such payment into another calendar month,
in which event such payment shall be made on the immediately preceding Business
Day. In the case of any extension of any payment of principal pursuant to the
preceding two sentences, interest thereon shall be payable at the then
applicable rate during such extension.
(e) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the
absence of manifest error. If such Lender's share of such borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
after such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
Base Rate Loans, on demand, from the Borrower.
(f) Unless the Administrative Agent shall have been notified
in writing by the Borrower prior to the date of any payment due to be made by
the Borrower hereunder that the Borrower will not make such payment to the
Administrative Agent, the Administrative Agent may assume that the Borrower is
making such payment, and the Administrative Agent may, but shall not be required
to, in reliance upon such assumption, make available to the Lenders their
respective pro rata shares of a corresponding amount. If such payment is not
made to the Administrative Agent by the Borrower within three Business Days
after such due date, the Administrative Agent shall be entitled to recover, on
demand, from each Lender to which any amount which was made available pursuant
to the preceding sentence, such amount with interest thereon at the rate per
annum equal to the daily average Federal Funds Effective Rate. Nothing
-33-
39
herein shall be deemed to limit the rights of the Administrative Agent or any
Lender against the Borrower.
2.15 Requirements of Law. (a) If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement or any Eurodollar Loan made
by it, or change the basis of taxation of payments to such Lender in
respect thereof (except for Non-Excluded Taxes covered by Section 2.16
and changes in the rate of tax on the overall net income of such
Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender that is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable. If
any Lender becomes entitled to claim any additional amounts pursuant to this
Section, it shall promptly notify the Borrower (with a copy to the
Administrative Agent) of the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under to a level below that which
such Lender or such corporation could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, after submission by such
Lender to the Borrower (with a copy to the Administrative Agent) of a written
request therefor, the Borrower shall pay to such Lender such additional amount
or amounts as will compensate such Lender or such corporation for such
reduction.
-34-
40
(c) A certificate as to any additional amounts payable
pursuant to this Section submitted by any Lender to the Borrower (with a copy to
the Administrative Agent) shall be conclusive in the absence of manifest error.
The obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.16 Taxes. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding franchise taxes and taxes imposed on or measured by net
income, receipts or capital imposed by reason of any connection between, as
applicable, any Agent, any Lender, any Assignee or Participant or other
recipient and the relevant taxing jurisdiction, including, without limitation, a
connection arising from such Person being or having been a citizen, domiciliary,
or resident of such jurisdiction, being organized in such jurisdiction, or
having or having had a permanent establishment or fixed place of business
therein, but excluding a connection arising solely from such Person having
executed, delivered, performed its obligations or received any payment under
this Agreement. If any such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions or withholdings ("Non-Excluded Taxes") or any Other
Taxes are required to be withheld from any amounts payable to any Agent or any
Lender hereunder, the amounts so payable to such Agent or such Lender shall be
increased to the extent necessary to yield to such Agent or such Lender (after
payment of all Non-Excluded Taxes and Other Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement; provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Lender with respect to any Non-Excluded
Taxes (i) that are attributable to such Lender's failure to comply with the
requirements of paragraph (d) or (e) of this Section or (ii) that are United
States withholding taxes imposed on amounts payable to such Lender at the time
such Lender becomes a party to this Agreement, except to the extent that such
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such Non-Excluded Taxes
pursuant to this paragraph (a).
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable
by the Borrower, as promptly as possible thereafter the Borrower shall send to
the Administrative Agent for the account of the relevant Agent or Lender, as the
case may be, a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes or Other Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agents and the Lenders
for any incremental taxes, interest or penalties that may become payable by any
Agent or any Lender as a result of any such
-35-
41
failure. The agreements in this Section shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
(d) Each Lender (or Transferee) that is not a citizen or
resident of the United States of America, a corporation, partnership or other
entity created or organized in or under the laws of the United States of America
(or any jurisdiction thereof), or any estate or trust that is subject to federal
income taxation regardless of the source of its income (a "Non-U.S. Lender")
shall deliver to the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two duly completed and signed copies of either U.S. Internal Revenue
Service Form W-8BEN or Form W-8ECI, including, where applicable, any such forms
required to be provided to certify to such exemption on behalf of such Non-U.S.
Lender's beneficial owners or, in the case of a Non-U.S. Lender claiming
exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of
the Code with respect to payments of "portfolio interest" a statement
substantially in the form of Exhibit E and a Form W-8BEN, or any subsequent
versions thereof or successors thereto duly completed and signed by such
Non-U.S. Lender (and where applicable, its beneficial owners) claiming complete
exemption from, or a reduced rate of, U.S. federal withholding tax on all
payments by the Borrower under this Agreement and the other Loan Documents. Such
forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Each Lender, Assignee
and Participant which is not a Non-U.S. Lender shall deliver to the Borrower and
the Administrative Agent (and if applicable the assigning or participating
Lender) two duly completed and signed copies of United States Internal Revenue
Service Form W-9 (or applicable successor form) unless it establishes to the
satisfaction of the Borrower that it is otherwise eligible for an exemption from
backup withholding tax or other applicable withholding tax. Each such Lender,
Assignee and Participant shall deliver to the Borrower and the Administrative
Agent and, if applicable, the assigning or participating Lender two further duly
completed and signed forms and statements (or successor forms) at or before the
time any such form or statement becomes obsolete. Notwithstanding any other
provision of this paragraph, a Non-U.S. Lender shall not be required to deliver
any form pursuant to this paragraph that such Non-U.S. Lender is not legally
able to deliver.
(e) A Lender that is entitled to an exemption from or
reduction of non-U.S. withholding tax under the law of the jurisdiction in which
the Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate, provided that such
Lender is legally entitled to complete,
-36-
42
execute and deliver such documentation and in such Lender's reasonable judgment
such completion, execution or submission would not materially prejudice the
legal position of such Lender.
(f) If the Administrative Agent or any Lender receives a
refund; or otherwise would have received a refund but for the offset of the
amount of such refund against such Lender's Non-Excluded or Other Taxes (a "Tax
Refund"), which in the reasonable judgment of such Lender is allocable to
Non-Excluded Taxes or Other Taxes paid by the Borrower, it shall promptly pay
such Tax Refund, together with any other amounts paid by the Borrower in
connection with such Tax Refund, to the Borrower, net of all out-of-pocket
expenses of such Lender incurred in obtaining such Tax Refund, provided,
however, that the Borrower agrees to promptly return such Tax Refund to the
Administrative Agent or the applicable Lender, as the case may be, if it
receives notice from the Administrative Agent or applicable Lender that the
Administrative Agent or such Lender is required to repay such Tax Refund.
2.17 Indemnity. The Borrower agrees to indemnify each Agent
and Lender for, and to hold each Lender harmless from, any loss or expense that
such Lender may sustain or incur as a consequence of (a) default by the Borrower
in making a borrowing of, conversion into or continuation of Eurodollar Loans
after the Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment or conversion of
Eurodollar Loans on a day that is not the last day of an Interest Period with
respect thereto. Such indemnification may include an amount equal to the excess,
if any, of (i) the amount of interest that would have accrued on the amount so
prepaid, or not so borrowed, converted or continued, for the period from the
date of such prepayment or of such failure to borrow, convert or continue to the
last day of such Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest for such Loans
provided for herein (excluding, however, the Applicable Margin included therein,
if any) over (ii) the amount of interest (as reasonably determined by such
Lender) that would have accrued to such Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
Eurodollar market. A certificate as to any amounts payable pursuant to this
Section submitted to the Borrower by any Lender shall be conclusive in the
absence of manifest error. This covenant shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
2.18 Illegality. Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall
forthwith be canceled and (b) such Lender's Loans then outstanding as Eurodollar
Loans, if any, shall be converted automatically to Base Rate Loans on the
respective last days of
-37-
43
the then current Interest Periods with respect to such Loans or within such
earlier period as required by law. If any such conversion of a Eurodollar Loan
occurs on a day which is not the last day of the then current Interest Period
with respect thereto, the Borrower shall pay to such Lender such amounts, if
any, as may be required pursuant to Section 2.17.
2.19 Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 2.15,
2.16(a) or 2.18 with respect to such Lender, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans affected by such
event with the object of avoiding the consequences of such event; provided, that
such designation is made on terms that, in the sole judgment of such Lender,
cause such Lender and its lending office(s) to suffer no economic, legal or
regulatory disadvantage, and provided, further, that nothing in this Section
shall affect or postpone any of the obligations of the Borrower or the rights of
any Lender pursuant to Section 2.15, 2.16(a) or 2.18.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this
Agreement and to make the Loans, the Borrower hereby represents and warrants to
each Agent and each Lender that:
3.1 Financial Condition. (a) The unaudited pro forma
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at March 31, 2000 (including the notes thereto) (the "Pro Forma Balance Sheet"),
copies of which have heretofore been furnished to each Lender, has been prepared
giving effect (as if such events had occurred on such date) to (i) the
consummation of the Spin-Off, (ii) the Loans, and the loans under the Borrowing
Base Facility, to be made on the Spin-Off Date and the use of proceeds thereof,
(iii) the incurrence of the Indebtedness under the Interim Loan Facility and the
application of the proceeds thereof on the Spin-Off Date and (iv) the payment of
fees and expenses in connection with the foregoing. The Pro Forma Balance Sheet
has been prepared based on the best information available to the Borrower as of
the date of delivery thereof, and presents fairly on a pro forma basis the
estimated financial position of Borrower and its consolidated Subsidiaries as at
March 31, 2000, assuming that the events specified in the preceding sentence had
actually occurred at such date.
(b) The audited consolidated balance sheets of the Borrower as
at December 31, 1997, December 31, 1998 and December 31, 1999, and the related
consolidated statements of income and of cash flows for the fiscal years ended
on such dates, reported on by and accompanied by an unqualified report from
Xxxxxx Xxxxxxxx LLP, present fairly the consolidated financial condition of the
Borrower as at such date, and the consolidated results of its operations and its
consolidated cash flows for the respective fiscal years then ended. The
unaudited consolidated balance sheet of the Borrower as at March 31, 2000, and
the related unaudited consolidated statements of income and cash flows for the
three-month period ended on such date,
-38-
44
present fairly the consolidated financial condition of the Borrower as at such
date, and the consolidated results of its operations and its consolidated cash
flows for such period (subject to normal year-end audit adjustments). All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by the aforementioned firm of accountants
and disclosed therein). The Borrower and its Subsidiaries do not have any
material Guarantee Obligations, contingent liabilities and liabilities for
taxes, or any material long-term leases or unusual forward or long-term
commitments, including, without limitation, any interest rate or foreign
currency swap or exchange transaction or other obligation in respect of
derivatives, that are not reflected or referred to in the most recent financial
statements, including the related schedules and notes thereto, referred to in
this paragraph. Except as disclosed in the Form 10 Registration Statement,
during the period from December 31, 1999 to and including the date hereof there
has been no Disposition by the Borrower of any material part of its business or
Property.
3.2 No Change. Except as disclosed in the Form 10 Registration
Statement, since December 31, 1999 there has been no development or event that
has had or could reasonably be expected to have a Material Adverse Effect.
3.3 Corporate Existence; Compliance with Law. Each of the
Borrower and its Subsidiaries (other than Inactive Subsidiaries and Foreign
Subsidiaries) (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization (except, with respect to
Subsidiaries of the Borrower only, on or prior to the Closing Date), (b) has the
corporate power and authority, and the legal right, to own and operate its
Property, to lease the Property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of Property or the conduct of its business
requires such qualification, except to the extent that the failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect 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,
reasonably be expected to have a Material Adverse Effect.
3.4 Corporate Power; Authorization; Enforceable Obligations.
Each Loan Party has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents to which it is a party and, in the
case of the Borrower, to borrow hereunder. Each Loan Party has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Loan Documents to which it is a party and, in the case of the Borrower,
to authorize the borrowings on the terms and conditions of this Agreement. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the Spin-Off, the borrowings hereunder or the execution,
delivery, performance, validity or enforceability of this Agreement or any of
the other Loan Documents, except (a) consents, authorizations, filings and
notices described in Schedule 3.4, which consents,
-39-
45
authorizations, filings and notices have been obtained or made and are in full
force and effect, except to the extent that the failure to do so could not
reasonably be expected to have a Material Adverse Effect, and (b) the filings
referred to in Section 3.19. Each Loan Document has been duly executed and
delivered on behalf of each Loan Party that is a party thereto. This Agreement
constitutes, and each other Loan Document upon execution will constitute, a
legal, valid and binding obligation of each Loan Party that is a party thereto,
enforceable against each such Loan Party in accordance with its terms, except as
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
3.5 No Legal Bar. The execution, delivery and performance of
this Agreement and the other Loan Documents, the borrowings hereunder and the
use of the proceeds thereof will not violate any Requirement of Law or any
Contractual Obligation of the Borrower or any of its Subsidiaries and will not
result in, or require, the creation or imposition of any Lien on any of their
respective properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation (other than the Liens created by the Security Documents
and immaterial Liens). No Requirement of Law or Contractual Obligation
applicable to the Borrower or any of its Subsidiaries could reasonably be
expected to have a Material Adverse Effect.
3.6 No Material Litigation. Except as disclosed on Schedule
3.6 or in the Form 10 Registration Statement, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Borrower or any
of its Subsidiaries or against any of their respective properties or revenues
(a) with respect to any of the Loan Documents or any of the transactions
contemplated hereby or thereby, or (b) that could reasonably be expected to have
a Material Adverse Effect.
3.7 No Default. Except as disclosed in the Form 10
Registration Statement, neither the Borrower nor any of its Subsidiaries is in
default under or with respect to any of its Contractual Obligations in any
respect that could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
3.8 Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries has title in fee simple to, or a valid leasehold interest in, all
its real property, and good title to, or a valid leasehold interest in, all its
other Property, and none of such Property is subject to any Lien except as
permitted by Section 6.3. Set forth on Schedule 3.8 is all real property owned,
leased or operated by the Borrower or any of its Subsidiaries and which are
material to the operation of the Borrower and its Subsidiaries.
3.9 Intellectual Property. The Borrower and each of its
Subsidiaries owns, or is licensed to use, all Intellectual Property necessary
for the conduct of its business as currently conducted, except to the extent the
failure to do so could not reasonably be
-40-
46
expected to have a Material Adverse Effect. No claim that could reasonably be
expected to have a Material Adverse Effect has been asserted and is pending by
any Person challenging or questioning the use of any Intellectual Property or
the validity or effectiveness of any Intellectual Property, nor does the
Borrower know of any valid basis for any such claim. To the knowledge of the
Borrower, the use of Intellectual Property by the Borrower and its Subsidiaries
does not infringe on the rights of any Person in any material respect.
3.10 Taxes. Each of AutoNation (with respect to any years in
which the Borrower would be deemed a part of the same consolidated group with
AutoNation for purposes of U.S. income taxes), the Borrower and each of its
Subsidiaries has filed or caused to be filed all Federal, state and other
material tax returns that 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 (other than any tax, fee or
charge, the amount or validity of which is currently being contested in good
faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of AutoNation, the Borrower
or its Subsidiaries, as the case may be); and no tax Lien has been filed, and,
to the knowledge of the Borrower, no claim is being asserted, with respect to
any such tax, fee or other charge.
3.11 Federal Regulations. No part of the proceeds of any Loans
will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U as now and
from time to time hereafter in effect or for any purpose that violates the
provisions of the Regulations of the Board. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1 referred to in Regulation U.
3.12 Labor Matters. There are no strikes or other labor
disputes against the Borrower or any of its Subsidiaries pending or, to the
knowledge of the Borrower, threatened that (individually or in the aggregate)
could reasonably be expected to have a Material Adverse Effect. To the knowledge
of the Borrower, hours worked by and payment made to employees of the Borrower
and its Subsidiaries have not been in violation of the Fair Labor Standards Act
or any other applicable Requirement of Law dealing with such matters that
(individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect. All payments due from the Borrower or any of its
Subsidiaries on account of employee health and welfare insurance that
(individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect if not paid have been paid or accrued as a liability on
the books of the Borrower or the relevant Subsidiary.
3.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with
-41-
47
the applicable provisions of ERISA and the Code except to the extent that the
failure to comply could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period, in either case which resulted in a material liability. The present value
of all accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued benefits
by a material amount. Neither the Borrower nor any Commonly Controlled Entity
has had a complete or partial withdrawal from any Multiemployer Plan that has
resulted or could reasonably be expected to result in a Material Adverse Effect,
and neither the Borrower nor any Commonly Controlled Entity would become subject
to any liability under ERISA that could reasonably be expected to result in a
Material Adverse Effect if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. To the knowledge of the Borrower, no such Multiemployer Plan is in
Reorganization or Insolvent which Reorganization or Insolvency could reasonably
be expected to result in a Material Adverse Effect.
3.14 Investment Company Act; Other Regulations. No Loan Party
is an "investment company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to incur Indebtedness.
3.15 Subsidiaries. The Subsidiaries listed on Schedule 3.15
constitute all the Subsidiaries of the Borrower at the date hereof. Schedule
3.15 sets forth as of the Closing Date the name and jurisdiction of
incorporation of each Subsidiary and, as to each Subsidiary, the percentage of
each class of Capital Stock owned by each Loan Party.
3.16 Use of Proceeds. The proceeds of the Loans shall be used
for working capital and general corporate purposes.
3.17 Environmental Matters. Other than exceptions to any of
the following that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect:
(a) the Borrower and its Subsidiaries: (i) are, and within the
period of all applicable statutes of limitation have been, in
compliance with all applicable Environmental Laws; (ii) hold all
Environmental Permits (each of which is in full force and effect)
required to be held by any of them for any of their current or intended
operations or for any property owned, leased, or otherwise operated by
any of them; (iii) are, and within the period of all applicable
statutes of limitation have been, in compliance with all of their
Environmental Permits; and (iv) reasonably believe that: each of their
Environmental Permits will be timely renewed and complied with, without
material
-42-
48
expense; any additional Environmental Permits that may be required of
any of them will be timely obtained and complied with, without
material expense; and compliance with any Environmental Law that is
or is expected to become applicable to any of them will be timely
attained and maintained, without material expense.
(b) Materials of Environmental Concern are not present at, on,
under, in, or about any real property now or formerly owned, leased or
operated by the Borrower or any of its Subsidiaries, or at any other
location (including, without limitation, any location to which
Materials of Environmental Concern have been sent for re-use or
recycling or for treatment, storage, or disposal) which could
reasonably be expected to (i) give rise to liability of the Borrower or
any of its Subsidiaries under any applicable Environmental Law or
otherwise result in costs to the Borrower or any of its Subsidiaries,
or (ii) interfere with the Borrower's or any of its Subsidiaries'
continued operations, or (iii) impair the fair saleable value of any
real property owned or leased by the Borrower or any of its
Subsidiaries.
(c) There is no judicial, administrative, or arbitral
proceeding (including any notice of violation or alleged violation)
under or relating to any Environmental Law to which the Borrower or any
of its Subsidiaries is, or to the knowledge of the Borrower or any of
its Subsidiaries will be, named as a party that is pending or, to the
knowledge of the Borrower or any of its Subsidiaries, threatened.
(d) Neither the Borrower nor any of its Subsidiaries has
received any written request for information, or been notified that it
is a potentially responsible party under or relating to the federal
Comprehensive Environmental Response, Compensation, and Liability Act
or any similar Environmental Law, or with respect to any Materials of
Environmental Concern.
(e) Neither the Borrower nor any of its Subsidiaries has
entered into or agreed to any consent decree, order, or settlement or
other agreement, or is subject to any judgment, decree, or order or
other agreement, in any judicial, administrative, arbitral, or other
forum for dispute resolution, relating to compliance with or liability
under any Environmental Law.
(f) Neither the Borrower nor any of its Subsidiaries has
assumed or retained, by contract or operation of law, any liabilities
of any kind, fixed or contingent, known or unknown, under any
Environmental Law or with respect to any Material of Environmental
Concern.
3.18 Accuracy of Information, etc. No statement or information
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum, the Form 10 Registration Statement or any other
document, certificate or statement furnished to the Administrative Agent or the
Lenders or any of them, by or on behalf of any Loan Party for use in connection
with the transactions contemplated
-43-
49
by this Agreement or the other Loan Documents, contained as of the date such
statement, information, document or certificate was so furnished (or, in the
case of the Confidential Information Memorandum, as of the date of this
Agreement), any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements contained herein or
therein not misleading. The projections and pro forma financial information
contained in the materials referenced above are based upon good faith estimates
and assumptions believed by management of the Borrower to be reasonable at the
time made, it being recognized by the Lenders that such financial information as
it relates to future events is not to be viewed as fact and that actual results
during the period or periods covered by such financial information may differ
from the projected results set forth therein by a material amount. There is no
fact known to any Loan Party that could reasonably be expected to have a
Material Adverse Effect that has not been expressly disclosed herein, in the
other Loan Documents, in the Confidential Information Memorandum, in the Form 10
Registration Statement or in any other documents, certificates and statements
furnished to the Agents and the Lenders for use in connection with the
transactions contemplated hereby and by the other Loan Documents, including,
without limitation, any notice delivered pursuant to Section 5.7.
3.19 Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Lenders, a legal, valid and enforceable security interest in the
Collateral described therein and proceeds thereof. In the case of the Pledged
Stock described in the Guarantee and Collateral Agreement, when any stock
certificates representing such Pledged Stock are delivered to the Administrative
Agent or a bailee thereof, and in the case of the other Specified Collateral
described in the Guarantee and Collateral Agreement for which security interests
may be perfected by a filing, when financing statements or other relevant filing
documents in appropriate form are filed in the offices specified on Schedule
3.19(a)-1 (which financing statements or other relevant filing documents shall
have been duly completed and executed and delivered to the Administrative Agent
on or before the Initial Funding Date) the Guarantee and Collateral Agreement
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in such Collateral and the proceeds
thereof, as security for the Obligations (as defined in the Guarantee and
Collateral Agreement), in each case prior and superior in right to any other
Person (except (i) in the case of Collateral other than Pledged Stock, Liens
permitted by Section 6.3 and (ii) in the case of all Collateral, the Liens in
favor of the administrative agent under the Borrowing Base Credit Facility).
Other than those that relate to the Vehicle Debt and to the Borrowing Base
Credit Facility and as described in Section 6.3(m), Schedule 3.19(a)-2 lists
each UCC Financing Statement that (i) names any Loan Party as debtor and (ii)
will remain on file after the Closing Date. Schedule 3.19(a)-3 lists each UCC
Financing Statement that (i) names any Loan Party as debtor and (ii) will be
terminated in accordance with Section 6.18(b) or with respect to which the
Borrower will comply with Section 6.18(c); and in accordance with Sections
6.18(b) and (c), the Borrower will have delivered to the Administrative Agent,
or caused to be filed, duly completed UCC termination statements, signed by the
relevant secured party, in respect of each UCC Financing Statement listed in
Schedule 3.19(a)-3.
-44-
50
(b) Each of the Mortgages executed and delivered on the
Initial Funding Date is, and each Mortgage executed and delivered after the
Initial Funding will be, effective to create in favor of the Administrative
Agent, for the benefit of the Lenders, a legal, valid and enforceable Lien on
the Mortgaged Properties described therein and proceeds thereof; and when the
Mortgages are filed in the offices specified on Schedule 3.19(b) (in the case of
the Mortgages to be executed and delivered on or prior to the Spin-Off Date) or
in the recording office designated by the Borrower (in the case of any Mortgage
to be executed and delivered after the Spin-Off Date), each Mortgage shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Loan Parties in the Mortgaged Properties described therein
and the proceeds thereof, as security for the Obligations (as defined in the
relevant Mortgage), in each case prior and superior in right to any other Person
(other than (i) Persons holding Liens or other encumbrances or rights permitted
by the relevant Mortgage and (ii) the mortgages executed and delivered in
connection with the Borrowing Base Credit Facility Documentation).
3.20 Solvency. The Borrower and its Subsidiaries, on a
consolidated basis, are and after giving effect to the Spin-Off and the
incurrence of all Indebtedness and obligations being incurred in connection
herewith and therewith will be and will continue to be, Solvent.
3.21 Regulation H. No Mortgage encumbers improved real
property which is located in an area that has been identified by the Secretary
of Housing and Urban Development as an area having special flood hazards and in
which flood insurance has been made available under the National Flood Insurance
Act of 1968 (except any Mortgaged Properties as to which such flood insurance as
required by Regulation H has been obtained and is in full force and effect as
required by this Agreement).
3.22 Customer and Trade Relations. As of the Closing Date,
there exists no actual or, to the knowledge of the Borrower, threatened
termination or cancellation of, or any material adverse modification or change
in the business relationship of the Borrower with GM.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Closing Date. The Closing Date shall be the
date on which the following conditions precedent shall have been fulfilled or
waived pursuant to this Agreement, as shall be evidenced by a written
acknowledgment of the Administrative Agent, which Closing Date occurred on May
26, 2000:
(a) Loan Documents. The Agents shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of the
Borrower and (ii) a Lender Addendum executed and delivered by each
Lender and accepted by the Borrower.
-45-
51
(b) Pro Forma Balance Sheet; Financial Statements. The Agents
shall have received (i) the Pro Forma Balance Sheet and (ii) audited
and unaudited consolidated financial statements of the Borrower
described in Section 3.1(b); and such financial statements shall not,
in the reasonable judgment of the Agents, reflect any material adverse
change in the consolidated financial condition of the Borrower, as
reflected in the financial statements or projections delivered to the
Agents prior to the date hereof. Without limiting the foregoing, the
Agents shall have received audited and unaudited (which have been
reviewed by the independent accountants for the Borrower as provided in
Statement on Auditing Standards No. 71) financial statements of the
Borrower (including pro forma financial statements) meeting the
requirements of Regulation S-X for a Form S-1 registration statement
under the Securities Act of 1933, as amended, and all such financial
statements shall be reasonably satisfactory to the Agents; such
financial statements shall in any event include the unaudited financial
statements of the Borrower for the fiscal quarter ending March 31, 2000
and for the month ending March 31, 2000, and such financial statements
shall show Consolidated EBITDA of the Borrower for the fiscal month
ending March 31, 2000 of not less than $11,700,000 and Consolidated
Adjusted EBITDA for such month of not less than $13,000,000.
(c) Related Agreements and Documents. The Agents shall have
received (in a form reasonably satisfactory to the Agents), true and
correct copies, certified as to authenticity by the Borrower, of (i)
forms of the Distribution Documentation to be executed and delivered on
or before the Spin-Off Date, (ii) the substantially final form of the
Interim Facility Loan Documentation, (iii) the forms of the AutoNation
Support Agreement, (iv) the Borrowing Base Credit Agreement, duly
executed by an authorized officer of each party thereto and (v)
existing forms of the General Motors Letter of Credit Documentation.
(d) Fees. The Lenders and the Agents shall have received all
fees required to be paid, and all expenses for which invoices have been
presented (including reasonable fees, disbursements and other charges
of counsel to the Agents), on or before the Closing Date.
(e) Business Plan. The Agents shall have received a business
plan for fiscal years 2000-2004 and a satisfactory written analysis of
the business and prospects of the Borrower and its Subsidiaries for the
period from the Closing Date through the Term Loan Maturity Date
(including in any event quarterly projections through the last quarter
of fiscal year 2001), all in form and substance satisfactory to the
Lenders.
4.2 Conditions to Initial Extension of Credit. The agreement
of each Lender to make the initial extension of credit requested to be made by
it hereunder (which shall not occur prior to June 30, 2000) is subject to the
satisfaction, prior to or concurrently with the making of such extension of
credit on the Spin-Off Date, of the following conditions precedent:
(a) Closing Date. The Closing Date shall have occurred.
-46-
52
(b) Consummation of Spin-Off. (i) Either the Spin-Off shall
have been consummated substantially in accordance with the description
thereof set forth in the Form 10 Registration Statement, and the Agents
shall have received such evidence thereof as they shall reasonably
request or (ii) the Spin-Off shall be scheduled to occur on the Initial
Funding Date and the Agents shall have received (A) a certificate, in
form and substance reasonably satisfactory to the Agents, executed by a
responsible officer of AutoNation certifying that (1) all of the
conditions to effectiveness of the Spin-Off pursuant to the
Distribution Documentation have been satisfied (except for the
distribution of shares of common stock of the Borrower to the
shareholders of AutoNation) and (2) AutoNation has given instructions
to the Distribution Agent (under and as defined in the Distribution
Documentation) to distribute the shares of common stock of the Borrower
to the shareholders of AutoNation and (B) a guarantee, in form and
substance reasonably satisfactory to the Agents, executed by AutoNation
to guarantee the Obligations, such guarantee to become effective only
if the Spin-Off does not occur on the Initial Funding Date.
(c) Shareholders' Equity After giving effect to the
consummation of the Spin-Off, the shareholders' equity of the Borrower,
determined in accordance with GAAP, shall be not less than
$851,000,000, and the Agents shall have received evidence thereof in
the form of a certificate to such effect, in form and substance
reasonably satisfactory to the Agents, executed by the Treasurer of the
Borrower and the Chief Financial Officer of AutoNation.
(d) [Intentionally Omitted.]
(e) Capital Structure. After giving effect to the Spin-Off,
the incurrence of the Indebtedness under each of the Interim Loan
Facility and the Borrowing Base Credit Facility and the application of
the proceeds thereof and the incurrence of any Indebtedness under this
Agreement on the Spin-Off Date, the capital structure of the Borrower
and its Subsidiaries shall be substantially as reflected in the Pro
Forma Balance Sheet (except for changes in the amount of Vehicle Debt
and except that the shareholders' equity of the Borrower need not
exceed $851,000,000).
(f) Related Agreements. The Agents shall have received, true
and correct copies, certified as to authenticity by the Borrower, of
(i) the Distribution Documentation and the AutoNation Support
Agreement, and the Distribution Documentation and the AutoNation
Support Agreement shall not be different in any material respect from
the forms thereof delivered to the Agents on the Closing Date pursuant
to Section 4.1(c), (ii) the Interim Facility Loan Documentation, which
shall not be different in any material respect from the form thereof
delivered to the Agents on the Closing Date pursuant to Section 4.1(c),
(iii) the General Motors Letter of Credit Documentation, which shall
not be different in any material respect from the forms thereof
delivered to the Agents on the Closing Date pursuant to Section 4.1(c),
(iv) the Borrowing Base Credit Facility Documentation, in
-47-
53
form and substance reasonably satisfactory to the Agents and (v) such
other documents or instruments as may be reasonably requested by the
Agents.
(g) Liquidity Facility. The Agents shall be satisfied that the
Borrower has obtained a commercial paper liquidity facility in an
aggregate principal amount of at least $1,095,000,000, on terms
equivalent to those which existed as of March 31, 2000, or in such
other amount and subject to such other terms as shall be acceptable to
the Agents.
(h) Fees. The Lenders and the Administrative Agent shall have
received all fees required to be paid, and all expenses for which
invoices have been presented (including reasonable fees, disbursements
and other charges of counsel to the Agents), on or before the Spin-Off
Date. All such amounts, to the extent not otherwise paid, will be paid
with proceeds of Loans made on the Spin-Off Date and will be reflected
in the funding instructions given by the Borrower to the Administrative
Agent on or before the Spin-Off Date.
(i) Sufficiency of Working Capital. The Lenders shall be
satisfied with the sufficiency of amounts available under this
Agreement and the Borrowing Base Credit Facility Documentation to meet
the ongoing working capital needs of the Borrower from the date of the
Spin-Off through the Term Loan Maturity Date.
(j) Loan Documents. The Agents shall have received (i) the
Guarantee and Collateral Agreement, executed and delivered by a duly
authorized officer of the Borrower and each Subsidiary Guarantor, (ii)
a Mortgage covering each of the Mortgaged Properties mortgaged by the
Borrower under the Borrowing Base Credit Facility on the Initial
Funding Date, executed and delivered by a duly authorized officer of
each party thereto, (iii) the Intercreditor Agreement, executed and
delivered by a duly authorized officer of each party thereto and (iv) a
Lender Addendum executed and delivered by each Lender and accepted by
the Borrower and the Administrative Agent.
(k) Approvals. All governmental and third party approvals
necessary in connection with the Spin-Off, the continuing operations of
the Borrower and its Subsidiaries and the transactions contemplated
hereby shall have been obtained and be in full force and effect.
(l) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions:
(i) the legal opinion of Fried, Frank, Harris,
Xxxxxxx & Xxxxxxxx, special counsel to the Borrower and its
Subsidiaries, in form and substance reasonably satisfactory to
the Agents;
(ii) the legal opinion of the general counsel of
the Borrower and its Subsidiaries, in form and substance
reasonably satisfactory to the Agents;
-48-
54
(iii) the legal opinion of local counsel in each
of Florida, Ohio and of such other special and local counsel
as may be required by the Administrative Agent in respect of
Mortgaged Properties or perfection matters outside the United
States; and
(iv) the legal opinion of counsel to AutoNation,
in form and substance reasonably satisfactory to the Agents,
as to matters relating to the AutoNation Support Agreement and
the guarantee delivered pursuant to Section 4.2(b)(ii)(B).
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Agents may
reasonably require.
(m) Pledged Stock; Stock Powers; Acknowledgment and Consent;
Pledged Notes. The Administrative Agent (or its bailee) shall have
received (i) the certificates representing the shares of Capital Stock
pledged pursuant to the Guarantee and Collateral Agreement, together
with an undated stock power for each such certificate executed in blank
by a duly authorized officer of the pledgor thereof, (ii) an
Acknowledgment and Consent, substantially in the form of Annex II to
the Guarantee and Collateral Agreement, duly executed by any issuer of
Capital Stock pledged pursuant to the Guarantee and Collateral
Agreement that is not itself a party to the Guarantee and Collateral
Agreement and (iii) each promissory note pledged pursuant to the
Guarantee and Collateral Agreement endorsed (without recourse) in blank
(or accompanied by an executed transfer form in blank satisfactory to
the Administrative Agent) by the pledgor thereof.
(n) Filings, Registrations and Recordings. Each document
(including, without limitation, any Uniform Commercial Code financing
statement) required by the Guarantee and Collateral Agreement or under
law or reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the
Administrative Agent, for the benefit of the Lenders, a perfected Lien
on the Collateral described therein, prior and superior in right to any
other Person (other than with respect to Liens expressly permitted by
Section 6.3), shall have been filed, registered or recorded or shall
have been delivered to the Administrative Agent be in proper form for
filing, registration or recordation.
(o) Solvency Analysis. If determined by the Syndication Agent
to be advisable for use in connection with the syndication of the
Revolving Credit Facility, the Lenders shall have received a solvency
certificate and analysis from the chief financial officer of the
Borrower which shall document the solvency of the Borrower and its
Subsidiaries after giving effect to the Spin-Off and the other
transactions contemplated hereby, all in form and substance
satisfactory to the Agents.
-49-
55
(p) Lien Searches. The Agents shall have received the results
of a recent lien search in each of the jurisdictions in which Uniform
Commercial Code financing statement or other filings or recordations
should be made to evidence or perfect security interests in all assets
of the Loan Parties, and such search shall reveal no liens on any of
the assets of the Loan Party, except for Liens permitted by Section
6.3.
(q) Environmental Matters. The Agents shall have received,
with a copy for each Lender, a written environmental assessment or
review regarding each of the parcels of real property to constitute
Mortgaged Properties on the Spin-Off Date, prepared by Environ
Corporation or other environmental consultants reasonably acceptable to
the Agents, in form, scope, and substance reasonably satisfactory to
the Agents, together with a letter from the relevant consultant
permitting the Agents and the Lenders to rely on such environmental
assessment or review as if addressed to and prepared for each of them;
and the Agents shall be reasonably satisfied with the environmental
affairs of the Borrower and it Subsidiaries generally.
(r) Closing Certificate. The Administrative Agent shall have
received a certificate of each Loan Party, dated the Initial Funding
Date, substantially in the form of Exhibit B, with appropriate
insertions and attachments.
(s) Insurance. The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 5.3 of
the Guarantee and Collateral Agreement.
(t) Subordinated Notes. The Agents shall have received true
and correct copies of the Subordinated Notes executed by the obligor
thereunder, certified as to authenticity by a Responsible Officer.
4.3 Conditions to Each Loan. The agreement of each Lender to
make any Loan requested to be made by it hereunder on any date (including,
without limitation, its initial extension of credit) is subject to the
satisfaction of the following conditions precedent:
(a) No Availability under the Borrowing Base Credit Facility.
The lesser of (i) the Borrowing Base and (ii) the Total Borrowing Base
Commitments shall not exceed the Total Borrowing Base Extensions of
Credit.
(b) Representations and Warranties. Each of the
representations and warranties made by any Loan Party in or pursuant to
the Loan Documents shall be true and correct in all material respects
on and as of such date as if made on and as of such date (except when
such representation or warranty relates to a specific date, in which
case, it shall be true and correct in all material respects as of such
date).
-50-
56
(c) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
Loans requested to be made on such date, provided that the agreement of
each Lender to make any Loan hereunder shall not be subject to the
condition that there shall not have occurred and be continuing a
Default or an Event of Default under Section 7(e) as a result of the
failure of the Borrower to comply with Section 2.10(a) of the Borrowing
Base Credit Agreement so long as any such Event of Default shall not be
continuing for more than five Business Days.
Each borrowing by the Borrower hereunder shall constitute a representation and
warranty by the Borrower as of the date of such extension of credit that the
conditions contained in this Section 4.3 have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Revolving
Credit Commitments remain in effect or any Loan or other amount is owing to any
Lender or any Agent hereunder, the Borrower shall, and shall cause each of its
Subsidiaries to:
5.1 Financial Statements. Furnish to the Administrative Agent
(with copies for each Lender):
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the
audited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year,
setting forth in each case in comparative form the figures as of the
end of and for the previous year, reported on without a "going concern"
or like qualification or exception, or qualification arising out of the
scope of the audit, by independent certified public accountants of
nationally recognized standing; provided that the delivery of the
Borrower's annual report on Form 10-K shall satisfy the requirements of
this Section 5.1(a);
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each
fiscal year of the Borrower, the unaudited consolidated balance sheet
of the Borrower and its consolidated Subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of income and
of cash flows for such quarter and the portion of the fiscal year
through the end of such quarter, setting forth in each case in
comparative form the figures as of the end of and for the corresponding
period in the previous year, certified by a Responsible Officer as
being fairly stated in all material respects (subject to normal
year-end audit adjustments); provided that the delivery of the
Borrower's quarterly report on Form 10-Q shall satisfy the requirements
of this Section 5.1(b); and
-51-
57
(c) while an Event of Default shall have occurred and be
continuing, as soon as available, but in any event not later than 45
days after the end of each month occurring during each fiscal year of
the Borrower (other than the third, sixth, ninth and twelfth such
month), the unaudited consolidated balance sheets of the Borrower and
its Subsidiaries as at the end of such month and the related unaudited
consolidated statements of income and of cash flows for such month and
the portion of the fiscal year through the end of such month, setting
forth in each case in comparative form the figures as of the end of and
for the corresponding period in the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments) until such time as such
Event of Default shall no longer be continuing;
all such financial statements to be prepared in reasonable detail and in
accordance with GAAP applied consistently throughout the periods reflected
therein and with prior periods (except as approved by such accountants or
officer, as the case may be, and disclosed therein).
5.2 Certificates; Other Information. Furnish to the
Administrative Agent (with copies for each Lender), or, in the case of clause
(f), to the relevant Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 5.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except as specified in
such certificate (it being understood that such certificate shall be
limited to the items that independent certified public accountants are
permitted to cover in such certificates pursuant to their professional
standards and customs of the profession);
(b) concurrently with the delivery of any financial statements
pursuant to Section 5.1, (i) a certificate of a Responsible Officer
stating that, to the best of such Responsible Officer's knowledge, each
Loan Party during such period has observed or performed all of its
covenants and other agreements, and satisfied every condition,
contained in this Agreement and the other Loan Documents to which it is
a party to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default or Event
of Default except as specified in such certificate and (ii) in the case
of quarterly or annual financial statements, (x) a Compliance
Certificate containing all information and calculations necessary for
determining compliance by the Borrower and its Subsidiaries with the
provisions of this Agreement referred to therein as of the last day of
the fiscal quarter or fiscal year of the Borrower, as the case may be,
(y) to the extent not previously disclosed to the Administrative Agent,
a listing of any county or state within the United States where any
Loan Party keeps inventory or equipment and of any Intellectual
Property acquired by any Loan Party since the date of the most recent
list delivered pursuant to this clause (y) (or, in the case of the
first such list so delivered, since the Closing Date) and (z) any UCC
financing statements or other
-52-
58
filings specified in such Compliance Certificate as being required to
be delivered therewith;
(c) no later than 10 Business Days prior to the effectiveness
thereof, copies of substantially final drafts of any proposed
amendment, supplement, waiver or other modification with respect to the
AutoNation Support Agreement, the Interim Facility Loan Documentation,
the Borrowing Base Credit Facility Documentation or the General Motors
Letter of Credit Documentation;
(d) within five days after the same are sent, copies of all
financial statements and reports that the Borrower sends to the holders
of any class of its debt securities or public equity securities and,
within five days after the same are filed, copies of all financial
statements and reports that the Borrower may make to, or file with, the
SEC;
(e) as soon as possible and in any event within five days of
obtaining knowledge thereof, any notice that any governmental authority
may deny any application for a material Environmental Permit sought by,
or revoke or refuse to renew any material Environmental Permit held by,
the Borrower; and
(f) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
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 material obligations of whatever nature (including without
limitation, the payment when due of all real estate taxes, assessments and other
charges against any Mortgaged Property), except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or its Subsidiaries, as the case may be.
5.4 Conduct of Business and Maintenance of Existence, etc.
(a)(i) Preserve, renew and keep in full force and effect its corporate, limited
liability company or partnership existence and (ii) take all reasonable action
to maintain all rights, privileges and franchises necessary or desirable in the
normal conduct of its business, except, in each case, as otherwise permitted by
Section 6.4 and except, in the case of clause (ii) above, to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (b) comply with all Contractual Obligations and Requirements of Law
(including without limitation, Requirements of Law applicable to the Mortgaged
Properties), except to the extent that failure to comply therewith could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect.
5.5 Maintenance of Property; Insurance. (a) Keep all Property
and systems useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted and (b) maintain with financially
sound and
-53-
59
reputable insurance companies insurance on all its Property in at least such
amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same or a similar
business.
5.6 Inspection of Property; Books and Records; Discussions.
(a) Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities and (b)
permit representatives of any Lender (at the expense of such Lender unless an
Event of Default has occurred and is continuing, in which case, at the expense
of the Borrower) to visit and inspect any of its properties and examine and make
abstracts from any of its books and records, and perform collateral audits, 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
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants (subject
to the confidentiality provisions contained in Section 9.14).
5.7 Notices. Promptly give notice to the Administrative Agent
of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any material
Contractual Obligation of the Borrower or any of its Subsidiaries or
(ii) litigation, investigation or proceeding which may exist at any
time between the Borrower or any of its Subsidiaries and any
Governmental Authority, that in either case, if not cured or if
adversely determined, as the case may be, could reasonably be expected
to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any
of its Subsidiaries in which the amount involved is $5,000,000 or more
and not covered by insurance or in which injunctive or similar relief
is sought;
(d) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof:
(i) the occurrence of any Reportable Event with respect to any Single
Employer Plan, a failure to make any required contribution to a Plan,
the creation of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency of,
any Multiemployer Plan or (ii) the institution of proceedings or the
taking of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the termination, Reorganization or Insolvency of,
any Plan that, in either case could reasonably be expected to result in
liability in excess of $5,000,000; and
-54-
60
(e) any development or event that has had or could reasonably
be expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower or the relevant Subsidiary proposes to take
with respect thereto.
5.8 Environmental Laws. (a) Comply in all material respects
with, and ensure compliance in all material respects by all tenants and
subtenants, if any, with, all applicable Environmental Laws, and obtain and
comply in all material respects with and maintain, and ensure that all tenants
and subtenants obtain and comply in all material respects with and maintain, any
and all Environmental Permits.
(b) Conduct and complete in all material respects all
investigations, studies, sampling and testing, and all remedial, removal and
other actions required under Environmental Laws and promptly comply in all
material respects with all lawful orders and directives of all Governmental
Authorities regarding Environmental Laws.
5.9 Additional Collateral, etc. (a) With respect to any
Property acquired after the Closing Date by any Loan Party, including any entity
that becomes a Loan Party hereafter pursuant to Section 5.9(c), (other than (x)
any Property described in paragraph (b) or paragraph (c) of this Section and (y)
any Property subject to a Lien expressly permitted by Section 6.3(g) or (h)) as
to which the Administrative Agent, for the benefit of the Lenders, does not have
a perfected Lien, promptly (i) execute and deliver to the Administrative Agent
such amendments to the Guarantee and Collateral Agreement or such other
documents as the Administrative Agent deems necessary or advisable to grant to
the Administrative Agent, for the benefit of the Lenders, a security interest in
such Property and (ii) take all actions necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected second
priority security interest (as provided in the Guarantee and Collateral
Agreement) in such Property, including without limitation, the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be required by
the Guarantee and Collateral Agreement or by law or as may be reasonably
requested by the Administrative Agent.
(b) With respect to any fee interest in any real property
having a value (together with improvements thereof) of at least $1,000,000
acquired after the Closing Date by any Loan Party, including any entity that
becomes a Loan Party hereafter pursuant to Section 5.9(c), (other than any such
real property subject to a Lien expressly permitted by Section 6.3(g)), promptly
(i) execute and deliver a Mortgage (as provided therein) in favor of the
Administrative Agent, for the benefit of the Lenders, covering such real
property, (ii) if requested by the Administrative Agent, provide the Lenders
with (x) title and extended coverage insurance covering such real property in an
amount at least equal to the purchase price of such real property (or such other
amount as shall be reasonably specified by the Administrative Agent) as well as
a current ALTA survey thereof, together with a surveyor's certificate and (y)
any consents or estoppels reasonably deemed necessary or advisable by the
Administrative Agent in connection with such Mortgage,
-55-
61
each of the foregoing in form and substance reasonably satisfactory to the
Administrative Agent and (iii) if requested by the Administrative Agent, deliver
to the Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(c) With respect to any new Subsidiary (other than an Excluded
Foreign Subsidiary, an Insurance Company, a Finance Company or an Inactive
Subsidiary) created or acquired after the Closing Date (which, for the purposes
of this paragraph, shall include (x) any existing Subsidiary that ceases to be
an Excluded Foreign Subsidiary or an Inactive Subsidiary and (y) any Risk
Management Subsidiary that becomes a Wholly Owned Subsidiary of the Borrower),
by the Borrower or any of its Subsidiaries, promptly (i) execute and deliver to
the Administrative Agent such amendments to the Guarantee and Collateral
Agreement as the Administrative Agent deems necessary or advisable to grant to
the Administrative Agent, for the benefit of the Lenders, a perfected second
priority security interest in the Capital Stock of such new Subsidiary that is
owned by the Borrower or any of its Subsidiaries, (ii) deliver to the
Administrative Agent (or a bailee thereof) the certificates representing such
Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the Borrower or such Subsidiary, as
the case may be, (iii) cause such new Subsidiary (A) to become a party to the
Guarantee and Collateral Agreement and (B) to take such actions necessary or
advisable to grant to the Administrative Agent for the benefit of the Lenders a
perfected second priority security interest in the Collateral described in the
Guarantee and Collateral Agreement with respect to such new Subsidiary,
including, without limitation, the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by the Guarantee and
Collateral Agreement or by law or as may be reasonably requested by the
Administrative Agent, and (iv) if requested by the Administrative Agent, deliver
to the Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(d) With respect to any new Excluded Foreign Subsidiary
created or acquired after the Closing Date by the Borrower or any of its
Subsidiaries (other than any Excluded Foreign Subsidiaries), promptly (i)
execute and deliver to the Administrative Agent such amendments to the Guarantee
and Collateral Agreement or such other documents as the Administrative Agent
deems necessary or advisable in order to grant to the Administrative Agent, for
the benefit of the Lenders, a perfected second priority security interest in the
Capital Stock of such new Subsidiary that is owned by the Borrower or any of its
Subsidiaries (other than any Excluded Foreign Subsidiaries), (provided that in
no event shall more than 65% of the total outstanding Capital Stock of any such
new Excluded Foreign Subsidiary be required to be so pledged), (ii) deliver to
the Administrative Agent (or a Bailee thereof) the certificates representing
such Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the Borrower or such Subsidiary, as
the case may be, and take such other action as may be necessary or, in the
opinion of the Administrative Agent, desirable to perfect the Lien of the
Administrative Agent thereon, and (iii) if requested by the Administrative
Agent, deliver to the Administrative Agent legal opinions relating to the
matters
-56-
62
described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.
5.10 Further Assurances. From time to time execute and
deliver, or cause to be executed and delivered, such additional instruments,
certificates or documents, and take such actions, as the Administrative Agent
may reasonably request for the purposes of implementing or effectuating the
provisions of this Agreement and the other Loan Documents, or of more fully
perfecting or renewing the rights of the Administrative Agent and the Lenders
with respect to the Collateral (or with respect to any additions thereto or
replacements or proceeds thereof or with respect to any other property or assets
hereafter acquired by the Borrower or any Subsidiary which may be deemed to be
part of the Collateral) pursuant hereto or thereto. Upon the exercise by the
Administrative Agent or any Lender of any power, right, privilege or remedy
pursuant to this Agreement or the other Loan Documents which requires any
consent, approval, recording, qualification or authorization of any Governmental
Authority, the Borrower will execute and deliver, or will cause the execution
and delivery of, all applications, certifications, instruments and other
documents and papers that the Administrative Agent or such Lender may be
required to obtain from the Borrower or any of its Subsidiaries for such
governmental consent, approval, recording, qualification or authorization.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that so long as the Revolving
Credit Commitments remain in effect, or any Loan or other amount is owing to any
Lender or any Agent hereunder, the Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly:
6.1 Financial Condition Covenants.
(a) Consolidated Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio for any period of four consecutive fiscal
quarters of the Borrower ending with any fiscal quarter set forth below to be
less than the ratio set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Interest Coverage Ratio
-------------- -----------------------
FQ3 2000 2.50:1.00
FQ4 2000 3.00:1.00
FQ1 2001 3.00:1.00
FQ2 2001 and each fiscal 3.25:1.00
quarter thereafter
-57-
63
(b) Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters of the Borrower ending with any fiscal quarter set forth below
to be less than the ratio set forth below opposite such fiscal quarter:
Consolidated Fixed
Fiscal Quarter Charge Coverage Ratio
-------------- ---------------------
FQ3 2000 1.10:1.00
FQ4 2000 1.10:1.00
FQ1 2001 and each fiscal 1.15:1.00
quarter thereafter
(c) Consolidated Adjusted Funded Debt Ratio. Permit the
Consolidated Adjusted Funded Debt Ratio as at the last day of any period of four
consecutive fiscal quarters of the Borrower ending with any fiscal quarter set
forth below to exceed the ratio set forth below opposite such fiscal quarter:
Consolidated Adjusted
Fiscal Quarter Funded Debt Ratio
-------------- -----------------
FQ3 2000 3.75:1.00
FQ4 2000 3.50:1.00
FQ1 2001 3.50:1.00
FQ2 2001 3.25:1.00
FQ3 2001 3.25:1.00
FQ4 2001 3.25:1.00
FQ1 2002 3.25:1.00
FQ2 2002 3.25:1.00
FQ3 2002 3.25:1.00
FQ4 2002 3.25:1.00
FQ1 2003 3.25:1.00
FQ2 2003 and each fiscal 3.00:1.00
quarter thereafter
-58-
64
6.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) Indebtedness (i) of any Loan Party to any other Loan
Party, (ii) of the Borrower to any Insurance Company, (iii) under the
Subordinated Notes and (iv) of any Foreign Subsidiary to any Loan Party
in an aggregate principal amount at any time outstanding not to exceed
the sum of (A) the amount set forth in Schedule 6.2(d), (B) an
aggregate amount up to $60,000,000 used to refinance foreign working
capital facilities existing on the Closing Date and set forth in
Schedule 6.2(d) and (C) an additional aggregate principal of
Indebtedness for all Foreign Subsidiaries of $25,000,000; provided,
that such Indebtedness permitted by clause (iv) shall be pari passu
with all other unsecured debt for borrowed money and that such
Indebtedness shall be evidenced by a promissory note that is pledged
pursuant to the Guarantee and Collateral Agreement;
(c) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 6.3(g) in an
aggregate principal amount not to exceed $25,000,000 at any one time
outstanding;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 6.2(d) and any refinancings, refundings, renewals or
extensions thereof (without any increase in the principal amount
thereof or any shortening of the maturity of any principal amount
thereof);
(e) Guarantee Obligations by any Loan Party of Indebtedness of
any other Loan Party permitted under this Section;
(f) Indebtedness of Foreign Subsidiaries in an aggregate
principal amount as to all Foreign Subsidiaries, exclusive of
Indebtedness permitted under Section 6.2(b)(iii), not to exceed
$50,000,000 at any one time outstanding;
(g) Guarantee Obligations by any Loan Party of Indebtedness of
any Foreign Subsidiary permitted under clause (f) above;
(h) Indebtedness of Subsidiaries in respect of the Vehicle
Debt incurred in the ordinary course of business, provided, that the
aggregate outstanding amount of such Indebtedness owed to Persons other
than the Borrower and its Subsidiaries as of the last day of any
calendar month shall not exceed the net book value of any collateral
securing such Indebtedness on such date;
-59-
65
(i) (i) Indebtedness of the Borrower in respect of the
Borrowing Base Credit Facility in an aggregate principal amount not to
exceed $175,000,000, (ii) Indebtedness of the Borrower in respect of
the Interim Loan Facility in an aggregate principal amount not to
exceed $225,000,000, (iii) the obligation of the Borrower to indemnify
AutoNation for its guarantee or other liability in respect of
Indebtedness of the Borrower otherwise permitted hereby and (iv)
Indebtedness of the Borrower arising under the General Motors Letter of
Credit Documentation and constituting reimbursement obligations in
respect of letters of credit issued pursuant to the General Motors
Letter of Credit Documentation, in an aggregate amount not exceeding
$60,000,000, plus related fees and interest (including any replacement
of the General Motors Letter of Credit and any refinancing of such
reimbursement obligations on terms no less favorable to the Loan
Parties or the Lenders than the terms under the General Motors Letter
of Credit Documentation), which in the case of the foregoing clauses
(iii) and (iv) is subordinate to the Obligations;
(j) Guarantee Obligations of any Subsidiary Guarantor in
respect of the Borrowing Base Credit Facility and the Interim Loan
Facility;
(k) Guarantee Obligations and L/C Obligations (as defined in
and under the Borrowing Base Credit Agreement) of the Borrower or any
Subsidiary in respect of obligations of airports and airport and other
Governmental Authorities in respect of the construction of airport
rental or related facilities to be used by the Borrower or any
Subsidiary in the ordinary course of business in an aggregate amount as
to the Borrower and all Subsidiaries not to exceed $30,000,000 at any
one time outstanding;
(l) Indebtedness incurred in connection with the acquisition
of Vehicles directly from the manufacturer thereof, provided, that (i)
such Vehicles could not be acquired with the proceeds of Vehicle Debt
and (ii) such Indebtedness does not exceed the net book value of such
Vehicles;
(m) unsecured purchase money Indebtedness of the Borrower or
any Subsidiary incurred as part of the purchase of a franchisee in an
amount as to the Borrower and all Subsidiaries not to exceed $5,000,000
at any one time outstanding;
(n) Indebtedness of the Borrower or any Subsidiary in respect
of Specified Hedge Agreements and Specified Hedge Agreements under and
as defined in the Borrowing Base Credit Agreement;
(o) Indebtedness of any Person that becomes a Subsidiary after
the date hereof in an aggregate amount not to exceed $10,000,000 at any
one time outstanding as to all such Subsidiaries and any refinancings,
refundings, renewals or extensions thereof (without any increase in the
principal amount thereof or any shortening of the maturity of any
principal amount thereof); provided, that such Indebtedness exists at
the time such Person becomes a Subsidiary and is not created in
contemplation of, or in connection with, such Person becoming a
Subsidiary;
-60-
66
(p) Indebtedness incurred in respect of workers' compensation
claims, self-insurance obligations, performance, surety and similar
bonds and completion guarantees provided by the Borrower or any other
Loan Party in the ordinary course of business;
(q) Indebtedness arising from agreements of the Borrower or
any other Loan Party providing for indemnification, adjustment of
purchase price or similar obligations, in each case, incurred or
assumed in connection with the Disposition of any business, assets or
Capital Stock of any Subsidiary that is a Loan Party or incurred in
connection with a sale of Capital Stock of the Borrower;
(r) letters of credit issued for the account of the Insurance
Companies in an amount not to exceed $40,000,000 in the aggregate
outstanding at any one time;
(s) additional notes issued pursuant to and in accordance with
the Loan Note Instrument, dated October 15, 1997, by Republic
Industries (UK) PLC and Republic Industries, Inc. (n/k/a AutoNation,
Inc.), provided that such notes shall not exceed (pound)6,765,380 in
the aggregate;
(t) Guarantee Obligations of the Borrower or any Subsidiary of
the Borrower of Indebtedness of any Permitted Joint Venture in an
aggregate principal amount for the Borrower and all Subsidiaries not to
exceed $10,000,000 at any one time outstanding;
(u) Indebtedness incurred in connection with the Permitted
Acquisitions in the amount (excluding the amounts of any assumed
Indebtedness permitted by clause (o) above and Section 6.8(i)(iv)) not
to exceed 10,000,000; and
(v) additional unsecured Indebtedness of the Borrower or any
of its Subsidiaries in an aggregate principal amount for the Borrower
and all Subsidiaries not to exceed $10,000,000 at any one time
outstanding.
6.3 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its Property, whether now owned or hereafter
acquired, except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of the
Borrower or its Subsidiaries, as the case may be, in conformity with
GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 30 days or
that are being contested in good faith by appropriate proceedings;
-61-
67
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and other
minor imperfections of title that, in the aggregate, are not
substantial in amount and which do not in any case materially detract
from the value of the Property subject thereto or materially interfere
with the ordinary conduct of the business of the Borrower and its
Subsidiaries, taken as a whole;
(f) Liens in existence on the date hereof listed on Schedule
6.3(f), securing Indebtedness permitted by Section 6.2(d), provided
that no such Lien is spread to cover any additional Property after the
Closing Date and that the amount of Indebtedness secured thereby is not
increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred or assumed pursuant to Section 6.2(c) to finance
the acquisition, construction or improvement of fixed or capital
assets, provided that (i) such Liens shall be created prior to or
substantially simultaneously with the acquisition, construction or
improvement of such fixed or capital assets, (ii) such Liens do not at
any time encumber any Property other than the Property financed by such
Indebtedness, (iii) the amount of Indebtedness secured thereby is
incurred prior to or within 150 days after the acquisition of, or
completion of the construction or improvement on, such fixed or capital
asset, and (iv) the principal amount of Indebtedness secured thereby is
not increased;
(h) (i) Liens securing (A) Vehicle Debt permitted by Section
6.2(h) and (B) Indebtedness permitted by Section 6.2(l), provided, in
each case, that such Liens shall not spread to any Property other than
the Vehicles purchased with such Indebtedness and (ii) Liens on cash or
cash equivalents pledged as collateral in respect of Vehicle Debt
(including the General Motors Letter of Credit Documentation or
Indebtedness permitted by Section 6.2(l)) as permitted by the terms of
the documentation governing the Vehicle Debt (including the General
Motors Letter of Credit Documentation or Indebtedness permitted by
Section 6.2(l));
(i) Liens created pursuant to the Security Documents and the
Borrowing Base Credit Facility Documentation;
(j) any interest or title of a lessor or sublessor under any
lease entered into by the Borrower or any Subsidiary in the ordinary
course of its business and covering only the assets so leased or
subleased;
-62-
68
(k) Liens on goods in favor of customs and revenue authorities
to secure payment of customs duties in connection with the importation
thereof in the ordinary course of business;
(l) Liens on any airport concession agreements or permits to
secure loans extended to finance tenant improvements used in connection
with the concession agreement or permit subject to such Lien;
(m) Liens (not in respect of Indebtedness) arising from
financing statements filed under the Uniform Commercial Code for
informational purposes with respect to leases incurred in the ordinary
course of business;
(n) Liens securing Indebtedness of a Person that becomes a
Subsidiary after the date hereof permitted by Section 6.2(o); provided
that such Liens are limited to the Property of such Person and were not
created in contemplation of, or in connection with, such Person
becoming a Subsidiary; and
(o) Liens on assets which are not of the type included in the
Borrowing Base and not otherwise permitted by this Section 6.3 so long
as neither (i) the aggregate outstanding principal amount of the
obligations secured thereby nor (ii) the aggregate fair market value
(determined, in the case of each such Lien, as of the date such Lien is
incurred) of the assets subject thereto exceeds (as to the Borrower and
all Subsidiaries) $5,000,000 at any one time.
6.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially all
of its Property or business, except that:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or with or into any
Subsidiary Guarantor (provided that (i) the Subsidiary Guarantor shall
be the continuing or surviving corporation or (ii) simultaneously with
such transaction, the continuing or surviving corporation shall become
a Subsidiary Guarantor and the Borrower shall comply with Section 5.10
in connection therewith);
(b) any Subsidiary of the Borrower may Dispose of any or all
of its assets (upon voluntary liquidation or otherwise) to the Borrower
or any Subsidiary Guarantor;
(c) the Borrower or any of its Subsidiaries may change the
jurisdiction of its organization so long as the new jurisdiction of the
Borrower or any Domestic Subsidiary is in the United States and any
actions required to continue the perfection of the Administrative
Agent's security interest in the Specified Collateral and priority of
the Administrative Agent's security interest in the Collateral shall
have been taken;
-63-
69
(d) any Foreign Subsidiary of the Borrower may be merged,
consolidated with or into, or Dispose any or all of its assets (upon
voluntary liquidation or otherwise) to, another Foreign Subsidiary of
the Borrower;
(e) any Finance Company may be merged, consolidated with or
into, or Dispose any or all of its assets (upon voluntary liquidation
or otherwise) to, another Finance Company;
(f) any Insurance Company may be merged, consolidated with or
into, or Dispose any or all of its assets (upon voluntary liquidation
or otherwise) to, another Insurance Company; and
(g) the Borrower may liquidate any of its Inactive
Subsidiaries.
6.5 Limitation on Disposition of Property. Dispose of any of
its Property (including, without limitation, receivables and leasehold
interests), whether now owned or hereafter acquired, or, in the case of any
Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock to any
Person, except:
(a) the Disposition of obsolete or worn out property in the
ordinary course of business, including the Disposition, in the ordinary
course of business and as a part of customary practices of replacing
Vehicles with newer Vehicles from time to time;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 6.4;
(d) the sale or issuance of any Subsidiary's Capital Stock to
the Borrower or any Subsidiary Guarantor;
(e) Dispositions of any assets or property of (i) any
Subsidiary to the Borrower or any Subsidiary Guarantor, (ii) any
Foreign Subsidiary of the Borrower to another Foreign Subsidiary of the
Borrower, (iii) any Finance Company to another Finance Company and (iv)
any Insurance Company to another Insurance Company;
(f) Dispositions of Cash Equivalents;
(g) any Restricted Payment that is permitted by Section 6.6 or
Investment that is permitted by Section 6.8;
(h) the sale or issuance of directors' qualifying shares or
shares or Investments required by any Requirement of Law to be held by
a Person other than the Borrower or a Subsidiary Guarantor;
-64-
70
(i) the grant of a Lien that is permitted by Section 6.3;
(j) non-recourse sales of receivables generated in the United
Kingdom in connection with working capital facilities permitted under
Section 6.2;
(k) Dispositions of assets listed on Schedule 6.5(k);
(l) Dispositions of assets that are not subject to a Lien in
favor of the Administrative Agent (other than real property located in
the United States and Intellectual Property);
(m) Dispositions of assets that are not included in the
Borrowing Base (other than Dispositions permitted under clauses (k) and
(l) above and Intellectual Property) having a fair market value not to
exceed $7,500,000 in the aggregate for any fiscal year of the Borrower;
and
(n) Dispositions of other assets that are included in the
Borrowing Base.
6.6 Limitation on Restricted Payments. Declare or pay any
dividend on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Capital Stock of the Borrower or any
Subsidiary, whether now or hereafter outstanding, or make any other distribution
in respect thereof, either directly or indirectly, whether in cash or property
or in obligations of the Borrower or any Subsidiary, or enter into any
derivatives or other transaction with any financial institution, commodities or
stock exchange or clearinghouse (a "Derivatives Counterparty") obligating the
Borrower or any Subsidiary to make payments to such Derivatives Counterparty as
a result of any change in market value of any such Capital Stock (collectively,
"Restricted Payments"), except that:
(a) any Subsidiary may make Restricted Payments to the
Borrower or any Subsidiary Guarantor;
(b) the Borrower may make Restricted Payments in the form of
common stock of the Borrower;
(c) the Borrower may purchase the Borrower's common stock or
common stock options from present or former officers or employers of
the Borrower or any Subsidiary upon the death, disability or
termination of employment of such officer or employer, provided, that
the aggregate amount of payments under this paragraph subsequent to the
date hereof (net of any proceeds received by the Borrower subsequent to
the date hereof in connection with resales of any common stock or
common stock options so purchased) shall not exceed $5,000,000;
-65-
71
(d) the Borrower may pay any dividend within 60 days after the
date of declaration thereof, if at said date of declaration such
payment would have complied with the provisions of this Agreement;
(e) the Borrower may make repurchases of Capital Stock (or
warrants or options convertible into or exchangeable for such Capital
Stock) deemed to occur upon exercise of stock options to the extent
that shares of such Capital Stock (or warrants or options convertible
into or exchangeable for such Capital Stock) represent a portion of the
exercise price of such options;
(f) the Borrower may make other Restricted Payments not
otherwise permitted by this Section 6.6 in an aggregate amount from the
Closing Date not to exceed $2,500,000; and
(g) either Risk Management Subsidiary may redeem the shares of
its minority shareholder to the extent required pursuant to the charter
documents (as in effect on the date hereof) governing such Risk
Management Subsidiary for cash consideration not to exceed $1,700,000
in the aggregate.
6.7 Limitation on Capital Expenditures. Make or commit to make
any Capital Expenditure, except Capital Expenditures of the Borrower and its
Subsidiaries in the ordinary course of business in any fiscal year set forth
below not to exceed the amount set forth below opposite such fiscal year:
Fiscal Year Capital Expenditures
----------- --------------------
2000 $100,000,000
2001 $105,000,000
2002 $115,000,000
2003 $115,000,000
provided, that (i) up to $35,000,000 of any such amount referred to above, if
not so expended in the fiscal year for which it is permitted, may be carried
over for expenditure in the next succeeding fiscal year and (ii) Capital
Expenditures made during any fiscal year shall be deemed made, first, in respect
of amounts permitted for such fiscal year as provided above and second, in
respect of amounts carried over from the prior fiscal year pursuant to clause
(i) above.
6.8 Limitation on Investments. Make any advance, loan,
extension of credit (by way of guaranty or otherwise) or capital contribution
to, or purchase any Capital Stock, bonds, notes, debentures or other debt
securities of, or any assets
-66-
72
constituting an ongoing business from, or make any other investment in, any
other Person (all of the foregoing, "Investments"), except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in cash or Cash Equivalents;
(c) Investments arising in connection with the incurrence of
Indebtedness permitted by Sections 6.2(b), (e), (g), (j), (k) and (l);
(d) loans and advances to employees of the Borrower or any
Subsidiaries of the Borrower in the ordinary course of business
(including, without limitation, for travel, payroll, entertainment and
relocation expenses) in an aggregate amount for the Borrower and
Subsidiaries of the Borrower not to exceed $2,000,000 at any one time
outstanding;
(e) Investments (other than those relating to the incurrence
of Indebtedness permitted by Section 6.8(c)) by the Borrower or any of
its Subsidiaries in the Borrower or any Person that, prior to such
Investment, is a Subsidiary Guarantor;
(f) stock, obligations or securities received in settlement of
debts created in the ordinary course of business and owing to the
Borrower or any other Loan Party or in satisfaction of judgments or
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of a debtor (including customers and
suppliers) or an Investment acquired by the Borrower or any other Loan
Party as a result of the transfer of title with respect to any secured
Investment in default as a result of a foreclosure by the Borrower or
any other Loan Party with respect to such secured Investment;
(g) Investment in prepaid expenses, negotiable instruments
held for collection and lease, utility and worker's compensation,
performance and other similar deposits;
(h) Investments existing on the Closing Date and described in
Schedule 6.8, setting forth the respective amounts of such Investments
as of a recent date;
(i) Investments by the Borrower for acquisitions ("Permitted
Acquisitions") in connection with its line of business in an amount not
to exceed (excluding the value of any Capital Stock of the Borrower
issued in connection with such Permitted Acquisition) $50,000,000 in
the aggregate; provided that after giving effect to any such Permitted
Acquisition (i) no Default or Event of Default shall occur and be
continuing, (ii) the Borrower would be in pro forma compliance with the
financial covenants set forth in Section 6.1 for the four quarters
preceding the effective date of the acquisition and (iii) the amount of
existing Indebtedness assumed in such acquisition (other than
Indebtedness that finances the acquiree's fleet of vehicles) when added
to the aggregate Indebtedness assumed for all such Permitted
Acquisitions and any Permitted Stock Acquisitions permitted by clause
(j) below would not exceed $10,000,000;
-67-
73
(j) Investments by the Borrower not otherwise permitted by
clause (i) above, for the purpose of acquiring ("Permitted Stock
Acquisitions") additional franchises of the Borrower, paid for solely
in common stock of the Borrower; provided, that after giving effect to
any such acquisition (i) no Default or Event of Default shall occur and
be continuing, (ii) the Borrower would be in pro forma compliance with
the financial covenants set forth in Section 6.1 for the four quarters
preceding the effective date of such Permitted Stock Acquisition and
(iii) the amount of Indebtedness assumed in such Permitted Stock
Acquisition (other than Indebtedness that finances the acquiree's fleet
of vehicles) when added to the aggregate Indebtedness assumed for all
such Permitted Stock Acquisitions (including any such acquisition
permitted pursuant to clause (i) above) would not exceed $10,000,000;
(k) Investments in joint ventures, partnerships or other
similar arrangements (other than Subsidiaries of the Borrower), whether
in corporate, partnership, limited liability company or other legal
form, when added to Guarantee Obligations permitted under Section
6.2(u), not to exceed $10,000,000 in the aggregate ("Permitted Joint
Ventures");
(l) Investments in the Finance Companies and Insurance
Companies to the extent required to meet their capital requirements
pursuant to the Requirements of Law (in the case of the Insurance
Companies) or Contractual Obligations relating to Vehicle Debt (in the
case of the Finance Companies);
(m) loans by the Insurance Companies to the Borrower;
(n) the purchase by the Borrower or one of its Subsidiaries of
warrants to purchase preferred stock of E-Travel, Inc., and the
exercise of such warrants, for an aggregate amount not to exceed
$1,750,000; and
(o) in addition to Investments otherwise expressly permitted
by this Section, Investments by the Borrower or any of its Subsidiaries
in an aggregate amount (valued at cost) not to exceed $10,000,000
during the term of this Agreement.
6.9 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. (a) Make or offer to make any optional or voluntary payment,
prepayment, repurchase or redemption of, or otherwise voluntarily or optionally
defease, any Subordinated Note, the Interim Loan Facility or the AutoNation
Subordinated Debt (other than (i) any refinancing of the Interim Loan Facility
with the issuance of senior notes (which may be sold in a public offering or
private placement) or other refinancing, in each case on terms no less favorable
to the Lenders than the terms under the Interim Loan Facility and (ii) any
refinancing of Indebtedness of the Borrower pursuant to the General Motors
Letter of Credit Documentation on terms no less favorable to Lenders than the
terms contained hereunder), or segregate funds for any such payment, prepayment,
repurchase,
-68-
74
redemption or defeasance, or enter into any derivative or other transaction with
any Derivatives Counterparty obligating the Borrower or any Subsidiary to make
payments to such Derivatives Counterparty as a result of any change in market
value of the Interim Loan Facility or (b) amend, modify or otherwise change, or
consent or agree to any amendment, modification, waiver or other change to, any
of the terms of any Subordinated Note, the Interim Facility Loan Documentation
or the AutoNation Subordinated Debt (other than any such amendment,
modification, waiver or other change which (i) would extend the maturity or
reduce the amount of any payment of principal thereof, reduce the rate or extend
the date for payment of interest thereon or relax any covenant or other
restriction applicable to the Borrower or any of its Subsidiaries and (ii) does
not involve the payment of a consent fee).
6.10 Limitation on Transactions with Affiliates. Enter into
any transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than the
Borrower or any Subsidiary Guarantor) unless such transaction is (a) otherwise
permitted under this Agreement, (b) in the ordinary course of business of the
Borrower or such Subsidiary, as the case may be, and (c) upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary, as the
case may be, than it would obtain in a comparable arm's length transaction with
a Person that is not an Affiliate. Notwithstanding the foregoing, the Borrower
may (i) enter into, and perform the transactions consummated pursuant to, or
contemplated by, the Tax Sharing Agreement, the Separation and Distribution
Agreement, the Transitional Services Agreement, the AutoNation Support Agreement
and the General Motors Letter of Credit Documentation, leases, guarantees, parts
agreements, corporate agreements, fleet agreements, association program
agreements, association and affinity agreements, any agreements evidencing the
Continuing Obligations, and other related agreements and other agreements
ancillary to any of the foregoing, in each case between AutoNation or any of its
Affiliates, on the one hand, and the Borrower or any of its Subsidiaries, on the
other hand, as such agreements are in effect on the Initial Funding Date, as
such agreements may be amended, supplemented or otherwise modified from time to
time in any manner no less favorable to the Lenders, (ii) make Investments or
Restricted Payments permitted under Sections 6.8 and 6.6, respectively, (iii)
pay fees and compensation to members of the Board of Directors of the Borrower
and its Subsidiaries, (iv) make loans or advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business permitted under Section 6.8(d), (v) pay fees and
compensation (including the issuance of stock options permitted under Section
6.6) to, and provide indemnity on behalf of, officers, directors, consultants or
employees of the Borrower or any of its Subsidiaries, pursuant to agreements,
statute, charter or by-law provision or otherwise, (vi) enter into customary
business arrangements consistent with past practice between the Borrower and its
Subsidiaries, on the one hand, and Certified Vacations, Inc. and its affiliates,
on the other hand and (vii) purchase revenue earning vehicles from AutoNation,
provided that (x) the purchase price for such vehicles is no greater than the
purchase price paid by AutoNation to an unrelated Person for such vehicles and
(y) any processing or other fees paid to AutoNation in connection with such
purchase are customary and consistent with industry practice, (viii) enter into
any employment, consulting, agency or other compensation agreement entered into
or
-69-
75
benefit plan adopted by the Borrower or any of its Subsidiaries in the ordinary
course of business, (ix) sell or otherwise issue Capital Stock of the Borrower,
including the issuance of stock options, (x) enter into transactions and
agreements in effect on the date of this Agreement, as such agreements may be
amended or transactions modified from time to time in any manner not materially
less favorable to the Lenders; (xi) enter into any transaction with an Affiliate
that involves consideration of $250,000 or less, provided that such transactions
as to all affiliates do not exceed $2,500,000 in the aggregate in any 12-month
period and (xii) enter into a registration rights agreement with Xxxxxxx X. Xxxx
and related entities in respect of the shares of common stock of the Borrower
distributed to him pursuant to the Spin-Off, which registration rights agreement
shall be on terms no less favorable to the Borrower than the existing
registration rights agreement between AutoNation and Xxxxxxx X. Xxxx.
6.11 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Borrower or such
Subsidiary except that (a) the Borrower or its Subsidiary may enter into a sale
and leaseback transaction if (i) it could have incurred Indebtedness in an
amount equal to the Attributable Debt relating to such sale and leaseback
transaction pursuant to Section 6.2(c), (ii) the net cash proceeds of such sale
and leaseback transaction are at least equal to the fair market value (as
determined in good faith by the Board of Directors if in excess of $5,000,000)
of the Property that is the subject of such sale and leaseback transaction and
(iii) the transfer of assets in such sale and leaseback transaction is permitted
by Section 6.5 to prepay any outstanding Loans; and (b) the restrictions of this
Section 6.11 shall not apply to sale and leaseback transactions with respect to
revenue earnings Vehicles.
6.12 Limitation on Changes in Fiscal Periods. Permit the
fiscal year of the Borrower to end on a day other than December 31 or change the
Borrower's method of determining fiscal quarters.
6.13 Limitation on Negative Pledge Clauses. Enter into or
suffer to exist or become effective any agreement that prohibits or limits the
ability of the Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its Property or revenues, whether now owned
or hereafter acquired, to secure the Obligations or, in the case of any
Subsidiary Guarantor, its obligations under the Guarantee and Collateral
Agreement, other than (a) this Agreement and the other Loan Documents, (b) the
Borrowing Base Credit Facility Documentation, (c) the Interim Facility Loan
Documentation, (d) the General Motors Letter of Credit Documentation, (e) any
instruments pursuant to which Vehicle Debt is outstanding or secured (in which
case any restriction shall only be effective against the Vehicles financed
thereby) and (f) any agreements governing any purchase money Liens or Capital
Lease Obligations otherwise permitted hereby (in which case, any prohibition or
limitation shall only be effective against the Vehicles financed thereby).
-70-
76
6.14 Limitation on Restrictions on Subsidiary Distributions.
Enter into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary, (b) make Investments in the
Borrower or any other Subsidiary or (c) transfer any of its assets to the
Borrower or any other Subsidiary, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan
Documents, (ii) any restrictions with respect to a Subsidiary imposed pursuant
to an agreement that has been entered into in connection with the Disposition of
all or substantially all of the Capital Stock or assets of such Subsidiary,
(iii) any instruments pursuant to which Vehicle Debt is outstanding or secured,
(iv) any restriction existing under documentation governing Indebtedness
permitted to be incurred under Section 6.2(e), (g), (i), (j), (k) and (t); (v)
any restrictions arising by reason of customary non-assignment provisions in
leases entered into in the ordinary course of business; (vi) customary
provisions restricting dispositions of real property interest set forth in any
reciprocal easement agreements of the Loan Parties; and (vii) any restrictions
arising or existing by reason of Requirements of Law, including, without
limitation, restrictions on the payment of dividends on the Insurance Companies
imposed by a Governmental Authority.
6.15 Limitation on Lines of Business. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
the Borrower and its Subsidiaries are engaged on the date of this Agreement or
that are reasonably related thereto.
6.16 Limitation on Amendments to Certain Instruments. (a)
Amend, supplement or otherwise modify the Tax Sharing Agreement, the Separation
and Distribution Agreement, the Transitional Services Agreement or any
documentation governing the Continuing Obligations in any manner that would
increase the amounts payable by the Borrower thereunder or (b) otherwise amend,
supplement or otherwise modify the terms and conditions of the Tax Sharing
Agreement, the Separation and Distribution Agreement, the Transitional Services
Agreement or any documentation governing the Continuing Obligations, except to
the extent that any such amendment, supplement or modification could not
reasonably be expected to have a Material Adverse Effect.
6.17 Subordinated Notes. On or before July 7, 2000, in the
case of ANC Financial, LP, fail to assume all of the obligations and the
liabilities of Alamo Rent-A-Car, LLC, under the Subordinated Notes, pursuant to
documentation reasonably satisfactory to the Administrative Agent.
6.18 Further Assurances. (a) Within 30 days after the Initial
Funding Date, fail to deliver to the Administrative Agent the agreements or
other documents set forth in Section A of Schedule 6.18.
-71-
77
(b) Within 60 days after the Initial Funding Date, fail to
deliver to the Administrative Agent, or cause to be filed, duly completed UCC
termination statements, signed by the relevant secured party, in respect of each
UCC Financing Statement listed in Section A of Schedule 3.19(a)-3.
(c) Fail to use their respective best efforts to deliver (i)
the agreements or other documents set forth in Section B of Schedule 6.18 or
(ii) or cause to be filed, duly completed UCC termination statements, signed by
the relevant secured party, in respect of each UCC Financing Statement listed in
Section B of Schedule 3.19(a)-3.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan
when due in accordance with the terms hereof; or the Borrower shall
fail to pay any interest on any Loan, or any other amount payable
hereunder or under any other Loan Document, within five days after any
such interest or other amount becomes due in accordance with the terms
hereof or thereof; or
(b) Any representation or warranty made or deemed made by any
Loan Party herein or in any other Loan Document or that is contained in
any certificate, document or financial or other statement furnished by
it at any time under or in connection with this Agreement or any such
other Loan Document shall prove to have been inaccurate in any material
respect on or as of the date made or deemed made or furnished; or
(c) (i) Any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section
5.4(a) (with respect to the Borrower only), Section 5.7(a) or Section
6, or in Section 5 of the Guarantee and Collateral Agreement or (ii) an
"Event of Default" under and as defined in any Mortgage shall have
occurred and be continuing; or
(d) Any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any
other Loan Document (other than as provided in paragraphs (a) through
(c) of this Section), and such default shall continue unremedied for a
period of 30 days; or
(e) The Borrower or any of its Subsidiaries shall (i) default
in making any payment of any principal of any Indebtedness (including,
without limitation, any Guarantee Obligation, but excluding the Loans)
on the scheduled or original due date with respect thereto; or (ii)
default in making any payment of any interest on any such Indebtedness
beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created; or (iii) default
in the observance or
-72-
78
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or beneficiary of
such Indebtedness (or a trustee or agent on behalf of such holder or
beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or to become
subject to any mandatory offer to purchase by the obligor thereunder
or (in the case of any such Indebtedness constituting a Guarantee
Obligation) to become payable; provided, that a default, event or
condition described in clause (i), (ii) or (iii) of this paragraph
(e) shall not at any time constitute an Event of Default unless, at
such time, one or more defaults, events or conditions of the type
described in clauses (i), (ii) and (iii) of this paragraph (e) shall
have occurred and be continuing with respect to Indebtedness the
outstanding principal amount of which exceeds in the aggregate
$5,000,000; or
(f) (i) The Borrower or any of its Subsidiaries 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, conservator or other similar official for
it or for all or any substantial part of its assets, or the Borrower or
any of its Subsidiaries shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against the Borrower
or any of its Subsidiaries any case, proceeding or other action of a
nature referred to in clause (i) above that (A) results in the entry of
an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days;
or (iii) there shall be commenced against the Borrower or any of its
Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against
all or any substantial part of its assets that results in the entry of
an order for any such relief that shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) the Borrower or any of its Subsidiaries 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 Borrower or any of its
Subsidiaries shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts as they become due; or
(g) (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 Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan, or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Borrower or any Commonly Controlled
Entity, (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 Single
-73-
79
Employer Plan, which Reportable Event or commencement of proceedings
or appointment of a trustee is, in the reasonable opinion of the
Required Lenders, likely to result in the termination of such Plan
for purposes of Title IV of ERISA, (iv) any Single Employer Plan
shall terminate for purposes of Title IV of ERISA, (v) the Borrower
or any Commonly Controlled Entity shall, or in the reasonable
opinion of the Required Lenders shall be likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, a Multiemployer Plan or (vi) any other event or
condition shall occur or exist with respect to a Plan; 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
reasonably be expected to have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries involving for the Borrower and
its Subsidiaries taken as a whole a liability (not paid or fully
covered by insurance as to which the relevant insurance company has
acknowledged coverage) of $5,000,000 or more, and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded
pending appeal within 30 days from the entry thereof; or
(i) Any of the Security Documents shall cease, for any reason
(other than by reason of the express release thereof pursuant to
Section 9.15), to be in full force and effect, or any Loan Party or any
Affiliate of any Loan Party shall so assert, or any Lien created by any
of the Security Documents shall cease to be enforceable and of the same
effect and priority purported to be created thereby; or
(j) (i) The guarantee contained in Section 2 of the Guarantee
and Collateral Agreement shall cease, for any reason (other than by
reason of the express release thereof pursuant to Section 9.15), to be
in full force and effect or any Loan Party or any Affiliate of any Loan
Party shall so assert; or (ii) the subordination provisions applicable
to the AutoNation Subordinated Debt shall cease for any reason to be in
effect, or AutoNation, any Loan Party or any Affiliate of any Loan
Party shall so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Revolving Credit Commitments shall immediately terminate and
the Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents shall immediately become due
and payable, and (B) if such event is any other Event of Default, either or both
of the following actions may be taken: (i) with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrower declare the
Revolving Credit Commitments to be terminated forthwith, whereupon the Revolving
Credit Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts
-74-
80
owing under this Agreement and the other Loan Documents to be due and payable
forthwith, whereupon the same shall immediately become due and payable.
SECTION 8. THE AGENTS
8.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Agents as the agents of such Lender under this Agreement and the
other Loan Documents, and each Lender irrevocably authorizes each Agent, in such
capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Agent shall have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against any Agent.
8.2 Delegation of Duties. Each Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
8.3 Exculpatory Provisions. Neither any Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except to the extent that any of the foregoing are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Loan Party or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agents under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or for any failure
of any Loan Party to perform its obligations hereunder or thereunder. The Agents
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of any Loan Party.
8.4 Reliance by Agents. Each Agent shall be entitled to rely,
and shall be fully protected in relying, upon any instrument, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other
-75-
81
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the Loan
Parties), independent accountants and other experts selected by such Agent. The
Agents may deem and treat the payee of any Note as the owner thereof for all
purposes unless such Note shall have been transferred in accordance with Section
9.6 and all actions required by such Section in connection with such transfer
shall have been taken. Each Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the Required Lenders
(or, if so specified by this Agreement, all Lenders or any other instructing
group of Lenders specified by this Agreement) as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Required Lenders (or,
if so specified by this Agreement, all Lenders or any other instructing group of
Lenders specified by this Agreement), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.
8.5 Notice of Default. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless such Agent shall have received notice from a Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent shall receive such a notice, the Administrative Agent
shall give notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders or any other instructing group of Lenders specified by
this Agreement); provided that unless and until the Administrative Agent shall
have received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
8.6 Non-Reliance on Agents and Other Lenders. Each Lender
expressly acknowledges that neither any of the Agents nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
any Agent hereafter taken, including any review of the affairs of a Loan Party
or any affiliate of a Loan Party, shall be deemed to constitute any
representation or warranty by any Agent to any Lender. Each Lender represents to
the Agents that it has, independently and without reliance upon any Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon any Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own
-76-
82
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Administrative Agent hereunder, no Agent
shall have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of any Loan Party or any
affiliate of a Loan Party that may come into the possession of such Agent or any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates.
8.7 Indemnification. The Lenders agree to indemnify each Agent
in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Revolving Credit Commitments shall have terminated
and the Loans shall have been paid in full, ratably in accordance with such
Aggregate Exposure Percentages immediately prior to such date), for, and to save
each Agent harmless from and against, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever that may at any time (including, without
limitation, at any time following the payment of the Loans) be imposed on,
incurred by or asserted against such Agent in any way relating to or arising out
of, the Revolving Credit Commitments, this Agreement, any of the other Loan
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by such Agent under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements that are found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted from such Agent's gross
negligence or willful misconduct. The agreements in this Section shall survive
the payment of the Loans and all other amounts payable hereunder.
8.8 Agent in Its Individual Capacity. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent were not an Agent.
With respect to its Loans made or renewed by it, each Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though it were not an Agent, and the terms
"Lender" and "Lenders" shall include each Agent in its individual capacity.
8.9 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 10 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among
-77-
83
the Lenders a successor agent for the Lenders, which successor agent shall
(unless an Event of Default shall have occurred and be continuing) be subject to
approval by the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term "Administrative Agent" shall
mean such successor agent effective upon such appointment and approval, and the
former Administrative Agent's rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective, and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. The Syndication Agent may, at any time, by notice
to the Lenders and the Administrative Agent, resign as Syndication Agent
hereunder, whereupon the duties, rights, obligations and responsibilities of the
Syndication Agent hereunder shall automatically be assumed by, and inure to the
benefit of, the Administrative Agent, without any further act by the Syndication
Agent, the Administrative Agent or any Lender. After any retiring Agent's
resignation as Agent, the provisions of this Section 8 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement and the other Loan Documents.
8.10 Authorization to Release Liens and Guarantees. The
Administrative Agent is hereby irrevocably authorized by each of the Lenders to
effect any release of Liens or guarantee obligations contemplated by Section
9.15.
8.11 The Arranger. The Arranger shall have no duties or
responsibilities, and shall incur no liability, under this Agreement and the
other Loan Documents.
-78-
84
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement or any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 9.1. The Required Lenders and each Loan Party to the relevant Loan
Document may, or (with the written consent of the Required Lenders) the Agents
and each Loan Party to the relevant Loan Document may, from time to time, (a)
enter into written amendments, supplements or modifications hereto and to the
other Loan Documents (including amendments and restatements hereof or thereof)
for the purpose of adding any provisions to this Agreement or the other Loan
Documents or changing in any manner the rights of the Lenders or of the Loan
Parties hereunder or thereunder or (b) waive, on such terms and conditions as
may be specified in the instrument of waiver, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall:
(i) forgive the principal amount or extend the final
scheduled date of maturity of any Loan, reduce the stated rate of any
interest or fee payable hereunder or extend the scheduled date of any
payment owing by the Borrower hereunder, or increase the amount or
extend the expiration date of any Commitment of any Lender, in each
case without the consent of each Lender directly affected thereby;
(ii) amend, modify or waive any provision of this Section
or amend any percentage specified in the definition of Required
Lenders, consent to the assignment or transfer by the Borrower of any
of its rights and obligations under this Agreement and the other Loan
Documents, release all or substantially all of the Collateral (except
as otherwise expressly required hereunder or under the other Loan
Documents) or release all or substantially all of the Subsidiary
Guarantors from their guarantee obligations under the Guarantee and
Collateral Agreement, in each case without the consent of all Lenders;
(iii) amend, modify or waive any provision of Section 8
without the consent of any Agent directly affected thereby; or
(iv) amend, modify or waive any provision of Section 2.14
without the consent of each Lender directly affected thereby.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Agents and all future holders of the Loans. In the case of any
waiver, the Loan Parties, the Lenders and the Agents shall be restored to their
former position and rights hereunder and under the other Loan 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. Any such waiver,
amendment, supplement or modification shall be effected by a written instrument
signed by the parties required to sign
-79-
85
pursuant to the foregoing provisions of this Section; provided, that delivery of
an executed signature page of any such instrument by facsimile transmission
shall be effective as delivery of a manually executed counterpart thereof.
For the avoidance of doubt, this Agreement and any other Loan
Document may be amended (or amended and restated) with the written consent of
the Required Lenders, the Administrative Agent and each Loan Party to each
relevant Loan Document (x) to add one or more additional credit facilities to
this Agreement and the accrued interest and fees in respect thereof
(collectively, the "Additional Loans") to share ratably in the benefits of this
Agreement and the other Loan Documents with the Loans and the accrued interest
and fees in respect thereof and (y) to include appropriately the lenders holding
such credit facilities in any determination of the Required Lenders.
9.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed (a) in the case of the Borrower and the Agents, as follows
and (b) in the case of the Lenders, as set forth in an administrative
questionnaire delivered to the Administrative Agent or on Schedule I to the
Lender Addendum to which such Lender is a party or, in the case of a Lender
which becomes a party to this Agreement pursuant to an Assignment and
Acceptance, in such Assignment and Acceptance or (c) in the case of any party,
to such other address as such party may hereafter notify to the other parties
hereto:
The Borrower: ANC Rental Corporation
000 Xxxxx Xxxxxxx Xxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxx Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Syndication Agent and
Administrative Agent: Xxxxxx Commercial Paper Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
provided that any notice, request or demand to or upon the any Agent or any
Lender shall not be effective until received.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of any Agent or any Lender, any
-80-
86
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
9.4 Survival of Representations and Warranties. All
representations and warranties made herein, in the other Loan Documents and in
any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.
9.5 Payment of Expenses. The Borrower agrees (a) to pay or
reimburse the Agents for all their reasonable out-of-pocket costs and expenses
incurred in connection with the syndication of the Revolving Credit Facility
(other than fees payable to syndicate members) and the development, preparation
and execution of, and any amendment, supplement or modification to, this
Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements and other charges of counsel to the
Administrative Agent and fees relating to the use of Intralinks in respect of
this Agreement and the other Loan Documents, (b) to pay or reimburse each Lender
and the Agents for all their costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the other Loan
Documents and any other documents prepared in connection herewith or therewith,
including, without limitation, the fees and disbursements of counsel to each
Lender and of counsel to the Agents, (c) to pay, indemnify, or reimburse each
Lender and the Agents for, and hold each Lender and the Agents harmless from,
any and all recording and filing fees 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 of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, and (d) to pay, indemnify or reimburse
each Lender, each Agent, their respective affiliates, and their respective
officers, directors, trustees, employees, advisors, agents and controlling
persons (each, an "Indemnitee") for, and hold each Indemnitee 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 this Agreement, the other Loan Documents and
any such other documents, including, without limitation, any of the foregoing
relating to the use of proceeds of the Loans or the violation of, noncompliance
with or liability under, any Environmental Law applicable to the operations of
the Borrower or any of its Subsidiaries or any of their respective Properties
and the reasonable fees and disbursements and other charges of legal counsel in
connection with claims, actions or proceedings by any Indemnitee against the
Borrower hereunder (all the foregoing in this clause (d), collectively, the
"Indemnified
-81-
87
Liabilities"), provided, that the Borrower shall have no obligation hereunder to
any Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnitee. Subject to the foregoing proviso, and to
the extent permitted by applicable law, the Borrower agrees not to assert and to
cause its Subsidiaries not to assert, and hereby waives and agrees to cause its
Subsidiaries so to waive, all rights for contribution or any other rights of
recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, (x) under
or related to Environmental Laws or (y) arising from the use by unauthorized
Persons of information or other materials sent through electronic,
telecommunications or other information transmission systems that are
intercepted by such Persons or for any special, indirect, consequential or
punitive damages in connection with the Facilities, that any of them might have
by statute or otherwise against any Indemnitee. All amounts due under this
Section shall be payable not later than 30 days after written demand therefor.
Statements payable by the Borrower pursuant to this Section shall be submitted
to Xxx Xxxxxx (Telephone No. (000) 000-0000) (Fax No. (000) 000-0000), at the
address of the Borrower set forth in Section 9.2, or to such other Person or
address as may be hereafter designated by the Borrower in a notice to the
Administrative Agent. The agreements in this Section shall survive repayment of
the Loans and all other amounts payable hereunder.
9.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Agents, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Agents and each Lender.
(b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "Participant") participating interests
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes under this Agreement and the other Loan Documents, and the
Borrower and the Agents shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents. In no event shall any Participant under
any such participation have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by any Loan
Party therefrom, except to the extent that such amendment, waiver or consent
would require the consent of all Lenders pursuant to Section 9.1. The Borrower
agrees that if amounts outstanding under this Agreement and the Loans are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law,
-82-
88
be deemed to have the right of setoff in respect of its participating interest
in amounts owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement, provided that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 9.7(a) as fully as if such Participant
were a Lender hereunder. The Borrower also agrees that each Participant shall be
entitled to the benefits of Sections 2.15, 2.16 and 2.17 with respect to its
participation in the Revolving Credit Commitments and the Loans outstanding from
time to time as if such Participant were a Lender; provided that, in the case of
Section 2.16, such Participant shall have complied with the requirements of said
Section, and provided, further, that no Participant shall be entitled to receive
any greater amount pursuant to any such Section than the transferor Lender would
have been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.
(c) Any Lender (an "Assignor") may, in accordance with
applicable law and upon written notice to the Agents, at any time and from time
to time assign to any Lender or any affiliate or Control Investment Affiliate
thereof or, with the consent of the Borrower and the Agents (which, in each
case, shall not be unreasonably withheld or delayed) (provided that no such
consent need be obtained by any Xxxxxx Entity for a period of 180 days following
the Closing Date), to an additional bank, financial institution or other entity
(an "Assignee") all or any part of its rights and obligations under this
Agreement pursuant to an Assignment and Acceptance, substantially in the form of
Exhibit C, executed by such Assignee and such Assignor (and, where the consent
of the Borrower or the Administrative Agent is required pursuant to the
foregoing provisions, by the Borrower and such other Persons) and delivered to
the Administrative Agent for acceptance and recording by the Administrative
Agent in the Register; provided that no such assignment to an Assignee (other
than any Lender or any affiliate thereof) shall be in an aggregate principal
amount of less than $1,000,000 (other than in the case of an assignment of all
of a Lender=s interests under this Agreement), unless otherwise agreed by the
Borrower and the Agents. Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder with the Revolving Credit Commitments
and/or Loans as set forth therein, and (y) the Assignor thereunder shall, to the
extent provided in such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of an Assignor's rights and obligations under this
Agreement, such Assignor shall cease to be a party hereto, except as to Section
2.15, 2.16 and 9.5 in respect of the period prior to such effective date).
Notwithstanding any provision of this Section, the consent of the Borrower shall
not be required for any assignment that occurs at any time when any Event of
Default shall have occurred and be continuing.
(d) The Administrative Agent shall, on behalf of the Borrower,
maintain at its address referred to in Section 9.2 a copy of each Assignment and
Acceptance delivered to it and a register (the "Register") for the recordation
of the names and addresses of the Lenders and the
-83-
89
Commitment of, and principal amount of the Loans owing to, each Lender from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, each Agent and the Lenders shall treat each
Person whose name is recorded in the Register as the owner of the Loans and any
Notes evidencing such Loans recorded therein for all purposes of this Agreement.
Any assignment of any Loan, whether or not evidenced by a Note, shall be
effective only upon appropriate entries with respect thereto being made in the
Register (and each Note shall expressly so provide). Any assignment or transfer
of all or part of a Loan evidenced by a Note shall be registered on the Register
only upon surrender for registration of assignment or transfer of the Note
evidencing such Loan, accompanied by a duly executed Assignment and Acceptance;
thereupon one or more new Notes in the same aggregate principal amount shall be
issued to the designated Assignee, and the old Notes shall be returned by the
Administrative Agent to the Borrower marked "canceled." The Register shall be
available for inspection by the Borrower or any Lender (with respect to any
entry relating to such Lender's Loans) at any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an Assignor and an Assignee (and, in any case where the consent of any other
Person is required by Section 9.6(c), by each such other Person) together with
payment to the Administrative Agent of a registration and processing fee of
$3,500 (except that no such registration and processing fee shall be payable (y)
in connection with an assignment by or to a Xxxxxx Entity or (z) in the case of
an Assignee which is already a Lender or is an affiliate of a Lender or a Person
under common management with a Lender), the Administrative Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) on the effective date
determined pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the Borrower. On
or prior to such effective date, the Borrower, at its own expense, upon request,
shall execute and deliver to the Administrative Agent (in exchange for the Note
of the assigning Lender) a new Note to the order of such Assignee in an amount
equal to the Commitment assumed or acquired by it pursuant to such Assignment
and Acceptance and, if the Assignor has retained a Commitment upon request, a
new Note to the order of the Assignor in an amount equal to the Commitment
retained by it hereunder. Such new Note or Notes shall be dated the Closing Date
and shall otherwise be in the form of the Note or Notes replaced thereby.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section concerning assignments of Loans
and Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests in Loans and Notes, including,
without limitation, any pledge or assignment by a Lender of any Loan or Note to
any Federal Reserve Bank in accordance with applicable law.
9.7 Adjustments; Set-off. (a) If any Lender (a "Benefitted
Lender") shall at any time receive any payment of all or part of the Obligations
owing to it, or receive any collateral in respect thereof (whether voluntarily
or involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 7(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Obligations, such Benefitted Lender shall purchase for
cash from the other Lenders a participating interest in such portion of each
such other Lender's
-84-
90
Obligations, or shall provide such other Lenders with the benefits of any such
collateral, as shall be necessary to cause such Benefitted Lender to share the
excess payment or benefits of such collateral ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise), to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such setoff and application.
9.8 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. Delivery of an executed signature page of this
Agreement or of a Lender Addendum by facsimile transmission shall be effective
as delivery of a manually executed counterpart hereof. A set of the copies of
this Agreement signed by all the parties shall be lodged with the Borrower and
the Administrative Agent.
9.9 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.10 Integration. This Agreement and the other Loan Documents
represent the entire agreement of the Borrower, the Agents, the Arranger and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Arranger, any Agent
or any Lender relative to subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
-85-
91
9.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts
from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower at its address set forth in Section 9.2 or at
such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
9.13 Acknowledgments. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Arranger, any Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between the Arranger, the Agents and the Lenders,
on one hand, and the Borrower, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Arranger, the Agents and the Lenders or
among, the Borrower and the Lenders.
-86-
92
9.14 Confidentiality. Each of the Agents and the Lenders
agrees to keep confidential all non-public information provided to it by any
Loan Party pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent any Agent or any Lender
from disclosing any such information (a) to the Arranger, any Agent, any other
Lender or any affiliate of any thereof, (b) to any Participant or Assignee
(each, a "Transferee") or prospective Transferee that agrees to comply with the
provisions of this Section, (c) to any of its employees, directors, agents,
attorneys, accountants and other professional advisors, (d) to any financial
institution that is a direct or indirect contractual counterparty in swap
agreements or such contractual counterparty's professional advisor (so long as
such contractual counterparty or professional advisor to such contractual
counterparty agrees to be bound by the provisions of this Section), (e) upon the
request or demand of any Governmental Authority having jurisdiction over it, (f)
in response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law, (g) in connection with
any litigation or similar proceeding, (h) that has been publicly disclosed other
than in breach of this Section, (i) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender's investment portfolio
in connection with ratings issued with respect to such Lender or (j) in
connection with the exercise of any remedy hereunder or under any other Loan
Document.
9.15 Release of Collateral and Guarantee Obligations.
(a) Notwithstanding anything to the contrary contained herein
or in any other Loan Document, upon request of the Borrower in connection with
any Disposition of Property permitted by the Loan Documents, the Administrative
Agent shall (without notice to, or vote or consent of, any Lender, or any
affiliate of any Lender that is a party to any Specified Hedge Agreement) take
such actions as shall be required to release its security interest in any
Collateral being Disposed of in such Disposition, and to release any guarantee
obligations under any Loan Document of any Person being Disposed of in such
Disposition, to the extent necessary to permit consummation of such Disposition
in accordance with the Loan Documents.
(b) Notwithstanding anything to the contrary contained herein
or any other Loan Document, when all Obligations (other than obligations in
respect of any Specified Hedge Agreement) have been paid in full and all
Revolving Credit Commitments have terminated or expired, upon request of the
Borrower, the Administrative Agent shall (without notice to, or vote or consent
of, any Lender, or any affiliate of any Lender that is a party to any Specified
Hedge Agreement) take such actions as shall be required to release its security
interest in all Collateral, and to release all guarantee obligations under any
Loan Document, whether or not on the date of such release there may be
outstanding Obligations in respect of Specified Hedge Agreements. Any such
release of guarantee obligations shall be deemed subject to the provision that
such guarantee obligations shall be reinstated if after such release any portion
of any payment in respect of the Obligations guaranteed thereby shall be
rescinded or must otherwise be restored or returned upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the
-87-
93
Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payment had not been made.
9.16 Accounting Changes. In the event that any "Accounting
Change" (as defined below) shall occur and such change results in a change in
the method of calculation of financial covenants, standards or terms in this
Agreement, then the Borrower may, by notice to the Agents, request that such
provisions of this Agreement be interpreted so as to equitably reflect such
Accounting Change with the desired result that the criteria for evaluating the
Borrower's financial condition shall be the same after such Accounting Change as
if such Accounting Change had not been made. Until such time as such notice
shall have been delivered by the Borrower, all financial covenants, standards
and terms in this Agreement shall continue to be calculated or construed as if
such Accounting Change had not occurred. "Accounting Change" refers to any
change in accounting principles required by the promulgation of any rule,
regulation, pronouncement or opinion by the Financial Accounting Standards Board
of the American Institute of Certified Public Accountants or, if applicable, the
SEC.
9.17 Delivery of Lender Addenda. Each initial Lender shall
become a party to this Agreement by delivering to the Administrative Agent a
Lender Addendum duly executed by such Lender, the Borrower and the
Administrative Agent.
9.18 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.
-88-
94
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
ANC RENTAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President and Treasurer
XXXXXX BROTHERS INC.,
as Arranger
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Authorized Signatory
XXXXXX COMMERCIAL PAPER INC., as
Syndication Agent and as Administrative
Agent
By: /s/ G. Xxxxxx Xxxxx
--------------------------------------
Name: G. Xxxxxx Xxxxx
Title: Authorized Signatory
-89-
