EXHIBIT 10.(Z)
LIMITED WAIVER AND
THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS LIMITED WAIVER AND THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT (this
"AMENDMENT") is made and entered into as of the 26th day of May, 2000, by and
among XXXXXX AUTOMOTIVE GROUP, INC., a Louisiana corporation ("BORROWER"), with
its principal place of business at 0000 X. Xxx Xxxxxxx Xxxxxxx X., Xxxxx 000,
Xxxxxxx, Xxxxx 00000, the financial institution(s) listed on the signature pages
hereof or which may become parties hereto and their respective successors and
assigns (each individually a "LENDER" and collectively "LENDERS") and XXXXXX
FINANCIAL, INC., a Delaware corporation (in its individual capacity, "XXXXXX",
and as Agent for itself and the Lenders, the "AGENT"), with offices at 000 Xxxx
Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, for itself as a Lender and as Agent.
RECITALS
A. Borrower, Agent and Lenders have entered into that certain Loan and
Security Agreement (the "ORIGINAL AGREEMENT"), dated as of March 10, 1999, as
amended by that certain First Amendment to Loan and Security Agreement, dated as
of April 27, 1999, ( the "FIRST AMENDMENT"), and that certain Second Amendment
to Loan and Security Agreement, dated as of January 17, 2000 (the "SECOND
AMENDMENT", together with the Original Agreement and the First Amendment, the
"LOAN AGREEMENT").
B. Borrower, Agent and Lenders, desire to amend the Loan Agreement, as
hereinafter set forth, subject to the terms and conditions set forth herein
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, intending to be legally bound, agree as
follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Amendment are defined in the Loan
Agreement, as amended hereby, unless otherwise stated.
ARTICLE II
AMENDMENT
2.01 AMENDMENT TO SUBSECTION 2.1(B)(2). Effective as of the date hereof,
SUBSECTION 2.1(B)(2) of the Loan Agreement is hereby amended and restated in its
entirety to read as follows:
"(2) `Borrowing Base' means, as of any date of determination,
an amount equal to the sum of (a) 85% of Eligible Accounts PLUS (b)
the lesser of (i) $24,000,000, until August 31, 2000, and
thereafter, $22,000,000, and (ii) the Applicable Inventory Advance
Rate and LESS in each case such reserves as Agent in its reasonable
discretion may elect to establish. As used herein, `Applicable
Inventory Advance Rate' means as of the date hereof 56% of the net
amounts of Eligible Inventory."
2.02 AMENDMENT TO SUBSECTION 2.2(A). Effective as of the date hereof,
SUBSECTION 2.2(A) of the Loan Agreement is hereby amended and restated in its
entirely to read as follows:
"(A) RATE OF INTEREST. The Loans and all other Obligations
shall bear interest from the date such Loans are made or such other
Obligations become due to the date paid at a rate per annum equal to
(i) in the case of Base Rate Loans and Obligations for which no
other interest rate is specified, the Base Rate plus the Applicable
Base Rate Margin,
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and (ii) in the case of LIBOR Loans, LIBOR plus the Applicable LIBOR
Margin (collectively the "Interest Rate"). Notwithstanding any other
provision of this Agreement, until a LIBOR Availability Event has
occurred, all Loans hereunder shall be Base Rate Loans, PROVIDED
however that any LIBOR Loans outstanding as of the Third Amendment
Effective Date shall remain LIBOR Loans until the end of the
applicable Interest Period, at which time they shall automatically
convert to Base Rate Loans. Subject to the provisions of SUBSECTION
2.1(D), Borrower shall designate to Agent whether a Loan shall be a
Base Rate Loan or, if available, a LIBOR Rate Loan at the time a
Notice of Borrowing is given pursuant to SUBSECTION 2.1(D). Such
designation by Borrower may be changed from time to time pursuant to
SUBSECTION 2.2(D). If on any day a Loan or a portion of any Loan is
outstanding with respect to which notice has not been delivered to
Agent in accordance with the terms of this Agreement specifying the
basis for determining the rate of interest or if LIBOR has been
specified and no LIBOR quote is available, then for that day that
Loan or portion thereof shall bear interest determined by reference
to the Base Rate.
After the occurrence and during the continuance of an Event of
Default (i) the Loans and all other Obligations shall, at the option
of Requisite Lenders, bear interest at a rate per annum equal to 2%
plus the applicable Interest Rate (the "Default Rate"), (ii) each
LIBOR Loan shall automatically convert to a Base Rate Loan at the
end of any applicable Interest Period and (iii) no Loans may be
converted to LIBOR Loans."
2.03 AMENDMENT TO SUBSECTION 2.2(D). Effective as of the date hereof, the
first sentence of SUBSECTION 2.2(D) of the Loan Agreement (and only such
sentence) is hereby amended and restated in its entirely to read as follows:
"Subject to the provisions of this SUBSECTION 2.2(D), and
subject to the prior occurrence of a LIBOR Availability Event,
Borrower shall have the option to (1) convert at any time all or any
part of outstanding Loans equal to $500,000 and integral multiples
of $100,000 in excess of that amount from Base Rate Loans to LIBOR
Loans or (2) upon the expiration of any Interest Period applicable
to a LIBOR Loan, to (a) continue all or any portion of such LIBOR
Loan equal to $500,000 and integral multiplies of $100,000 in excess
of that amount as a LIBOR Loan or (b) convert all or any portion of
such LIBOR Loan to a Base Rate Loan."
2.04 AMENDMENT TO SUBSECTION 2.3(C). Effective as of the date hereof,
SUBSECTION 2.3(C) of the Loan Agreement is hereby amended and restated to read
in its entirety as follows:
"(C) PREPAYMENT FEES. If Borrower voluntarily prepays the
Obligations in full or, in the case of any voluntary prepayment of
the Term Loans, in part (other than voluntary prepayments of the
Revolving Loan which do not terminate the Revolving Loan
Commitment), Borrower, at the time of prepayment, shall pay to Agent
for the benefit of Lenders, as compensation for the costs of being
prepared to make funds available to Borrower under this Agreement,
and not as a penalty, an amount determined by multiplying the
percentage set forth below by (1) in the case of a prepayment in
full of the Obligations, the sum of the Term Loans at the date of
such prepayment plus the amount of the Revolving Loan Commitment, or
(2) in the case of a prepayment of the Term Loans only, in whole or
in part, the amount of such prepayment: 1% upon a prepayment during
any Loan Year, provided, however, that no such amount shall be
payable (a) with respect to a prepayment made during the fourth or
fifth Loan Years, if and only if such prepayment is made from the
proceeds of a secondary public offering of the capital stock of
Borrower, or (b) with respect to a prepayment of the Term Loans that
is a condition to the consummation of a Capital Event approved by
Requisite Lenders, unless the Revolving Loan Commitment is
terminated in connection therewith."
2.05 AMENDMENT TO SECTION 4. Effective as of the date hereof, SECTION 4 of
the Loan Agreement is hereby amended by inserting the following new SUBSECTION
4.27 at the end thereof:
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"4.27 PRINCIPAL PLACE OF BUSINESS. Borrower's principal
place of business is at 0000 X. Xxx Xxxxxxx Xxxxxxx X., Xxxxx 000,
Xxxxxxx, Xxxxx 00000."
2.06. AMENDMENT TO SECTION 5. Effective as of the date hereof, SECTION 5
of the Loan Agreement shall be hereby amended by inserting the following new
SUBSECTION 5.10 at the end thereof:
"5.10 CRISIS CONSULTANT. Borrower shall engage a crisis
consultant acceptable to Agent in its reasonable discretion, to
advise and consult with the Borrower regarding the operation of the
Borrower's cash management and accounts payable systems, and to
undertake such other efforts as may be described in the engagement
agreement with such consultant (which shall be in scope and on terms
and conditions acceptable to Agent in its reasonable discretion), on
or before (a) July 15, 2000, if a Letter of Intent has not been
obtained by the Borrower on or before June 30, 2000, or (b) August
7, 2000, if a Letter of Intent has been obtained on or before June
30, 2000 but the Capital Event contemplated thereby has not been
consummated on or before July 31, 2000. If Borrower fails to retain
such consultant as aforesaid, Agent may elect to do so. Borrower
agrees to cooperate fully with any such consultant, including
meeting with and providing information to any such consultant, and
granting such consultant access to Borrower's personnel (whom
Borrower shall authorize and instruct to discuss any of Borrower's
affairs with such consultant), books, records and accounting and
other systems. Borrower consents to Agent and Lenders providing
financial and other information of Borrower to any such consultant.
Borrower further agrees to pay all fees, costs and expenses in
connection with the foregoing."
2.07 AMENDMENT TO SUBSECTION 10.3. Effective as of the date hereof,
SUBSECTION 10.3 of the Loan Agreement shall be amended and restated in its
entirety to read as follows:
"10.3 NOTICES. Unless otherwise specifically provided herein,
all notices shall be in writing addressed to the respective party as
set forth below and may be personally served, telecopied or sent by
overnight courier service or United States mail and shall be deemed
to have been given: (a) if delivered in person, when delivered; (b)
if delivered by telecopy, on the date of transmission if transmitted
on a Business Day before 4:00 p.m. Chicago time or, if not, on the
next succeeding Business Day; (c) if delivered by overnight courier,
two days after delivery to such courier properly addressed; or (d)
if by U.S. Mail, four Business Days after depositing in the United
States mail, with postage prepaid and properly addressed.
If to Borrower: XXXXXX AUTOMOTIVE GROUP, INC.
0000 X. Xxx Xxxxxxx Xxxxxxx X., Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
With a copy to: Xxxxx Xxxxxx, Esq.
Mayor, Day, Xxxxxxxx & Xxxxxx, LLP
000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telecopy No.: (000) 000-0000
If to Agent or
to Xxxxxx: XXXXXX FINANCIAL, INC.
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx, 00000
Attn: Corporate Finance/ Account Executive
for Xxxxxx Automotive
Telecopy No.: (000) 000-0000
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With a copy to: XXXXXX FINANCIAL, INC.
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Legal Department/Corporate Finance
Telecopy No.: (000) 000-0000
If to any Lender: Its address indicated on the signature page
hereto, in an Assignment and Assumption Agreement or in a notice to
Agent and Borrower or to such other address as the party addressed
shall have previously designated by written notice to the serving
party, given in accordance with this SUBSECTION 10.3.
A party may change its address for the receipt of notice, for
all purposes set forth in this SUBSECTION 10.3, by providing written
notice to all parties to this Agreement in accordance with this
SUBSECTION 10.3."
2.08. AMENDMENTS TO SUBSECTION 11.1. (a) Effective as of the date hereof,
SUBSECTION 11.1 of the Loan Agreement is hereby amended by adding the following
new definitions thereto, in proper alphabetical order:
"`Applicable Base Rate Margin' means, for any Base Rate Loan,
the per annum interest rate margin from time to time in effect and
payable in addition to the Base Rate, applicable to such Loan (i) as
set forth below:
------------------------------------------- ------------------------------------
APPLICABLE BASE RATE
LOAN MARGIN
------------------------------------------- ------------------------------------
Revolving Loan and
other Obligations for
which no other
interest rate is
specified 1.00%
------------------------------------------- ------------------------------------
Term Loan A-1 and 1.50%
Term Loan A-2
------------------------------------------- ------------------------------------
Term Loan B 1.75%
------------------------------------------- ------------------------------------
Or (ii) with respect to any period for which the ratio of Borrower's
Indebtedness to Borrower's Tangible Net Worth (on a consolidated
basis) exceeds the ratio set forth below for such period, the
applicable percentage set forth below for such Loan:
--------------------------------------------------------------------------------
APPLICABLE BASE RATE MARGIN FOR:
-------------------------------------------
REVOLVING LOAN
AND OTHER
MAXIMUM OBLIGATIONS FOR
INDEBTEDNESS WHICH NO OTHER TERM LOAN
TO TANGIBLE INTEREST RATE A-1 AND TERM
PERIOD NET WORTH RATIO IS SPECIFIED LOAN A-2 TERM LOAN B
------ --------------- ------------ -------- -----------
June 30, 2000
through
July 30, 2000 4.00:1 1.25% 1.75% 2.00%
July 31, 2000
through
August 31, 2000 4:00:1 1.50% 2.00% 2.25%
August 31, 2000
and thereafter 4:00:1 1.75% 2.25% 2.50%"
"`Applicable LIBOR Margin' means, for any LIBOR Loan, the per
annum interest rate margin from time to time in effect and payable
in addition to LIBOR, applicable to such Loan, as set forth below:
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------------------------------------------- ------------------------------------
APPLICABLE LIBOR
LOAN MARGIN
------------------------------------------- ------------------------------------
Revolving Loan and
other Obligations for
which no other
interest rate is
specified 3.00%
------------------------------------------- ------------------------------------
Term Loan A-1 and 3.50%
Term Loan A-2
------------------------------------------- ------------------------------------
Term Loan B 3.75%"
------------------------------------------- ------------------------------------
"`Capital Event' means one or more transactions resulting, in the
aggregate, in the infusion of not less than $5,000,000 of new
capital into Borrower, or the prepayment of not less than $5,000,000
of the Obligations from the proceeds of new Indebtedness issued by
Borrower or the sales of assets of Borrower, in any case in form and
structure, and on terms and conditions, reasonably acceptable to
Agent and Requisite Lenders."
"`Letter of Intent' means a binding written commitment of a third
party (whether in the form of a letter of intent, commitment letter
or otherwise) to consummate a Capital Event, in form and substance,
and subject to only such qualifications and conditions, reasonably
acceptable to Agent and Requisite Lenders."
"`LIBOR Availability Event' means the ratio of Borrower's
Indebtedness to Borrower's Tangible Net Worth (on a consolidated
basis) being less than 4.0:1."
"`Third Amendment Effective Date' shall mean May 26, 2000."
(b) Effective as of the date hereof, SUBSECTION 11.1 of the Loan Agreement
is hereby further amended by deleting from said subsection the definition of
"REVOLVING LOAN COMMITMENT" and inserting the following in lieu thereof:
"`Revolving Loan Commitment' means (a) as to any Lender, the
commitment of such Lender to make Revolving Advances pursuant to
SUBSECTION 2.1(B), and to purchase participations in Lender Letters
of Credit pursuant to SUBSECTION 2.1(H) in the aggregate amount set
forth below for such Lender or in the most recent Assignment and
Assumption Agreement, if any, executed by such Lender and (b) as to
all Lenders, the aggregate commitment of all Lenders to make
Revolving Advances and to purchase participations in Lender Letters
of Credit.
-------------------------------------- -----------------------------------------
LENDER REVOLVING LOAN COMMITMENT
-------------------------------------- -----------------------------------------
Xxxxxx Financial, Inc. $16,680,000
-------------------------------------- -----------------------------------------
Finova Capital Corporation $3,330,000
-------------------------------------- -----------------------------------------
Bank One, Texas N.A. $9,990,000
-------------------------------------- -----------------------------------------
Total $30,000,000"
-------------------------------------- -----------------------------------------
2.09 AMENDMENT TO FINANCIAL COVENANT RIDER. Effective as of the date
hereof, the Financial Covenant Rider to the Loan Agreement shall be amended and
restated in its entirety to read as set forth on ANNEX I hereto.
ARTICLE III
CONDITIONS PRECEDENT
The effectiveness of this Amendment is subject to the satisfaction of the
following conditions precedent, unless specifically waived in writing by Agent
and each Lender:
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(a) Agent and each Lender shall have received the following, in form
and substance satisfactory to Agent and each Lender (unless waived or the
satisfaction delayed by Agent in writing):
(i) this Amendment, duly executed by Borrower and Lenders;
(ii) company general certificate certified by the Secretary or
Assistant Secretary of Borrower acknowledging (A) that Borrower's
Board of Directors met prior to or on the date hereof and at that
time adopted, approved, consented to and ratified resolutions which
authorize the execution and delivery by such Borrower of this
Amendment, and (B) the names of the officers of Borrower authorized
to sign this Amendment together with specimen signatures of such
officers;
(iii) a copy of the resolutions of Borrower authorizing (A)
the execution, delivery and performance of this Amendment, and (B)
the consummation of the transactions contemplated by this Amendment,
all certified by the Secretary or Assistant Secretary of such
Borrower; and
(iv) amendments to the UCC financing statements filed in favor
of Agent, reflecting the address of Borrower's current principal
place of business, in proper form for filing in the appropriate
jurisdictions and duly executed by Borrower; and
(v) such additional documents, instruments and information as
Agent or any Lender or their respective legal counsel may reasonably
request.
(b) The representations and warranties contained herein, in the Loan
Agreement, as amended hereby, and in the other Loan Documents, shall be
true and correct as of the date hereof, as if made on the date hereof.
(c) No Default or Event of Default shall have occurred and be
continuing which Agent shall not have waived in writing.
(d) All corporate proceedings taken in connection with the
transactions contemplated by this Amendment and all documents, instruments
and other legal matters incident thereto shall be satisfactory to Agent,
each Lender, and their respective legal counsel.
(e) Borrower shall have paid to Agent, for the ratable benefit of
Lenders, an amendment fee equal to .25% of the sum of (i) the outstanding
principal balance of the Term Loans as of the date hereof, PLUS and (ii)
the Revolving Loan Commitments of all Lenders (after giving effect to this
Amendment), which fee shall be fully earned and nonrefundable upon
execution of this Amendment.
ARTICLE IV
LIMITED WAIVER
Upon satisfaction of the terms and conditions in ARTICLE III hereof, Agent
and each Lender hereby waive each Event of Default that occurred solely as a
result of (i) the violation of the covenants contained in the Financial
Covenants Rider for the Fiscal Quarter of the Borrower ended on or about
February 25, 2000, or (ii) the violation of the covenants set forth in
PARAGRAPHS A and B of the Financial Covenants Rider for the month ended March
31, 2000.
The Borrower is hereby notified that irrespective of (i) any waivers
previously granted by Agent and Lenders regarding the Loan Agreement and the
Loan Documents, (ii) any previous failures or delays of Agent and/or Lenders in
exercising any right, power or privilege under the Loan Agreement or the Loan
Documents, or (iii) any previous failures or delays of Agent and/or Lenders in
the monitoring or in the requiring of compliance by the Borrower with the
duties, obligations, and agreements of the Borrower in the Loan Agreement and
the Loan Documents, hereafter the Borrower will be expected to comply strictly
with its duties, obligations and agreements under the Loan Agreement and the
Loan Documents.
53
Except as expressly provided above, nothing contained in this Amendment or
any other communication between Agent and/or Lenders and the Borrower shall be a
waiver of any past, present or future violation, default or Event of Default of
the Borrower under the Loan Agreement or any Loan Documents. Similarly, Agent
and Lenders hereby expressly reserve any rights, privileges and remedies under
the Loan Agreement and each Loan Document that Agent and Lenders may have with
respect to each violation, default or Event of Default, and any failure by Agent
and/or Lenders to exercise any right, privilege or remedy as a result of the
violations set forth above shall not directly or indirectly in any way
whatsoever either (i) impair, prejudice or otherwise adversely affect the rights
of Agent and/or Lenders, except as set forth herein, at any time to exercise any
right, privilege or remedy in connection with the Loan Agreement or any Loan
Documents, (ii) amend or alter any provision of the Loan Agreement or any Loan
Documents or any other contract or instrument, or (iii) constitute any course of
dealing or other basis for altering any obligation of the Borrower or any
rights, privilege or remedy of Agent and/or Lenders under the Loan Agreement or
any Loan Documents or any other contract or instrument. Nothing in this
Amendment shall be construed to be a consent by Agent and/or Lenders to any
prior, existing or future violations of the Loan Agreement or any Loan Document.
ARTICLE V
RATIFICATIONS, REPRESENTATIONS AND WARRANTIES
5.01 RATIFICATIONS. The terms and provisions set forth in this Amendment
shall modify and supersede all inconsistent terms and provisions set forth in
the Loan Agreement and the other Loan Documents, and, except as expressly
modified and superseded by this Amendment, the terms and provisions of the Loan
Agreement and the other Loan Documents are ratified and confirmed and shall
continue in full force and effect. Borrower and Agent and each Lender agree that
the Loan Agreement and the other Loan Documents, as amended hereby, shall
continue to be legal, valid, binding and enforceable in accordance with their
respective terms.
5.02 REPRESENTATIONS, WARRANTIES AND AGREEMENTS. Borrower hereby
represents and warrants to Agent and each Lender that (a) the execution,
delivery and performance of this Amendment and any and all other Loan Documents
executed and/or delivered in connection herewith have been authorized by all
requisite corporate action on the part of Borrower and will not violate the
Articles of Incorporation or Bylaws of Borrower; (b) the representations and
warranties contained in the Loan Agreement, as amended hereby, and any other
Loan Documents, as amended hereby (including this Amendment), are true and
correct on and as of the date hereof and on and as of the date of execution
hereof as though made on and as of each such date (except to the extent such
representations and warranties expressly relate to an earlier date, in which
case such representations and warranties shall have been true and correct as of
such earlier date); (c) no Default or Event of Default under the Loan Agreement,
as amended hereby, has occurred and is continuing unless waived in writing by
Agent and Lenders (including the waiver set forth herein); and (d) Borrower is
in full compliance with all covenants and agreements contained in the Loan
Agreement and the other Loan Documents, as amended hereby.
5.03. ACKNOWLEDGEMENT REGARDING REPORTING REQUIREMENTS. Without limiting
the foregoing, Borrower expressly acknowledges that the Reporting Rider to the
Loan Agreement requires, among other things, that Borrower deliver its monthly
financial statements not later than 30 days after the end of each month
(including any month that contains the end of a Fiscal Quarter), along with a
Compliance Certificate (all as more particularly described in the Reporting
Rider), and Borrower hereby reaffirms its agreement to comply with such
requirements. Borrower acknowledges that Lenders are relying on such
reaffirmation in agreeing to the amendments and waivers set forth herein.
54
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made in the Loan Agreement or any other Loan Documents, including,
without limitation, any document furnished in connection with this Amendment,
shall survive the execution and delivery of this Amendment and the other Loan
Documents, and no investigation by Agent or any Lender or any closing shall
affect the representations and warranties or the right of Agent or any Lender to
rely upon them.
6.02 REFERENCE TO LOAN AGREEMENT. Each of the Loan Agreement and the other
Loan Documents (including this Amendment), and any and all other agreements,
documents or instruments now or hereafter executed and delivered pursuant to the
terms hereof or pursuant to the terms of the Loan Agreement, as amended hereby,
are hereby amended (unless the context clearly requires otherwise) so that any
reference in the Loan Agreement and such other Loan Documents to the Loan
Agreement shall mean a reference to the Loan Agreement as amended hereby.
6.03 EXPENSES OF AGENT AND LENDERS. As provided in the Loan Agreement,
Borrower agrees to pay on demand; and hereby authorizes and confirms Agent's
right to make a Loan under the Loan Agreement to pay when due, all costs and
expenses incurred by Agent or any Lender in connection with the preparation,
negotiation and execution of this Amendment executed pursuant hereto and any and
all amendments, modifications, and supplements thereto, including, without
limitation, the costs and fees of Agent's and any Lender's legal counsel, and
all costs and expenses incurred by Agent and each Lender in connection with the
enforcement or preservation of any rights under the Loan Agreement, as amended
hereby, or any other Loan Documents, including, without, limitation, the costs
and fees of Agent's and each Lender's legal counsel.
6.04 SEVERABILITY. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
6.05 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and shall
inure to the benefit of Agent and each Lender and Borrower and their respective
successors and assigns, except that Borrower may not assign or transfer any of
their rights or obligations hereunder without the prior written consent of Agent
and Lenders.
6.06 COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.
6.07 EFFECT OF WAIVER. No consent or waiver, express or implied, by Agent
or any Lender to or for any breach of or deviation from any covenant or
condition by Borrower shall be deemed a consent to or waiver of any other breach
of the same or any other covenant, condition or duty.
6.08 HEADINGS. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
6.09 APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED
PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN AND
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
ILLINOIS.
6.10 FINAL AGREEMENT. THE LOAN AGREEMENT, AS AMENDED HEREBY, AND THE OTHER
LOAN DOCUMENTS REPRESENT THE ENTIRE EXPRESSION OF THE PARTIES WITH RESPECT TO
THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS EXECUTED. NEITHER THE
LOAN AGREEMENT AS AMENDED HEREBY NOR THE OTHER LOAN DOCUMENTS, MAY BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NO
MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY PROVISION OF THIS
AMENDMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY BORROWER AND
AGENT AND EACH LENDER.
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6.11 RELEASE. BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE,
COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE
WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS
LIABILITY TO REPAY THE "INDEBTEDNESS" OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES
OF ANY KIND OR NATURE FROM AGENT OR ANY LENDER. BORROWER HEREBY VOLUNTARILY AND
KNOWINGLY RELEASES AND FOREVER DISCHARGES AGENT AND EACH LENDER, THEIR
RESPECTIVE PREDECESSORS, OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, SUCCESSORS AND
ASSIGNS, FROM ALL CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS,
EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR
UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT
LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS
AMENDMENT IS EXECUTED, WHICH THE BORROWER MAY NOW, OR REASONABLY EXPECT
HEREAFTER TO, HAVE AGAINST AGENT AND EACH LENDER, THEIR RESPECTIVE PREDECESSORS,
OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, AND
IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION
OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM ANY "LOANS", INCLUDING,
WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING
OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE
EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE LOAN AGREEMENT OR OTHER LOAN
DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, this Amendment has been executed and is effective as
of the date first written above.
BORROWER: LENDERS:
XXXXXX AUTOMOTIVE GROUP, INC. XXXXXX FINANCIAL, INC., AS AGENT AND
A LENDER
By: /S/ XXXXXXX X. XXXXXX By: /S/ XXXXX X. X'XXXXX
Name: XXXXXXX X. XXXXXX Name XXXXX X. X'XXXXX
Title: CHAIRMAN, CEO Title: SENIOR VICE PRESIDENT
FEIN: 00-0000000
FINOVA CAPITAL CORPORATION
By: /S/ XXXXXX X. XXXXXXX
Name: XXXXXX X. XXXXXXX
Title: DIRECTOR, SYNDICATION
FINANCIAL
BANK ONE, TEXAS, N.A.
By: /S/ X.X. XXXX, XX.
Name: X.X. XXXX, XX.
Title: FIRST VICE PRESIDENT
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ANNEX I
FINANCIAL COVENANTS RIDER
This Financial Covenants Rider is attached and made a part of that certain Loan
and Security Agreement, dated as of March 10th, 1999 and entered into among
Borrower, Agent & Lenders, as amended (the "Loan Agreement").
For purposes of the covenants set forth herein, if Borrower closes its
books for any month on a day other than the last day of such month, then such
covenants may be tested on the date such books were closed.
A. TANGIBLE NET WORTH. Borrower shall maintain a Tangible Net Worth of at
least the amount set forth below as of the last day of the corresponding month
set forth below:
MONTH ENDING AMOUNT
------------ ------
May 31, 2000 $4,970,000.00
June 30, 2000 $5,460,000.00
July 31, 2000 $5,960,000.00
August 31, 2000 $6,370,000.00
September 30, 2000 $6,650,000.00
October 31, 2000 $6,900,000.00
November 30, 2000 $7,090,000.00
December 31, 2000 $7,250,000.00
January 31, 2001 $7,465,000.00
February 28, 2001 $7,675,000.00
March 31, 2001 and monthly Increases by $1,000,000
thereafter each fiscal quarter
B. RATIO OF INDEBTEDNESS TO TANGIBLE NET WORTH. Borrower shall not permit
the ratio of (a) Borrower's Indebtedness, on a consolidated basis, to (b)
Borrower's Tangible Net Worth (the "Indebtedness to Tangible Net Worth Ratio"),
as of the last day of any month set forth below to be greater than the ratio set
forth below for such month:
MONTH ENDING RATIO
------------ -----
May 31, 2000 6.70:1
June 30, 2000 6.10:1
July 31, 2000 5.45:1
August 31, 2000 5.00:1
September 30, 2000 4.60:1
October 31, 2000 4.40:1
November 30, 2000 4.10:1
December 31, 2000 4.00:1
January 31, 2001 3.90:1
February 28, 2001 3.75:1
March 31, 2001 and monthly Decreases by .25 each
thereafter fiscal quarter, but shall
not be less than 2.00:1
C. CAPITAL EXPENDITURE LIMITS. The aggregate amount of all Capital
Expenditures, Capital Leases with respect to fixed assets of Borrower and its
Subsidiaries (which shall be considered to be expended in full on the date such
Capital Lease is entered into), excluding the Capital Lease for a new computer
system as described in SUBSECTION 7.1(D) of the Loan Agreement, and other
contracts with respect to fixed assets initially capitalized on Borrower's or
any Subsidiary's balance sheet prepared in accordance with GAAP (which shall be
considered to be expended in full on the date such contract is entered into)
(excluding, in each case, expenditures for trade-ins and replacement of assets
to the extent funded with casualty insurance proceeds) will not exceed
$200,000.00 per Fiscal Year. The permitted $200,000.00 for any one Fiscal Year
not made in any Fiscal Year may be carried over for one
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year only to the next Fiscal Year provided, however, any carried-over amount
will be deemed used only after all otherwise permitted amounts for that Fiscal
Year have been used.
D. FIXED CHARGE COVERAGE. Borrower shall not permit its Fixed Charge
Coverage (calculated on a trailing twelve month basis) as of the last day of any
month set forth below to be less than the amount set forth below for such month:
MONTH ENDING FIXED CHARGE COVERAGE
------------ ---------------------
May 31, 2000 0.59
June 30, 2000 0.59
July 31, 2000 0.65
August 31, 2000 0.70
September 30, 2000 0.75
October 31, 2000 0.80
November 30, 2000 0.80
December 31, 2000 0.90
January 31, 2001 0.99
February 28, 2001 1.10
March 31, 2001 and monthly Increases by .05 each
thereafter fiscal quarter
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