REVOLVING CREDIT AGREEMENT
Dated as of March 23, 2005
Among
Xxxxxx Automotive Group, Inc.
The Subsidiary Borrowers Listed Herein,
As Borrowers
The Lenders Listed Herein
JPMorgan Chase Bank, N.A.,
As Administrative Agent and
As Floor Plan Agent
and
Bank of America, N.A.,
As Syndication Agent
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X.X. Xxxxxx Securities Inc. Banc of America Securities LLC
As Joint Bookrunners and Co-Lead Arrangers
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ARTICLE I. CERTAIN DEFINED TERMS, ACCOUNTING TERMS AND CONSTRUCTION............1
Section 1.1 Certain Defined Terms......................................1
Section 1.2 Accounting Terms..........................................22
Section 1.3 Interpretation............................................22
ARTICLE II. THE FLOOR PLAN LOANS..............................................23
Section 2.1 Floor Plan Loan Commitments...............................23
Section 2.2 Floor Plan Loans Generally................................23
Section 2.3 Floor Plan Borrowing Procedure............................24
Section 2.4 Floor Plan Adjustment Date Mechanics......................26
Section 2.5 Payments; Application of Payments.........................27
Section 2.6 Issuance of Drafting Agreements...........................28
Section 2.7 Conditions to Execution of Drafting Agreements............28
Section 2.8 Notice of Issuance of or Entering into
Manufacturers Drafting Letters............................29
Section 2.9 Drafts Under Manufacturer's Drafting Letters..............29
Section 2.10 Obligations Absolute......................................30
Section 2.11 Dealer Access System......................................31
ARTICLE III. REVOLVING CREDIT LOANS...........................................31
Section 3.1 Revolving Credit Loan Commitments.........................31
Section 3.2 Revolving Credit Loans....................................31
Section 3.3 Notice of Revolving Credit Loan Borrowings and
Borrowing Procedures......................................32
Section 3.4 Reserve Commitment; Suspension of Revolving Credit Loan...33
Section 3.5 Obligations Absolute......................................33
ARTICLE IV. SWING LINE LOANS..................................................33
Section 4.1 Swing Line Commitments and Payments.......................33
Section 4.2 Accrual of Interest; Margin Adjustments...................34
Section 4.3 Requests for Swing Line Loans.............................34
Section 4.4 Disbursement of Swing Line Loans..........................35
Section 4.5 Refunding of and Participation Interest in Swing
Line Loans................................................35
ARTICLE V. ALL LOANS..........................................................37
Section 5.1 Notes: Repayment of Loans.................................37
Section 5.2 Interest on Loans.........................................37
Section 5.3 Interest on Overdue Amounts...............................38
Section 5.4 Fees......................................................38
Section 5.5 Termination, Reduction or Conversion of Commitments.......39
Section 5.6 Alternate Rate of Interest................................40
Section 5.7 Prepayment of Loans; Mandatory Reduction of Indebtedness..41
Section 5.8 Reserve Requirements; Change in Circumstances.............41
Section 5.9 Change in Legality........................................43
Section 5.10 Breakage Costs and Related Matters........................43
Section 5.11 Pro Rata Treatment........................................44
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Section 5.12 Place of Payments.........................................44
Section 5.13 Sharing of Setoffs........................................45
Section 5.14 Payments Free of Taxes....................................45
Section 5.15 Applicable Interest Rate..................................48
Section 5.16 Extension of Maturity Date................................49
Section 5.17 Replacement Lenders.......................................50
Section 5.18 Increase of Commitments...................................51
ARTICLE VI. LETTERS OF CREDIT.................................................52
Section 6.1 General...................................................52
Section 6.2 Issuance, Amendment and Renewal of Letters of Credit......53
Section 6.3 Risk Participations, Drawings and Reimbursements..........54
Section 6.4 Repayment of Participation................................56
Section 6.5 Role of the Issuing Bank..................................56
Section 6.6 Obligations Absolute......................................57
Section 6.7 Letter of Credit Fees.....................................58
Section 6.8 Cash Collateralization....................................58
ARTICLE VII. REPRESENTATIONS AND WARRANTIES...................................59
Section 7.1 Organization; Corporate Powers............................59
Section 7.2 Authorization.............................................59
Section 7.3 Governmental Approval.....................................60
Section 7.4 Enforceability............................................60
Section 7.5 Financial Statements......................................60
Section 7.6 No Material Adverse Change................................60
Section 7.7 Title to Properties; Security Documents...................60
Section 7.8 Litigation; Compliance with Laws; Etc.....................61
Section 7.9 No Default................................................61
Section 7.10 Use of Proceeds/Federal Reserve Regulations...............61
Section 7.11 Taxes.....................................................61
Section 7.12 Pension and Welfare Plans.................................62
Section 7.13 No Material Misstatements.................................62
Section 7.14 Investment Company Act; Public Utility Holding
Company Act...............................................62
Section 7.15 Maintenance of Insurance..................................62
Section 7.16 Existing Liens............................................62
Section 7.17 Environmental Matters.....................................63
Section 7.18 Subsidiaries..............................................63
Section 7.19 Engaged in Business of Motor Vehicle Sales and
Related Businesses........................................64
Section 7.20 Franchise Agreements......................................64
ARTICLE VIII. CONDITIONS OF LENDING...........................................64
Section 8.1 Conditions Precedent to Closing Date......................64
Section 8.2 Conditions Precedent to Initial Borrowings................66
Section 8.3 Conditions Precedent to Each Borrowing....................67
Section 8.4 Conditions Precedent to Conversions and Continuations.....68
ARTICLE IX. AFFIRMATIVE COVENANTS.............................................69
Section 9.1 Existence.................................................69
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Section 9.2 Repair....................................................69
Section 9.3 Insurance.................................................69
Section 9.4 Obligations and Taxes.....................................70
Section 9.5 Financial Statements; Reports.............................70
Section 9.6 Litigation and Other Notices..............................71
Section 9.7 ERISA.....................................................72
Section 9.8 Books, Records and Access.................................72
Section 9.9 Use of Proceeds...........................................72
Section 9.10 Nature of Business........................................73
Section 9.11 Compliance................................................73
Section 9.12 Audits....................................................73
Section 9.13 Demonstrators and Rental Motor Vehicles; Title
Documents.................................................73
Section 9.14 Cash Management System....................................73
Section 9.15 Further Assurances........................................74
Section 9.16 Permitted Acquisitions....................................74
Section 9.17 Title Documents...........................................74
Section 9.18 Additional Subsidiaries...................................75
Section 9.19 Updated Control Agreements................................76
Section 9.20 Final Lien Releases; Termination of Security Interests....76
ARTICLE X. NEGATIVE COVENANTS.................................................76
Section 10.1 Indebtedness..............................................76
Section 10.2 Liens.....................................................79
Section 10.3 Consolidations and Mergers................................79
Section 10.4 Disposition of Assets.....................................80
Section 10.5 Investments...............................................81
Section 10.6 Transactions with Affiliates..............................82
Section 10.7 Other Agreements..........................................82
Section 10.8 Fiscal Year; Accounting...................................83
Section 10.9 Pension Plans.............................................82
Section 10.10 Restricted Payments and Distributions.....................82
Section 10.11 Adjusted Net Worth........................................83
Section 10.12 Fixed Charge Coverage Ratio...............................83
Section 10.13 Total Leverage Ratio......................................83
Section 10.14 Current Ratio.............................................83
Section 10.15 Deposit and Security Accounts.............................83
ARTICLE XI. EVENTS OF DEFAULT AND REMEDIES....................................83
Section 11.1 Revolving Credit Events of Default........................83
Section 11.2 Revolving Credit Remedies.................................85
Section 11.3 Floor Plan Events of Default..............................86
Section 11.4 Floor Plan Remedies.......................................88
Section 11.5 Overdrawing of Floor Plan Loans...........................89
Section 11.6 Application of Collateral.................................90
ARTICLE XII. THE AGENT, FLOOR PLAN AGENT AND THE COLLATERAL...................91
Section 12.1 Authorization and Action of the Agent; Funding
During Transition Period; Rights and Duties
Regarding Collateral, Priority of Distributions...........91
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Section 12.2 Agent's Reliance..........................................93
Section 12.3 Agent and Affiliates; JPMorgan Chase and Affiliates.......93
Section 12.4 Lenders' Indemnity of Agent...............................94
Section 12.5 Lender Credit Decision....................................95
Section 12.6 Resignation of Agent; Successor Agent.....................95
Section 12.7 Notice of Default.........................................95
Section 12.8 Authorization and Action of the Floor Plan Agent;
Quarterly Audits..........................................96
Section 12.9 Floor Plan Agent's Reliance...............................96
Section 12.10 Floor Plan Agent and Affiliates; JPMorgan Chase Bank,
N.A. and Affiliates.......................................97
Section 12.11 Floor Plan Agent's Indemnity..............................97
Section 12.12 Lender Credit Decision....................................98
Section 12.13 Resignation of Floor Plan Agent; Successor
Floor Plan Agent..........................................98
Section 12.14 Notice of Default.........................................99
Section 12.15 Syndication Agent.........................................99
ARTICLE XIII. MISCELLANEOUS...................................................99
Section 13.1 Notices, Etc..............................................99
Section 13.2 Survival of Agreement....................................101
Section 13.3 Successors and Assigns; Participations...................101
Section 13.4 Expenses of the Agents and Lenders; Indemnity............104
Section 13.5 Right of Setoff..........................................106
Section 13.6 Governing Law; Jurisdiction..............................106
Section 13.7 Waivers; Amendments......................................107
Section 13.8 Interest Rate Limitation.................................108
Section 13.9 Severability; Conflicts..................................108
Section 13.10 Counterparts.............................................108
Section 13.11 Binding Effect...........................................109
Section 13.12 Subsidiary Solvency Savings Clause.......................109
Section 13.13 Joint and Several Liability and Related Matters..........109
Section 13.14 Power of Attorney........................................110
Section 13.15 USA Patriot Act..........................................111
Section 13.16 Confidentiality..........................................111
Section 13.17 WAIVER OF JURY TRIAL.....................................111
Section 13.18 FINAL AGREEMENT OF THE PARTIES...........................112
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Exhibits:
EXHIBIT 1.1A FORM OF ADDENDUM AND JOINDER AGREEMENT TO REVOLVING CREDIT
AGREEMENT AND NOTE
EXHIBIT 1.1B FORM OF ADMINISTRATIVE QUESTIONNAIRE
EXHIBIT 1.1C FORM OF FLOOR PLAN PROMISSORY NOTE
EXHIBIT 1.1D FORM OF REQUEST FOR BORROWING (Floor Plan Loans/Swing Line
Loans)
EXHIBIT 1.1E FORM OF REQUEST FOR BORROWING (Revolving Credit Loans/Swing
Line Loans)
EXHIBIT 1.1F FORM OF REVOLVING CREDIT PROMISSORY NOTE
EXHIBIT 1.1G FORM OF SECURITY AGREEMENT
EXHIBIT 1.1H FORM OF SECURITY AGREEMENT (TOYOTA/LEXUS INVENTORY)
EXHIBIT 1.1I FORM OF SECURITY AGREEMENT (TOYOTA/LEXUS NON-INVENTORY)
EXHIBIT 1.1J FORM OF GUARANTY AGREEMENT
EXHIBIT 2.8 FORM OF NOTICE OF DRAFTING AGREEMENT
EXHIBIT 5.18(b) FORM OF NEW LENDER AGREEMENT
EXHIBIT 5.18(c) FORM OF COMMITMENT INCREASE AGREEMENT
EXHIBIT 8.1(f) FORM OF LEGAL OPINION [TO COME]
EXHIBIT 9.5(c) FORM OF COMPLIANCE CERTIFICATE
EXHIBIT 9.5(g) FORM OF AVAILABILITY ANALYSIS
EXHIBIT 9.18 FORM OF NEW ACQUISITION REPORT
EXHIBIT 13.3(b) FORM OF ASSIGNMENT AND ACCEPTANCE
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Schedules:
SCHEDULE 1.1(a) CONCENTRATION ACCOUNTS
SCHEDULE 1.1(b) LENDERS AND COMMITMENTS
SCHEDULE 1.1(c) PLATFORM ACCOUNTS
SCHEDULE 1.1(d) ENTITIES ENGAGED IN TRUCK OPERATIONS
SCHEDULE 1.1(e) PLATFORM SUBSIDIARIES
SCHEDULE 7.8(a) LITIGATION
SCHEDULE 7.16(g) EXISTING LIENS
SCHEDULE 7.18 SUBSIDIARIES
SCHEDULE 7.19 LOCATIONS OF INVENTORY
SCHEDULE 7.20 DEALER FRANCHISE AGREEMENTS
SCHEDULE 10.1(b) EXISTING INDEBTEDNESS
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THIS CREDIT AGREEMENT dated as of March 23, 2005, is entered into among
XXXXXX AUTOMOTIVE GROUP, INC., a Delaware corporation (the "Company"), each of
the Subsidiaries of the Company listed on the signature pages hereof and such
other Subsidiaries of the Company which hereafter may become parties to this
Agreement (the "Floor Plan Borrowers"; the Company and the Floor Plan Borrowers
are sometimes referred to herein as, individually, a "Borrower," and
collectively, the "Borrowers"), each of the lenders listed on the signature
pages hereof or that may become party hereto pursuant to Section 5.17 or Section
13.3 (the "Lenders"), JPMORGAN CHASE BANK, N.A., as Administrative Agent for the
Lenders (in such capacity, together with any successor in such capacity pursuant
to Section 12.6, the "Agent"), JPMORGAN CHASE BANK, N.A., as Floor Plan Agent
for the Lenders (in such capacity, together with any successor in such capacity
pursuant to Section 12.13, the "Floor Plan Agent"), and BANK OF AMERICA, N.A.,
as Syndication Agent.
R E C I T A L S
WHEREAS, the Company and each of the other Borrowers have requested the
Lenders, the Agent and the Floor Plan Agent to enter into this Credit Agreement
and extend the loans herein described, and said parties have agreed to do so
pursuant to the terms hereof;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE I.
CERTAIN DEFINED TERMS, ACCOUNTING TERMS AND CONSTRUCTION
Section 1.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"ABR Borrowing" means a Borrowing consisting of one or more Alternate
Base Rate Loans.
"Account" means any "account" as such term is defined in the UCC, now
or hereafter owned by the Company or any of its Subsidiaries , including rights
to payment for goods and services sold or leased, whether now in existence or
hereafter arising in the future.
"Addendum" means the form of Addendum and Joinder Agreement
substantially in the form of Exhibit 1.1A.
"Adjusted Net Worth" means, for any date of determination,
Stockholders' Equity minus (i) fifty percent (50%) of the Net Income of the
Company and its Subsidiaries on a consolidated basis (but only to the extent
such amount is positive) subsequent to December 31, 2003 and (ii) 100% of the
net proceeds (cash and non-cash) from the issuance of equity subsequent to
December 31, 2003, and plus, to the extent deducted from Stockholders' Equity
subsequent to December 31, 2003, the amount of any non-cash impairment charges
related to goodwill, other intangible or long-lived assets.
"Adjusted Total Indebtedness" means, for any date of determination, on
a consolidated basis, Indebtedness of the Company and its Subsidiaries, minus
Floor Plan Indebtedness.
1
"Administrative Questionnaire" means an Administrative Questionnaire in
the form of Exhibit 1.1B hereto, which each Lender shall complete and provide to
the Agent on or prior to the Closing Date or delivered by any new Lenders after
the Closing Date pursuant to Section 13.3.
"Affiliate" of any Person means any other Person who directly or
indirectly beneficially owns or controls five percent (5%) or more of the total
voting power of shares of capital stock of such Person having the right to vote
for directors under ordinary circumstances, any Person controlling, controlled
by or under common control with any such Person (within the meaning of Rule 405
under the Securities Act of 1933), and any director or executive officer of such
Person.
"Agency Fee(s)" has the meaning specified in Section 5.4(b).
"Agent" has the meaning specified in the introduction to this
Agreement.
"Agent's Letter" has the meaning specified in Section 5.4(b).
"Agreement" shall mean this Revolving Credit Agreement.
"Alternate Base Rate" means, for any day, a fluctuating rate per annum
(rounded upwards to the next highest one-eighth (?) of one percent (1%) if not
already an integral multiple of one-eighth (?) of one percent (1%)) equal to the
greater of (a) the Prime Rate in effect on such day, and (b) the Federal Funds
Effective Rate in effect on such day plus one-half (1/2) of one percent (1%).
"Prime Rate" means, for any day, the rate most recently announced by JPMorgan
Chase Bank, N.A., as its prime lending rate for unsecured commercial loans in
the U.S., as in effect from time to time, automatically fluctuating upward and
downward with and, at the time specified in each such announcement, without
notice to any Borrower or any other Person, which prime rate may not necessarily
represent the lowest or best rate actually charged to a customer. "Federal Funds
Effective Rate" shall mean, for any day, an interest rate per annum equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers on such
day, as published for such day (or, if such day is not a Business Day, for the
next preceding 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 such day on such transactions received by the Agent from
three federal funds brokers of recognized standing selected by it. Any change in
the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change in the
Prime Rate, or the Federal Funds Effective Rate, respectively.
"Alternate Base Rate Loan" means any Loan with respect to which the
Company shall have selected an interest rate based on the Alternate Base Rate in
accordance with the provisions of this Agreement.
"Applicable Lending Office" means, with respect to a Lender, such
Lender's Domestic Lending Office in the case of an Alternate Base Rate Loan and
such Lender's Eurodollar Lending Office in the case of a Eurodollar Loan.
"Applicable Margin" means, on any date, with respect to Eurodollar
Loans or Alternate Base Rate Loans that are Revolving Credit Loans, the
applicable percentages set forth below based upon the Total Leverage Ratio in
effect as of such date.
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Total Leverage Eurodollar Alternate Base Commitment
Ratio Margin Rate Margin Fee Rate
Level 1 x > 4.00 3.00% 1.50% .375%
Xxxxx 0 3.50 < x < 4.00 2.75% 1.25% .375%
-
Xxxxx 0 3.00 < x < 3.50 2.50% 1.00% .375%
-
Xxxxx 0 2.50 < x < 3.00 2.25% .75% .375%
-
Xxxxx 0 x < 2.50 2.00% .50% .375%
-
"Assignment and Acceptance" has the meaning specified in Section
13.3(b).
"Auto Dealer" means a Person engaged in the sale of New and/or Used
Motor Vehicles pursuant to a franchise or licensing agreement with a
Manufacturer and related operations.
"Availability Analysis" means the calculations required by Exhibit
9.5(g), which shall include a calculation of the Revolving Credit Loan Advance
Limit.
"Board" means the Board of Governors of the Federal Reserve System of
the United States.
"Book Value" means the net book value of an asset pursuant to GAAP.
"Borrower" or "Borrowers" has the meaning specified in the introduction
to this Agreement.
"Borrowing" means a Loan or a group of Loans of a single Type made by
the Lenders on a single date and as to which a single Interest Period is in
effect.
"Borrowing Date" means, with respect to each Borrowing, the Business
Day upon which the proceeds of such Borrowing are made available to any
Borrower.
"Business Day" means a day when the Agent and banking institutions
generally are open for business in New York, New York and in Houston, Texas, and
if the applicable Business Day relates to any Eurodollar Loan, a day on which
dealings are carried on in the London interbank market and commercial banks are
open for domestic or international business in London, England.
"Capital Lease" means any lease required to be accounted for as a
capital lease under GAAP.
"Cash Collateral Account" has the meaning specified in Section 6.8(a).
"Change of Control" means (i) the direct or indirect sale, transfer,
conveyance or other disposition, in one or a series of related transactions, of
(x) the voting stock in the Company, the result of which is that a Person other
than a Permitted Holder becomes the beneficial owner, directly or indirectly of
more than 50% of the voting stock of the Company, measured by voting power
rather than number of shares or (y) all or substantially all of the assets of
the Company, or (ii) a Change of Control as defined in the Indenture. As used
herein, "Permitted Holder" means those direct and indirect beneficial owners of
the voting stock of the Company as of the Closing Date. As used herein, voting
3
stock of any Person as of any date means the capital stock of such Person that
at such date is entitled to vote in the election of the Board of Directors of
such Person.
"Closing Date" means the Business Day on which all of the following
shall have occurred: (a) counterparts of this Agreement and all of the Loan
Documents shall have been executed and delivered by each Borrower, each Lender
and the Agent and (b) all of the other conditions set forth in Section 8.1 shall
have been satisfied or waived.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" means the collateral described in each of the Security
Documents.
"Commitment" means at any time (a) for each Lender, the sum of (i) such
Lender's Revolving Credit Loan Commitment plus (ii) such Lender's Floor Plan
Loan Commitment, each as in effect at such time; and (b) for the Swing Line
Bank, its obligation to make Swing Line Loans to the Company up to the amount of
the Revolver Swing Line Commitment and to the Floor Plan Borrowers up to the
amount of the Floor Plan Swing Line Commitment, as the same may be increased or
decreased pursuant to the provisions of Section 2.3(d)(ii), Section 3.4, Section
5.5 or Section 5.18.
"Commitment Fees" means, collectively, the Floor Plan Loan Commitment
Fees and the Revolving Credit Loan Commitment Fees as such terms are defined in
Section 5.4(a).
"Commitment Increase Agreement" has the meaning specified in Section
5.18(c).
"Commitment Increase Notice" has the meaning specified in Section
5.18(a).
"Communications" has the meaning specified in Section 13.1.
"Company" has the meaning specified in the introduction to this
Agreement.
"Concentration Accounts" means the bank accounts in the name of the
Company or one of its Subsidiaries and described on Schedule 1.1(a) hereto (as
such may be supplemented or changed from time to time), and into which bank
accounts the cash from the Floor Plan Borrower Dealership Accounts or the
Platform Accounts, as the case may be, is swept on a regular basis in accordance
with the Company's cash management system.
"Confidential Information Memorandum" means the Confidential
Information Memorandum dated December, 2004 furnished by X.X. Xxxxxx Securities
Inc. and Banc of America Securities LLC, as Joint Bookrunners and Co-Lead
Arrangers relating to the credit facilities evidenced by this Agreement.
"Consolidated EBITDA" means EBITDA of the Company and its Subsidiaries,
determined on a consolidated basis.
"Consolidated Pro Forma EBITDA" means the Pro Forma EBITDA of the
Company and its Subsidiaries, determined on a consolidated basis.
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"Current Ratio" means, as of any date of determination, for the Company
and its Subsidiaries on a consolidated basis, the ratio of (a) current assets as
of such date plus the then undrawn amounts of the Revolving Credit Loan Advance
Limit to (b) the sum of current liabilities plus (to the extent not otherwise
included in current liabilities) the then outstanding balance of all Floor Plan
Indebtedness as of such date.
"Curtailment Date" means (a) with respect to a New Motor Vehicle, three
hundred sixty-five (365) days from the date it is Deemed Floored, (b) with
respect to a Rental Motor Vehicle, three hundred sixty-five (365) days from the
date it is Deemed Floored, (c) with respect to a Demonstrator, the earlier of
(i) three hundred sixty-five (365) days from the date it is Deemed Floored and
(ii) the date that such Motor Vehicle no longer qualifies as a Demonstrator, and
(d) with respect to a Used Motor Vehicle, one hundred twenty (120) days from the
date it is Deemed Floored.
"Dealer Access System" has the meaning specified in Section 2.11.
"Dealer Franchise Agreement" has the meaning specified in Section 7.20.
"Dealer Location" means any physical site at which any Subsidiary of
the Company operates a Motor Vehicle dealership, repair or service facility.
"Deemed Floored" means with respect to a Motor Vehicle, the date a
Floor Plan Loan Borrowing is advanced by the Floor Plan Agent for such Motor
Vehicle.
"Default" means any event or condition which, with the lapse of time or
giving of notice or both, would constitute an Event of Default
"Demonstrator" means a Motor Vehicle that (i) has not been previously
titled (other than to a Floor Plan Borrower in accordance with applicable law),
(ii) is the current model year or last model year, (iii) has an odometer reading
of less than 7,500 miles and (iv) is designated by the applicable Auto Dealer as
such.
"Disposition" means the sale, lease, conveyance or other disposition of
property.
"Dollars" and the symbol "$" mean the lawful currency of the United
States of America.
"Domestic Lending Office" means, with respect to any Lender, the office
of such Lender specified as its "Domestic Lending Office" in its Administrative
Questionnaire or such other office as such Lender may hereafter designate from
time to time as its "Domestic Lending Office" by written notice to the Company
and the Agent.
"Draft" means a draft on a Floor Plan Borrower's account with the Floor
Plan Agent made by a Manufacturer in accordance with the terms of a Drafting
Agreement or in a form commonly used by the applicable Floor Plan Borrower.
"Drafting Agreement" means an agreement (whether or not issued in the
form of a letter of credit) by and among the Floor Plan Agent, a Floor Plan
Borrower and a Manufacturer, entered into for the account of a Floor Plan
Borrower (and in some cases acknowledged or countersigned by a Floor Plan
Borrower) under which a Manufacturer is entitled to submit Drafts to the Floor
5
Plan Agent (via ACH electronic transfer or otherwise) for payment of invoices
identifying one or more Motor Vehicles delivered or shipped to such Floor Plan
Borrower, on terms and conditions consistent with the usual customs and
practices in effect from time to time for the automobile industry.
"Earnings Available for Fixed Charges" means, for any period of
determination, an amount equal to (a) Consolidated EBITDA plus (b) lease
expenses of the Company and its Subsidiaries on a consolidated basis minus (c)
capital expenditures in an amount equal to $200,000 per year for each Dealer
Location from which a Floor Plan Borrower, Silo Borrower or other Subsidiary
engaged in Truck Operations, sells Motor Vehicles, determined on a consolidated
basis as reported in the annual audited and the quarterly unaudited financial
statements of the Company.
"EBITDA" means, for any Person, for any period, Net Income for such
period, plus, to the extent deducted in the determination of Net Income and
without duplication with items included in the adjustments under GAAP to Net
Income in the determination of net income, (a) provisions for income taxes, (b)
Interest Expense, other than Floor Plan Interest Expense, and (c) non-cash
income or charges, including depreciation and amortization expenses.
"Eligible Accounts" means the consolidated net value of all of the
Accounts of the Company and its Subsidiaries on which the Agent holds a
perfected, first priority Lien, each of which Accounts meet the following
criteria on the date of determination:
(a) such Account arises from: (i) the sale or lease of inventory and
such inventory has been shipped or delivered in conformity with any
contract therefor to the Person obligated on such Account or (ii) the
performance of services and such services have been fully rendered, in each
case, subject to non-material contests;
(b) such Account is owned by the Company or such Subsidiary free and
clear of all Liens or rights of others other than the Liens and rights of
the Agent under the Security Documents;
(c) except for amounts due from Manufacturers, the payment due date of
such Account (or portion of such Account to be included in Eligible
Accounts) is not more than ninety (90) days from the date of the original
invoice;
(d) such Account is evidenced by an invoice or other statement
rendered to the responsible Account debtor or by chattel paper in favor of
the Company or one of its Subsidiaries that is a Floor Plan Borrower;
(e) such Account is the valid obligation of the Account debtor,
enforceable in accordance with its terms and neither the Company nor any of
its Subsidiaries has received notice that such Account is subject to any
set-off, counterclaim, defense, allowance or adjustment or that there is a
dispute, objection or complaint by the Account debtor concerning its
liability for the Account, and the vehicle or other goods, the sale of
which gave rise to the Account, have not been returned, rejected, lost or
damaged;
(f) no notice of an Insolvency Proceeding with respect to the Account
debtor has been received by the Company or the applicable Subsidiary;
6
(g) such Account is denominated in Dollars and the relevant Account
debtor is domiciled in the United States;
(h) such Account together with all other Accounts due from any one
Account debtor, other than any Manufacturer, do not comprise more than
twenty percent (20%) of the aggregate Eligible Accounts, unless otherwise
approved in writing by the Required Lenders;
(i) no more than twenty percent (20%) of the Accounts from one Account
debtor are ineligible under subparagraph (c) above, in which case all
Accounts from such Account debtor shall be ineligible; and
(j) the Account is not due from an Affiliate, a Subsidiary of the
Company or any Subsidiary thereof or employee of any of the foregoing.
"Eligible Assignee" means (a) any Lender or any Affiliate of such
Lender other than an Affiliate of a Lender engaged in the business of automotive
dealerships; (b) a commercial bank organized under the laws of the United
States, or any state thereof, and having total assets in excess of one billion
Dollars ($1,000,000,000) and having deposits that are rated in either of the two
highest generic letter rating categories (without regard to subcategories) from
either Standard & Poor's Rating Services, a division of The XxXxxx-Xxxx
Companies, Inc. ("S&P") or Moody's Investor's Service, Inc. ("Moody's") or a
comparable nationally recognized national or international rating agency if S&P
and Moody's are not then rating such banks; (c) a commercial bank organized
under the laws of any other country which is a member of the OECD, or a
political subdivision of any such country, and having total assets in excess of
one billion Dollars ($1,000,000,000) or its equivalent in any other currency,
provided that such bank is acting through a branch located in the country in
which it is organized or another country which is also a member of the OECD; (d)
the central bank of any country which is a member of the OECD; (e) the finance
subsidiary of a Manufacturer; (f) a fund that engages in making, purchasing,
holding or investing in, inter alia, bank loans and similar credits in the
ordinary course of its business; or (g) any other Person approved by the Agent
and the Company (if such consent is required pursuant to Section 13.3) which
approval, in respect of the Company, shall not be unreasonably withheld.
"ERISA" means the Employee Retirement Income Security Act of 1974,
together with the regulations thereunder, in each case as in effect from time to
time. References to sections of ERISA shall be construed to also refer to any
successor sections.
"ERISA Affiliate" means any corporation, trade or business that is,
along with the Company, a member of a controlled group of corporations or a
controlled group of trades or businesses, as described in Sections 414(b) and
414(c), respectively, of the Code or Section 4001(a)(14) of ERISA.
"Eurodollar Borrowing" means a Borrowing comprised of one or more
Eurodollar Loans.
"Eurodollar Lending Office" means, with respect to each Lender, the
office of such Lender which such Lender has designated as its "Eurodollar
Lending Office" in its Administrative Questionnaire or such other office of such
Lender as such Lender may hereafter designate from time to time as its
"Eurodollar Lending Office" by notice to the Company and the Agent.
7
"Eurodollar Loan" means any Floor Plan Loan or any Loan with respect to
which the Company shall have selected an interest rate based on the LIBO Rate in
accordance with the provisions of this Agreement.
"Event of Default" means either a Floor Plan Event of Default or a
Revolving Credit Event of Default.
"Federal Funds Effective Rate" has the meaning specified in the
definition of "Alternate Base Rate."
"Fixed Charge Coverage Ratio" means the ratio of (a) Earnings Available
for Fixed Charges to (b) Fixed Charges.
"Fixed Charges" means, for any period of determination, the sum of (i)
Interest Expense minus interest paid on Floor Plan Indebtedness, (ii) scheduled
amortization of the principal portion of all funded Indebtedness, (iii) lease
expenses, and (iv) the cash portion of income taxes, in each case, for the
Company and its Subsidiaries, determined on a consolidated basis.
"Fleet Motor Vehicles" means one of a large group of New Motor Vehicles
sold to a Person (e.g., a rental car agency) which purchases significant volumes
of vehicles for short-term use.
"Floor Plan Adjustment Date" means the first Business Day of each
calendar month.
"Floor Plan Advance Limit" means (a) with respect to New Motor
Vehicles, Rental Motor Vehicles purchased from a Manufacturer with which the
purchasing Floor Plan Borrower has a signed Dealer Franchise Agreement and
Demonstrators, the wholesale purchase price invoiced by a Manufacturer to the
Floor Plan Borrower, and (b) with respect to Used Motor Vehicles and Rental
Motor Vehicles other than those described in (a) above, the Book Value of such
vehicles to such Floor Plan Borrower; provided, (i) with respect to Used Motor
Vehicles, the aggregate amount of Floor Plan Loans outstanding at any time may
not exceed an amount equal to seventy percent (70%) of the aggregate Book Value
of all Used Motor Vehicles owned by the Floor Plan Borrowers, and (ii) with
respect to Rental Motor Vehicles and Demonstrators, the aggregate amount of
Floor Plan Loans outstanding at any time may not exceed Twenty-Five Million and
No/100 Dollars ($25,000,000).
"Floor Plan Agent" has the meaning specified in the introduction to
this Agreement.
"Floor Plan Borrower" means any Wholly-Owned Subsidiary of the Company
(excluding any entity engaged in Truck Operations) that is an Auto Dealer party
to this Agreement, and has granted a first priority Lien to the Agent for the
benefit of the Lenders on certain of its property that is Collateral in
accordance with the Security Documents, subject only to Permitted Liens.
"Floor Plan Borrower Dealership Account" means, with respect to a Floor
Plan Borrower, the bank account of such Floor Plan Borrower into which are
deposited the proceeds paid to such Floor Plan Borrower from the sale, lease or
servicing of vehicles or spare parts.
"Floor Plan Event of Default" means the occurrence of one of the events
specified in Section 11.3.
8
"Floor Plan Indebtedness" means all secured Indebtedness of the Company
and its Subsidiaries incurred to finance Motor Vehicles.
"Floor Plan Interest Expense" means that component of the Company's
aggregate Interest Expense, determined on a consolidated basis, attributable to
Floor Plan Indebtedness.
"Floor Plan Lenders" shall mean all Lenders having a Floor Plan Loan
Commitment.
"Floor Plan Loan" has the meaning specified in Section 2.1.
"Floor Plan Loan Commitment" means for each Floor Plan Lender, its
obligation to make Floor Plan Loans to the Floor Plan Borrowers up to the amount
set forth opposite such Lender's name on Schedule 1.1(b) under the caption
"Floor Plan Loan Commitments" (as the same may be permanently terminated,
reduced or increased from time to time pursuant to the applicable provisions of
Section 2.3(d)(ii), Section 3.4, Section 5.5, Section 5.18 or Section 11.4 and
as such amount may be increased or decreased from time to time by an Assignment
and Acceptance pursuant to Section 5.17 or Section 13.3(b)).
"Floor Plan New Swing Rate" means, for a Borrowing, the rate of
interest per annum equal to the LIBO Rate in effect on the third Business Day of
the month in which such Borrowing is made plus 1.25%.
"Floor Plan Note" means each of the Notes substantially in the form of
Exhibit 1.1C, duly issued by the Floor Plan Borrowers to each Lender in the
aggregate principal face amount of such Lender's Floor Plan Loan Commitment.
"Floor Plan Swing Line Commitment" means, for the Swing Line Bank, its
obligation to make Swing Line Loans to the Floor Plan Borrowers in (i) any
amount requested by the Company (not to exceed the Total Floor Plan Loan
Commitments) to finance Motor Vehicles prior to the end of the Transition
Period, and, (ii) thereafter, in an amount not to exceed $75,000,000, as
determined by the Swing Line Bank in its sole discretion, provided, the Swing
Line Bank, in its sole discretion, for the purpose of funding intra-month
advances of Floor Plan Swing Line Loans to finance Motor Vehicles acquired
pursuant to a Permitted Acquisition, may waive said $75,000,000 limit for up to
thirty (30) days; provided further, the Swing Line Bank shall provide the Agent
and the Floor Plan Lenders notice of any increase in the Floor Plan Swing Line
Commitment under this clause (ii) immediately when made; and provided further,
subject to the provisions of Article IV, the Floor Plan Swing Line Commitment
shall be a part of the Floor Plan Loan Commitment rather than a separate,
independent commitment.
"Floor Plan Swing Line Loan" means a Floor Plan Loan made by the Swing
Line Bank to a Floor Plan Borrower under the Floor Plan Swing Line Commitment.
"Floor Plan Used Swing Rate" means, for a Borrowing, the rate of
interest per annum equal to the LIBO Rate in effect on the third Business Day of
the month in which such Borrowing is made plus 1.375%.
"Fronting Fees" has the meaning specified in Section 6.7(b).
9
"GAAP" means generally accepted accounting principles as in effect, as
of the applicable date of determination thereof, from time to time as set forth
in the opinions, statements and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and the
Financial Accounting Standards Board applied on a consistent basis.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of, or pertaining to,
government.
"Guarantee" by any Person means all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing, or in effect guaranteeing,
in any manner, directly or indirectly, any Indebtedness or other obligation of
any other Person (the "Primary Obligor"):
(a) to purchase such Indebtedness or obligation or any
property or assets constituting security therefor,
(b) (i) to advance or supply funds for the purchase or payment
of such Indebtedness or obligation or (ii) to maintain working capital
or other balance sheet condition or otherwise to maintain funds for the
purchase or payment of such Indebtedness or obligation,
(c) to lease property under a Capital Lease or any other
lease, the lessee under which is a Person other than the Company or
Wholly-Owned Subsidiary or to purchase securities or other property or
services primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of the Primary Obligor to
make payment of such Indebtedness or perform such obligation, or
(d) otherwise to assure the owner of such Indebtedness or such
obligation of the Primary Obligor against loss in respect thereof.
"Guarantor" means the Company and all Subsidiaries of the Company,
other than the Toyota/Lexus Floor Plan Borrowers, that are parties to the
Guaranty Agreement.
"Guaranty Agreement" means each Guaranty Agreement, substantially in
the form of Exhibit 1.1J, executed by the Guarantors (other than the
Toyota/Lexus Floor Plan Borrowers).
"Hedging Agreement" shall mean any interest rate or currency swap, rate
cap, rate floor, rate collar, forward agreement, or other exchange or rate
protection agreement entered into in the ordinary course of business for risk
prevention purposes and not for speculative purposes.
"Honor Date" has the meaning specified in Section 6.3(b).
10
"Indebtedness" of any Person means, without duplication:
(a) any obligation of such Person for borrowed money,
including any obligation of such Person evidenced by bonds, debentures,
notes, letter of credit reimbursement agreements or other similar debt
instruments,
(b) all obligations of such Person under conditional sale or
other title retention agreements relating to property purchased by such
Person, regardless of whether any personal liability exists in respect
thereof,
(c) any obligation of such Person for the deferred purchase
price of any property or services, regardless of whether any personal
liability exists in respect thereof,
(d) obligations in respect of Capital Leases of such Person,
(e) all Guarantees by such Person, provided however, that a
Guarantee will not be considered Indebtedness if the underlying
obligation secured by such Guarantee would not constitute Indebtedness
under this Agreement,
(f) any Indebtedness of another Person secured by a Lien on
any asset of such first Person, whether or not such Indebtedness is
assumed by such first Person,
(g) any Indebtedness consisting of preferred stock of a Person
having a mandatory redemption prior to the Maturity Date, and
(h) any cash liability with respect to Hedging Agreements.
For purposes of this definition, the term "Indebtedness" shall not
include the following direct and/ or contingent obligations: (i) credit
facilities providing immediate credit on deposited dealer drafts; (ii) check
guarantee letters for payment of sales tax, title, license and other taxes or
fees; and (iii) direct or contingent obligations for risk products associated
with the Company's depository, treasury, merchant processing and other similar
products and services incurred in the ordinary course of business
"Indemnitee" has the meaning specified in Section 13.4(b).
"Indenture" means the Indenture governing those certain $200,000,000,
8% Senior Subordinated Notes due 2014, issued by the Company, in the form as it
exists on the Closing Date.
"Insolvency Proceeding" means (a) any case, action or proceeding
relating to bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, winding-up or relief of debtors, or (b) any general assignment for
the benefit of creditors, composition, marshaling of assets for creditors, or
other similar arrangements in respect of its creditors generally or any
substantial portion of a Person's creditors, undertaken under federal law.
"Intercreditor Agreements" mean those certain intercreditor agreements,
reasonably satisfactory to the Agent, the Floor Plan Agent and the Required
Lenders, executed in connection herewith between the Agent and certain parties
providing (i) Permitted New Vehicle Floor Plan Indebtedness to Silo Borrowers,
11
(ii) Indebtedness described in Section 10.1(p) and (iii) floor plan financing to
entities engaged in Truck Operations.
"Interest Expense" means, for any Person, determined on a consolidated
basis, the sum of all interest on Indebtedness paid or payable (including the
portion of rents payable under Capital Leases allocable to interest, but
excluding interest allowances from Manufacturers) plus all original issue
discount and other interest expense associated with Indebtedness amortized or
required to be amortized in accordance with GAAP.
"Interest Payment Date" means, (a) with respect to any Floor Plan Loan
that is a Eurodollar Loan (including Floor Plan Swing Line Loans), the fifth
(5th) Business Day of each month in arrears, (b) with respect to Revolving
Credit Loans that are Eurodollar Loans, the last Business Day of the Interest
Period applicable to each such Loan (and in addition, in the case of any
Interest Period of six months, the day that would have been the Interest Payment
Date of such Interest Period if such Interest Period had been three months), (c)
with respect to Revolving Credit Loans that are Alternate Base Rate Loans, on
the first Business Day of each January, April, July and October of each year in
arrears, commencing April 1, 2005, and (d) with respect to Revolving Credit
Swing Line Loans on the date said Loan is due and payable.
"Interest Period" means: with respect to:
(a) Floor Plan Loans (other than Swing Line Loans) that are
Eurodollar Loans, the period commencing on the date of such Eurodollar
Loan and ending on the numerically corresponding day (or, if there is
no numerically corresponding day, on the last day) of the following
month; provided, that (i) if any Interest Period would end on a day
that shall not be a Business Day, such Interest Period shall be
extended to the next succeeding Business Day and (ii) no Interest
Period shall end later than the Maturity Date; and
(b) Revolving Credit Loans (other than Swing Line Loans) that
are Eurodollar Loans, the period commencing on the date of such
Eurodollar Loan and ending on the numerically corresponding day (or, if
there is no numerically corresponding day, on the last day) of the
calendar month that is one, two, three or six months thereafter, as the
Company may elect; provided, that (i) if any Interest Period would end
on a day that shall not be a Business Day, such Interest Period shall
be extended to the next succeeding Business Day, and (ii) no Interest
Period shall end later than the Maturity Date;
"Inventory Detail Report" means a report delivered pursuant to Section
9.5(f) by the Company and the Floor Plan Borrowers (on an individual basis)
which breaks out in detail the New Motor Vehicles, Rental Motor Vehicles, Used
Motor Vehicles and Demonstrators held by such Floor Plan Borrower.
"Investment" means, as to any Person, any investment so classified
under GAAP.
"Issue" means, with respect to any Letter of Credit, to issue or to
extend the expiration date of, or to renew or increase the amount of, such
Letter of Credit; and the terms "Issued," "Issuing" and "Issuance" have
corresponding meanings.
12
"Issuing Bank" means JPMorgan Chase Bank, N.A., in its capacity as
issuer of one or more Letters of Credit hereunder, together with any successor
letter of credit issuer and any replacement letter of credit issuer.
"Lenders" has the meaning specified in the introduction to this
Agreement, and Lender(s) shall include the Floor Plan Lenders, the Revolving
Credit Loan Lenders and the Swing Line Bank unless the context otherwise
requires.
"Letter of Credit" means any letter of credit issued by the Issuing
Bank pursuant to Article VI.
"Letter of Credit Application" and "Letter of Credit Amendment
Application" means an application form for Issuance of, and for amendment of,
Letters of Credit in the then-standard form promulgated by the Issuing Bank.
"Letter of Credit Commitment" means the obligation of the Issuing Bank
to Issue, and the obligation of the Lenders severally to participate in, Letters
of Credit from time to time Issued or outstanding under Article VI in an
aggregate amount not to exceed on any date the amount of Fifteen Million and
No/100 Dollars ($15,000,000.00); provided that the Letter of Credit Commitment
of each Lender is a part of its Revolving Credit Loan Commitment, rather than a
separate, independent commitment.
"Letter of Credit Fees" has the meaning specified in Section 6.7(a).
"Letter of Credit Obligations" means at any time the sum of (a) the
aggregate undrawn amount of all Letters of Credit then outstanding, plus (b) the
amount of all unreimbursed drawings under all Letters of Credit, including all
outstanding Loans outstanding under Section 6.3(b) or (c).
"Letter of Credit Related Documents" means the Letters of Credit, the
Letter of Credit Applications, the Letter of Credit Amendment Applications and
any other document relating to any Letter of Credit, including any of the
Issuing Bank's standard documents for issuance of Letters of Credit.
"Letter of Credit Termination Date" has the meaning provided in Section
6.1(a).
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, the rate per annum determined by the Agent at approximately
11:00 a.m., London time, on the Quotation Day for such Interest Period by
reference to the British Bankers' Association Interest Settlement Rates for
deposits in the currency of such Borrowing (as reflected on the applicable
Telerate screen page), for a period equal to such Interest Period; provided
that, to the extent that an interest rate is not ascertainable pursuant to the
foregoing provisions of this definition, the "LIBO Rate" shall be the average
(rounded upward, if necessary, to the next 1/100 of 1%) of the respective
interest rates per annum at which deposits in the currency of such Borrowing are
offered for such Interest Period to major banks in the London interbank market
by JPMorgan Chase Bank, N.A. at approximately 11:00 a.m., London time, on the
Quotation Day for such Interest Period.
"Lien" means any mortgage, pledge, hypothecation, judgment lien or
similar legal process, conditional sale, title retention or other security
interest or any lease in the nature thereof.
13
"Loan" means an Alternate Base Rate Loan, a Eurodollar Loan, a
Revolving Credit Loan, a Floor Plan Loan, or a Swing Line Loan; and "Loans"
means all such Loans made pursuant to this Agreement.
"Loan Documents" means this Agreement, the Notes, the Security
Documents, the Agent's Letter, the Administrative Fee Letter, the Guaranty
Agreement, the Intercreditor Agreements and all other documents and instruments
executed by the Borrowers or any other Person in connection with this Agreement
and the Loans.
"Manufacturer" means the manufacturer or a manufacturer appointed
wholesale distributor of a Motor Vehicle.
"Manufacturer/Dealer Statement" means a financial statement prepared by
a Floor Plan Borrower for a Manufacturer and delivered to the Manufacturer on a
periodic basis as required by the Manufacturer.
"Manufacturer's Certificate" means any Manufacturer's statement of
origin, certificate of origin or any other document evidencing the ownership or
transfer of ownership of a New Motor Vehicle from a Manufacturer to a Borrower.
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Effect" means, relative to any occurrence of whatever
nature (including any determination in any litigation, arbitration or
governmental investigation or proceeding), (i) a material adverse effect on the
financial condition, business, operations or assets of the Company and its
Subsidiaries, on a consolidated basis, (ii) a material impairment of the ability
of the Company or any of its Subsidiaries to perform their Obligations under the
Loan Documents or (iii) a material impairment of the validity or enforceability
of the Loan Documents.
"Maturity Date" means March 23, 2008, or the earlier termination of the
Commitments under Section 5.5, Section 11.2 and Section 11.4 unless extended
pursuant to Section 5.16.
"Maximum Rate" has the meaning specified in Section 13.8.
"Motor Vehicle" means any motorized vehicle approved for highway use by
any State of the United States.
"Net Income" means for any Person for any period for which the amount
thereof is to be determined, the net income (or net losses) of such Person and
its Subsidiaries on a consolidated basis as determined in accordance with GAAP
after deducting, to the extent included in computing said net income and without
duplication, (i) the income (or deficit) of any Person (other than a
wholly-owned Subsidiary of such Person), in which such Person or any of its
Subsidiaries has any ownership interest, except to the extent that any such
income has been actually received by such Person or such Subsidiary in the form
of cash dividends or similar cash distribution, (ii) any income (or deficit) of
any other Person accrued prior to the date it becomes a Subsidiary of such
Person or merges into or consolidates with such entity, (iii) the gain or loss
(net of any tax effect) resulting from the sale of any capital assets, (iv) any
gains or losses or other income which are non-recurring, extraordinary or
attributable to discontinued operations, (v) gains or losses resulting from the
14
write-up or write-down of any assets, and (vi) any portion of the net income of
any Subsidiaries which is not available for distribution.
"New Lender" has the meaning specified in Section 5.18(b).
"New Lender Agreement" has the meaning specified in Section 5.18(b).
"New Motor Vehicle" means any Motor Vehicle not previously titled and
which Motor Vehicle is from the Manufacturer with which the Person owning said
Motor Vehicle has an executed Dealer Franchise Agreement, excluding
Demonstrators and Rental Motor Vehicles.
"Note" and "Notes" mean each of the Revolving Credit Notes and the
Floor Plan Notes.
"Obligations" means all advances, debts, liabilities, obligations,
covenants and duties, arising under any Loan Document or any Hedging Agreement
owing by any Borrower or any Subsidiary of any Borrower to any Lender, the
Agent, the Floor Plan Agent, the Swing Line Bank or the Issuing Bank, whether
direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising.
"OECD" means the Organization for Economic Cooperation and Development.
"Other Activities" has the meaning specified in Section 12.3.
"Other Financings" has the meaning specified in Section 12.3.
"Other Taxes" has the meaning specified in Section 5.14(b).
"Out of Balance" means that (i) with respect to a Motor Vehicle, the
outstanding balance of the Floor Plan Loan pursuant to which such Motor Vehicle
was purchased exceeds the Floor Plan Advance Limit for the category of such
Motor Vehicle (ii) with respect to Used Motor Vehicles, Rental Motor Vehicles
and Demonstrators, the aggregate amount of the Floor Plan Loans outstanding with
respect to such Motor Vehicles exceeds the aggregate Floor Plan Advance Limit
applicable to such Motor Vehicles or (iii) with respect to a Floor Plan Loan,
the outstanding balance thereof has not been paid in accordance with Section
2.5.
"Overage Amount" has the meaning specified in Section 2.3(d)(ii)(4).
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Permitted Acquisition" has the meaning specific in Section 9.16.
"Permitted Liens" means those Liens described in Section 10.2.
"Permitted New Vehicle Floor Plan Indebtedness" has the meaning
specified in Section 10.1(o).
"Permitted Real Estate Debt" means Indebtedness of a Borrower (i)
secured solely by real estate owned by such Borrower, the amount of which does
not exceed eighty-five percent (85%) of the value of the real estate securing
15
such Indebtedness (determined on a per loan basis), as evidenced by an appraisal
of the real estate ordered in connection with obtaining such Indebtedness, and
(ii) for which no Person other than the obligor of such Indebtedness or the
Company has any liability with respect to such Indebtedness.
"Person" means any natural person, corporation, trust, business trust,
association, company, limited liability company, joint venture, partnership or
Governmental Authority.
"Plan" means a "pension plan," as such term is defined in Section
3(2)(A) of ERISA, established or maintained by the Company or any of its
Subsidiaries or any ERISA Affiliate or as to which the Company or any of its
Subsidiaries or any ERISA Affiliate contributes or is a member or otherwise may
have any liability.
"Platform Account" means a bank account described on Schedule 1.1(c)
hereto (as such may be supplemented or changed from time to time), which bank
account is held in the name of a Platform Subsidiary and into which bank account
the cash from the Floor Plan Borrower Dealership Accounts is swept on a regular
basis in accordance with the Company's cash management system.
"Platform Subsidiary" means a Subsidiary of the Company listed on
Schedule 1.1(e) that owns one or more other Subsidiaries that are Auto Dealers.
"Prime Rate" has the meaning specified in the definition of the term
"Alternate Base Rate."
"Pro Forma EBITDA" means, for any Person, for any period of
determination, EBITDA of such Person for the immediately preceding four fiscal
quarters plus (or minus), without duplication, the EBITDA for such four quarter
period of any Person acquired during such period as if such acquisition had
occurred on the first day of such four quarter period, provided, if a
calculation of Pro Forma EBITDA results in an increase in the Company's
Consolidated EBITDA by 10% or more from the most recent date of determination,
no such increase above 10% shall be considered a part of any computation
hereunder unless the applicable calculations of Pro Forma EBITDA are based on:
(i) audited financial statements from independent auditors satisfactory to the
Agent, with said calculations being supported by such audited statements and
(ii) such other information as the Agent may reasonably request to assist in the
determination of such calculation.
"Pro Forma Floor Plan Interest Expense" means, for any Person, as of
any period of determination, Floor Plan Interest Expense of such Person for the
immediately preceding four fiscal quarters plus (or minus), without duplication,
the Floor Plan Interest Expense for such period of any Person acquired during
such period, as if acquired on the first day of such period.
"Pro Rata Share of Floor Plan Loan Commitments" means, at any time,
with respect to any Floor Plan Lender, the percentage corresponding to a
fraction, the numerator of which shall be the amount of the Floor Plan Loan
Commitment of such Lender and the denominator of which shall be the aggregate
amount of the Floor Plan Loan Commitments of all Lenders.
"Pro Rata Share of Revolving Credit Loan Commitments" means, at any
time, with respect to any Revolving Credit Loan Lender, the percentage
corresponding to a fraction, the numerator of which shall be the amount of the
16
Revolving Credit Loan Commitment of such Lender and the denominator of which
shall be the aggregate amount of the Revolving Credit Loan Commitments of all
Lenders.
"Pro Rata Share of Total Commitments" means, at any time, with respect
to any Lender, the percentage corresponding to a fraction, the numerator of
which is such Lender's Commitment and the denominator of which shall be the
aggregate amount of the Commitments of all Lenders.
"Qualified Sale/Leaseback Transaction" means a sale by any of the
Borrowers of personal property or real property and related fixtures and
accessories used in the ordinary course of business, which property does not
include any Collateral and which property is, in a concurrent transaction,
leased by such Borrower from the purchaser thereof under a lease agreement, the
terms of which, as of the date of such transaction, based upon the immediately
preceding four fiscal quarters of the Company, would not cause the Company to be
in Default under any of the provisions of this Agreement.
"Quotation Day" shall mean, with respect to any Eurodollar Borrowing
and any Interest Period, the day on which it is market practice in the relevant
interbank market for prime banks to give quotations for deposits in the currency
of such Borrowing for delivery on the first day of such Interest Period. If such
quotations would normally be given by prime banks on more than one day, the
Quotation Day will be the last of such days.
"Re-Allocation Date" has the meaning specified in Section 5.18(e).
"Register" has the meaning specified in Section 13.3(d).
"Regulation D" means Regulation D of the Board, as the same is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Regulation T" means Regulation T of the Board, as the same is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Regulation U" means Regulation U of the Board, as the same is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Regulation X" means Regulation X of the Board, as the same is from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Rental Motor Vehicle" means a Motor Vehicle less than two years old
owned by a Floor Plan Borrower and purchased directly from a Manufacturer as a
New Motor Vehicle and used as a service loaner vehicle or is periodically
subject to a rental contract with customers of the Floor Plan Borrower for
loaner or rental periods of up to thirty (30) consecutive days or is used by
dealership personnel in connection with parts and service operations.
"Reportable Event" means a Reportable Event as referenced in Section
4043(b)(3) of ERISA.
"Request for Borrowing" means, in connection with a Floor Plan Loan or
a Swing Line Loan, under the Floor Plan Commitment, a Request for Borrowing
substantially in the form attached hereto as Exhibit 1.1D, and in the case of a
17
Revolving Credit Loan or a Swing Line Loan under the Revolving Credit
Commitment, a Request for Borrowing substantially in the form attached hereto as
Exhibit 1.1E.
"Required Lenders" means, at any time, Lenders holding 50.1% of the
Total Commitments or, after all of the Commitments have terminated, 50.1% of the
Indebtedness outstanding under the Loan Documents, provided that any Swing Line
Loans shall be allocated among the Lenders pro rata.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of any arbitrator or of a
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.
"Reserve Commitment" has the meaning specified in Section 3.4.
"Restricted Payment" means, as to any Person, any dividend or other
distribution of assets, properties, cash, rights, obligations or securities made
by such Person or any Subsidiary of such Person on account of shares of such
Person's capital stock, or any partnership interest or similar ownership
interest in such Person, or any purchase, retirement, redemption or other
acquisition made by such Person or any Subsidiary of such Person of any of such
Person's capital stock, partnership interest or similar ownership interest or
warrants, rights or options evidencing a right to acquire such shares or
interests.
"Revolver Swing Line Commitment" means, for the Swing Line Bank, its
obligation to make Swing Line Loans to the Company up to an amount equal to Five
Million and No/100 Dollars ($5,000,000.00), which commitment is a part of the
Revolving Credit Loan Commitment rather than a separate, independent commitment.
"Revolving Credit Borrowing Base" means for the Company and its
Subsidiaries, excluding Toyota/Lexus Floor Plan Borrowers, on a consolidated
basis the positive difference between:
(i) the sum of the following items, without duplication,
on which the Administrative Agent holds a valid and
perfected first priority Lien:
(a) 100% of the wholesale purchase price of New Motor
Vehicles and Demonstrators that are part of the
Collateral;
(b) 75% of the Book Value of Used Motor Vehicles and
Rental Motor Vehicles that are part of the
Collateral;
(c) 100% of the amount of contracts in transit,
including, without limitation, all accounts, chattel
paper and agreements of third parties to pay the
purchase price of vehicles sold to customers, which
agreements are not yet funded;
(d) 80% of Eligible Accounts, excluding those
described in (c) above;
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(e) 60% of the Book Value of parts inventory;
(f) 50% of the cash deposits in the Concentration
Accounts, Platform Accounts and Floor Plan Borrower
Dealership Accounts and all other deposit accounts in
which the Lenders have a perfected security interest
evidenced by a control agreement with the depository
bank for each such account; and
(g) 50% of the market value of the securities held in
securities accounts in which the Lenders have a
perfected security interest evidenced by a control
agreement with the securities intermediary for each
such account.
and
(ii) 100% of all Floor Plan Loans and Floor Plan Swing Line
Loans.
"Revolving Credit Event of Default" has the meaning specified in
Section 11.1.
"Revolving Credit Loan" has the meaning specified in Section 3.1.
"Revolving Credit Loan Advance Limit" means, as of any Borrowing Date
of a Revolving Credit Loan, for the Company and its Subsidiaries on a
consolidated basis, calculated as of the last day of the most recently ended
month for which an Availability Analysis has been delivered under Section
9.5(g), an amount equal to the lesser of (i) the Revolving Credit Loan
Commitment and (ii) the Revolving Credit Borrowing Base minus, in each case, the
amount of the Reserve Commitment, if any, in existence at the time of
determination.
"Revolving Credit Loan Commitment" means for each Revolving Credit Loan
Lender, its obligation to make Revolving Credit Loans to the Company up to the
amount set forth opposite such Lender's name on Schedule 1.1(b) under the
caption "Revolving Credit Loan Commitments" (as the same may be permanently
terminated or reduced or increased from time to time pursuant to the applicable
provisions in Section 2.3(d)(ii), Section 3.4, Section 5.5, Section 5.18 or
Section 11.2 or as such amount may be increased or decreased from time to time
by an Assignment and Acceptance pursuant to Section 5.17 or Section 13.3(b)).
"Revolving Credit Loan Lender" shall mean any Lender specified in
Schedule 1.1(b) as having an Revolving Credit Loan Commitment.
"Revolving Credit Notes" means each of the Notes substantially in the
form of Exhibit 1.1F, duly issued by the Company to each Lender in the aggregate
principal face amount of such Lender's Revolving Credit Loan Commitment.
"Revolving Credit Swing Line Loan" means a Swing Line Loan made by the
Swing Line Bank under the Revolver Swing Line Commitment.
"Sale Dated" means, in connection with the sale of a Motor Vehicle,
that closing of the sale of such Motor Vehicle is pending financing or other
contingencies.
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"Security Agreement" means the Security and Pledge Agreement
substantially in the form of Exhibit 1.1G hereto, executed by each of the
Borrowers (other than the Toyota/Lexus Floor Plan Borrowers), the Platform
Subsidiaries and all other Subsidiaries of the Company in favor of the Agent for
the benefit of the Lenders covering the Collateral described therein, as
amended, restated or otherwise modified from time to time.
"Security Agreement (Toyota/Lexus Inventory)" means the Security and
Pledge Agreement substantially in the form of Exhibit 1.1H hereto, executed by
each of the Toyota/Lexus Floor Plan Borrowers in favor of the Agent for the
benefit of the Lenders covering the Collateral of the Toyota/Lexus Floor Plan
Borrowers described therein.
"Security Agreement (Toyota/Lexus Non-Inventory)" means the Security
and Pledge Agreement substantially in the form of Exhibit 1.1F, executed by each
of the Toyota/Lexus Floor Plan Borrowers in favor of the Agent for the benefit
of the Lenders covering the Collateral of the Toyota/Lexus Floor Plan Borrowers
described therein.
"Security Documents" means the Security Agreement, the Security
Agreement (Toyota/Lexus Inventory), the Security Agreement (Toyota/Lexus
Non-Inventory) any deposit account control agreements and securities account
control agreements that are required by the Security Agreement or the Security
Agreement (Toyota/Lexus Non-Inventory), the Intercreditor Agreements, and any
and all other agreements or instruments now or hereafter executed and delivered
by any Borrower or any other Person in connection with, or as security for, the
payments or performance of any of the Obligations.
"Silo Borrowers" means those Subsidiaries engaged in the sale of New
Motor Vehicles manufactured by Ford Motor Company (including Mazda) or General
Motors Corporation or any of their subsidiaries, pursuant to a Dealer Franchise
Agreement with such Manufacturers.
"Stockholders' Equity" means, as of any date of determination, the
consolidated stockholders' equity of the Company and its Subsidiaries determined
in accordance with GAAP, after eliminating all intercompany items and after
deducting from stockholders' equity such portion thereof as is properly
attributable to minority interests in Subsidiaries as reflected in the financial
statements most recently delivered.
"Subordinated Indebtedness" means unsecured subordinated Indebtedness
of the Company (which may be guaranteed by the Subsidiaries of the Company on an
unsecured basis) provided, such Indebtedness (a) is subordinated to payment of
the Obligations on terms that are, in the aggregate, no less favorable to the
holders of the senior indebtedness in any material respect than the
subordination provisions contained in the Indenture, (b) does not have a
maturity earlier than the Maturity Date, and (c) has terms that are no more
restrictive than the terms of the Loan Documents, and further provided, after
giving effect to the issuance of such Indebtedness, no Event of Default shall
have occurred and be continuing or would occur as a result thereof.
"Subsidiary" means any Person of which or in which any other Person
(the "Parent") or any other Subsidiary of the Parent owns directly or indirectly
fifty percent (50%) or more of:
20
(a) the combined voting power of all classes of stock having
general voting power under ordinary circumstances to elect a majority
of the board of directors of such Person, if it is a corporation;
(b) the capital interest or profits interest of such Person,
if it is a partnership, joint venture or similar entity; or
(c) the beneficial interest of such Person, if it is a trust,
association or other unincorporated organization.
"Swing Line Bank" means JPMorgan Chase Bank, N.A. and its successors
and assignees as provided in this Agreement.
"Swing Line Loan" has the meaning specified in Section 4.1(a).
"Swing Line Minimum Amount" means Ten Million and No/100 Dollars
($10,000,000), which shall be the minimum amount remaining outstanding as of
each Floor Plan Adjustment Date, and which amount may change from time to time
as the Company and the Floor Plan Agent shall mutually agree.
"Syndication Agent" has the meaning specified in the introduction to
this Agreement.
"Taxes" has the meaning specified in Section 5.14(a).
"Total Commitment" means, at any time, the aggregate amount of the
Commitments of all Lenders, as in effect at such time in accordance with this
Agreement, which Commitments, as of the Closing Date, shall equal $800,000,000.
"Total Floor Plan Loan Commitments" means at any time, the aggregate
amount of the Floor Plan Loan Commitments of all Lenders, as in effect at such
time in accordance with this Agreement, which Commitments, as of the Closing
Date, shall equal $650,000,000.
"Total Leverage Ratio" means, as of any date of determination, for the
Company, the ratio on such date of (a) Adjusted Total Indebtedness to (b)
Consolidated Pro Forma EBITDA.
"Total Revolving Credit Commitment" means at any time, the aggregate
amount of the Revolving Credit Loan Commitments of all Lenders, as in effect at
such time in accordance with this Agreement, which, as of the Closing Date,
equals $150,000,000.
"Toyota/Lexus Floor Plan Borrowers" means Floor Plan Borrowers engaged
in the sale of New Motor Vehicles manufactured by Toyota or Lexus pursuant to a
Dealer Franchise Agreement or licensing agreement with such Manufacturers.
"Transferee" has the meaning specified in Section 5.14(a).
"Transition Period" has the meaning specified in Section 8.1.
"Truck Financing" means the Indebtedness of any entity engaged in Truck
Operations to finance the acquisition or purchase of heavy trucks.
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"Truck Operations" means operations of the entities listed on Schedule
1.1(d), which are engaged primarily in the sale or service of Motor Vehicles
with a gross vehicle weight of 16,000 pounds or more.
"Type" means any type of Loan determined with respect to the interest
option applicable thereto, i.e., a Eurodollar Loan or an Alternate Base Rate
Loan.
"UCC" means the Uniform Commercial Code as adopted and in effect in the
State of New York from time to time.
"Used Motor Vehicle" means a Motor Vehicle that is in the current or
preceding three (3) model years and that is not a New Motor Vehicle, a
Demonstrator or a Rental Motor Vehicle and either (i) has been previously titled
or (ii) was previously a Demonstrator and now has an odometer reading of more
than 7,500 miles.
"Wholly-Owned Subsidiary" means any Person of which the Company or its
other Wholly-Owned Subsidiaries own directly or indirectly one hundred percent
(100%) of:
(a) the issued and outstanding shares of stock (except shares
required as directors' qualifying shares and shares constituting less
than two percent (2%) of the issued and outstanding shares);
(b) the capital interest or profits interest of such Person,
if it is a partnership, joint venture or similar entity; or
(c) the beneficial interest of such Person, if it is a trust,
association or other unincorporated organization.
Section 1.2 Accounting Terms. Except as otherwise herein specifically
provided, each accounting term used herein and calculations required hereunder
shall have the meaning given it under GAAP.
Section 1.3 Interpretation.
(a) In this Agreement, unless a clear contrary intention
appears:
(i) the singular number includes the plural number and vice
versa;
(ii) reference to any gender includes the other gender;
(iii) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a
whole and not to any particular Article, Section or
other subdivision;
(iv) reference to any Person includes such Person's
successors and assigns but, if applicable, only if such
successors and assigns are permitted by this Agreement,
and reference to a Person in a particular capacity
excludes such Person in any other capacity or
22
individually, provided that nothing in this clause (iv)
is intended to authorize any assignment not otherwise
permitted by this Agreement;
(v) reference to any agreement (including this Agreement),
document or instrument means such agreement, document
or instrument as amended, supplemented or modified and
in effect from time to time in accordance with the
terms thereof and, if applicable, the terms hereof, and
reference to any Note includes any note issued pursuant
hereto in extension or renewal thereof and in
substitution or replacement therefor;
(vi) unless the context indicates otherwise, reference to
any Article, Section, Schedule or Exhibit means such
Article or Section hereof or such Schedule or Exhibit
hereto;
(vii) the word "including" (and with correlative meaning
"include") means including, without limiting the
generality of any description preceding such term;
(viii) with respect to the determination of any period of
time, the word "from" means "from and including" and
the word "to" means "to but excluding"; and
(ix) reference to any law means such law as amended,
modified, codified or reenacted, in whole or in part,
and in effect from time to time.
(b) The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the
construction hereof.
(c) No provision of this Agreement shall be interpreted or
construed against any Person solely because that Person or its legal
representative drafted such provision.
ARTICLE II.
THE FLOOR PLAN LOANS
Section 2.1 Floor Plan Loan Commitments. Subject to the terms and
conditions and relying upon the representations and warranties of the Borrowers
herein set forth, each Floor Plan Lender severally and not jointly agrees to
make revolving credit loans (each such loan, a "Floor Plan Loan") to any Floor
Plan Borrower from time to time during the period from the Closing Date to the
Maturity Date in an aggregate amount not to exceed at any time such Lender's Pro
Rata Share of Floor Plan Loan Commitments; provided that, subject to Section
2.3(d)(ii), after giving effect to all Floor Plan Loans, including all Floor
Plan Swing Line Loans requested on any date, the aggregate principal amount of
all outstanding Floor Plan Loans and Floor Plan Swing Line Loans shall not at
any time exceed the Floor Plan Loan Commitments and, further that the aggregate
principal amount of all outstanding Floor Plan Loans, Swing Line Loans,
Revolving Credit Loans and Letter of Credit Obligations shall not at any time
exceed the Total Commitment. Subject to the terms and conditions hereof, any
Floor Plan Borrower may borrow, prepay and reborrow Floor Plan Loans under this
Section 2.1.
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Section 2.2 Floor Plan Loans Generally.
(a) Each Floor Plan Loan Borrowing shall be in the minimum aggregate
principal amount of Five Million and No/100 Dollars ($5,000,000.00) and in
integral multiples of One Million and No/100 Dollars ($1,000,000.00); provided,
a Swing Line Loan under the Floor Plan Loan Commitment may be in any amount, and
provided, further, that the failure of any Floor Plan Lender to make any Floor
Plan Loan shall not relieve any other Floor Plan Lender of its obligations
hereunder.
(b) Each Floor Plan Loan Borrowing shall be a Eurodollar Borrowing.
Subject to Section 5.14(h), each Floor Plan Lender may fulfill its obligation to
make Floor Plan Loans by causing, at its option, any domestic or foreign branch
or Affiliate of such Floor Plan Lender to make such Loan, provided, the exercise
of such option shall not affect the obligation of the applicable Floor Plan
Borrower to repay such Loan in accordance with the terms of the applicable Note.
Section 2.3 Floor Plan Borrowing Procedure.
(a) All Borrowings under the Floor Plan Commitment
(including Floor Plan Swing Line Loans) may be requested by:
(i) a Floor Plan Borrower by means of the Floor Plan
Agent's Dealer Access System, or
(ii) a Manufacturer or other seller of a Motor Vehicle by
means of a Draft, whether pursuant to a Drafting
Agreement or otherwise.
(iii) a Floor Plan Borrower by means of a Request for
Borrowing substantially in the form of Exhibit 1.1D,
containing the information shown thereon;
(b) (i) Drafts, if presented prior to 2:30 P.M., New York
time, will be paid by the end of the next Business Day,
(ii) requests for Floor Plan Borrowings, either in writing
or by means of the Dealer Access System, if presented
prior to 2:30 P.M., New York time, will be funded by
the end of the next Business Day.
(c) The aggregate principal amount of each such Borrowing
including Floor Plan Swing Line Loans shall not exceed the Floor Plan
Advance Limit for the Motor Vehicles described in any request for
Borrowing under Section 2.3(a).
(d) Notwithstanding the foregoing,
(i) if the Floor Plan Agent has, at the request of the
Required Lenders or acting in its discretion according
to the terms hereof, taken action to suspend or
terminate Drafts pursuant to one or more Drafting
Agreements and such Drafting Agreements have in fact
been suspended or terminated in accordance with their
respective terms, then the Floor Plan Agent shall not
fund the amount of such Draft; and
24
(ii) if on any day the conditions precedent set forth in
Section 8.3 have been satisfied and a Draft is
presented for payment, the payment of which would cause
(A) the aggregate principal amount of all Floor Plan
Loans then outstanding, plus (B) the aggregate
principal amount of all Floor Plan Swing Line Loans
then outstanding, plus (C) the aggregate principal
amount of all requests for Borrowings of Floor Plan
Loans outstanding as of such day to exceed the Total
Floor Plan Loan Commitments as of such day, then, in
such event:
(1) the Company may either immediately reduce any
pending request for Borrowing (if any) of a Floor Plan Loan
which does not consist of a Draft or make a payment of
principal on Floor Plan Loans and/or Swing Line Loans in an
amount which would prevent the aggregate amounts described
in (A), (B) and (C) above from exceeding the Total Floor
Plan Loan Commitments; or
(2) the Company may request an increase in the
aggregate Floor Plan Loan Commitments pursuant to Section
5.18, and such Draft shall be funded to the extent of such
increase in accordance with said Section; or
(3) if the Company does not elect to act under clause
(1) or (2) above and if there is a Reserve Commitment
available under Section 3.4, then the Total Floor Plan Loan
Commitments shall be increased by the amount of such Reserve
Commitment, and such Draft shall be funded to the extent of
such increase; or
(4) if there is no Reserve Commitment available, the
Floor Plan Agent may, but shall not be obligated to, fund
the payment of such Draft in whole or in part (the amount of
any such funding made by the Floor Plan Agent, the "Overage
Amount"). Nothing in this Agreement shall be construed as a
commitment by or as requiring the Floor Plan Agent to fund
any such Overage Amount. The Floor Plan Agent will notify
the Agent upon the funding of any Overage Amount that is
advanced, and the Agent will then notify the Lenders of any
such Overage Amount.
(e) Each request for Borrowing for a Floor Plan Loan, once
given, shall be irrevocable. Each of the Floor Plan Borrowers hereby
authorizes the Floor Plan Agent or the Swing Line Bank as applicable,
to disburse Floor Plan Loans under this Section 2.3 pursuant to the
instructions of any Person purporting to be a Person identified by
name on a written list of Persons authorized by each such Floor Plan
Borrower to make a request for Borrowing for Floor Plan Loans on
behalf of such Borrower(s). Notwithstanding the foregoing, each of the
Floor Plan Borrowers acknowledges and agrees that the applicable Floor
Plan Borrower shall bear all risk of loss resulting from disbursements
made upon any request.
(f) If at any time between Floor Plan Adjustment Dates, the
repayment of all of a Swing Line Loan would cause the outstanding
balance of all Swing Line Loans outstanding under the Floor Plan Loan
Commitments to be paid in full, then such payment shall be applied to
outstanding Floor Plan Loans and shall be subject to Section 5.10.
25
Section 2.4 Floor Plan Adjustment Date Mechanics.
(a) At or before 11:00 a.m. New York, New York time on each Floor Plan
Adjustment Date, the Floor Plan Agent shall provide written (including via
facsimile) notice to the Company of the amount, as of the last day of the
immediately preceding period since the last Floor Plan Adjustment Date, of (i)
Floor Plan Loans outstanding, (ii) Swing Line Loans outstanding under the Floor
Plan Loan Commitments in excess of the Swing Line Minimum Amount, (iii) all
interest that has accrued on the Floor Plan Loans and Swing Line Loans under the
Floor Plan Swing Line Commitment during such period and (iv) the principal
amounts due pursuant to Section 2.5(a) in respect of Motor Vehicles for which
Curtailment Dates have occurred since the last Floor Plan Adjustment Date.
(b) At or before 3:00 p.m., New York, New York time, on each Floor
Plan Adjustment Date, the Company may provide a written (including via
facsimile) Request for Borrowing to the Floor Plan Agent designating the amount
of Swing Line Loans under the Floor Plan Swing Line Commitment in excess of the
Swing Line Minimum Amount, if any, it wishes to remain outstanding as Swing Line
Loans, how much thereof will bear interest at the Floor Plan New Swing Rate and
how much thereof will bear interest at the Floor Plan Used Swing Rate. If, for
any reason, the Company does not deliver the Request for Borrowing; the Company
shall be deemed to have requested that on such Floor Plan Adjustment Date, all
Swing Line Loans outstanding under the Floor Plan Commitment in excess of the
Swing Line Minimum Amount be converted to Floor Plan Loans and that a portion of
remaining Floor Plan Swing Line Loans shall bear interest at the Floor Plan New
Swing Rate and the remainder of the Floor Plan Swing Line Loans shall bear
interest at the Floor Plan Used Swing Rate; the amounts of the Floor Plan Swing
Line Loans bearing interest at each rate shall be in the same relative
proportion that existed during the immediately preceding month.
(c) At or before 12:00 p.m. New York, New York time on the second
Business Day following each Floor Plan Adjustment Date, the Floor Plan Agent
shall provide prompt written (including facsimile) notice to the Administrative
Agent who shall provide prompt written (including facsimile) notice to the Floor
Plan Lenders advising them of the LIBO Rate that will be in effect for the Floor
Plan Loans for the following period and (A) that the amount of Floor Plan Loans
required pursuant to Section 2.4(a) and Section 2.4(b) above is greater than the
amount required as of the immediately preceding Floor Plan Adjustment Date and,
with respect to each Floor Plan Lender, the amount of additional Floor Plan
Loans to be advanced by such Floor Plan Lender, or (B) that the amount of Floor
Plan Loans required pursuant to Section 2.4(a) and Section 2.4(b) above, has
decreased since the immediately preceding Floor Plan Adjustment Date and, with
respect to each Floor Plan Lender, the amount of repayment to be made to such
Floor Plan Lender, or (C) that there is no change in the amount of Floor Plan
Loans required pursuant to Section 2.4(a) and Section 2.4(b) above since the
immediately preceding Floor Plan Adjustment Date. If no Request for Borrowing
has been received, then the Notice shall advise the Lenders of the amounts and
terms deemed requested pursuant to Section 2.4(b).
(d) At or before 12:00 p.m., New York, New York time, on the fourth
Business Day of each month, the Floor Plan Agent shall initiate automatic debits
by ACH transfer from the accounts of the Floor Plan Borrowers in the amount of
26
the interest owed by such Floor Plan Borrower described in Section 2.4(a)(iii)
above and the amount of principal to be paid pursuant to Section 2.5(a)(iv)
below.
(e) On the fifth Business Day of each month, in accordance with the
Floor Plan Agent's notice under Section 2.4(c), each Floor Plan Lender shall,
advance any amounts required in connection with each such Floor Plan Loan
Borrowing by paying to the Agent in U.S. Dollars and in immediately available
funds on such day not later than 1:00 p.m., New York, New York time. Subject to
satisfaction of the conditions set forth in Article VIII, insofar as it applies
to Floor Plan Loans, and the terms, provisions and conditions set forth in
Section 2.3 and Section 4.3, the Agent shall promptly and in any event on the
same day, credit the amounts so received to the account of the Floor Plan Agent,
or, if a Floor Plan Loan Borrowing shall not occur on such date because any
condition precedent herein specified shall not have been met, return the amounts
so received to the respective Floor Plan Lenders. Upon receipt of such funds the
Floor Plan Agent shall promptly and in any event on the same day, credit the
amount so received to the account of the applicable Floor Plan Borrower. On the
same day, the Floor Plan Agent shall credit all amounts received pursuant to
Section 2.4(d) to the Agent, and the Agent shall pay to the Lenders their
respective pro rata portion of such amounts.
Section 2.5 Payments; Application of Payments.
(a) Each Floor Plan Borrower shall pay in full an amount equal to the
Floor Plan Advance Limit with respect to any Motor Vehicle that has been sold
immediately upon the earliest to occur of: (i) with respect to Motor Vehicles
other than those described in (ii) and (iii) below, five (5) Business Days after
the sale thereof, (ii) with respect to Sale Dated Motor Vehicles or Motor
Vehicles financed by a retail installment contract, consumer lease agreement or
loan arranged by the Floor Plan Borrower, within ten (10) days of the date of
such Motor Vehicle was sold (or possession of the Motor Vehicle transferred to
the buyer, if earlier), (iii) with respect to Fleet Motor Vehicles, within
thirty (30) days of the date of sale and, (iv) in all cases, one (1) Business
Day following receipt of payment in full from the sale thereof. With respect to
Motor Vehicles that are not sold, each Floor Plan Borrower shall pay in full an
amount equal to the Floor Plan Loan with respect to any Motor Vehicle on the
fifth Business Day of the month following the Curtailment Date of such Motor
Vehicle, to the extent payment has not earlier been made. Upon the funding
thereof, any Overage Amount shall be due and payable by the Floor Plan Borrower
or Borrowers on whose account or accounts such Overage Amount was funded in
connection with a Draft under Section 2.3(d)(ii)(4) by the next Business Day.
(b) Subject to the provisions of Section 2.3(f), payments required to
be made by any Floor Plan Borrower as set forth in Section 2.5(a) shall be
applied in the following order: (i) first, to the outstanding principal balance
and then to accrued interest on any Overage Amount, (ii) second, to the
outstanding principal balance of Floor Plan Swing Line Loans, (iii) third, to
the outstanding principal balance of Floor Plan Loans funded from the Reserve
Commitment, and (iv) finally, to the remaining outstanding principal balance of
the Floor Plan Loans.
(c) Each Floor Plan Borrower shall cause all proceeds from the sale of
Motor Vehicles financed hereunder to be deposited directly into the applicable
Floor Plan Borrower Dealership Account.
27
Section 2.6 Issuance of Drafting Agreements. Subject to the terms and
conditions of this Agreement, the Floor Plan Agent shall, at any time and from
time to time from and after the Closing Date until thirty (30) Business Days
prior to the Maturity Date, upon the written request of the Company or the
applicable Floor Plan Borrower, which may be countersigned by the Company,
accompanied by such other customary documentation related thereto as the Floor
Plan Agent may reasonably require, issue Drafting Agreements for the account of
the applicable Floor Plan Borrower.
Section 2.7 Conditions to Execution of Drafting Agreements. (a) The Floor
Plan Agent shall enter into Drafting Agreements upon request, if the following
conditions are satisfied, as of the date of issuance of such Drafting Agreement:
(i) the Company or the applicable Floor Plan Borrower requesting the
Drafting Agreement shall have delivered to the Floor Plan Agent
not less than ten (10) Business Days prior to the requested date
for acceptance of Drafts (or such shorter time as the Floor Plan
Agent in its sole discretion may permit), a written application
and such other documentation (including without limitation a
letter of credit agreement if the Drafting Agreement is to be
issued in the form of a letter of credit) and the terms of such
documents and of the proposed Drafting Agreement shall satisfy
the terms hereof;
(ii) the satisfaction of the conditions precedent set forth in Section
8.3;
(iii) no order, judgment or decree of any Governmental Authority shall
by its terms purport to enjoin or restrain the Floor Plan Agent
or any other Person that is a party thereto from entering into or
issuing such Drafting Agreement; no Requirement of Law applicable
to the Floor Plan Agent or any other Person that is a party
thereto and no request or directive (whether or not having the
force of law) from any Governmental Authority with jurisdiction
over the Floor Plan Agent or any other Person that is a party
thereto shall prohibit the Floor Plan Agent, or request that the
Floor Plan Agent refrain, from issuing or entering into drafting
agreements generally or such Drafting Agreement in particular or
shall impose upon the Floor Plan Agent any additional
restriction, reserve or capital requirement not in effect on the
Closing Date, or shall impose upon the Floor Plan Agent any
unreimbursed loss, cost or expense which was not applicable on
the Closing Date and which the Floor Plan Agent in good xxxxx
xxxxx material to it; and
(iv) the Floor Plan Agent does not receive written notice from any
Lender, the Agent or any Borrower, on or prior to the Business
Day immediately preceding the requested date of entry into such
Drafting Agreement that one or more of the applicable conditions
contained in Article VIII insofar as it applies to Floor Plan
Loans (or in this Section 2.7) has not been satisfied or that an
Event of Default has occurred and is continuing.
(b) Each application for a Drafting Agreement made by a Floor Plan
Borrower hereunder shall constitute certification by each of the Company and
such Floor Plan Borrower of the matters set forth in Section 2.7(a)(i) and
Section 2.7(a)(ii), and the Floor Plan Agent shall be entitled to rely on such
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certification without any duty of inquiry. Immediately upon the issuance or
entering into by the Floor Plan Agent of each Drafting Agreement, each Floor
Plan Lender hereby irrevocably and unconditionally agrees to, and does hereby,
purchase from the Floor Plan Agent a participation in such Drafting Agreement in
an amount equal to the product of (i) the Pro Rata Share of Floor Plan Loan
Commitments of such Floor Plan Lender and (ii) the amount of the Draft presented
by a Manufacturer under the Drafting Agreement.
(c) The Floor Plan Agent shall take such action as necessary to
terminate and suspend all Drafting Agreements effective twelve (12) days prior
to the Maturity Date, and none of the Borrowers shall be entitled to borrow
under any Drafting Agreement after the date that is ten (10) days prior to the
Maturity Date, provided, the immediately foregoing is intended only as a
limitation to the Borrowers' ability to borrow under Drafting Agreements and not
as an enlargement of the Floor Plan Agent's obligations hereunder.
Section 2.8 Notice of Issuance of or Entering into Manufacturers Drafting
Letters. The Floor Plan Agent shall give notice, substantially in the form of
Exhibit 2.8, to each Floor Plan Lender of the issuance of or entering into each
Drafting Agreement not later than five (5) Business Days after issuance of or
entering into such Drafting Agreement, attaching a copy of such Drafting
Agreement.
Section 2.9 Drafts Under Manufacturer's Drafting Letters.
(a) The applicable Floor Plan Borrower shall be liable for the
repayment of each Draft submitted by a Manufacturer pursuant to a Drafting
Agreement. Upon its submission to the Floor Plan Agent, the Floor Plan Agent
shall request that the Swing Line Bank pay such Draft, unless such payment would
cause all Floor Plan Loans plus Floor Plan Swing Line Loans to exceed the Total
Floor Plan Loan Commitments (in which case the provisions of Section
2.3(d)(ii)(4) shall apply), unless the Drafting Agreement pursuant to which such
Draft was presented has been terminated or suspended. Such funding shall
constitute a Floor Plan Swing Line Loan. Notwithstanding the foregoing, subject
to the terms and conditions of Article XII hereof, the Floor Plan Agent may take
all actions reasonably necessary to suspend and/or terminate Drafts in
accordance with Section 11.4 following the occurrence of any Floor Plan Event of
Default allowing the exercise of remedies under Section 11.4(c).
(b) Notwithstanding the obligation of the Floor Plan Agent or the
Swing Line Bank to fund a Draft, (i) if at any time any Floor Plan Borrower has
failed to satisfy the conditions precedent for the Floor Plan Agent to make a
Floor Plan Loan or for the Swing Line Bank to make a Swing Line Loan, (ii)
subject to Section 2.3(d)(ii), if at any time the amount of such Draft would
cause the aggregate amount of Floor Plan Loans plus Floor Plan Swing Line Loans
to exceed the Total Floor Plan Loan Commitments, or (iii) if a Default or an
Event of Default has occurred and is continuing, then in any such event, the
funding of such Draft shall not constitute a waiver of any such condition,
Default or Event of Default or otherwise in any manner whatsoever affect the
rights, and remedies available to the Floor Plan Agent, the Agent, the Swing
Line Bank or any of the Lenders hereunder. In any such event, the Floor Plan
Borrowers shall remain obligated to pay the amount of any Draft as set forth
herein and shall have all other duties and obligations applicable to the Floor
Plan Borrowers under this Agreement. Notwithstanding anything to the contrary
contained herein, each of the Floor Plan Borrowers shall bear all risk of loss
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resulting from the payment of any Draft, or any resulting disbursements of the
Floor Plan Loans or Swing Line Loans, as the case may be, whether or not due to
the gross negligence, willful misconduct or fraud of any Manufacturer.
(c) Subject to Section 11.5 hereof, each Floor Plan Lender shall be
obligated to fund Floor Plan Loans to reimburse the Swing Line Bank for Floor
Plan Swing Line Loans by making available their respective Pro Rata Share of
Floor Plan Loan Commitments of the amounts so advanced, all in accordance with
Section 2.2 hereof; furthermore, any right of the Floor Plan Agent, acting in
its discretion and not at the direction or with the concurrence of the Required
Lenders, to terminate or suspend drafting privileges of any Manufacturer or
otherwise exercise any right or remedy under the terms of this Agreement shall
be for the sole benefit and protection of the Floor Plan Agent, and the Floor
Plan Agent shall not owe any duty to any of the other Lenders with respect to
such rights or remedies or be required to exercise such rights or remedies to
protect any of the other Lenders. Notwithstanding the foregoing, the Floor Plan
Lenders shall not be obligated to purchase any portion of any Overage Amount.
Section 2.10 Obligations Absolute. The Obligations of a Floor Plan Borrower
under this Agreement and any of the other Loan Documents to reimburse the Floor
Plan Agent or the Swing Line Bank for Floor Plan Loans and Floor Plan Swing Line
Loans shall be unconditional and irrevocable. Such obligation shall be paid
strictly in accordance with the terms of this Agreement and each such other Loan
Document under all circumstances, including the following: (a) any lack of
validity or enforceability of such Drafting Agreement or any of the other Loan
Documents; (b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of any other Borrower in respect of
any Draft or any Drafting Agreement or any other amendment or waiver of or any
consent to departure from all or any of the applicable/related Loan Documents;
(c) the existence of any claim, set-off, defense or other right that any other
Floor Plan Borrower may have at any time against any Manufacturer or any other
beneficiary or transferee of any Drafting Agreement (or any Person for whom any
such beneficiary or such transferee may be acting), the Floor Plan Agent or any
other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by the related Loan Documents or any unrelated
transaction other than the defense of payment; (d) any Draft, demand,
certificate or other document presented under a Drafting Agreement proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; (e) any loss or delay in the
transmission or otherwise of any document required in order to make a Draft
under any Drafting Agreement; (f) any payment by the Floor Plan Agent under any
Drafting Agreement against presentation of a draft or certificate that does not
strictly comply with the terms of any Drafting Agreement; (g) any payment made
by the Floor Plan Agent under any Drafting Agreement to any trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of a successor to any beneficiary
or any transferee of any Drafting Agreement, including any arising in connection
with any Insolvency Proceeding; (h) any exchange, release or non-perfection of
any Collateral, or any release or amendment or waiver of or consent to departure
from all or any of the Obligations of any other Borrower in respect of any
Drafting Agreement; or (i) any other circumstance that might otherwise
constitute a defense available to, or discharge of, any other Borrower other
than the defense of payment. Nothing contained in this Section shall constitute
a waiver by any Floor Plan Borrower of any claims arising out of the gross
negligence, bad faith or willful misconduct of the Agent, the Floor Plan Agent
or the Swing Line Bank.
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Section 2.11 Dealer Access System. The Floor Plan Borrowers may request
Floor Plan Loans electronically by access to the Floor Plan Agent's web based
Dealer Access System (the "Dealer Access System"). Requests for Borrowing
through the Dealer Access System shall be processed by the Floor Plan Agent in
accordance with and subject to the terms and conditions of this Agreement. The
Floor Plan Borrowers have requested access to the Dealer Access System to permit
the Floor Plan Borrowers to access certain account information relating to the
Floor Plan Loans and to facilitate the making of any payments on the Floor Plan
Loans by authorizing the Floor Plan Agent to debit any one or more of the Floor
Plan Borrowers' deposit accounts with the Floor Plan Agent or with such other
financial institutions as indicated by the Floor Plan Borrowers. In
consideration for the Floor Plan Agent's granting to the Floor Plan Borrowers
access to the Dealer Access System to view loan account information and make
payments, the Floor Plan Borrowers acknowledge responsibility for the security
of such Floor Plan Borrowers' passwords and other information necessary for
access to the Dealer Access System, and the Company and each Floor Plan Borrower
fully, finally, and forever releases and discharges the Agent and the Floor Plan
Agent and their employees, agents, and representatives from any and all causes
of action, claims, debts, demands, and liabilities, of whatever kind or nature,
in law or equity that the Company or any Floor Plan Borrower may now or
hereafter have, in any way relating to the Company or any Floor Plan's
Borrower's access to, or use of, the Dealer Access System, other than those
arising out of the gross negligence, bad faith or willful misconduct of the
Floor Plan Agent or the Swing Line Bank.
ARTICLE III.
REVOLVING CREDIT LOANS
Section 3.1 Revolving Credit Loan Commitments. Subject to the terms and
conditions hereof and relying upon the representations and warranties of the
Company herein set forth, each Revolving Credit Loan Lender severally and not
jointly agrees to make revolving credit loans to the Company (each such loan, a
"Revolving Credit Loan") from time to time on any Business Day during the period
from the Closing Date to the Maturity Date in an aggregate amount not to exceed
at any time such Lender's pro rata share of the Revolving Credit Loan Advance
Limit; provided, after giving effect to any Revolving Credit Loan, the aggregate
amount of all outstanding Revolving Credit Loans, all Revolving Credit Swing
Line Loans and all outstanding Letter of Credit Obligations shall not at any
time exceed the Total Revolving Credit Commitments, and further provided that
the aggregate principal amount of all outstanding Revolving Credit Loans, Floor
Plan Loans, Swing Line Loans and Letter of Credit Obligations shall not at any
time exceed the Total Commitment. Subject to the other terms and conditions
hereof, the Company may, at any time and from time to time, borrow, prepay and
reborrow Revolving Credit Loans under this Section 3.1.
Section 3.2 Revolving Credit Loans.
(a) Each Revolving Credit Loan Borrowing shall be in the minimum
aggregate principal amount of One Million Dollars ($1,000,000) (or the amount of
a Letter of Credit Borrowing or the remaining balance of the aggregate Revolving
Credit Loan Commitments, if less) and an integral multiple of One Million
Dollars ($1,000,000) (provided, a Swing Line Loan under the Revolver Swing Line
Commitment may be in any amount) and shall consist of Revolving Credit Loans of
the same Type, made by the Revolving Credit Loan Lenders in accordance with
their respective Pro Rata Share of Revolving Credit Loan Commitments; provided,
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the failure of any Lender to make any Revolving Credit Loan shall not relieve
any other Lender of its obligation to lend hereunder.
(b) Each Revolving Credit Loan Borrowing (other than a Swing Line
Loan under the Revolving Credit Loan Commitment) shall be an ABR Borrowing or a
Eurodollar Borrowing as the Company may request in a Request for Borrowing
delivered to the Agent in accordance with Section 3.3. Subject to Section
5.14(h), each Revolving Credit Loan Lender may fulfill its Revolving Credit Loan
Commitment with respect to any Eurodollar Loan by causing, at its option, any
domestic or foreign branch or Affiliate of such Lender to make such Loan,
provided that the exercise of such option shall not affect the obligation of the
Company to repay such Loan in accordance with the terms hereof. Revolving Credit
Loan Borrowings of more than one Type may be outstanding at the same time.
(c) Each Revolving Credit Loan Lender shall make Revolving Credit Loans
equal to its then Pro Rata Share of the Revolving Credit Loan Commitments by
paying the amount required to the Agent in New York, New York in U.S. Dollars
and in immediately available funds not later than 1:00 p.m., New York, New York
time, on the proposed Borrowing Date and, subject to satisfaction of the
conditions set forth in Article VIII, insofar as same applies to Revolving
Credit Loans, the Agent shall promptly and in any event on the same Business
Day, credit the amounts so received to the general deposit account of the
Company maintained with the Agent, or to such other depository account as shall
be designated by the Company or, if a Borrowing shall not occur on such date
because any condition precedent herein specified shall not have been met, return
the amounts so received to the respective Lenders.
Section 3.3 Notice of Revolving Credit Loan Borrowings and Borrowing
Procedures.
(a) In order to obtain a Revolving Credit Loan, the Company shall
make an irrevocable written request therefor (or give irrevocable telephone
notice thereof, confirmed as soon as practicable by written request) to the
Agent, in the form of a Request for Borrowing (i) in the case of an ABR
Borrowing, not later than 11:00 a.m., New York, New York time, one (1) Business
Day before the Borrowing Date of a proposed Revolving Credit Loan Borrowing,
(ii) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York,
New York time, three (3) Business Days before the Borrowing Date of a proposed
Revolving Credit Loan Borrowing, (iii) and, in the case of a Swing Line Loan,
not later than 11:00 a.m., New York, New York time on the Business Day said Loan
is requested. Each Request for Loan Borrowing shall specify (1) whether the Loan
then being requested is to be an ABR Borrowing or a Eurodollar Borrowing, or a
Swing Line Loan under the Revolver Swing Line Loan Commitment at the Alternate
Base Rate, (2) the Borrowing Date (which shall be a Business Day) and (3) the
aggregate amount thereof and (4) if a Eurodollar Loan is being requested, the
Interest Period or Interest Periods with respect thereto. If no election as to
the Type of Revolving Credit Loan Borrowing is specified, such Borrowing shall
be an ABR Borrowing. If no Interest Period is specified, the Company shall be
deemed to have selected an Interest Period of one (1) month's duration. The
Agent shall promptly advise the Lenders of any Request for Borrowing given by
the Company on the same day such Request for Borrowing is received pursuant to
this Section 3.3 and of each Lender's pro rata share of the requested Revolving
Credit Loan Borrowing.
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(b) No more than twelve (12) Revolving Credit Loans may be outstanding
at any time. For purposes of the foregoing, Borrowings comprised of Revolving
Credit Loans having different Interest Periods, regardless of whether they
commence on the same date, shall be considered separate Loans.
Section 3.4 Reserve Commitment; Suspension of Revolving Credit Loan.
Notwithstanding the foregoing provisions of this Article III, in the event that
on any day the aggregate outstanding principal amount of all (a) Floor Plan
Loans, plus (b) Floor Plan Swing Line Loans, plus (c) requests for Floor Plan
Loan Borrowings pursuant to Section 2.3(a) exceeds ninety-five percent (95%) of
the aggregate Floor Plan Loan Commitments as of such date, then (i) a portion of
the Revolving Credit Loan Commitment (the "Reserve Commitment") in an amount
equal to the lesser of (y) Ten Million and No/100 Dollars ($10,000,000.00) and
(z) the entire remaining unused portion of the Revolving Credit Loan Commitment
as of such date, less the Revolving Credit Loan Commitment of any Revolving
Credit Lender that is not also a Floor Plan Lender, shall be reserved and shall
no longer be available for funding Revolving Credit Loans but shall be available
under Section 2.3(d)(ii)(3), and (ii) no further Revolving Credit Loan
Borrowings (after giving effect to the Reserve Commitment in clause (i) hereof)
shall be available to the Company until the first Business Day on which such
condition no longer exists.
Section 3.5 Obligations Absolute. The Obligations of the Company under this
Agreement and any of the other Loan Documents to repay any Swing Line Loans
under the Revolving Credit Loan Commitments or the Revolving Credit Loans, as
the case may be, shall be unconditional and irrevocable. Such obligation shall
be paid strictly in accordance with the terms of this Agreement and each such
other Loan Document under all circumstances, including the following: (a) any
lack of validity or enforceability of this Agreement or any of the other Loan
Documents; (b) any change in the time, manner or place of payment of, or in any
other term of all or any of the Obligations of any other Borrower, or other
amendment or waiver of or any consent to departure from all or any of the
applicable/related Loan Documents; (c) the existence of any other claim that the
Company may then have against the Agent or any other Lender in connection with
this Agreement or the transactions contemplated hereby or by the related Loan
Documents, other than the defense of payment; (d) any other circumstance that
might otherwise constitute a defense available to, or discharge of, any other
Borrower other than the defense of payment. Nothing contained in this Section
3.5 shall constitute a waiver by the Company of any claims arising out of the
gross negligence, bad faith or willful misconduct of the Agent or the Swing Line
Bank.
ARTICLE IV.
SWING LINE LOANS
Section 4.1 Swing Line Commitments and Payments.
(a) The Swing Line Bank shall, on the terms and subject to the
conditions set forth in Section 2.7(c) and Section 4.3, make one or more
advances (each such advance being a "Swing Line Loan") to any Floor Plan
Borrower under the Floor Plan Swing Line Commitments and to the Company under
the Revolver Swing Line Commitment from time to time on any Business Day during
the term hereof, in amounts not to exceed at any time (i) the aggregate amount
of the Floor Plan Swing Line Commitment with respect to Floor Plan Swing Line
Loans, (ii) the Floor Plan Advance Limit with respect to Motor Vehicles financed
under Floor Plan Swing Line Loans, or (iii) the aggregate amount of the Revolver
Swing Line Commitment with respect to Revolving Credit Swing Line Loans.
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(b) All Revolving Credit Swing Line Loans shall be due and payable
ten (10) days after same are made. All Floor Plan Swing Line Loans shall be due
and payable pursuant to the provisions of Section 2.4 and Section 4.5.
Section 4.2 Accrual of Interest; Margin Adjustments. Each Swing Line Loan
shall bear interest at the rate set forth in Section 5.2. The amount and date of
each such Swing Line Loan, the Alternate Base Rate, the Floor Plan New Swing
Rate, the Floor Plan Used Swing Rate, and the amount and date of any repayment
shall be noted on the Swing Line Bank's records, which records will be
conclusive evidence thereof, absent manifest error; provided, any failure by the
Swing Line Bank to record any such information shall not affect the obligations
of the applicable Floor Plan Borrower with respect thereto in accordance with
the terms of this Agreement and the Loan Documents, and, further provided, upon
the occurrence and during the continuance of an Event of Default, each Swing
Line Loan shall bear interest at the rate otherwise applicable thereto, plus
three percent (3%).
Section 4.3 Requests for Swing Line Loans.
(a) On any day that a Floor Plan Swing Line Loan is requested pursuant
to Section 2.3 or a Revolving Credit Swing Line Loan is requested pursuant to
Section 3.3(a), the applicable Floor Plan Borrower with respect to Floor Plan
Swing Line Loans or the Company with respect to Revolving Credit Swing Line
Loans shall be deemed to have delivered to the Swing Line Bank a Request for
Borrowing in connection therewith, subject to the following and to the remaining
provisions of this Section 4.3:
(i) in the case of Floor Plan Loan Commitments, the aggregate
principal amount of such requested Swing Line Loan Borrowing under the
Floor Plan Loan Commitments, plus the aggregate principal amount of
all other Swing Line Loans then outstanding under the Floor Plan Loan
Commitments shall not exceed the Floor Plan Swing Line Commitment, and
any Borrowing under the Floor Plan Loan Commitments shall not exceed
the Floor Plan Advance Limit;
(ii) in the case of the Revolving Credit Loan Commitments, the
aggregate principal amount of such requested Swing Line Loan Borrowing
under the Revolving Credit Loan Commitments, plus the aggregate
principal amount of all other Swing Line Loans then outstanding under
the Revolving Credit Loan Commitments shall not exceed the Revolver
Swing Line Commitment;
(iii) such request for Borrowing shall be irrevocable and if it
is a request for a Borrowing under the Revolving Credit Commitment,
shall constitute a certification by the Company of the provisions of
Section 8.3; and
(iv) such request may be in writing (including via facsimile) or
by telephone (if promptly confirmed in writing) or, if for Floor Plan
Swing Line Loans, pursuant to the provisions of Section 2.3. Each of
the Company and the Floor Plan Borrowers hereby authorizes the Swing
34
Line Bank to disburse Swing Line Loans pursuant to the telephone
instructions of any Person purporting to be a Person identified by
name on a written list of Persons authorized by the Company or each
such Floor Plan Borrower to make requests for Swing Line Loans on
behalf of the Company or such Floor Plan Borrowers. Notwithstanding
the foregoing, each of the Company and the Floor Plan Borrowers
acknowledges and agrees that each Borrower shall bear all risk of loss
resulting from disbursements made upon any telephone request.
Section 4.4 Disbursement of Swing Line Loans.
(a) In the case of Revolving Credit Swing Line Loans, subject to
receipt of a Request for Borrowing of a Swing Line Loan and to the other terms
and conditions of this Agreement, the Swing Line Bank shall make available to
the Company the amount so requested, in same day funds, not later than 1:00 p.m.
New York, New York time on the Borrowing Date for such Swing Line Loan, by
credit to an account of the Company maintained with the Swing Line Bank or to
such other account or third party as the Company may direct.
(b) Floor Plan Swing Line Loans shall be disbursed in accordance with
the provisions of Section 2.3.
Section 4.5 Refunding of and Participation Interest in Swing Line Loans.
(a) Upon the occurrence and during the continuance of an Event of
Default other than those described in paragraph (c) below, the Swing Line Bank,
in its sole and absolute discretion, may, on behalf of any Floor Plan Borrower
(each of whom hereby irrevocably directs the Swing Line Bank to act on its
behalf), make a written (including via facsimile) request to the Agent,
requesting the Floor Plan Lenders to make Floor Plan Loans in an amount equal to
the outstanding principal amount of the Floor Plan Swing Line Loans in
accordance with each Floor Plan Lender's respective Pro Rata Share of Floor Plan
Loan Commitments (including the portion thereof which constitutes the Swing Line
Minimum Amount). Any such Swing Line Loans shall be made by the Lenders pursuant
to the provisions of Section 2.4; provided, that no such request shall require
any Floor Plan Lender to make Floor Plan Loans in excess of such Floor Plan
Lender's Floor Plan Loan Commitment on the date such request is made. Unless an
Event of Default described in Section 11.3(d), Section 11.3(e), Section 11.3(f),
or Section 11.3(g), shall have occurred (in which event the procedures of
Section 4.5(c) shall apply) and regardless of whether the conditions precedent
set forth in this Agreement to the making of a Floor Plan Loan are then
satisfied or were satisfied at the time the Swing line Bank advanced such Floor
Plan Swing Line Loans, each Floor Plan Lender shall upon request by the Agent in
the manner specified in Section 2.4 make the proceeds of its Floor Plan Loan
available to the Floor Plan Agent for the benefit of the Swing Line Bank.
(b) At any time that a Revolving Credit Swing Line Loan is outstanding
for more than ten (10) days and, in any event, upon the occurrence and during
the continuance of an Event of Default, the Swing Line Bank in its sole and
absolute discretion, may, on behalf of the Company (who hereby irrevocably
directs the Swing Line Bank to act on its behalf), make a written (including via
facsimile) request to the Agent, requesting the Revolving Credit Loan Lenders
(including the Swing Line Bank in its capacity as a Revolving Credit Loan
Lender) to make Revolving Credit Loans in an amount equal to the outstanding
principal amount of the Swing Line Loans outstanding under the Revolving Credit
35
Loan Commitments in accordance with each Revolving Credit Loan Lender's
respective Pro Rata Share of Revolving Credit Loan Commitments. Such loans shall
accrue interest at the Alternate Base Rate, provided, no such request shall
require any Revolving Credit Loan Lender to make Revolving Credit Loans in
excess of such Revolving Credit Loan Lender's Pro Rata Share of the Total
Revolving Credit Commitment on the date such request is made. Unless an Event of
Default described in Section 11.1(f) or Section 11.1(g) shall have occurred (in
which event the procedures of Section 4.5(c) shall apply) and only if the
conditions precedent set forth in this Agreement to the making of such Revolving
Credit Swing Line Loan were satisfied at the time the Swing Line Lender advanced
such Loan, but regardless of whether the conditions precedent set forth in this
Agreement to the making of a Revolving Credit Loan are then satisfied, each
Revolving Credit Loan Lender shall immediately upon request by the Agent in the
manner specified in Section 3.3 make the proceeds of its Revolving Credit Loan
available to the Agent for the benefit of the Swing Line Bank.
(c) If, prior to making of a Floor Plan Loan pursuant to Section
4.5(a) or a Revolving Credit Loan pursuant to Section 4.5(b), an Event of
Default described in Section 11.1(f) or Section 11.1(g) or Section 11.3(d),
Section 11.3(e), Section 11.3(f), or Section 11.3(g), shall have occurred and be
continuing, each Lender shall, in the manner provided for herein, on the date
such Loan was to have been made, purchase from the Swing Line Bank participation
interests in the Swing Line Loans under the Floor Plan Loan Commitments and
under the Revolving Credit Loan Commitments equal to such Lender's Pro Rata
Share of such Commitments.
(d) Subject to Section 4.5(c) above, each Lender's obligation to make
Loans pursuant to this Section and to purchase participation interests shall be
absolute and unconditional and shall not be affected by any circumstance,
including, without limitation, (i) any setoff counterclaim, recoupment, defense
or other right which such Lender may have against the Swing Line Bank, any
Borrower or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of any Default or Event of Default; (iii) any adverse change in the
condition (financial or otherwise) of any Borrower or any other Person; (iv) any
breach of this Agreement by any Borrower or any other Person; (v) any inability
of any Borrower to satisfy the conditions precedent to a Borrowing set forth in
this Agreement on the date upon which such Loan is required to be made or such
participating interest is to be purchased; or (vi) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
If any Lender does not make available to the applicable Agent the amount
required pursuant to Section 4.5(a) or Section 4.5(b), as the case may be, the
Swing Line Bank shall be entitled to recover such amount on demand from such
Lender, together with interest thereon for each day from the date of non-payment
until such amount is paid in full at the Federal Funds Effective Rate.
(e) Loans made to refund Floor Plan Swing Line Loans as provided in
Section 4.5(a) shall be Floor Plan Loans and shall bear interest at the
Alternate Base Rate plus three percent (3%) per annum (in accordance with
Section 5.3) until any such Event of Default is cured or waived, and then at the
Alternate Base Rate until the fifth (5th) Business Day of the first month
following the cure or waiver of the applicable Event of Default. On the next
succeeding Floor Plan Adjustment Date such Loans shall be treated as all other
Floor Plan Loans outstanding in accordance with the provisions of Section
2.4(a).
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ARTICLE V.
ALL LOANS
Section 5.1 Notes: Repayment of Loans.
(a) All Loans made hereunder shall be evidenced by the Notes payable
as therein provided, which Notes shall be dated the Closing Date, and shall be
in an aggregate principal amount equal to the Total Commitments on such date.
The outstanding principal balance of such Loans and all interest thereon and all
the Obligations, as evidenced by the Notes, shall be due and payable in
accordance with the terms and provisions of this Agreement, and on the Maturity
Date. Each Note shall bear interest from its date on the outstanding principal
balance thereof as provided in Section 5.2.
(b) Each Lender or the Agent, on its behalf, is hereby authorized by
each Borrower to, endorse on a schedule attached to the Notes delivered to it
(or a computer generated supplement thereto, which supplement shall be deemed to
be a part thereof), or otherwise record in such Lender's or Agent's, as the case
may be, internal records, an appropriate notation evidencing the date and amount
of each Loan, as well as the date and amount of each payment and prepayment with
respect thereto; provided, that the failure of any Lender or the Agent to make
such a notation or any error in such a notation shall not affect the Obligations
of any Borrower hereunder or under the Notes.
Section 5.2 Interest on Loans.
(a) Subject to the provisions of Section 5.3, each Alternate Base Rate
Loan which is a Revolving Credit Loan (excluding in each case Swing Line Loans)
shall bear interest at a rate per annum, equal to the Alternate Base Rate plus
the Applicable Margin for Alternate Base Rate Loans (if the Alternate Base Rate
is based on the Prime Rate, computed on the basis of the actual number of days
elapsed over a year of 365 or 366 days, as the case may be; or if the Alternate
Base Rate is based on the Federal Funds Effective Rate, computed on the basis of
the actual number of days elapsed over a year of 360 days).
(b) Subject to the provisions of Section 5.3, (i) each Eurodollar Loan
which is a Revolving Credit Loan (excluding Swing Line Loans) shall bear
interest at a rate per annum (computed on the basis of the actual number of days
elapsed over a year of 360 days) equal to the LIBO Rate for the Interest Period
in effect for such Loan plus the Applicable Margin for Eurodollar Revolving
Credit Loans, and each change in the Applicable Margin shall apply to all
Eurodollar Loans that are outstanding during the period commencing on the
effective date of such change and ending on the date immediately preceding the
effective date of the next such change, even if the effective date occurs in the
middle of an Interest Period; and (ii) each Eurodollar Loan which is a Floor
Plan Loan (excluding Swing Line Loans) shall bear interest at a rate per annum
(computed on the basis of the actual number of days elapsed over a year of 360
days) equal to the LIBO Rate for the Interest Period in effect for such Loan
plus: (A) 1.25% if such Loan is to finance New Motor Vehicles or Demonstrators
and (B) 1.375% if such Loan is to finance Used Motor Vehicles or Rental Motor
Vehicles.
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(c) Floor Plan Swing Line Loans shall bear interest at a rate per
annum (computed on the basis of the actual number of days elapsed over a year of
360 days) equal to the Floor Plan New Swing Rate for Swing Line Loans to finance
New Motor Vehicles or Demonstrators or the Floor Plan Used Swing Rate for Swing
Line Loans to finance Used Motor Vehicles or Rental Motor Vehicles.
(d) Revolving Credit Swing Line Loans shall bear interest at a rate
per annum equal to the Alternate Base Rate (if the Alternate Base Rate is based
on the Prime Rate, computed on the basis of the actual number of days elapsed
over a year of 365 or 366 days, as the case may be; or if the Alternate Base
Rate is based on the Federal Funds Effective Rate, computed on the basis of the
actual number of days elapsed over a year of 360 days).
(e) Any Overage Amount shall bear interest at the Alternate Base Rate
plus three percent (3.0%) per annum.
(f) Interest on each Revolving Credit Loan, each Swing Line Loan and
each Floor Plan Loan shall be payable in arrears on each Interest Payment Date
applicable to such Loan except as otherwise provided in this Agreement. Interest
on any Overage Amount shall be payable upon demand. The applicable LIBO Rate,
and the Alternate Base Rate shall be determined by the Agent, and the Floor Plan
New Swing Rate and the Floor Plan Used Swing Rate shall be determined by the
Swing Line Bank and such determinations shall be conclusive absent manifest
error. The Agent or Floor Plan Agent, as applicable shall promptly advise the
Borrowers and each Lender of each such determination.
Section 5.3 Interest on Overdue Amounts. Upon the occurrence and
continuance of an Event of Default, the Company or the defaulting Borrower shall
on demand pay interest, to the extent permitted by applicable law, on all Loans
outstanding up to (but not including) the date of actual payment at a rate per
annum (computed on the basis of the actual number of days elapsed over a year of
360 days) equal to the interest rate otherwise applicable thereto, plus three
percent (3%) per annum (after as well as before judgment) and, if such Loan is a
Eurodollar Loan, such Loan shall be converted to an Alternate Base Rate Loan at
the end of the applicable Interest Period. Any such loan that is so converted
shall bear interest upon conversion at the Alternate Base Rate plus the
Applicable Margin plus three percent (3%) per annum.
Section 5.4 Fees.
(a) The Company shall pay to the Agent, on the last day of each March,
June, September and December and on the Maturity Date, in immediately available
funds, (i) for the pro rata benefit of the Floor Plan Lenders, a Floor Plan Loan
Commitment fee (the "Floor Plan Loan Commitment Fee") equal to
twenty-five-one-hundredths of one percent (0.25%) per annum times the average
unused amount of the Floor Plan Loan Commitments during the immediately
preceding fiscal quarter (or shorter portion thereof) just ended (excluding any
unused portion of the Revolving Credit Loan Commitments that has been
reallocated or converted to the Floor Plan Loan Commitment in accordance with
the terms hereof); (ii) for the pro rata benefit of the Revolving Credit Loan
Lenders, a Revolving Credit Loan Commitment fee (the "Revolving Credit Loan
Commitment Fee") equal to three-hundred seventy-five-one-thousandths of one
percent (0.375%) per annum times the average unused amount of the Revolving
Credit Loan Commitments (including any portion of Revolving Credit Loan
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Commitments that has been reallocated or converted to the Floor Plan Loan
Commitment in accordance with the terms hereof and remains unused thereunder)
during the immediately preceding fiscal quarter (or shorter period thereof) just
ended. All Commitment Fees under this Section 5.4(a) shall be computed on the
basis of the actual number of days elapsed in a year of 365 or 366 days, as the
case may be. The Commitment of a Lender shall be deemed "unused" to the extent
and in the amount such Lender is obligated to fund future Loans or Letter of
Credit Obligations of any Borrower regardless of whether or not any amounts are
outstanding under any Swing Line Loan. The Floor Plan Loan Commitment Fees and
the Revolving Credit Loan Commitment Fees due to each Lender shall commence to
accrue on the Closing Date and cease to accrue on the earlier of the Maturity
Date and the termination of the Commitments of such Lender pursuant to Section
5.5 or Section 13.3(b).
(b) The Company shall pay the Agent, X.X. Xxxxxx Securities Inc., Bank
of America, N.A. and Banc of America Securities LLC, the fees (the "Agency
Fees") in such amount and on such dates as may be agreed among the Company, the
Agent, X.X. Xxxxxx Securities Inc., Bank of America, N.A. and Banc of America
Securities LLC, for their account and for the account of the Lenders, as
applicable, as set forth in that certain letter agreement dated October 28, 2004
among said parties (the "Agent's Letter").
(c) The Company shall pay the Agent and the Floor Plan Agent the
agency and floor plan agency fees ("Administrative Fees") in such amount and on
such dates as may be agreed among the Company, the Agent, and the Floor Plan
Agent pursuant to that certain letter agreement between said parties dated March
___, 2004 among said parties (the "Administrative Fee Letter").
(d) The Company shall pay to the Agent for the benefit of the Lenders
on the Closing Date the fees payable to the Lenders as provided in the Agent's
Letter.
Section 5.5 Termination, Reduction or Conversion of Commitments.
(a) Upon at least three (3) Business Days' prior written notice to the
Agent, the Company may at any time, in whole, permanently terminate or
permanently reduce the Total Commitments, among the Lenders in accordance with
(i) their respective Pro Rata Share of Floor Plan Loan Commitments, and (ii)
their respective Pro Rata Share of Revolving Credit Loan Commitments; provided
(x) any such partial reduction of the Total Commitments shall be in minimum
aggregate increments of Five Million Dollars ($5,000,000); (y) no reduction
shall reduce the amount of the Revolving Credit Loan Commitments to an amount
which is less than the Letter of Credit Obligations outstanding at such time,
plus any Reserve Commitment required pursuant to Section 3.4; and (z) following
any such reduction, the Revolving Credit Loan Commitment shall not exceed twenty
percent (20%) of the Total Commitment. In connection with any such reduction,
the Floor Plan Agent in its discretion may suspend and/or terminate all or a
portion of the then outstanding Drafting Agreements selected by the Company, in
an amount that corresponds to the size of said reduction.
(b) Subject to Section 5.5(a) above and the provisions contained in
this paragraph (b), at any time there exists any unused portion of the Revolving
Credit Loan Commitments, the Company may request in writing the Agent to convert
all or a part of such unused portion of the Revolving Credit Loan Commitments
into Floor Plan Loan Commitments, provided, following such conversion, the total
39
of the Revolving Credit Loan Commitments shall never be less than an amount
equal to (i) the sum of all Revolving Credit Loans then outstanding, plus (ii)
all Letter of Credit Obligations then outstanding, plus (iii) any Reserve
Commitment; and in such event and following five (5) days prior written notice
from the Company to the Agent, the Floor Plan Loan Commitments shall, upon such
request, be increased by the amount so requested by the Company, such amount
together with the Revolving Credit Loan Commitments not to exceed the Total
Commitment, and, further provided, that the Revolving Credit Loan Commitment of
any Revolving Credit Loan Lender that is not also a Floor Plan Lender may not be
so converted. At any time there exists any unused amount of a converted portion
of the Floor Plan Loan Commitments, the Company may request the Agent to reverse
any such portion thereof, in whole or in part, and in such event the Floor Plan
Loan Commitments and the Revolving Credit Loan Commitments shall be restored, as
applicable, in the respective amounts so requested by the Company.
(c) Upon any such conversion of Revolving Credit Loan Commitments into
Floor Plan Loan Commitments or vice versa, the Floor Plan Loan Commitments shall
be increased or decreased, as the case may be, pro rata among the Floor Plan
Lenders, and the Revolving Credit Loan Commitments shall be increased or
decreased, as the case may be, in an aggregate amount of the corresponding
increase or decrease in the Floor Plan Loan Commitments, which increase or
decrease in the Revolving Credit Loan Commitments shall be allocated among the
Revolving Credit Loan Lenders (other than any Revolving Credit Loan Lender that
is not also a Floor Plan Lender) based on their Pro Rata Share of Revolving
Credit Loan Commitments.
(d) At the time the Commitments of any Lender are terminated or
reduced pursuant to Section 5.5(a), the Company shall pay to the Agent for the
account of each such Lender, the Floor Plan Loan Commitment Fees and the
Revolving Credit Loan Commitment Fees on the amount of such terminated or
reduced Commitments owed to the date of such termination or reduction.
(e) Each of the Commitments shall automatically and permanently
terminate on the Maturity Date.
Section 5.6 Alternate Rate of Interest. If on the day two (2) Business Days
prior to the commencement of any Interest Period for a Eurodollar Borrowing, the
Agent shall have determined that: (a) Dollar deposits in the amount set forth in
the request for Borrowing are not generally available in the London interbank
market or that the rate at which Dollar deposits are being offered will not
adequately and fairly reflect the cost to any Lender or the Swing Line Bank of
making or maintaining the principal amount of its Eurodollar Loan comprising
such Borrowing during such Interest Period, or (b) reasonable means do not exist
for ascertaining the LIBO Rate, then the Agent shall as soon as practicable
thereafter give written notice of such determination to the Company, the Lenders
and/or the Swing Line Bank; and any request by a Borrower for the making of a
Eurodollar Borrowing shall, until the circumstances giving rise to such notice
no longer exist, be deemed to be a request for a Borrowing to be comprised of
Alternate Base Rate Loans. Each determination of the Agent hereunder shall be
conclusive, absent manifest error.
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Section 5.7 Prepayment of Loans; Mandatory Reduction of Indebtedness.
(a) Each Revolving Credit Loan Borrowing, each Floor Plan Loan
Borrowing and each Swing Line Loan may be prepaid at any time and from time to
time prior to its respective date due in accordance herewith, in whole or in
part, subject to the requirements of Section 5.10, but otherwise without premium
or penalty, upon at least three (3) Business Days' prior written or facsimile
notice to the Agent.
(b) On the date of any termination or reduction of the Total
Commitments pursuant to Section 5.5(a), each of the Borrowers shall prepay the
Loans in an amount equal to the amount by which the Commitments are being so
terminated or reduced, as shall be necessary in order that the aggregate
principal amount of the Loans and Letter of Credit Obligations outstanding will
not exceed the Total Commitments following such termination or reduction. All
prepayments under this paragraph shall be subject to Section 5.10.
(c) Each notice of prepayment shall be irrevocable and shall specify
the prepayment date and the principal amount of each Loan (or portion thereof)
and the Type of Loan to be prepaid. All prepayments shall be accompanied by
accrued interest on the principal amount being prepaid to the date of
prepayment.
(d) Subject to the provisions of Section 2.3(d)(ii), if at any time
and for any reason:
(i) the aggregate principal amount of all (y) Floor Plan Loans
outstanding, plus (z) Floor Plan Swing Line Loans shall exceed the
Total Floor Plan Loan Commitments at such time, or
(ii) the aggregate principal amount of all (x) Revolving Credit
Loans, plus (y) Swing Line Loans outstanding under the Revolving
Credit Loan Commitments, plus (z) Letter of Credit Obligations shall
exceed the amount of the Revolving Credit Loan Advance Limit, or
(iii) the aggregate principal amount of all (w) Floor Plan Loans
outstanding, plus (x) Swing Line Loans outstanding, plus (y) Revolving
Credit Loans outstanding, plus (z) Letter of Credit Obligations
outstanding shall exceed the Total Commitments,
the Borrowers shall immediately, upon demand, pay to the Agent an amount of such
Obligations equal to such excess, provided, Borrowers shall have the right to
direct such repayment first to prepay such portion of the Indebtedness not
subject to the provisions of Section 5.10.
Section 5.8 Reserve Requirements; Change in Circumstances.
(a) It is understood that the cost to each Lender of making or
maintaining any of the Eurodollar Loans may fluctuate as a result of the
applicability of reserve requirements imposed by the Board at the ratios
provided for in Regulation D on the date hereof. The Borrowers agree to pay to
such Lender from time to time such amounts as shall be necessary to compensate
such Lender for the portion of the cost of making or maintaining Eurodollar
Loans resulting from any increase in such reserve requirements provided for in
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Regulation D (or any successor regulation or ruling issued in respect thereof)
from those as in effect on the date hereof, it being understood that the rates
of interest applicable to Eurodollar Loans have been determined on the
assumption that no such reserve requirements exist or will exist and that such
rates do not reflect costs imposed on the Lenders in connection with such
reserve requirements.
(b) Notwithstanding any other provision herein, if after the date of
this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (whether or not having the
force of law) shall change the basis of taxation of payments to any Lender of
the principal of or interest on any Eurodollar Loan made by such Lender or any
other fees or amounts payable hereunder (other than taxes imposed on the overall
net income or profits of such Lender by the jurisdiction in which such Lender or
its applicable lending office has its principal office or is located or by any
political subdivision or taxing authority therein), or shall impose, modify or
deem applicable any reserve, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by, such
Lender or shall impose on such Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender and
the result of any of the foregoing shall be to increase the cost to such Lender
of making or maintaining any Eurodollar Loan or to reduce the amount of any sum
received or receivable by such Lender hereunder (whether of principal, interest
or otherwise) in respect thereof, by an amount deemed by such Lender in its sole
discretion to be material, then the Borrowers shall pay as required in Section
5.8(d) such additional amount or amounts as will compensate such Lender for such
additional costs or an amount equal to such reduction will be paid to such
Lender with respect to the Eurodollar Loans, as the case may be.
(c) If any Lender shall have determined that the applicability of any
law, rule, regulation or guideline regarding capital adequacy, or any change in
any of the foregoing or in the interpretation or administration of any of the
foregoing by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Lender (or any Applicable Lending Office of such Lender) with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's capital, if any, as a
consequence of this Agreement or the Loans made by such Lender pursuant hereto
to a level below that which such Lender could have achieved but for such
adoption, change or compliance (taking into consideration such Lender's policies
with respect to capital adequacy) by an amount deemed by such Lender to be
material, then the Borrowers shall pay as required to Section 5.8(d) to such
Lender such additional amount or amounts as will compensate such Lender for any
such reduction.
(d) A certificate of each Lender setting forth in reasonable detail
calculations (together with the basis and assumptions therefor) to establish
such amount or amounts as shall be necessary to compensate without duplication
such Lender (or participating banks or other entities pursuant to Section 13.3
subject to the limitations set forth therein) under Section 5.8(a), Section
5.8(b) or Section 5.8(c) shall be delivered to the Agent which shall promptly
deliver the same to the Company and such certificate shall be rebuttably
presumptive evidence of the amount or amounts which such Lender is entitled to
receive. The Borrowers shall pay such Lender the amount shown as due on any such
certificate within ten (10) days after its receipt of the same.
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(e) Any demand for compensation pursuant to this Section 5.8 must be
made no later than ninety (90) days after the later of (i) the date on which the
Lender first incurs the expense, cost or economic loss referred to and (ii) the
date on which the Lender first has knowledge that it is liable for such expense,
cost or economic loss, or such Lender shall be deemed to have waived the right
to such compensation. The protection of this Section 5.8 shall be available to
each Lender regardless of any possible contention of the invalidity or
inapplicability of any law, regulation or other condition which shall give rise
to any demand by such Lender for compensation; provided, if any such contention
is undertaken by any Lender, in its sole discretion, and same results in any
refund to such Lender of any amounts paid by any Borrower under this Section
5.8, Lender shall promptly refund such payment to the Company, without interest.
Section 5.9 Change in Legality.
(a) Notwithstanding anything to the contrary herein contained, if any
change in any law or regulation or in the interpretation thereof by any
Governmental Authority charged with the administration or interpretation thereof
shall make it unlawful for any Lender to make or maintain any Eurodollar Loan,
then, by written notice to the Agent, such Lender may:
(i) declare that Eurodollar Loans will not thereafter be made by
such Lender hereunder, whereupon any request by any Borrower for a
Eurodollar Borrowing shall, as to such Lender only, be deemed a
request for an Alternate Base Rate Loan, as applicable unless such
declaration shall be subsequently withdrawn; and
(ii) require that all outstanding Eurodollar Loans made by it be
converted to Alternate Base Rate Loans, in which event all such
Eurodollar Loans shall be automatically converted to Alternate Base
Rate Loans, as of the effective date of such notice as provided in
Section 5.9(b).
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been applied to
repay the Eurodollar Loans made by such Lender or the converted Eurodollar Loans
of such Lender shall instead be applied to repay the Alternate Base Rate Loans,
made by such Lender in lieu of, or resulting from the conversion of, such
Eurodollar Loans.
(b) For purposes of Section 5.9(a), a notice to the Agent by any
Lender shall be effective as to each Eurodollar Loan on the last day of each
applicable Interest Period.
Section 5.10 Breakage Costs and Related Matters.
(a) The Borrowers shall indemnify each Lender against any loss or
expense which such Lender may sustain or incur as a consequence of (i) any
failure by any Borrower to fulfill on the date of any Borrowing hereunder the
applicable conditions set forth in Article VIII, (ii) any failure by any
Borrower to borrow, convert or continue hereunder after delivery of a Request
for Borrowing or a request for Borrowing pursuant to Section 2.3(a) or a notice
of conversion or continuation has been given pursuant to Section 2.4, Section
3.3 or Section 5.15, (iii) any payment, prepayment or conversion of a Eurodollar
Loan required by any other provision of this Agreement or otherwise made on a
date other than the last day of the applicable Interest Period, (iv) any default
43
in payment or prepayment of the principal amount of any Loan or any part thereof
or interest accrued thereon, as and when due and payable (at the due date
thereof, by irrevocable notice of prepayment or otherwise), or (v) the
occurrence of any Event of Default, including, but not limited to, any loss or
reasonable expense sustained or incurred or to be sustained or incurred in
liquidating or employing deposits from third parties acquired to effect or
maintain such Loan or any part thereof as a Eurodollar Loan. Such loss or
reasonable expense shall include an amount equal to the excess, if any, as
reasonably determined by each Lender of (A) its cost of obtaining the funds for
the Loan being paid, prepaid or converted or not borrowed (based on the LIBO
Rate applicable thereto) for the period from the date of such payment,
prepayment or conversion or failure to borrow to the last day of the Interest
Period for such Loan (or, in the case of a failure to borrow, the Interest
Period for such Loan which would have commenced on the date of such failure to
borrow) over (B) the amount of interest that could be realized by such Lender in
reemploying during such period the funds so paid, prepaid or converted or not
borrowed. A certificate of each Lender setting forth in reasonable detail
calculations (together with the basis and assumptions therefore) to establish
any amount or amounts which such Lender is entitled to receive pursuant to this
Section 5.10 shall be delivered to the Agent which shall promptly deliver the
same to the Company and such certificate shall be rebuttably presumptive
evidence of the amount or amounts which such Lender is entitled to receive.
(b) The provisions of this Section 5.10 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term or
provision of this Agreement or any Note; provided, demand for compensation
pursuant to Section 5.8 must be made on or before ninety (90) days after the
later of (i) the first date on which the Lender incurs the expense, cost or
economic loss referred to and (ii) the first date on which the Lender first has
knowledge that it is liable for such expense, cost or economic loss, or such
Lender shall be deemed to have waived the right to such compensation. All
amounts due under this Section 5.10 shall be payable within ten (10) days after
receipt of demand therefor.
Section 5.11 Pro Rata Treatment. Except as otherwise provided herein, each
Borrowing, each payment or prepayment of principal of the Notes, each payment of
interest on such Notes, each other reduction of the principal or interest
outstanding under such Notes, however achieved, each payment of the Commitment
Fees and each reduction of the Commitments shall be made, as applicable, in
accordance with each Lender's respective (i) Pro Rata Share of Floor Plan Loan
Commitments and (ii) Pro Rata Share of Revolving Credit Loan Commitments.
Section 5.12 Place of Payments.
(a) The Floor Plan Borrowers shall make all payments of principal and
interest on any Floor Plan Swing Line Loan and any Floor Plan Loan , including
payments pursuant to Section 2.5 or of the proceeds of the sale of any Motor
Vehicle, on the date when due in Dollars to the Floor Plan Agent at the office
specified by the Floor Plan Agent. The Company shall make all payments of
principal and interest on any Revolving Credit Swing Line Loan and any Revolving
Credit Loan on the date when due in Dollars to the Agent at JPMorgan Chase Bank,
000 Xxxx Xxxxxx, Xxxxx, Xxxxxxx, Xxxxx 00000, or by wire transfer to JPMorgan
Chase Bank, ABA#000000000, for credit to account #000-000-000, reference: Xxxxxx
Automotive, Attn: Agency Services Xxxxxxxx Xxxxxxxx. Except as otherwise
provided in this Agreement, the Company and/or any of the Floor Plan Borrowers
44
shall make all payments (including principal of or interest on any Borrowing,
the Agency Fee, or any other fees or other amounts) payable hereunder and under
any other Loan Document not later than 1:00 p.m., New York time in immediately
available funds, without setoff or counterclaim.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation of
interest and fees, if applicable; provided, all payments must be made on or
before the Maturity Date.
(c) Unless the Agent shall have received notice from a Lender prior
to the date of a Borrowing that such Lender will not make available to the Agent
its portion of such Borrowing, the Agent may assume that such Lender has made
such portion available to the Agent on the date of such Borrowing. The Agent
may, in reliance upon such assumption, make available to the appropriate Person
on such date a corresponding amount. If, and to the extent that a Lender shall
not have made its portion of a Borrowing available to the Agent, such Lender and
the Borrowers severally, but without duplication, agree to pay to the Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Agent until the
date such amount is repaid to the Agent (i) in the case of the Borrowers, at the
applicable rate in respect of the affected Loan and (ii) in the case of such
Lender, at the Federal Funds Effective Rate. If such Lender shall repay to the
Agent such corresponding amount, such amount shall constitute such Lender's
portion of such Borrowing for purposes of this Agreement.
Section 5.13 Sharing of Setoffs. Each Lender agrees that if it shall, in
any manner, including through the exercise of a right of banker's lien, setoff
or counterclaim against any Borrower, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any Insolvency Proceeding or otherwise, obtain payment (voluntary or
involuntary) in respect of the Note held by it as a result of which the unpaid
principal portion of the Note held by it shall be proportionately less than the
unpaid principal portion of the Note held by any other Lender, it shall be
deemed to have simultaneously purchased from such other Lender a participation
in the Note held by such other Lender, so that the aggregate unpaid principal
amount of the Note and participations in Notes held by each Lender shall be in
the same proportion to the aggregate unpaid principal amount of all Notes then
outstanding as the principal amount of the Note held by it prior to such
exercise of banker's lien, setoff or counterclaim was to the principal amount of
all Notes outstanding prior to such exercise of banker's lien, setoff or
counterclaim; provided, that if any such purchase or purchases or adjustments
shall be made pursuant to this Section 5.13 and the payment giving rise thereto
shall thereafter be recovered, such purchase or purchases or adjustments shall
be rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest.
Section 5.14 Payments Free of Taxes.
(a) Any and all payments by the Borrowers hereunder shall be made free
and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding taxes imposed on the Agent's, the Floor Plan Agent's,
45
the Swing Line Bank's or any Lender's or any transferee's, assignee's or
participation holder's (any such entity a "Transferee") net income and franchise
taxes imposed on the Agent, the Floor Plan Agent, the Swing Line Bank or any
Lender (or Transferee) by the United States or any jurisdiction under the laws
of which it is organized or any political subdivision thereof (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrowers shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to the Lenders (or any Transferee), the Agent, the Floor Plan Agent or
the Swing Line Bank then: (i) the sum payable shall be increased by the amount
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 5.14) such Lender (or
Transferee) or the Agent, the Floor Plan Agent or the Swing Line Bank (as the
case may be) shall receive an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrowers shall make such deductions and
(iii) the Borrowers shall pay the full amount deducted to the relevant taxing
authority or other Governmental Authority in accordance with applicable law.
(b) In addition, the Borrowers agree to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document which are not excluded under Section 5.14
(hereinafter referred to as "Other Taxes").
(c) The Borrowers will indemnify each Lender (or Transferee), the
Swing Line Bank, the Agent and the Floor Plan Agent for the full amount of Taxes
and Other Taxes (including any Taxes or Other Taxes imposed by any jurisdiction
on amounts payable under this Section 5.14) paid by such Lender (or Transferee),
the Swing Line Bank, the Agent and the Floor Plan Agent, as the case may be, and
any liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted by the relevant taxing authority or other Governmental
Authority. Such indemnification shall be made within thirty (30) days after the
date any such Person indemnified hereunder makes written demand therefor, such
demand to contain a certificate setting forth the calculations (including all
assumptions and the basis therefor) to establish the amount for which indemnity
is claimed. If a Lender (or Transferee), the Agent, the Swing Line Bank, or the
Floor Plan Agent shall become aware that it is entitled to receive a refund in
respect of Taxes or Other Taxes, it shall promptly notify the Company of the
availability of such refund and shall, within thirty (30) days after receipt of
a request by the Borrowers, apply for such refund at the Company's expense. If
any Lender (or Transferee), the Swing Line Bank, the Agent or the Floor Plan
Agent receives a refund in respect of any Taxes or Other Taxes for which such
Person has received payment from any of the Borrowers, it shall promptly notify
the Company of such refund and shall, within thirty (30) days after receipt of a
request by any of the Borrowers (or promptly upon receipt, if any of the
Borrowers has requested application for such refund pursuant hereto), repay such
refund to the Company, net of all out-of-pocket expenses of such Person and
without interest; provided that the Borrowers, upon the request of such Person,
agree to return such refund (plus penalties, interest or other charges) to such
Person in the event such Person is required to repay such refund.
(d) Within thirty (30) days after the date of any payment of Taxes or
Other Taxes withheld by the Borrowers in respect of any payment to any Lender
(or Transferee), the Swing Line Bank, the Agent or the Floor Plan Agent, the
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Borrowers will furnish to such Person, at its address referred to in Section
13.1, the original or a certified copy of a receipt evidencing payment thereof
to the extent available.
(e) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 5.14 shall
survive the payment in full of the principal of and interest on all Loans made
hereunder.
(f) The Agent, the Floor Plan Agent, each Lender, the Swing Line Bank
and each Transferee each represents that it is either (i) a corporation
organized under the laws of the United States of America or any state thereof or
(ii) it is entitled to complete exemption from United States withholding tax
imposed on or with respect to any payments, including fees, to be made to it
pursuant to this Agreement (y) under an applicable provision of a tax convention
to which the United States of America is a party or (z) because it is acting
through a branch, agency or office in the United States of America and any
payment to be received by it hereunder is effectively connected with a trade or
business in the United States of America. Each Lender (or Transferee) which is
organized outside the United States shall, on the date it becomes a signatory
hereto, deliver to the Company and the Agent such certificates, documents or
other evidence, as required by the Code or Treasury Regulations issued pursuant
thereto, including Internal Revenue Service Form W-8 BEN or Form W-8 ECI and any
other certificate or statement of exemption required by Treasury Regulation
Section 1.1441-1(a) or Section 1.1441-6(c) or any subsequent version thereof,
properly completed and duly executed by such Lender (or Transferee) establishing
such payments to it are (i) not subject to withholding under the Code because
such payment is effectively connected with the conduct by such Lender (or
Transferee) of a trade or business in the United States or (ii) exempt from
United States tax under a provision of an applicable tax treaty. Unless the
Company and the Agent have received forms or other documents satisfactory to
them indicating that payments hereunder or under the Notes are not subject to
United States withholding tax or are subject to such tax at a rate reduced by an
applicable tax treaty, the Borrowers, the Agent, the Swing Line Bank and/or the
Floor Plan Agent shall withhold taxes from such payments at the applicable
statutory rate in the case of payments to or for any Lender (or Transferee) or
assignee organized under the laws of a jurisdiction outside the United States.
The Borrowers hereby waive any cause of action against the Agent, the Floor Plan
Agent, the Swingline Bank, any Transferee or any of the Lenders resulting from a
breach of any obligation contained in this Section 5.14(f) or the
representations contained in this Section 5.14(f) being untrue.
(g) The Borrowers shall not be required to pay any additional amounts
to any Lender (or Transferee) in respect of United States withholding tax
pursuant to Section 5.14(a) or Section 5.14(c) if the obligation to pay such
additional amounts would not have arisen but for the failure of the
representation in Section 5.14(f) to be true or a failure by such Lender (or
Transferee) to comply with the provisions of Section 5.14(f) above unless such
failure results from (i) a change in applicable law, regulation or official
interpretation thereof or (ii) an amendment, modification or revocation of any
applicable tax treaty or a change in official position regarding the application
or interpretation thereof, in each case after the Closing Date.
(h) Any Lender (or Transferee) claiming any additional amounts payable
pursuant to Section 5.8 or this Section 5.14 shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file any certificate or
document requested by the Company or to change the jurisdiction of its
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Applicable Lending Office if the making of such a filing or change would avoid
the need for or reduce the amount of any such additional amounts which may
thereafter accrue and would not, in the sole determination of such Lender, be
otherwise disadvantageous to such Lender (or Transferee).
(i) If any Lender (or Transferee) requests compensation pursuant to
this Section 5.14, or is unable to make a Eurodollar Loan, as contemplated in
Section 5.7 when other Lenders are able to do so, the Company may give notice to
such Lender (with a copy to the Agent) that they wish to seek one or more
Eligible Assignees (which may be one or more of the Lenders) to assume the
Commitments of such Lender and to purchase its outstanding Loans and Note. Each
affected Lender (or Transferee) hereto agrees to sell all of its Commitments,
its Loans and its Note pursuant to Section 13.3 to any such Eligible Assignee
for an amount equal to the sum of the outstanding unpaid principal of and
accrued interest on such Loans and Note plus all Commitment Fees and other fees
and amounts due such Lender (or Transferee) hereunder calculated, in each case,
to the date such Commitment, Loans and Note are purchased, whereupon such Lender
(or Transferee) shall thereafter have no other Commitments or other obligation
to the Company or the Floor Plan Borrowers hereunder or under any Note.
Section 5.15 Applicable Interest Rate. The Company shall have the right
with respect to Revolving Credit Loan Borrowings, at any time upon prior
irrevocable notice to the Agent (x) not later than 10:00 a.m., New York, New
York time, on the date of conversion, to convert any Eurodollar Borrowing into
an ABR Borrowing, (y) not later than 11:00 a.m., New York, New York time, three
Business Days prior to conversion or continuation, to convert all or any portion
of any ABR Borrowing into a Eurodollar Borrowing or to continue all or any
portion of any Eurodollar Borrowing of any Borrower as a Eurodollar Borrowing
for an additional Interest Period, and (z) not later than 11:00 a.m., New York
time, three Business Days prior to conversion, to convert all or any portion of
the Interest Period with respect to any Eurodollar Borrowing to another Interest
Period subject, in each case, to the following:
(a) each conversion or continuation shall be made among the Lenders,
in accordance with each Lender's Pro Rata Share of Revolving Credit Loan
Commitments;
(b) if less than all the outstanding principal amount of any such
Revolving Credit Loan shall be converted or continued, the aggregate principal
amount of such Revolving Credit Loan converted or continued shall be an integral
multiple of One Million Dollars ($1,000,000) and not less than One Million
Dollars ($1,000,000);
(c) if any Eurodollar Borrowing is converted at a time other than the
end of the Interest Period applicable thereto, the Company shall pay any
amounts due to the Lenders under Section 5.10;
(d) any portion of a Borrowing required to be repaid in less than one
month may not be converted into or continued as a Eurodollar Borrowing;
(e) any portion of a Eurodollar Borrowing which cannot be converted
into or continued as a Eurodollar Borrowing by reason of clause (d) above shall
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be automatically converted at the end of the Interest Period in effect for such
Revolving Credit Loan Borrowing into an ABR Borrowing; and
(f) accrued interest on an Revolving Credit Loan (or portion thereof)
being converted or continued shall be paid by the Company at the time of
conversion or continuation.
Each notice pursuant to this Section 5.15 shall be irrevocable and specify (w)
the identity and amount of the Revolving Credit Loan Borrowing that the Company
requests to be converted or continued, (x) whether such Revolving Credit Loan
Borrowing is to be converted to or continued as a Eurodollar Borrowing or an ABR
Borrowing, (y) if such notice requests a conversion, the date of such conversion
(which shall be a Business Day) and (z) if such Revolving Credit Loan Borrowing
is to be converted to or continued as a Eurodollar Borrowing, the Interest
Period with respect thereto. If no Interest Period is specified in any such
notice with respect to any conversion to or continuation as a Eurodollar
Borrowing, the Company shall be deemed to have selected an Interest Period of
one (1) month's duration. The Agent shall promptly advise the other Lenders of
any notice given pursuant to this Section 5.15 and of each Lender's portion of
any converted or continued Borrowing and the applicable interest rate. If the
Company shall not have given written notice in accordance with this Section 5.15
to continue any Eurodollar Borrowing into a subsequent Interest Period (and
shall not otherwise have given written notice in accordance with this Section
5.15 to convert such Revolving Credit Loan Borrowing), such Revolving Credit
Loan Borrowing shall, at the end of the Interest Period applicable thereto
(unless repaid pursuant to the terms hereof), automatically be extended as a
Eurodollar Loan with an Interest Period of one (1) month's duration.
Section 5.16 Extension of Maturity Date.
(a) If no Event of Default has occurred and is then continuing, the
Company may, by irrevocable written notice to Agent with a copy to each Lender
prior to April 1, but not before March 1, of each fiscal year beginning in 2007,
request that the Lenders extend the then applicable Maturity Date to a date that
is one year later than the Maturity Date then in effect. Each Lender shall, not
later than April 30 of such fiscal year, give written notice to the Agent
stating whether such Lender is willing to extend the Maturity Date as requested.
If the Agent has received the written approvals of such request from the
Required Lenders, then, effective upon the date of the Agent's receipt of all
such written approvals from the Required Lenders, the Maturity Date shall be so
extended for an additional one year period, the term "Maturity Date" shall mean
such extended date and the Agent shall promptly notify the Company and the
Lenders that such extension has occurred, provided, if less than all of the
Lenders have approved the extension, (i) the Total Commitment shall be reduced
by the amount of any non-consenting Lenders, and the Commitments of any
non-consenting Lenders shall be terminated (ii) any Obligations outstanding
above the amount of the reduced Total Commitment shall be repaid as a condition
to such extension following such reduction, together with all other amounts
owing any non-consenting Lender pursuant to any Loan Document and (iii) the
revised Revolving Credit Loan Commitment shall not exceed twenty percent (20%)
of the revised Total Commitment as a condition to such extension.
(b) If (i) any Lender gives the Agent written notice that it is
unwilling to extend the Maturity Date as requested or (ii) any Lender fails to
provide written approval to Agent of such a request on or before April 30 of
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such fiscal year, then, (y) subject to Section 5.17(a)(iv) such Lender shall be
deemed to have declined to extend the Maturity Date, and (z) the then-current
Maturity Date shall remain in effect in respect of such Lender.
Section 5.17 Replacement Lenders.
(a) If any Lender (i) makes a demand for compensation pursuant to
Section 5.8(a), Section 5.8(b) or Section 5.8(c), (ii) notifies the Agent of the
unlawfulness of such Lender making or maintaining Eurodollar Loans as provided
in Section 5.9, (iii) requests the Borrowers to make payments for Taxes or Other
Taxes pursuant to Section 5.14, or (iv) gives the Agent notice as provided in
Section 5.16(b) that it is unwilling to extend the Maturity Date or fails to
provide approval of such extension, then in any such event the Company may,
unless such Lender has notified the Company that the circumstances giving rise
to such event no longer apply, terminate, in whole but not in part, the
Commitments of such Lender (the "Terminated Lender") at any time upon five
Business Days' prior written notice to the Terminated Lender and the Agent (such
notice referred to herein as a "Notice of Termination").
(b) In order to effect the termination of the Commitments of a
Terminated Lender, the Company shall (i) obtain an agreement with one or more
Lenders to increase their Commitments or (ii) request any one or more other
Persons to become a "Lender" in place and instead of such Terminated Lender and
agree to accept its Commitments subject to the terms hereof or (iii) a reduction
under Section 5.5(a); provided, such one or more other such Persons are Eligible
Assignees and become parties by executing an Assignment and Acceptance and (the
Lenders or other Persons that agree to accept in whole or in part the
Commitments being referred to herein as the "Replacement Lenders"), such that
the aggregate increased and/or accepted Commitments of the Replacement Lenders
under clauses (i) and (ii) above equal the Commitments of the Terminated
Lenders.
(c) The Notice of Termination shall include the name of the Terminated
Lender, the date the termination will occur (the "Termination Date"), the
Replacement Lender or Replacement Lenders to which the Terminated Lender will
assign its Commitments, and, if there will be more than one Replacement Lender,
the portion of the Terminated Lender's Commitments to be assigned to each
Replacement Lender.
(d) The Termination Date shall not occur until all of the following
shall have been satisfied: (i) the Terminated Lender shall by execution and
delivery of an Assignment and Acceptance assign its Commitments to the
Replacement Lender or Replacement Lenders (pro rata, if there is more than one
Replacement Lender, in proportion to the portion of the Terminated Lender's
Commitments to be assigned to each Replacement Lender) indicated in the Notice
of Termination and shall assign to the Replacement Lender or Replacement Lenders
its then outstanding Loans so assigned then outstanding (pro rata as aforesaid),
(ii) the Terminated Lender shall endorse its applicable Note(s), payable without
recourse, representation or warranty to the order of the Replacement Lender or
Replacement Lenders (pro rata as aforesaid), (iii) the Replacement Lender or
Replacement Lenders shall purchase the Note(s) held by the Terminated Lender
(pro rata as aforesaid) at a price equal to the unpaid principal amount thereof
plus interest and fees accrued and unpaid to the Termination Date, (iv) the
Company and each of its Subsidiaries shall, upon request, execute and deliver,
at its own expense, new Notes to the Replacement Lenders in accordance with
their respective interests, which new Notes will be in replacement of and not in
addition to the Notes assigned and endorsed to the Replacement Lenders by the
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Terminated Lender (v) the Company shall, upon request, pay any compensation due
to the Terminated Lender under Section 5.17(a) to the extent not previously paid
to the Agent or Floor Plan Agent and (vi) the Replacement Lender or Replacement
Lenders will thereupon (pro rata as aforesaid) succeed to and be substituted in
all respects for the Terminated Lender to the extent of such assignment from and
after such date with the like effect as if becoming a Lender pursuant to the
terms of Section 13.3. To the extent not in conflict, the terms of Section 13.3
shall supplement the provisions of this Section 5.17.
Section 5.18 Increase of Commitments.
(a) At any time after the date hereof, provided that no Event of
Default shall have occurred and be continuing, the Company may request an
increase of the aggregate Commitments by notice thereof to the Agent in writing
(such notice, a "Commitment Increase Notice"), in an amount not less than
$25,000,000 nor more than $100,000,000 in the aggregate. The Agent will provide
the Lenders with notice of such Commitment Increase Notice. Such increase shall
be allocated between Floor Plan Loan Commitments and Revolving Credit Loan
Commitments as requested by Borrower, provided, following any such increase, the
Revolving Credit Loan Commitment shall not exceed twenty percent (20%) of the
Total Commitment. Any such Commitment Increase Notice shall be in a form
reasonably satisfactory to the Agent, and must offer each Lender the opportunity
to subscribe for its pro rata share of each increased Commitment. If the Company
does not receive either telephonic or written notice from the Agent that all of
the increased Commitment is subscribed for by the Lenders within fifteen (15)
Business Days after the delivery of the Commitment Increase Notice, the Company
may, in its sole discretion, but with the consent of the Agent as to any Person
that is not at such time a Lender, offer to any existing Lender or to one or
more additional banks or financial institutions the opportunity to participate
in all or a portion of such unsubscribed portion of the increased Commitments
pursuant to Section 5.18(b) or Section 5.18(c), as applicable.
(b) Any additional bank or financial institution that the Company
selects to offer participation in the increased Commitments, and that elects to
become a party to this Agreement with the Company and the Agent (a "New
Lender"), by the execution of an agreement (a "New Lender Agreement")
substantially in the form of Exhibit 5.18(b), shall become a Lender for all
purposes and to the same extent as if originally a party hereof and shall be
bound by and entitled to the benefits of this Agreement. The Commitment of any
such New Lender shall be in an amount not less than $10,000,000, and such
Commitment must be comprised of both a Floor Plan Loan Commitment and a
Revolving Credit Loan Commitment on a pro rata basis.
(c) Any Lender that accepts an offer by the Company to increase its
Commitment pursuant to this Section 5.18 shall, in each case, execute an
agreement whereby it agrees to be bound by, and accept the benefits of, this
Agreement and the other Loan Documents (a "Commitment Increase Agreement")
substantially in the form of Exhibit 5.18(c), with the Company and the Agent.
Upon delivery to the Agent of one or more Commitment Increase Agreements, the
Agent shall enter such New Lender and its Commitment in the Register and
distribute a new Schedule 1.1(a) reflecting the Commitment of such New Lender
and the Total Commitments, as increased.
(d) The effectiveness of any Commitment Increase Agreement shall be
contingent upon receipt by the Agent of such corporate resolutions of the
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Company and legal opinions of counsel to the Company as the Agent shall
reasonably request with respect thereto, in each case in form and substance
reasonably satisfactory to the Agent.
(e) Additional Loans made on or after the date that any bank or
financial institution becomes a New Lender pursuant to Section 5.18(b) or any
Lender's Commitment is increased pursuant to Section 5.18(c), (the
"Re-Allocation Date") shall be made pro rata based on their respective Floor
Plan Loan Commitments in effect on or after such Re-Allocation Date (except to
the extent that any such pro rata borrowings would result in any Lender making
an aggregate principal amount of Loans in excess of its Commitment, in which
case such excess amount will be allocated to, and made by, such New Lender
and/or Lenders with such increased Commitments to the extent of, and pro rata
based on, their respective Commitments), and continuations of Eurodollar Loans
outstanding on such Re-Allocation Date shall be effected by repayment of such
Eurodollar Loans on the last day of the Interest Period applicable thereto and
the making of new Eurodollar Loans pro rata based on the respective Commitments
in effect on and after such Re-Allocation Date. In the event that on any such
Re-Allocation Date there is an unpaid principal amount of Eurodollar Loans, such
Eurodollar Loans shall remain outstanding with the respective holders thereof
until the expiration of their respective Interest Periods (unless the Company
elects to prepay any thereof in accordance with the applicable provisions of
this Agreement), and interest on and repayments of such Eurodollar Loans will be
paid thereon to the respective Lenders holding such Eurodollar Loans pro rata
based on the respective principal amounts thereof outstanding.
(f) Notwithstanding anything to the contrary in this Section 5.18,
(i) no Lender shall have any obligation to increase its Commitment unless it
agrees to do so in its sole discretion and (ii) after giving effect to any
increase in the Commitments pursuant to this Section 5.18, the aggregate amount
of the Commitments shall not exceed $900,000,000.
(g) The Company shall execute and deliver a Note or Notes to each New
Lender and replacement Notes to Lenders signing a Commitment Increase Agreement
in the amount of said Persons' Commitments.
ARTICLE VI.
LETTERS OF CREDIT
Section 6.1 General.
(a) On the terms and conditions set forth herein (i) the Issuing Bank
agrees from time to time on any Business Day during the period from the Closing
Date to the Business Day which is thirty (30) days prior to the Maturity Date
(the "Letter of Credit Termination Date") to issue one or more Letter or Letters
of Credit for the account of the Company; and (ii) the Revolving Credit Loan
Lenders severally agree to participate in such Letters of Credit; provided, that
the Issuing Bank shall not be obligated to Issue, and no Lender shall be
obligated to participate in, any Letter of Credit if, as of the date of request
of such Letter of Credit, after giving effect to the maximum amount payable
under such Letter of Credit, (y) the aggregate principal amount of all Letter of
Credit Obligations outstanding shall at any time exceed the Letter of Credit
Commitment or (z) the aggregate principal amount of Revolving Credit Loans
outstanding, plus Swing Line Loans outstanding under the Revolving Credit Loan
Commitments, plus the Letter of Credit Obligations outstanding as of such day
shall exceed the Revolving Credit Loan Commitments of all the Lenders. Within
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the foregoing limits, and subject to the other terms and conditions hereof, the
ability of the Company to obtain Letters of Credit shall be fully revolving,
and, accordingly, the Borrowers may, during the foregoing period, obtain Letters
of Credit to replace Letters of Credit which have expired or which have been
drawn upon and reimbursed.
(b) The Issuing Bank is under no obligation to Issue any Letter of
Credit if: (i) any order, judgment or decree of any Governmental Authority shall
by its terms purport to enjoin or restrain the Issuing Bank from Issuing such
Letter of Credit, or any Requirement of Law applicable to the Issuing Bank or
any request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the Issuing Bank shall prohibit
the Issuing Bank, or request that the Issuing Bank refrain, from the Issuance of
Letters of Credit generally or such Letter of Credit in particular or shall
impose upon the Issuing Bank with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which the Issuing Bank is not
otherwise compensated hereunder) not in effect on the Closing Date; (ii) the
Issuing Bank has received written notice from any Lender, the Agent or any
Borrower, on or before the Business Day prior to the requested date of Issuance
of such Letter of Credit, that one or more of the conditions contained in
Section 8.3 in respect of Revolving Credit Loans is not then satisfied; (iii)
the expiration date of any requested Letter of Credit is more than one (1) year
from the date of Issuance thereof or after the Maturity Date; (iv) any requested
Letter of Credit is not in form and substance reasonably acceptable to the
Issuing Bank, or the Issuance of such Letter of Credit shall violate any
applicable policies of the Issuing Bank or shall be denominated in a currency
other than Dollars.
Section 6.2 Issuance, Amendment and Renewal of Letters of Credit.
(a) Each Letter of Credit shall be issued upon the irrevocable written
request of the Company received by the Issuing Bank (with a copy sent by the
Company to the Agent) at least three (3) Business Days prior to the proposed
date of Issuance. Each such request for Issuance of a Letter of Credit shall be
by facsimile, confirmed immediately in writing, in the form of a Letter of
Credit Application. Each Letter of Credit (i) will be for the account of the
Company, (ii) will be a non-transferable standby letter of credit to support
certain payment or performance obligations of the Company.
(b) Prior to the Issuance of any Letter of Credit, the Issuing Bank
will confirm with the Agent (by telephone or in writing) that the Agent has
received a copy of the Letter of Credit Application or Letter of Credit
Amendment Application from the Company and, if not, the Issuing Bank will
provide the Agent with a copy thereof. Unless the Issuing Bank has received
notice prior to the Issuance of a requested Letter of Credit from the Agent (i)
directing the Issuing Bank not to Issue such Letter of Credit because such
Issuance is not then permitted under this Section 6.2, or (ii) that one or more
conditions specified in Section 8.3 in respect of Revolving Credit Loans are not
then satisfied or waived; then, subject to the terms and conditions hereof, the
Issuing Bank shall, on the requested date, Issue a Letter of Credit for the
account of the Company in accordance with the Issuing Bank's usual and customary
business practices.
(c) From time to time while a Letter of Credit is outstanding and
prior to the Letter of Credit Termination Date, the Issuing Bank will, upon the
written request of the Company received by the Issuing Bank (with a copy sent by
the Company to the Agent) at least three (3) Business Days (or such shorter time
as the Issuing Bank may agree in a particular instance in its sole discretion)
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prior to the proposed date of amendment or extension, amend any Letter of Credit
Issued by it or extend the expiry date. Each such request for amendment or
extension of a Letter of Credit shall be made by facsimile, confirmed
immediately in an original writing, made in such form as the Issuing Bank shall
require in accordance with its usual and customary business practices. The
Issuing Bank shall be under no obligation to amend or extend the expiry date any
Letter of Credit if: (i) the Issuing Bank would have no obligation at such time
to Issue such amended Letter of Credit under the terms of this Agreement; or
(ii) the beneficiary of any such Letter of Credit does not accept the proposed
amendment to the Letter of Credit.
(d) Upon receipt of notice from the Issuing Bank, the Agent will
promptly notify the Lenders of the Issuance of a Letter of Credit and any
amendment or extension thereto.
(e) If any outstanding Letter of Credit shall provide that it shall be
automatically renewed unless the beneficiary thereof receives notice from the
Issuing Bank that such Letter of Credit shall not be renewed, the Issuing Bank
shall be permitted to allow such Letter of Credit to be renewed subject to the
terms of Section 6.1(b), and the Company and the Lenders hereby authorize such
renewal. The Issuing Bank shall not be obligated to allow such Letter of Credit
to renew if the Issuing Bank would have no obligation at such time to Issue or
amend such Letter of Credit under the terms of this Agreement.
(f) The Issuing Bank may, at its election (or as required by the
Agent at the direction of the Required Lenders), deliver any notices of
termination or other communications to any Letter of Credit beneficiary or
transferee, and take any other action as necessary or appropriate, at any time
and from time to time, in order to cause the expiration date of any Letter of
Credit to be a date not later than the Maturity Date.
(g) As among the Issuing Bank, the Lenders and the Company, this
Agreement shall control in the event of any conflict with any documents
executed in connection with a Letter of Credit issued hereunder.
(h) The Issuing Bank will also deliver to the Agent, concurrently or
promptly following its delivery of a Letter of Credit, or amendment or extension
to a Letter of Credit, to an advising bank or a beneficiary, a true and complete
copy of each such Letter of Credit, amendment or extension to a Letter of
Credit.
Section 6.3 Risk Participations, Drawings and Reimbursements.
(a) Immediately upon the Issuance of each Letter of Credit, the
Revolving Credit Loan Lenders hereby irrevocably and unconditionally agree to,
and hereby, purchase from the Issuing Bank participation interests in such
Letters of Credit or each drawing thereunder, ratably in amounts equal to the
product of (i) each such Lender's Pro Rata Share of Revolving Credit Loan
Commitments, and (ii) the maximum amount available to be drawn under such Letter
of Credit. Each Issuance of a Letter of Credit shall be applied to utilize the
Revolving Credit Loan Commitment of each Revolving Credit Loan Lender by an
amount equal to the amount of such participation.
(b) In the event of any request for a drawing under a Letter of
Credit by the beneficiary or transferee thereof, the Issuing Bank will promptly
notify the Company. In the case of Letters of Credit under which drawings are
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payable one or more Business Days after the drawing is made, the Issuing Bank
will give such notice to the Company at least one Business Day prior to the date
any such drawing is payable. In each such instance, the Company shall reimburse
the Issuing Bank prior to 11:00 a.m., New York, New York time, on each date that
any amount is paid by the Issuing Bank under any Letter of Credit in an amount
equal to the amount so paid by the Issuing Bank. In the case of Letters of
Credit under which drawings are payable on the same Business Day as presentment
of such Letter of Credit, the Issuing Bank will give such notice to the Company
on the date that such drawing is paid by the Issuing Bank. In each such
instance, the Company shall reimburse the Issuing Bank prior to 2:00 p.m., New
York, New York time if the Company receives notice prior to 12:00 p.m., New
York, New York time, otherwise by 11:00 a.m., New York, New York time on the
next Business Day. In the event the Company fails to reimburse the Issuing Bank
for the full amount of any drawing under any Letter of Credit in accordance with
this Section 6.3(b), the Issuing Bank will promptly notify the Agent and the
Agent will promptly notify each Lender thereof, and the Company shall be deemed
to have requested the Lenders to make a Revolving Credit Loan that is an ABR
Borrowing to be disbursed on the date payment is due from the Company (the
"Honor Date") under such Letter of Credit, subject to the amount of the
unutilized portion of the Revolving Credit Loan Commitment. Any notice given by
the Issuing Bank or the Agent pursuant to this Section 6.3(b) may be oral if
immediately confirmed in writing (including by facsimile); provided that the
lack of such an immediate confirmation shall not affect the conclusiveness or
binding effect of such notice.
(c) Upon any notice pursuant to Section 6.3(b), the Revolving Credit
Loan Lenders shall, subject to the conditions set forth in Section 8.3, in
accordance with their respective Pro Rata Share of Revolving Credit Loan
Commitments, make available to the Agent for the account of the Issuing Bank an
amount in Dollars and in immediately available funds equal to the amount of the
drawing, whereupon the Lenders shall each be deemed to have made a Revolving
Credit Loan that is an ABR Borrowing to the applicable Borrower in that amount.
If any Revolving Credit Loan Lender so notified fails to make available to the
Agent for the account of the Issuing Bank said amount by no later than 12:00
noon, New York, New York time, on the Honor Date, then interest shall accrue on
such Lender's obligation to make such payment, from the Honor Date to the date
such Lender makes such payment, at the rate per annum equal to the Federal Funds
Effective Rate in effect from time to time during such period. The Agent will
promptly give notice to each Lender of the occurrence of any Honor Date, but
failure of the Agent to give any such notice on the Honor Date or in sufficient
time to enable any Lender to effect such payment on such date shall not relieve
such Lender from its obligations under this Section 6.3.
(d) Any drawing under a Letter of Credit not reimbursed by the Company
when due and not repaid by a Revolving Credit Loan pursuant to Section 6.3(b)
because of a failure of the Company to satisfy the conditions set forth in
Section 8.3 or for any other reason, shall be due and payable on demand
(together with interest) and shall bear interest at a rate per annum equal to
the Alternate Base Rate plus the Applicable Margin plus two percent (2%) per
annum, and, only if the conditions precedent to issuance of such Letter of
Credit in Section 6.2(b) were satisfied at the time of issuance or renewal of
such Letter of Credit, each Lender shall purchase a pro rata portion of such
unreimbursed drawing from the Issuing Bank.
(e) Each Revolving Credit Loan Lender's obligation in accordance with
this Agreement to make Revolving Credit Loans or participate in Letters of
Credit, as contemplated by this Section 6.3, as a result of a drawing under the
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Letter of Credit, shall be absolute and unconditional and without recourse to
the Issuing Bank and shall not be affected by any circumstance, including (i)
any set-off, counterclaim, recoupment, defense or other right which such Lender
may have against the Issuing Bank, any Borrower or any other Person for any
reason whatsoever, (ii) the occurrence or continuance of a Default, an Event of
Default or a Material Adverse Effect, or (iii) any other circumstance, happening
or event whatsoever, whether or not similar to any of the foregoing.
Section 6.4 Repayment of Participation.
(a) If the Agent receives immediately available funds from the Company
for the account of the Issuing Bank to pay any unreimbursed drawing under a
Letter of Credit, in respect of which any Revolving Credit Loan Lender has paid
the Agent for the account of the Issuing Bank for such Lender's participation in
an unreimbursed drawing under a Letter of Credit pursuant to Section 6.3, the
Agent will pay to each Lender, in the same funds as those received by the Agent
for the account of the Issuing Bank, the amount of such funds attributable to
each such Lender, and the Issuing Bank shall receive and retain the amount of
such funds attributable to any Lender that did not so pay the Agent for the
account of the Issuing Bank. (b) If the Agent or the Issuing Bank is required at
any time to return to the Borrowers or to a trustee, receiver, liquidator,
custodian, or any official in an Insolvency Proceeding, any portion of the
payments made by the Company to the Agent for the account of the Issuing Bank
pursuant to Section 6.4(a) in reimbursement of a payment made under a Letter of
Credit, or interest thereon, each of the Revolving Credit Loan Lenders shall, on
demand of the Agent, in accordance with each Lender's Pro Rata Share of
Revolving Credit Loan Commitments, forthwith return to the Agent or the Issuing
Bank the amount so returned by the Agent or the Issuing Bank plus interest
thereon from the date such demand is made to the date such amounts are returned
by such Lender to the Agent or the Issuing Bank, at a rate per annum equal to
the Federal Funds Rate in effect from time to time.
Section 6.5 Role of the Issuing Bank.
(a) Each Lender and the Company agree that, in paying any drawing
under a Letter of Credit, the Issuing Bank shall not have any responsibility to
obtain any document (other than any sight draft, certificates and other
documents, if any, expressly required by such Letter of Credit) or to ascertain
or inquire as to the validity or accuracy of any such document or the authority
of the Person executing or delivering any such document.
(b) Neither the Issuing Bank nor any of its correspondents,
participants or assignees shall be liable to any Lender for: (i) any action
taken or omitted in connection herewith at the request or with the approval of
the Lenders (including the Required Lenders, as applicable); (ii) any action
taken or omitted in the absence of gross negligence or willful misconduct; or
(iii) the effectiveness, validity or enforceability of any Letter of
Credit-Related Document.
(c) The Company hereby assumes all risks of the acts or omissions of
any beneficiary or transferee with respect to such beneficiary's or transferee's
use of any Letter of Credit; provided, this assumption is not intended to, and
shall not, preclude the Company from pursuing such rights and remedies as it may
56
have against such beneficiary or transferee at law or under any other agreement
or assume risks or losses arising out of the gross negligence, bad faith or
willful misconduct of the Issuing Bank. Neither the Issuing Bank, nor any
correspondents, participants or assignees of the Issuing Bank, shall be liable
or responsible for any of the matters described in clauses (i) through (vii) of
Section 6.6; provided, the Company may have a claim against the Issuing Bank,
and the Issuing Bank may be liable to the Company, to the extent, but only to
the extent, of any direct, as opposed to consequential or exemplary damages
suffered or incurred by the Company which are caused by the Issuing Bank's
willful misconduct or gross negligence (i) in failing to pay under any Letter of
Credit after the presentation by the beneficiary of a sight draft,
certificate(s) and any other documents, if any, strictly complying with the
terms and conditions of such Letter of Credit, (ii) in its paying under a Letter
of Credit against presentation of a sight draft, certificate(s) or other
documents not complying with the terms of such Letter of Credit or (iii) its
failure to comply with the obligations imposed upon it, as an issuing bank,
under applicable law; provided, that (y) the Issuing Bank may accept documents
that appear on their face to be in order, without responsibility for further
investigation, and (z) the Issuing Bank shall not be responsible for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason, provided that any such instrument appears
on its face to be in order.
Section 6.6 Obligations Absolute. The Obligations of the Company under this
Agreement and any document executed in connection with any Letter of Credit
issued hereunder to reimburse the Issuing Bank for a drawing under a Letter of
Credit, and to repay any Letter of Credit Borrowing and any drawing under a
Letter of Credit converted into a Revolving Credit Loan, shall be unconditional
and irrevocable and shall be paid strictly in accordance with the terms of this
Agreement and each such other Letter of Credit Application, Letter of Credit
Amendment Application or any other documents related to the issuance or
amendment of Letters of Credit, notwithstanding the following: (i) any lack of
validity or enforceability of this Agreement or any Letter of Credit-Related
Document; (ii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of the Company in respect of any
Letter of Credit; (iii) the existence of any claim, set-off, defense or other
right that the Company may have at any time against any beneficiary or any such
transferee of any Letter of Credit (or any Person for whom any such beneficiary
or any such transferee may be acting), the Issuing Bank or any other Person,
whether in connection with this Agreement, the transactions contemplated herein
or by the Letter of Credit-Related Documents or any unrelated transaction other
than the defense of payment; (iv) any draft, demand, certificate or other
document presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect or any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under any Letter of Credit;
(v) any payment made by the Issuing Bank under any Letter of Credit to any
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of a successor to any
beneficiary or any transferee of any Letter of Credit, including any arising in
connection with any Insolvency Proceeding; (vi) any exchange, release or
non-perfection of any Collateral, or any release or amendment or waiver of or
consent to departure from any other guarantee, for all or any of the Obligations
of the Company in respect of any Letter of Credit; or (vii) any other
circumstance that might otherwise constitute a defense available to, or
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discharge of, the Company. Nothing contained in this Section 6.6 shall
constitute a waiver by the Company of any claims arising out of the gross
negligence, bad faith or willful misconduct of the Agent or the Issuing Bank.
Section 6.7 Letter of Credit Fees.
(a) Letter of Credit Fees. The Company shall pay to the Agent for the
account of each of the Revolving Credit Loan Lenders a letter of credit fee (the
"Letter of Credit Fees") with respect to each outstanding Letter of Credit,
which fee shall be equal to the greater of: (i) $500 per annum, and (ii) the
Applicable Margin for Eurodollar Loans that are Revolving Credit Loans
multiplied by the face amount of such Letter of Credit per annum.
(b) Fronting Fees. The Company shall pay to the Issuing Bank for its
own account, for each Letter of Credit issued by the Issuing Bank, a fronting
fee (the "Fronting Fees") for each Letter of Credit Issued by the Issuing Bank
equal to one hundred twenty-five-one-thousandths percent (0.125%) per annum
multiplied by the maximum amount available to be drawn on such outstanding
Letters of Credit.
(c) Calculation of Fees. The Letter of Credit Fees and the Fronting
Fees each shall be computed on a quarterly basis in arrears on the last Business
Day of each calendar quarter based upon the face amount of all Letters of Credit
outstanding for such quarter as calculated by the Issuing Bank (computed on the
basis of the actual number of days elapsed over a year of 360 days). Such fees
shall be due and payable quarterly in arrears on the last Business Day of each
calendar quarter during which such Letters of Credit are outstanding, commencing
on the first such quarterly date to occur after the Closing Date, through the
Maturity Date, with the final payment to be made on the Maturity Date.
(d) Other. The Company shall pay to the Issuing Bank from time to
time on demand the normal issuance, presentation, amendment and other processing
fees, and other standard costs and charges of the Issuing Bank relating to
Letters of Credit as from time to time in effect.
Section 6.8 Cash Collateralization.
(a) If any Event of Default shall occur and be continuing, or the
Revolving Credit Loan Commitment is terminated or reduced to an amount
insufficient to fund the then outstanding Letter of Credit Obligations, the
Company shall, on the second Business Day following receipt of notice from the
Agent acting upon instructions of the Required Lenders, deposit in an account
(the "Cash Collateral Account") held by the Agent for the benefit of the
Revolving Credit Loan Lenders, an amount of cash or cash equivalents equal to
the Letter of Credit Obligations as of such date. Such deposit shall be held by
the Agent as collateral for the payment and performance of the such Letter of
Credit Obligations. The Agent shall have exclusive dominion and control,
including exclusive right of withdrawal, over such account. Cash collateral
shall be held in a blocked, interest-bearing account held by the Agent upon such
terms and in such type of account as customary at the depository institution.
The Company shall pay any reasonable fees charged by the Agent which fees are of
the type customarily charged by such institution with respect to such accounts.
Moneys in such account shall (i) first, be applied by the Agent to the payment
of Letter of Credit Borrowings and interest thereon, (ii) second, be held for
the satisfaction of the reimbursement Obligations, if any, of the Borrowers in
respect of Letters of Credit, and (iii) third, in the event the maturity of the
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Loans has been accelerated, with the consent of the Required Lenders, be applied
to satisfy the Obligations. If the Company shall provide cash collateral under
this Section 6.8(a) and thereafter either (i) drafts or other demands for
payment complying with the terms of such Letters of Credit are not made prior to
the respective expiration dates thereof, or (ii) such Event of Default shall
have been waived or cured, then the Agent, the Floor Plan Agent, the Swing Line
Bank and the Lenders agree that the Agent is hereby authorized, without further
action by any other Person, to release the Lien in such cash and will direct the
Agent to remit to the Company amounts for which the contingent obligations
evidenced by such Letters of Credit have ceased.
(b) As security for the payment of all Obligations, the Company hereby
grants, conveys, assigns, pledges, sets over and transfers to the Agent, and
creates in the Agent's favor a Lien on, and security interest in, all money,
instruments and securities at any time held in or acquired in connection with
the Cash Collateral Account, together with all proceeds thereof. At any time and
from time to time, upon the Agent's request, each Borrower promptly shall
execute and deliver any and all such further instruments and documents as may be
reasonably necessary, appropriate or desirable in the Agent's judgment to
perfect the security interest created herein as a first priority security
interest and to otherwise obtain the full benefits of the security interest
created or intended to be created by this Section 6.8(b) and of the rights and
powers herein granted.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES
The Company, as to itself and as to each other Borrower and each of its
Subsidiaries, and each of the Borrowers other than the Company, as to itself and
its Subsidiaries, if any, represent and warrant to the Agent, the Floor Plan
Agent, the Swing Line Bank and the Lenders as follows:
Section 7.1 Organization; Corporate Powers. Each Borrower and each of their
respective Subsidiaries is duly organized under the laws of the state of its
organization and each is validly existing and in good standing under the laws of
the state of its respective incorporation or organization, has the requisite
power and authority, governmental licenses, consents and approvals to own its
property and assets and to carry on its business as now conducted and is
qualified to do business in every jurisdiction where such qualification is
required. Each Borrower and each of their respective Subsidiaries have the
corporate power to execute, deliver and perform its Obligations under the Loan
Documents to which it is a party, to borrow hereunder and to execute and deliver
the Notes.
Section 7.2 Authorization. The execution, delivery and performance of this
Agreement and the other Loan Documents, the Borrowings hereunder, and the
execution and delivery of the Notes by each Borrower, the issuance of Letters of
Credit and Drafting Agreements hereunder and the use of the proceeds of the
Borrowings (a) have been duly authorized by all requisite corporate and, if
required, stockholder action on the part of such Borrower and each Subsidiary
and (b) will not (i) violate or conflict with (A) any provision of law, statute,
rule or regulation or the certificate of incorporation or the bylaws of the any
Borrower or any Subsidiary thereof, (B) any order of any court, or any rule,
regulation or order of any other Governmental Authority binding upon any
Borrower or any Subsidiary thereof or (C) any provisions of any indenture,
agreement or other document, instrument or other contract to which any Borrower
or any of its respective Subsidiaries is a party, or by which any Borrower or
any of its Subsidiaries or any of their respective properties or assets are or
59
may be bound, except to the extent that any such violation could not be expected
to have a Material Adverse Effect, or (ii) result in the creation or imposition
of any Lien whatsoever upon any property or assets of any Borrower or any of its
Subsidiaries other than under the Loan Documents.
Section 7.3 Governmental Approval. No registration with, or consent or
approval of, or other action by, any federal, state or other Governmental
Authority is or will be required in connection with the execution, delivery and
performance of this Agreement, any other Loan Document, the execution and
delivery of the Notes or repayment of the Borrowings hereunder.
Section 7.4 Enforceability. This Agreement and each of the Loan Documents
have been duly executed and delivered by each of the Borrowers and each of their
Subsidiaries which is a party hereto or thereto and constitute legal, valid and
binding obligations of the Borrowers and such Subsidiaries; and the Notes, when
duly executed and delivered by each applicable Borrower, will constitute legal,
valid and binding obligations of such Borrower(s), in each case enforceable in
accordance with their respective terms, subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium and
similar laws affecting creditors' rights generally and general principles of
equity.
Section 7.5 Financial Statements. As to the Company, the audited
consolidated financial statements of the Company and each of its Subsidiaries,
as of December 31, 2003, copies of which have been furnished to the Lenders,
have been prepared in conformity with GAAP applied on a basis consistent with
that of the preceding fiscal year, and present fairly in all material respects
the financial condition of the Company and each of its Subsidiaries, as at such
date and the consolidated results of the operations of the Company and each of
its Subsidiaries for the period then ended.
(a) The Form 10-K of the Company for the fiscal year ended December
31, 2003, copies of which have been furnished to the Lenders, have been
prepared in accordance with all applicable rules, regulations and guidelines of
the Securities and Exchange Commission and present fairly in all material
respects the financial condition of the Company and each of its Subsidiaries,
as at such date and the results of their operations for the period then ended.
Section 7.6 No Material Adverse Change. No event has occurred that would
constitute a Material Adverse Effect since December 31, 2003.
Section 7.7 Title to Properties; Security Documents.
(a) Each Borrower and each of its respective Subsidiaries has good and
marketable title to, or valid leasehold interests in, all its properties and
assets, except for (i) such properties as are no longer used or useful in the
conduct of its business or as have been disposed of in the ordinary course of
business, (ii) Liens permitted by Section 7.16 and Section 10.2, and (iii) minor
defects in title that do not interfere with the ability of such Borrower or such
Subsidiary to conduct its business as now conducted.
(b) The Security Documents contain descriptions of the Collateral
sufficient to grant to the Agent for the benefit of Lenders, perfected Liens
therein pursuant to applicable law and the terms, provisions and conditions of
this Agreement.
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Section 7.8 Litigation; Compliance with Laws; Etc.
(a) There are no actions, suits, proceedings, governmental
investigations or arbitrations except as specified in Schedule 7.8(a), or in the
latest report provided pursuant to Section 9.6, at law or in equity or by or
before any Governmental Authority that has been instituted or threatened in
writing or that affects the Company or any of its Subsidiaries or any property
of the Company or any of its Subsidiaries, any of which actions, suits,
proceedings, governmental investigation or arbitration (or, in the case of
multiple actions, suits, proceedings, governmental investigations or
arbitrations arising out of the same general allegations or circumstances) is
likely, in the Company's reasonable judgment, to result in incurrence by the
Company or any of its Subsidiaries of liability in an amount aggregating Five
Hundred Thousand and No/100 Dollars ($500,000.00) or more.
(b) None of the Borrowers or their respective Subsidiaries is (i) in
violation of any law, the breach or consequence of which could be expected to
have a Material Adverse Effect and to the best knowledge of the Company and its
Subsidiaries after due investigation, the Company and each of its Subsidiaries
are in material compliance with all statutes and governmental rules and
regulations applicable to them, or (ii) in default under any material order,
writ, injunction, award or decree of any Governmental Authority binding upon it
or its assets or any indenture, contract, agreement or other document,
instrument or other contract to which it is a party or by which any of its
properties may be bound except to the extent that any such default could not be
expected to have a Material Adverse Effect with respect to any of the Borrowers
or Guarantors.
Section 7.9 No Default. No Event of Default has occurred and is continuing.
Section 7.10 Use of Proceeds/Federal Reserve Regulations.
(a) The proceeds of the Loans shall be used to support the issuance of
Letters of Credit, for working capital and general corporate purposes and for
acquisitions and capital expenditures. Neither the Agent nor any Lender shall
have any responsibility as to the use of any Letter of Credit or any proceeds of
the Loans.
(b) Neither the Company nor any of its Subsidiaries is engaged
principally in the business of extending credit for the purpose of purchasing
or carrying Margin Stock.
(c) No part of the proceeds of the Loans will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately (i)
to purchase or carry Margin Stock or to extend credit to others for the purpose
of purchasing or carrying Margin Stock or to refund Indebtedness originally
incurred for such purpose or (ii) for any purpose which entails a violation of,
or which is inconsistent with, the provisions of the Regulations of the Board,
including Regulations T, U or X.
Section 7.11 Taxes. Each of the Company and its Subsidiaries has filed all
tax returns which are required to have been filed and has paid, or made adequate
provisions for the payment of, all of its taxes which are due and payable,
except such taxes, if any, as are being contested in good faith and by
appropriate proceedings and as to which such reserves or other appropriate
provisions as may be required by GAAP have been maintained. Neither the Company
nor any of its Subsidiaries is aware of any proposed assessment against it for
61
additional taxes (or any basis for any such assessment) which might have a
Material Adverse Effect on the Company or such Subsidiary.
Section 7.12 Pension and Welfare Plans. Each Plan complies in all material
respects with all applicable statutes and governmental rules and regulations,
and: (a) no Reportable Event has occurred and is continuing with respect to any
Plan, (b) since December 31, 2003, neither the Company nor any ERISA Affiliate
has withdrawn from any Plan or instituted steps to do so and (c) since December
31, 2003, no steps have been instituted to terminate any Plan. No condition
exists or event or transaction has occurred in connection with any Plan which
could result in the incurrence by the Company or any ERISA Affiliate of any
liability, fine or penalty. Neither the Company nor any ERISA Affiliate is a
member of, or contributes to, any multiple employer Plan as described in Section
4064 of ERISA. None of the Borrowers has any contingent liability with respect
to any post-retirement "welfare benefit plans," as such term is defined in
ERISA.
Section 7.13 No Material Misstatements. Neither this Agreement, the other
Loan Documents, the Confidential Information Memorandum nor any other document
delivered by or with the knowledge and consent of the Company on behalf of the
Company or any Subsidiary in connection with any Loan Document or included
therein contained or contains any material misstatement of fact or omitted or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
Section 7.14 Investment Company Act; Public Utility Holding Company Act.
Neither the Company nor any of its Subsidiaries is an "investment company" or a
company "controlled" by an investment company as defined in, or subject to
regulation under, the Investment Company Act of 1940. Neither the Company nor
any of its Subsidiaries is a "holding company" as defined in, or subject to
regulation under, the Public Utility Holding Company Act of 1935.
Section 7.15 Maintenance of Insurance. The Company and each of its
Subsidiaries represent and warrant that they maintain insurance to such extent
and against such hazards and liabilities as is commonly maintained by companies
similarly situated.
Section 7.16 Existing Liens. None of the assets of the Company or any
Subsidiary is subject to any Lien, except:
(a) Liens for current taxes not delinquent or taxes being contested
in good faith and by appropriate proceedings and as to which such reserves or
other appropriate provisions as may be required by GAAP are being maintained;
(b) carriers', warehousemen's, mechanics', materialmen's, landlord's
and other like statutory or contractual Liens arising in the ordinary course of
business securing obligations which are not overdue for a period of more than
thirty (30) days or which are being contested in good faith and by appropriate
proceedings and as to which such reserves or other appropriate provisions as may
be required by GAAP are being maintained;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
62
(d) deposits to secure the performance of bids, trade contracts,
statutory obligations, and other obligations of a like nature incurred in the
ordinary course of business, and Liens securing reimbursement obligations
created by open letters of credit for the purchase of inventory;
(e) Liens granted by a Subsidiary of the Company to secure such
Subsidiary's Indebtedness to the Company or to any other Subsidiary of the
Company so long as such Indebtedness is subordinated to the Obligations and so
long as such Liens cover only real property, related real property rights,
improvements, fixtures and tangible personal property (other than Collateral);
(f) Zoning, easements and restrictions on the use of real property
that do not, in the aggregate, materially impair the use of such property;
(g) Liens in existence on the date hereof and listed on Schedule
7.16(g); and
(h) Liens permitted by Section 10.2.
Section 7.17 Environmental Matters. The Company and each of its
Subsidiaries has complied in all material respects with all applicable federal,
state, local and other statutes, ordinances, orders, judgments, rulings and
regulations relating to environmental pollution or to environmental regulation
or control except where the failure to comply could not be expected to have a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries has
received notice of any failure so to comply. Neither the Company, nor any of its
Subsidiaries manages any hazardous wastes, hazardous substances, hazardous
materials, toxic substances or toxic pollutants, as those terms are used in the
Resource Conservation and Recovery Act, the Comprehensive Environmental Response
Compensation and Liability Act, the Hazardous Materials Transportation Act, the
Toxic Substance Control Act, the Clean Air Act or the Clean Water Act, in a
manner that violates any regulations promulgated pursuant to such laws except
for any such violation that could not be expected to have a Material Adverse
Effect or any such violation the remediation of which is being diligently
pursued by the Company or any Subsidiary.
Section 7.18 Subsidiaries. As of the Closing Date, the Company has no
Subsidiaries, and no Subsidiary has a Subsidiary, other than those specifically
disclosed in part (a) of Schedule 7.18, and neither the Company nor any
Subsidiary has any equity investments in any other Person other than the
Subsidiaries listed in part (a) of Schedule 7.18, except as set forth in part
(b) of Schedule 7.18. All Subsidiaries listed in part (a) of Schedule 7.18,
other than those described in part (c) of said schedule, are Floor Plan
Borrowers or will become Floor Plan Borrowers as soon as practical in accordance
with the provisions of Section 9.18. The state of incorporation or formation,
the address, principal place of business and a list of other business locations
for each Subsidiary is specified in part (a) of Schedule 7.18. The Company
and/or each of its Subsidiaries is the owner, directly or indirectly, free and
clear of all Liens (except for Liens in favor of the Agent and the Lenders and
transfer restrictions contained in the Dealer Franchise Agreements), of all of
the issued and outstanding voting stock of each Subsidiary disclosed on Schedule
7.18 (except where ownership of less than one hundred percent (100%) is
indicated on Schedule 7.18). All shares of such stock have been validly issued
and are fully paid and nonassessable, and no rights to subscribe to additional
shares have been granted or exist.
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Section 7.19 Engaged in Business of Motor Vehicle Sales and Related
Businesses. Each of the Borrowers is engaged in the business of selling Motor
Vehicles and related activities. The Company is in the business of acquiring,
owning, operating and, in some cases, selling dealerships engaged in such
businesses. Except as set forth in Schedule 7.16(g), as of the Closing Date,
there is no financing statement, or similar statement or instrument of
registration under the laws of any jurisdiction, covering or purporting to cover
any interest of any kind in all such Motor Vehicles or their proceeds on file or
registered in any public office other than a financing statement in favor of the
Agent for the benefit of the Lenders covering all such Motor Vehicles. Except as
set forth in Schedule 7.16(g), as of the Closing Date, there is no other floor
plan or other financing arrangement with any party other than the Agent for the
benefit of the Lenders with respect to all such Motor Vehicles; and except as
set forth in Schedule 7.16(g), as of the Closing Date, none of the Borrowers has
made any other oral or written contract or arrangement of any kind, the
performance of which by the other party thereto would give rise to a Lien
against any such Motor Vehicle, or the proceeds thereof. The locations (and
addresses) set forth in Schedule 7.19 are the primary locations at which the
Company and its Subsidiaries keep the Motor Vehicles held as inventory, except
for Demonstrators and except for times when such Motor Vehicles may be in
transit between locations, in transit for `dealer swaps' or being test driven by
potential customers. The addresses set forth in Schedule 7.18 are each
Borrower's place of business and each Borrower is formed or incorporated only in
the state shown for it on Schedule 7.18 hereto. All of each Floor Plan
Borrower's books and records with regard to all Motor Vehicles are maintained
and kept at the address(es) of such Floor Plan Borrower set forth in Schedule
7.19.
Section 7.20 Franchise Agreements. As of the Closing Date, neither the
Company nor any of the Borrowers is a party to any dealer franchise agreements
or any other similar agreements, ("Dealer Franchise Agreements") other than
those listed in Schedule 7.20, which schedule shows the Manufacturer and the
Borrower which is a party to each such agreement, the date such agreement was
entered into and the expiration date (if any) of each such agreement. Each of
the Dealer Franchise Agreements is currently in full force and effect, and no
Borrower has received any notice of termination with respect to any such
agreements; and, except as disclosed on Schedule 7.20, no Borrower is aware of
any event which with notice, lapse of time, or both would allow any Manufacturer
which is a party to any of the Dealer Franchise Agreements to terminate any such
agreements. There exists no present condition or state of facts or circumstances
in regard to said Dealer Franchise Agreements, in the aggregate, which could be
expected to have a Material Adverse Effect.
ARTICLE VIII.
CONDITIONS OF LENDING
Section 8.1 Conditions Precedent to Closing Date. The Closing Date shall
occur upon the execution, where applicable, and delivery to the Agent of the
items described in this Section 8.1, each dated (unless otherwise indicated) the
Closing Date and, with sufficient copies for each Lender; provided, the Floor
Plan Borrowers shall not be entitled to request Borrowings hereunder, and the
representations and warranties contained herein and the other Loan Documents
shall not be deemed operative with respect to such Floor Plan Borrower until:
(i) the completion of the audits described in Section 8.2(b)(iii), and (ii)
notification from the Agent in writing that such audit has been satisfactorily
completed and that the Loan Documents are fully effective in all respects in
regard to the Borrower in question, and further provided, for the period
commencing with the Closing Date and ending the date on which all Floor Plan
Borrowers become eligible to borrow hereunder under this Agreement (the
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"Transition Period"), the Company shall be entitled to request Borrowings of
Revolving Credit Loans (but not in excess of $50,000,000) without regard to the
Revolving Credit Borrowing Base which shall not be operative until after such
Transition Period.
(a) From each Borrower:
(i) a counterpart of this Agreement (to which all of the Exhibits
and Schedules have been attached) executed by the Borrowers, the
Agent, the Floor Plan Agent, the Swing Line Bank, the Issuing Bank and
the Lenders; and
(ii) Revolving Credit Notes dated the Closing Date, properly
executed by the Company to the order of the Lenders, respectively.
(b) From each Subsidiary of the Company, in a form satisfactory to the
Agent, executed originals of:
(i) the Security Documents;
(ii) a Guaranty Agreement signed by each Subsidiary of the
Company (other than the Toyota/Lexus Floor Plan Borrowers)
guaranteeing the Revolving Credit Loan and all Floor Plan Loans;
(iii) UCC-1 financing statements to the extent required to
perfect the Liens granted in the Security Documents.
(c) from the Company and each Subsidiary of the Company (i) a
certificate of the Secretary or an Assistant Secretary of said Subsidiary,
certifying that (A) attached are true and complete copies of its constituent
documents, (B) attached thereto is a true and complete copy of resolutions or
unanimous consent duly adopted by its Board of Directors, members or partners
authorizing the execution, delivery and performance of this Agreement, the Notes
and/or Loan Documents to which it is a party, and that such resolutions have not
been modified, rescinded or amended and are in full force and effect, and (C) as
to the incumbency and specimen signature of each officer of the Company and each
such Subsidiary executing or to execute this Agreement, the Notes, any of the
Loan Documents or other documents delivered in connection herewith or therewith;
and (ii) such other documents as the Agent may reasonably request.
(d) the Agent's Letter duly executed by the Company.
(e) the Floor Plan Agent's Letter duly executed by the Company.
(f) an opinion of counsel to the Company and each Subsidiary of the
Company which signs any of the Loan Documents, addressed to the Agent and the
Lenders and in the form of Exhibit 8.1(f) hereto and opinions of local counsel
to the Borrowers and the Subsidiaries of the Company as required by Agent.
(g) consent from American Honda Motor Co., Inc. ("Honda") for the
Company and the Subsidiaries of the Company that have Dealer Franchise
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Agreements with Honda or its Subsidiaries to grant security interests to the
Agent in all consideration received (i) in connection with the transfer of stock
or other equity interest in such Subsidiaries of the Company and any of their
respective Subsidiaries and (ii) in connection with the sale or transfer of
goodwill associated with the business of the Company and any of such
Subsidiaries of the Company.
(h) Intercreditor Agreements with the parties providing Permitted New
Vehicle Floor Plan Indebtedness and the parties providing Truck Financing.
(i) evidence that the fees and disbursements required to be paid by
the Company pursuant to Section 5.4 and Section 13.4 on the Closing Date have
been paid.
(j) evidence that all UCC-1 filings and other Liens affecting the
Collateral owned by the Company and all its Subsidiaries (other than the Floor
Plan Borrowers) that are not permitted pursuant to this Agreement and which are
existing or reflected in searches performed by the Agent or its counsel as of
the Closing Date have been released and/or terminated to the reasonable
satisfaction of the Agent and its counsel.
(k) evidence of insurance required by Section 9.3.
(l) all documentation and other information requested by the Agent to
satisfy the requirements of bank regulatory authorities under applicable "know
your customer" and anti-money laundering rules and regulations, including the
Act (as defined in Section 13.15).
Section 8.2 Conditions Precedent to Initial Borrowings.
(a) In addition to the conditions listed in Section 8.1 above, the
obligation of each Revolving Credit Loan Lender to make the initial Revolving
Credit Loans, or of the Swing Line Bank to make the initial Revolving Credit
Swing Line Loan or of the Issuing Bank to issue any Letter of Credit is subject
to the further conditions precedent that:
(i) each document (including, without limitation, any UCC
financing statement) required by the Security Documents or under law
or requested by Agent to be filed, registered or recorded in order to
create, in favor of Agent, for the benefit of Lenders, a perfected
first Lien (subject to any Permitted Liens) on the Collateral owned by
the Company or any Subsidiary of the Company shall have been properly
filed, registered or recorded in each jurisdiction in which the
filing, registration or recordation thereof is so required or
requested, and
(ii) such other and further conditions shall have been fulfilled
as the Agent, or its counsel shall have reasonably determined.
(b) In addition to the conditions listed in Section 8.1 above, the
obligation of each Floor Plan Lender to make the initial Floor Plan Loans or of
the Swing Line Bank to make the initial Floor Plan Swing Line Loan, or of the
Floor Plan Agent to execute any Drafting Agreement is subject to the conditions
precedent that with respect to the Floor Plan Borrower requesting such Loans:
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(i) a payoff letter or other similar release document in form
satisfactory to Agent from the finance companies providing floor plan
financing to such Floor Plan Borrower, which payoff letter or other
document contains an agreement that the security interests held by
such finance companies shall terminate and be released and which
authorizes the Floor Plan Agent to terminate any Lien filings with
respect to Motor Vehicles that are refinanced by the Floor Plan
Lenders, excluding any Lien fillings in connection with security
interests permitted under Intercreditor Agreements.
(ii) each document (including, without limitation, any UCC
financing statement) required by the Security Documents or under law
or requested by the Agent or the Floor Plan Agent to be filed,
registered or recorded in order to create, in favor of Agent, for the
benefit of Lenders, a perfected first Lien (except as otherwise
provided in the Intercreditor Agreement) on the Collateral owned by
such Floor Plan Borrower shall have been properly filed, registered or
recorded in each jurisdiction in which the filing, registration or
recordation thereof is so required or requested; and
(iii) the Floor Plan Agent shall have completed to its
satisfaction any and all audits of Motor Vehicles owned by or in
transit to each such Floor Plan Borrower, provided, the Floor Plan
Agent may, in its sole discretion, enter into Drafting Agreements
prior to completion of such audits.
Section 8.3 Conditions Precedent to Each Borrowing. The obligation of each
Lender to make a Loan on the occasion of any Borrowing (including the initial
Revolving Credit Loan and the Floor Plan Loan) and the obligation of the Issuing
Bank to issue Letters of Credit and the obligation of the Swing Line Bank to
make Swing Line Loans and the obligation of the Floor Plan Agent to execute
Drafting Agreements shall be subject to the further conditions precedent that on
the Borrowing Date of such Borrowing or Issuance:
(a) with respect to Borrowings under the Revolving Credit Loan
Commitment, the representations and warranties contained in Article VII are
correct on and as of the date of such Borrowing, upon giving effect to such
Borrowing and to the application of the proceeds therefrom, as though made on
and as of such date (unless expressly limited to an earlier date, in which case,
it shall be true as of such date);
(b) with respect to Borrowings under the Revolving Credit Loan
Commitment, but excluding Borrowings during the Transition Period, the Company
shall have certified that there is no change in the calculation of the Revolving
Credit Borrowing Base that would result in a reduction of the amounts available
for borrowing thereunder since the last Availability Analysis provided to the
Agent;
(c) no event has occurred and is continuing, or would result from such
Borrowing or from the application of the proceeds therefrom, which constitutes
(i) a Material Adverse Effect, (ii) in the case of Revolving Credit Borrowings
(including Revolving Credit Swing Line Loans), a Default or a Revolving Credit
Event of Default or (iii) in the case of Floor Plan Borrowings (including Floor
Plan Swing Line Loans), (A) no Floor Plan Event of Default exists with respect
to the Floor Plan Borrower that is requesting the Borrowing, (B) no Floor Plan
Event of Default under Section 11.3(c), (f) or (g) exists, and (C) no Floor Plan
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Event of Default under any other subsection of Section 11.3 has continued for
sixty (60) days or more;
(d) each request for Borrowing (and the acceptance of the proceeds of
such Borrowing) shall constitute a certification, representation and warranty
by the Company that on the date of such Borrowing the statements contained in
this Section 8.3 are true;
(e) following the making of such Borrowing or Issuance of any Letter
of Credit and all other Borrowings to be made on the same day under this
Agreement, except as may otherwise be permitted hereunder, (i) if such Borrowing
is a Floor Plan Loan Borrowing, the aggregate principal amount of all Floor Plan
Loans outstanding plus all Floor Plan Swing Line Loans outstanding shall not
exceed the Floor Plan Loan Commitments of all the Lenders, such Floor Plan Loan
Borrowings shall not exceed the Floor Plan Advance Limit, and the Agent shall
have a first priority lien on the Motor Vehicles that are being purchased with
such Floor Plan Loan Borrowing after giving effect to such Borrowing, (ii) if
such Borrowing is a Revolving Credit Loan Borrowing, the aggregate principal
amount of all Revolving Credit Loans outstanding plus all Revolving Credit Swing
Line Loans outstanding plus Letters of Credit Obligations outstanding shall not
exceed the Revolving Credit Loan Advance Limit, (iii) if such Borrowing is a
Swing Line Loan Borrowing, the aggregate principal amount of all Swing Line
Loans outstanding shall not exceed the applicable Swing Line Commitment, (iv) if
a Letter of Credit is issued, the total amount of Letter of Credit Obligations
outstanding plus the aggregate principal amount of all Revolving Credit Loans
outstanding shall not exceed the Revolving Credit Loan Advance Limit, and (v)
the aggregate principal amount of all Loans and Letter of Credit Obligations
then outstanding shall not exceed the Total Commitments;
(f) no party (other than the Agent, the Floor Plan Agent or a Lender)
to any Intercreditor Agreement executed in connection with any Permitted New
Vehicle Floor Plan Indebtedness has disputed or contested the contractual
subordination provision thereof in whole or in part or has otherwise breached
its material obligations thereunder which dispute, contest or breach involves
$1,000,000 or more in collateral, and such dispute, contest or breach has not
been waived, resolved or remedied within thirty (30) days after delivery of a
notice from the Agent or the Floor Plan Agent to such other party and the
Company; and
(g) with respect to Borrowings under the Revolving Credit Loan
Commitment in connection with any acquisition for which the total consideration
is Forty Million and No/100 Dollars ($40,000,000) or greater (exclusive of
amounts paid for New Motor Vehicle inventory), the Company shall have provided
calculations for the financial covenants contained in Section 10.11 through
Section 10.14, which calculations demonstrated compliance with all such
financial covenants on a pro forma basis after giving effect to the acquisition
for which such Borrowing is requested.
Section 8.4 Conditions Precedent to Conversions and Continuations. The
obligation of the Lenders to convert any existing Borrowing into a Eurodollar
Borrowing or to continue any existing Borrowing as a Eurodollar Borrowing is
subject to the condition precedent that, on the date of such conversion or
continuation, each of the conditions to Borrowing set forth in Section 8.3 shall
have been satisfied, and no Event of Default shall have occurred and be
continuing or would result from the making of such conversion or continuation.
The acceptance of the benefits of each such conversion and continuation shall
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constitute a representation and warranty by the Company to each of the Lenders
that no Event of Default shall have occurred and be continuing or would result
from the making of such conversion or continuation.
ARTICLE IX.
AFFIRMATIVE COVENANTS
So long as this Agreement shall remain in effect or the principal of or
interest on any Note, any Commitment Fees or any other fee, expense or amount
payable hereunder shall be unpaid, and until the Commitments of all the Lenders
shall expire or terminate, until no Letter of Credit Obligations are outstanding
and until all Drafting Agreements are terminated, (i) the Company, as to itself
and as to each other Borrower and each Subsidiary and (ii) each Borrower other
than the Company, as to itself and its Subsidiaries only, covenant and agree
with the Agent, the Floor Plan Agent, the Swing Line Bank and each Lender that:
Section 9.1 Existence. It will maintain and preserve, and except as
permitted by Section 10.3, will cause each Subsidiary to maintain and preserve,
its respective existence and good standing under the laws of its state of
jurisdiction, as a corporation or other form of business organization, as the
case may be.
Section 9.2 Repair. It will maintain, preserve and keep, and will cause
each of its Subsidiaries to maintain, preserve and keep, all of its properties
in good repair, working order and condition (ordinary wear and tear excepted).
It will at all times do or cause to be done all things necessary to preserve,
renew and keep in full force and effect, and will cause each of its Subsidiaries
to do or cause to be done all things necessary to preserve, renew and keep in
full force and effect in all material respects, the rights, licenses, permits,
franchises, patents, copyrights, trademarks and trade names material to the
conduct of its businesses; it and each of its respective Subsidiaries will
maintain and operate such businesses in substantially the manner in which they
are presently conducted and operated (subject to changes in the ordinary course
of business); it and each of its Subsidiaries will comply with all laws and
regulations applicable to the operation of such businesses whether now in effect
or hereafter enacted and with all other applicable laws and regulations except
where the failure to comply therewith would not have a Material Adverse Effect.
Section 9.3 Insurance. (a) The Company will maintain, on a consolidated
basis, insurance to such extent and against such hazards and liabilities as is
commonly maintained by companies similarly situated or as may be required in the
Security Documents including, without limitation with respect to Motor Vehicles
owned by Floor Plan Borrowers, naming the Agent, for the benefit of the Lenders,
as additional insured or loss payee, as appropriate.
(b) Unless the Company provides the Agent with evidence of the
insurance coverage required by this Agreement or any other Loan Document, the
Agent (at its discretion, or acting at the request of the Floor Plan Agent) may
purchase insurance at the Company's expense to protect the Lenders' interest.
This insurance may, but need not, also protect the Company's interest. If the
Collateral becomes damaged, the coverage that the Agent purchases may not pay
any claim the Company or any of its Subsidiaries makes or any claim made against
the Company or any of its Subsidiaries. The Company may later cancel this
coverage by providing evidence that the Company has obtained the required
insurance coverage.
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(c) The Company is responsible for the cost of any insurance purchased
by the Agent. The cost of this insurance may be added to the Obligations. If the
cost is added to the Obligations, the interest rate provided in Section 5.3
shall apply to such added amount. The effective date of coverage may be the date
the Company's prior coverage lapsed or the date the Company failed to provide
proof of coverage.
(d) The Company acknowledges that the coverage the Agent purchases
may be considerably more expensive than insurance that the Company can obtain
on its own and may not satisfy any need for property damage coverage or any
mandatory liability insurance requirements imposed by applicable law.
Section 9.4 Obligations and Taxes. The Company will pay and discharge and
will cause each of its Subsidiaries to pay and discharge, when due, all taxes,
assessments and governmental charges or levies imposed upon the Company or such
Subsidiary, as the case may be, as well as all lawful claims for labor,
materials and supplies or otherwise unless and only to the extent that the
Company or such Subsidiary, as the case may be, is contesting such taxes,
assessments and governmental charges, levies or claims in good faith and by
appropriate proceedings and the Company or such Subsidiary has set aside on its
books such reserves or other appropriate provisions therefor as may be required
by GAAP.
Section 9.5 Financial Statements; Reports. The Company will furnish to the
Agent and each Lender:
(a) Annual Audit Reports. Within 90 days after the end of each fiscal
year of the Company, a copy of the annual audit report of the Company and its
Subsidiaries prepared on a consolidated basis in conformity with GAAP
consistently applied and certified by an independent certified public accountant
of recognized national standing;
(b) Quarterly Financial Statements. Within forty-five (45) days after
the end of each quarter of each fiscal year of the Company, a copy of the Form
10-Q of the Company, for such quarter, prepared in accordance with the rules,
regulations and guidelines of the Securities and Exchange Commission and
including therein the consolidated financial statements of the Company, subject
to normal year end audit adjustments;
(c) Officer's Certificate. Together with the financial statements
furnished by the Company under Section 9.5(a) and Section 9.5(b), a compliance
certificate in the form of Exhibit 9.5(c) executed by the Company's Chief
Financial Officer or Vice President and Treasurer dated the date of such annual
audit report or such quarterly financial statement, as the case may be, and
including therewith (i) the calculations (and summary calculations) for the
financial covenants set forth in Section 10.12 through Section 10.15 and (ii)
the number of Dealer Locations as of the date of such report or statement;
(d) SEC and Other Reports. Copies of each communication from the
Company or any of its Subsidiaries to shareholders generally, promptly upon the
making thereof and Email notification alerts of filings with the Securities and
Exchange Commission;
(e) Manufacturer/Dealer Statements. At the time the same are delivered
to any Manufacturer, copies of each Manufacturer/Dealer Statement of each Floor
Plan Borrower;
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(f) Inventory Detail Report. Upon request of the Floor Plan Agent, the
Agent or any Lender, such Floor Plan Borrower shall provide copies of the
Inventory Detail Report of each Floor Plan Borrower;
(g) Availability Analysis. Within twenty (20) days of the end of each
month, a completed Availability Analysis in the form of Exhibit 9.5(g), and such
other information as the Agent may have reasonably requested to determine the
accuracy of such calculation, calculated as of the end of the preceding month;
(h) Deposit and Securities Account. Within twenty (20) days of the
end of each month, a list of any new, closed or changed depository accounts or
securities accounts held by the Company or any of its Subsidiaries since the
last report provided to the Agent, or a written statement that no such accounts
have been opened, closed or changed since the last report.
(i) Insurance. Within ninety (90) days after the end of each fiscal
year of the Company, a schedule of insurance coverage for the Company and all
of its Subsidiaries, which schedule shall reflect the type, amount and provider
for such insurance and shall be accompanied by evidence of such insurance.
(j) Requested Information. Promptly, from time to time, such other
reports or information as the Agent, the Floor Plan Agent or any Lender may
reasonably request.
Section 9.6 Litigation and Other Notices. (a) The Company will notify the
Agent and the Lenders in writing of any of the following as promptly as possible
upon learning of the occurrence thereof, describing the same and, if applicable,
the steps being taken by the Person(s) affected with respect thereto:
(i) Judgment. The entry of any final, non-appealable judgment or
decree against the Company and/or any of its other Subsidiaries if the
aggregate amount of such judgment or decree exceeds One Million and
No/100 Dollars ($1,000,000.00) (after deducting the amount with
respect to which the Company or such Subsidiary is insured and with
respect to which the insurer has assumed responsibility in writing);
(ii) Default. The occurrence of any Event of Default, including,
without limitation, any notices of default or acceleration received by
any Borrower from the provider of any Permitted New Vehicle Floor Plan
Indebtedness, together with a written explanation of the facts and
circumstances associated therewith;
(iii) Material Adverse Change. The occurrence of any event which
could be expected to have a Material Adverse Effect;
(iv) Pension and Welfare Plans. The occurrence of a Reportable
Event with respect to any Plan; the institution of any steps by the
Company or any of its Subsidiaries or any ERISA Affiliate, the PBGC or
any other Person to terminate any Plan if such termination could be
expected to result in a Material Adverse Effect; the institution of
any steps by the Company or any of its Subsidiaries or any ERISA
Affiliate to withdraw from any Plan if such withdrawal could be
expected to result in a Material Adverse Effect; or the incurrence of
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any material increase in the contingent liability of the Company or
any of its Subsidiaries with respect to any post-retirement welfare
benefits; or
(v) Other Events. The occurrence of such other events as the
Agent or the Required Lenders may reasonably specify from time to
time.
(b) The Company will provide the Agent and the Lenders with a written
report within thirty (30) days after the end of each month describing each
action, suit, proceeding, governmental investigation or arbitration that has
been instituted or threatened in writing against or that affects the Company or
any of its Subsidiaries or any property of the Company or any of its
Subsidiaries, which action, suit, proceeding, governmental investigation or
arbitration, or in the case of multiple actions, suits, proceedings,
governmental investigations or arbitrations arising out of the same general
allegations or circumstances, is likely, in the Company's reasonable judgment,
to result in the incurrence by the Company or any of its Subsidiaries of
liability in an amount aggregating Five Hundred Thousand and No/100 Dollars
($500,000.00) or more. Such monthly report will include the status of any
unresolved item covered by any previous reports and provide such other
information as may be reasonably requested by the Agent.
Section 9.7 ERISA. Each Borrower will comply with the applicable provisions
of ERISA except where the failure to comply could not be expected to have a
Material Adverse Effect.
Section 9.8 Books, Records and Access. Each Borrower will maintain accurate
books and records in which full and correct entries in conformity with GAAP
shall be made of all dealings and transactions in relation to the business and
activities of such Borrowers. No more frequently than twice in any twelve (12)
month period and any time during the continuance of a Default or Event of
Default (except for access required in connection with a floor plan audit
pursuant to Section 9.12, which will be permitted at any time), each Borrower
will permit access by the Agent or its designee to the books and records
relating to such Borrower during normal business hours, to permit or cause to be
permitted the Agent or its designee to make extracts from such books and records
and permit, or cause to be permitted, any authorized representative designated
by any Lender to discuss the affairs, finances and condition of the Company with
its principal financial officers and principal accounting officers and such
other officers as such Borrower shall deem appropriate.
Section 9.9 Use of Proceeds. The Borrowers shall use the proceeds of the
Loans for only the following purposes:
(a) Floor Plan Loans. The proceeds of the Floor Plan Loans may be used
only to finance Motor Vehicles for resale in the ordinary course of business of
the Floor Plan Borrowers.
(b) Revolving Credit Loans. The proceeds of the Revolving Credit Loans
may be used only for the following purposes: (i) for working capital and general
corporate purposes, including, without limitation, the issuance of Letters of
Credit and to pay outstanding Floor Plan Loans; and (ii) to make Permitted
Acquisitions.
(c) Floor Plan Swing Line Loans. The proceeds of the Floor Plan Swing
Line Loans may be used only to finance Motor Vehicles for resale in the ordinary
course of business of the Borrowers and under the Revolving Credit Loan
Commitments for general corporate and working capital purposes.
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(d) All Loans. No Loans shall be used for any purpose which would be
in contravention of any Requirement of Law.
Section 9.10 Nature of Business. Each Borrower will engage in substantially
the same field of business as such Borrower is engaged in on the date hereof,
and except as permitted in Section 10.5(j), will refrain from engaging in,
establishing or becoming in any way involved in any other business.
Section 9.11 Compliance. Each Borrower will comply in all material respects
with all statutes and governmental rules and regulations applicable to them
including all such statutes and government rules and regulations relating to
environmental pollution or to environmental regulation and control except to the
extent that non-compliance could not reasonably be expected to cause a Material
Adverse Effect.
Section 9.12 Audits.
(a) Entry on Premises. Each Floor Plan Borrower shall permit a duly
authorized representative of the Floor Plan Agent to enter upon such Borrower's
premises during regular business hours to perform audits of Motor Vehicles
constituting Collateral in a manner reasonably satisfactory to the Floor Plan
Agent and will cooperate with and assist such representatives in performing said
audits. Each Floor Plan Borrower shall assist the Floor Plan Agent, and its
representatives, in whatever way reasonably necessary to make the inspections
and audits provided for herein.
(b) Delivery of Audits. Within thirty (30) days after the end of each
fiscal quarter of the Company, the Floor Plan Agent shall deliver to the Agent a
summary of the audits of Motor Vehicles of each of the Floor Plan Borrowers
performed by the Floor Plan Agent during the fiscal quarter just ended, setting
forth therein a spread sheet reflecting for all Floor Plan Borrowers a summary
of the results of each floor plan audit during the fiscal quarter. The Agent
shall promptly deliver a copy of such report to each Lender.
Section 9.13 Demonstrators and Rental Motor Vehicles; Title Documents. Each
Borrower shall maintain records at the premises where the Motor Vehicles are
kept evidencing which Motor Vehicles are being used as Demonstrators and Rental
Motor Vehicles. Each Borrower shall cause all certificates of title for such
Demonstrators and Rental Motor Vehicles that are titled to the Floor Plan
Borrowers to be marked or to otherwise indicate that Agent is the only
lienholder with respect to such Demonstrators and Rental Motor Vehicles.
Section 9.14 Cash Management System. The Borrowers shall maintain and shall
cause their Subsidiaries to maintain the current cash management system employed
by them substantially in its present form and will continue to consolidate funds
from the various Floor Plan Borrower Dealership Accounts into the Platform
Accounts and the Concentration Accounts to the maximum extent practical, whether
by automated cash management or other means, given the working capital needs and
regular operating practices of the Company and its Subsidiaries. The Company
will advise the Agent of any change in the Concentration Accounts from that
provided in Schedule 1.1(a) hereto.
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Section 9.15 Further Assurances. The Company shall, and shall cause each
other Borrower, to the extent applicable, to execute, acknowledge, deliver, and
record or file such further instruments, including, without limitation, further
security agreements, financing statements, and continuation statements, and do
such further acts as may be reasonably necessary, desirable, or proper to carry
out more effectively the purposes of this Agreement, including, without
limitation, (i) causing any additions, substitutions, replacements, or equipment
related to the Motor Vehicles financed hereunder to be covered by and subject to
the Liens created in the Loan Documents to which any Floor Plan Borrower is a
party; and (ii) with respect to any Motor Vehicles which are or are required to
be subject to Liens created in the Loan Document to which any Floor Plan
Borrower is a party, execute, acknowledge, endorse, deliver, procure, and record
or file any document or instrument, including, without limitation, any financing
statement, certificate of title, manufacturer's statement of origin, certificate
of origin, and dealer reassignment of any of the foregoing which are evidences
of ownership of such Motor Vehicles, deemed advisable by the Agent or the Floor
Plan Agent to protect the Liens granted in this Agreement or the Loan Documents
to which any of them respectively is a party and against the rights or interests
of third Persons, and the Company will pay all reasonable costs connected with
any of the foregoing.
Section 9.16 Permitted Acquisitions
(a) Subject to the remaining provisions of this Section 9.16
applicable thereto and the requirements contained in the definition of Permitted
Acquisition, the Company may, from time to time after the Closing Date make
acquisitions of not less than 100% of the capital stock (or equivalent equity
interest) of a Person engaged in the type of business described in Section 7.19
or a substantial part of the assets of an Auto Dealer, as long as with respect
thereto each of the following conditions are satisfied (a "Permitted
Acquisition"):
(i) no Default under Section 11.1 or under Section 11.3(a), (b),
(d), (e), (f) or (g) or any Event of Default is in existence at the
time of the consummation of such proposed acquisition or would exist
after giving effect thereto, all representations and warranties
contained herein and in the other Loan Documents shall be true and
correct in all material respects with the same effect as though such
representations and warranties were made on and as of the date of such
proposed Acquisition (both before and after giving effect thereto), no
other agreement, contract or instrument to which any Borrower is a
party prohibits such proposed Acquisition and the Company shall be in
compliance with all covenants contained herein (including Section
10.11 through Section 10.14) on a pro forma basis, after such
Permitted Acquisition) for the immediately preceding four fiscal
quarters; and
(ii) for each Permitted Acquisition involving the acquisition or
creation of a direct or indirect Subsidiary of the Company, the
acquisition will not have the effect of causing or requiring any
direct Subsidiary of the Company to be engaged in the sale of New
Motor Vehicles of a different Manufacturer than the Manufacturer whose
New Motor Vehicles such Subsidiary was authorized to sell prior to the
acquisition.
Section 9.17 Title Documents. All original Manufacturer's invoices and
title documents evidencing the Floor Plan Borrowers' ownership of all of their
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Motor Vehicles financed hereunder, including, without limitation, the
Manufacturer's Certificate, shall be maintained in safekeeping by the Floor Plan
Borrowers in a manner reasonably acceptable to the Floor Plan Agent. At any
time, however, that the Agent may exercise the remedies under Section 11.2, the
Floor Plan Agent may request and the Floor Plan Borrowers shall deliver or cause
to be delivered to the Floor Plan Agent within three (3) Business Days of such
request, all such original Manufacturer's invoices and title documents then
being maintained by the Floor Plan Borrowers and, immediately, all such original
Manufacturer's invoices and title documents that later come into the possession
of the Floor Plan Borrowers, and the Floor Plan Agent or its designee may take
and retain said invoices and title documents. Thereafter, all such original
Manufacturer's Certificates and title documents shall remain in the Floor Plan
Agent's possession until the related Floor Plan Loan Borrowing or such ratable
portion thereof in respect of a Motor Vehicle sold by any Floor Plan Borrower
has been paid in full; provided that, the Floor Plan Agent may transfer, as
applicable, title documents delivered to it pursuant to this Section 9.17 in
connection with the sale of Motor Vehicles in accordance with its rights
provided for in this Agreement or the other Loan Documents.
Section 9.18 Additional Subsidiaries. In connection with any Permitted
Acquisition, or formation of any additional Subsidiary of the Company, the
Company (i) concurrently with the quarterly financial statements described in
Section 9.5(b), shall furnish to the Agent and the Lenders an officer's
certificate in the form of Exhibit 9.18 executed by the chief financial officer
of the Company, (x) describing each acquisition made and any new Subsidiary of
the Company formed during the prior quarter and (y) certifying as to compliance
with the requirements of Section 9.16(a)(i), and (ii), and stating that all
conditions to such acquisitions were satisfied and that such acquisitions are
Permitted Acquisitions in accordance with the terms of this Agreement, (ii)
within sixty (60) days of a Permitted Acquisition, shall cause any such
Subsidiary that is an Auto Dealer (other than any Silo Borrower and any entity
engaged in Truck Operations) and that is created or is otherwise acquired as
part of a Permitted Acquisition, to become a Floor Plan Borrower and a Guarantor
and to execute and deliver an Addendum and updated Schedules to this Agreement,
if applicable, and (iii) within thirty (30) days of a Permitted Acquisition,
shall cause any such Subsidiary that is not an Auto Dealer and any such
Subsidiary that is a Silo Borrower or engaged in Truck Operations (provided, the
Company shall not and shall not permit any of its Subsidiaries other than Xxxxxx
Automotive Atlanta L.L.C. to form or acquire any new entity engaged in Truck
Operations without the consent of the Agent) and that is created or is otherwise
acquired as a part of a Permitted Acquisition, to become a Guarantor and to
execute and deliver an Addendum and updated Schedules to this Agreement, if
applicable. The security interests granted by such Subsidiaries shall be subject
only to Liens permitted by Section 10.2, and any liens to be released within the
sixty (60) day period immediately following the closing of the related Permitted
Acquisition or the formation of such Subsidiary. The security documents and
other instruments related thereto shall be duly recorded or filed in such manner
and in such places as are required by law to establish, perfect, preserve and
protect the Liens, in favor of the Agent for the benefit of the Lenders,
required to be granted pursuant to such additional Security Documents and all
taxes, fees and other charges payable in connection therewith shall be paid in
full by the Company. Notwithstanding the foregoing, the Company shall have a
period of thirty (30) days from the date any Permitted Acquisition is effected
within which to pay off the existing floor plan facility, and all other actions
required to be taken by this Section 9.18 with respect to the additional
Collateral shall be completed no later than sixty (60) days after the date on
which any Permitted Acquisition is effected.
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Section 9.19 Updated Control Agreements. Upon request by any bank
maintaining deposit accounts subject to Liens under the Security Documents or by
any securities intermediary maintaining securities accounts subject to Liens
under the Security Documents, the Company shall and shall cause its Subsidiaries
to execute amended control agreements in order to reflect changes, deletions or
additions to the list of deposit accounts or securities accounts included in
such control agreements.
Section 9.20 Final Lien Releases; Termination of Security Interests. With
respect to each Floor Plan Borrower, within sixty (60) days of the completion of
the audit concerning such Floor Plan Borrower described in Section 8.2(b)(iii),
such Floor Plan Borrower shall provide Agent with evidence that all Indebtedness
with respect to such Floor Plan Borrower not otherwise permitted under this
Agreement has been satisfied and that all UCC-1 filings and other Liens
affecting the Collateral owned by such Floor Plan Borrower not permitted
pursuant to this Agreement have been terminated.
ARTICLE X.
NEGATIVE COVENANTS
So long as this Agreement shall remain in effect or the principal of or
interest on any Note, any Commitment Fees or any other expense or amount payable
hereunder shall be unpaid, and until the Commitments of all the Lenders shall
expire or terminate, the Letter of Credit Obligations are paid in full and all
Drafting Agreements are terminated, (i) the Company, as to itself and as to each
other Borrower and each Subsidiary and (ii) each Borrower other than the
Company, as to itself and its Subsidiaries only covenants and agrees with the
Agent, the Floor Plan Agent, the Swing Line Bank and each Lender that:
Section 10.1 Indebtedness. It will not incur, create, assume or suffer to
exist any Indebtedness, except:
(a) the Notes and the Indebtedness and Obligations under this
Agreement and the other Loan Documents;
(b) Indebtedness of any Borrower existing at the Closing Date which
is reflected in Schedule 10.1(b) hereto (and does not fall within any other
category in this Section 10.1) or otherwise falls within a category in this
Section 10.1 and all renewals and extensions thereof on substantially the same
terms;
(c) Indebtedness created under leases which, in accordance with GAAP,
have been recorded and/or should have been recorded on the books of the
applicable Borrower as Capital Leases;
(d) Subordinated Indebtedness;
(e) accounts payable (for the deferred purchase price of property or
services) which are from time to time incurred in the ordinary course of
business and which are not in excess of ninety (90) days past the invoice or
billing date (except for amounts due to Manufacturers);
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(f) Permitted Real Estate Debt and any Guarantees by the Company of
such Indebtedness;
(g) Indebtedness of any Subsidiary of the Company in existence (but
not incurred or created in connection with an acquisition) on the date on which
such Subsidiary is acquired by the Company, provided (i) neither the Company
nor any of its other Subsidiaries has any obligation with respect to such
Indebtedness, (ii) none of the properties of the Company or any of its other
Subsidiaries is bound with respect to such Indebtedness and (iii) the Company
is in full compliance with Section 10.11 through Section 10.14 hereof before
and after such acquisition;
(h) Indebtedness secured by Liens upon any property hereafter acquired
by the Company or any of its Subsidiaries to secure Indebtedness in existence on
the date of an acquisition (but not incurred or created in connection with such
acquisition) at a time when the Company is in full compliance with Section 10.11
through Section 10.14 hereof before and after such acquisition, which
Indebtedness is assumed by such Person simultaneously with such acquisition,
which Liens extend only to such property so acquired (and not to any
after-acquired property) and with respect to which Indebtedness neither the
Company nor any of its Subsidiaries (other than the acquiring Person) has any
obligation;
(i) contingent obligations (including Guarantees) of any Indebtedness
permitted hereunder;
(j) Indebtedness in respect of Hedging Agreements;
(k) purchase options in favor of a Manufacturer in respect of a dealer
franchise;
(l) Indebtedness that refinances any existing Indebtedness of
Borrowers, so long that such refinancing does not in any material respect
increase the principal amount thereof or expand the property subject to any Lien
(unless otherwise permitted under this Agreement) and in the case of
Subordinated Indebtedness, shorten the maturity or change any of the
subordination provisions in a manner adverse to the Lenders without the consent
of Required Lenders;
(m) Indebtedness of the Borrowers secured by Liens upon property other
than the Collateral, which Liens extend only to such property, with respect to
which Indebtedness none of the Subsidiaries other than the owner of such
encumbered asset has any obligation, provided the aggregate amount of all such
Indebtedness is less than $25 million outstanding at any one time;
(n) Unsecured debt of the Company, not guaranteed by any Subsidiary,
in an aggregate amount not to exceed Fifty Million and No/100 Dollars
($50,000,000) outstanding at any time; provided that not more than Twenty
Million and No/100 Dollars ($20,000,000) of such aggregate amount may be
cross-guaranteed by Subsidiaries of the Company; and
(o) Indebtedness of any Silo Borrower (which, for purposes of this
Section 10.1(o), shall include any Silo Borrower that is both a Silo Borrower
and a Floor Plan Borrower) consisting of floor plan financing for New Motor
Vehicles provided by Ford Motor Credit Corporation or General Motors Acceptance
Corporation ("GMAC") to such Subsidiary ("Permitted New Vehicle Floor Plan
Indebtedness"), provided (i) such financing applies only to New Motor Vehicles
sold to such Subsidiary by a Manufacturer affiliated with Ford Motor Credit
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Corporation or GMAC and that have never been and are not subject to a security
interest in favor of the Agent other than as contemplated in an intercreditor
agreement as described below in this Section 10.1(o), (ii) such Indebtedness is
secured solely by a Lien on said New Motor Vehicles and the proceeds thereof and
such other collateral as agreed by Agent and the Required Lenders, and (iii) the
Agent shall have executed with Ford Motor Credit Corporation or GMAC an
Intercreditor Agreement, reasonably satisfactory to the Agent, the Floor Plan
Agent and the Required Lenders, setting forth the respective rights of each
party in the assets of such Silo Borrower;
(p) Indebtedness of any Subsidiary that is an Auto Dealer and that is
not a Floor Plan Borrower as of the Closing Date, provided the Company has given
notice to the Agent that (i) the conditions precedent for imposition of the
Reserve Commitment exist as of the date of such notice, and requesting therein a
reasonable increase in the Floor Plan Loan Commitment, and the Lenders shall
not, within twenty (20) Business Days after the date of such notice, have
provided for such increase in the Floor Plan Loan Commitment, or (ii) in
connection with a Permitted Acquisition, the Floor Plan Loan Commitment will
not, in the reasonable determination of the Company, be adequate for the floor
plan funding requirements of the Auto Dealer(s) to be acquired and the Lenders
shall not, within twenty (20) Business Days after the date of such notice have
agreed to increase the Floor Plan Loan Commitments in the amounts reasonably
requested by the Company upon closing of the acquisition of such Auto Dealers
provided (i) such financing applies only to New Motor Vehicles that have never
been and are not subject to a security interest in favor of the Agent other than
as contemplated in an intercreditor agreement as described below in this Section
10.1(p), (ii) such Indebtedness is secured solely by a Lien on said New Motor
Vehicles and the proceeds thereof and such other Collateral as agreed by Agent
and the Required Lenders all as further described in the Intercreditor
Agreements, and (iii) the Agent shall have executed with the lender providing
such financing an Intercreditor Agreement, reasonably satisfactory to the Agent,
the Floor Plan Agent and the Required Lenders, setting forth the respective
rights of each party in the assets of such Subsidiary; and
(q) Indebtedness consisting of obligations arising under loans or
leases or guarantees thereof in connection with the dispositions of dealerships
or substantially all of the assets with respect thereto, where such obligations
do not total more than Five Million and No/100 Dollars ($5,000,000.00) per year
in connection with dispositions permitted under Section 10.4;
(r) Truck Financing provided by Comerica Bank, N.A., Navistar
Financial Corporation, Navistar Leasing Company, International Truck and Engine
Corporation, or IC Corporation (the "Truck Lenders") provided (i) that such
financing applies only to New Motor Vehicles that are heavy trucks or buses used
primarily for commercial or industrial transportation applications and not for
individual, household or family use, that are sold by Manufacturers to entities
listed on Schedule 1.1(d) and that have never been and are not subject to a
security interest in favor of the Agent other than as contemplated in an
intercreditor agreement as described below in this Section 10.1(r), (ii) such
Indebtedness is secured solely by a Lien on said New Motor Vehicles and the
proceeds thereof and such other collateral as agreed by Agent and the Required
Lenders, all as further described in the Intercreditor Agreements and (iii) the
Agent shall have executed with the Truck Lenders Intercreditor Agreements,
reasonably satisfactory to the Agent, the Floor Plan Agent and the Required
Lenders, setting forth the respective rights of each party in the assets of such
entity; and
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(s) Indebtedness of any Borrower created under a qualified service
loaner program with the financial affiliate of the Manufacturer of the Motor
Vehicles to be provided to such Borrower under such service loaner program,
provided, such indebtedness does not exceed Thirty Million and No/100 Dollars
($30,000,000.00) in the aggregate.
Section 10.2 Liens. No Borrower nor any Subsidiary of any Borrower will
incur, create, assume or permit to exist any Lien on any of its property or
assets, whether owned at the date hereof or hereafter acquired, or assign or
convey any rights to or security interests in any future revenues, except:
(a) Liens securing payment of the Obligations;
(b) Liens securing Indebtedness permitted by Section 10.1(c), Section
10.1(m), Section 10.1(o), Section 10.1(p), Section 10.1(r) or Section 10.1(s);
(c) Liens referred to in Section 7.16;
(d) Liens securing Permitted Real Estate Debt;
(e) extensions, renewals and replacements of Liens referred to in
Section 10.2(a), (b), (c), (d) and (g) provided, that any such extension,
renewal or replacement Lien shall be limited to the property or assets covered
by the Lien being extended, renewed or replaced and that the Indebtedness
secured by any such extension, renewal or replacement lien shall be in an amount
not greater than the amount of the Indebtedness secured by the Original Lien
extended, renewed or replaced;
(f) Certain rights of set-off in favor of a Manufacturer on amounts
owing in connection with Motor Vehicles purchased from such Manufacturer;
(g) Liens on real property, related real property rights, improvements
on such real property, and fixtures (that, in each case, does not constitute
Collateral) related to other Indebtedness permitted under Section 10.1(g), or
(h); and
(h) Liens related to Hedging Agreements with the Lenders.
Section 10.3 Consolidations and Mergers. No Borrower nor any Subsidiary of
any Borrower shall merge, consolidate with or into, or convey, transfer, lease
or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except:
(a) any of its Subsidiaries may merge with the Company, provided that
the Company shall be the continuing or surviving Person, or with any one or more
such Subsidiaries, provided that if any such transaction shall be between
Subsidiaries, one of which is a Wholly-Owned Subsidiary and one of its
Subsidiaries which is not a Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary
shall be the continuing or surviving Person;
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(b) any Subsidiary of the Company may sell all or substantially all
of its assets (upon voluntary liquidation or otherwise) to the Company or a
Wholly-Owned Subsidiary that is a party to the Security Documents; and
(c) any Subsidiary of the Company or the Company may merge or
consolidate with another Person (that is not the Company or any of its
Subsidiaries) if (x) the Company or such Subsidiary involved in the merger or
the consolidation is the surviving Person and (y) immediately prior to and after
giving effect to such merger or consolidation, there exists no Event of Default;
and
(d) as permitted in Section 10.4.
Section 10.4 Disposition of Assets. No Borrower nor any Subsidiary of any
Borrower shall permit any Disposition (whether in one or a series of
transactions) of any property or assets (including Accounts, notes receivable,
and/or chattel paper, with or without recourse) or enter into any agreement so
to do, except:
(a) Dispositions of Motor Vehicles and other inventory in the ordinary
course of business;
(b) Dispositions of assets, properties or businesses by the Company or
any of its Subsidiaries (including Subsidiaries and dealer franchises),
transferred or otherwise disposed of in the ordinary course of business
including Disposition of assets, including dealer franchises, the Disposition of
which the Company determines to be in its best interest, provided, (A) no Event
of Default will result from such Disposition, (B) the Company shall be in
compliance with Section 10.11 through Section 10.14 and (C) the total Revolving
Credit Loans (including Revolving Credit Swing Line Loans) outstanding should
not exceed the Revolving Credit Loan Advance Limit, in each case, after giving
effect to such Disposition.
(c) Dispositions of equipment and other property which is obsolete,
worn out or no longer used in or useful to such Person's business, all in the
ordinary course of business;
(d) Dispositions occurring as the result of a casualty event,
condemnation or expropriation;
(e) Dispositions in any year of other property, assets (including
capital stock of its Subsidiaries and Affiliates) or businesses of the Company
not otherwise permitted by clauses (a) through (d) of this Section 10.4;
provided, that the proceeds realized from such Disposition in any applicable
year in excess of ten percent (10%) of the tangible assets of the Company as of
the beginning of such year are either reinvested within one (1) year in similar
assets or used to repay the Obligations;
(f) Dispositions pursuant to Qualified Sale/Leaseback Transactions so
long as no Event of Default exists under Section 11.1(b), Section 11.1(c),
Section 11.1(f), Section 11.1(g), Section 11.3(a), Section 11.3(b), Section
11.3(d), Section 11.3(e), Section 11.3(f), or Section 11.3(g);
(g) Dispositions of chattel paper in arms-length transactions for fair
value in the ordinary course of business; and
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(h) As permitted in Section 10.3
Section 10.5 Investments. No Borrower nor any Subsidiary of any Borrower
will make or permit to exist any Investment in any Person, except for:
(a) Permitted Acquisitions;
(b) extensions of credit in the nature of Accounts or notes receivable
and/or chattel paper arising from the sale of goods and services in the ordinary
course of business;
(c) shares of stock, obligations or other securities received in
settlement of claims arising in the ordinary course of business;
(d) Investments in securities maturing within two (2) years and issued
or fully guaranteed or insured by the United States of America or any state or
agency thereof;
(e) Investments in commercial paper maturing within one year from the
date of acquisition thereof and having, at such date of acquisition, a credit
rating of at least A-1 from S&P and P-1 from Xxxxx'x;
(f) Investments in certificates of deposit, banker's acceptances and
time deposits maturing within one year from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts issued
or offered by, any domestic office of any commercial bank organized under the
laws of the United States of America or any State thereof that has a combined
capital and surplus and undivided profits of not less than $500,000,000, or any
Lender;
(g) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (d) above and entered into with
a financial institution satisfying the criteria described in clause (f) above;
(h) money market funds that (i) comply with the criteria set forth in
Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of
1940, (ii) are rated or invest solely in the assets described in clauses (e)
through (g) above and (iii) have portfolio assets of at least $5,000,000,000;
and
(i) Investments as permitted by the Floor Plan Agent;
(j) Investments in seller-financed notes in connection with Motor
Vehicles; provided that such Investments shall not exceed $50,000,000
outstanding at any one time;
(k) Investments in Wholly-Owned Subsidiaries that are Floor Plan
Borrowers; and
(l) Investments in less than Wholly-Owned Subsidiaries and in
Subsidiaries that are not Floor Plan Borrowers in an aggregate amount of up to
$50,000,000 during the term of this Agreement.
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Section 10.6 Transactions with Affiliates. No Borrower nor any Subsidiary
of any Borrower will enter into any transaction with any Affiliate except upon
terms no less favorable than the applicable Borrower or Subsidiary could obtain
in an arm's-length transaction with a Person which was not an Affiliate.
Section 10.7 Other Agreements. No Borrower nor any Platform Subsidiary will
enter into any agreement containing any provision which would be violated or
breached by such Borrower's or Platform Subsidiary's performance of its
Obligations hereunder or under any instrument or document delivered or to be
delivered by the Borrowers hereunder or in connection herewith.
Section 10.8 Fiscal Year; Accounting. No Borrower nor any Subsidiary of any
Borrower will change its fiscal year without prior notification to the Agent or
change its method of accounting (other than immaterial changes and methods and
changes authorized or required by GAAP).
Section 10.9 Pension Plans. No Borrower nor any Subsidiary of any Borrower
will permit any condition to exist in connection with any Plan which might
constitute grounds for the PBGC to institute proceedings to have such Plan
terminated or a trustee appointed to administer such Plan, or engage in, or
permit to exist or occur any other condition, event or transaction with respect
to any Plan which could be expected to have Material Adverse Effect.
Section 10.10 Restricted Payments and Distributions.
(a) No Borrower nor any Subsidiary of any Borrower shall declare or
make any Restricted Payment, except that any Borrower or any Subsidiary of any
Borrower may pay dividends to the Company (directly or indirectly) or to another
Wholly-Owned Subsidiary of any Borrower at any time, and may also make the
following Restricted Payments, provided that, immediately after giving effect to
the declaration of any dividend, and the payment of any Restricted Payment,
there exists no Default under Section 11.1(b) or Section 11.1(c), Default under
Section 11.1(f) or (g) or Section 11.3(d), (e), (f) or (g) or Event of Default
and, further provided, that, immediately after giving effect to the declaration
of any dividend and the payment of any Restricted Payment, the Company is in
compliance with the covenants contained in Section 10.11, Section 10.12, Section
10.13, and Section 10.14 on a proforma basis for the immediately preceding four
(4) quarters:
(i) the Company may declare and pay cash dividends on its capital
stock and may purchase shares of its capital stock, provided the
aggregate amount payable in respect of cash dividends paid by the
Company or the shares purchased by the Company shall not exceed an
amount equal to the sum of $15,000,000 plus one-half (1/2) of the
aggregate Net Income of the Company in accordance with GAAP for the
period subsequent to December 31, 2003 and ending on the date of
determination; and
(ii) the Company may declare and pay stock dividends directly or
indirectly.
(b) Distributions - No Borrower will (A) distribute any funds from the
Concentration Accounts or from any Floor Plan Borrower Dealership Account to any
Floor Plan Borrower with respect to which any Floor Plan Event of Default
exists, except to the extent necessary to cure such Floor Plan Event of Default
or (B) receive funds from any Floor Plan Borrower Dealership Account from any
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Floor Plan Borrower with respect to which any Floor Plan Event of Default
exists.
Section 10.11 Adjusted Net Worth. The Company will not at any time permit
its Adjusted Net Worth to be less than or equal to $350,000,000.
Section 10.12 Fixed Charge Coverage Ratio. The Company will not permit (as
of the end of any fiscal quarter) its Fixed Charge Coverage Ratio to be less
than 1.2 to 1.0, such ratio to be calculated as of the end of each fiscal
quarter of the Company based upon the four fiscal quarters immediately preceding
such date of determination.
Section 10.13 Total Leverage Ratio. The Company shall not, at any time
permit its Total Leverage Ratio to be greater than 4.5 to 1.0.
Section 10.14 Current Ratio. The Company shall not, at any time, permit its
Current Ratio to be less than 1.2 to 1.0.
Section 10.15 Deposit and Security Accounts. No Subsidiary of the Company
will open any deposit account or deposit any funds or invest any funds into any
deposit account or security account other than the Concentration Accounts,
Platform Accounts, Floor Plan Borrower Dealership Accounts or any other deposit
account or securities account pledged to Agent and in which Agent has a
perfected security interest by control within thirty (30) days of the opening of
such account or such deposit or investment.
ARTICLE XI.
EVENTS OF DEFAULT AND REMEDIES
Section 11.1 Revolving Credit Events of Default. The following events shall
constitute Revolving Credit Events of Default (herein called "Revolving Credit
Events of Default"):
(a) any representation or warranty made or deemed made in or in
connection with this Agreement, the Notes, any of the Loan Documents or any of
the Borrowings hereunder or in any report, certificate, financial statement or
other instrument furnished in connection with this Agreement or the execution
and delivery of the Notes or any of the Loan Documents or the making of any of
the Borrowings hereunder shall prove to have been false or misleading in any
material respect when made or deemed made;
(b) default shall be made in the payment of any principal of any
Revolving Credit Loan (including any Revolving Credit Swing Line Loan) when and
as the same shall become due and payable pursuant to the terms of this
Agreement, whether at the due date thereof or at a date fixed for prepayment
thereof or by acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on any
Revolving Credit Loan or any Commitment Fees or any other amount due under this
Agreement other than principal of any Revolving Credit Loan or any amount
described in Section 11.3(a) or (b), when and as the same shall become due and
payable which shall remain unremedied for a period of five (5) days from the
date due, or, in the case of Commitment Fees, from the date of invoice, if
later;
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(d) default shall be made in the due observance or performance of any
covenant, condition or agreement contained in Section 9.1, Section 9.6(a)(i),
Section 9.6(a)(iii), Section 9.9, Section 9.10, Section 9.20 or in Article X,
other than Section 10.2 (to the extent Liens referenced in said Section are
involuntary), Section 10.6, Section 10.7, Section 10.8 (with respect to the
Subsidiaries of the Company only) and Section 10.9;
(e) except as provided in Section 11.1(a) through Section 11.1(d),
inclusive, default shall be made in the due observance or performance of any
other covenant, condition or agreement to be observed or performed pursuant to
this Agreement or any of the other Loan Documents and such default shall
continue unremedied for thirty (30) days after the earlier to occur of (i) the
Company obtaining knowledge thereof and (ii) written notice thereof having been
given to the Company;
(f) the Company or any of its Subsidiaries shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11 of
the United States Code or any other federal or state bankruptcy, insolvency,
liquidation or similar law, (ii) consent to the institution of, or fail to
contravene in a timely and appropriate manner to any such proceeding or the
filing of any such petition, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator or similar official for such Person
or for a substantial part of such Person's property or assets, (iv) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (v) make a general assignment for the benefit of creditors, or
(vi) become unable, admit in writing its inability or fail generally to pay its
debts as they become due;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of the Company or any of its Subsidiaries, or of a substantial part
of the property or assets of any such Person, under Title 11 of the United
States Code or any other federal or state bankruptcy, insolvency, receivership
or similar law, (ii) the appointment of a receiver, trustee, custodian,
sequestrator or similar official for any such Person or for a substantial part
of the property of any such Person or (iii) the winding-up or liquidation of any
such Person; and such proceeding or petition shall continue undismissed for
sixty (60) days or an order or decree approving or ordering any of the foregoing
shall continue unstayed and in effect for sixty (60) days;
(h) default (other than a default in the payment of principal or
interest) shall be made with respect to any Indebtedness of the Company or any
of its Subsidiaries, if the total amount of such Indebtedness in default exceeds
in the aggregate, an amount equal to Twenty Million Dollars ($20,000,000) and if
the effect of any such default or defaults shall be to accelerate, or to permit
the holder or obligee of any such Indebtedness (or any trustee on behalf of such
holder or obligee) to accelerate (with or without notice or lapse of time or
both), the maturity of any such Indebtedness; or any payment of principal or
interest, regardless of amount, on any Indebtedness of the Company or any of its
Subsidiaries, which Indebtedness exceeds in the aggregate an amount equal to
Twenty Million Dollars ($20,000,000), shall not be paid when due, whether at
maturity, by acceleration or otherwise (after giving effect to any period of
grace as specified in the instrument evidencing or governing such Indebtedness);
(i) a Reportable Event or Reportable Events shall have occurred with
respect to any Plan or Plans;
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(j) there shall be entered against the Company or any of its
Subsidiaries one or more judgments or decrees in excess of Ten Million Dollars
($10,000,000) in the aggregate at any one time outstanding for the Company and
all its Subsidiaries and all such judgments or decrees in the amount of such
excess shall not have been vacated, discharged, stayed or bonded pending appeal
within sixty (60) days from the entry thereof, excluding those judgments or
decrees for and to the extent which the Company or any such Subsidiary is
insured and with respect to which the insurer has assumed responsibility in
writing (subject to usual deductibles);
(k) there shall occur any material loss of or change to any Dealer
Franchise Agreement between any Borrower and a Manufacturer, which could be
expected to result in a Material Adverse Effect; (l) any of the Loan Documents
shall cease to be legal, valid and binding agreements enforceable against any
Person other than the Agent or any Lender executing the same in accordance with
the respective terms thereof except as permitted by the terms hereof or thereof
or shall in any way be terminated (excluding termination caused by the Agent or
Lenders) or become or be declared ineffective or inoperative or shall in any way
whatsoever cease to give or provide the respective first priority Liens,
security interests, rights, titles, interests, remedies, powers or privileges
intended to be created thereby, and such cessation or failure to give or provide
such first priority Liens continues for ten (10) days after the first to occur
of (i) the Company obtaining knowledge thereof and (ii) written notice thereof
having been given to the Company;
(m) an audit performed by the Floor Plan Agent pursuant to the
provisions of Section 9.12(a) reveals that Motor Vehicles of the Borrowers
securing the Obligations have, for a period of thirty (30) consecutive days,
been Out of Balance, and such Out of Balance condition continues until the
earlier of (i) three (3) days following knowledge thereof by an officer of the
Company and (ii) three (3) days following notice to the Company thereof;
(n) a Change of Control; or
(o) a Floor Plan Event of Default shall occur and be continuing.
Section 11.2 Revolving Credit Remedies.
(a) Upon the occurrence of any Revolving Credit Event of Default
(other than an event with respect to the Company described in Section 11.1(f) or
Section 11.1(g)), and at any time thereafter during the continuance of such
event, the Agent may, and at the request of the Required Lenders shall, by
written or telegraphic notice to the Company, take any of the following actions
at the same or different times: (x) terminate forthwith the Revolving Credit
Loan Commitments of the Lenders hereunder, and any such termination shall
automatically constitute a termination of the Revolver Swing Line Commitment,
(y) declare the Revolving Credit Notes then outstanding to be immediately due
and payable, whereupon the principal of the Revolving Credit Notes, together
with accrued and unpaid interest thereon and any unpaid accrued Commitment Fees
and all other liabilities of the Borrowers accrued hereunder with respect to the
Revolving Credit Loans, shall become immediately due and payable both as to
principal and interest, without presentment, demand, protest, notice of protest,
notice of intent to accelerate, notice of acceleration or any other notice of
any kind, all of which are hereby expressly waived by the Borrowers, anything
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contained herein or in any Note or other Loan Document to the contrary
notwithstanding, or (z) pursue and enforce any of the rights and remedies of the
Agent on behalf of the Lenders as provided in any of the Loan Documents or as
otherwise provided in the UCC or other applicable law;
(b) With respect to the events described in Section 11.1(f) or Section
11.1(g), the Revolving Credit Commitments of the Lenders shall automatically
terminate (if not theretofore terminated) and any such termination shall
automatically constitute a termination of the Revolver Swing Line Commitment,
and the Revolving Credit Notes shall automatically become due and payable, both
as to principal and interest, without presentment, demand, protest, notice of
intent to accelerate, notice of acceleration or other notice of any kind, all of
which are hereby expressly waived by the Borrowers, anything contained herein or
in any Note or other Loan Document to the contrary notwithstanding, and the
Company and the other Borrowers shall immediately deliver cash collateral to the
Agent in such amounts as are acceptable to the Agent to be held by the Agent,
for the benefit of the Swing Line Bank and the Lenders as Collateral for the
payment and performance of Drafting Agreements until all such Drafting
Agreements are terminated according to their terms.
(c) Notwithstanding the above, with respect to a Revolving Credit
Event of Default described in Section 11.1(o), if such is caused solely by the
occurrence of a single Event of Default occurring under Section 11.3(a), (b),
(d), (e), (h), (i), (j), (k) or (l) and affects only one Floor Plan Borrower and
no other Event of Default has occurred and is continuing, the Agent shall not be
entitled to accelerate the Revolving Credit Notes for a period of sixty (60)
days from the date of such Floor Plan Event of Default.
Section 11.3 Floor Plan Events of Default. The following events shall
constitute Floor Plan Events of Default hereunder in respect of any one or more
Floor Plan Borrowers (herein called "Floor Plan Events of Default"):
(a) (i) Default shall be made in the payment of any principal of any
Floor Plan Loan (including any Floor Plan Swing Line Loan) or any Overage Amount
when and as the same shall become due and payable pursuant to the terms of this
Agreement, whether at the due date thereof or at a date fixed for prepayment
thereof or by acceleration thereof or otherwise, or (ii) the Company shall fail
to cure any Out of Balance condition, which condition in each case shall remain
unremedied for a period of three (3) days following notice thereof by the Agent
to the Company;
(b) Default shall be made in the payment of any interest on any Floor
Plan Loan or in the payment of any fees or any other amount payable by any Floor
Plan Borrower pursuant to the Loan Documents which default continues until the
earlier of: (i) ten (10) days after the due date thereof and (ii) three (3)
Business Days following notice thereof by the Agent to the Company;
(c) (i) the Revolving Credit Loans shall be accelerated, (ii) unless
the Revolving Credit Loans shall have been heretofore accelerated pursuant to
clause (i), the Company shall fail to pay the principal or interest on the
Revolving Credit Loans within sixty (60) days of the due date thereof, (iii)
Revolving Credit Loan Commitments shall be terminated pursuant to Section 11.2
and the Revolving Credit Event of Default that provided the basis for such
termination shall continue for sixty (60) days thereafter, or (iv) an event
shall occur that would have constituted a Revolving Credit Event of Default (but
for the fact that prior thereto the Revolving Credit Loan Commitments shall have
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been voluntarily terminated pursuant to Section 5.5) and such event shall
continue for sixty (60) days after notice thereof from the Required Lenders to
the Company;
(d) such Floor Plan Borrower shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the United
States Code or any other federal or state bankruptcy, insolvency, liquidation or
similar law, (ii) consent to the institution of, or fail to contravene in a
timely and appropriate manner, any such proceeding or the filing of any such
petition, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator or similar official for such Floor Plan Borrower or for
a substantial part of such Floor Plan Borrower's property or assets, (iv) file
an answer admitting the material allegations of a petition filed against it in
any such proceeding, (v) make a general assignment for the benefit of creditors,
(vi) become unable, admit in writing its inability or fail generally to pay its
debts as they become due or (vii) take any corporate or other action for the
purpose of effecting any of the foregoing;
(e) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of such Floor Plan Borrower, or of a substantial part of the property
or assets of such Floor Plan Borrower, under Title 11 of the United States Code
or any other federal or state bankruptcy, insolvency, receivership or similar
law, (ii) the appointment of a receiver, trustee, custodian, sequestrator or
similar official for such Floor Plan Borrower or for a substantial part of the
property of such Floor Plan Borrower or (iii) the winding-up or liquidation of
such Floor Plan Borrower; and such proceeding or petition shall continue
undismissed for sixty (60) days or an order or decree approving or ordering any
of the foregoing shall continue unstayed and in effect for sixty (60) days;
(f) the Company shall (i) voluntarily commence any proceeding or file
any petition seeking relief under Title 11 of the United States Code or any
other federal or state bankruptcy, insolvency, liquidation or similar law, (ii)
consent to the institution of, or fail to contravene in a timely and appropriate
manner, any such proceeding or the filing of any such petition, (iii) apply for
or consent to the appointment of a receiver, trustee, custodian, sequestrator or
similar official for the Company or for a substantial part of it s property or
assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors, or (vi) become unable, admit in writing its inability or
fail generally to pay its debts as they become due;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of the Company, or of a substantial part of the property or assets of
the Company, under Title 11 of the United States Code or any other federal or
state bankruptcy, insolvency, receivership or similar law, (ii) the appointment
of a receiver, trustee, custodian, sequestrator or similar official for the
Company or for a substantial part of its property or (iii) the winding-up or
liquidation of the Company; and such proceeding or petition shall continue
undismissed for sixty (60) days or an order or decree approving or ordering any
of the foregoing shall continue unstayed and in effect for sixty (60) days;
(h) default (other than defaults in the payment of principal or
interest) shall be made with respect to any Indebtedness of such Floor Plan
Borrower, if the total amount of such Indebtedness in default exceeds in the
aggregate, an amount equal to Ten Million Dollars ($10,000,000) and if the
effect of any such default or defaults shall be to accelerate, or to permit the
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holder or obligee of any such Indebtedness (or any trustee on behalf of such
holder or obligee) to accelerate (with or without notice or lapse of time or
both), the maturity of any such Indebtedness; or any payment of principal or
interest, regardless of amount, on any Indebtedness of such Floor Plan Borrower
which Indebtedness exceeds in the aggregate, an amount equal to Ten Million
Dollars ($10,000,000) shall not be paid when due, whether at maturity, by
acceleration or otherwise (after giving effect to any period of grace as
specified in the instrument evidencing or governing such Indebtedness);
(i) there shall be entered against such Floor Plan Borrower one or
more judgments or decrees in excess of Ten Million Dollars ($10,000,000) in the
aggregate at any one time outstanding and all such judgments or decrees in the
amount of such excess shall not have been vacated, discharged, stayed or bonded
pending appeal within sixty (60) days from the entry thereof, excluding those
judgments or decrees for and to the extent which such Floor Plan Borrower is
insured and with respect to which the insurer has assumed responsibility in
writing (subject to usual deductibles) or for and to the extent to which such
Floor Plan Borrower is otherwise indemnified if the terms of such
indemnification are reasonably satisfactory to the Required Lenders;
(j) there shall occur a termination of such Floor Plan Borrower's
Dealer Franchise Agreement with a Manufacturer;
(k) any of the Loan Documents or Security Documents in respect of such
Floor Plan Borrower shall cease to be in full force and effect or in any way be
terminated (excluding termination caused by the Agent or Lenders) or become or
be declared ineffective or inoperative or shall in any way whatsoever cease to
give or provide the respective first priority Liens, intended to be created
thereby, and such cessation or failure to give or provide such first priority
Liens continues for ten (10) days after the first to occur of (i) the Company
obtaining knowledge thereof and (ii) written notice thereof having been given to
the Company; or
(l) default shall be made in the due observance or performance of the
covenant contained in Section 9.20.
Section 11.4 Floor Plan Remedies.
(a) Upon the occurrence of a Floor Plan Event of Default under Section
11.3(a), (b), (d), (e), (h), (i), (j), (k) or (l), the Agent may, and at the
direction of the Required Lenders, shall: (i) (A) make no further Loans to such
Floor Plan Borrower during the continuance of such Floor Plan Event of Default
and shall at the direction of the Required Lenders cause the Borrowers to
terminate all "sweep", "connectivity", "automatic funding", "zero balanced"
account features and related transfer services in respect of such Floor Plan
Borrower Dealership Accounts, (B) suspend and terminate the Drafting Agreements
with respect to such Floor Plan Borrower during the continuance of such Floor
Plan Event of Default, and (C) the Floor Plan Agent, upon three (3) days prior
notice to the Company before the first debit, may initiate automatic debits from
all such accounts of such Floor Plan Borrower in order to pay sums due under any
Floor Plan Loans of such Floor Plan Borrower; and (ii) exercise its control
rights under the Security Agreement and other Security Documents in respect of
all other bank accounts of all Borrowers; provided, the Floor Plan Agent shall
not exercise its control rights under the Security Agreement (Toyota/Lexus
Non-Inventory) or other Security Documents with respect to any Toyota/Lexus
Floor Plan Borrower unless and until a Floor Plan Event of Default has occurred
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with respect to such Toyota/Lexus Floor Plan Borrower. Notwithstanding the
foregoing, the Lenders shall continue to make Floor Plan Loans available to all
Floor Plan Borrowers with respect to which no Floor Plan Event of Default has
occurred until otherwise provided in Section 11.3(c) above.
(b) Upon the occurrence and during the continuance of a Floor Plan
Event of Default under Section 11.3(c) above, the Applicable Margin for all
Floor Plan Loans made to all Floor Plan Borrowers during the sixty (60) day
period referred to therein shall increase by two percent (2%).
(c) Immediately upon the occurrence of a Floor Plan Event of Default
under Section 11.3(c), (f) or (g), or sixty (60) days after the occurrence of
any Floor Plan Event of Default under Section 11.3(a), (b), (d), (e), (h), (i),
(j), (k), or (l) that is continuing and immediately upon the occurrence of a
second, concurrent Floor Plan Event of Default under Section 11.3(a), (b), (d),
(e), (h), (i), (j), (k) or (l), (i) no further Loans shall be made and the Agent
may, and at the request of the Required Lenders shall, by written or facsimile
notice to the Company, take any of the following actions at the same or
different times: (x) terminate immediately all of the Floor Plan Commitments and
Revolving Credit Commitments of the Lenders hereunder, and any such termination
shall automatically terminate the Revolver Swing Line Commitment and the Floor
Plan Swing Line Commitment, (y) declare the Revolving Credit Notes and the Floor
Plan Notes then outstanding to be immediately due and payable, whereupon the
principal of the Revolving Credit Notes, the Floor Plan Notes, together with
accrued and unpaid interest thereon and any unpaid accrued Commitment Fees and
all other liabilities of the Borrowers hereunder and under all of the Loan
Documents shall become immediately due and payable both as to principal and
interest, without presentment, demand, protest, notice of protest, notice of
intent to accelerate, notice of acceleration or any other notice of any kind,
all of which are hereby expressly waived by the Borrowers, anything contained
herein or in any Note or other Loan Document to the contrary notwithstanding, or
(z) pursue and enforce any of the rights and remedies of the Agent on behalf of
the Lenders as provided in any of the Loan Documents or as otherwise provided in
the UCC or other applicable law and (ii) the Floor Plan Agent in its sole
discretion may, and at the request of the Required Lenders shall (and, to the
extent the Commitments have been terminated, such request shall be deemed to
have been made), suspend and terminate all Drafting Agreements, and the Agent
shall have all remedies available to it at law or in equity or as contained in
any of the Loan Documents.
Section 11.5 Overdrawing of Floor Plan Loans. If at any time the aggregate
outstanding principal amount of all (i) Floor Plan Loans (including Requests for
Borrowings of Floor Plan Loans and including any outstanding Overage Amount),
plus (ii) Floor Plan Swing Line Loans, plus (iii) Drafts presented for payment
exceeds (a) 110% of the aggregate Floor Plan Loan Commitments and such condition
exists for two (2) consecutive days or (b) the aggregate Floor Plan Loan
Commitments by any amount for fifteen (15) days out of any 30-day period, then,
in such event, the Floor Plan Agent acting in its sole discretion may, and upon
election of the Required Lenders, shall (y) take any and all actions reasonably
necessary to suspend and/or terminate Drafting Agreements and (z) elect by
written notice to the Company to terminate the Floor Plan Commitments and to
deem such occurrence as constituting a Revolving Credit Event of Default.
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Section 11.6 Application of Collateral.
(a) Upon the exercise of remedies by the Agent in accordance with this
Article XI and pursuant to the procedures among the Lenders set forth in Section
11.6(b), the Agent, after giving written notice to the Borrowers and to all
Lenders and the Swing Line Bank of the action(s) to be taken, may at any time or
times thereafter (i) receive directly, for the benefit of the Lenders and Swing
Line Bank and for application to the then outstanding Obligations as provided
hereafter in this Section 11.6(a), all payments and proceeds related to the
Collateral and/or (ii) in accordance with the Security Documents sell, assign
and deliver all of the Collateral or any part thereof, or any substitution
therefor or any additions thereto as provided hereafter. Any such sale or
assignment may be at any broker's board or at any public or private sale, at the
option of the Agent or of any officer or representative acting on behalf of the
Agent, without advertisement or any notice to the Borrowers or any other Person
except those required by applicable law (the Borrowers hereby agreeing that ten
(10) days' notice constitutes "reasonable notice"); and each Lender (including
the Agent), its officers and assigns, may bid and become purchasers at any such
sale, if public, or at any broker's board if the Collateral is of a type
customarily sold in a recognized market or is of a type which is the subject of
widely distributed standard price quotations. Sales hereunder may be at such
time or times, place or places, for cash or credit, and upon such terms and
conditions as the Agent may determine in its sole discretion. Upon the
completion of any sale, the Agent shall execute all instruments of transfer
necessary to vest in the purchaser(s) title to the property sold, and shall
deliver to such purchaser(s) any of the property so sold which may be in the
possession of the Agent.
In the case of any sale or other liquidation of Collateral (other than
amounts already in the Cash Collateral Account, which amount shall be applied as
set forth in Section 6.8), the purchase money proceeds and avails and all other
proceeds which then may be held or recovered by the Agent or the Floor Plan
Agent for the benefit of the Lenders and the Swing Line Bank, shall be applied
in the following order:
(i) First, to the payment of the reasonable costs and expenses of
such sale and of the collection or enforcement of such Collateral, and
of all reasonable expenses (including attorneys' fees) and liabilities
incurred and advances made by the Lenders in connection therewith;
(ii) Second, to the payment of any outstanding Overage Amounts
plus any accrued interest thereon;
(iii) Third, to the payment of any amounts due to Swing Line Bank
in the form of Floor Plan Swing Line Loans;
(iv) Fourth, to the payment ratably of the amounts due to the
Lenders for interest and then principal on all Floor Plan Loans (other
than Swing Line Loans) then outstanding that were funded from the
Reserve Commitment;
(v) Fifth, to the payment ratably of the amounts due to the
Lenders for interest and then principal on all Floor Plan Loans not
paid pursuant to (iii) or (iv) immediately above;
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(vi) Sixth, to the payment of any amounts due to Swing Line Bank
in the form of Revolving Credit Swing Line Loans;
(vii) Seventh, to the payment ratably of (i) the amounts due to
the Lenders for interest and then principal on all Revolving Credit
Loans (which include all unreimbursed drawings under all Letter of
Credit Obligations) and (ii) a Cash Collateral Account equal to the
aggregate undrawn amount of all outstanding Letters of Credit, which
account shall be subject to the provisions of Section 6.8(a);
(viii) Eighth, to the payment ratably of the amounts due to the
Lenders, for all Obligations arising under any Hedging Agreement with
any of the Lenders; and
(ix) Ninth, to the payment of the surplus, if any, to the
Borrowers, their successors or assigns, or to whomsoever may be
lawfully entitled to receive the same, or as a court of competent
jurisdiction may direct.
(b) Notwithstanding anything to the contrary contained herein or in
the Security Documents, all Lenders making Floor Plan Loans and all Lenders
making Revolving Credit Loans acknowledge that any proceeds resulting from the
sale or other realization of any Collateral (other than amounts already in the
Cash Collateral Account) shall be applied in the order described in Section
11.6(a), above, such that all Floor Plan Loans shall be paid before Revolving
Credit Loans, and all Revolving Credit Loans will be paid before any liabilities
under any Hedging Agreement Indebtedness to the Lenders. Such application will
be made by the Agent or the Floor Plan Agent based on either of their
calculations of all of such Indebtedness and the various classifications of any
Loans made hereunder, which calculations shall be conclusive, absent manifest
error. The intent of such classification shall be to create a priority of
payments in the order stated notwithstanding that all of said Indebtedness is
secured as a group by the Security Documents and the Collateral described
therein.
(c) The Agent is not required to act with respect to the Collateral
except in accordance with the written procedures as established by the Required
Lenders; however, if the Required Lenders fail to agree upon and establish such
procedures, and the exigency of the circumstances requires, the Agent, in its
sole discretion and in good faith, may (but is not required to) take whatever
action it deems necessary to protect and enforce the Collateral or the rights of
the Lenders and the Swing Line Bank under the Loan Documents.
ARTICLE XII.
THE AGENT, FLOOR PLAN AGENT AND THE COLLATERAL
Section 12.1 Authorization and Action of the Agent; Funding During
Transition Period; Rights and Duties Regarding Collateral, Priority of
Distributions.
(a) In order to expedite the various transactions contemplated by this
Agreement, each Lender, the Floor Plan Agent and the Swing Line Bank hereby
irrevocably appoints and authorizes JPMorgan Chase Bank, N.A. to act as Agent on
its behalf. Each of the Lenders, the Floor Plan Agent and the Swing Line Bank
and each subsequent holder of any Note by its acceptance thereof, hereby
irrevocably authorizes and directs the Agent to take such action on its behalf
and to exercise such powers hereunder as are specifically delegated to or
required of the Agent by the terms and provisions hereof, together with such
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powers as are reasonably incidental thereto. The Agent may perform any of its
duties hereunder by or through its agents and employees. The duties of the Agent
shall be mechanical and administrative in nature; the Agent shall not have, by
reason of this Agreement or any other Loan Document, a fiduciary relationship in
respect of any Lender, the Floor Plan Agent or the Swing Line Bank; and nothing
in this Agreement or any other Loan Document, expressed or implied, is intended
to, or shall be so construed as to, impose upon the Agent any obligations in
respect of this Agreement or any other Loan Document except as expressly set
forth herein or therein. The Agent is hereby expressly authorized on behalf of
the Lenders, the Floor Plan Agent and the Swing Line Bank, without hereby
limiting any implied authority, (i) to receive on behalf of each of the Lenders
and the Swing Line Bank any payment of principal of or interest on the Notes
outstanding hereunder and all other amounts accrued hereunder paid to the Agent,
and promptly to distribute to each Lender its proper share of all payments so
received; (ii) to give notice within a reasonable time on behalf of each of the
Lenders and the Swing Line Bank to the Borrowers of any Default or Event of
Default specified in this Agreement of which the Agent has actual knowledge as
provided in Section 12.7; (iii) to distribute to each Lender and the Swing Line
Bank copies of all notices, agreements and other material as provided for in
this Agreement as received by the Agent; (iv) to distribute to the Borrowers any
and all requests, demands and approvals received by the Agent or from the
Lenders, and (v) to distribute and receive all notices, agreements and other
material as provided in this Agreement with respect to Floor Plan Loans and to
deal with the Floor Plan Agent to the fullest extent required or contemplated by
the terms of their Agreement or any other Loan Document. As to any matters not
expressly provided for by this Agreement, the Notes or the other Loan Documents
(including enforcement or collection of the Notes), the Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lenders and all holders of Notes and the
Loans, the Floor Plan Agent and the Swing Line Bank; provided, that the Agent
shall not be required to take any action which exposes the Agent to personal
liability or which is contrary to this Agreement or applicable law.
(b) The Agent and the Lenders acknowledge and agree that the Agent may
fund all Floor Plan Loans and all Revolving Credit Loans on behalf of the
Lenders during the Transition Period. Upon request by the Agent, at any time
during the Transition Period or thereafter, each Lender will make Floor Plan
Loans and Revolving Credit Loans in an amount equal to the outstanding principal
amount of all such Loans funded by the Agent during the Transition Period in
accordance with each Lender's respective Pro Rata Share of Floor Plan Loan
Commitments and Pro Rata Share of Revolving Credit Loan Commitments.
(c) The Agent shall hold all of the Collateral along with all payments
and proceeds arising therefrom, for the benefit of all Lenders and the Swing
Line Bank as security for the payment of all the Obligations subject to the
provisions of Section 11.6(a). Upon payment in full of all the Obligations and
termination of the Commitments, the Agent shall release all of the Collateral to
the Borrowers. Except as otherwise expressly provided for in Section 13.5, the
Agent, in its own name or in the name of the Borrowers, may enforce any of the
rights provided for in the Security Documents and may collect, receive and
receipt for all proceeds receivable on account of the Collateral.
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(d) All payments and proceeds of every kind from the Collateral, when
directly received by the Agent pursuant to Section 11.6(a) (whether from
payments on or with respect to the Collateral, from foreclosure and sale to
third parties, from sale of Collateral subsequent to a foreclosure at which the
Agent or another Lender was the purchaser, or otherwise) shall be held by it as
a part of the Collateral and, except as otherwise expressly provided
hereinafter, shall be applied to the Obligations in the manner set forth in
Section 11.6(a).
Section 12.2 Agent's Reliance.
(a) Neither the Agent nor any of its directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken by it or
them under or in connection with this Agreement, the Notes or any of the other
Loan Documents (i) with the consent or at the request of the Required Lenders or
(ii) in the absence of its or their own gross negligence or willful misconduct
(it being the express intention of the parties hereto that the Agent and its
directors, officers, agents and employees shall have no liability for actions
and omissions under this Section 12.2 resulting from their sole ordinary or
contributory negligence).
(b) Without limitation of the generality of the foregoing, the Agent:
(i) may treat the payee of each Note and the Swing Line Bank, respectively, as
the holder of such Note until the Agent receives written notice of the
assignment or transfer thereof signed by such payee and in form satisfactory to
the Agent; (ii) may consult with legal counsel (including counsel for any
Borrower), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (iii)
makes no warranty or representation to any Lender, the Swing Line Bank, or the
Floor Plan Agent and shall not be responsible to any Lender, the Swing Line
Bank, or the Floor Plan Agent for any statements, warranties or representations
made in or in connection with this Agreement, any Note or any other Loan
Document; (iv) except as otherwise expressly provided herein, shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of this Agreement, any Note or any other Loan
Document or to inspect the property (including the books and records) of any
Borrower; (v) shall not be responsible to any Lender, the Swing Line Bank or the
Floor Plan Agent for the due execution, legality, validity, enforceability,
collectability, genuineness, sufficiency or value of this Agreement, any Note,
any other Loan Document or any other instrument or document furnished pursuant
hereto or thereto; (vi) shall not be responsible to any Lender, the Swing Line
Bank or the Floor Plan Agent for the perfection or priority of any Lien securing
the Loans; and (vii) shall incur no liability under or in respect of this
Agreement, any Note or any other Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by facsimile)
reasonably believed by it to be genuine and signed or sent by the proper party
or parties.
Section 12.3 Agent and Affiliates; JPMorgan Chase and Affiliates. Without
limiting the right of any other Lender or the Swing Line Bank to engage in any
business transactions with any Borrower or any of its Affiliates, with respect
to their Commitments, the Loans, if any, made by them and the Notes, if any,
issued to them, JPMorgan Chase Bank, N.A.. shall have the same rights and powers
under this Agreement, any Note or any of the other Loan Documents as any other
Lender and may exercise the same as though it were not the Agent; and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated, include
JPMorgan Chase Bank, N.A. in its individual capacity. JPMorgan Chase Bank, N.A.
and its Affiliates may be engaged in, or may hereafter engage in, one or more
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loan, letter of credit, leasing or other financing activities not the subject of
the Loan Documents (collectively, the "Other Financings") with any of Borrower
or any of their Affiliates, or may act as trustee on behalf of, or depository
for, or otherwise engage in other business transactions with any of the
Borrowers or any of their Affiliates (all Other Financings and other such
business transactions being collectively, the "Other Activities") with no
responsibility to account therefor to the Lenders or the Floor Plan Agent.
Without limiting the rights and remedies of the Lenders, the Swing Line Bank, or
the Floor Plan Agent specifically set forth in the Loan Documents, no other
Lender, the Swing Line Bank, nor the Floor Plan Agent shall have any interest in
(a) any Other Activities, (b) any present or future guarantee by or for the
account of any Borrower not contemplated or included in the Loan Documents, (c)
any present or future offset exercised by the Agent in respect of any such Other
Activities, (d) any present or future property taken as security for any such
Other Activities or (e) any property now or hereafter in the possession or
control of the Agent which may be or become security for the Obligations of any
Borrower under the Loan Documents by reason of the general description of
indebtedness secured, or of property contained in any other agreements,
documents or instruments related to such Other Activities; provided, that if any
payment in respect of such guarantees or such property or the proceeds thereof
shall be applied to reduction of the Obligations evidenced hereunder and by the
Notes, then each Lender, the Swing Line Bank and the Floor Plan Agent shall be
entitled to share in such application according to its equitable portion of such
Obligations.
Section 12.4 Lenders' Indemnity of Agent.
(a) The Agent shall not be required to take any action hereunder or to
prosecute or defend any suit in respect of this Agreement, the Notes or any
other Loan Document unless indemnified to the Agent's satisfaction by the
Lenders and the Swing Line Bank against loss, cost, liability and expense. If
any indemnity furnished to the Agent shall become impaired, the Agent may call
for additional indemnity and cease to do the acts indemnified against until such
additional indemnity is given. In addition, the Lenders and the Swing Line Bank
agree to indemnify the Agent (to the extent not reimbursed by the Borrowers),
ratably according to the respective Pro Rata Share of Total Commitments, or if
no Commitments are outstanding, the respective Pro Rata Share of Total
Commitments immediately prior to the time the Total Commitments ceased to be
outstanding held by each of them), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Agent (or either of them) in any way
relating to or arising out of this Agreement or any action taken or omitted by
the Agent under this Agreement, the Notes and the other Loan Documents
(including any action taken or omitted under Article II of this Agreement).
Without limitation of the foregoing, each Lender and the Swing Line Bank agrees
to reimburse the Agent promptly upon demand for its respective Pro Rata Share of
the Total Commitments of any out-of-pocket expenses (including reasonable
counsel fees) incurred by the Agent in connection with the preparation,
execution, administration, or enforcement of, or legal advice in respect of
rights or responsibilities under, this Agreement, the Notes and the other Loan
Documents to the extent that the Agent is not reimbursed for such expenses by
the Borrowers. The provisions of this Section 12.4 shall survive the termination
of this Agreement, the payment of the Obligations and/or the assignment of any
of the Notes.
(b) Notwithstanding the foregoing, no Lender or the Swing Line Bank shall be
liable under this Section 12.4 to the Agent for any portion of such liabilities,
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obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's gross negligence or willful
misconduct as determined in a final, nonappealable judgment by a court of
competent jurisdiction. Each Lender and the Swing Line Bank agrees, however,
that it expressly intends, under this Section 12.4, to indemnify the Agent
ratably as aforesaid for all such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements arising
out of or resulting from the Agent's sole ordinary or contributory negligence.
Section 12.5 Lender Credit Decision. Each Lender and the Swing Line Bank
acknowledges that it has, independently and without reliance upon the Agent, the
Floor Plan Agent or any other Lender or the Swing Line Bank and based on the
financial statements referred to in Section 7.5 or Section 9.5 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender and the Swing
Line Bank also acknowledges that it will, independently and without reliance
upon the Agent, the Floor Plan 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 decisions in taking or not taking action under or based upon this
Agreement, the other Loan Documents, any related agreement or any document
furnished hereunder.
Section 12.6 Resignation of Agent; Successor Agent. The Agent may resign at
any time by giving thirty (30) days written notice thereof to the Lenders, the
Swing Line Bank, the Floor Plan Agent and the Company. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Agent, subject to the approval of the Company, prior to the occurrence and
continuance of an Event of Default, which approval shall not be unreasonably
withheld. If within thirty (30) calendar days after the retiring Agent's giving
of notice of resignation no successor Agent shall have been so appointed by the
Required Lenders, approved by the Company, prior to the occurrence and
continuance an Event of Default and shall have accepted such appointment, then
the retiring Agent may, on behalf of the Lenders, appoint a successor Agent,
which shall be a commercial bank or a finance subsidiary of a Manufacturer,
organized or licensed under the laws of the United States or of any state
thereof and having a combined capital and surplus of at least Five Hundred
Million Dollars ($500,000,000). Upon the acceptance of any appointment as Agent
by a successor Agent hereunder and under the Notes, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under this Agreement and the Notes. After any
retiring Agent's resignation as the Agent hereunder and under the Notes, the
provisions of this Article XII and Section 13.4 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 Notes.
Section 12.7 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent shall have received notice from a Lender, the Swing
Line Bank, the Floor Plan Agent or the Borrowers referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default" or "notice of event of default," as applicable. If the Agent
receives such a notice, the Agent shall give notice thereof to the Lenders, the
Swing Line Bank and the Floor Plan Agent and, if such notice is received from a
Lender, the Swing Line Bank or the Floor Plan Agent, the Agent shall give notice
thereof to the other Lenders, the Swing Line Bank and the Company. The Agent
shall be entitled to take action or refrain from taking action with respect to
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such Default or Event of Default as provided in Section 11.2, Section 11.4,
Section 11.5, Section 12.1 or Section 12.2.
Section 12.8 Authorization and Action of the Floor Plan Agent; Quarterly
Audits.
(a) The Floor Plan Agent may perform any of its duties hereunder by or
through its agents and employees. The duties of the Floor Plan Agent shall be
mechanical and administrative in nature; the Floor Plan Agent shall not have by
reason of this Agreement or any other Loan Document a fiduciary relationship in
respect of any Lender, the Swing Line Bank or the Agent; and nothing in this
Agreement or any other Loan Document, expressed or implied, is intended to, or
shall be so construed as to, impose upon the Floor Plan Agent any obligations in
respect of this Agreement or any other Loan Document except as expressly set
forth herein or therein. The Floor Plan Agent is hereby expressly authorized on
behalf of the Lenders to (i) receive and distribute funds, (ii) to receive and
distribute all Communications and agreements and other material and (iii) to
take all actions and perform such duties and make such determinations, all as
provided in this Agreement. As to any matters not expressly provided for by this
Agreement or any Loan Document, the Floor Plan Agent shall not be required to
exercise any discretion or take any action, but shall not be required to act or
to refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lenders, the Swing Line Bank, the Agent
and all holders of Notes and the Loans and the Floor Plan Agent; provided, that
the Floor Plan Agent shall not be required to take any action which exposes it
to personal liability or which is contrary to this Agreement or applicable law.
(b) All payments and proceeds of every kind from Motor Vehicles
constituting Collateral, when directly received by the Floor Plan Agent (whether
from payments on or with respect to proceeds of Motor Vehicles constituting
Collateral, from foreclosure and sale to third parties, from sale of Motor
Vehicles constituting Collateral subsequent to a foreclosure at which the Floor
Plan Agent or another Lender was the purchaser, or otherwise) shall be, except
as otherwise expressly provided hereinafter, applied to the Obligations in the
manner set forth in Section 11.6(a).
(c) The Floor Plan Agent shall perform audits of Motor Vehicles
constituting Collateral quarterly or otherwise consistent with sound floor plan
lending practices, but no less frequently than once in any twelve (12) month
period.
Section 12.9 Floor Plan Agent's Reliance.
(a) Neither the Floor Plan Agent nor any of its directors, officers,
agents or employees shall be liable for any action taken or omitted to be taken
by it or them under or in connection with this Agreement (i) with the consent or
at the request of the Required Lenders acting by and through the Agent or (ii)
in the absence of its or their own gross negligence or willful misconduct (it
being the express intention of the parties hereto that the Floor Plan Agent and
its directors, officers, agents and employees shall have no liability for
actions and omissions under this Section 12.9 resulting from their sole ordinary
or contributory negligence).
(b) Without limitation of the generality of the foregoing, the Floor
Plan Agent: (i) may treat the Agent as Agent hereunder until the Floor Plan
Agent receives written notice of the appointment of a successor Agent as
provided in Section 12.6; (ii) may consult with legal counsel (including counsel
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for the Borrowers), independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (iii) makes no warranty or representation to any Lender, the Swing Line
Bank or the Agent and shall not be responsible to any Lender, the Swing Line
Bank or the Agent for any statements, warranties or representations made in or
in connection with this Agreement; (iv) except as otherwise expressly provided
herein, shall not have any duty to ascertain or to inquire as to the performance
or observance of any of the terms, covenants or conditions of this Agreement, or
to inspect the property (including the books and records) of any Borrower; (v)
shall not be responsible to any Lender, the Swing Line Bank or the Agent for the
due execution, legality, validity, enforceability, collectibility, genuineness,
sufficiency or value of this Agreement, or any other instrument or document
furnished pursuant hereto or thereto; (vi) except as otherwise expressly
provided herein shall not be responsible to any Lender, the Swing Line Bank or
the Agent for the perfection or priority of any Lien securing the Loans; and
(vii) shall incur no liability under or in respect of this Agreement, by acting
upon any notice, consent, certificate or other instrument or writing (which may
be by facsimile) reasonably believed by it to be genuine and signed or sent by
the proper party or parties.
Section 12.10 Floor Plan Agent and Affiliates; JPMorgan Chase Bank, N.A.
and Affiliates. Without limiting the right of any other Lender, the Swing Line
Bank or the Agent to engage in any business transactions with any Borrower or
any of its Affiliates, with respect to their Commitments, the Loans, if any,
made by them and the Notes, if any, issued to them, JPMorgan Chase Bank, N.A.
shall have the same rights and powers under this Agreement, any Note or any of
the other Loan Documents as any other Lender and may exercise the same as though
it were not the Floor Plan Agent; and the term "Lender" or "Lenders" shall,
unless otherwise expressly indicated, include JPMorgan Chase Bank, N.A. in its
individual capacity. Unless prohibited hereby, JPMorgan Chase Bank, N.A. and its
Affiliates may be engaged in, or may hereafter engage in, one or more Other
Financings with the Company, any other Borrower or any of their Affiliates, or
may act as trustee on behalf of, or depository for, or otherwise engage in Other
Activities with no responsibility to account therefor to the Lenders or the
Agent. Without limiting the rights and remedies of the Lenders or the Agent
specifically set forth in the Loan Documents, no other Lender nor the Agent
shall have any interest in (a) any Other Activities, (b) any present or future
guarantee by or for the account of any of the Borrowers not contemplated or
included in the Loan Documents, (c) any present or future offset exercised by
the Floor Plan Agent in respect of any such Other Activities, (d) any present or
future property taken as security for any such Other Activities or (e) any
property now or hereafter in the possession or control of the Floor Plan Agent
which may be or become security for the Obligations of the Borrowers under the
Loan Documents by reason of the general description of indebtedness secured, or
of property contained in any other agreements, documents or instruments related
to such Other Activities; provided, that if any payment in respect of such
guarantees or such property or the proceeds thereof shall be applied to
reduction of the Obligations evidenced hereunder and by the Notes, then each
Lender and the Swing Line Bank shall be entitled to share in such application
according to its equitable portion of such Obligations.
Section 12.11 Floor Plan Agent's Indemnity.
(a) The Floor Plan Agent shall not be required to take any action
hereunder or to prosecute or defend any suit in respect of this Agreement, the
Notes or any other Loan Document unless indemnified to the Floor Plan Agent's
satisfaction by the Lenders and the Swing Line Bank, against loss, cost,
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liability and expense. If any indemnity furnished to the Floor Plan Agent shall
become impaired, it may call for additional indemnity and cease to do the acts
indemnified against until such additional indemnity is given. In addition, the
Lenders and the Swing Line Bank agree to indemnify the Floor Plan Agent (to the
extent not reimbursed by the Borrowers), ratably according to the respective Pro
Rata Share of Total Commitments, or if no Commitments are outstanding, the
respective Pro Rata Share of Total Commitments immediately prior to the time the
Total Commitments ceased to be outstanding held by each of them, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the
Floor Plan Agent in any way relating to or arising out of this Agreement or any
action taken or omitted by the Floor Plan Agent under this Agreement, the Notes
and the other Loan Documents (including action taken or omitted under Article II
or Article IV of this Agreement). Without limitation of the foregoing, each
Lender and the Swing Line Bank agrees to reimburse the Floor Plan Agent promptly
upon demand for its respective Pro Rata Share of the Total Commitments of any
out-of-pocket expenses (including reasonable counsel fees) incurred by the Floor
Plan Agent in connection with the preparation, execution, administration, or
enforcement of, or legal advice in respect of rights or responsibilities under,
this Agreement, the Notes and the other Loan Documents to the extent that the
Floor Plan Agent is not reimbursed for such expenses by the Borrowers. The
provisions of this Section 12.11 shall survive the termination of this
Agreement, the payment of the Loans and/or the assignment of any of the Notes.
(b) Notwithstanding the foregoing, no Lender nor the Swing Line Bank
shall be liable under this Section 12.11 to the Floor Plan Agent for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the Floor Plan
Agent's gross negligence or willful misconduct as determined in a final,
nonappealable judgment by a court of competent jurisdiction. Each Lender and the
Swing Line Bank agrees however, that it expressly intends, under this Section
12.11, to indemnify the Floor Plan Agent ratably as aforesaid for all such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements arising out of or resulting from the Floor
Plan Agent's sole ordinary or contributory negligence.
Section 12.12 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Floor Plan Agent, the Agent or any
other Lender and based on the financial statements referred to in Section 7.5
and Section 9.5 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender and the Swing Line Bank also acknowledges that it will,
independently and without reliance upon the Floor Plan Agent, the Swing Line
Bank, the 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 decisions in
taking or not taking action under or based upon this Agreement, the other Loan
Documents, any related agreement or any document furnished hereunder.
Section 12.13 Resignation of Floor Plan Agent; Successor Floor Plan Agent.
The Floor Plan Agent may resign at any time by giving thirty (30) days written
notice thereof to the Lenders, the Agent and the Company. Prior to the
effectiveness of the termination of the existing Floor Plan Agent, all amounts
funded by the Floor Plan Agent pursuant to Section 2.9 hereof and all Overage
Amounts shall be purchased by the successor Floor Plan Agent or the Lenders, and
all of the obligations of the Floor Plan Agent pursuant to any drafting
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agreements issued by the Floor Plan Agent pursuant to Section 2.6 hereof shall
have been irrevocably assumed by the successor Floor Plan Agent, and the
successor Floor Plan Agent shall have agreed to indemnify the existing Floor
Plan Agent in connection with any costs, liabilities or obligations arising out
of, or in any way connected with, the transfer of such drafting agreements to
the Successor Floor Plan Agent. Upon any such resignation or termination, the
Required Lenders shall have the right to appoint a successor Floor Plan Agent,
subject to the approval of the Company, which approval shall not be unreasonably
withheld. If no successor Floor Plan Agent shall have been so appointed by the
Required Lenders, approved by the Company and shall have accepted such
appointment, all within thirty (30) calendar days after the resignation or
termination of the Floor Plan Agent, then the Agent shall, on behalf of the
Lenders, appoint a successor Floor Plan Agent, which shall be a commercial bank
organized or licensed under the laws of the United States or of any state
thereof and having a combined capital and surplus of at least Five Hundred
Million Dollars ($500,000,000). Upon the acceptance of any appointment as Floor
Plan Agent hereunder, such successor Floor Plan Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Floor Plan Agent, and the retiring Floor Plan Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring Floor
Plan Agent's resignation as the Floor Plan Agent hereunder, the provisions of
this Article XII and Section 13.4 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Floor Plan Agent under this
Agreement.
Section 12.14 Notice of Default. Neither the Agent nor the Floor Plan Agent
shall be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default hereunder unless the Agent and the Floor Plan Agent shall have
received notice from a Borrower, a Lender or the Swing Line Bank, stating that
such Default or Event of Default has occurred and stating that such notice is a
"notice of default or "notice of event of default", as applicable. If the Floor
Plan Agent receives such a notice, the Floor Plan Agent shall give notice
thereof to the Lenders, the Swing Line Bank and the Agent. If the Floor Plan
Agent receives such a notice, the Floor Plan Agent shall be entitled to take
action or refrain from taking action with respect to such Default or Event of
Default as provided in Section 12.8 and Section 12.9.
Section 12.15 Syndication Agent. The Lender identified on the facing page
and signature pages of this Agreement as Syndication Agent shall not have any
right, power, obligation, liability or responsibility or duty under this
Agreement other than those applicable to all Lenders as such. Without limiting
the foregoing, the Lender so identified shall neither have nor be deemed to have
any fiduciary relations with any other Lender. Each Lender acknowledges that it
has not relied, and will not rely, on the Syndication Agent in deciding to enter
into this Agreement or in taking any action hereunder.
ARTICLE XIII.
MISCELLANEOUS
Section 13.1 Notices, Etc. The Agent, any Lender, or the holder of any of
the Notes or Loans, the Floor Plan Agent, and the Swing Line Bank giving consent
or notice or making any request of the Company or any of the other Borrowers
provided for hereunder, shall notify each Lender, the Floor Plan Agent and the
Agent thereof. In the event that the holder of any Note (including any Lender)
shall transfer such Note, it shall promptly so advise the Agent which shall be
entitled to assume conclusively that no transfer of any Note has been made by
any holder (including any Lender) unless and until the Agent receives written
notice to the contrary. All notices, consents, requests, approvals, demands and
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other communications (collectively, "Communications") provided for herein shall
be in writing (including facsimile) and mailed, telecopied or delivered:
(a) if to the Company, at 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: General Counsel, Facsimile No. (000) 000-0000. Telephone
No. (000) 000-0000.
(b) if to the Borrowers, or any individual Borrower, at the address
of the Company specified in Section 13.1(a) above;
(c) if to the Agent, at 000 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxx Xxxxxx, Facsimile No. (000) 000-0000, Telephone
No. (000) 000-0000:
with a copy to JPMORGAN CHASE BANK, N.A., 0000 Xxxxxx, 00xx Xxxxx,
Xxxxxxx, Xxxxx 00000, Attention: Xx. Xxxxxxxx Xxxxxxxx, Loan and Agency
Services, Facsimile No. (000) 000-0000, Telephone No. (000) 000-0000; and
with a copy to Xxxxxxx Xxxxx, LLP, 600 Xxxxxx, JPMorgan Xxxxx Xxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxx, Attn: Xxxxxx X. Xxxxxx, Facsimile No.
(000) 000-0000, Telephone No. (000) 000-0000.
(d) if to any Lender, as specified on the signature page for such
Lender hereto or, in the case of any Person who becomes a Lender after the date
hereof, as specified on the Assignment and Acceptance executed by such Person or
in the Administrative Questionnaire delivered by such Person or;
(e) in the case of any party hereto, such other address or telecopy
number as such party may hereafter specify for such purpose by notice to the
other parties;
(f) if to the Floor Plan Agent, at 000 Xxxxxxx Xxxxxx, 0xx Xxxxx,
Xxxxxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxxxx, Facsimile No.
(000) 000-0000, Telephone No. (000) 000-0000.
with a copy to, Xxxxxxx Xxxxx, LLP, 600 Xxxxxx, JPMorgan Xxxxx Xxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxx, Attn: Xxxxxx X. Xxxxxx, Facsimile No.
(000) 000-0000, Telephone No. (000) 000-0000
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All Communications shall be effective when (i) mailed by certified mail, return
receipt requested to any party at its address specified above, on the signature
page hereof or on the signature page of such Assignment and Acceptance (or other
address designated by such party in a Communication to the other parties
hereto), or (ii) telecopied to any party to the telecopy number set forth above,
on the signature page hereof or on the signature page of such Assignment and
Acceptance (or other telecopy number designated by such party in a Communication
to the other parties hereto) and confirmed by a transmission report verifying
the correct telecopier number and number of pages and that such transmission was
well transmitted, or (iii) delivered personally to any party at its address
specified above, on the signature page hereof or on the signature page of such
Assignment and Acceptance (or other address designated by such party in a
Communication to the other parties hereto).
Section 13.2 Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrowers herein and in the other
Loan Documents and in the certificates or other instruments prepared or
delivered in connection with this Agreement shall be considered to have been
relied upon by the Lenders and shall survive the making by the Lenders of the
Loans and the execution and delivery to the Lenders of the Notes evidencing such
Loans and shall continue in full force and effect as long as the principal of or
any accrued interest on any Note or any Commitment Fees or any other fee or
amount payable under the Notes or this Agreement is outstanding and unpaid and
as long as the Commitments of the Lenders have not been terminated.
Section 13.3 Successors and Assigns; Participations.
(a) Whenever in this Agreement any of the parties hereto is referred
to, such reference shall be deemed to include the successors and assigns of such
party; and all covenants, promises and agreements by or on behalf of the
Borrowers, the Agent, the Floor Plan Agent or the Lenders that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns. Except as permitted by Section 10.3, no Borrower may
assign or transfer any of its rights or Obligations hereunder without the prior
written consent of all the Lenders.
(b) Each Lender may assign to one or more Eligible Assignees all or a
portion of its interests, rights and obligations under this Agreement (including
a portion of its Commitment and the same portion of the Loans at the time owing
to it and the Note held by it); provided, that (i) except in the case of an
assignment to a Lender, an Affiliate of a Lender, a fund managed by a Lender, an
Affiliate of a Lender or an entity or an Affiliate of an entity that administers
or manages a Lender, the Company (except during the continuance of a Default or
Event of Default) and the Agent must give their prior written consent by
countersigning the Assignment and Acceptance (which consent shall not be
unreasonably withheld), (ii) each such assignment shall be of a constant, and
not a varying, percentage of all the assigning Lender's rights and obligations
to this Agreement, and be pro rata between the Revolving Credit Loan Commitment
of such Lender and the Floor Plan Loan Commitment of such Lender, (iii) the
amount of the Commitment of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Agent) shall (A) be equal to the entire amount of
the Commitment of the assigning Lender or (B) if not equal to the entire amount
of the Commitment of the assigning Lender, in no event be less than Five Million
Dollars ($5,000,000) and shall be in an amount which is an integral multiple of
One Million Dollars ($1,000,000); provided, for purposes of this Section
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13.3(b), that the retained Commitment of the assigning Lender may not be less
than Five Million Dollars ($5,000,000), (iv) the parties to each such assignment
shall execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance substantially in the form of Exhibit
13.3(b) hereto (an "Assignment and Acceptance"), together with any Note subject
to such assignment and the assignor shall pay to the Agent a processing and
recordation fee of Three Thousand Dollars ($3,000) payable by the Lender's
assignor thereunder, and (v) the assignee shall deliver to the Agent an
Administrative Questionnaire. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be no later than five (5) Business Days
after the execution thereof unless otherwise agreed to by the assigning Lender,
the Eligible Assignee thereunder and the Agent, (x) the assignee thereunder
shall become a party hereto and under the other Loan Documents and, to the
extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and under the other Loan Documents and (y) the
Lender thereunder shall, to the extent provided in such Assignment and
Acceptance, be released from its obligations under this Agreement.
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than the
representation and warranty contained in Section 5.14(f) and that it is the
legal and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement, any other Loan Document or any other instrument or document furnished
pursuant hereto; (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of any of
the Borrowers or the performance or observance by any of the Borrowers of any of
their Obligations under this Agreement, the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the financial statements most recently delivered under Section 7.5 or Section
9.5 and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance upon the
Agent, such Lender's assignor or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement; (v)
such assignee confirms that it is an Eligible Assignee and can make the
representation contained in Section 5.14 and has, to the extent required,
complied with the covenants contained therein; (vi) such assignee appoints and
authorizes the Agent and the Floor Plan Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement as are delegated to
the Agent and the Floor Plan Agent by the terms hereof, together with such
powers as are reasonably incidental thereto; and (vii) such assignee agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of this Agreement are required to be performed by it as a Lender.
(d) The Agent shall maintain at its address referred to in Section
13.1 a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders and the Commitments
of, and principal amount of the Loans owing to, each Lender from time to time
(the "Register"). The entries in the Register shall be conclusive, in the
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absence of demonstrable error, and the Borrowers and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement and the Loan Documents. The Register shall be
available for inspection by the Borrowers or any Lender at any reasonable time
and from time to time upon reasonable prior notice. Upon request, the Agent will
send a copy of the Register to the Company.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Eligible Assignee together with the Note subject to such
assignment, the processing and recordation fee referred to in Section 13.3(b)
and, if required, the Company's written consent to such assignment, the Agent
shall (subject to the consent of the Company to such assignment, if required),
if such Assignment and Acceptance has been completed and is in the form of
Exhibit 13.3(b), (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Company and the Lenders. Within five (5) Business Days after
receipt of notice, the Company, at its own expense, shall execute and deliver
and shall cause each of the other Borrowers to execute and deliver to the Agent
in exchange for the surrendered Note a new Note to the order of such Eligible
Assignee in an amount equal to the assigning Lender's Commitment assumed by it
pursuant to such Assignment and Acceptance, and a new Note to the order of the
assigning Lender in an amount equal to the portion of its Commitment retained by
the assigning Lender hereunder. Such new Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Note, shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of Exhibit 1.1. Each canceled Note
shall be promptly returned to the Company.
(f) Each Lender may without the consent of any Borrower or the Agent
sell participations to one or more banks or other entities in all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans owing to it and the Note held by it); provided,
that (i) such Lender's obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) the participating banks or other
entities shall be entitled to the cost protection provisions and Tax indemnities
contained in Article V only to the same extent that the Lender from which such
participating bank or other entity acquired its participation would be entitled
to the benefit of such cost protection provisions and Tax indemnities and (iv)
the Borrowers, the Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall retain the sole right to
enforce the Obligations of any of the Borrowers relating to the Loans and to
approve any amendment, modification or waiver of any provision of this Agreement
(other than amendments, modifications or waivers with respect to any fees
payable hereunder or the amount of principal of or the rate at which interest is
payable on the Loans, or the dates fixed for payments of principal of or
interest on the Loans).
(g) Any Lender or participant may, in connection with any assignment
or participation or proposed assignment or participation pursuant to this
Section 13.3, disclose to the assignee or participant or proposed assignee or
participant, any information relating to any Borrower furnished to such Lender
by or on behalf of any of the Borrowers; provided that prior to any such
disclosure, each such assignee or participant or proposed assignee or
participant shall agree (subject to customary exceptions, including without
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limitation the provisions of Section 13.16) to preserve the confidentiality of
any confidential information relating to any Borrower received from such Lender.
(h) Anything in this Section 13.3 to the contrary notwithstanding, any
Lender may at any time, without the consent of any Borrower or the Agent, assign
and pledge all or any portion of its Commitment and the Loans owing to it to any
Federal Reserve Bank (and its transferees) as collateral security pursuant to
Regulation A of the Board and any Operating Circular issued by such Federal
Reserve Bank. No such assignment shall release the assigning Lender from its
obligations hereunder.
(i) All transfers of any interest in any Note hereunder shall be in
compliance with all federal and state securities laws, if applicable.
Notwithstanding the foregoing sentence, however, the parties to this Agreement
do not intend that any transfer under this Section 13.12 be construed as a
"purchase" or "sale" of a "security" within the meaning of any applicable
federal or state securities laws.
Section 13.4 Expenses of the Agents and Lenders; Indemnity.
(a) The Borrowers agree to pay all reasonable out-of-pocket expenses
reasonably incurred by the Agent and the Floor Plan Agent in connection with the
preparation of this Agreement, the Notes and the other Loan Documents or in
connection with any amendments, modifications or waivers of the provisions
hereof (whether or not the transactions hereby contemplated shall be
consummated) or reasonably incurred by the Agent, the Floor Plan Agent or any
Lender in connection with the enforcement or protection of their rights in
connection with this Agreement or with the Loans made or the Notes issued
hereunder, including the reasonable fees and disbursements of the counsel for
the Agent and the Floor Plan Agent, and, in connection with the exercise of
remedies following an Event of Default, the reasonable fees and disbursements of
other counsel for any Lender. The Borrowers agree to indemnify the Lenders from
and hold them harmless against any documentary taxes, assessments or charges
made by any Governmental Authority by reason of the execution and delivery of
this Agreement or any of the Notes or other Loan Documents.
(b) THE BORROWERS EACH AGREE TO INDEMNIFY THE AGENT, THE FLOOR PLAN
AGENT AND THE LENDERS AND THEIR RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS,
EMPLOYEES AND AGENTS (EACH SUCH PERSON BEING CALLED AN "INDEMNITEE") AGAINST,
AND TO HOLD THE LENDERS AND SUCH OTHER INDEMNITEE HARMLESS FROM, ANY AND ALL
LOSSES, CLAIMS, DAMAGES, LIABILITIES AND RELATED EXPENSES, INCLUDING REASONABLE
COUNSEL FEES AND EXPENSES, INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE
ARISING OUT OF, IN ANY WAY CONNECTED WITH, OR AS A RESULT OF (I) THE EXECUTION
AND DELIVERY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS CONTEMPLATED HEREBY,
THE PERFORMANCE BY THE PARTIES HERETO AND THERETO OF THEIR RESPECTIVE
OBLIGATIONS HEREUNDER AND THEREUNDER (INCLUDING THE MAKING OF THE COMMITMENT OF
EACH LENDER) AND CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY, (II) THE USE OF PROCEEDS OF THE LOANS OR (III) ANY CLAIM, LITIGATION,
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INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER OR NOT ANY
INDEMNITEE IS A PARTY THERETO; PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY
LENDER, APPLY TO ANY SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED
EXPENSES THAT ARE DETERMINED BY A COURT OF COMPETENT JURISDICTION BY FINAL AND
NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF SUCH INDEMNITEE. THE BORROWERS AGREE, THAT THEY EXPRESSLY INTEND
TO INDEMNIFY EACH INDEMNITEE FROM AND HOLD EACH OF THEM HARMLESS AGAINST ANY AND
ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES OR EXPENSES ARISING OUT OF THE ORDINARY
SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH INDEMNITEE OR ANY LIABILITY STRICTLY
IMPOSED BY STATUTE IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY.
(c) The provisions of this Section 13.4 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Obligations, the invalidity or unenforceability of any
term or provision of this Agreement or any Note. All amounts due under this
Section 13.4 shall be payable within ten (10) days following receipt by the
Company of a detailed invoice or statement setting forth in reasonable detail
the basis of such claim and the amounts so expended or lost or the amount of
damages so incurred.
(d) No Indemnitee may settle any claim to be indemnified without prior
written notice to the Company; provided failure to provide such prior written
notice shall in no way affect the settlement of such claims, unless, and only to
the extent that, such omission results in the Company forfeiting substantive
rights or defenses. The Company shall be entitled to assume the defense of any
Indemnitee in connection with any proceeding, including the employment of
counsel reasonably satisfactory to such Indemnitee and the Agent, and the
payment of the fees and disbursements of such counsel. Notwithstanding the
Company's decision to assume the defense of any such proceeding, (x) its right
to enter into any compromise or settlement of the proceeding shall be limited as
set forth below, and (y) the Indemnitees shall have the right to employ separate
counsel and to participate in the defense of any proceeding. Such counsel shall
be at the expense of the affected Indemnitee, unless (i) the use of counsel
chosen by the Company to represent the Indemnitees would present such counsel
with a conflict of interest, (ii) the named parties to any proceeding (including
any impleaded parties) include both the Company and an affected Indemnitee and
(A) representation of both parties by the same counsel, or conduct by the
Company of the defense of the affected Indemnitee, would be inappropriate due to
actual or potential differing interests between the Company and such Indemnitee
or (B) there may be defenses available to the affected Indemnitee which are
materially different from, or in addition to, the defenses available to the
Company, or (iii) the Company fails to assume the defense of the proceeding or
to employ counsel reasonably satisfactory to the affected Indemnitee in each
case in a timely manner. In the event of any of clauses (i) through (iii) is
applicable, then the affected Indemnitee may employ separate counsel at the
Company's expense to represent or defend such Indemnitee in any such proceeding
or group of related proceedings (it being agreed that the Company shall not,
under any of the circumstances described in clause (i) or (ii) above, have the
right to direct the defense of the proceeding on behalf of any Indemnitee). In
no event shall the Company be liable for the fees and expenses of more than one
separate counsel for all Indemnitees in connection with any proceeding, plus one
firm of local counsel in each jurisdiction in which any such proceeding is
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taking place. Notwithstanding anything to the contrary herein, the Indemnitee
and its counsel shall have the right (at the Company's expense) to defend and to
make the final decision on matters affecting the conduct of such proceeding with
respect to any allegation that such Indemnitee is not entitled to be indemnified
by the Company.
(e) In the case of any indemnification hereunder, the Indemnitee shall
give notice to the Company of any such claim or demand being made against the
Indemnitee and the Company may participate in such proceeding at its own expense
if legal counsel to the Company is acceptable to the Agent subject to Paragraph
(d), above.
Section 13.5 Right of Setoff. If a Revolving Credit Event of Default shall
have occurred and be continuing, each Lender and the Swing Line Bank are hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender, the Swing Line Bank or any branch Subsidiary or
Affiliate thereof to or for the credit or the account of the Borrowers against
any of and all the Obligations of the Borrowers now or hereafter existing under
this Agreement and the Note held by such Lender and the Swing Line Bank,
respectively, according to their respective rights as otherwise provided herein,
irrespective of whether or not such Lender shall have made any demand under this
Agreement or such Note and although such Obligations may be unmatured. Each
Lender and the Swing Line Bank agree promptly to notify the Borrowers after any
such setoff and application, but the failure to give such notice shall not
affect the validity of such setoff and application. The rights of each Lender
and the Swing Line Bank under this Section 13.5 are in addition to other rights
and remedies (including other rights of setoff) which such Lender and the Swing
Line Bank may have under applicable law. Each Lender hereby specifically agrees
that in order to ensure that it has control over said deposit accounts (as
defined in the UCC), it will act in accordance with the instructions from the
Agent in regard to the disposition of the funds in said deposit accounts without
further consent from any Borrower. The Lenders agree to indemnify each other (to
the extent not reimbursed by the Borrowers), ratably according to their
respective Pro Rata Share of Total Commitments, or if no Commitments are
outstanding, the respective Pro Rata Share of Total Commitments immediately
prior to the time the Total Commitments ceased to be outstanding held by each of
them, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against any Lender in any way relating to or arising out of any action taken or
omitted by such Lender in connection with its exercise of set off rights for
credit to any or all of the Obligations.
Section 13.6 Governing Law; Jurisdiction.
(a) This Agreement, the Notes, the other Loan Documents and all other
documents executed in connection herewith, shall be deemed to be contracts and
agreements executed by the Borrowers, the Agent, the Floor Plan Agent and the
Lenders under the laws of the State of New York and of the United States of
America and for all purposes shall be governed by, and construed and interpreted
in accordance with, the laws of said State and of the United States of America.
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(b) Each Borrower hereby irrevocably submits generally and
unconditionally for itself and in respect of its property to the non-exclusive
jurisdiction of any New York state court, or any United States federal court,
sitting in the City of New York or County of New York, New York, and to the
non-exclusive jurisdiction of any state or United States federal court sitting
in the state in which any of the Collateral is located, over any suit, action or
proceeding arising out of or relating to this Agreement or the Obligations. Each
Borrower hereby agrees and consents that, in addition to any methods of service
of process provided for under applicable law, all service of process in any such
suit, action or proceeding in any New York state court, or any United States
federal court, sitting in the City of New York or County of New York, New York
may be made by certified or registered mail, return receipt requested, directed
to such Borrower at its address stated in Section 13.1, or at a subsequent
address of which the Agent received actual notice from such Borrower in
accordance with this Agreement, and service so made shall be complete five (5)
days after the same shall have been so mailed. Each Borrower, to the extent it
is not qualified to do business in New York, hereby irrevocably designates,
appoints and empowers the Company, with offices at the address specified in
Section 13.1(a) as its designee, appointee and agent to receive, accept and
acknowledge for and on its behalf, and in respect of its property, service of
any and all legal process, summons, notices and documents which may be served in
any such action or proceedings.
Section 13.7 Waivers; Amendments.
(a) No failure or delay of the Agent, the Floor Plan Agent or any
Lender in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Agent, the Floor Plan Agent and
the Lenders hereunder are cumulative and not exclusive of any rights or remedies
which they would otherwise have. No waiver of any provision of this Agreement,
the Notes or the other Loan Documents or consent to any departure by the
Borrowers therefrom shall in any event be effective unless the same shall be
authorized as provided in Section 13.7(b), and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which given.
No notice or demand on the Borrowers in any case shall entitle the Borrowers to
any other or further notice or demand in similar or other circumstances. Each
holder of any Note shall be bound by any amendment, modification, waiver or
consent authorized as provided herein, whether or not such Note shall have been
marked to indicate such amendment, modification, waiver or consent.
(b) Neither this Agreement, any Note, any Loan Document nor any
provision hereof or thereof may be waived, amended or modified except pursuant
to a written agreement or agreements entered into by the Borrowers and the
Required Lenders; provided, that no such agreement shall (i) change the
principal amount of, or extend the maturity of or any date for the payment of
any principal of or interest on, any Loan, or waive or excuse any such payment
or any part thereof, or, except as provided in this Agreement, decrease the rate
of interest on any Loan, or the amount of any fees payable to any Lender without
the written consent of each Lender affected thereby, (ii) change the Commitment
of any Lender without the written consent of such Lender or decrease the
Commitment Fees payable to any Lender without the written consent of each
Lender, or change the amount of the Total Commitment without the consent of each
Lender (except in accordance with Section 5.18), (iii) release or defer the
granting or perfecting of a Lien in any Collateral or release any Guarantee or
similar undertaking provided by any Person or modify any indemnity provided to
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the Lenders hereunder or under the other Loan Documents without the written
consent of each Lender; provided, the Agent or the Floor Plan Agent, as the case
may be, shall be entitled to release any Collateral or any Guarantee which a
Borrower is permitted to sell or transfer or otherwise release under the terms
of this Agreement or any Loan Document without notice to or any further action
or consent of the Lenders; or (iv) amend or modify the provisions of this
Section 13.7, Section 5.18(f), Section 6.7(a), Section 11.6(a), or Section
13.3(a), the definition of the "Required Lenders" or the definition of
"Borrowers" without the written consent of each Lender; and provided further
that no such agreement shall amend, modify, waive or otherwise affect the rights
or duties of the Agent or the Floor Plan Agent hereunder without the written
consent of the Agent or the Floor Plan Agent, respectively. Notwithstanding the
foregoing, the Agent may execute and deliver to any Borrower releases of chattel
paper sold to any provider of Permitted New Vehicle Floor Plan Indebtedness in
accordance with the terms of the Intercreditor Agreement executed in connection
therewith between the Agent and any such provider. Each Lender and each holder
of any Note shall be bound by any modification or amendment authorized by this
Section 13.7 regardless of whether its Note shall be marked to make reference
thereto, and any consent by any Lender or holder of a Note pursuant to this
Section 13.7 shall bind any Person subsequently acquiring a Note from it,
whether or not such Note shall be so marked.
Section 13.8 Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under applicable law (collectively, the "Charges") shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section 13.8 shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
Section 13.9 Severability; Conflicts.
(a) In the event any one or more of the provisions contained in this
Agreement, the Notes or any other Loan Document should be held invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein or therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions, the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
(b) In the event any of the terms and provisions of any other Loan
Document are inconsistent with the terms and provisions set forth in this
Agreement, the terms and provisions set forth in this Agreement shall prevail.
Section 13.10 Counterparts. This Agreement may be executed in two or more
counterparts, which may be delivered in original, electronic or facsimile form,
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and each of which shall constitute an original, but all of which when taken
together shall constitute but one contract, and shall become effective as
provided in Section 13.11.
Section 13.11 Binding Effect. This Agreement shall become effective on the
Closing Date, and thereafter shall be binding upon and inure to the benefit of
each Borrower, the Agent, the Floor Plan Agent and each Lender and their
respective successors and assigns, except that no Borrower shall have the right
to assign its rights hereunder or any interest herein except as provided in
Section 13.3(a).
Section 13.12 Subsidiary Solvency Savings Clause. Each of the Borrowers and
Guarantors acknowledges the receipt and acceptance of valuable consideration as
of the Closing Date and thereafter in connection with this Agreement; and each
Borrower and Guarantor further acknowledges and agrees that the direct benefits
and enrichment it derives from being a party to this Agreement constitute a
reasonably equivalent value to it in exchange for the liability it has incurred
pursuant to this Agreement. Further, each of the Borrowers and Guarantors
acknowledges the interdependence by and among the other Borrowers and Guarantors
in successfully carrying out their business operations. Each of the Borrowers
and Guarantors represents that it is solvent prior to entering into this
Agreement and that the transactions completed hereby will not render it
insolvent; provided, in the event that the Indebtedness incurred by any Borrower
or Guarantor pursuant to this Agreement or the transactions contemplated hereby
would constitute a "fraudulent transfer" under Section 548 of the Federal
Bankruptcy Code or pursuant to any applicable state law governing "fraudulent
transfers" because such Borrower or Guarantor is deemed to have become insolvent
as a result of incurring such Indebtedness, then, in such event, the liability
of any such Borrower or Guarantor hereunder shall automatically be deemed for
all purposes to be equal to one dollar less than that amount of Indebtedness
which would not render such Borrower or Guarantor insolvent.
Section 13.13 Joint and Several Liability and Related Matters.
(a) Each of Floor Plan Borrowers authorizes the Company with full
power and authority as attorney-in-fact, to execute and deliver Requests for
Borrowings and each other instrument, certificate and report to be delivered by
any Floor Plan Borrower to the Agent, the Floor Plan Agent and the Lenders
pursuant to this Agreement or any Loan Document. Each of the Floor Plan
Borrowers agrees that it shall be bound by any action taken by the Company on
its behalf pursuant to such appointment.
(b) The Obligations of each Floor Plan Borrower under this Agreement
and the other Loan Documents (other than the Guaranty Agreement, the Security
Agreement and the Security Agreement (Toyota/Lexus Inventory), which are
expressly excluded from the terms of this Section 13.13(b)) in respect of Floor
Plan Loans made hereunder are several and shall be limited to an amount equal to
the sum of (i) the Floor Plan Borrowings of such Floor Plan Borrower, (ii) all
costs and expenses associated with the collection and enforcement of the
Obligations of such Floor Plan Borrower arising under the Loan Documents,
including, without limitation, all attorney's fees and expenses, and (iii) all
capital contributions and expenditures for capital or fixed assets made by the
Company or any other Floor Plan Borrower on behalf of such Floor Plan Borrower.
No individual Floor Plan Borrower shall be liable as a Co-Borrower for the Floor
Plan Loans made to other Floor Plan Borrowers. Nothing in this Section 13.13
shall in any way impair or limit the liability of any Floor Plan Borrower that
has executed the Guaranty Agreement of the Revolving Credit Loan or otherwise
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agreed to become liable for any of the Obligations, or any of said Person's
obligations or liability under any of the Security Documents or any Guaranty
Agreement. The Obligations of the Company under this Agreement and the other
Loan Documents shall be joint and several with all Borrowers and not limited in
any way whatsoever.
(c) Each Borrower agrees that its liability hereunder and its
liability under any of the Loan Documents shall continue to be effective or be
reinstated, as the case may be, if at any time any payment (in whole or in part)
of any of the Obligations is rescinded or must be restored by any Lender or any
holder of any Note, upon the insolvency, bankruptcy or reorganization of any
Borrower as though such payment had not been made.
(d) Each Borrower hereby expressly waives: (i) notice of the Lenders'
acceptance of this Agreement; (ii) notice of the existence or creation or non
payment of all or any of the Obligations other than notices expressly provided
for in this Agreement; (iii) presentment, demand, notice of dishonor, protest,
acceleration and the notice of intent to accelerate and all other notices
whatsoever other than notices expressly provided for in this Agreement; and (iv)
all diligence in collection or protection of or realization upon the Obligations
or any part thereof, any obligation hereunder, or any security for or Guarantee
of any of the foregoing, subject, however, in the case of Collateral in the
possession of the Agent or a Lender to such Person's duty to use reasonable care
in the custody and preservation of such Collateral.
(e) No delay on any of the Lenders' part in the exercise of any right
or remedy shall operate as a waiver thereof, and no single or partial exercise
by any of the Lenders of any right or remedy shall preclude other or further
exercise thereof or the exercise of any other right or remedy. No action of any
of the Lenders permitted hereunder shall in any way affect or impair any such
Lenders' rights or any Borrower's Obligations under this Agreement or the other
Loan Documents.
Section 13.14 Power of Attorney. For the purpose of expediting the
financing of Motor Vehicles under the terms of this Agreement and for other
purposes relating to such financing transaction, each Borrower irrevocably
constitutes and appoints the Floor Plan Agent and any of its officers, and each
of them, severally, as its true and lawful attorneys-in-fact or attorney-in-fact
with full authority to act on behalf of, and in the name of, place, and stead
of, each such Borrower, after the occurrence and during the continuance of an
Event of Default, to prepare, execute, and deliver any and all instruments,
documents, and agreements required to be executed and delivered by each such
Borrower necessary to evidence Borrowings hereunder and/or to evidence, perfect,
or realize upon the security interest granted by this Agreement, and/or any of
the Loan Documents, including, without limitation, the Notes, requests for
advances, security agreements, financing statements, other instruments for the
payment of money, receipts, manufacturer's certificates of origin, certificates
of origin, certificates of title, applications for certificates of title, other
basic evidences of ownership, dealer reassignments of any of the foregoing,
affidavits, and acknowledgments. The foregoing power of attorney shall be
coupled with an interest, and shall be irrevocable so long as this Agreement
remains in effect, any Drafting Agreement remains in effect or any Obligations
remain outstanding under this Agreement or any of the Notes. Each of said
attorneys-in-fact shall have the power to act hereunder with or without the
other. The Floor Plan Agent or the Agent may, but shall not be obligated to,
notify the Borrowers of any such instruments or documents either of said Agents
has executed on any Borrower's behalf prior to such execution.
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Section 13.15 USA Patriot Act. Each Lender that is subject to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the "Act") hereby notifies the Borrowers that pursuant
to the requirements of the Act, it is required to obtain, verify and record
information that identifies the Borrowers and their Subsidiaries, which
information includes the name and address of the Borrowers and their
Subsidiaries, and other information that will allow such Lender to identify the
Borrowers and their Subsidiaries in accordance with the Act.
Section 13.16 Confidentiality. In the event that the Company or any of its
Subsidiaries provides to the Agent, the Floor Plan Agent or any Lender, written
confidential information belonging to the Company or any of its Subsidiaries
that is denominated in writing as "confidential," the Agent, the Floor Plan
Agent, and the Lenders shall thereafter maintain such information in confidence
in accordance with the standards of care and diligence that each utilizes in
maintaining its own confidential information, including without limitation,
non-disclosure of such information to any of such Agent's, Floor Plan Agent's or
Lender's Affiliates who may be competitors of the Company and its Subsidiaries
in the business of acquiring and/or consolidating automotive dealerships. The
obligation of confidence under this Section 13.16 shall not apply to such
portions of the information which (i) are in the public domain, (ii) hereafter
become part of the public domain without the Agent, the Floor Plan Agent or any
Lender breaching its obligation of confidence hereunder, (iii) are previously
known by such Agent, Floor Plan Agent or Lender from some source other than the
Company, (iv) are hereafter obtained by or available to such Agent, Floor Plan
Agent or Lender from a third party who owes no obligation of confidence to the
Company and its Subsidiaries with respect to such information or through any
other means other than through disclosure by the Company or its Subsidiaries,
(v) must be disclosed either pursuant to any requirement of any Governmental
Authority or to Persons regulating or claiming regulatory authority over the
activities of such Agent, Floor Plan Agent or Lender, or (vi) as may be required
by law or regulation or order of any Governmental Authority in any judicial,
arbitration, or governmental proceeding. Further, the Agent, the Floor Plan
Agent and the Lenders may disclose any such information to any other Lender,
participants and prospective assignees and participants who agree to be bound by
the terms of this Section 13.16, Affiliates of such Lender who are not
competitors of the Company and its Subsidiaries in the business of acquiring
and/or consolidating automotive dealerships, any independent certified public
accountants and any legal counsel employed by such Person in connection with
this Agreement or any Security Document, including without limitation, the
enforcement or exercise of all rights and remedies thereunder; provided, that
the Agent, the Floor Plan Agent or such Lender imposes on the Person to whom
such information is disclosed the same obligation to maintain the
confidentiality of such information as is imposed upon it hereunder.
Section 13.17 WAIVER OF JURY TRIAL. THE LENDERS, THE AGENT, THE FLOOR PLAN
AGENT AND EACH OF THE BORROWERS AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY
TO CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY LOAN DOCUMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTION OF ANY OF THEM. NEITHER THE LENDERS, THE
AGENT, THE FLOOR PLAN AGENT NOR ANY OF THE BORROWERS SHALL SEEK TO CONSOLIDATE,
111
BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN
WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN
WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY
RESPECT OR RELINQUISHED BY THE LENDERS, THE AGENT, THE FLOOR PLAN AGENT OR ANY
OF THE BORROWERS EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL OF THEM.
Section 13.18 FINAL AGREEMENT OF THE PARTIES. Any previous agreement among
the parties with respect to the subject matter hereof is superseded by this
Agreement. Nothing in this Agreement, expressed or implied, is intended to
confer upon any party other than the parties hereto any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
* * *
Signatures on Separate Pages
112
Exhibit 1.1G
SECURITY AND PLEDGE AGREEMENT
dated as of
March 23, 2005
among
XXXXXX AUTOMOTIVE GROUP INC.
THE SUBSIDIARIES PARTY HERETO
and
JPMORGAN CHASE BANK, N.A.
not in its individual capacity, but solely as Administrative Agent
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS..........................................................1
1.01 Definitions..................................................1
1.02 Interpretation...............................................5
ARTICLE II COLLATERAL..........................................................5
2.01 Grant of Security Interest...................................5
2.02 Termination of Security Interests............................6
2.03 Security Interest Absolute...................................6
2.04 Joinder of Additional Debtors................................7
2.05 Limit of Liability...........................................7
2.06 Reinstatement................................................7
ARTICLE III PERFECTION OF SECURITY INTEREST....................................8
3.01 Perfection...................................................8
3.02 Perfection of Additional Collateral..........................9
3.03 Intellectual Property Filings................................9
3.04 Instruments and Chattel Paper................................9
3.05 Further Assurances..........................................10
3.06 Use of Collateral...........................................10
ARTICLE IV REPRESENTATIONS AND WARRANTIES.....................................10
4.01 Security Documents..........................................10
4.02 Title.......................................................11
4.03 Chief Executive Office; Jurisdiction of Organization........11
4.04 Corporate Names; Prior Transactions.........................11
4.05 Records.....................................................11
4.06 Changes in Circumstances....................................11
4.07 Inventory...................................................11
4.08 Trademark Collateral........................................12
4.09 Financing Statements and Other Filings; Maintenance
of Perfected Security Interest..............................12
4.10 Deposit Accounts and Securities Accounts....................12
4.11 Letters of Credit...........................................12
4.12 Commercial Tort Claims......................................12
ARTICLE V COVENANTS...........................................................12
5.01 Access to Records...........................................12
5.02 Other Financing Statements and Liens........................13
5.03 Reports.....................................................13
5.04 Adverse Claims..............................................13
5.05 Certain Changes.............................................13
5.06 Letters of Credit...........................................13
5.07 Collection of Accounts......................................13
5.08 Disposition of Collateral...................................13
i
5.09 Protection of Intellectual Property.........................13
5.10 Special Provisions Relating to Certain Collateral...........14
ARTICLE VI REMEDIES...........................................................15
6.01 Events of Default, Etc......................................15
6.02 Deficiency..................................................17
6.03 Private Sale................................................17
6.04 Application of Proceeds.....................................18
6.05 Attorney-in-Fact............................................18
6.06 Expenses....................................................18
6.07 Administrative Agent's Right to Perform on Debtor's Behalf..19
6.08 Rights of Secured Parties...................................19
6.09 No Marshalling..............................................19
6.10 Remedies Cumulative.........................................19
ARTICLE VII MISCELLANEOUS.....................................................20
7.01 Waivers of Rights Inhibiting Enforcement....................20
7.02 Notices.....................................................20
7.03 Assignment..................................................20
7.04 Successors and Assigns......................................21
7.05 Amendment and Waiver........................................21
7.06 No Implied Waiver...........................................21
7.07 Severability................................................21
7.08 Entire Agreement............................................21
7.09 Execution in Counterparts...................................21
7.10 Governing Law...............................................21
7.11 Headings....................................................22
7.12 Interpretation..............................................22
7.13 Waiver of Jury..............................................22
7.14 Survival, Etc...............................................22
7.15 Agents, Etc.................................................22
7.16 Limitation of Liability.....................................22
7.17 Subrogation.................................................23
7.18 Authority of the Administrative Agent.......................23
Annex 1.01........Trademark Collateral
Annex 4.01........Filing Offices
Annex 4.03........Debtor Information
Annex 4.04........Previous Names and Transactions
Annex 4.05........Offices and Locations of Records
Annex 4.07........Locations of Inventory
Annex 4.09........Filings
Annex 4.10........Deposit Accounts and Securities Accounts
Annex 4.11........Letters of Credit
Annex 4.12........Commercial Tort Claims
Exhibit A.........Grant of Trademark Security Agreement
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SECURITY AND PLEDGE AGREEMENT
This SECURITY AND PLEDGE AGREEMENT (this "Agreement") dated as of March
23, 2005, is among XXXXXX AUTOMOTIVE GROUP INC., ("Company"), the Subsidiaries
of the Company listed on the signature pages hereof and such other Subsidiaries
of the Company which hereafter shall become parties to this Agreement (the
Company, together with such Subsidiaries, the "Debtors"), and JPMORGAN CHASE
BANK, N.A., as Administrative Agent under the Credit Agreement (as herein
defined), not in its individual capacity, but solely as agent for the Lenders
and other Secured Parties (as such terms are defined herein) (in such capacity,
together with its successors in such capacity, the "Administrative Agent" ).
RECITALS:
A. Pursuant to the Revolving Credit Agreement dated as of March
23, 2005 (as amended, modified and supplemented from time to time, the "Credit
Agreement"), among certain of the Subsidiaries of the Company, the lenders
parties thereto (the "Lenders"), the Administrative Agent, JPMorgan Chase Bank,
N.A., as Floor Plan Agent, Bank of America, N.A., as Syndication Agent, and
X.X.Xxxxxx Securities Inc. and Banc of America Securities LLC, as Joint
Bookrunners and Co-Lead Arrangers, the Lenders agreed to make loans to and other
extensions of credit on behalf of the Debtors.
B. It is a condition to the obligations of the Lenders and the
Administrative Agent under the Credit Agreement that Debtors shall have
guaranteed the Obligations pursuant to that certain Guaranty Agreement of even
date herewith (the "Guaranty Agreement").
C. It is a condition to the obligations of the Lenders and the
Administrative Agent under the Credit Agreement that Debtors shall have granted
Liens securing the Obligations guaranteed pursuant to the Guaranty Agreement and
executed and delivered this Agreement.
D. To induce the Lenders and the Administrative Agent to enter
into the Credit Agreement and to induce certain of the Secured Parties to make
loans and/or extend other credit to the Borrowers, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Debtors have agreed to grant security interests in the Collateral
as security for the Secured Obligations described herein.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
1.01 Definitions. Capitalized terms not otherwise defined herein have
the respective meanings assigned to them in the Credit Agreement. All terms used
herein that are not defined herein or in the Credit Agreement and are defined in
the UCC have the meanings therein stated. In addition, the following terms have
the following meanings under this Agreement:
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"Accounts" means all accounts (as defined in the UCC) and all general
intangibles (including payment intangibles and software) (as defined in the UCC)
of any Debtor constituting any right to the payment of money, whether or not
earned by performance, including all moneys due and to become due to any Debtor
in respect of any loans or advances or for Inventory or other goods sold or
leased or for services rendered, tax refunds, insurance refund claims and other
insurance claims and proceeds, tort claims, securities and other investment
property, letter of credit rights, all accounts owing from any Subsidiary or any
Affiliate of any Debtor, supporting obligations of every nature and any
guarantee of any of the foregoing.
"Administrative Agent" has the meaning set forth in the introductory
paragraph to this Agreement.
"Agreement" has the meaning set forth in the introductory paragraph to
this Agreement.
"Chattel Paper" means all "chattel paper" as defined in the UCC.
"Collateral" has the meaning assigned to such term in Section 2.01.
"Contracts" means, collectively, with respect to each Debtor, all sale,
service, performance, equipment or property lease contracts, agreements or
grants and all other contracts, agreements or grants (in each case, whether
written or oral, or third party or intercompany), between such Debtor and third
parties, and all assignments, amendments, restatements, supplements, extensions,
renewals, replacements or modifications thereof, in each case that evidence or
give rise to Accounts but expressly excluding any franchise or framework
agreements.
"Contracts in Transit" means, collectively, with respect to each
Debtor, all agreements, including all Accounts and Chattel Paper, of third
parties to pay the purchase price of vehicles sold to customers, which
agreements are not yet funded.
"Control" means (i) in the case of each Deposit Account, "control," as
such term is defined in Section 9.104 of the UCC, and (ii) in the case of any
security entitlement in a Securities Account, "control," as such term is defined
in Section 8.106 of the UCC.
"Credit Agreement" has the meaning set forth in Recital A.
"Deposit Account Control Agreement" means an agreement that perfects
the security interest granted hereunder in the Deposit Accounts by control, in a
form reasonably satisfactory to the Administrative Agent and to the depository
bank maintaining the Deposit Account covered by such agreement.
"Deposit Accounts" means, collectively, with respect to each Debtor,
(i) all "deposit accounts" as such term is defined in the UCC including, without
limitation, the Concentration Accounts, Platform Accounts and the Floor Plan
Borrower Dealership Accounts and (ii) all cash, funds, checks, notes and
instruments from time to time on deposit in any of the accounts described in
clause (i) of this definition.
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"Documents" means all "documents" (as defined in the UCC) or other
receipts covering, evidencing or representing Inventory.
"Foreign Entity" means any corporation, limited liability company,
partnership or other legal entity that is a controlled foreign corporation under
Section 957 of the Code (or any successor provision thereto).
"General Intangibles" means all "general intangibles" (as defined in
the UCC) now owned or hereafter acquired by any Debtor, including (i) all
obligations or indebtedness owing to any Debtor (other than Accounts) from
whatever source arising, (ii) all Intellectual Property and goodwill, (iii) all
rights or claims in respect of refunds for taxes paid, (iv) all payment
intangibles and (v) to the extent permitted by applicable law, all rights in
respect of any pension plan or similar arrangement maintained for employees of
any Debtor but specifically excluding any securities accounts that are
maintained by the Company for the investment of funds in connection with
employee deferred compensation plans.
"Instruments" means all "instruments" or "letters of credit" (each as
defined in the UCC) of any Debtor, including all instruments or letters of
credit evidencing, representing, arising from or existing in respect of,
relating to, securing or otherwise supporting the payment of, any Account or any
other right to payment, including promissory notes, drafts, bills of exchange
and trade acceptances now owned or hereafter acquired and all interest, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any of the Instruments.
"Intellectual Property" means all Patent Collateral and all Trademark
Collateral now or hereafter owned by any Debtor and all causes of action, claims
and warranties now or hereafter owned by any Debtor in respect thereof.
"Inventory" means all inventory (as defined in the UCC) and all other
goods of any Debtor held for sale, lease or furnishing under a contract of
service (including to its Subsidiaries or Affiliates), including, without
limitation, all Motor Vehicles held by the Debtors as inventory for sale, or
material used or consumed in its business, including all spare parts and related
supplies, all goods obtained by any Debtor in exchange for such goods, all
products made or processed from such goods and all substances, if any,
commingled therewith or added to such goods;
"Motor Vehicles" means any motorized vehicle approved for highway use
by any State of the United States.
"Patent Collateral" means all Patents now or hereafter owned by any
Debtor.
"Patents" means, collectively, (i) all patents and patent applications,
including the inventions and improvements described and claimed therein, and all
patentable inventions, (ii) all reissues, divisions, continuations, renewals,
extensions and continuations-in-part thereof, and (iii) all rights, licenses and
goodwill relating thereto, now existing or hereafter coming into existence, (A)
to all income, profits, royalties, damages and payments now or hereafter due
and/or payable under and with respect thereto, including damages and payments
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for past, present or future infringements thereof, (B) to xxx for past, present
and future infringements thereof, and (C) otherwise accruing under or pertaining
to any of the foregoing throughout the world.
"Proceeds" has the meaning assigned to such term in the UCC, including
all proceeds of insurance and all condemnation awards and all other compensation
for any casualty event with respect to all or any part of the Collateral
(together with all rights to recover and proceed with respect to the same), and
all accessions to, substitutions for and replacements of all or any part of the
other Collateral.
"Records" has the meaning assigned to such term in Section 4.05.
"Secured Obligations" means (i) all Obligations and (ii) all amounts
guaranteed by the Debtors pursuant to the Guaranty Agreement, whether now or
hereafter existing, including any extensions, modifications, substitutions,
amendments and renewals thereof, whether for principal, interest, fees,
expenses, indemnification, or otherwise, including all costs and expenses
(including reasonable attorneys' fees and expenses) incurred by the
Administrative Agent or, after an Event of Default, any Secured Party in
connection with any suit or proceeding in connection with the performance by
such Secured Party of any of the agreements contained in any of the Contracts,
or in connection with any exercise of its rights or remedies hereunder, pursuant
to the terms of this Agreement.
"Secured Parties" means, collectively, the Administrative Agent, the
Floor Plan Agent, the Swing Line Bank and the Lenders.
"Securities Accounts" means, collectively, with respect to each Debtor,
all "securities accounts" as such term is defined in the UCC including, without
limitation, all "securities entitlements," as such term is defined in the UCC in
connection with such accounts. Securities Accounts shall not include any
securities accounts that are maintained by the Company for the investment of
funds solely in connection with employee deferred compensation plans.
"Securities Account Control Agreement" means an agreement that perfects
the security interest granted hereunder in the Securities Accounts by control,
in a form reasonably satisfactory to the Administrative Agent and the securities
intermediary maintaining the Securities Account covered by such agreement.
"Security Interest" means the security interest in the Collateral
granted by Debtors under this Agreement.
"Trademark Collateral" means all Trademarks now or hereafter owned by
any Debtor including each Trademark Collateral identified in Annex 1.01.
"Trademarks" means, collectively, (i) all trade names, trademarks and
service marks, logos, trademark and service xxxx registrations, and applications
for trademark and service xxxx registrations, (ii) all renewals of trademark and
service xxxx registrations, and (iii) all rights (A) to all income, royalties,
damages and other payments (including in respect of all past, present and future
infringements) with respect to any of the foregoing, (B) to xxx for all past,
present and future infringements thereof, and (C) otherwise accruing under or
A-4
pertaining to any of the foregoing, together, in each case, with the product
lines and goodwill of the business connected with the use of, and symbolized by,
each such trade name, trademark and service xxxx.
"Trademark Security Agreement" means an agreement substantially in the
form annexed hereto as Exhibit A.
"UCC" means the Uniform Commercial Code as now or hereafter in effect
in the State of New York; provided that if, by reason of mandatory provisions of
Law, the perfection or the effect of perfection or non-perfection of any
Security Interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than New York, "UCC" means the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or the effect of perfection or
non-perfection.
1.02 Interpretation. The principles of interpretation set out in
Section 1.03 of the Credit Agreement shall apply equally to this Agreement
mutatis mutandis.
ARTICLE II.
COLLATERAL
2.01 Grant of Security Interest. As collateral security for the prompt
payment in full when due (whether at stated maturity, by acceleration or
otherwise) and performance of the Secured Obligations, each Debtor hereby grants
to the Administrative Agent for the benefit of the Secured Parties a security
interest in all of such Debtor's right, title and interest in, to and under the
following property, whether now owned or hereafter acquired by such Debtor and
whether now existing or hereafter coming into existence and wherever located
(collectively, the "Collateral" ):
(a) all Accounts;
(b) all Chattel Paper; (c) all Contracts in Transit;
(d) all Deposit Accounts;
(e) all Documents;
(f) all General Intangibles;
(g) all Instruments;
(h) all Inventory;
(i) all Motor Vehicles that are titled to a Debtor;
(j) all Records;
A-5
(k) all Securities Accounts;
(l) all rights, claims and benefits of such Debtor against any Person
arising out of, relating to or in connection with Inventory purchased
by such Debtor, including any such rights, claims or benefits against
any Person storing or transporting such Inventory;
(m) all consideration of any kind received or to be received by any Debtor
(i) in connection with the transfer of stock or other equity interest
in any of Debtor's Subsidiaries, including, without limitation,
Accounts, Contracts, Chattel Paper and General Intangibles in
connection therewith and (ii) in connection with the sale or transfer
of goodwill associated with the business of any Debtor;
(n) all replacements and substitutions of the foregoing; and
(o) all Proceeds of the Collateral described in the foregoing clauses (a)
through (n).
2.02 Termination of Security Interests. This Agreement and the
Security Interests shall terminate and all rights to the Collateral shall revert
to the Debtors when (i) all outstanding Secured Obligations shall have been paid
in full, (ii) all Commitments under the Credit Agreement shall have expired or
been terminated and (iii) the Letter of Credit Obligations have been reduced to
zero or fully cash collateralized as provided in the Credit Agreement. Upon such
termination, the Administrative Agent shall (at the written request and expense
of the Borrower) promptly cause to be assigned, transferred and delivered,
against receipt but without any recourse, warranty or representation whatsoever,
any remaining Collateral and money received in respect thereof, to or on the
order of the Debtors or as may be otherwise specified by a court of law. The
Administrative Agent shall also (at the written request and expense of the
Borrower) promptly deliver to the Borrower upon such termination such UCC
termination statements and such other documentation as shall be reasonably
requested by the Borrower to evidence the termination and release of the
Security Interests on the Collateral.
2.03 Security Interest Absolute. To the maximum extent permitted by
applicable law, each Debtor agrees that the rights and remedies of the
Administrative Agent hereunder, the Liens created hereby, and the obligations of
the Debtors under this Agreement are absolute, irrevocable and unconditional and
will remain in full force and effect without regard to, and will not be
released, suspended, discharged, terminated or otherwise affected by, any
circumstance or occurrence whatsoever (other than termination pursuant to
Section 2.02), including:
(a) any renewal, extension, amendment, or modification of, or addition
or supplement to or deletion from, any of the Loan Documents or any other
instrument or agreement referred to therein, or any assignment or transfer
of any thereof;
(b) any waiver of, consent to or departure from, extension, indulgence
or other action or inaction under or in respect of any of the Secured
Obligations, this Agreement, any other Loan Document or other instrument or
agreement relating thereto, or any exercise or non-exercise of any right,
remedy, power or privilege under or in respect of the Secured Obligations,
A-6
this Agreement, any other Loan Document or any such other instrument or
agreement relating thereto;
(c) any furnishing of any additional security for the Secured
Obligations or any part thereof to the Administrative Agent or any other
Person or any acceptance thereof by the Administrative Agent or any other
person or any substitution, sale, exchange, release, surrender or
realization of or upon any such security by the Administrative Agent or any
other person or the failure to create, preserve, validate, perfect or
protect any other Lien granted to, or purported to be granted to, or in
favor of, the Administrative Agent or any other Secured Party;
(d) any invalidity, irregularity or unenforceability of all or any
part of the Secured Obligations, any Loan Document or any other agreement
or instrument relating thereto or any security therefor;
(e) the acceleration of the maturity of any of the Secured Obligations
or any other modification of the time of payment thereof;
(f) any other event or circumstance whatsoever that might otherwise
constitute a legal or equitable discharge of a surety or a guarantor or
otherwise, it being the intent of this Section 2.04 that the obligations of
the Debtors hereunder shall be absolute, irrevocable and unconditional
under any and all circumstances; or
(g) any bankruptcy or other insolvency proceeding with respect to the
other Borrowers or Debtors.
2.04 Joinder of Additional Debtors. Upon the execution and delivery of
an Addendum by a new Floor Plan Borrower pursuant to Section 9.18 of the Credit
Agreement, such Floor Plan Borrower shall constitute a "Debtor" for all purposes
hereunder with the same force and effect as if originally named as a Debtor
herein. The execution and delivery of such Joinder Agreement shall not require
the consent of any Debtor hereunder. The rights and obligations of each Debtor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Debtor as a party to this Agreement.
2.05 Limit of Liability. Notwithstanding the foregoing, the security
interest granted by each Debtor hereunder shall be limited to the extent
necessary so that such Debtor's obligations hereunder would never exceed the
maximum amount that said Debtor could transfer or grant without having such
transfer or grant set aside as a fraudulent transfer or fraudulent conveyance or
similar action under the U.S. Bankruptcy Code or applicable state or foreign
law.
2.06 Reinstatement. This Agreement and the Liens created hereunder
shall automatically be reinstated if and to the extent that for any reason any
payment by or on behalf of any Debtor in respect of the Secured Obligations is
rescinded or must otherwise be restored by any holder of the Secured
Obligations, whether as a result of any fraudulent conveyance, proceedings in
bankruptcy or reorganization or otherwise. EACH DEBTOR SHALL DEFEND AND
INDEMNIFY EACH SECURED PARTY FROM AND AGAINST ANY CLAIM, DAMAGE, LOSS,
LIABILITY, COST, OR EXPENSE UNDER THIS SECTION 2.07 (INCLUDING REASONABLE
ATTORNEYS' FEES AND EXPENSES) IN THE DEFENSE OF ANY SUCH ACTION OR SUIT,
A-7
INCLUDING SUCH CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR EXPENSE ARISING AS A
RESULT OF THE INDEMNIFIED SECURED PARTY'S OWN NEGLIGENCE OR STRICT LIABILITY BUT
EXCLUDING SUCH CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR EXPENSE THAT IS FOUND IN
A FINAL, NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE
RESULTED FROM SUCH INDEMNIFIED SECURED PARTY'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
ARTICLE III.
PERFECTION OF SECURITY INTEREST
3.01 Perfection. Prior to or concurrently with the execution and
delivery of this Agreement or any Addendum, Debtors shall:
(a) file or cause to be filed such financing statements and other
documents in such offices as shall be necessary or as the Administrative
Agent may reasonably request to perfect and establish the priority (subject
only to Permitted Liens) of the Security Interest;
(b) subject to Section 3.04, deliver to the Administrative Agent any
and all Instruments and Chattel Paper, endorsed or accompanied by such
instruments of assignment and transfer in such form and substance as the
Administrative Agent may reasonably request; provided, however, with
respect to Instruments meeting the qualifications set forth in the
foregoing where a Debtor is the maker thereof, absent an Event of Default,
Debtors shall only be required to deliver such Instruments and Chattel
Paper within 45 days of the end of each calendar quarter;
(c) cause the Administrative Agent to be listed as the lienholder on
all certificates of title or ownership relating to Motor Vehicles that are
Demonstrators or Rental Vehicles owned by Debtors and deliver to the
Administrative Agent originals of all such certificates of title or
ownership for such Motor Vehicles;
(d) deliver to the Administrative Agent a Deposit Account Control
Agreement with respect to each Deposit Account of the Debtors, other than
any Deposit Account maintained by the Administrative Agent, executed by the
applicable Debtor and the bank maintaining such Deposit Account;
(e) deliver to the Administrative Agent a Securities Account Control
Agreement with respect to each of the Securities Accounts of the Debtors,
executed by the applicable Debtor and the Securities Intermediary
maintaining such Securities Accounts; and
(f) take all such other actions as shall be necessary or as the
Administrative Agent may reasonably request to perfect and establish the
priority of the Security Interest.
Additionally, each Debtor hereby authorizes the Administrative Agent to prepare,
execute, deliver, file and/or record (without the signature of such Debtor to
A-8
the extent permitted by applicable law) any such financing statement,
continuation statement, amendment or other document that may be necessary or
desirable (in the reasonable judgment of the Administrative Agent): (i) to
create, preserve, perfect or validate the Security Interest; or (ii) to enable
the Administrative Agent to exercise and enforce its rights hereunder with
respect to such Security Interest. The Debtors shall pay the costs of, or
incidental to, any recording or filing of any such financing or continuation
statement, amendment or other document or otherwise arising out of or in
connection with the execution and delivery of this Agreement.
3.02 Perfection of Additional Collateral. Each Debtor shall:
(a) maintain records at the premises where Motor Vehicles are kept
evidencing which Motor Vehicles are being used as Demonstrators and Rental
Motor Vehicles. Each Debtor shall cause all certificates of title for such
Demonstrators and Rental Motor Vehicles that are titled to it to be marked
or to otherwise indicate that Administrative Agent is the only lienholder
with respect to such Demonstrators and Rental Motor Vehicles;
(b) keep full and accurate Records; and
(c) furnish to the Administrative Agent from time to time (but, unless
an Event of Default shall have occurred and be continuing, within 45 days
after the end of each calendar quarter) statements and schedules further
identifying and describing the Patent Collateral and the Trademark
Collateral, respectively, and such other reports in connection with the
Patent Collateral and the Trademark Collateral as the Administrative Agent
may reasonably request, all in reasonable detail.
3.03 Intellectual Property Filings. On the date hereof, each Debtor
will execute and deliver to the Administrative Agent the Trademark Security
Agreement with respect to all Trademark Collateral then owned by it. Upon the
request of the Administrative Agent, it will sign and deliver to the
Administrative Agent any Trademark Security Agreement necessary to grant
Security Interests in any Trademark Collateral owned by it at such time that are
not covered by the Security Interests granted in any previous Trademark Security
Agreements so executed and delivered by it. In each case, it shall promptly make
all Intellectual Property filings necessary to record the Security Interests in
such Intellectual Property. Each Debtor hereby appoints the Administrative Agent
as its attorney-in-fact to execute and file all Intellectual Property filings
required or so requested for the foregoing purposes, all acts of such attorney
being hereby ratified and confirmed; and such power, being coupled with an
interest, shall be irrevocable until the Collateral is released pursuant to
Section 2.02.
3.04 Instruments and Chattel Paper. So long as no Event of Default
shall have occurred and be continuing, each Debtor may retain for collection in
the ordinary course any Instruments and Chattel Paper received by it in the
ordinary course of business; provided, if Administrative Agent may exercise its
remedies pursuant to Section 11.2 or Section 11.4 of the Credit Agreement, each
Debtor will promptly deliver to Administrative Agent upon request all
Instruments and Chattel Paper, properly endorsed and assigned and accompanied by
instruments of transfer or assignment executed in blank, and the Administrative
Agent shall, promptly upon request and at the expense of any Debtor, make
appropriate arrangements for making any Instrument and Chattel Paper pledged by
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such Debtor and held by the Administrative Agent available to such Debtor for
purposes of presentation, collection or renewal (any such arrangement to be
effected, to the extent deemed appropriate by the Administrative Agent, against
trust receipt or like document).
3.05 Further Assurances. Each Debtor shall, from time to time, at its
sole expense, promptly execute, deliver, file and record all further agreements,
assignments, instruments, documents and certificates and take all further action
that may be reasonably necessary or reasonably desirable, or that the
Administrative Agent may reasonably request, in order to create, preserve,
perfect, confirm or validate the Security Interest in the Collateral or to
enable the Administrative Agent to obtain the full benefits of the Security
Documents (including the delivery of possession of any Collateral that hereafter
comes into existence or is acquired in the future by the Administrative Agent as
pledgee for the benefit of the Secured Parties), or to enable the Administrative
Agent to exercise and enforce any of its rights, powers and remedies thereunder
with respect to any of such Collateral.
3.06 Use of Collateral. So long as no Event of Default shall have
occurred and be continuing, each Debtor shall, except as otherwise provided
herein, in any Deposit Account Control Agreement, in any Securities Account
Control Agreement or in the Credit Agreement, be entitled to use and possess the
Collateral and to exercise its rights, title and interest in all Contracts
subject to the rights, remedies, powers and privileges of the Administrative
Agent under Article VI and to exercise such use, possession or exercise not
otherwise constituting an Event of Default.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Each Debtor represents and warrants to the Secured Parties as follows:
4.01 Security Documents.
(a) This Agreement and each of the Security Documents is effective to
create in favor of the Administrative Agent for the benefit of the Secured
Parties a legal, valid and enforceable security interest in and Lien on the
Collateral and, when (i) financing statements and other filings in
appropriate form are filed in the offices specified on Annex 4.01 and (ii)
upon the taking of possession or Control by the Administrative Agent of the
Collateral with respect to which a security interest may be perfected only
by possession or Control, the Liens and Security Interests created by this
Agreement shall constitute a fully perfected Lien on, and security interest
in, all right, title and interest of the Debtors in the Collateral, in each
case subject to no Liens other than Permitted Liens.
(b) When the Trademark Security Agreement is filed in the United
States Patent and Trademark Office and the financing statements referenced
in Section 4.01(a) are filed, the Lien created by this Agreement shall
constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the grantors thereunder in the Intellectual Property
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which is registered in the United States, in each case subject to no Liens
other than Permitted Liens.
4.02 Title. Each Debtor is the sole legal and beneficial owner of all
Collateral in which it purports to xxxxx x Xxxx and Security Interest pursuant
to this Agreement, and such Collateral is free and clear of all Liens other than
Permitted Liens. The Security Interests have attached and upon the filing of the
financing statements and delivery of Collateral which may be perfected only by
possession or Control, will constitute, under the UCC, perfected security
interests in all such Collateral prior to all other Liens (except Permitted
Liens and except to the extent that certain Collateral is excluded from Article
9 of the UCC by Section 9.109 thereof). No currently effective financing
statement or other instrument similar in effect is on file in any recording
office covering all or any part of the Collateral, except such as may have been
filed evidencing Permitted Liens. No Person other than the Administrative Agent
has Control or possession of all or any part of the Collateral except as
permitted by the Credit Agreement or except as will be released concurrently
with the closing of the transactions contemplated in the Credit Agreement.
4.03 Chief Executive Office; Jurisdiction of Organization. The exact
legal name, type of organization, jurisdiction of organization, Federal Taxpayer
Identification Number, organizational identification number and chief executive
office of each Debtor is indicated next to its name in Annex 4.03.
4.04 Corporate Names; Prior Transactions. No Debtor has, (i) for the
period from January 1, 2000 to December 31, 2000, been known by or used any
other corporate or fictitious name or been a party to any merger or
consolidation, or acquired all or substantially all of the assets of any person,
or acquired any of its property or assets out of the ordinary course of business
(which includes purchasing auto dealerships) based on a review of the records
maintained by the Company, except as set forth in Annex 4.04 or (ii) since
December 31, 2000, been known by or used any other corporate name or been a
party to any merger or consolidation, or acquired all or substantially all of
the assets of any person, or acquired any of its property or assets out of the
ordinary course of business (which includes purchasing auto dealerships) except
as set forth on Annex 4.04, or (iii) during the past five years, been known by
or used any fictitious name, based on a review of the records maintained by the
Company, except as set forth on Annex 4.04.
4.05 Records. The principal place of business and chief executive
office of each Debtor and the office where each Debtor keeps its books and
records concerning the Collateral (hereinafter, collectively called the
"Records") is located at the address set out on Annex 4.05.
4.06 Changes in Circumstances. No Debtor has, within the period of four
months prior to the date hereof: (a) changed its location (as defined in Section
9-307 of the UCC); (b) changed its name; or (c) become a "new debtor" (as
defined in Section 9-102(a)(56) of the UCC) with respect to a security agreement
previously entered into by any other Person.
4.07 Inventory. Substantially all Inventory of the Debtors other than
such Inventory which is in-transit to the applicable purchaser thereof: (a) is
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located at one of the locations identified in Annex 4.07 or in transit from one
of such location to another; and (b) is in the exclusive Control of a Debtor on
the date hereof.
4.08 Trademark Collateral. No Debtor owns any Trademarks registered in
the United States of America that would be rendered invalid, abandoned, void or
unenforceable by reason of its being included in the Collateral.
4.09 Financing Statements and Other Filings; Maintenance of Perfected
Security Interest. The only filings, registrations and recordings necessary and
appropriate to create, preserve, protect, publish notice of and perfect the
security interest granted by each Debtor to the Administrative Agent (for the
benefit of the Secured Parties) pursuant to this Agreement in respect of the
Collateral are listed in Annex 4.09. All such filings, registrations and
recordings have been delivered to the Administrative Agent in completed and, to
the extent necessary or appropriate, duly executed form for filing and shall be
filed, registered and recorded as soon as practicable.
4.10 Deposit Accounts and Securities Accounts. As of the Closing Date,
no Debtor has opened or maintains any Deposit Accounts or Securities Accounts
for which the Debtors are required to obtain Deposit Account Control Agreements
or Securities Account Control Agreements other than the accounts listed in Annex
4.10. Upon execution and delivery to the Administrative Agent of the Deposit
Account Control Agreements and Securities Account Control Agreements with
respect to the Deposit Accounts the Administrative Agent will have a perfected
first priority security interest on behalf of the Lenders in each Deposit
Account and each Securities Account listed in Annex 4.10 by Control. No Debtor
owns, holds or has any interest in any Investment Property other than those
maintained in the Securities Accounts listed on Annex 8, and any equity interest
of the Debtors in their Subsidiaries.
4.11 Letters of Credit . As of the Closing Date, the Company is not a
beneficiary under any standby letter of credit except as listed in Annex 4.11.
4.12 Commercial Tort Claims. As of the Closing Date, no Debtor holds
any material commercial tort claims payable to it other than those listed in
Annex 4.12.
ARTICLE V.
COVENANTS
In furtherance of the grant of the Security Interests pursuant to
Article II, each Debtor hereby agrees with the Administrative Agent as follows:
5.01 Access to Records. Each Debtor will maintain accurate books and
records in which full and correct entries in conformity with GAAP shall be made
of all dealings and transactions in relation to the business and activities of
such Debtors. No more frequently than twice in any twelve (12) month period and
any time during the continuance of a Default or Event of Default (except for
access required in connection with a floor plan audit pursuant to Section 9.12
of the Credit Agreement, which will be permitted at any time), each Debtor will
permit access by the Administrative Agent or its designee to the books and
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records relating to such Debtor during normal business hours, to permit or cause
to be permitted the Administrative Agent or its designee to make extracts from
such books and records and permit, or cause to be permitted, any authorized
representative designated by any Lender to discuss the affairs, finances and
condition of the Company with its principal financial officers and principal
accounting officers and such other officers as such Debtor shall deem
appropriate.
5.02 Other Financing Statements and Liens. No Debtor shall file or
suffer to be on file, or authorize or permit to be filed or to be on file, in
any jurisdiction, any financing statement or like instrument with respect to the
Collateral in which the Administrative Agent is not named as the sole secured
party for the benefit of the Secured Parties except to the extent such filing or
like instrument pertains to a Permitted Lien.
5.03 Reports. Each Debtor shall furnish to the Administrative Agent
from time to time statements and schedules further identifying and describing
the Collateral and such other reports in connection with the Collateral as the
Administrative Agent may reasonably request, all in reasonable detail; provided,
however, absent the existence of an Event of Default, the Debtors shall not be
required to deliver such information more frequently than quarterly. Promptly
upon request of the Administrative Agent, following receipt by the
Administrative Agent of any reports pursuant to the preceding sentence, the
Debtors shall deliver to the Administrative Agent revised Annex 1.01 to include
Trademarks that become part of the Collateral under this Agreement.
5.04 Adverse Claims. Each Debtor shall defend, all at its own expense,
such Debtor's title and the existence, perfection and first priority of the
Administrative Agent's security interest in the Collateral against all adverse
claims (other than Permitted Liens).
5.05 Certain Changes. Each Debtor shall notify the Administrative
Agent in writing within thirty (30) days of the date such Debtor (i) changes its
name, identity or the jurisdiction under which it is organized, (ii) in the case
of the Company, changes its chief executive office or chief place of business or
(iii) with respect to all Debtors other than the Company, ceases to be a
Wholly-Owned Subsidiary of the Company.
5.06 Letters of Credit. Each Debtor shall keep and maintain all
standby letters of credit issued in favor of such Debtor at its chief executive
office described in Annex 4.03.
5.07 Collection of Accounts. Each Debtor shall use commercially
reasonable efforts to cause to be collected from its account debtors, as and
when due, any and all amounts owing under or on account of each of its Accounts
(including Accounts that are delinquent, such Accounts to be collected in
accordance with lawful collection procedures) and shall apply forthwith upon
receipt thereof all such amounts as are so collected to the outstanding balance
of such Accounts.
5.08 Disposition of Collateral. No Debtor shall sell, lease, exchange,
assign or otherwise dispose of, or grant any option with respect to, any of its
Collateral except in the ordinary course of business as permitted by the Credit
Agreement.
5.09 Protection of Intellectual Property. Each Debtor shall timely pay
all fees (including maintenance fees), file all documents or declarations
(including applications, applications for renewal, affidavits of use and
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affidavits of incontestability) and take all other action necessary to obtain,
maintain and renew each Patent and Trademark included in the Collateral,
provided, however, the Debtors shall not be required to take any such action
with respect to Trademarks not used in the business of any Debtor.
5.10 Special Provisions Relating to Certain Collateral.
(a) Contracts.
(i) Anything herein to the contrary notwithstanding, each Debtor shall
remain liable to perform all of its duties and obligations under each of
the Contracts included in the Collateral to the same extent as if this
Agreement had not been executed. The exercise by the Administrative Agent
or any other Secured Party of any of the rights and remedies hereunder
shall not release any Debtor from any of its duties or obligations under
the Contracts. Neither the Administrative Agent nor any other Secured Party
shall have any duty, obligation or liability under such Contracts included
in the Collateral or otherwise in respect of the Collateral by reason of
this Agreement or be obligated to perform any of the obligations or duties
of any Debtor under the Contracts or otherwise in respect of the Collateral
or to take any action to collect or enforce any claim for payment or any
other right assigned hereunder.
(ii) During the existence of an Event of Default, if Debtor fails to
perform any agreement contained herein or in any of the Contracts, the
Administrative Agent may (but shall not be obligated to) itself perform, or
cause the performance of, such agreement, and the reasonable fees, costs
and expenses of the Administrative Agent incurred in connection therewith
shall be payable by or on behalf of Debtors and shall be Secured
Obligations to the Administrative Agent.
(b) Intellectual Property.
(i) For the purpose of enabling the Administrative Agent to exercise
rights and remedies under Article VI at such time as the Administrative
Agent shall be lawfully entitled to exercise such rights and remedies, and
for no other purpose, each Debtor hereby grants to the Administrative
Agent, to the extent assignable, an irrevocable, non-exclusive license
(exercisable without payment of royalty or other compensation to any
Debtor) to use, assign, license or sublicense any of the Intellectual
Property now or hereafter owned by such Debtor, wherever the same may be
located, including in such license reasonable access to all media in which
any of the licensed items may be recorded or stored and to all computer
programs used for the compilation or printout thereof; provided, however,
such license shall only be effective during the existence of an Event of
Default.
(ii) So long as no Event of Default shall have occurred and be
continuing, each Debtor will be permitted to exploit, use, enjoy, protect,
license, sublicense, assign, sell, dispose of or take other actions with
respect to the Intellectual Property in the ordinary course of the business
of such Debtor. In furtherance of the foregoing, unless an Event of Default
shall have occurred and be continuing, the Administrative Agent shall, from
time to time, upon the request of any Debtor, execute and deliver any
instruments, certificates or other documents, in the form so requested,
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that such Debtor shall have certified are appropriate (in its judgment) to
allow it to take any action permitted above (including relinquishment of
the license provided pursuant to clause (i) immediately above as to any
specific Intellectual Property). The exercise of rights and remedies under
Article VI by the Administrative Agent shall not terminate the rights of
the holders of any licenses or sublicenses theretofore granted by any
Debtor in accordance with the first sentence of this clause (ii).
(c) Deposit Accounts. No Debtor shall hereafter establish and maintain
any Deposit Account or Securities Account unless the financial institution
or securities intermediary that holds such account and such Debtor shall
have duly executed and delivered to the Administrative Agent a Deposit
Account Control Agreement or Securities Account Control Agreement, as
applicable, with respect to such Deposit Account or such Securities
Account. No Debtor shall grant Control of any Deposit Account or Securities
Account to any person other than the Administrative Agent.
ARTICLE VI.
REMEDIES
6.01 Events of Default, Etc. If any Event of Default shall have
occurred and be continuing, subject to the provisions of Section 11.2 and
Section 11.4 of the Credit Agreement:
(a) the Administrative Agent shall have, and in its discretion may
exercise, the rights and remedies with respect to this Agreement as more
particularly provided herein or in the Credit Agreement;
(b) each Debtor shall, upon the reasonable request of the
Administrative Agent, assemble Collateral owned by it (and not otherwise in
the possession of the Administrative Agent) at such place or places,
reasonably convenient to both the Administrative Agent and such Debtor,
designated in such request;
(c) the Administrative Agent may (but shall not be obligated to),
without notice to any Debtor and at such times as the Administrative Agent
in its sole discretion may determine, exercise any or all of Debtors'
rights in, to and under, or in any way connected to, the Collateral and the
Administrative Agent shall otherwise have and may (but shall not be
obligated to) exercise all of the rights, powers, privileges and remedies
with respect to the Collateral of a secured party under the UCC (whether or
not said UCC is in effect in the jurisdiction where the rights, powers,
privileges and remedies are asserted) and such additional rights, powers,
privileges and remedies to which a secured party is entitled under the laws
in effect in any jurisdiction where any rights, powers, privileges and
remedies hereunder may be asserted, including the right, to the maximum
extent permitted by applicable law, to exercise all voting, consensual and
other powers of ownership pertaining to the Collateral as if the
Administrative Agent were the sole and absolute owner thereof (and the
Debtors agree to take all such action as may be appropriate to give effect
to such right);
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(d) the Administrative Agent may (but shall not be obligated to) make
any reasonable compromise or settlement it deems desirable with respect to
any of the Collateral and may (but shall not be obligated to) extend the
time of payment, arrange for payment in installments, or otherwise modify
the terms, of all or any part of the Collateral;
(e) the Administrative Agent may (but shall not be obligated to), in
its name or in the name of any Debtor or otherwise, demand, xxx for,
collect or receive any money or property at any time payable or receivable
on account of or in exchange for any of the Collateral;
(f) the Administrative Agent may (but shall not be obligated to) sell,
lease, assign or dispose of all or any part of the Collateral which shall
then be or shall thereafter come into the possession, custody or control of
the Administrative Agent, any other Secured Party or any of their
respective agents at such place or places as the Administrative Agent deems
best, and for cash or for credit or for future delivery (without thereby
assuming any credit risk), at public or private sale, without demand of
performance or notice of intention to effect any such disposition or of the
time or place thereof except such notice as is required by applicable law
and cannot be waived. If, pursuant to applicable law, prior notice of sale
of the Collateral under this Section is required to be given to any Debtor,
each Debtor hereby acknowledges that the minimum time required by such
applicable law, or if no minimum time is specified, 10 days, shall be
deemed a reasonable notice period. The Administrative Agent or any other
Secured Party or anyone else may be the purchaser, lessee, assignee or
recipient of any or all of the Collateral so disposed of at any public sale
(or, to the maximum extent permitted by applicable law, at any private
sale) and thereafter hold the same absolutely, free from any claim or right
of whatsoever kind, including any right or equity of redemption (statutory
or otherwise), of Debtors, any such demand, notice and right or equity
being hereby expressly waived and released to the maximum extent permitted
by applicable law. The Administrative Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
the sale, and such sale may be made at any time or place to which the sale
may be so adjourned. The Collateral may be sold in one or more sales, at
public or private sale, conducted by any officer or agent of, or auctioneer
or attorney for, the Administrative Agent, at the Administrative Agent's
place of business or elsewhere, for cash, upon credit or for other
property, for immediate or future delivery, and at such price or prices and
on such terms as the Administrative Agent shall deem appropriate in its
reasonable discretion. The Administrative Agent may, in its reasonable
discretion, at any such sale restrict the prospective bidders or purchasers
as to their number, nature of business and investment intention to the
extent necessary to comply with applicable law. Upon any public or private
sale the Administrative Agent shall have the right to deliver, assign and
transfer to the purchaser thereof the Collateral so sold. At any such sale
the Collateral may be sold in one lot as an entirety or in separate
parcels. The Administrative Agent shall not be obligated to make any sale
pursuant to any such notice. In case of any sale of all of any part of the
Collateral on credit or for future delivery, the Collateral so sold may be
retained by the Administrative Agent until the full selling price is paid
by the purchaser thereof, but neither the Administrative Agent nor any
Secured Party shall incur any liability in case of the failure of such
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purchaser to take up and pay for the Collateral so sold, and, in case of
any such failure, such Collateral may again be sold pursuant to the
provisions hereof. All cash proceeds of any such sale, and any other
realization upon all or any part of the Collateral may, in the sole
discretion of the Administrative Agent, be held by the Administrative Agent
as collateral for or applied then or at any time thereafter, in whole or in
part, by the Administrative Agent for the benefit of the Secured Parties to
the payment and satisfaction of the Secured Obligations in accordance with
Section 6.04;
(g) the Administrative Agent may cause any action at law or suit in
equity or other proceeding to be instituted and prosecuted to enforce any
rights vested in it by this Agreement or by law or included in the
Collateral, subject to the provisions and requirements hereof and thereof,
or to aid in the exercise of any power herein or therein granted, or for
any foreclosure hereunder and sale under a judgment or decree in any
judicial proceeding;
(h) in connection with any acceleration and foreclosure, the
Administrative Agent may lawfully and peacefully take possession of the
Collateral and lawfully and peacefully render it usable and repair and
renovate the same, without, however, any obligation to do so, and lawfully
and peacefully enter upon any location where the Collateral may be located
for that purpose, control, manage, operate, rent and lease the Collateral,
collect all rents and income from the Collateral and apply the same to
reimburse the Secured Parties for any cost or expenses incurred hereunder
or under any of the Loan Documents and to the payment or performance of any
Debtor's obligations hereunder or under any of the Loan Documents, and
apply the balance to the other Secured Obligations and any remaining excess
balance to whomsoever is legally entitled thereto;
(i) the Administrative Agent may secure the appointment of a receiver
for the Collateral or any part thereof.
6.02 Deficiency. If the proceeds of sale, collection or other
realization of or upon the Collateral by virtue of the exercise of remedies
under Section 6.01 are insufficient to cover the costs and expenses of such
exercise and the payment in full of the Secured Obligations, the Administrative
Agent shall retain all rights and remedies under the Loan Documents, and each
Debtor shall remain liable, with respect to any deficiency.
6.03 Private Sale. The Administrative Agent and the other Secured
Parties shall incur no liability as a result of the sale, lease or other
disposition of all or any part of the Collateral, at any private sale pursuant
to Section 6.01 conducted in a commercially reasonable manner. Subject to and
without limitation of the preceding sentence, Debtor hereby waives any claims
against the Administrative Agent or any other Secured Party arising by reason of
the fact that the price at which the Collateral may have been sold at such a
private sale was less than the price that might have been obtained at a public
sale or was less than the aggregate amount of the Secured Obligations, even if
the Administrative Agent accepts the first offer received and does not offer the
Collateral to more than one offeree.
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6.04 Application of Proceeds. Except as otherwise herein expressly
provided, the proceeds of any collection, sale or other realization of all or
any part of the Collateral pursuant hereto, and any other cash at the time held
by the Administrative Agent under this Article VI, shall be applied by the
Administrative Agent in accordance with Section 11.6 of the Credit Agreement.
6.05 Attorney-in-Fact. Without limiting any rights or powers granted
by this Agreement to the Administrative Agent while no Event of Default has
occurred and is continuing, upon the occurrence and during the continuance of
any Event of Default, each Debtor hereby appoints the Administrative Agent as
the attorney-in-fact of such Debtor for the purpose of carrying out the
provisions of this Article VI and taking any action and executing any
instruments that the Administrative Agent may deem necessary or desirable to
accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest. Without limiting the generality of the
foregoing, so long as the Administrative Agent shall be entitled under this
Article VI to make collections in respect of the Collateral, the Administrative
Agent shall have the right and power
(a) to receive, endorse and collect all checks made payable to the
order of any Debtor representing any dividend, payment or other
distribution in respect of the Collateral or any part thereof and to give
full discharge for the same.
(b) to file any claims or take any action or institute any proceedings
in connection therewith which the Secured Party may deem to be necessary or
advisable;
(c) to pay, settle or compromise all bills and claims which may be or
become liens or security interests against any or all of the Collateral, or
any part thereof, unless a bond or other security satisfactory to the
Secured Party has been provided; and
(d) upon foreclosure, to do any and every act which any Debtor may do
on its behalf with respect to the Collateral or any part thereof and to
exercise any or all of such Debtor's rights and remedies under any or all
of the Collateral;
provided, however, that the Secured Party shall not exercise any such rights
except upon the occurrence and continuation of an Event of Default. This power
of attorney is a power coupled with an interest and shall be irrevocable.
6.06 Expenses.
(a) The Administrative Agent may incur, and Debtors shall pay to the
Administrative Agent, all reasonable fees and out-of-pocket expenses
(including reasonable fees and expenses for legal services) of, or directly
related to, the enforcement of any of the provisions of this Article VI, or
exercise, by experts, agents or attorneys selected by the Administrative
Agent in good faith, of any rights or privileges of Debtors in respect of
the Collateral, or any actual or attempted sale, or any exchange,
enforcement, collection, compromise or settlement in respect of any of the
Collateral, and for the care of the Collateral and defending or asserting
rights and claims of the Administrative Agent and the other Secured Parties
in respect thereof, by litigation or otherwise, and all such fees and
expenses and, to the extent such amounts are not timely paid, together with
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interest thereon at the applicable rate provided for in the Credit
Agreement, shall be Secured Obligations of the Administrative Agent secured
under Article II. All amounts payable by the Debtors under this Section
6.06(a) shall be payable within ten (10) Business Days of demand thereof.
(b) The terms, conditions, covenants and agreements to be observed or
performed by each Debtor under this Agreement shall be observed or
performed by it at its sole cost and expense.
6.07 Administrative Agent's Right to Perform on Debtor's Behalf. If
any Debtor fails to perform any of its obligations under this Agreement, the
Administrative Agent may (but shall not be obligated to), upon reasonable notice
to such Debtor, unless such Debtor is diligently pursuing a cure for such
failure, itself perform or cause to be performed such obligations at the expense
of such Debtor, either in its name or in the name and on behalf of such Debtor.
6.08 Rights of Secured Parties. The Administrative Agent or any other
Secured Party may (but shall not be obligated to) pay or secure payment of any
Taxes or other claim that is determined by a final non-appealable decision of
the applicable authority and that may be secured by or result in a Lien on any
Collateral, unless such Taxes are being contested in accordance with the Credit
Agreement. The Administrative Agent or any other Secured Party may (but shall
not be obligated to) do any other thing that it in good faith believes is
necessary or desirable to preserve, protect or maintain the Collateral. Debtors
shall immediately reimburse the Administrative Agent or any other Secured Party
for any reasonable payment or expense (including reasonable attorneys' fees and
expenses) that the Administrative Agent or such other Secured Party may incur
pursuant to this Section 6.08.
6.09 No Marshalling. Neither the Administrative Agent nor any other
Secured Party shall be required to marshal any present or future collateral
security (including but not limited to the Collateral) for, or other assurances
of payment of, the Obligations or any of them or to resort to such collateral
security or other assurances of payment in any particular order.
6.10 Remedies Cumulative. No right, power or remedy herein conferred
upon or reserved to the Administrative Agent or any Secured Party is intended to
be exclusive of any other right, power or remedy, and every such right, power
and remedy shall, to the extent permitted by law, be cumulative and in addition
to every other right, power and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder or otherwise shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy. Resort to any
or all security now or hereafter held by the Administrative Agent may be taken
concurrently or successively and in one or several consolidated or independent
judicial actions or lawfully taken nonjudicial proceedings, or both.
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ARTICLE VII.
MISCELLANEOUS
7.01 Waivers of Rights Inhibiting Enforcement. Each Debtor waives, for
itself and all who may claim under it, to the maximum extent permitted by
applicable law:
(a) any claim that, as to any part of the Collateral, a public sale,
should the Administrative Agent elect so to proceed, is, in and of itself,
not a commercially reasonable method of sale for the Collateral;
(b) the right to assert in any action or proceeding between it and the
Administrative Agent any offsets or counterclaims that it may have and any
defenses with respect to the circumstances or occurrences described in
Section 2.03(a) through (g);
(c) except as otherwise provided in this Agreement, NOTICE OR JUDICIAL
HEARING IN CONNECTION WITH THE ADMINISTRATIVE AGENT'S TAKING POSSESSION OR
DISPOSITION OF ANY OF THE COLLATERAL INCLUDING ANY AND ALL PRIOR NOTICE AND
HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT THAT ANY
DEBTOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE
UNITED STATES OR OF ANY STATE, AND ALL OTHER REQUIREMENTS AS TO THE TIME,
PLACE AND TERMS OF SALE OR OTHER REQUIREMENTS WITH RESPECT TO THE
ENFORCEMENT OF THE ADMINISTRATIVE AGENT'S RIGHTS HEREUNDER;
(d) all rights of redemption, appraisement, valuation, stay, extension
or moratorium; and
(e) the right to invoke any law requiring marshalling of collateral
and all other rights the exercise of which would, directly or indirectly,
prevent, delay or inhibit the enforcement of any of the rights or remedies
of the Administrative Agent and the other Secured Parties under this
Agreement or the absolute sale of the Collateral, now or hereafter in force
under any applicable law.
7.02 Notices. The Administrative Agent or any Debtor shall give any
notice, request, demand or other communication (a "Notice") pursuant to this
Agreement in accordance with Section 13.1 of the Credit Agreement. Any Notice to
the Debtor shall be sent to the address of the Borrowers set forth in the Credit
Agreement or to such other address provided by such Debtor to the Administrative
Agent in writing. Any Notice sent as hereinabove provided shall be deemed
delivered upon receipt or refusal of delivery.
7.03 Assignment. No Debtor may assign any of its rights or delegate
any performance under this Agreement (whether voluntarily or involuntarily, by
merger, consolidation, dissolution, operation of law or any other manner). Any
purported assignment without such consent is void. When any Lender assigns or
otherwise transfers any interest held by it under the Credit Agreement or other
Loan Document to any other Person pursuant to the terms of the Credit Agreement
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or such other Loan Document, that other Person shall thereupon become vested
with all the benefits held by such Lender under this Security Agreement.
7.04 Successors and Assigns. This Agreement binds the Debtors and
their respective successors and assigns and inures to the benefit of the
Administrative Agent, the Secured Parties and their respective successors and
assigns.
7.05 Amendment and Waiver. No amendment or waiver of any provision of
this Agreement, nor consent to any departure by any Debtor therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Required Lenders, the Borrower and the other Debtors; provided that any
amendment, waiver, or consent shall be signed by all the Lenders to the extent
required by the Credit Agreement. Any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
7.06 No Implied Waiver. No failure or delay in exercising any right,
power or privilege or requiring the satisfaction of any condition hereunder, and
no course of dealing between the Debtors and the Administrative Agent operates
as a waiver or estoppel of any right, remedy or condition. No single or partial
exercise of any right or remedy under this Agreement precludes any simultaneous
or subsequent exercise of any other right, power or privilege. The rights and
remedies set forth in this Agreement are not exclusive of, but are cumulative
to, any rights or remedies now or subsequently existing at law, in equity or by
statute.
7.07 Severability. In case one or more provisions of this Agreement
shall be invalid, illegal or unenforceable in any respect under any applicable
law, the validity, legality, and enforceability of the remaining provisions
contained herein or therein shall not be affected or impaired thereby.
7.08 Entire Agreement. This Agreement and the other Loan Documents
contain the entire agreement between the parties relating to the subject matter
hereof and supersede all prior or contemporaneous oral or written negotiations
and agreements relating to the subject matter hereof. The provisions of this
Agreement may not be explained, supplemented or qualified through evidence or
trade usage or a prior course of dealing. In entering into this Agreement, the
Debtors have not relied upon any statement, representation, warranty or
agreement of the Administrative Agent except as set forth in the Loan Documents.
There are no conditions precedent to the effectiveness of this Agreement. In the
event of any conflict between the terms of this Agreement and the terms of the
Credit Agreement, the terms of the Credit Agreement shall control.
7.09 Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
7.10 Governing Law. The laws of the State of New York (without giving
effect to its conflicts of law principles) govern all matters arising out of or
relating to this Agreement and all of the transactions it contemplates,
including without limitation its validity, interpretation, construction,
performance (including the details of performance) and enforcement, except to
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the extent that the validity or perfection of the security interests hereunder,
or remedies hereunder, in respect of any particular Collateral are governed by
the laws of a jurisdiction other than the State of New York .
7.11 Headings. The descriptive headings of the articles, sections and
subsections of this Agreement are for convenience only and do not constitute a
part of this Agreement.
7.12 Interpretation. This Agreement has been reviewed and negotiated
by counsel for both the Debtors and the Administrative Agent and, consequently,
this Agreement shall not be construed against the drafter.
7.13 Waiver of Jury. THE DEBTORS AND THE ADMINISTRATIVE AGENT HEREBY
IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN RESPECT OF ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
7.14 Survival, Etc. The provisions of Sections 2.06, 6.03, 6.06, 6.08,
6.09, 6.10, 7.01, 7.16, 7.17 and 7.18 shall survive the termination of this
Agreement. In addition, the representations, warranties and covenants of the
Debtors set out in this Agreement or contained in any documents delivered to the
Administrative Agent or any other Secured Party pursuant to this Agreement shall
survive the execution and delivery of this Agreement.
7.15 Agents, Etc. The Administrative Agent may employ agents, experts
and attorneys-in-fact in connection herewith and shall not be responsible for
the negligence or misconduct of any such agents, experts or attorneys-in-fact
selected by it in good faith.
7.16 Limitation of Liability. NEITHER THE ADMINISTRATIVE AGENT NOR ANY
OTHER SECURED PARTY SHALL HAVE LIABILITY WITH RESPECT TO, AND DEBTORS HEREBY
WAIVE, RELEASE AND AGREE NOT TO XXX FOR:
(a) ANY LOSS OR DAMAGE SUSTAINED BY ANY DEBTOR, OR ANY LOSS, DAMAGE,
DEPRECIATION OR OTHER DIMINUTION IN THE VALUE OF ANY COLLATERAL, THAT MAY
OCCUR AS A RESULT OF, IN CONNECTION WITH, OR THAT IS IN ANY WAY RELATED TO,
ANY EXERCISE OF ANY RIGHT OR REMEDY UNDER THIS AGREEMENT EXCEPT FOR ANY
SUCH LOSS, DAMAGE, DEPRECIATION OR DIMINUTION TO THE EXTENT THAT THE SAME
IS THE RESULT OF ACTS OR OMISSIONS ON THE PART OF SUCH SECURED PARTY
CONSTITUTING WILLFUL MISCONDUCT OR GROSS NEGLIGENCE (AS FINALLY DETERMINED
BY A COURT OF COMPETENT JURISDICTION); OR
(b) ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR
EXEMPLARY DAMAGES SUFFERED BY ANY DEBTOR IN CONNECTION WITH ANY CLAIM
RELATED TO THIS AGREEMENT.
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7.17 Subrogation. Each Debtor shall not exercise, and hereby
irrevocably waives, any claim, right or remedy that it may now have or may
hereafter acquire against any other Debtor arising under or in connection with
this Agreement, including, without limitation, any claim, right or remedy of
subrogation, contribution, reimbursement, exoneration, indemnification or
participation arising under contract, by applicable law or otherwise in any
claim, right or remedy of the Administrative Agent or the other Secured Parties
against such Debtor or any other Person or any Collateral which the
Administrative Agent or any other Secured Party may now have or may hereafter
acquire, until the indefeasible payment and satisfaction in full of all Secured
Obligations and the expiration and termination of the Commitments. If,
notwithstanding the preceding sentence, any amount shall be paid to any Debtor
on account of such subrogation rights at any time when any of the Secured
Obligations shall not have been paid in full, such amount shall be held by such
Debtor in trust for the Administrative Agent and the other Secured Parties,
segregated from other funds of such Debtor and be turned over to the
Administrative Agent in the exact form received by such Debtor (duly endorsed by
such Debtor to the Administrative Agent, if required), to be applied against the
Secured Obligations, whether matured or unmatured, in accordance with the Loan
Documents. Notwithstanding the foregoing, the Debtors shall be expressly
permitted hereunder to make payments to each other to the extent not prohibited
by the Credit Agreement.
7.18 Authority of the Administrative Agent. The rights and
responsibilities of the Administrative Agent under this Agreement with respect
to any action taken by the Administrative Agent or the exercise or non-exercise
by the Administrative Agent of any power, right or remedy provided for or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the Secured Parties, be governed by the Credit Agreement and by such
other agreements with respect thereto as may exist from time to time among them,
but, as between the Administrative Agent and Debtors, the Administrative Agent
shall be conclusively presumed to be acting as the Administrative Agent for the
Secured Parties with full and valid authority so to act or refrain from acting,
and Debtors shall be under no obligation or entitlement to make any inquiry
respecting such authority.
[Signatures on separate pages]
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EXHIBIT A
GRANT OF TRADEMARK SECURITY INTEREST
WHEREAS, [_______________], a [_________________] ("Grantor"), owns
various intangible assets, including the Trademark Collateral (as defined
below); and
WHEREAS, pursuant to the Credit Agreement dated as of March 23, 2005
(the "Credit Agreement"), among Xxxxxx Automotive, Inc., a Delaware corporation
(the "Company"), the Wholly-Owned Subsidiaries of the Company listed on the
signature pages thereof and such other Wholly-Owned Subsidiaries of the Company
which hereafter shall become parties thereto (the "Floor Plan Borrowers"), the
Lenders party thereto (the "Lenders"), JPMorgan Chase Bank, N.A., as
Administrative Agent, JPMorgan Chase Bank, N.A., as Floor Plan Agent, Bank of
America, N.A., as Syndication Agent, X.X. Xxxxxx Securities Inc. and Banc of
America Securities LLC, as Co-Lead Arrangers and Joint Bookrunners, the Lenders
have agreed to make Loans to and make other extensions of credit on behalf of
the Company (capitalized terms used but not defined herein have the respective
meanings assigned to them in the Credit Agreement); and
WHEREAS, pursuant to the terms of the Security and Pledge Agreement
dated as of March 23, 2005 (as amended, supplemented or otherwise modified from
time to time, the "Security Agreement"), among the Company, all Subsidiaries of
the Company other than the Floor Plan Borrowers (Toyota/Lexus) and JPMorgan
Chase Bank, N.A., as Administrative Agent and collateral agent for each of the
Secured Parties (as defined in the Security Agreement) (in such capacity, the
"Administrative Agent"), Grantor has agreed to grant in favor of the
Administrative Agent a perfected security interest in, and the Administrative
Agent has agreed to become a secured creditor with respect to, Trademark
Collateral;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, subject to the terms and conditions
of the Security Agreement, Grantor hereby grants to the Administrative Agent a
security interest in all of Grantor's right, title and interest in and to the
following, in each case whether now or hereafter existing and in which Grantor
now or hereafter owns and wherever the same may be located (the "Trademark
Collateral"):
(i) all trade names, trademarks and service marks, logos,
trademark and service xxxx registrations, and applications for
trademark and service xxxx registrations, including but not limited to
those registrations and applications listed on Schedule A;
(ii) all renewals of trademark and service xxxx registrations;
(iii) all rights (A) to all income, royalties, damages and
other payments (including in respect of all past, present and future
infringements) with respect to any of the foregoing, (B) to xxx for all
past, present and future infringements thereof, and (C) otherwise
accruing under or pertaining to any of the foregoing, together, in each
case, with the product lines and goodwill of the business connected
with the use of, and symbolized by, each such trade name, trademark and
service xxxx; and
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(iv) all causes of action, claims and warranties now or
hereafter owned or acquired by Grantor in respect of any of the items
listed above.
Notwithstanding anything herein to the contrary, in no event shall the
Trademark Collateral include, and Grantor shall not be deemed to have granted a
security interest in, any of Grantor's rights or interests in any license,
contract or agreement to which Grantor is a party or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement or otherwise,
result in a breach of the terms of, or constitute a default under any license,
contract or agreement to which Grantor is a party; provided, that immediately
upon the ineffectiveness, lapse or termination of any such provision, the
Trademark Collateral shall include, and Grantor shall be deemed to have granted
a security interest in, all such rights and interests as if such provision had
never been in effect.
Grantor further acknowledges that the rights and remedies of the
Administrative Agent with respect to the security interest in the Trademark
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, Grantor has caused this Grant of Trademark
Security Interest to be duly executed and delivered by its duly authorized
officer as of the __ day of _______, _____.
[----------------------------------]
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
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SCHEDULE A
TO
GRANT OF TRADEMARK SECURITY INTEREST
United States Registration or Registration
Registered Owner Trademark/Service Xxxx Serial Number or Filing Date
---------------- ---------------------- ------------- --------------
ANNEX 1.01
Trademark Collateral
ANNEX 4.01
Filing Offices
ANNEX 4.03
Debtor Information
ANNEX 4.04
Previous Names and Transactions
ANNEX 4.05
Offices and Locations of Records
ANNEX 4.06
Locations of Inventory
ANNEX 4.09
Filings
ANNEX 4.10
Deposit Accounts and Securities Accounts
ANNEX 4.11
Letters of Credit
ANNEX 4.12
Commercial Tort Claims
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (this "Guaranty") dated as of March 23, 2005,
made by Xxxxxx Automotive Group, Inc. (the "Company") and each of the
undersigned Subsidiaries of the Company and such other Subsidiaries of the
Company which hereafter become parties to this Guaranty (together with the
Company, each, a "Guarantor," and collectively, the "Guarantors"), in favor of
JPMorgan Chase Bank, N.A. as Agent (the "Agent") for the benefit of the Lenders
pursuant to that certain Revolving Credit Agreement dated as of even date
herewith (the "Credit Agreement"), by and among the Company and the Floor Plan
Borrowers (the Company and the Floor Plan Borrowers are herein referred to as
the "Borrowers"), the Agent, the Syndication Agent and the Lenders.
W I T N E S S E T H
WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to
make Loans to the Borrowers in a manner and upon the terms and conditions set
forth therein;
WHEREAS, in accordance with the Credit Agreement, the Agent requires
that the Guarantors execute a guaranty agreement guaranteeing the Obligations of
the Borrowers under the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and agreements herein
and in order to induce the Lenders to make the Loans pursuant to the Credit
Agreement, the Guarantors hereby agree as follows:
Section 1. Definitions. Capitalized terms used herein and not
otherwise defined shall have the respective meanings assigned thereto in the
Credit Agreement.
Section 2. Guaranty of Payment. Each Guarantor (not merely as a surety
or guarantor of collection)hereby jointly, severally, unconditionally and
irrevocably, guarantees the punctual payment and performance when due, whether
at stated maturity, as an installment, by prepayment or by demand, acceleration
or otherwise, of all Obligations of the Borrowers heretofore or hereafter
existing. If any or all of the Obligations become due and payable under the
Credit Agreement, the Guarantors jointly and severally and unconditionally
promise to pay such Obligations, on demand, together with any and all expenses
(including reasonable counsel fees and expenses), which may be incurred by the
Agent in collecting any of the Obligations and in connection with the
protection, defense and enforcement of any rights under the Credit Agreement or
under any other Loan Document (the "Expenses"). The Guarantors guarantee that
the Obligations shall be paid strictly in accordance with the terms of the
Credit Agreement. The Obligations include, without limitation, interest accruing
after the commencement of a proceeding under bankruptcy, insolvency or similar
laws of any jurisdiction at the rate or rates provided in the Credit Agreement.
The Agent shall not be required to exhaust any right or remedy or take any
action against any Borrower or any other person or entity or any collateral
prior to any demand or other action hereunder against the Guarantors. The
Guarantors agree that, as between the Guarantors and the Agent, the Obligations
may be declared to be due and payable for the purposes of this Guaranty
notwithstanding any stay, injunction or other prohibition which may prevent,
delay or vitiate any declaration as regards the Borrowers and that in the event
of a declaration or attempted declaration, the Obligations shall immediately
become due and payable by the Guarantors for the purposes of this Guaranty and
each Guarantor shall forthwith pay the Obligations specified by the Agent to be
paid as provided in the Credit Agreement without further notice or demand.
Notwithstanding anything contained herein or in the Credit Agreement, any Loan
Document or any other document or any other agreement, security document or
instrument relating hereto or thereto to the contrary, the maximum liability of
each Guarantor hereunder shall never exceed the maximum amount that said
Guarantor could pay without having such payment set aside as a fraudulent
transfer or fraudulent conveyance or similar action under the U.S. Bankruptcy
Code or applicable state or foreign law.
Section 3. Guaranty Absolute. The liability of each Guarantor under
this Guaranty is absolute and unconditional irrespective of: (a) any change in
the time, manner or place of payment of, or in any other term of, the Credit
Agreement or the Obligations, or any other amendment or waiver of or any consent
to departure from any of the terms of the Credit Agreement or the Obligations,
including any increase or decrease in the rate of interest thereon; (b) any
release or amendment or waiver of, or consent to departure from, any other
guaranty or support document, or any exchange, release or non-perfection of any
collateral, for the Credit Agreement or the Obligations; (c) any present or
future law, regulation or order of any jurisdiction (whether of right or in
fact) or of any agency thereof purporting to reduce, amend, restructure or
otherwise affect any term of the Credit Agreement or the Obligations; (d)
without being limited by the foregoing, any lack of validity or enforceability
of the Credit Agreement or the Obligations; (e) any other setoff, defense or
counterclaim whatsoever (in any case, whether based on contract, tort or any
other theory) with respect to the Credit Agreement or the transactions
contemplated thereby which might constitute a legal or equitable defense
available to, or discharge of, the Borrowers or other Guarantors and (f) any
claim or assertion that any payment by any Guarantor hereunder should be set
aside pursuant to Section 2 in connection with any stay, injunction or other
prohibition or event, in which case each Guarantor shall be unconditionally
required to pay all amounts demanded of it hereunder prior to any determination
of the maximum liability of each Guarantor hereunder in accordance with Section
2 and the recipient of such payment, if so required by a final non-appealable
court of competent jurisdiction by a final and non-appealable judgment, shall
then be liable for the refund of any excess amounts. If any such rebate or
refund is ever required, all other Guarantors shall be fully liable for the
repayment thereof to the maximum extent allowed by applicable law.
Section 4. Guaranty Irrevocable. This Guaranty is a continuing
guaranty of the payment of all Obligations now or hereafter existing under the
Credit Agreement and shall remain in full force and effect until payment in full
of all Obligations and other amounts payable under this Guaranty and until all
Commitments of the Lenders to make Loans under the Credit Agreement shall be
terminated in accordance with the terms thereof and the Credit Agreement is no
longer in effect.
Section 5. Reinstatement. This Guaranty shall continue to be
effective, or be automatically reinstated, as the case may be, if at any time
any payment of any of the Obligations is rescinded or must otherwise be returned
by the Agent on the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any of the Borrowers, any Guarantor, or any Person that is a
party to the Loan Documents, or upon or as a result of the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to any of the Borrowers, any Guarantor or any other Person that is a party to
the Loan Documents, or otherwise, all as though the payment had not been made.
Section 6. Subrogation. Each Guarantor hereby agrees that it shall not
exercise any rights which it may acquire by way of subrogation, by any payment
made under this Guaranty or otherwise, until all the Obligations have been paid
in full and the Credit Agreement is no longer in effect. Any amounts paid to a
Guarantor on account of subrogation rights under this Guaranty at any time when
all the Obligations have not been paid in full, shall be held in trust for the
benefit of the Agent and shall promptly be paid to the Agent to be credited and
applied to the Obligations, whether matured or unmatured or absolute or
contingent, in accordance with the terms of the Credit Agreement. If a Guarantor
has made a payment to the Agent hereunder of all or any part of the Obligations
and all the Obligations are paid in full and the Credit Agreement is no longer
in effect, the Agent shall, at such Guarantor's request, execute and deliver to
the Guarantor the appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation to
the Guarantor of an interest in the Obligations resulting from the payment.
Section 7. Subordination. Any liabilities owed by the Borrowers to the
Guarantors in connection with any extension of credit or financial accommodation
by the Guarantors to or for the account of the Borrowers, including but not
limited to interest accruing at the agreed contract rate after the commencement
of a bankruptcy or similar proceeding, are hereby subordinated to the
Obligations, and such liabilities of the Borrowers to the Guarantors, if the
Agent so requests, shall be collected, enforced and received by the Guarantors
as trustee for the Agent and shall be paid over to the Agent on account of the
Obligations.
Section 8. Certain Taxes. The Guarantors further agree that all
payments to be made hereunder shall be made without setoff or counterclaim and
free and clear of, and without deduction for Taxes. If any Taxes are required to
be withheld from any amounts payable to the Agent hereunder, the amounts so
payable to the Agent shall be increased to the extent necessary to yield to the
Agent (after payment of all Taxes) the amounts payable hereunder in the full
amounts so to be paid. Whenever any Tax is paid by a Guarantor, as promptly as
possible thereafter, such Guarantor shall send the Agent an official receipt
showing payment thereof, together with such additional documentary evidence as
may be required from time to time by the Agent.
Section 9. Representations and Warranties. Each of the Guarantors
represents and warrants that: (a) this Guaranty (i) has been authorized by all
necessary action; (ii) does not violate any agreement, instrument, law,
regulation or order applicable to it; (iii) does not require the consent or
approval of any Person, or any filing or registration of any kind; and (iv) is
the legal, valid and binding obligation of such Guarantor enforceable against
such Guarantor in accordance with its terms, except to the extent that
enforcement may be limited by applicable bankruptcy, insolvency and other
similar laws affecting creditors' rights generally; and (b) in executing and
delivering this Guaranty, such Guarantor has not relied and will not rely upon
any representations or warranties of the Agent not embodied herein or any acts
heretofore or hereafter taken by the Agent (including but not limited to any
review by the Agent of the affairs of the Borrowers).
Section 10. Remedies Generally. The remedies provided in this Guaranty
are cumulative and not exclusive of any remedies provided by law.
Section 11. Setoff. Each Guarantor agrees that, in addition to (and
without limitation of) any right of setoff, banker's lien or counterclaim the
Agent or the Lenders may otherwise have, the Agent and each of the Lenders shall
be entitled, at their option, to offset balances (general or special, time or
demand, provisional or final) held by them for the accounts of the Guarantors at
any of the Agent's or any Lender's offices, in U.S. dollars or in any other
currency, against any amount payable by the Guarantors under this Guaranty which
is not paid when due, in which case it shall promptly notify the Guarantors
thereof; provided that the Agent's or any Lender's failure to give such notice
shall not affect the validity thereof.
Section 12. Formalities. Each Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations, the Credit Agreement and this Guaranty and any liability to which
the Credit Agreement and this Guaranty applies or may apply, and waives
presentment, demand of payment, notice of intent to accelerate, notice of
acceleration, notice of dishonor or nonpayment, and any requirement that the
Agent institute suit, collection proceedings or take any other action to collect
the Obligations, including any requirement that the Agent protect, secure,
perfect or insure any security interest or Lien against any Property subject
thereto or exhaust any right or take any action against the Borrowers or any
other Person (including the other Guarantors) or any Collateral (it being the
intention of the Agent and each Guarantor that the obligations of such Guarantor
under this Guaranty are to be a guaranty of payment and not of collection) or
that any Borrower or any other Person (including the other Guarantors) be joined
in any action hereunder. Each Guarantor hereby waives marshaling of assets and
liabilities, notice by the Agent of the creation of any Indebtedness or
liability to which it applies or may apply, any amounts received by the Agent,
notice of disposition or substitution of Collateral and of the creation,
advancement, increase, existence, extension, renewal, rearrangement and/or
modification of the Obligations.
Section 13. Amendments and Waivers. No amendment or waiver of any
provision of this Guaranty, nor consent to any release by any Guarantor
therefrom, shall be effective unless it is in writing and signed by the Agent
and such Guarantor, and then the waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given. No failure
on the part of the Agent to exercise, and no delay in exercising, any right
under this Guaranty shall operate as a waiver or preclude any other or further
exercise thereof or the exercise of any other right.
Section 14. Expenses. The Guarantors shall reimburse the Agent on
demand for all Expenses without duplication of any reimbursements affected under
the Credit Agreement. The obligations of the Guarantors under this Section shall
survive the termination of this Guaranty.
Section 15. Assignment. This Guaranty shall be binding on, and shall
inure to the benefit of the Guarantors, the Agent and their respective
successors and assigns; provided that the Guarantors may not assign or transfer
their respective rights or obligations under this Guaranty. Without limiting the
generality of the foregoing: (a) the obligations of the Guarantors under this
Guaranty shall continue in full force and effect and shall be binding on any
successor partnership and on previous partners and their respective estates if
any of the Guarantors is a partnership, regardless of any change in the
partnership as a result of death, retirement or otherwise; and (b) the Agent may
assign, sell participations in or otherwise transfer its rights under the Credit
Agreement to any other person or entity in accordance with the terms and
conditions thereof, and the other person or entity shall then become vested with
all the rights granted to the Agent in this Guaranty or otherwise.
Section 16. Captions. The headings and captions in this Guaranty are
for convenience only and shall not affect the interpretation or construction of
this Guaranty.
Section 17. Governing Law, Etc. THIS GUARANTY SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. EACH GUARANTOR
CONSENTS TO THE NONEXCLUSIVE JURISDICTION AND VENUE OF THE STATE OR FEDERAL
COURTS LOCATED IN THE CITY OF NEW YORK. SERVICE OF PROCESS BY THE AGENT IN
CONNECTION WITH ANY SUCH DISPUTE SHALL BE BINDING ON EACH GUARANTOR IF SENT TO
SUCH GUARANTOR BY REGISTERED MAIL AT THE ADDRESS SPECIFIED BELOW OR AS OTHERWISE
SPECIFIED BY SUCH GUARANTOR FROM TIME TO TIME. EACH GUARANTOR WAIVES ANY RIGHT
IT MAY HAVE TO JURY TRIAL IN ANY ACTION RELATED TO THIS GUARANTY OR THE
TRANSACTIONS CONTEMPLATED HEREBY AND FURTHER WAIVES ANY RIGHT TO INTERPOSE ANY
COUNTERCLAIM RELATED TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY IN
ANY SUCH ACTION. TO THE EXTENT THAT ANY GUARANTOR HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
FROM SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OF A JUDGMENT, EXECUTION OR OTHERWISE), EACH SUCH GUARANTOR HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
GUARANTY.
Section 18. Integration; Effectiveness. This Guaranty alone sets forth
the entire understanding of the Guarantors and the Agent relating to the
guarantee of the Obligations and constitutes the entire contract between the
parties relating to the subject matter hereof and supersedes any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof. This Guaranty shall become effective when it shall have been
executed and delivered by the Guarantors to the Agent. Delivery of an executed
signature page of this Guaranty by telecopy shall be effective as delivery of a
manually executed signature page of this Guaranty.
[SIGNATURES ON SEPARATE PAGES]
