AMENDMENT AGREEMENT NO. 3
to that certain
REVOLVING CREDIT AGREEMENT
This AMENDMENT AGREEMENT NO. 3 (the "Amendment"), dated as of
March 19, 1998, is among National Auto Finance Company, Inc. (the "Borrower"),
BankBoston, N.A. and the other lending institutions party thereto (collectively
the "Banks"), and BankBoston, N.A. as agent (the "Agent") for itself and the
other Banks.
WHEREAS, the Borrower, the Banks and the Agent are parties to that
certain Revolving Credit Agreement, dated as of September 29, 1997 (as amended
by Amendment No. 1, dated as of October 1, 1997 and an Amendment Agreement No.
2, dated as of December 19, 1997, the "Credit Agreement"), pursuant to which the
Banks, upon certain terms and conditions, have made loans to the Borrower; and
WHEREAS, the Borrower had requested that the Banks agree, and the Banks
have agreed, on the terms and subject to the conditions set forth herein, to
make certain changes to the Credit Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
SS.1. DEFINED TERMS. Capitalized terms which are used herein
--------------
without definition and which are defined in the Credit Agreement shall have the
same meanings herein as in the Credit Agreement.
SS.2. AMENDMENT OF CREDIT AGREEMENT. The Credit Agreement is
-----------------------------
hereby amended as follows:
(a) Section 1.1 of the Credit Agreement is amended as follows:
(i) Clause (b) of the definition of Borrowing Base set
forth in such ss.1.1 is amended by deleting the text "; plus"
at the end of such clause and substituting in place thereof a
period.
(ii) Clause (c) of the definition of Borrowing Base
set forth in such ss.1.1 is deleted in its entirety.
(iii) Clause (g) of the definition of Eligible Vehicle
Loan set forth in such ss.1.1 is amended and restated in its
entirety to read as follows:
"(g) that is consistent with the Borrower's
Current Policies Regarding Purchase of Retail
Installment Vehicle Loans or, if a Portfolio Loan,
the Borrower's Criteria for Purchasing Vehicle Loans,"
2
(iv) Clause (h) of the definition of Eligible Vehicle
Loan set forth in such ss.1.1 is amended and restated in its
entirety to read as follows:
"(h) except with respect to Portfolio Loans, that has
a bureau (Beacon) score rating of 550 points or more
("C" rated paper) at the time of origination,"
(v) Clause (l) of the definition of Eligible Vehicle
Loan set forth in such ss.1.1 is amended and restated in its
entirety to read as follows:
"(l) that has not previously been sold, discounted or
transferred to any Person, other than (i) Portfolio
Loans or (ii) Vehicle Loans sold in connection with
previously completed asset securitizations which have
been repurchased by the Borrower, and"
(vi) Section 1.1 is further amended by adding the
following new definitions:
A. Criteria for Purchasing Vehicle Loans. With
respect to Eligible Vehicle Loans, the Borrower's
policies regarding the origination and purchase of
such retail installment car loans from third parties
in the form of Exhibit H hereto, as such policies may
be amended, restated, supplemented, or otherwise
modified from time to time only with the prior
written consent of the Agent.
B. Portfolio Loans. A Vehicle Loan (a) which is
originated by a third party that is not an Affiliate
of the Borrower, (b) which is purchased by the
Borrower as part of a portfolio of Vehicle Loans from
such third party at purchase prices not greater than
fair market value pursuant to good xxxxx xxxx fide
transactions consistent with the Criteria for
Purchasing Vehicle Loans and (c) in respect of which
the Borrower shall have delivered to the Agent, in
form and substance satisfactory to the Agent, the
following: (i) a true, correct and complete copy of
the purchase and sale agreement relating to the
Borrower's purchase of such portfolio of Vehicle
Loans; (ii) a Compliance Certificate demonstrating
compliance with the covenants set forth in ss.9 of
the Credit Agreement after giving pro forma effect to
the Borrower's purchase of such portfolio of Vehicle
Loans and any borrowings made in connection
therewith; (iii) a Borrowing Base Report dated as of
the date of the purchase of such portfolio of Vehicle
Loans; and (iv) such other information regarding such
portfolio of Vehicle Loans as the Agent may
reasonably request.
3
(vii) Section 1.1 is also amended by deleting the
definitions of Excess Spread Receivables, Residual Value and
Spread Accounts set forth in such ss.1.1 in their entirety.
(b) Section 6.22(c) of the Credit Agreement is amended by
adding at the end of such clause (c) the following sentence: "Exhibit H
hereto completely and accurately described the Borrower's Criteria for
Purchasing Vehicle Loans as in effect on the date hereof."
(c) Section 7.9.2 of the Credit Agreement is amended by
deleting the text "the Borrower will obtain and deliver to the Agent"
in the first sentence thereof and substituting in place thereof the
following text: "the Borrower will cooperate with the Agent in the
Agent's obtaining".
(d) Section 8.3(i) of the Credit Agreement is amended and
restated in its entirety to read as follows:
(i) in purchases of Portfolio Loans.
(e) Section 8.8 of the Credit Agreement is amended by deleting
the last sentence thereof in its entirety.
(f) Exhibit A to the Credit Agreement is amended and replaced
in its entirety by the Exhibit A attached hereto. All references to
Exhibit A to the Credit Agreement contained in any of the Loan
Documents shall hereinafter be deemed to refer to the Exhibit A
attached hereto.
SS.3. AFFIRMATION AND ACKNOWLEDGMENT OF THE BORROWER. The Borrower
----------------------------------------------
hereby ratifies and confirms all of its Obligations to the Banks, including,
without limitation the Loans, and the Borrower hereby affirms its absolute and
unconditional promise to pay to the Banks the Loans and all other amounts due
under the Credit Agreement as amended hereby. The Borrower hereby confirms that
the Obligations are and remain secured pursuant to the Security Documents and
pursuant to all other instruments and documents executed and delivered by the
Borrower as security for the Obligations.
SS.4. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents
--------------------------------
and warrants to the Banks as follows:
(a) The execution and delivery by the Borrower of this
Amendment and all other instruments and agreements required to be
executed and delivered by the Borrower in connection with the
transactions contemplated hereby or referred to herein (collectively,
the "Amendment Documents"), and the performance by the Borrower of its
obligations and agreements under the Amendment Documents and the Credit
Agreement as amended hereby, are within the corporate authority of the
4
Borrower, have been authorized by all necessary corporate proceedings
on behalf of the Borrower, and do not and will not contravene any
provision of law, statute, rule or regulation to which the Borrower or
any of its Subsidiaries is subject or any of the Borrower's charter,
other incorporation papers, by-laws or any stock provision or any
amendment thereof or of any indenture, agreement, instrument or
undertaking binding upon the Borrower.
(b) The Amendment Documents and the Credit Agreement as
amended hereby constitute legal, valid and binding obligations of the
Borrower, enforceable in accordance with their respective terms, except
as limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting generally the enforcement of
creditors' rights.
(c) No approval or consent of, or filing with, any
governmental agency or authority is required to make valid and legally
binding the execution, delivery or performance by the Borrower of the
Amendment Documents or the Credit Agreement as amended hereby, or the
consummation by the Borrower of the transactions among the parties
contemplated hereby and thereby or referred to herein.
(d) The representations and warranties contained in ss.6 of
the Credit Agreement were correct at and as of the date made. Except to
the extent of changes resulting from transactions contemplated or
permitted by the Credit Agreement and changes occurring in the ordinary
course of business that singly or in the aggregate are not materially
adverse and to the extent such representations and warranties relate
expressly to an earlier date, such representations and warranties also
are correct at and as of the date hereof; provided, however, the Agent
and the Banks acknowledge that the application of FAS 125 and its
effects on securitization assets, including the Borrower's assets, and
the use of "gain-on-sale" accounting, in general, are presently under
review by the Borrower's accountants and the accounting profession as a
whole. The Agent and the Banks further acknowledge that any change in
the interpretation or application of FAS 125 to the gain-on-sale
accounting policies utilized by the Borrower and the assumptions
underlying those policies may affect the financial condition and
operating results of the Borrower for 1997 and in the future..
(e) The Borrower has performed and complied in all material
respects with all terms and conditions herein required to be performed
or complied with by it prior to or at the time hereof, and as of the
date hereof, after giving effect to the provisions hereof, there exists
no Event of Default or Default.
SS.5. EFFECTIVENESS. The effectiveness of this Amendment shall be
-------------
subject to the satisfaction of the following conditions:
(a) Delivery. Each of the Borrower, the Agent and the Banks
shall have executed and delivered this Amendment.
(b) Proceedings and Documents. All proceedings in connection
with the transactions contemplated by this Amendment, the transactions
contemplated by the Securities Purchase Agreement and all documents
5
incident thereto shall be reasonably satisfactory in substance and form
to the Banks, the Agent and the Agents' Special Counsel, and the Banks,
the Agent and such counsel shall have received all information and such
counterpart originals or certified or other copies of such documents as
the Agent may reasonably request.
SS.6 MISCELLANEOUS PROVISIONS. (a) Except as otherwise expressly
provided by this Amendment, all of the terms, conditions and provisions of the
Credit Agreement shall remain the same. It is declared and agreed by each of the
parties hereto that the Credit Agreement, as amended hereby, shall continue in
full force and effect, and that this Amendment and the Credit Agreement shall be
read and construed as one instrument.
(b) THIS AMENDMENT IS INTENDED TO TAKE EFFECT AS AN AGREEMENT UNDER
SEAL AND SHALL BE CONSTRUED ACCORDING TO AND GOVERNED BY THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS.
(c) This Amendment may be executed in any number of counterparts, but
all such counterparts shall together constitute but one instrument. In making
proof of this Amendment it shall not be necessary to produce or account for more
than one counterpart signed by each party hereto by and against which
enforcement hereof is sought.
(d) Pursuant to ss.15 of the Credit Agreement, the Borrower hereby
agrees to pay to the Agent, on demand by the Agent, all reasonable out-of-pocket
costs and expenses incurred or sustained by the Agent in connection with the
preparation of this Amendment (including reasonable legal fees).
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
6
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first written above.
NATIONAL AUTO FINANCE COMPANY,
INC.
By:____________________________________
Title:
BANKBOSTON, N.A.,
individually and as Agent
By:____________________________________
Title:
EXHIBIT A
---------
FORM OF BORROWING BASE REPORT
-----------------------------
FOR THE MONTH ENDED ______________
BankBoston, N.A., as Agent
000 Xxxxxxx Xxxxxx, 00-00-00
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Director
Ladies and Gentlemen:
Reference is hereby made to that certain Revolving Credit Agreement,
dated as of September 29, 1997 (as the same may be amended and in effect from
time to time, the "Credit Agreement"), by and among National Auto Finance
Company, Inc. (the "Borrower"), BankBoston, N.A. ("BKB"), the other lending
institutions party thereto (collectively with BKB, the "Banks"), BKB as agent
for itself and the other Banks (the "Agent"). Capitalized terms which are used
herein without definition and which are defined in the Credit Agreement shall
have the same meanings herein as in the Credit Agreement.
The undersigned hereby certifies as follows: (a) the information
furnished in the materials attached hereto was true, correct and complete in all
material respects as of the last day of the calendar month immediately preceding
the date of this certificate; (b) as of the date hereof, there exists no Default
or Event of Default; and (c) the representations and warranties contained in
ss.6 of the Credit Agreement were correct in all material respects when made and
are correct at and as of the date hereof except to the extent (i) any such
representation or warranty expressly relates to an earlier date, or (ii) of
changes resulting from transactions contemplated or permitted by the Credit
Agreement and changes occurring in the ordinary course of business that singly
or in the aggregate are not materially adverse.
BankBoston, N.A., as Agent
Page 2
IN WITNESS WHEREOF, the undersigned has executed this Borrowing Base
Certificate on behalf of the Borrower, as of the date written below.
Very truly yours,
NATIONAL AUTO FINANCE COMPANY,
INC.
By:
Name:
Title:
Date:_________________
BORROWING BASE WORKSHEET
NATIONAL AUTO FINANCE COMPANY, INC.
As of _______________, 19__
I. NET AMOUNT OF ELIGIBLE VEHICLE LOANS
------------------------------------
A. Outstanding principal amount of Vehicle Loans pledged to the Agent for
the benefit of the Banks pursuant to the Security Agreement $_________
Minus: Ineligible Vehicle Loans
i. Outstanding principal amount of Stayed Loans $_________
ii. Outstanding principal amount of Vehicle Loans not secured
by an Eligible Vehicle $_________
iii. Outstanding principal amount of Vehicle Loans not denominated
and payable in Dollars to an Obligor
(other than an Affiliate of the Borrower) $_________
iv. Outstanding principal amount of Vehicle Loans (A) (1) not
originated by a Dealer other than a Dealer that is an Affiliate
of the Borrower, (2) not originated by an ACCH Lender other than
an ACCH Lender that is an Affiliate of the Borrower, or (3) not
otherwise consented to in writing by the Agent, and (B) not
purchased pursuant to a Dealer
Agreement or an ACCH Agreement $_________
v. Outstanding principal amount of Vehicle Loans that are presently
delinquent (without regard to any stated grace
period) for more than sixty (60) days past any payment date $_________
vi. Outstanding principal amount of Vehicle Loans in respect of
which the related motor vehicle, if repossessed, is not an
Eligible Repossessed Vehicle $_________
vii. Outstanding principal amount of Vehicle Loans that the Obligor
on which has been granted more than five (5) extensions or other
forbearances in connection with any delinquencies of more than
150 days in the aggregate during the initial term of such
Vehicle Loans $_________
viii. Outstanding principal amount of Vehicle Loans that are not
consistent with the Borrower's Current Policies Regarding
Purchase of Retail Installment Vehicle Loans or, if a Portfolio
Loan, the Borrower's Criteria for Purchasing Vehicle Loans $_________
2
ix. Outstanding principal amount of Vehicle Loans with a Beacon
(bureau) score rating of less than 550 points (not "C"
rated paper) (excluding Portfolio Loans) $_________
x. Outstanding principal amount of Vehicle Loans for which opinions
regarding such Vehicle Loans constituting chattel paper that are
reasonably satisfactory to the Agent have not been delivered
$_________
xi. Outstanding principal amount of Vehicle Loans that are not
covered by Eligible Insurance $_________
xii. Outstanding principal amount of Vehicle Loans in respect of
which the representations and warranties set forth in the
Security Agreement are not true $_________
xiii. Outstanding principal amount of Vehicle Loans that have
previously been sold, discounted or transferred to any Person
(excluding Portfolio Loans or Vehicle Loans sold in connection
with previously completed asset securitizations which have been
repurchased by the Borrower) $_________
xiv. Outstanding principal amount of Vehicle Loans that the Agent
otherwise deems in its reasonable judgment to be not collectible $_________
B. Total Ineligible Vehicle Loans (sum of items (i) through (xiv)) $_________
C. To the extent included in the principal amounts of such Vehicle Loans, (i)
unearned interest and finance charges with respect to future periods (or
reserves with respect to unearned interest and finance charges) and (ii)
unless otherwise deducted as shown on the balance sheet of the Borrower,
any categories of reserves, credits and discounts with respect to such
Vehicle Loans $_________
D. Net Amount of Eligible Vehicle Loans pledged to the Agent for the
benefit of the Banks pursuant to the Security Agreement $_________
(difference of item I(A) minus item I(B) minus item I(C))
E. Formula (Advance Rate) 90%
F. Net Amount of Eligible Vehicle Loans Availability $_________
II. ELIGIBLE REPOSSESSED VEHICLES
-----------------------------
A. Determined Value of Eligible Vehicle Inventory $_________
Minus: Ineligible Repossessed Vehicles
i. Determined Value of Eligible Vehicles that have been
repossessed by the Borrower and are not in the possession
of ADT $_________
3
ii. Determined Value of Eligible Vehicles that have been in the
inventory of ADT for more than sixty (60) days after the date
of such repossession $_________
iii. Determined Value of Eligible Vehicles as to which the Obligor
has (A) filed a petition or sought relief under or taken
advantage of any insolvency law, (B) made an assignment for the
benefit of its creditors, (C) commenced a proceeding for the
appointment of a receiver, trustee, liquidator, custodian or
conservator of itself or for the whole or substantially all of
its property, (D) filed, or consented to, a petition under any
chapter of the Code, or (E) filed a petition or sought relief
under, or taken advantage of, any bankruptcy or similar law or
statute of any jurisdiction, now or hereafter in effect
$_________
B. Determined Value of Eligible Repossessed Vehicles $_________
(sum of item II(A)(i) plus item II(A)(ii) plus item II(A)(iii))
C. Formula (Advance Rate) 40%
D. Determined Value of Eligible Repossessed Vehicles Availability
(the lesser of $1,500,000 and the product of item II(B) times item II(C)) $_________
III. AVAILABILITY
------------
A. Borrowing Base Availability (Item I(F) plus item II(D)) $_________
B. Loans Outstanding $_________
C. Net Borrowing Base Availability (Item III(A) minus item III(B)) $_________
(but in no event to exceed the lesser of item III(A) and the Total
Commitment)
