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Exhibit (4)(h)
SECOND AMENDMENT TO LIMITED TERM EXTENSION
This Second Amendment to Limited Term Extension (the "Second
Amendment") is entered into this 16th day of March, 1998 between National Auto
Credit, Inc. ("National"), as borrower, NAC, Inc. and NAC Investment Company, as
guarantors, The First National Bank of Chicago ("First Chicago"), Xxxxxx
Guaranty Trust Company of New York ("Xxxxxx"), The Bank of New York ("BNY"),
First Union National Bank ("First Union"), The Huntington National Bank
("Huntington"), Allstate Life Insurance Company ("Allstate"), Connecticut
General Life Insurance Company (on behalf of itself and one or more separate
accounts, collectively "Connecticut General"), Principal Mutual Life Insurance
Company ("Principal Mutual"), New York Life Insurance Company ("New York Life"),
New York Life Insurance and Annuity Corporation ("New York Annuity"), Lincoln
National Life Insurance Company ("Lincoln National") and Lincoln Life & Annuity
Company of New York ("Lincoln Life"), as lenders, and NBD Bank, ("NBD") as
issuer of letters of credit. Capitalized terms not otherwise defined herein
shall have the meanings ascribed to such terms in that certain Limited Term
Extension dated as of February 13, 1998 (as amended to the date hereof, the
"Extension").
RECITALS
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WHEREAS, National presently owes (i) approximately $35 million
in Principal Obligations on Loans extended by the Banks pursuant to the Credit
Agreement, and (ii) approximately $41.5 million in Principal Obligations on
loans extended by the Insurance Companies pursuant to the terms of the Note
Purchase Agreement and Notes.
WHEREAS, on February 13, 1998, National, the Lenders and NBD
entered into the Extension pursuant to which the Banks granted National a
limited extension of maturities and the Insurance Companies granted National a
limited extension of the Waiver Extension, all on the terms and conditions
specifically set forth therein.
WHEREAS, pursuant to the terms of the Extension, all Lender
Obligations became due and payable in full on March 6, 1998.
WHEREAS, on March 6, 1998, National, the Lenders and NBD
entered into the First Amendment to Limited Term Extension (the "First
Amendment") pursuant to which the Lenders granted National an additional limited
extension of maturities and the Insurance Companies granted National an
additional limited extension of the Waiver Extension, all on the terms and
conditions specifically set forth therein.
WHEREAS, National has requested the Lenders and NBD for an
additional extension of the Extension Termination Date.
WHEREAS, the Lenders and NBD are prepared to extend the
Extension Termination Date until May 29, 1998 on the terms and conditions
contained herein.
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NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree to amend the Extension as follows:
1. The definition of "Extension Default" is amended in its
entirety so that, as amended, it provides as follows:
"EXTENSION DEFAULT" means (i) all "Defaults" as defined in the Credit
Agreement, (ii) all "Defaults" as defined in the Note Purchase
Agreement, (iii) National's failure to comply with any term or
provision of this Limited Term Extension, or (iv) the payment by
National of any portion of the principal obligations owed to Xxxxx
Brothers Xxxxxxxx & Co.
2. The definition of "Extension Termination Date" is amended
in its entirety so that, as amended, it provides as follows:
"EXTENSION TERMINATION DATE" means the earlier to occur of (i) May 29,
1998, and (ii) the occurrence of an Extension Default.
3. The following definition is added to the Extension:
"RECONSTITUTED SPECIAL COMMITTEE" means the special committee appointed
by National's Board of Directors on March 11, 1998.
4. Paragraph 2 of the Extension is amended in its entirety so
that, as amended, it provides as follows:
"2. Upon the execution hereof, National shall pay to the
Agent, for distribution to the Banks, and to the Insurance Companies,
all interest accrued through March 19, 1998 on the Credit Agreement
Obligations and the Note Obligations, respectively, at the rates set
forth in paragraph 3 of the Extension."
5. Paragraph 3 of the Extension is amended in its entirety so
that, as amended, it provides as follows:
"3. From and after January 31, 1998, interest will accrue on
the unpaid balance of all Lender Obligations at a per annum rate
(computed on the basis of a 360-day year of twelve 30-day months) equal
to the higher of (i) the Floating Rate, and (ii) 7.66%. Commencing on
March 20, 1998 interest will be payable to all Lenders weekly, in
arrears, on Friday of each week. From and after January 31,1998
interest will accrue on the unpaid balance of any overdue Credit
Agreement Obligation or Note Obligation at the rate applicable to such
overdue Obligation under the terms of the Credit Agreement or Note
Purchase Agreement, as the case may be."
6. Paragraph 4 of the Extension is amended in its entirety so
that, as amended, it provides as follows:
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"4. National shall make principal payments to the Lenders and
NBD on the following dates and in the following amounts:
February 19, 1998 $1,000,000
March 6, 1998 $5,500,000
March 19, 1998 $6,000,000
National shall make payments to the Lenders and NBD on the following
dates and in the following amounts, to be applied first to accrued and
unpaid interest, and the balance to principal:
March 20, 1998 $625,000
March 27, 1998 $625,000
April 3, 1998 $625,000
April 10, 1998 $625,000
April 17, 1998 $625,000
April 24, 1999 $625,000
May 1, 1998 $625,000
May 8, 1998 $625,000
May 15, 1998 $625,000
May 22, 1998 $625,000
May 29, 1998 $625,000
National shall also remit to the Lenders, for application to the
Principal Obligations, all federal tax refunds (if any) received by
National through May 29, 1998, when and as such refunds are received.
Each principal payment will be distributed to the Lenders and NBD on a
Pro Rata basis and will be applied by the Lenders against the Principal
Obligations. Principal payments distributed to NBD in respect of the
Reimbursement Obligation will be held by NBD as cash collateral to
secure payment of the Reimbursement Obligation until the Letters of
Credit are drawn. If one or more Letters of Credit expires or is
returned to NBD undrawn, NBD will distribute the cash collateral then
held by NBD in respect of such Letter(s) of Credit to all Lenders (and,
to the extent that other Letters of Credit remain outstanding, to NBD)
for reduction of Principal Obligations on a Pro Rata basis. The
remaining balance of all Lender Obligations shall be due and payable in
full on the Extension Termination Date; provided, however, that to the
extent payment of the Note Obligations is voluntarily waived or
extended by the Insurance Companies beyond the Extension Termination
Date, the Extension Termination Date shall not constitute a "Settlement
Date" for purposes of Section 8.6 of the Note Purchase Agreement."
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7. Paragraph 7 of the Extension is amended in its entirety so
that, as amended, it provides as follows:
"7. National shall update the Lenders, no less frequently than
bi-weekly, which updates shall take the form of oral reports to counsel
and, at the request of the Lenders, to the Lenders concerning (i) the
business and operations of National, (ii) National's progress in its
efforts to obtain financing, (iii) the Reconstituted Special
Committee's internal review of National, (iv) National's negotiation of
the terms and provisions of the settlement agreement that National
intends to enter into with the United States Department of Labor, and
(v) such other matters as the Lenders may reasonably request."
8. Paragraph 9 of the Extension is amended in its entirety so
that, as amended, it provides as follows:
"9. Notwithstanding any prior or future waiver of defaults by
the Lenders (and without waiving or modifying rights available to the
Lenders under the Credit Agreement and the Note Purchase Agreement),
(i) National will, on a monthly basis or such shorter time as the
Lenders may request, promptly pay statements (which statements may or
may not be accompanied by the billing information described in the last
sentence of this paragraph) for the reasonable fees and expenses
incurred on behalf of the Lenders by the firms of Xxxxxxxx & Xxxxx,
LLC, O'Melveny & Xxxxx LLP, and Sidley & Austin, and (ii) National
will, on a monthly basis, reimburse each Lender for its reasonable fees
and expenses (including reasonable fees and expenses for outside and
in-house counsel as well as travel and other expenses for each Lender's
personnel) incurred by such Lender in connection with such Lender's
loans to National in accordance with the terms of the Credit Agreement
and the Note Purchase Agreement, as the case may be. Additionally, it
is an express condition to the effectiveness of this Amendment that all
outstanding statements for fees and expenses incurred by Xxxxxxxx &
Xxxxx, LLC, O'Melveny & Xxxxx LLP, and Sidley & Austin shall have been
paid in full in connection with the matters set forth herein. The
Lenders will, when or as soon as is reasonably practicable after
statements have been submitted to National for payment, provide
National with copies of the billing information submitted to the
Lenders by Xxxxxxxx & Xxxxx, LLC, O'Melveny & Xxxxx LLP, and Sidley &
Austin; provided, however, that the Lenders shall be entitled to redact
information which the Lenders believe to be subject to privilege or to
be otherwise confidential."
9. The following paragraphs shall be added to the Extension as
paragraphs 13, 14, 15 and 16, respectively:
"13. National shall deliver to the Lenders, no later than May
15, 1998, a comprehensive business plan reflecting National's projected
operations, including all cash receipts and disbursements in a format
and in detail reasonably acceptable to National and Xxxxxxxx & Xxxxx,
LLC.
14. National shall promptly inform the former National
directors who served on the Special Committee until March 9, 1998, as
well as the professionals who had been retained by the Special
Committee prior to March 9,1998, that National consents to such former
directors and such professionals communicating directly with the
Lenders concerning all facets of the Special Committee Report.
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15. National shall, and National shall cause Xxxxx Xxxxxxxx
to, cooperate with Xxxxxxxx & Xxxxx, LLC in all respects. Without
limiting the foregoing in any respect, National and Xxxxx Xxxxxxxx
shall promptly provide Xxxxxxxx & Xxxxx, LLC with all information and
reports (reasonably available to National and/or Xxxxx Xxxxxxxx) that
may be reasonably requested by Xxxxxxxx & Xxxxx, LLC, including,
without limitation, balance sheets, income statements and statements of
changes in cash position and any financial information provided by
National to prospective lenders.
16. The Lenders hereby agree:
(a) to extend the time limit, imposed by Section 5.1(d)(iii)
of the Credit Agreement and Section 7.1(b) of the Note Purchase
Agreement, within which National must deliver audited financial
statements (meeting the requirements set forth in Section 5.1(d)(iii)
of the Credit Agreement and Section 7.1(b) of the Note Purchase
Agreement) to the Lenders until two business days after National's
independent auditors issue their audit opinion to National; provided,
however, that in no event will the time limit extend beyond the
Extension Termination Date;
(b) to extend the time limit, imposed by Section 5.1(d)(vii)
of the Credit Agreement and Section 7.1(j) of the Note Purchase
Agreement, within which National must deliver the prescribed claims
analysis to the Lenders until two business days after National's
independent auditors issue their audit opinion to National; provided,
however, that in no event will the time limit extend beyond the
Extension Termination Date;
(c) to suspend National's obligation to comply with the fixed
charge coverage ratio covenants contained in Section 5.2(b) of the
Credit Agreement and Section 10.5(d) of the Note Purchase Agreement
until the Extension Termination Date; and
(d) that, in light of the foregoing extensions and suspension,
neither (i) National's failure to deliver audited financials meeting
the requirements set forth in Section 5.1(d)(iii) of the Credit
Agreement and Section 7.1(b) of the Note Purchase Agreement within 100
days after the end of its 1998 fiscal year, (ii) National's failure to
deliver the specified claims analysis within 30 days of the end of its
1998 fiscal year, nor (iii) National's failure to comply with the fixed
charge coverage ratios during the term of this Extension shall
constitute an Extension Default."
10. Except to the extent that they are amended by the terms of
this Second Amendment, the terms and provisions of the Extension shall remain in
full force and effect.
11. This Second Amendment is a contract made under, and shall
be governed by and construed in accordance with, the law of the State of
Illinois applicable to contracts made and to be performed entirely within such
State and without giving effect to choice of law principles of such State.
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NATIONAL AUTO CREDIT, INC.
By:
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Its
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NAC, INC.
By:
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Its
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NAC INVESTMENT COMPANY
By:
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Its
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THE FIRST NATIONAL BANK OF CHICAGO, as
Administrative Agent and as a Lender
By:
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Its
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XXXXXX GUARANTY TRUST COMPANY OF
NEW YORK, as Documentation Agent and as
a Lender
By:
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Its
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THE BANK OF NEW YORK
By:
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Its
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FIRST UNION NATIONAL BANK (formerly known
as First Union National Bank of North
Carolina)
By:
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Its
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THE HUNTINGTON NATIONAL BANK
By:
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Its
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ALLSTATE LIFE INSURANCE COMPANY
By:
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Its
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By:
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Its
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CONNECTICUT GENERAL LIFE INSURANCE
COMPANY BY CIGNA INVESTMENTS, INC.
By:
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Its
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CONNECTICUT GENERAL LIFE INSURANCE
COMPANY ON BEHALF OF ONE OR MORE SEPARATE
ACCOUNTS BY CIGNA INVESTMENTS, INC.
By:
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Its
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PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
By:
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Its
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By:
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Its
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NEW YORK LIFE INSURANCE COMPANY
By:
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Its
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NEW YORK LIFE INSURANCE AND ANNUITY
CORPORATION BY NEW YORK LIFE INSURANCE
COMPANY
By:
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Its
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LINCOLN NATIONAL LIFE INSURANCE COMPANY
By:
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Its
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LINCOLN LIFE & ANNUITY COMPANY OF
NEW YORK
By:
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Its
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NBD BANK
By:
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Its
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