EXHIBIT 10.31
CROSS-DEFAULT AGREEMENT
THIS CROSS-DEFAULT AGREEMENT (this "Agreement") dated
_____________________, 2001, is by and among Hometown Auto Retailers, Inc., a
Delaware corporation, ("Hometown"), and each of the entities listed on the
guarantor signature block of this Agreement (collectively, "Guarantor") and FORD
MOTOR CREDIT COMPANY a Delaware corporation, ("Ford Credit").
WHEREAS, Ford Credit has separately extended or will separately extend
wholesale credit lines and other credit facilities (the "Wholesale Facilities")
to Hometown and to certain of the Guarantors operating dealership subsidiaries,
now existing or hereafter acquired by Hometown over which the Hometown exercises
control, directly or indirectly; and
WHEREAS, as a condition of extending the Wholesale Facilities, Ford Credit
has required that Hometown guaranty the obligations of each Guarantor; and
WHEREAS, as an additional condition of extending the Wholesale Facilities,
Ford Credit has required that Hometown and Guarantor agree to the cross-default
of the obligations of each other.
NOW, THEREFORE, in consideration of the promises and other valuable
consideration, receipt of which is hereby acknowledged, Obligors and Ford Credit
hereby covenant and agree as follows:
1. As used herein, the following terms shall have the following
meanings:
(a) Event of Default: An Event of Default or any other default under
any document evidencing the Wholesale Facilities.
(b) Indebtedness: The principal of and interest on and all other
amounts, payments and premiums due under the Wholesale Facilities and all other
indebtedness of each Obligor to Ford Credit under and/or secured by the Security
Documents, or any amendments, modifications, renewals and extensions of any of
the foregoing.
(c) Loans: Collectively, the Wholesale Facilities.
(d) Obligations: Any and all of the covenants, promises and other
obligations (other than the Indebtedness) made or owing by Hometown and/or
Guarantor to or due to Ford Credit under and/or as set forth in the documents
evidencing the Wholesale Facilities and/or the Security Documents, and any and
all extensions, renewals, modifications and amendments of any of the foregoing.
(e) Security Documents: All deeds of trust, mortgages, assignments,
loan agreements, security agreements and any and all other documents now or
hereafter created securing the payment of the Indebtedness or the observance or
performance of the Obligations.
2. Cross-Default. An Event of Default with respect to any Wholesale
Facilities shall be an Event of Default with respect to all Wholesale
Facilities, and upon the occurrence of an Event of Default, Ford Credit (or any
agent acting on behalf of Ford Credit) shall have the right to exercise any and
all remedies granted to Ford Credit under the Security Documents in accordance
with the terms and conditions of such Security Documents.
3. Governing Law. This Agreement shall be deemed to have been made under,
and shall be governed by, and construed and enforced in accordance with, the
laws of the State of Michigan.
4. Reaffirmation of Loan Obligations. Hometown and Guarantor hereby (a)
confirm and reaffirm their liabilities, obligations and agreements under the
Security Documents, and (b) represent and warrant that, as of the date hereof,
there are no defenses, set-offs, claims or counterclaims available to the
Hometown and/or Guarantor which could be asserted against any Lender arising
from or in connection with any instruments delivered in connection with the
Loans, any related agreements and the Security Documents.
5. Addition of Parties. Each Guarantor acknowledges that as Hometown makes
acquisitions of any entity acquired pursuant to a Permitted Acquisition shall be
required to acknowledge the terms of this Agreement and agree to the
cross-default of the Loan and the Other Loans with each other. Each Guarantor
waives any defense that may accrue to it by the addition of any entity acquired
by Hometown (pursuant to a Permitted Acquisition) as a party to this Agreement.
Furthermore, each Guarantor acknowledges that any Lender may extend to any such
entity acquired by Hometown (pursuant to a Permitted Acquisition) a wholesale
line of credit that will be part of the Other Loans.
6. Amendment of Terms and Conditions. The terms of this Agreement may not
be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against which enforcement of the change, waiver,
discharge or termination is asserted, and then such modification, waiver or
consent shall be effective only in the specific instance and for the specific
purpose given.
7. Miscellaneous. All terms used in the singular shall also include the
plural and all terms used in the plural shall also include the singular.
Pronouns indicating gender shall include all genders. The covenants and
agreements of each Obligor contained herein shall be deemed to be the joint and
several covenants and agreements of each person and/or entity named in the
definition of the term "Guarantor".
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above intending to be legally bound hereby.
HOMETOWN AUTO FRAMINGHAM, INC.
By: _______________________________________
Name: ____________________________________
Title: ___________________________________
HOMETOWN BRATTLEBORO, INC.
By: _______________________________________
Name: ____________________________________
Title: ___________________________________
FAMILY FORD, INC.
By: _______________________________________
Name: ____________________________________
Title: ___________________________________
XXXXXX AUTOMOTIVE GROUP, INC.
By: _______________________________________
Name: ____________________________________
Title: ___________________________________
GOOD DAY CHEVROLET, OLDSMOBILE, ISUZU, INC.
By: _______________________________________
Name: ____________________________________
Title: ___________________________________
SHAKER'S INC.
By: _______________________________________
Name: ____________________________________
Title: ___________________________________
WESTWOOD LINCOLN/MERCURY SALES, INC.
By: _______________________________________
Name: ____________________________________
Title: ___________________________________
HOMETOWN NEWBURGH, INC.
By: _______________________________________
Name: ____________________________________
Title: ___________________________________
HOMETOWN AUTO RETAILERS, INC.
By: ______________________________
Name: ___________________________
Title: _____________________________
FORD MOTOR CREDIT COMPANY,
a Delaware corporation
By: _______________________________________
Name: ____________________________________
Title: ___________________________________
