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EXHIBIT 10.1.19.6
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AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF DECEMBER 22, 2000
AMONG
UNITED AUTO GROUP, INC.,
VARIOUS FINANCIAL INSTITUTIONS
AND
CHRYSLER FINANCIAL COMPANY L.L.C.,
AS AGENT
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TABLE OF CONTENTS
SECTION 1 DEFINITIONS.........................................................1
1.1 Definitions...........................................................1
1.2 Other Interpretive Provisions........................................13
1.3 Addition of New Lenders..............................................13
SECTION 2 COMMITMENTS OF THE LENDERS; BORROWING AND LETTER OF
CREDIT PROCEDURES..................................................14
2.1 Commitments..........................................................14
2.1.1 Revolving Loan Commitment...................................14
2.1.2 Acquisition Loan Commitment.................................14
2.1.3 L/C Commitment..............................................14
2.1.4 Term Loans..................................................14
2.2 Loan Procedures......................................................14
2.3 Letter of Credit Procedures...........................................15
2.3.1 L/C Applications............................................15
2.3.2 Participations in Letters of Credit.........................15
2.3.3 Reimbursement Obligations...................................16
2.3.4 Limitation on Obligations of Issuing Lender.................16
2.3.5 Funding by Lenders to Issuing Lender........................16
2.4 Commitments Several..................................................17
2.5 Certain Conditions....................................................17
SECTION 3 NOTES EVIDENCING LOANS.............................................17
3.1 Notes................................................................18
3.2 Recordkeeping........................................................18
SECTION 4 INTEREST...........................................................18
4.1 Interest Rate........................................................18
4.2 Interest Payment Dates...............................................18
4.3 Computation of Interest..............................................18
SECTION 5 FEES...............................................................18
5.1 Letter of Credit Fees................................................18
SECTION 6 REDUCTION OR TERMINATION OF THE REVOLVING COMMITMENT
AMOUNT AND THE ACQUISITION COMMITMENT AMOUNT;
PREPAYMENTS........................................................19
6.1. Voluntary Reduction or Termination of Commitment Amounts............19
6.2 Voluntary Prepayments...............................................19
6.3 Mandatory Prepayments...............................................19
6.4 All Prepayments of Term Loans.......................................20
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SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES....................20
7.1 Making of Payments...................................................20
7.2 Application of Certain Payments......................................20
7.3 Due Date Extension...................................................20
7.4 Setoff...............................................................20
7.5 Proration of Payments................................................20
7.6 Taxes................................................................21
SECTION 8 WARRANTIES.........................................................22
8.1 Organization.........................................................22
8.2 Authorization; No Conflict...........................................22
8.3 Validity and Binding Nature..........................................22
8.4 Financial Condition..................................................22
8.5 No Material Adverse Change ..........................................23
8.6 Litigation and Contingent Liabilities................................23
8.7 Ownership of Properties; Liens.......................................23
8.8 Subsidiaries.........................................................23
8.9 Pension Plans........................................................23
8.10 Investment Company Act..............................................24
8.11 Public Utility Holding Company Act..................................24
8.12 Regulation U........................................................24
8.13 Taxes...............................................................24
8.14 Solvency, etc.......................................................24
8.15 Environmental Matters...............................................24
8.16 Insurance...........................................................25
8.17 Information.........................................................25
8.18 Intellectual Property...............................................26
8.19 Burdensome Obligations..............................................26
8.20 Labor Matters.......................................................26
8.21 No Default..........................................................26
8.22 Securities Purchase Agreement.......................................26
8.23 Senior Debt.........................................................27
SECTION 9 COVENANTS..........................................................27
9.1 Reports, Certificates and Other Information..........................27
9.1.1 Annual Report..............................................27
9.1.2 Interim Reports............................................27
9.1.3 Compliance Certificates/Asset Reports......................28
9.1.4 Reports to the SEC and to Shareholders.....................28
9.1.5 Notice of Default, Litigation and ERISA Matters............28
9.1.6 Management Reports.........................................29
9.1.7 Subordinated Debt Notices..................................29
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9.1.8 Subordinated Notes.........................................29
9.1.9 Other Information..........................................29
9.2 Books, Records and Inspections.......................................29
9.3 Maintenance of Property; Insurance...................................30
9.4 Compliance with Laws; Payment of Taxes and Liabilities...............30
9.5 Maintenance of Existence, etc........................................31
9.6 Financial Covenants..................................................31
9.6.1 Ratio of Funded Debt to Stockholders' Equity...............31
9.6.2 Ratio of Non-Floorplan Debt to Stockholders' Equity........31
9.6.3 Funded Debt to EBITDA Ratio................................31
9.6.4 Working Capital............................................31
9.7 Limitations on Debt..................................................31
9.8 Liens................................................................32
9.9 Restricted Payments..................................................33
9.10 Mergers, Consolidations, Sales......................................34
9.11 Modification of Organizational Documents............................35
9.12 Use of Proceeds.....................................................35
9.13 Further Assurances..................................................35
9.14 Transactions with Affiliates........................................36
9.15 Employee Benefit Plans..............................................36
9.16 Environmental Matters...............................................36
9.17 Inconsistent Agreements.............................................36
9.18 Business Activities.................................................36
9.19 Investments.........................................................37
9.20 Restriction of Amendments to Certain Documents......................38
9.21 Limitation on Floor Plan Amendments.................................38
9.22 Amendments to Subordinated Note Indentures..........................38
SECTION 10 EFFECTIVENESS; CONDITIONS OF LENDING, ETC...........................38
10.1 Conditions to Effectiveness..........................................38
10.1.1 Notes.....................................................38
10.1.2 Resolutions...............................................38
10.1.3 Consents, etc.............................................38
10.1.4 Incumbency and Signature Certificates.....................39
10.1.5 Reaffirmation.............................................39
10.1.6 Opinion of Counsel........................................39
10.1.7 Payment of Fees...........................................39
10.1.8 Solvency Certificate......................................39
10.1.9 Closing Certificate.......................................39
10.1.10 Other.....................................................39
10.2 Conditions..........................................................39
10.2.1 Compliance with Warranties, No Default, etc...............39
10.2.2 Confirmatory Certificate..................................40
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10.3 Further Conditions to Acquisition Loans.............................41
SECTION 11 EVENTS OF DEFAULT AND THEIR EFFECT..................................41
11.1 Events of Default...................................................41
11.1.1 Non-Payment of the Loans, etc.............................41
11.1.2 Non-Payment of Other Debt.................................41
11.1.3 Other Material Obligations................................42
11.1.4 Bankruptcy, Insolvency, etc...............................42
11.1.5 Non-Compliance with Loan Documents........................42
11.1.6 Warranties................................................42
11.1.7 Pension Plans.............................................42
11.1.8 Judgments.................................................43
11.1.9 Invalidity of Guaranty, etc...............................43
11.1.10 Invalidity of Collateral Documents, etc..................43
11.1.11 Invalidity of Subordination Provisions, etc..............43
11.1.12 Change of Control........................................43
11.1.13 Securities Purchase Agreement; Put of Stock..............43
11.2 Effect of Event of Default..........................................43
SECTION 12 THE AGENT...........................................................44
12.1 Appointment and Authorization.......................................44
12.2 Delegation of Duties................................................44
12.3 Liability of Agent..................................................45
12.4 Reliance by Agent...................................................45
12.5 Notice of Default...................................................45
12.6 Credit Decision.....................................................46
12.7 Indemnification.....................................................46
12.8 Agent in Individual Capacity........................................46
12.9 Successor Agent.....................................................47
12.10 Collateral Matters.................................................47
12.11 Funding Reliance...................................................47
SECTION 13 GENERAL.............................................................48
13.1 Waiver; Amendments..................................................48
13.2 Confirmations.......................................................49
13.3 Notices.............................................................49
13.4 Computations........................................................49
13.5 Regulation U........................................................49
13.6 Costs, Expenses and Taxes...........................................50
13.7 Subsidiary References...............................................50
13.8 Captions............................................................50
13.9 Assignments; Participations.........................................50
13.9.1 Assignments...............................................50
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13.9.2 Participations............................................51
13.10 Governing Law......................................................52
13.11 Counterparts.......................................................52
13.12 Successors and Assigns.............................................52
13.13 Indemnification by the Company.....................................52
13.14 Nonliability of Lenders............................................53
13.15 Forum Selection and Consent to Jurisdiction........................53
13.16 Waiver of Jury Trial...............................................54
13.17 CFC Right of First Refusal on Floor Plan Financing.................54
13.18 Confidentiality....................................................54
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SCHEDULES
SCHEDULE 2.1 Lenders and Pro Rata Shares
SCHEDULE 8.6 Litigation and Contingent Liabilities
SCHEDULE 8.8 Subsidiaries
SCHEDULE 8.15 Environmental Matters
SCHEDULE 8.16 Insurance
SCHEDULE 8.19 Burdensome Obligations
SCHEDULE 8.20 Labor Matters
SCHEDULE 9.7 Permitted Existing Debt
SCHEDULE 9.8 Permitted Existing Liens
SCHEDULE 9.17 Permitted Restrictions
SCHEDULE 9.19 Investments
SCHEDULE 13.3 Addresses for Notices
EXHIBITS
EXHIBIT A Form of Note (Section 3.1)
EXHIBIT B Form of Compliance Certificate (Section 9.1.3)
EXHIBIT C Guaranty (Section 1.1)
EXHIBIT D Security Agreement (Section 1.1)
EXHIBIT E Pledge Agreement (Section 1.1)
EXHIBIT F Form of Solvency Certificate (Section 10.1.8)
EXHIBIT G Form of Assignment Agreement (Section 13.9.1)
EXHIBIT H Form of Reaffirmation of Loan Documents (Section 10.1.5)
EXHIBIT I Subordination Provisions Applicable to Subordinated Debt
(Section 1.1)
EXHIBIT J Form of L/C Application (Section 1.1)
EXHIBIT K Form of Accountant's Report (Section 9.1.8)
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT dated as of December 22, 2000
(this "Agreement") is entered into among UNITED AUTO GROUP, INC. (the
"Company"), the financial institutions that are or may from time to time become
parties hereto (together with their respective successors and assigns, the
"Lenders") and CHRYSLER FINANCIAL COMPANY L.L.C. (in its individual capacity,
"CFC"), as agent for the Lenders.
WHEREAS, the Company and CFC are parties to a Credit Agreement, dated as of
August 3, 1999 (as amended or otherwise modified from time to time prior to the
date hereof, the "Existing Agreement");
WHEREAS, the Company and the Lenders desire to amend and restate the
Existing Agreement to increase the commitments of the Lenders to $706,000,000
and to make certain other changes as hereinafter set forth; it being the
intention of the Company, the Agent and the Lenders that this Agreement and the
execution and delivery of any substituted promissory notes not effect a novation
of the obligations of the Company and the Lenders under the Existing Agreement
but merely a restatement and, where applicable, substitution of the terms
governing and evidencing such obligations hereafter; and
WHEREAS, the Company and the Lenders have agreed that on the Effective Date
(as defined below) the Existing Agreement shall be amended and restated in the
form of this Agreement and that the outstanding loans and letters of credit
under the Existing Agreement shall be deemed to be Loans and Letters of Credit
hereunder;
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
SECTION 1 DEFINITIONS.
1.1 Definitions. When used herein the following terms shall have the
following meanings:
Acquisition means an acquisition by the Company or any Subsidiary of all or
substantially all the assets of a business unit or a controlling interest in the
capital stock or other ownership interests of an Automobile Dealership, whether
through a purchase, merger, consolidation or otherwise.
Acquisition Commitment Amount means, on any date, (x) $520,000,000, as
reduced from time to time pursuant to Section 6.1 minus (y) the Revolving
Outstandings on such date.
Acquisition Loan - see Section 2.1.2.
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Affiliate of any Person means (i) any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such
Person and (ii) any officer or director of such Person. A Person shall be deemed
to be "controlled by" any other Person if such Person possesses, directly or
indirectly, power to vote 10% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or managers or
power to direct or cause the direction of the management and policies of such
Person whether by contract or otherwise.
Agent means CFC in its capacity as agent for the Lenders hereunder and any
successor thereto in such capacity.
Agreement - see the Preamble.
Asset Value - means, at any time, the book value of the Net Tangible Assets
on which the Agent has a Lien of the Company and its Subsidiaries as reported on
the most recent asset report of the Company pursuant to Section 9.1.3 that has
been delivered to the Agent.
Assignment Agreement - see Section 13.9.1.
Attorney Costs means, with respect to any Person, all reasonable fees and
charges of any counsel to such Person, the reasonable allocable cost of internal
legal services of such Person, all reasonable disbursements of such internal
counsel and all court costs and similar legal expenses.
Automobile Dealership means a business that operates a dealership or
dealerships for the retail sales of new and/or used automobiles or trucks and
businesses ancillary to the operation of such dealerships owned or operated by
the Company or its Subsidiaries, including service and parts operations, body
shops, the sale of finance, extended warranty and insurance products (including
after-market items), the financing of the purchase of new and/or used vehicles,
the purchase, sale and servicing of finance contracts for new and/or used
vehicles and other related businesses.
Base LIBO Rate - see definition of "Interest Rate."
Business Day means any day of the year (other than any Saturday or Sunday)
which is not a day on which commercial banks are authorized or required by law
to close in Detroit, Michigan.
Capital Lease means, with respect to any Person, any lease of (or other
agreement conveying the right to use) any real or personal property by such
Person that, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of such Person.
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Cash Collateralize means to deliver cash collateral to the Agent, to be
held as cash collateral for outstanding Letters of Credit, pursuant to
documentation reasonably satisfactory to the Agent and the Company. Derivatives
of such term have corresponding meanings.
Cash Equivalent Investment means, at any time, (a) any evidence of Debt,
maturing not more than one year after such time, issued or guaranteed by the
United States Government or any agency thereof, (b) commercial paper, maturing
not more than one year from the date of issue, or corporate demand notes, in
each case rated at least A-l by Standard & Poor's Ratings Group or P-l by
Xxxxx'x Investors Service, Inc., (c) any certificate of deposit (or time
deposits represented by such certificates of deposit) or banker's acceptance,
maturing not more than one year after such time, or overnight Federal Funds
transactions that are issued or sold by any Lender or its holding company or by
a commercial banking institution that is a member of the Federal Reserve System
and has a combined capital and surplus and undivided profits of not less than
$500,000,000, (d) any repurchase agreement entered into with CFC (or with a
commercial banking institution of the stature referred to in clause (c)) which
(i) is secured by a fully perfected security interest in any obligation of the
type described in any of clauses (a) through (c) and (ii) has a market value at
the time such repurchase agreement is entered into of not less than 100% of the
repurchase obligation of CFC (or commercial banking institution) thereunder, (e)
shares of money market mutual funds within the definition of Rule 2a-7
promulgated by the SEC under the Investment Company Act of 1940 and (f) other
cash equivalent investments approved by the Agent.
CERCLA - see Section 8.15.
CFC - see the Preamble.
Closing Date means October 8, 1999.
Code means the Internal Revenue Code of 1986.
Collateral Documents means the Security Agreement, each Pledge Agreement
and any other agreement or instrument pursuant to which the Company, any
Subsidiary or any other Person grants collateral to the Agent for the benefit of
the Lenders to secure the obligations hereunder and under the other Loan
Documents and any obligations owing by the Company or any Subsidiary to CFC in
respect of any Floor Plan Financing.
Commitment means, as to any Lender, such Lender's commitment to make Loans,
and to issue or participate in Letters of Credit, under this Agreement. The
initial amount of each Lender's Pro Rata Share of the Revolving Commitment
Amount and the Acquisition Commitment Amount is set forth on Schedule 2.1.
Company - see the Preamble.
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Computation Period means each period of four consecutive Fiscal Quarters
ending on the last day of a Fiscal Quarter.
Consolidated Net Income means, with respect to the Company and its
Subsidiaries for any period, the net income (or loss) of the Company and its
Subsidiaries for such period, excluding any gains (or losses) from asset sales,
any extraordinary or unusual non-recurring gains (or losses) and any gains (or
losses) from discontinued operations.
Controlled Group means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Company, are treated
as a single employer under Section 414 of the Code or Section 4001 of ERISA.
Debt of any Person means, without duplication, (a) all indebtedness of such
Person for borrowed money, whether or not evidenced by bonds, debentures, notes
or similar instruments, (b) all obligations of such Person as lessee under
Capital Leases which have been recorded as liabilities on a balance sheet of
such Person in accordance with GAAP, (c) all obligations of such Person to pay
the deferred purchase price of property or services (excluding trade accounts
payable and accrued expenses in the ordinary course of business), (d) all
indebtedness secured by a Lien on the property of such Person, whether or not
such indebtedness shall have been assumed by such Person, (e) all obligations,
contingent or otherwise, with respect to the face amount of all letters of
credit (whether or not drawn) and banker's acceptances issued for the account of
such Person (including the Letters of Credit), (f) all Hedging Obligations of
such Person, (g) all Suretyship Liabilities of such Person and (h) except to the
extent the terms of such Debt provide that such Person is not liable thereunder,
all Debt of any partnership of which such Person is a general partner.
Disposal - see the definition of "Release".
Dollar and the sign "$" mean lawful money of the United States of America.
EBITDA means, for any period, Consolidated Net Income for such period plus,
to the extent deducted in determining such Consolidated Net Income, Interest
Expense, income tax expense, depreciation and amortization, franchise taxes and
minority interest for such period.
Effective Date - see Section 10.1.
Environmental Claims means all claims, however asserted, by any
governmental, regulatory or judicial authority or other Person alleging
potential liability or responsibility for violation of any Environmental Law, or
for release or injury to the environment.
Environmental Laws means all present or future federal, state or local
laws, statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative
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orders, directed duties, requests, licenses, authorizations and permits of, and
agreements with, any governmental authority, in each case relating to
Environmental Matters.
Environmental Matters means any matter arising out of or relating to health
and safety, or pollution or protection of the environment or workplace,
including any of the foregoing relating to the presence, use, production,
generation, handling, transport, treatment, storage, disposal, distribution,
discharge, release, control or cleanup of any Hazardous Substance.
ERISA means the Employee Retirement Income Security Act of 1974.
Event of Default means any of the events described in Section 11.1.
Existing Agreement - see the recitals.
Existing Letters of Credit means a letter of credit issued under the
Existing Agreement which is outstanding on the Effective Date.
Federal Funds Rate means, for any day, the rate set forth in the weekly
statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor
publication, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 A.M. (New York City time) on
that day by each of three leading brokers of Federal funds transactions in New
York City selected by the Agent.
Fiscal Quarter means a fiscal quarter of a Fiscal Year.
Fiscal Year means the fiscal year of the Company and its Subsidiaries,
which period shall be the 12-month period ending on December 31 of each year.
References to a Fiscal Year with a number corresponding to any calendar year
(e.g., "Fiscal Year 2000") refer to the Fiscal Year ending on December 31 of
such calendar year.
Floor Plan Financing means a financing undertaken by the Company or any
Subsidiary all of the proceeds of which are used to purchase vehicles and/or
vehicle parts and supplies to be sold in the ordinary course of business of the
Company and its Subsidiaries.
Floor Plan Financing Provider means each provider of Floor Plan Financing
to the Company and its Subsidiaries.
Foreign Investment means any Investment in a Subsidiary or any other Person
that is not organized under the laws of the United States (including Puerto
Rico) or Canada.
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Foreign Subsidiary means any Subsidiary of the Company which is not
incorporated or organized in the United States or in any State thereof.
FRB means the Board of Governors of the Federal Reserve System or any
successor thereto.
Funded Debt means all Debt of the Company and its Subsidiaries, determined
on a consolidated basis, excluding (i) contingent obligations in respect of
Suretyship Liabilities (except to the extent constituting Suretyship Liabilities
in respect of Debt of a Person other than the Company or any Subsidiary), (ii)
Hedging Obligations, (iii) Debt of the Company to Subsidiaries and Debt of
Subsidiaries to the Company or to other Subsidiaries and (iv) an amount equal to
25% of the Loans outstanding at the time of calculation the proceeds of which
were used to repurchase, redeem, repay or defease the Subordinated Notes.
Funded Debt to EBITDA Ratio means, as of the last day of any Fiscal
Quarter, the ratio of (i) Funded Debt as of such day (minus Debt under Floor
Plan Financings and Subordinated Debt and excluding the lesser of (x) all Debt
outstanding under Capital Leases and (y) $50,000,000) to (ii) EBITDA for the
Computation Period ending on such day. If the Company or any Subsidiary makes
any Acquisition during any Computation Period, EBITDA for such Computation
Period will be determined on a pro forma basis as if such Acquisition were made,
and all Debt incurred in connection therewith was incurred, on the first day
thereof. In determining the pro forma adjustments to EBITDA to be made with
respect to any Acquisition for periods prior to the acquisition date thereof,
actions taken by the Company and its Subsidiaries prior to the first anniversary
of such acquisition date that result in cost savings with respect to such
Acquisition will be deemed to have been taken on the first day of the
Computation Period (with the intent that such cost savings be effectively
annualized by extrapolation from the demonstrated cost savings since the related
acquisition date).
GAAP means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or organizations
with similar functions of comparable stature and authority within the U.S.
accounting profession), which are applicable to the circumstances as of the date
of determination.
Guaranty means the Guaranty dated as of October 8, 1999, executed by each
Subsidiary of the Company (other than Foreign Subsidiaries), a copy of which is
attached as Exhibit C.
Hazardous Substances - see Section 8.15.
Hedging Agreement means any interest rate, currency or commodity swap
agreement, cap agreement or collar agreement, and any other agreement or
arrangement designed to protect a Person against fluctuations in interest rates,
currency exchange rates or commodity prices.
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Hedging Obligation means, with respect to any Person, any liability of such
Person under any Hedging Agreement.
Indemnified Liabilities - see Section 13.13.
Interest Expense means for any period the consolidated interest expense of
the Company and its Subsidiaries for such period (including all imputed interest
on Capital Leases but excluding all interest on Floor Plan Financings).
Interest Rate means, for each day, a rate per annum equal to the sum of (a)
that rate of interest per annum initially equal to 6.70% and adjusting on the
first day of each month during the term of this Agreement (a "Calculation
Date"), and for each succeeding day until the date of the next monthly
recalculation, the average of (x) the LIBO Rate for such Calculation Date (or,
if such date is not a Business Day, for the immediately preceding Business Day)
and (y) the LIBO Rate for the 16th day of the immediately preceding month (or,
if such date is not a Business Day, for the immediately preceding Business Day)
(the rate set forth in this clause (a) being the "Base LIBO Rate") plus (b)(x)
in the case of all Term Loans and, if the Company uses the proceeds of any
Revolving Loans to repurchase, redeem, repay or defease the Subordinated Notes,
with respect to such Revolving Loans, three percent (3.00%) per annum, and (y)
in the case of Revolving Loans (other than Revolving Loans described in clause
(b)(x) above) and Acquisition Loans, (1) to the extent that the aggregate
principal amount of Revolving Loans plus the aggregate principal amount of all
Acquisition Loans is less than or equal to the total of (A) the Asset Value,
minus (B) the Stated Amount of all Letters of Credit, then two percent (2.00%)
per annum and (2) in all other cases, two and one quarter percent (2.25%) per
annum. For purposes of this definition, "LIBO Rate" means, for each date of
calculation, (1) the rate of interest (rounded upwards, if necessary, to the
next 1/16th of 1%) published in the Wall Street Journal on such day (or the
immediately preceding Business Day, if such date is not a Business Day) in its
"Money Rates" column as the one month London Interbank Offered Rate for United
States dollar denominated deposits (if the Wall Street Journal ceases to publish
such a rate or substantially changes the methodology used to determine such
rate, then the rate shall be the rate of interest (rounded upwards, if
necessary, to the next 1/16th of 1%) published by Reuters Monitor Rates Service
on such day (or the immediately preceding Business Day, if such date is not a
Business Day) as the one month London Interbank Offered Rate for United States
dollar denominated deposits or (2) if such rate is not published or available,
such rate as shall be otherwise independently determined by the Agent on a basis
substantially similar to the methodology used by the Wall Street Journal on the
date of this Agreement.
Investment means, relative to any Person, any investment in another Person,
whether by acquisition of any debt or equity security, by making any loan or
advance or by becoming obligated with respect to a Suretyship Liability in
respect of obligations of such other Person (other than travel and similar
advances to employees in the ordinary course of business).
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Issuing Lender means CFC in its capacity as the issuer of Letters of Credit
hereunder and its successors and assigns in such capacity.
L/C Application means, with respect to any request for the issuance of a
Letter of Credit, a letter of credit application in the form of Exhibit J.
Lender - see the Preamble. References to the "Lenders" shall include the
Issuing Lender; for purposes of clarification only, to the extent that CFC (or
any successor Issuing Lender) may have any rights or obligations in addition to
those of the other Lenders due to its status as Issuing Lender, its status as
such will be specifically referenced.
Letter of Credit - see Section 2.1.3. The term "Letter of Credit" includes
each Existing Letter of Credit.
Lien means, with respect to any Person, any interest granted by such Person
in any real or personal property, asset or other right owned or being purchased
or acquired by such Person which secures payment or performance of any
obligation and shall include any mortgage, lien, encumbrance, charge or other
security interest of any kind, whether arising by contract, as a matter of law,
by judicial process or otherwise.
Loan Documents means this Agreement, the Notes, the Guaranty, the Letters
of Credit and the Collateral Documents.
Loan Party means the Company and each Subsidiary party to any Loan
Document.
Loans means Acquisition Loans, Revolving Loans and Term Loans.
Margin Stock means any "margin stock" as defined in Regulation U.
Material Adverse Effect means (a) a material adverse change in, or a
material adverse effect upon, the financial condition, operations, assets,
business, properties or prospects of the Company and its Subsidiaries taken as a
whole, (b) a material impairment of the ability of the Company or any Subsidiary
to perform any of its obligations under any Loan Document or (c) a material
adverse effect upon any substantial portion of the collateral under the
Collateral Documents or upon the legality, validity, binding effect or
enforceability against the Company or any Subsidiary of any Loan Document.
Xxxxxx - see Section 9.8(i).
Xxxxxx Swap - see Section 9.8(i).
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Multiemployer Pension Plan means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Company or any member of the
Controlled Group may have any liability.
Net Cash Proceeds means, with respect to any issuance of Debt, the
aggregate cash proceeds received by the Company or any Subsidiary pursuant to
such issuance, net of the direct costs of such issuance.
Net Tangible Assets means (i) the total assets of the Company and its
Subsidiaries, excluding goodwill, organizational expenses and similar intangible
assets in accordance with GAAP minus (ii) all liabilities of the Company and its
Subsidiaries (other than the Loans and other obligations of the Company
hereunder and under the other Loan Documents).
New Lender - see Section 1.3.
Note - see Section 3.1.
PBGC means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
Pension Plan means a "pension plan", as such term is defined in Section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a Multiemployer
Pension Plan), and to which the Company or any member of the Controlled Group
may have any liability, including any liability by reason of having been a
substantial employer within the meaning of Section 4063 of ERISA at any time
during the preceding five years, or by reason of being deemed to be a
contributing sponsor under Section 4069 of ERISA.
Penske Capital Partners means, collectively, Penske Capital Partners,
L.L.C., International Motor Cars Group I, L.L.C. and International Motor Cars
Group II, L.L.C., each a Delaware limited liability company.
Permitted Restrictions means restrictions on the ability of any Subsidiary
to declare or pay any dividend or make other distributions, or to advance or
loan funds, to the Company: (i) as set forth on Schedule 9.17 on the Closing
Date, including restrictions imposed by existing Floor Plan Financing
arrangements; (ii) pursuant to modifications to any Floor Plan Financing
arrangement, provided that such modifications are not materially more
restrictive; (iii) applicable to a Person at the time such Person becomes a
Subsidiary and not created in contemplation of such an event; (iv) resulting
from manufacturer-imposed modifications to any franchise agreement; or (v)
imposed by applicable law.
Person means any natural person, corporation, partnership, joint venture,
trust, limited liability company, association, governmental authority or unit,
or any other entity, whether acting in an individual, fiduciary or other
capacity.
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Pledge Agreement means the Pledge Agreement dated as of October 8, 1999,
executed by the Company and each Subsidiary which itself owns any Subsidiary (to
the extent not prohibited by a Permitted Restriction in favor of an auto
manufacturer), a copy of which is attached as Exhibit E.
Prime Rate means, on any day, the rate of interest per annum published in
the Wall Street Journal in its "Money Rates" column as the Prime Rate for such
day.
Pro Rata Share means, with respect to any Lender, the percentage specified
opposite such Lender's name on Schedule 2.1 hereto, as adjusted from time to
time in accordance with the terms hereof.
RCRA - see Section 8.15.
Refinancing Agreement - see Section 10.2.1(c).
Reaffirmation means a reaffirmation of loan documents in substantially the
form of Exhibit H.
Refinancing Debt means Debt that refunds or refinances any Debt, including
Debt that refinances other Refinancing Debt; provided that (i) the Refinancing
Debt has a maturity no earlier than the maturity of the Debt being refinanced,
(ii) the Refinancing Debt has a weighted average life to maturity no earlier
than the weighted average life to maturity of the Debt being refinanced, (iii)
the Refinancing Debt is incurred in an aggregate principal amount (or, if issued
with original issue discount, an aggregate issue price) that is equal to or less
than the aggregate principal amount (or, if issued with original issue discount,
the aggregate accreted value) then outstanding of the Debt being refinanced and
(iv) if the Debt being refinanced is Subordinated Debt, the subordination terms
of the Refinancing Debt are at least as favorable to the Lenders as the
subordination terms of the Debt being refinanced.
Regulation U means Regulation U of the FRB.
Release has the meaning specified in CERCLA and the term "Disposal" (or
"Disposed") has the meaning specified in RCRA; provided that in the event either
CERCLA or RCRA is amended so as to broaden the meaning of any term defined
thereby, such broader meaning shall apply as of the effective date of such
amendment; and provided, further, that to the extent that the laws of a state
wherein any affected property lies establish a meaning for "Release" or
"Disposal" which is broader than is specified in either CERCLA or RCRA, such
broader meaning shall apply.
Required Lenders means Lenders having Pro Rata Shares aggregating more than
65%.
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Revolving Commitment Amount means $125,000,000, as reduced from time to
time pursuant to Section 6.1.
Revolving Loan - see Section 2.1.1.
Revolving Outstandings means, at any time, the sum of (a) the aggregate
principal amount of all outstanding Revolving Loans, plus (b) the Stated Amount
of all Letters of Credit.
Revolving Termination Date means the earlier to occur of (a) August 3, 2005
or (b) such other date on which the Commitments terminate pursuant to Section 6
or 11.
SEC means the Securities and Exchange Commission or any other governmental
authority succeeding to any of the principal functions thereof.
Securities Purchase Agreement means the Securities Purchase Agreement dated
as of April 12, 1999 among the Company, International Motor Cars Group I, L.L.C.
and International Motor Cars Group II, L.L.C.
Security Agreement means the Security Agreement dated as of October 8,
1999, executed by the Company and each Subsidiary (other than Foreign
Subsidiaries), a copy of which is attached as Exhibit D.
Seller Subordinated Debt means unsecured indebtedness of the Company that:
(a) is subordinated, substantially upon the terms set forth in Exhibit
I or other terms that are more favorable to the Agent and the Lenders, in
right of payment to the payment in full in cash of the Loans and all other
amounts owed under the Loan Documents (whether or not matured or due and
payable), including amounts required to provide cash collateral for the
Letters of Credit; and
(b) represents all or part of the purchase price payable by the
Company in connection with an Acquisition permitted under this Agreement.
Series A Subordinated Notes means the Senior Subordinated Notes due 2007,
in an initial aggregate principal amount of $150,000,000 issued pursuant to the
Series A Subordinated Notes Indenture.
Series A Subordinated Notes Indenture means the Indenture dated as of July
23, 1997 between the Company and the Trustee.
Series B Subordinated Notes means the Senior Subordinated Notes due 2007,
in an initial aggregate principal amount of $50,000,000 issued pursuant to the
Series B Subordinated Notes Indenture.
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Series B Subordinated Notes Indenture means the Indenture dated as of
September 16, 1997 between the Company and the Trustee.
Stated Amount means, with respect to any Letter of Credit at any date of
determination, (a) the maximum aggregate amount available for drawing thereunder
under any and all circumstances plus (b) the aggregate amount of all
unreimbursed payments and disbursements under such Letter of Credit.
Stockholders' Equity, of any Person, means the excess of total assets over
total liabilities of such Person and its Subsidiaries, as reported on the
Company's consolidated financial statements.
Subordinated Debt means (i) the Subordinated Notes, (ii) Seller
Subordinated Debt and (iii) any other unsecured Debt of the Company which has
subordination terms, covenants, pricing and other terms which have been approved
in writing by the Required Lenders.
Subordinated Notes means the Series A Subordinated Notes and the Series B
Subordinated Notes.
Subordinated Notes Indentures means the Series A Subordinated Notes
Indenture and the Series B Subordinated Notes Indenture.
Subsidiary means, with respect to any Person, a corporation, partnership,
limited liability company or other entity of which such Person and/or its other
Subsidiaries own, directly or indirectly, such number of outstanding shares or
other ownership interests as have more than 50% of the ordinary voting power for
the election of directors or other managers of such corporation, partnership,
limited liability company or other entity. Unless the context otherwise
requires, each reference to Subsidiaries herein shall be a reference to
Subsidiaries of the Company.
Suretyship Liability means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to or\ otherwise to invest in a
debtor, or otherwise to assure a creditor against loss) any indebtedness,
obligation or other liability of any other Person (other than by endorsements of
instruments in the course of collection), or guarantees the payment of dividends
or other distributions upon the shares of any other Person. The amount of any
Person's obligation in respect of any Suretyship Liability shall (subject to any
limitation set forth therein) be deemed to be the principal amount of the debt,
obligation or other liability supported thereby.
Taxes - see Section 7.6.
Term Loan Termination Date means December 23, 2007.
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Term Loans - see Section 2.1.4.
Trustee means The Bank of New York, as trustee under the Subordinated Notes
Indentures.
Unmatured Event of Default means any event that, if it continues uncured,
will, with lapse of time or notice or both, constitute an Event of Default.
Wholly-Owned Subsidiary means, as to any Person, another Person all of the
shares of capital stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by such Person
and/or another Wholly-Owned Subsidiary of such Person.
Xxxxx XX Agreement - see Section 9.9.
1.2 Other Interpretive Provisions. (a) The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms.
(b) Section, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(c) The term "including" is not limiting and means "including without
limitation."
(d) In the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including"; the words "to" and
"until" each mean "to but excluding", and the word "through" means "to and
including."
(e) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
shall be construed as including all statutory and regulatory provisions
amending, replacing, supplementing or interpreting such statute or regulation.
(f) This Agreement and the other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and each shall be
performed in accordance with its terms.
(g) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the Company,
the Lenders and the other parties thereto and are the products of all parties.
Accordingly, they shall not be construed
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against the Agent or the Lenders merely because of the Agent's or Lenders'
involvement in their preparation.
(h) References herein to the "knowledge" of the Company or any Subsidiary
shall mean the actual knowledge of the officers of the Company or such
Subsidiary.
1.3 Addition of New Lenders. On the Effective Date, (a) each financial
institution listed on the signature pages hereof that was not a party to the
Existing Agreement (each, a "New Lender") shall automatically become a party
hereto and be entitled to the benefits, and have the obligations, of a "Lender"
hereunder, and (b) each New Lender shall deliver to the Agent immediately
available funds to cover such New Lender's Pro Rata Share of all outstanding
Loans and, from such funds, the Agent shall disburse to each Lender that was a
party to the Existing Agreement an amount in cash such that, after giving effect
to such disbursement, such Lender has an amount of Loans outstanding equal to
its Pro Rata Share of all outstanding Revolving Loans, Acquisition Loans and
Term Loans. To facilitate the foregoing, the Company agrees that on the
Effective Date the Company will pay to the Agent for the account of each Lender
which is a party to the Existing Agreement all interest and fees owed to such
Lender under the Existing Agreement.
SECTION 2 COMMITMENTS OF THE LENDERS; BORROWING AND LETTER OF CREDIT
PROCEDURES.
2.1 Commitments. On and subject to the terms and conditions of this
Agreement, each of the Lenders, severally and for itself alone, agrees to make
Loans to, and to issue or participate in Letters of Credit for the account of,
the Company as follows:
2.1.1 Revolving Loan Commitment. Each Lender will make loans on a revolving
basis ("Revolving Loans") from time to time until the Revolving Termination Date
in such Lender's Pro Rata Share of such aggregate amounts as the Company may
request from all Lenders; provided that the Revolving Outstandings will not at
any time exceed the Revolving Commitment Amount.
2.1.2 Acquisition Loan Commitment. Each Lender will make loans on a
revolving basis ("Acquisition Loans") from time to time until the Revolving
Termination Date in such Lender's Pro Rata Share of such aggregate amounts as
the Company may request from all Lenders; provided that the aggregate principal
amount of all outstanding Acquisition Loans will not at any time exceed the
Acquisition Commitment Amount.
2.1.3 L/C Commitment. (a) The Issuing Lender will issue letters of credit,
in each case containing such terms and conditions as are permitted by this
Agreement and are reasonably satisfactory to the Issuing Lender (each a "Letter
of Credit"), at the request of and for the account of the Company from time to
time before the date which is 30 days prior to the Revolving Termination Date
and (b) as more fully set forth in Section 2.3.2, each Lender agrees to purchase
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a participation in each such Letter of Credit; provided that (i) the aggregate
Stated Amount of all Letters of Credit shall not at any time exceed $10,000,000
and (ii) the Revolving Outstandings will not at any time exceed the Revolving
Commitment Amount.
2.1.4 Term Loans. Each Lender which was a party hereto prior to the
Effective Date has heretofore made term loans to the Company (each such loan, a
"Term Loan") in such Lender's Pro Rata Share of $186,000,000. No amount paid or
prepaid with respect to any Term Loan may be reborrowed.
2.2 Loan Procedures. The Company shall give written notice or telephonic
notice (followed immediately by written confirmation thereof) to the Agent of
each proposed borrowing not later than 10:00 A.M., Detroit time, at least three
Business Days prior to the proposed date of such borrowing. Each such notice
shall be effective upon receipt by the Agent, shall be irrevocable, and shall
specify the date and amount of borrowing. Within one Business Day of receipt of
such notice, the Agent shall advise each Lender thereof. Not later than 1:00
P.M., Detroit time, on the date of a proposed borrowing, each Lender shall
provide the Agent at the office specified by the Agent with immediately
available funds covering such Lender's Pro Rata Share of such borrowing and, so
long as the Agent has not received written notice that the conditions precedent
set forth in Section 10 with respect to such borrowing have not been satisfied,
the Agent shall pay over the funds received by the Agent to the Company on the
requested borrowing date. Each borrowing shall be on a Business Day.
2.3 Letter of Credit Procedures.
2.3.1 L/C Applications. The Company shall give notice to the Agent and the
Issuing Lender of the proposed issuance of each Letter of Credit (other than an
Existing Letter of Credit) on a Business Day which is at least three Business
Days (or such lesser number of days as the Agent and the Issuing Lender shall
agree in any particular instance in their sole discretion) prior to the proposed
date of issuance of such Letter of Credit. Each such notice shall be accompanied
by an L/C Application, duly executed by the Company and in all respects
reasonably satisfactory to the Agent and the Issuing Lender, together with such
other documentation as the Agent or the Issuing Lender may reasonably request in
support thereof, it being understood that each L/C Application shall specify,
among other things, the date on which the proposed Letter of Credit is to be
issued, the expiration date of such Letter of Credit (which shall not be later
than the earlier to occur of (x) one year after the date of issuance thereof and
(y) thirty days prior to the scheduled Revolving Termination Date) and whether
such Letter of Credit is to be transferable in whole or in part. So long as the
Issuing Lender has not received written notice that the conditions precedent set
forth in Section 10 with respect to the issuance of such Letter of Credit have
not been satisfied, the Issuing Lender shall issue such Letter of Credit on the
requested issuance date. The Issuing Lender shall promptly advise the Agent and
each Lender of the issuance of each Letter of Credit and of any amendment
thereto, extension thereof or event or circumstance changing the amount
available for drawing thereunder. In the event of any
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inconsistency between the terms of any L/C Application and the terms of this
Agreement, the terms of this Agreement shall control.
2.3.2 Participations in Letters of Credit. Concurrently with the issuance
of each Letter of Credit (or, in the case of any Existing Letter of Credit, on
the Effective Date), the Issuing Lender shall be deemed to have sold and
transferred to each other Lender, and each other Lender shall be deemed
irrevocably and unconditionally to have purchased and received from the Issuing
Lender, without recourse or warranty, an undivided interest and participation,
to the extent of such other Lender's Pro Rata Share, in such Letter of Credit
and the Company's reimbursement obligations with respect thereto. For the
purposes of this Agreement, the unparticipated portion of each Letter of Credit
shall be deemed to be the Issuing Lender's "participation" therein. The Issuing
Lender hereby agrees, upon request of the Agent or any Lender, to deliver to the
Agent or such Lender a list of all outstanding Letters of Credit issued by the
Issuing Lender, together with such information related thereto as the Agent or
such Lender may reasonably request.
2.3.3 Reimbursement Obligations. The Company hereby unconditionally and
irrevocably agrees to reimburse the Issuing Lender for each payment or
disbursement made by the Issuing Lender under any Letter of Credit honoring any
demand for payment made by the beneficiary thereunder, in each case on the date
that such payment or disbursement is made. Any amount not reimbursed on the date
of such payment or disbursement shall bear interest from the date of such
payment or disbursement to the date that the Issuing Lender is reimbursed by the
Company therefor, payable on demand, at a rate per annum equal to the Base LIBO
Rate from time to time in effect plus 2% plus, beginning on the third Business
Day after receipt of notice from the Issuing Lender of such payment or
disbursement, 2%. The Issuing Lender shall notify the Company and the Agent
whenever any demand for payment is made under any Letter of Credit by the
beneficiary thereunder; provided that the failure of the Issuing Lender to so
notify the Company shall not affect the rights of the Issuing Lender or the
Lenders in any manner whatsoever.
2.3.4 Limitation on Obligations of Issuing Lender. In determining whether
to pay under any Letter of Credit, the Issuing Lender shall not have any
obligation to the Company or any Lender other than to confirm that any documents
required to be delivered under such Letter of Credit appear to have been
delivered and appear to comply on their face with the requirements of such
Letter of Credit. Any action taken or omitted to be taken by the Issuing Lender
under or in connection with any Letter of Credit, if taken or omitted in the
absence of gross negligence and willful misconduct, shall not impose upon the
Issuing Lender any liability to the Company or any Lender and shall not reduce
or impair the Company's reimbursement obligations set forth in Section 2.3.3 or
the obligations of the Lenders pursuant to Section 2.3.5.
2.3.5 Funding by Lenders to Issuing Lender. If the Issuing Lender makes any
payment or disbursement under any Letter of Credit and the Company has not
reimbursed the Issuing Lender in full for such payment or disbursement by 10:00
A.M., Detroit time, on the date of such payment or disbursement, or if any
reimbursement received by the Issuing Lender from the
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Company is or must be returned or rescinded upon or during any bankruptcy or
reorganization of the Company or otherwise, each other Lender shall be obligated
to pay to the Agent for the account of the Issuing Lender, in full or partial
payment of the purchase price of its participation in such Letter of Credit, its
Pro Rata Share of such payment or disbursement (but no such payment shall
diminish the obligations of the Company under Section 2.3.3), and, upon notice
from the Issuing Lender, the Agent shall promptly notify each other Lender
thereof. Each other Lender irrevocably and unconditionally agrees to so pay to
the Agent in immediately available funds for the Issuing Lender's account the
amount of such other Lender's Pro Rata Share of such payment or disbursement. If
and to the extent any Lender shall not have made such amount available to the
Agent by 2:00 P.M., Detroit time, on the Business Day on which such Lender
receives notice from the Agent of such payment or disbursement (it being
understood that any such notice received after noon, Detroit time, on any
Business Day shall be deemed to have been received on the next following
Business Day), such Lender agrees to pay interest on such amount to the Agent
for the Issuing Lender's account forthwith on demand, for each day from the date
such amount was to have been delivered to the Agent to the date such amount is
paid, at a rate per annum equal to (a) for the first three days after demand,
the Federal Funds Rate from time to time in effect and (b) thereafter, the Base
LIBO Rate from time to time in effect plus 2%. Any Lender's failure to make
available to the Agent its Pro Rata Share of any such payment or disbursement
shall not relieve any other Lender of its obligation hereunder to make available
to the Agent such other Lender's Pro Rata Share of such payment, but no Lender
shall be responsible for the failure of any other Lender to make available to
the Agent such other Lender's Pro Rata Share of any such payment or
disbursement.
2.4 Commitments Several. The failure of any Lender to make a requested Loan
on any date shall not relieve any other Lender of its obligation (if any) to
make a Loan on such date, but no Lender shall be responsible for the failure of
any other Lender to make any Loan to be made by such other Lender.
2.5 Certain Conditions. Notwithstanding any other provision of this
Agreement, no Lender shall have an obligation to make any Loan and the Issuing
Lender shall not have any obligation to issue any Letter of Credit, if an Event
of Default or Unmatured Event of Default has occurred and is continuing.
SECTION 3 NOTES EVIDENCING LOANS.
3.1 Notes. The Loans of each Lender shall be evidenced by a promissory note
(each a "Note") substantially in the form set forth in Exhibit A, with
appropriate insertions, payable to the order of such Lender as follows:
(a) each Revolving Loan and Acquisition Loan of such Lender shall be
paid in full on the Revolving Termination Date; and
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(b) each Term Loan of such Lender shall be paid in installments equal
to such Lender's Pro Rata Share of the aggregate principal amount of the
installments of the Term Loans to be paid on the following dates:
Payment Date Payment Amount
------------ --------------
December 23, 2001 $25,000,000 (or, if less, the aggregate
amount of all Term Loans then
outstanding)
December 23, 2003 $25,000,000 (or, if less, the aggregate
amount of all Term Loans then
outstanding)
December 23, 2005 $25,000,000 (or, if less, the aggregate
amount of all Term Loans then
outstanding)
Term Loan Termination Date The aggregate amount of all Term Loans then
outstanding.
3.2 Recordkeeping. Each Lender shall record in its records, or at its
option on the schedule attached to its Note, the date and amount of each Loan
made by such Lender and each repayment thereof. The aggregate unpaid principal
amount so recorded shall be rebuttable presumptive evidence of the principal
amount owing and unpaid on such Note. The failure to so record any such amount
or any error in so recording any such amount shall not, however, limit or
otherwise affect the obligations of the Company hereunder or under any Note to
repay the principal amount of the Loans evidenced by such Note together with all
interest accruing thereon.
SECTION 4 INTEREST.
4.1 Interest Rate. The Company promises to pay interest on the unpaid
principal amount of each Loan for the period commencing on the date of such Loan
until such Loan is paid in full at the Interest Rate.
4.2 Interest Payment Dates. Accrued interest on each Loan shall be payable
in arrears for each month on the 20th day of the next succeeding month and at
maturity. After maturity, accrued interest on all Loans shall be payable on
demand.
4.3 Computation of Interest. Interest shall be computed for the actual
number of days elapsed on the basis of a year of 360 days. The Interest Rate
shall change simultaneously with each change in the LIBO Rate average referred
to in the definition of "Interest Rate."
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SECTION 5 FEES.
5.1 Letter of Credit Fees. The Company agrees to pay to the Agent for the
account of each Lender a fee for each Letter of Credit equal to 0.50% per annum
of such Lender's Pro Rata Share (as adjusted from time to time) of the undrawn
amount of such Letter of Credit (computed for the actual number of days elapsed
on the basis of a year of 360 days). Such letter of credit fee shall be payable
in arrears (x) at all times prior to the Revolving Termination Date, within 30
days after being invoiced therefor by the Agent and (y) on the Revolving
Termination Date (or such later date on which such Letter of Credit expires or
is terminated) for the period from the date of the issuance of each Letter of
Credit (or the last day on which the letter of credit fee was paid with respect
thereto) to the date such payment is due or, if earlier, the date on which such
Letter of Credit expired or was terminated.
SECTION 6 REDUCTION OR TERMINATION OF THE REVOLVING COMMITMENT AMOUNT AND
THE ACQUISITION COMMITMENT AMOUNT; PREPAYMENTS.
6.1. Voluntary Reduction or Termination of Commitment Amounts. (a) The
Company may from time to time on at least one Business Day's prior written
notice to the Agent (which shall promptly advise each Lender thereof)
permanently reduce the Revolving Commitment Amount to an amount not less than
the Revolving Outstandings. Concurrently with any reduction of the Revolving
Commitment Amount to zero, the Company shall pay all interest on the Revolving
Loans and all letter of credit fees and shall Cash Collateralize in full all
obligations arising with respect to the Letters of Credit.
(b) The Company may from time to time on at least one Business Day's prior
written notice to the Agent (which shall promptly advise each Lender thereof)
permanently reduce the Acquisition Commitment Amount to an amount not less than
the aggregate outstanding principal amount of all Acquisition Loans.
Concurrently with any reduction of the Acquisition Commitment Amount to zero,
the Company shall pay all interest on the Acquisition Loans.
(c) All reductions of the Revolving Commitment Amount and the Acquisition
Commitment Amount shall reduce the Commitments pro rata among the Lenders
according to their respective Pro Rata Shares.
6.2 Voluntary Prepayments. The Company may, upon not less than one Business
Day's notice to the Agent, from time to time prepay the Loans in whole or in
part, without premium or penalty. All such prepayments of the Term Loans shall
be applied to the remaining installments thereof in inverse order of maturity.
6.3 Mandatory Prepayments. (a) If the Company or any Subsidiary shall
receive any Net Cash Proceeds from the issuance of any Subordinated Debt (other
than Seller Subordinated Debt and other than Refinancing Debt in respect of any
portion of the Subordinated Notes that has not
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been repurchased, redeemed, defeased or otherwise repaid with the proceeds of
Loans) or any other Debt that is not permitted by Section 9.7, the Company
shall, concurrently with such receipt, make a prepayment of the Term Loans in an
amount equal to 100% of such Net Cash Proceeds.
(b) If at any time (A) the sum of (i) the Revolving Outstandings plus (ii)
the aggregate principal amount of the Term Loans plus (iii) the aggregate
principal amount of the Acquisition Loans exceeds (B) the sum of (i) the Asset
Value in effect at such time plus (ii) $300,000,000, the Company shall
immediately prepay Loans and/or Cash Collateralize Letters of Credit, or do a
combination of the foregoing, in an amount sufficient to eliminate such excess.
To the extent Cash Collateral is provided for any Letter of Credit as provided
in the immediately preceding sentence, the Agent agrees, upon request of the
Company, to release such Cash Collateral if at any time when no Event of Default
exists clause (A) of the immediately preceding sentence does not exceed clause
(B) of such sentence.
6.4 All Prepayments of Term Loans. Each prepayment of the Term Loans shall
be applied to the remaining installments thereof in inverse order of maturity.
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.
7.1 Making of Payments. All payments of principal of or interest on the
Notes, and of all fees, shall be made by the Company to the Agent in immediately
available funds at the office specified by the Agent not later than noon,
Detroit time, on the date due; and funds received after that hour shall be
deemed to have been received by the Agent on the following Business Day. The
Agent shall promptly remit to each Lender its share of all such payments
received in collected funds by the Agent for the account of such Lender.
7.2 Application of Certain Payments. Each payment of principal shall be
applied to such Loans as the Company shall direct by notice to be received by
the Agent on or before the date of such payment or, in the absence of such
notice, first to Term Loans, next to Revolving Loans used to repurchase
Subordinated Notes, next to other Revolving Loans and next to Acquisition Loans.
Concurrently with each remittance to any Lender of its share of any such
payment, the Agent shall advise such Lender as to the application of such
payment.
7.3 Due Date Extension. If any payment of principal or interest with
respect to any of the Loans, or of any fees, falls due on a day which is not a
Business Day, then such due date shall be extended to the immediately following
Business Day and, in the case of principal, additional interest shall accrue and
be payable for the period of any such extension.
7.4 Setoff. The Company agrees that the Agent and each Lender have all
rights of set-off provided by applicable law, and in addition thereto, the
Company agrees that at any time any Event of Default exists, the Agent and each
Lender may apply to the payment of any obligations of the Company hereunder,
whether or not then due, any and all balances, credits, deposits,
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accounts or moneys of the Company then or thereafter with the Agent or such
Lender. The Agent or the Lender exercising the set-off shall promptly notify the
Company thereof after making such exercise; provided that failure to give such
notice shall not affect the validity of the set-off.
7.5 Proration of Payments. If any Lender shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of offset or otherwise,
but excluding any payment pursuant to Section 13.9) on account of principal of
or interest on any Loan (or on account of its exposure under any Letter of
Credit) in excess of its pro rata share of payments and other recoveries
obtained by all Lenders on account of principal of and interest on the Loans (or
such exposure) then held by them, such Lender shall purchase from the other
Lenders such participations in the Loans and Letters of Credit held by them as
shall be necessary to cause such purchasing Lender to share the excess payment
or other recovery ratably with each of them; provided that if all or any portion
of the excess payment or other recovery is thereafter recovered from such
purchasing Lender, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery.
7.6 Taxes. All payments of principal of, and interest on, the Loans and all
other amounts payable hereunder shall be made free and clear of and without
deduction for any present or future income, excise, stamp or franchise taxes and
other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, excluding franchise taxes and taxes
imposed on or measured by any Lender's net income or receipts (all non-excluded
items being called "Taxes"). If any withholding or deduction from any payment to
be made by the Company hereunder is required in respect of any Taxes pursuant to
any applicable law, rule or regulation, then the Company will:
(a) pay directly to the relevant authority the full amount required to
be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(c) pay to the Agent for the account of the Lenders such additional
amount as is necessary to ensure that the net amount actually received by
each Lender will equal the full amount such Lender would have received had
no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Agent or any Lender
with respect to any payment received by the Agent or such Lender hereunder, the
Agent or such Lender may pay such Taxes and the Company will promptly pay such
additional amounts (including any penalty, interest or expense) as is necessary
in order that the net amount received by such Person after the payment of such
Taxes (including any Taxes on such additional amount) shall equal the amount
such Person would have received had such Taxes not been asserted.
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If the Company fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Agent, for the account of the respective
Lenders, the required receipts or other required documentary evidence, the
Company shall indemnify the Lenders for any incremental Taxes, interest or
penalties that may become payable by any Lender as a result of any such failure.
For purposes of this Section 7.6, a distribution hereunder by the Agent or any
Lender to or for the account of any Lender shall be deemed a payment by the
Company.
Each Lender that (a) is organized under the laws of a jurisdiction other
than the United States of America or a state thereof and (b)(i) is a party
hereto on the Effective Date or (ii) becomes an assignee of an interest under
this Agreement under Section 13.9.1 after the Effective Date (unless such Lender
was already a Lender hereunder immediately prior to such assignment) shall
execute and deliver to the Company and the Agent one or more (as the Company or
the Agent may reasonably request) United States Internal Revenue Service Form
W-8ECI or Form W-8BEN or such other forms or documents, appropriately completed,
as may be applicable to establish that such Lender is exempt from withholding or
deduction of Taxes. The Company shall not be required to pay additional amounts
to any Lender pursuant to this Section 7.6 to the extent that the obligation to
pay such additional amounts would not have arisen but for the failure of such
Lender to comply with this paragraph.
SECTION 8 WARRANTIES.
To induce the Agent and the Lenders to enter into this Agreement and to
induce the Lenders to make Loans and issue and participate in Letters of Credit
hereunder, the Company warrants to the Agent and the Lenders that:
8.1 Organization. The Company is a corporation validly existing and in good
standing under the laws of the State of Delaware; each Subsidiary is validly
existing and in good standing under the laws of the jurisdiction of its
organization; and each of the Company and each Subsidiary is duly qualified to
do business in each jurisdiction where, because of the nature of its activities
or properties, such qualification is required, except for such jurisdictions
where the failure to so qualify could not reasonably be expected to have a
Material Adverse Effect.
8.2 Authorization; No Conflict. Each of the Company and each other Loan
Party is duly authorized to execute and deliver each Loan Document to which it
is a party, the Company is duly authorized to borrow monies hereunder and each
of the Company and each other Loan Party is duly authorized to perform its
obligations under each Loan Document to which it is a party. The execution,
delivery and performance by the Company of this Agreement and by each of the
Company and each other Loan Party of each Loan Document to which it is a party,
and the borrowings by the Company hereunder, do not and will not (a) require any
consent or approval of any governmental agency or authority (other than any
consent or approval which has been obtained and is in full force and effect),
(b) conflict with (i) any provision of law, (ii) the charter, by-laws or other
organizational documents of the Company or any other Loan Party or (iii) any
agreement, indenture, instrument or other document, or any judgment, order or
decree, which is
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binding upon the Company or any other Loan Party or any of their respective
properties or (c) require, or result in, the creation or imposition of any Lien
on any asset of the Company, any Subsidiary or any other Loan Party (other than
Liens in favor of the Agent created pursuant to the Collateral Documents).
8.3 Validity and Binding Nature. Each of this Agreement and each other Loan
Document to which the Company or any other Loan Party is a party is the legal,
valid and binding obligation of such Person, enforceable against such Person in
accordance with its terms, subject to bankruptcy, insolvency and similar laws
affecting the enforceability of creditors' rights generally and to general
principles of equity.
8.4 Financial Condition. The audited consolidated financial statements of
the Company and its Subsidiaries as at December 31, 1999 and the unaudited
consolidated condensed financial statements of the Company and its Subsidiaries
as at September 30, 2000, copies of each of which have been delivered to the
Agent for distribution to each Lender, were prepared in accordance with GAAP.
8.5 No Material Adverse Change. Since December 31, 1999 there has been no
material adverse change in the financial condition, operations, assets,
business, properties or prospects of the Company and its Subsidiaries taken as a
whole.
8.6 Litigation and Contingent Liabilities. No litigation (including
derivative actions), arbitration proceeding or governmental investigation or
proceeding is pending or, to the Company's knowledge, threatened against the
Company or any Subsidiary which might reasonably be expected to have a Material
Adverse Effect, except as set forth in Schedule 8.6. Other than any liability
incident to such litigation or proceedings, neither the Company nor any
Subsidiary has, to the best of the Company's knowledge, any material contingent
liabilities not listed on Schedule 8.6 or permitted by Section 9.7.
8.7 Ownership of Properties; Liens. Each of the Company and each Subsidiary
owns good and, in the case of real property, marketable title to all of its
properties and assets, real and personal, tangible and intangible, of any nature
whatsoever (including patents, trademarks, trade names, service marks and
copyrights), free and clear of all Liens, charges and claims (including
infringement claims with respect to patents, trademarks, service marks,
copyrights and the like) except as permitted by Section 9.8.
8.8 Subsidiaries. As of the Effective Date, the Company has no Subsidiaries
other than those listed on Schedule 8.8.
8.9 Pension Plans. (a) During the twelve-consecutive-month period prior to
the date of the execution and delivery of this Agreement or the making of any
Loan or the issuance of any Letter of Credit, (i) no steps have been taken to
terminate any Pension Plan and (ii) no contribution failure has occurred with
respect to any Pension Plan sufficient to give rise to a Lien
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under Section 302(f) of ERISA. No condition exists or event or transaction has
occurred with respect to any Pension Plan which could result in the incurrence
by the Company of any material liability, fine or penalty.
(b) All contributions (if any) have been made to any Multiemployer Pension
Plan that are required to be made by the Company or any other member of the
Controlled Group under the terms of the plan or of any collective bargaining
agreement or by applicable law; neither the Company nor any member of the
Controlled Group has withdrawn or partially withdrawn from any Multiemployer
Pension Plan, incurred any withdrawal liability with respect to any such plan or
received notice of any claim or demand for withdrawal liability or partial
withdrawal liability from any such plan, and no condition has occurred which, if
continued, might result in a withdrawal or partial withdrawal from any such
plan; and neither the Company nor any member of the Controlled Group has
received any notice that any Multiemployer Pension Plan is in reorganization,
that increased contributions may be required to avoid a reduction in plan
benefits or the imposition of any excise tax, that any such plan is or has been
funded at a rate less than that required under Section 412 of the Code, that any
such plan is or may be terminated, or that any such plan is or may become
insolvent.
8.10 Investment Company Act. Neither the Company nor any Subsidiary is an
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940.
8.11 Public Utility Holding Company Act. Neither the Company nor any
Subsidiary is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935.
8.12 Regulation U. The Company is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
8.13 Taxes. Each of the Company and each Subsidiary has filed all Federal
and other material tax returns and reports required by law to have been filed by
it and has paid all taxes and governmental charges thereby shown to be owing,
except any such taxes or charges which are being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books.
8.14 Solvency, etc. On the Effective Date, and immediately prior to and
after giving effect to the issuance of each Letter of Credit and each borrowing
hereunder and the use of the proceeds thereof, (a) the assets of the Company and
the other Loan Parties, taken as a whole, will exceed the liabilities of the
Company and the other Loan Parties, taken as a whole, and (b) the Company and
the other Loan Parties, taken as a whole, will be solvent, will be able to pay
their debts as they mature, will own property with fair saleable value greater
than the amount
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required to pay their debts and will have capital sufficient to carry on their
business as then constituted.
8.15 Environmental Matters.
(a) No Violations. Except as set forth on Schedule 8.15, neither the
Company nor any Subsidiary, nor any operator of the Company's or any
Subsidiary's properties, is in violation, or alleged violation, of any judgment,
decree, order, law, permit, license, rule or regulation pertaining to
environmental matters, including those arising under the Resource Conservation
and Recovery Act ("RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 or any other Environmental Law which individually or
in the aggregate otherwise might reasonably be expected to have a Material
Adverse Effect.
(b) Notices. Except as set forth on Schedule 8.15 and for matters
arising after the Effective Date, in each case none of which could singly or in
the aggregate be expected to have a Material Adverse Effect, neither the Company
nor any Subsidiary has received notice from any third party, including any
Federal, state or local governmental authority: (a) that any one of them has
been identified by the U.S. Environmental Protection Agency as a potentially
responsible party under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part 000 Xxxxxxxx X; (b) that any hazardous waste, as
defined by 42 U.S.C. ss.6903(5), any hazardous substance as defined by 42 U.S.C.
ss.9601(14), any pollutant or contaminant as defined by 42 U.S.C. ss.9601(33) or
any toxic substance, oil or hazardous material or other chemical or substance
regulated by any Environmental Law (all of the foregoing, "Hazardous
Substances") which any one of them has generated, transported or disposed of has
been found at any site at which a Federal, state or local agency or other third
party has conducted a remedial investigation, removal or other response action
pursuant to any Environmental Law; (c) that the Company or any Subsidiary must
conduct a remedial investigation, removal, response action or other activity
pursuant to any Environmental Law; or (d) of any Environmental Claim.
(c) Handling of Hazardous Substances. Except as set forth on Schedule
8.15, (i) no portion of the real property or other assets of the Company or any
Subsidiary has been used for the handling, processing, storage or disposal of
Hazardous Substances except in accordance in all material respects with
applicable Environmental Laws and no underground tank or other underground
storage receptacle for Hazardous Substances is located on such properties; (ii)
in the course of any activities conducted by the Company, any Subsidiary or the
operators of any real property of the Company or any Subsidiary, no Hazardous
Substances have been generated or are being used on such properties except in
accordance in all material respects with applicable Environmental Laws; (iii)
there have been no Releases or threatened Releases of Hazardous Substances on,
upon, into or from any real property or other assets of the Company or any
Subsidiary, which Releases singly or in the aggregate might reasonably be
expected to have a material adverse effect on the value of such real property or
assets; (iv) there have been no Releases on, upon, from or into any real
property in the vicinity of the real property or other
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assets of the Company or any Subsidiary which, through soil or groundwater
contamination, may have come to be located on, and which might reasonably be
expected to have a material adverse effect on the value of, the real property or
other assets of the Company or any Subsidiary; and (v) any Hazardous Substances
generated by the Company and its Subsidiaries have been transported offsite only
by properly licensed carriers and delivered only to treatment or disposal
facilities maintaining valid permits as required under applicable Environmental
Laws, which transporters and facilities have been and are operating in
compliance in all material respects with such permits and applicable
Environmental Laws.
8.16 Insurance. Set forth on Schedule 8.16 is a complete and accurate
summary of the property and casualty insurance program of the Company and its
Subsidiaries as of the Effective Date (including the names of all insurers,
policy numbers, expiration dates, amounts and types of coverage, annual
premiums, exclusions, deductibles, self-insured retention, and a description in
reasonable detail of any self-insurance program, retrospective rating plan,
fronting arrangement or other risk assumption arrangement involving the Company
or any Subsidiary).
8.17 Information. All information heretofore or contemporaneously herewith
furnished in writing by the Company or any Subsidiary to the Agent or any Lender
for purposes of or in connection with this Agreement and the transactions
contemplated hereby is, and all written information hereafter furnished by or on
behalf of the Company or any Subsidiary to the Agent or any Lender pursuant
hereto or in connection herewith will be, true and accurate in every material
respect on the date as of which such information is dated or certified, and none
of such information is or will be materially incomplete by omitting to state any
material fact necessary to make such information not misleading in light of the
circumstances under which made (it being recognized by the Agent and the Lenders
that any projections and forecasts provided by the Company are based on good
faith estimates and assumptions believed by the Company to be reasonable as of
the date of the applicable projections or forecasts and that actual results
during the period or periods covered by any such projections and forecasts may
differ from projected or forecasted results).
8.18 Intellectual Property. The Company and each Subsidiary owns and
possesses or has a license or other right to use all patents, patent rights,
trademarks, trademark rights, trade names, trade name rights, service marks,
service xxxx rights and copyrights as are necessary for the conduct of the
business of the Company and its Subsidiaries, without any infringement upon
rights of others, except to the extent that failure to comply with any of the
foregoing could not reasonably be expected to have a Material Adverse Effect.
8.19 Burdensome Obligations. Neither the Company nor any Subsidiary is a
party to any agreement or contract or subject to any corporate or partnership
restriction which might reasonably be expected to have a Material Adverse
Effect, excluding those items set forth in Schedule 8.19.
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8.20 Labor Matters. Except as set forth on Schedule 8.20, neither the
Company nor any Subsidiary is subject to any labor or collective bargaining
agreement. There are no existing or threatened strikes, lockouts or other labor
disputes involving the Company or any Subsidiary that singly or in the aggregate
could reasonably be expected to have a Material Adverse Effect. Hours worked by
and payment made to employees of the Company and its Subsidiaries are not in
violation of the Fair Labor Standards Act or any other applicable law, rule or
regulation dealing with such matters.
8.21 No Default. No Event of Default or Unmatured Event of Default exists
or would result from the incurring by the Company of any Debt hereunder or under
any other Loan Document.
8.22 Securities Purchase Agreement. (a) The execution and delivery of the
Securities Purchase Agreement did not, and the consummation of the transactions
contemplated thereby will not, violate any statute or regulation of the United
States (including any securities law) or of any state or other applicable
jurisdiction, or any order, judgment or decree of any court or governmental body
binding on the Company or any Subsidiary or result in a breach of, or constitute
a default under, any material agreement, indenture, instrument or other
document, or any judgment, order or decree, to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary is bound.
(b) No statement or representation made in the Securities Purchase
Agreement by the Company or, to the Company's knowledge, any other Person,
contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in light of the circumstances under which they are made, not
misleading.
8.23 Senior Debt. The obligations of the Company and each Loan Party under
the Loan Documents constitute "Senior Debt" of the Company or such Loan Party,
as applicable, under and as defined in each Subordinated Notes Indenture.
SECTION 9 COVENANTS.
Until the expiration or termination of the Commitments and thereafter until
all obligations of the Company hereunder and under the other Loan Documents are
paid in full and all Letters of Credit have been Cash Collateralized or
terminated, the Company agrees that, unless at any time the Required Lenders
shall otherwise expressly consent (except as provided in Section 13.1) in
writing, it will:
9.1 Reports, Certificates and Other Information. Furnish to the Agent:
9.1.1 Annual Report. Promptly when available and in any event within 90
days after the close of each Fiscal Year: (a) a copy of the annual report of the
Company and its Subsidiaries for
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such Fiscal Year, including therein consolidated balance sheets and statements
of earnings and cash flows of the Company and its Subsidiaries for such Fiscal
Year, certified (without any qualification arising from the scope of the audit)
by Deloitte & Touche or other independent auditors of recognized standing
selected by the Company and reasonably acceptable to the Agent, together with a
written statement from such accountants to the effect that in making the
examination necessary for the signing of such annual audit report by such
accountants, nothing came to their attention that caused them to believe that
the Company was not in compliance with any provision of Section 9.6, 9.7 or 9.9
of this Agreement insofar as such provision relates to accounting matters or, if
something has come to their attention that caused them to believe that the
Company was not in compliance with any such provision, describing such
non-compliance in reasonable detail; and (b) consolidating balance sheets of the
Company and its Subsidiaries as of the end of such Fiscal Year and a
consolidating statement of earnings for the Company and its Subsidiaries for
such Fiscal Year.
9.1.2 Interim Reports. Promptly when available and in any event within 60
days after the end of each Fiscal Quarter (except the last Fiscal Quarter of
each Fiscal Year), consolidated and consolidating balance sheets of the Company
and its Subsidiaries as of the end of such Fiscal Quarter, together with
consolidated and consolidating statements of earnings and cash flows for such
Fiscal Quarter and for the period beginning with the first day of such Fiscal
Year and ending on the last day of such Fiscal Quarter, together with a
comparison with the corresponding period of the previous Fiscal Year; provided,
that so long as the Company is a registrant within the meaning of Rule 1-01 of
Regulation S-X of the SEC, the Company may deliver a copy of its report on Form
10Q for such Fiscal Quarter, together with consolidating balance sheets and
consolidating statements of earnings for the relevant period, in lieu of the
foregoing within such 60-day period.
9.1.3 Compliance Certificates/Asset Reports. Contemporaneously with the
furnishing of a copy of each annual audit report pursuant to Section 9.1.1 and
each set of quarterly statements pursuant to Section 9.1.2, (i) a duly completed
compliance certificate in the form of Exhibit B, with appropriate insertions,
dated the date of such annual report or such quarterly statements and signed by
the Chief Financial Officer or the President of the Company, containing a
computation of each of the financial ratios and restrictions set forth in
Section 9.6 and a statement to the effect that such officer has not become aware
of any Event of Default or Unmatured Event of Default that has occurred and is
continuing or, if there is any such event, describing it and the steps, if any,
being taken to cure it and setting forth all Events of Default that had occurred
but were cured or waived during the period covered by the related financial
statements and (ii) a report in the form previously delivered to the Agent
setting forth the Net Tangible Assets of the Company and its Subsidiaries as of
the last day of the Computation Period covered by such audit report or quarterly
statements.
9.1.4 Reports to the SEC and to Shareholders. Promptly upon the filing or
sending thereof, copies of all regular, periodic or special reports of the
Company or any Subsidiary filed with the SEC; copies of all registration
statements of the Company or any Subsidiary filed with
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the SEC (other than on Form S-8); and copies of all proxy statements or other
communications made to security holders generally.
9.1.5 Notice of Default, Litigation and ERISA Matters. Promptly upon the
Company obtaining knowledge of any of the following, written notice describing
the same and the steps being taken by the Company or the Subsidiary affected
thereby with respect thereto:
(a) the occurrence of an Event of Default or an Unmatured Event of
Default;
(b) any litigation, arbitration or governmental investigation or
proceeding not previously disclosed by the Company to the Lenders which has
been instituted or, to the knowledge of the Company, is threatened against
the Company or any Subsidiary or to which any of the properties of any
thereof is subject which might reasonably be expected to have a Material
Adverse Effect;
(c) the institution of any steps by any member of the Controlled Group
or any other Person to terminate any Pension Plan, or the failure of any
member of the Controlled Group to make a required contribution to any
Pension Plan (if such failure is sufficient to give rise to a Lien under
Section 302(f) of ERISA) or to any Multiemployer Pension Plan, or the
taking of any action with respect to a Pension Plan which could result in
the requirement that the Company furnish a bond or other security to the
PBGC or such Pension Plan, or the occurrence of any event with respect to
any Pension Plan or Multiemployer Pension Plan which could result in the
incurrence by any member of the Controlled Group of any material liability,
fine or penalty (including any claim or demand for withdrawal liability or
partial withdrawal from any Multiemployer Pension Plan), or any material
increase in the contingent liability of the Company with respect to any
post- retirement welfare plan benefit, or any notice that any Multiemployer
Pension Plan is in reorganization, that increased contributions may be
required to avoid a reduction in plan benefits or the imposition of an
excise tax, that any such plan is or has been funded at a rate less than
that required under Section 412 of the Code, that any such plan is or may
be terminated, or that any such plan is or may become insolvent;
(d) any cancellation (unless contemporaneously replaced with similar
coverage) or material change in any insurance maintained by the Company or
any Subsidiary;
(e) any material violation of law by the Company or any Subsidiary or
any officer or director of the Company or any Subsidiary related to the
business of the Company or such Subsidiary; or
(f) any other event (including any violation of any Environmental Law
or the assertion of any Environmental Claim) which might reasonably be
expected to have a Material Adverse Effect.
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9.1.6 Management Reports. Promptly upon receipt thereof, copies of all
detailed financial and management reports submitted to the Company by
independent auditors in connection with each audit made by such auditors of the
books of the Company, to the extent such reports identify a material deficiency
in the Company's internal controls.
9.1.7 Subordinated Debt Notices. Promptly from time to time, copies of any
material notices (including notices of default or acceleration) received from
any holder, or any notice from any trustee, of, under or with respect to any
Subordinated Debt.
9.1.8 Subordinated Notes. Within 45 days of the end of each Fiscal Quarter,
the Company shall obtain from its independent certified public accountants and
furnish to the Agent a letter, in the form of Exhibit K, stating that such
accountants have read Section 4.04 of the Series A Subordinated Notes Indenture
and Section 4.4 of the Series B Subordinated Notes Indenture (and any similar
provision in any Refinancing Agreement), that such accountants have tested the
compliance by the Company with such provisions during such Fiscal Quarter and
concluding that the Company was in compliance with such provisions during such
Fiscal Quarter or, if the Company was not in compliance with any such provision,
describing such non-compliance in reasonable detail.
9.1.9 Other Information. Promptly from time to time, such other information
concerning the Company and its Subsidiaries as any Lender or the Agent may
reasonably request.
9.2 Books, Records and Inspections. Keep, and cause each Subsidiary to
keep, its books and records in accordance with sound business practices
sufficient to allow the preparation of financial statements in accordance with
GAAP; permit, and cause each Subsidiary to permit, any Lender or the Agent or
any representative thereof to inspect the properties and operations of the
Company or such Subsidiary; and permit, and cause each Subsidiary to permit, at
any reasonable time and with reasonable notice (or at any time without notice if
an Event of Default exists), any Lender or the Agent or any representative
thereof to visit any or all of its offices, to discuss its financial matters
with its officers and its independent auditors, and to examine (and, at the
expense of the Agent or any Lender, unless an Event of Default has occurred and
is continuing, in which case at the expense of the Company or the applicable
Subsidiary, photocopy extracts from) any of its books or other records; and
permit, and cause each Subsidiary to permit, the Agent and its representatives
to inspect the inventory and other tangible assets of the Company or such
Subsidiary and to inspect, audit, check and make copies of and extracts from the
books, records, computer data, computer programs, journals, orders, receipts,
correspondence and other data relating to inventory, accounts receivable and any
other collateral.
9.3 Maintenance of Property; Insurance. (a) Keep, and cause each Subsidiary
to keep, all material property necessary in the business of the Company or such
Subsidiary in good working order and condition, ordinary wear and tear excepted.
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(b) Maintain, and cause each Subsidiary to maintain, with responsible
insurance companies, such insurance as may be required by any law or
governmental regulation or court decree or order applicable to it and such other
insurance, to such extent (including customary deductibles) and against such
hazards and liabilities, as is customarily maintained by companies similarly
situated; and, upon request of the Agent or any Lender, furnish to the Agent or
such Lender a certificate setting forth in reasonable detail the nature and
extent of all insurance maintained by the Company and its Subsidiaries. The
Company shall cause each issuer of an insurance policy to provide the Agent with
an endorsement (i) showing loss payable to the Agent with respect to each policy
of property or casualty insurance and naming the Agent and each Lender as an
additional insured with respect to each policy of insurance for liability for
personal injury or property damage, (ii) providing that 30 days' notice will be
given to the Agent prior to any cancellation of, material reduction or change in
coverage provided by or other material modification to such policy and (iii)
reasonably acceptable in all other respects to the Agent. The Company shall
execute and deliver, and shall cause each Subsidiary to execute and deliver, to
the Agent a collateral assignment, in form and substance reasonably satisfactory
to the Agent, of each business interruption insurance policy maintained by the
Company or such Subsidiary.
9.4 Compliance with Laws; Payment of Taxes and Liabilities. (a) Comply, and
cause each Subsidiary to comply, in all material respects with all applicable
laws, rules, regulations, decrees, orders, judgments, licenses and permits,
except where failure to comply could not reasonably be expected to have a
Material Adverse Effect; and (b) pay, and cause each Subsidiary to pay, prior to
delinquency, all taxes and other governmental charges against it or any of its
property, as well as claims of any kind which, if unpaid, might become a Lien on
any of its property; provided that the foregoing shall not require the Company
or any Subsidiary to pay any such tax or charge so long as it shall contest the
validity thereof in good faith by appropriate proceedings and shall set aside on
its books adequate reserves with respect thereto in accordance with GAAP.
9.5 Maintenance of Existence, etc. Maintain and preserve, and (subject to
Section 9.10 and to the ability of the Company to dissolve Subsidiaries the
dissolution of which could not have a Material Adverse Effect) cause each
Subsidiary to maintain and preserve, (a) its existence and good standing in the
jurisdiction of its organization and (b) its qualification to do business and
good standing in each jurisdiction where the nature of its business makes such
qualification necessary (except in those instances in which the failure to be
qualified or in good standing does not have a Material Adverse Effect).
9.6 Financial Covenants.
9.6.1 Ratio of Funded Debt to Stockholders' Equity. Not permit the ratio of
Funded Debt to Stockholders' Equity to be greater than (x) 2.5:1 at any time
during the period from the Effective Date through December 31, 2000 and (y)
2.75:1 at any time thereafter.
9.6.2 Ratio of Non-Floorplan Debt to Stockholders' Equity. Not permit the
ratio of
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Funded Debt (less Debt under Floor Plan Financings) to Stockholders' Equity to
be greater than 1.3:1 at any time.
9.6.3 Funded Debt to EBITDA Ratio. Not permit the Funded Debt to EBITDA
Ratio as of the last day of any Computation Period to exceed 3.75:1.
9.6.4 Working Capital. Cause each Subsidiary to maintain such level of
working capital as is necessary to satisfy the requirements of such Subsidiary's
franchise agreements.
9.7 Limitations on Debt. Not, and not permit any Subsidiary to, create,
incur, assume or suffer to exist any Debt, except:
(a) obligations under this Agreement and the other Loan Documents;
(b) Debt secured by Liens permitted by Section 9.8(d), and extensions,
renewals and refinancings thereof;
(c) Debt of Subsidiaries to the Company or to any Subsidiary;
(d) unsecured Debt of the Company to Subsidiaries;
(e) (i) the Subordinated Notes and guaranties thereof provided by the
Subsidiaries, each such guaranty thereof subordinated to the obligations of
the respective Subsidiary under the Loan Documents on substantially the
same basis as the obligations of the Company under the Subordinated Notes
are subordinated to the obligations of the Company under the Loan
Documents, (ii) other Subordinated Debt and (iii) Refinancing Debt in
respect thereof; provided that the aggregate principal amount of all Seller
Subordinated Debt at any time outstanding shall not exceed $30,000,000;
(f) Hedging Obligations incurred for bona fide hedging purposes and
not for speculation;
(g) Debt described on Schedule 9.7 and any extension, renewal or
refinancing thereof so long as the principal amount thereof is not
increased;
(h) Debt with respect to any Floor Plan Financing provided to the
Company or any Subsidiary by General Motors Acceptance Corporation, BMW
Financial Services NA, Inc., Ford Motor Credit Corporation, World Omni
Financial Corporation (with respect to Toyota make new vehicles only in
five states and used vehicles manufactured by various manufacturers),
Toyota Motor Credit Corporation or Toyota Credit de Puerto Rico Corp. or
any other Person to whom CFC, in its sole discretion, consents;
(i) Debt to CFC in respect of Floor Plan Financings;
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(j) Debt with respect to wholesale motor vehicle financing provided by
Persons other than CFC provided CFC has declined to provide the same and
the financing is provided by such other Person in compliance with Section
13.17; and
(k) other Debt, in addition to the Debt listed above, in an aggregate
amount not at any time exceeding $20,000,000.
9.8 Liens. Not, and not permit any Subsidiary to, create or permit to exist
any Lien on any of its real or personal properties, assets or rights of
whatsoever nature (whether now owned or hereafter acquired), except:
(a) Liens for taxes or other governmental charges not at the time
delinquent or thereafter payable without penalty or being contested in good
faith by appropriate proceedings and, in each case, for which it maintains
adequate reserves;
(b) Liens arising in the ordinary course of business (such as (i)
Liens of carriers, warehousemen, mechanics and materialmen and other
similar Liens imposed by law and (ii) Liens incurred in connection with
worker's compensation, unemployment compensation and other types of social
security (excluding Liens arising under ERISA) or in connection with surety
bonds, bids, performance bonds and similar obligations) for sums not
overdue or being contested in good faith by appropriate proceedings and not
involving any deposits or advances or borrowed money or the deferred
purchase price of property or services and, in each case, for which it
maintains adequate reserves;
(c) Liens described on Schedule 9.8;
(d)(i) Liens arising in connection with Capital Leases (and attaching
only to the property being leased), (ii) Liens existing on property at the
time of the acquisition thereof by the Company or any Subsidiary (and not
created in contemplation of such acquisition) and (iii) Liens that
constitute purchase money security interests on any property securing Debt
incurred for the purpose of financing all or any part of the cost of
acquiring such property, provided that any such Lien attaches to such
property within 60 days of the acquisition thereof and attaches solely to
the property so acquired;
(e) attachments, appeal bonds, judgments and other similar Liens, for
sums not exceeding $10,000,000 arising in connection with court
proceedings, provided the execution or other enforcement of such Liens is
effectively stayed and the claims secured thereby are being actively
contested in good faith and by appropriate proceedings;
(f) easements, rights of way, restrictions, minor defects or
irregularities in title and other similar Liens not interfering in any
material respect with the ordinary conduct of the business of the Company
or any Subsidiary;
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(g) Liens arising under the Loan Documents;
(h) Liens on any asset of an Automobile Dealership securing Debt
permitted by Sections 9.7(h), (i) and (j) (in the case of Debt under
Sections 9.7(h) and (j), (x) such Liens under agreements entered into after
August 3, 1999 may attach only to the inventory floorplanned by such Debt
and proceeds thereof, accounts receivable and payment intangibles owing by
the relevant Dealer to the manufacturer with whom the provider of the
financing is affiliated (and, with respect to World Omni Financial Corp.,
owing to Southeast Toyota Distributors, Inc.) (and all other rights to
payment in which any such financing provider could exercise a right of
setoff or recoupment) and service loaner vehicles manufactured by a
manufacturer and financed by a financing provider permitted under Section
9.7(h) or (j) (collectively, "Permitted Floorplan Collateral") and (y) to
the extent that such Liens under agreements in existence on August 3, 1999
attach to assets in addition to Permitted Floorplan Collateral, such Liens
on such assets other than Permitted Floorplan Collateral must be
subordinated to the security interest of the Agent in form and substance
satisfactory to the Agent; and
(i) Liens arising in connection with cash collateral provided in
support of that certain Swap Confirmation (deal no. 421023) with Xxxxxx
Guaranty Trust Company of New York ("Xxxxxx") dated as of January 12, 2000
(the "Xxxxxx Swap").
9.9 Restricted Payments. Not, and not permit any Subsidiary to, (a) make
any distribution to any of its shareholders, (b) purchase or redeem any of its
capital stock or other equity interests or any warrants, options or other rights
in respect thereof, (c) pay any management fees or similar fees to any of its
shareholders or any Affiliate thereof, (d) make any redemption, prepayment,
defeasance or repurchase of any Subordinated Debt or (e) set aside funds for any
of the foregoing. Notwithstanding the foregoing, (i) any Subsidiary may pay
dividends or make other distributions to the Company or another Subsidiary and
(ii) so long as no Event of Default or Unmatured Event of Default has occurred
and is continuing or would result therefrom, the Company and its Subsidiaries
may (1) pay dividends to its stockholders and purchase or redeem its capital
stock, (2) pay management fees to Young Automotive Group, LLC, an Indiana
limited liability company ("YAG"), and its Affiliates (collectively, "Young") in
connection with joint ventures formed by the Company and its Subsidiaries
pursuant to that certain Joint Venture Formation Agreement, dated as of January
31, 1998, among the Company, YAG and certain other parties (the "Xxxxx XX
Agreement"), in an amount not to exceed 30% of the annual pre-tax income of all
Persons in which Investments are made pursuant to the Xxxxx XX Agreement, (3)
pay management fees to minority investors in UAG Cerritos, LLC and [Brazil] in
an amount not to exceed 20% of the annual pre-fix income of UAG Cerritos LLC or
[Brazil], as the case may be, (4) repurchase, redeem, defease or otherwise repay
all or any of the Subordinated Notes using the proceeds of up to $ 5,000,000 of
Revolving Loans and (5) repurchase, redeem, defease or otherwise repay all or
any of the Subordinated Notes using the proceeds of an offering of equity
securities, which equity securities are issued by the Company.
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9.10 Mergers, Consolidations, Sales. Not, and not permit any Subsidiary to,
be a party to any merger or consolidation, or purchase or otherwise acquire all
or substantially all of the assets or any stock of any class of, or any
partnership or joint venture interest in, any other Person, or, except in the
ordinary course of its business, sell, transfer, convey or lease all or any
substantial part of its assets, or sell or assign with or without recourse any
receivables, except for: (a) any such merger, consolidation, sale, transfer,
conveyance, lease or assignment of or by any Subsidiary into the Company or
into, with or to any other Subsidiary; (b) any such purchase or other
acquisition by the Company or any Subsidiary of the assets or stock of any
Subsidiary; (c) any Acquisition by the Company or any Subsidiary if (1)
immediately before and after giving effect to such Acquisition, no Event of
Default or Unmatured Event of Default shall exist, (2) immediately after giving
effect to such Acquisition, the Company is in pro forma compliance with all the
financial ratios and restrictions set forth in Section 9.6, (3) in the case of
the Acquisition of any Person, the Board of Directors of such Person has
approved such Acquisition and all auto manufacturers doing business with such
Person have consented to such Acquisition (provided that the auto manufacturers
doing business with the acquired Person need not have consented to such
Acquisition at the time of consummation thereof if the Company or the Subsidiary
making such Acquisition has an irrevocable option, on terms and conditions
(including cash escrow) satisfactory to the Agent in its sole discretion, to put
the Person acquired in such Acquisition back to the seller thereof for a price
in cash at least equal to the total amount of cash consideration paid by the
Company or such Subsidiary in such Acquisition (including purchase price,
noncompetition payments, earnout payments and other similar consideration)
within 180 days if such auto manufacturers have not consented to such
Acquisition, which option is otherwise unconditional, and which option must be
exercised by the Company or the applicable Subsidiary within such period if such
consents are not obtained), (4) after giving effect to such Acquisition, at
least 20% of the total consideration (including cash and noncash purchase price,
liabilities assumed, deferred purchase price, noncompetition payments and the
like) paid by the Company in respect of all Acquisitions consummated after June
28, 2000 at any time has been paid otherwise than by means of any Debt incurred
by the Company or any Subsidiary (provided that, for purposes of this clause (4)
only, "Debt" shall not include Acquisition Loans and Revolving Loans to the
extent that the aggregate principal amount of all Acquisition Loans and
Revolving Loans is less than or equal to $200,000,000) and (5) prior to and
after such Acquisition, the Chief Financial Officer of the Company has delivered
a certificate to the Agent confirming that the conditions set forth in clauses
(1) - (4) above will be (in the case of a certificate delivered prior to such
Acquisition) or have been (in the case of a certificate delivered after such
Acquisition) met; and (d) sales and dispositions ("Dispositions") of assets
(including the stock of Subsidiaries) for at least fair market value (as
determined by the Board of Directors of the Company) so long as the net book
value of all assets sold or otherwise disposed of in any Fiscal Year does not
exceed $50,000,000 (exclusive of any Disposition the net cash proceeds of which
are used within 180 days to purchase another asset performing the same or a
similar function as the asset disposed of).
9.11 Modification of Organizational Documents. Not permit the Certificate
or Articles of Incorporation, By-Laws or other organizational documents of the
Company or any Subsidiary
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to be amended or modified in any way which might reasonably be expected to
materially adversely affect the interests of the Lenders.
9.12 Use of Proceeds. Use the proceeds of the Revolving Loans and
Acquisition Loans, and the Letters of Credit, solely for working capital, for
Acquisitions permitted by Section 9.10, for capital expenditures, to repurchase,
redeem, defease or otherwise repay all or any of the Subordinated Notes (to the
extent permitted by Section 9.9) to make Investments permitted hereunder, to
repurchase the Company's capital stock and for other general corporate purposes
(including, in the case of Revolving Loans, to pay Term Loans); and not use or
permit any proceeds of any Loan to be used, either directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, of "purchasing or
carrying" any Margin Stock.
9.13 Further Assurances. Take, and cause each Subsidiary to take, such
actions as are necessary or as the Agent or the Required Lenders may reasonably
request from time to time (including the execution and delivery of guaranties,
security agreements, pledge agreements, mortgages, deeds of trust, financing
statements and other documents, the filing or recording of any of the foregoing,
and the delivery of stock certificates and other collateral with respect to
which perfection is obtained by possession) to ensure that (a) the obligations
of the Company hereunder and under the other Loan Documents (i) are secured by
substantially all of the assets (other than property in which the Company is
prohibited from granting a security interest, pledge or assignment pursuant to a
Permitted Restriction) of the Company and (ii) guaranteed by all of its
Subsidiaries (including, promptly upon the acquisition or creation thereof, any
Subsidiary acquired or created after the date hereof but excluding Foreign
Subsidiaries (to the extent that such exclusion is necessary to avoid material
adverse tax consequences for the Company)) by execution of a counterpart of the
Guaranty and (b) the obligations of each Subsidiary under the Guaranty are
secured by substantially all of the assets (other than property in which such
Subsidiary is prohibited from granting a security interest, pledge or assignment
pursuant to a Permitted Restriction) of such Subsidiary (other than Foreign
Subsidiaries (to the extent that such exclusion is necessary to avoid material
adverse tax consequences for the Company)), provided that (i) the pledge by the
Company or any Subsidiary (other than a Foreign Subsidiary) of the stock of any
Foreign Subsidiary shall be limited to 65% of the stock of such Foreign
Subsidiary to the extent the pledge of a greater percentage would have material
adverse tax consequences for the Company and (ii) a pledge of the stock of a
Subsidiary shall not be required if and to the extent that such pledge would
violate a Permitted Restriction in favor of an auto manufacturer.
9.14 Transactions with Affiliates. Not, and not permit any Subsidiary to,
enter into, or cause, suffer or permit to exist any transaction, arrangement or
contract with any of its other Affiliates (other than the Company and its
Subsidiaries) which is on terms that are less favorable than are obtainable from
any Person which is not one of its Affiliates.
9.15 Employee Benefit Plans. Maintain, and cause each Subsidiary to
maintain, each Pension Plan in substantial compliance with all applicable
requirements of law and regulations.
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9.16 Environmental Matters. (a) If any Release or Disposal of Hazardous
Substances shall occur or shall have occurred on any real property or any other
assets of the Company or any Subsidiary, the Company shall, or shall cause the
applicable Subsidiary to, cause the prompt containment and removal of such
Hazardous Substances and the remediation of such real property or other assets
as necessary to comply with all Environmental Laws and to preserve the value of
such real property or other assets. Without limiting the generality of the
foregoing, the Company shall, and shall cause each Subsidiary to, comply with
any valid Federal or state judicial or administrative order requiring the
performance at any real property of the Company or any Subsidiary of activities
in response to the Release or threatened Release of a Hazardous Substance.
(b) To the extent that the transportation of "hazardous waste" as
defined by RCRA is permitted by this Agreement, the Company shall, and shall
cause its Subsidiaries to, dispose of such hazardous waste only at licensed
disposal facilities operating in compliance with Environmental Laws.
9.17 Inconsistent Agreements. Not, and not permit any Subsidiary to, enter
into any agreement containing any provision which would (a) be violated or
breached by any borrowing by the Company hereunder or by the performance by the
Company or any Subsidiary of any of its obligations hereunder or under any other
Loan Document, (b) except for Permitted Restrictions, prohibit the Company or
any Subsidiary from granting to the Agent, for the benefit of the Lenders, a
Lien on any of its assets or (c) except for Permitted Restrictions, create or
permit to exist or become effective any encumbrance or restriction on the
ability of any Subsidiary to (i) pay dividends or make other distributions to
the Company or any other applicable Subsidiary, or pay any Debt owed to the
Company or any other Subsidiary, (ii) make loans or advances to the Company or
(iii) transfer any of its assets or properties to the Company.
9.18 Business Activities. Not, and not permit any Subsidiary to, engage in
any line of business other than the businesses engaged in on August 3, 1999 and
businesses reasonably related thereto.
9.19 Investments. Not, and not permit any Subsidiary to, make or permit to
exist any Investment in any other Person, except (without duplication) the
following:
(a) contributions by the Company to the capital of any of its
Subsidiaries, or by any such Subsidiary to the capital of any of its
Subsidiaries;
(b) Investments by the Company in any Subsidiary or by any Subsidiary
in the Company, or by any Subsidiary in any Subsidiary, by way of
intercompany loans, advances or guaranties, all to the extent permitted by
Section 9.7;
(c) Suretyship Liabilities permitted by Section 9.7;
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(d) Cash Equivalent Investments;
(e) bank deposits in the ordinary course of business;
(f) Investments in securities of account debtors received pursuant to
any plan of reorganization or similar arrangement upon the bankruptcy or
insolvency of such account debtors;
(g) Investments to consummate Acquisitions permitted by Section 9.10;
(h) Investments listed on Schedule 9.19;
(i) Investments in an aggregate amount not exceeding $15,000,000 at
any one time outstanding in Persons engaged in businesses in which the
Company and its Subsidiaries are permitted to engage hereunder (provided
that any Investment made with the proceeds of any offering of equity
securities or Subordinated Debt of the Company shall be disregarded when
determining compliance with the aggregate dollar limit in this clause (i));
and
(j) such other Investments consented to by the Agent in its sole
discretion;
provided that (x) any Investment which when made complies with the requirements
of the definition of the term "Cash Equivalent Investment" may continue to be
held notwithstanding that such Investment if made thereafter would not comply
with such requirements; (y) no Investment otherwise permitted by clause (b),
(c), (g) or (i) shall be permitted to be made if, immediately before or after
giving effect thereto, any Event of Default or Unmatured Event of Default
exists; and (z) the aggregate amount of Foreign Investments made during the
period from and after August 3, 1999 shall not exceed $25,000,000 (provided that
any Investment made with the proceeds of any offering of equity securities or
Subordinated Debt of the Company shall be disregarded when determining
compliance with the aggregate dollar limit in this clause (z)).
9.20 Restriction of Amendments to Certain Documents. Not amend or otherwise
modify, or waive any rights under, either Subordinated Notes Indenture, the
Subordinated Notes or the Xxxxxx Swap, in any case, if such amendment,
modification or waiver could reasonably be expected to be adverse to the Lenders
in any respect; and not take any action to terminate the Xxxxxx Swap if it is a
condition to such termination that the Company make any payment to Xxxxxx, or if
a consequence of such termination would permit Xxxxxx to retain or sell any
collateral or to demand any payment from the Company.
9.21 Limitation on Floor Plan Amendments. Not modify any Floor Plan
Financing arrangement if such modification would have a Material Adverse Effect.
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9.22 Amendments to Subordinated Note Indentures. Not solicit the consent of
any holder of Subordinated Notes to any amendment, waiver or modification of any
Subordinated Note Indenture (or any Refinancing Agreement) unless, concurrently
with any other consents being solicited, the consent of such holders is
solicited to amend Section 4.04(ii) of the Series A Subordinated Notes Indenture
and Section 4.4(ii) of the Series B Subordinated Notes Indenture (and any
similar provision in any Refinancing Agreement) to increase the maximum amount
of Debt that can be incurred under the "Senior Credit Facility" pursuant to such
subsections from $100,000,000 to $250,000,000.
SECTION 10 EFFECTIVENESS; CONDITIONS OF LENDING, ETC.
The obligation of each Lender to make its Loans and of the Issuing Lender
to issue Letters of Credit is subject to the following conditions precedent:
10.1 Conditions to Effectiveness. This Agreement shall become effective,
and all Loans outstanding under the Existing Agreement and the Existing Letters
of Credit shall be deemed to be issued and outstanding hereunder (as more fully
set forth in Section 1.3), on the date on which the Agent shall have received
all of the following, each duly executed and dated the date hereof (or such
other date as shall be satisfactory to the Agent), in form and substance
reasonably satisfactory to the Agent (and the date on which all such conditions
precedent have been satisfied or waived in writing by the Agent and the Lenders
is called the "Effective Date"):
10.1.1 Notes. A Note executed by the Company in favor of each New Lender.
10.1.2 Resolutions. Certified copies of resolutions of the Board of
Directors of the Company authorizing the execution, delivery and performance by
the Company of this Agreement, the Notes and the other Loan Documents to which
the Company is a party; and certified copies of resolutions of the Board of
Directors of each other Loan Party authorizing the execution, delivery and
performance by such Loan Party of each Loan Document to which such entity is a
party.
10.1.3 Consents, etc. Certified copies of all documents evidencing any
necessary corporate or partnership action, consents and governmental approvals
(if any) required for the execution, delivery and performance by the Company and
each other Loan Party of the documents referred to in this Section 10.
10.1.4 Incumbency and Signature Certificates. A certificate of the
Secretary or an Assistant Secretary (or other appropriate representative) of
each Loan Party certifying the names of the officer or officers of such entity
authorized to sign the Loan Documents to which such entity is a party, together
with a sample of the true signature of each such officer (it being understood
that the Agent and each Lender may conclusively rely on each such certificate
until formally advised by a like certificate of any changes therein).
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10.1.5 Reaffirmation. A counterpart of the Reaffirmation executed by each
Subsidiary of the Company (other than Foreign Subsidiaries).
10.1.6 Opinion of Counsel. An opinion of counsel reasonably satisfactory to
the Agent.
10.1.7 Payment of Fees. Evidence of payment by the Company of all accrued
and unpaid fees, costs and expenses to the extent then due and payable on the
Effective Date, together with all Attorney Costs of the Agent to the extent
invoiced prior to the Effective Date, plus such additional amounts of Attorney
Costs as shall constitute the Agent's reasonable estimate of Attorney Costs
incurred or to be incurred by the Agent through the closing proceedings
(provided that such estimate shall not thereafter preclude final settling of
accounts between the Company and the Agent).
10.1.8 Solvency Certificate. A Solvency Certificate, substantially in the
form of Exhibit F, executed by the Chief Financial Officer of the Company.
10.1.9 Closing Certificate. A certificate signed by a Vice President of the
Company dated as of the Effective Date, affirming the matters set forth in
Section 10.2.1 as of the Effective Date.
10.1.10 Other. Such other documents as the Agent or any Lender may
reasonably request.
10.2 Conditions. The obligation (a) of each Lender to make each Loan and
(b) of the Issuing Lender to issue each Letter of Credit is subject to the
following further conditions precedent that:
10.2.1 Compliance with Warranties, No Default, etc. Both before and after
giving effect to any borrowing and the issuance of any Letter of Credit, the
following statements shall be true and correct:
(a) the representations and warranties of the Company and each
Subsidiary set forth in this Agreement and the other Loan Documents shall
be true and correct in all material respects with the same effect as if
then made (except to the extent stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct as of such earlier date);
(b) no Event of Default or Unmatured Event of Default shall have then
occurred and be continuing;
(c) unless the proceeds of such borrowing are to be used to
repurchase, redeem or repay all outstanding Subordinated Notes, for so long
as either Subordinated Notes Indenture is in effect (unless the obligations
of the Company with respect to all
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Subordinated Notes thereunder have been, or are concurrently with such
borrowing to be, defeased in accordance with the terms of such Subordinated
Notes Indenture), if after giving effect to such borrowing or the issuance
of such Letter of Credit, the sum of the aggregate principal amount of all
outstanding Loans plus the Stated Amount of all Letters of Credit would
exceed the maximum amount of Debt permitted under each of Section 4.04(ii)
of the Series A Subordinated Notes Indenture or Section 4.4(ii) of the
Series B Subordinated Notes Indenture (or any similar provision in any
instrument, indenture or agreement governing Refinancing Debt with respect
to the Subordinated Notes (a "Refinancing Agreement") that limits the
maximum amount of Debt that the Company may incur under this Agreement or
any other senior credit facility of the Company without recourse to any
other provision of such Refinancing Agreement), the Agent shall be
satisfied that such borrowing or such issuance of a Letter of Credit will
not violate either Subordinated Notes Indenture (or any Refinancing
Agreement) and that the Company's obligations to the Agent and the Lenders
in respect of such borrowing or Letter of Credit are "Senior Debt" under
and as defined in each Subordinated Notes Indenture that is in effect at
the time of such borrowing; and
(d) (i) if the proceeds of any borrowing are to be used to finance a
tender offer for Subordinated Notes, (x) all terms and conditions of any
such tender offer shall be satisfactory to the Agent (including the maximum
tender price and all fees and commissions paid to any information agent,
solicitation agent, dealer manager or Person performing any similar role)
and each such tender offer shall comply with the offer documents applicable
thereto and all applicable laws (including Rule 14e-1 under the Securities
Exchange Act of 1934 and other Federal and state securities laws and
regulations) and (y) there shall have been delivered to the Agent true and
correct copies of all offer documents applicable thereto, all of which
shall be in form and substance reasonably satisfactory to the Agent (the
Agent agrees to review any such documents received by it reasonably
promptly following receipt) and (ii) if the proceeds of any borrowing are
to be used in connection with any solicitation of consents to amend any
Subordinated Notes Indenture, all terms and conditions of each such consent
solicitation shall be reasonably satisfactory to the Agent (the Agent
agrees to review any such documents received by it reasonably promptly
following receipt).
10.2.2 Confirmatory Certificate. If requested by the Agent or any Lender,
the Agent shall have received (in sufficient counterparts to provide one to each
Lender) a certificate dated the date of such requested Loan or Letter of Credit
and signed by a duly authorized representative of the Company as to the matters
set out in Section 10.2.1 (it being understood that each request by the Company
for the making of a Loan or the issuance of a Letter of Credit shall be deemed
to constitute a warranty by the Company that the conditions precedent set forth
in Section 10.2.1 will be satisfied at the time of the making of such Loan or
the issuance of such Letter of Credit), together with such other documents as
the Agent or any Lender may reasonably request in support thereof.
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10.3 Further Conditions to Acquisition Loans. In addition to the
conditions set forth in Sections 10.1 and 10.2, the obligation of each Lender to
make each Acquisition Loan is subject to the following further conditions
precedent that:
(a) all of the proceeds of each such Acquisition Loan shall be used to
consummate an Acquisition;
(b) the Agent shall have received evidence of compliance by the Person
to be acquired in such Acquisition with all auto manufacturers' working
capital requirements;
(c) the Agent shall have received a certificate from the Chief
Financial Officer of the Company to the effect that (i) no Event of Default
or Unmatured Event of Default shall exist after giving effect to the
consummation of such Acquisition and (ii) confirming the matters set forth
in clause (a) above.
SECTION 11 EVENTS OF DEFAULT AND THEIR EFFECT.
11.1 Events of Default. Each of the following shall constitute an Event of
Default under this Agreement:
11.1.1 Non-Payment of the Loans, etc. Default in the payment when due of
the principal of any Loan; or default, and continuance thereof for five Business
Days, in the payment when due of any interest, fee, reimbursement obligation
with respect to any Letter of Credit or other amount payable by the Company
hereunder or under any other Loan Document.
11.1.2 Non-Payment of Other Debt. Any default shall occur under the terms
applicable to any Debt of the Company or any Subsidiary in an aggregate amount
(for all such Debt so affected) exceeding $20,000,000 and such default shall (a)
consist of the failure to pay such Debt when due, whether by acceleration or
otherwise, or (b) accelerate the maturity of such Debt or permit the holder or
holders thereof, or any trustee or agent for such holder or holders, to cause
such Debt to become due and payable prior to its expressed maturity; or any such
Debt shall be required to be prepaid or redeemed (other than by a regularly
scheduled prepayment or redemption), purchased or defeased or an offer to
prepay, redeem, purchase or defease such Debt shall be required to be made, in
each case prior to the stated maturity thereof; or any default shall occur under
any Floor Plan Financing provided by any Lender or any Affiliate of a Lender to
the Company or any Subsidiary.
11.1.3 Other Material Obligations. Default in the payment when due, or in
the performance or observance of, any material obligation of, or condition
agreed to by, the Company or any Subsidiary with respect to any material
purchase or lease of goods or services, or any agreement with an auto
manufacturer, where such default, singly or in the aggregate with all other such
defaults, might reasonably be expected to have a Material Adverse Effect or
cause the loss of a material franchise.
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11.1.4 Bankruptcy, Insolvency, etc. The Company or any Subsidiary becomes
insolvent or generally fails to pay, or admits in writing its inability or
refusal to pay, debts as they become due; or the Company or any Subsidiary
applies for, consents to, or acquiesces in the appointment of a trustee,
receiver or other custodian for the Company or such Subsidiary or any property
thereof, or makes a general assignment for the benefit of creditors; or, in the
absence of such application, consent or acquiescence, a trustee, receiver or
other custodian is appointed for the Company or any Subsidiary or for a
substantial part of the property of any thereof and is not discharged within 60
days; or any bankruptcy, reorganization, debt arrangement, or other case or
proceeding under any bankruptcy or insolvency law, or any dissolution or
liquidation proceeding, is commenced in respect of the Company or any Subsidiary
(other than a voluntary dissolution, not under any bankruptcy or insolvency law,
of an immaterial Subsidiary), and if such case or proceeding is not commenced by
the Company or such Subsidiary, it is consented to or acquiesced in by the
Company or such Subsidiary, or remains for 30 days undismissed; or the Company
or any Subsidiary takes any action to authorize, or in furtherance of, any of
the foregoing.
11.1.5 Non-Compliance with Loan Documents. (a) Failure by the Company to
comply with or to perform any covenant set forth in Sections 9.1.5(a), 9.5
through 9.14 (excluding Section 9.6.4), and 9.19 through 9.21; (b) failure by
the Company to comply with the covenant set forth in Section 9.6.4 and
continuance of such failure for 60 days; or (c) failure by the Company to comply
with or to perform any other provision of this Agreement or any other Loan
Document (and not constituting an Event of Default under any other provision of
this Section 11) and continuance of such failure for 30 days.
11.1.6 Warranties. Any warranty made by the Company or any Subsidiary
herein or any other Loan Document is breached or is false or misleading in any
material respect, or any schedule, certificate, financial statement, report,
notice or other writing furnished by the Company or any Subsidiary to the Agent
or any Lender in connection herewith is false or misleading in any material
respect on the date as of which the facts therein set forth are stated or
certified.
11.1.7 Pension Plans. (i) Institution of any steps by the Company or any
other Person to terminate a Pension Plan if as a result of such termination the
Company could be required to make a contribution to such Pension Plan, or could
incur a liability or obligation to such Pension Plan, in excess of $10,000,000;
(ii) a contribution failure occurs with respect to any Pension Plan sufficient
to give rise to a Lien under Section 302(f) of ERISA; or (iii) there shall occur
any withdrawal or partial withdrawal from a Multiemployer Pension Plan and the
withdrawal liability (without unaccrued interest) to Multiemployer Pension Plans
as a result of such withdrawal (including any outstanding withdrawal liability
that the Company and the Controlled Group have incurred on the date of such
withdrawal) exceeds $10,000,000.
11.1.8 Judgments. Final judgments which exceed an aggregate of $10,000,000
shall be rendered against the Company or any Subsidiary and shall not have been
paid, discharged or
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vacated or had execution thereof stayed pending appeal within 60 days after
entry or filing of such judgments.
11.1.9 Invalidity of Guaranty, etc. The Guaranty shall cease to be in
full force and effect with respect to any Subsidiary, other than by virtue of
the release of such Subsidiary after sale thereof in a transaction permitted
hereunder or the voluntary dissolution of an immaterial Subsidiary; or any
Subsidiary (or any Person by, through or on behalf of such Subsidiary) shall
contest in any manner the validity, binding nature or enforceability of the
Guaranty with respect to such Subsidiary.
11.1.10 Invalidity of Collateral Documents, etc. Any Collateral Document
shall cease to be in full force and effect, other than by virtue of the release
of such Subsidiary after sale thereof in a transaction permitted hereunder or
the voluntary dissolution of an immaterial Subsidiary; or the Company or any
Subsidiary (or any Person by, through or on behalf of the Company or any
Subsidiary) shall contest in any manner the validity, binding nature or
enforceability of any Collateral Document.
11.1.11 Invalidity of Subordination Provisions, etc. Any subordination
provision in any document or instrument governing Subordinated Debt, or any
subordination provision in any guaranty by any Subsidiary of any Subordinated
Debt, shall cease to be in full force and effect, or the Company or any other
Person (including the holder of any applicable Subordinated Debt) shall contest
in any manner the validity, binding nature or enforceability of any such
provision.
11.1.12 Change of Control. A majority of the members of the Board of
Directors of the Company shall cease to be constituted of (i) nominees and
designees of Penske Capital Partners or Penske Corporation, (ii) officers and
directors of any entity which, directly or indirectly, controls or is controlled
by or is under common control with Penske Capital Partners or Penske Corporation
or (iii) any Person approved by the vote of a majority of the members of the
Board of Directors of the Company then in office who were at the time Persons
described in clauses (i) and (ii) above.
11.1.13 Securities Purchase Agreement; Put of Stock. Penske Capital
Partners shall exercise its right to require the Company to repurchase the stock
of the Company held by Penske Capital Partners pursuant to Section 7.2 of the
Securities Purchase Agreement.
11.2 Effect of Event of Default. If any Event of Default described in
Section 11.1.4 shall occur, the Commitments (if they have not theretofore
terminated) shall immediately terminate and the Loans and all other obligations
hereunder shall become immediately due and payable and the Company shall become
immediately obligated to Cash Collateralize all Letters of Credit, all without
presentment, demand, protest or notice of any kind; and, if any other Event of
Default shall occur and be continuing, the Agent (upon written request of the
Required Lenders) shall declare the Commitments (if they have not theretofore
terminated) to be terminated and/or declare all Loans and all other obligations
hereunder to be due and payable and/or demand that the
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Company immediately Cash Collateralize all Letters of Credit, whereupon the
Commitments (if they have not theretofore terminated) shall immediately
terminate and/or all Loans and all other obligations hereunder shall become
immediately due and payable and/or the Company shall immediately become
obligated to Cash Collateralize all Letters of Credit, all without presentment,
demand, protest or notice of any kind. The Agent shall promptly advise the
Company of any such declaration, but failure to do so shall not impair the
effect of such declaration. Notwithstanding the foregoing, the effect as an
Event of Default of any event described in Section 11.1.1 or Section 11.1.4 may
be waived by the written concurrence of all of the Lenders, and the effect as an
Event of Default of any other event described in this Section 11 may be waived
by the written concurrence of the Required Lenders (except as provided in
Section 13.1). Any cash collateral delivered hereunder shall be held by the
Agent (without liability for interest thereon) and applied to reimbursement
obligations under the Letters of Credit. After the expiration or termination of
the Letters of Credit, such cash collateral shall be applied by the Agent to any
remaining obligations hereunder and any excess shall be delivered to the Company
or as a court of competent jurisdiction may direct.
SECTION 12 THE AGENT.
12.1 Appointment and Authorization. (a) Each Lender hereby irrevocably
(subject to Section 12.9) appoints, designates and authorizes the Agent to take
such action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duty or
responsibility except those expressly set forth herein, nor shall the Agent have
or be deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against the Agent.
(b) The Issuing Lender shall act on behalf of the Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith. The
Issuing Lender shall have all of the benefits and immunities (i) provided to the
Agent in this Section 12 with respect to any acts taken or omissions suffered by
the Issuing Lender in connection with Letters of Credit issued by it or proposed
to be issued by it and the applications and agreements for letters of credit
pertaining to such Letters of Credit as fully as if the term "Agent", as used in
this Section 12, included the Issuing Lender with respect to such acts or
omissions and (ii) as additionally provided in this Agreement with respect to
the Issuing Lender.
12.2 Delegation of Duties. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
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12.3 Liability of Agent. None of the Agent nor any of its directors,
officers, employees or agents shall (i) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Agreement or
any other Loan Document or the transactions contemplated hereby (except for its
own gross negligence or willful misconduct), or (ii) be responsible in any
manner to any of the Lenders for any recital, statement, representation or
warranty made by the Company or any Subsidiary or Affiliate of the Company, or
any officer thereof, contained in this Agreement or in any other Loan Document,
or in any certificate, report, statement or other document referred to or
provided for in, or received by the Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of the Company or any other party to any Loan
Document to perform its obligations hereunder or thereunder. The Agent shall not
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of the Company or any of the Company's Subsidiaries or
Affiliates.
12.4 Reliance by Agent. The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation reasonably believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to the Company), independent accountants and other experts reasonably selected
by the Agent. The Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate and, if it so requests, confirmation from the Lenders of their
obligation to indemnify the Agent against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Required Lenders and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all of the Lenders.
12.5 Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Event of Default or Unmatured Event of
Default except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Agent for the account of the Lenders, unless
the Agent shall have received written notice from a Lender or the Company
referring to this Agreement, describing such Event of Default or Unmatured Event
of Default and stating that such notice is a "notice of default". The Agent will
notify the Lenders of its receipt of any such notice. The Agent shall take such
action with respect to such Event of Default or Unmatured Event of Default as
may be requested by the Required Lenders in accordance with Section 11; provided
that unless and until the Agent has received any such request, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Event of Default or Unmatured Event of Default as
it shall deem advisable or in the best interest of the Lenders.
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12.6 Credit Decision. Each Lender acknowledges that the Agent has not
made any representation or warranty to it, and that no act by the Agent
hereafter taken, including any review of the affairs of the Company and its
Subsidiaries, shall be deemed to constitute any representation or warranty by
the Agent to any Lender. Each Lender represents to the Agent that it has,
independently and without reliance upon the Agent and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Company and its Subsidiaries, and
made its own decision to enter into this Agreement and to extend credit to the
Company hereunder. Each Lender also represents that it will, independently and
without reliance upon the Agent and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Company. Except for notices,
reports and other documents expressly herein required to be furnished to the
Lenders by the Agent, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
prospects, operations, property, financial or other condition or
creditworthiness of the Company which may come into the possession of the Agent.
12.7 Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand the Agent and
its directors, officers, employees and agents (to the extent not reimbursed by
or on behalf of the Company and without limiting the obligation of the Company
to do so), pro rata, from and against any and all Indemnified Liabilities;
provided that no Lender shall be liable for any payment to any such Person of
any portion of the Indemnified Liabilities resulting from such Person's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender shall reimburse the Agent upon demand for its ratable share of any costs
or out-of-pocket expenses (including Attorney Costs) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Company. The undertaking in
this Section shall survive repayment of the Loans, cancellation of the Notes,
expiration or termination of the Letters of Credit, any foreclosure under, or
modification, release or discharge of, any or all of the Collateral Documents,
termination of this Agreement and the resignation or replacement of the Agent.
12.8 Agent in Individual Capacity. CFC and its Affiliates may make loans
to, issue letters of credit for the account of, acquire equity interests in and
generally engage in any kind of business with the Company and its Subsidiaries
and Affiliates as though CFC were not the Agent hereunder and without notice to
or consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, CFC or its Affiliates may receive information regarding the Company
or its Affiliates (including information that may be subject to confidentiality
obligations in favor
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of the Company or such Affiliate) and acknowledge that the Agent shall be under
no obligation to provide such information to them. With respect to their Loans
(if any), CFC and its Affiliates shall have the same rights and powers under
this Agreement as any other Lender and may exercise the same as though CFC were
not the Agent, and the terms "Lender" and "Lenders" include CFC and its
Affiliates, to the extent applicable, in their individual capacities.
12.9 Successor Agent. The Agent may resign as Agent upon 30 days' notice
to the Lenders. If the Agent resigns under this Agreement, the Required Lenders
shall, with (so long as no Event of Default exists) the consent of the Company
(which shall not be unreasonably withheld or delayed), appoint from among the
Lenders a successor agent for the Lenders. If no successor agent is appointed
prior to the effective date of the resignation of the Agent, the Agent may
appoint, after consulting with the Lenders and the Company, a successor agent
from among the Lenders. Upon the acceptance of its appointment as successor
agent hereunder, such successor agent shall succeed to all the rights, powers
and duties of the retiring Agent and the term "Agent" shall mean such successor
agent, and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Section 12 and Sections 13.6 and 13.13 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. If no successor agent has accepted appointment as Agent by
the date which is 30 days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Agent hereunder until
such time, if any, as the Required Lenders appoint a successor agent as provided
for above.
12.10 Collateral Matters. The Lenders irrevocably authorize the Agent, at
its option and in its discretion, (a) to release any Lien granted to or held by
the Agent under any Collateral Document (i) upon termination of the Commitments
and payment in full of all Loans and all other obligations of the Company
hereunder and the expiration or termination of all Letters of Credit; (ii)
constituting property sold or to be sold or disposed of as part of or in
connection with any disposition permitted hereunder; or (iii) subject to Section
13.1, if approved, authorized or ratified in writing by the Required Lenders; or
(b) to subordinate its interest in any collateral to any holder of a Lien on
such collateral which is permitted by clause (d)(i), (d)(iii) or (h) of Section
9.8. Upon request by the Agent at any time, the Lenders will confirm in writing
the Agent's authority to release, or subordinate its interest in, particular
types or items of collateral pursuant to this Section 12.10.
12.11 Funding Reliance. (a) Unless the Agent receives notice from a
Lender by noon, Detroit time, on the day of a proposed borrowing that such
Lender will not make available to the Agent an amount equal to its Pro Rata
Share of such borrowing, the Agent may assume that such Lender has made such
amount available to the Agent and, in reliance upon such assumption, make a
corresponding amount available to the Company. If and to the extent such Lender
has not made such amount available to the Agent, such Lender and the Company
jointly and severally agree to repay such amount to the Agent forthwith on
demand, together with interest thereon at the interest rate applicable to Loans
comprising such borrowing or, in the case of any Lender which repays
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such amount within three Business Days, the Federal Funds Rate. Nothing set
forth in this clause (a) shall relieve any Lender of any obligation it may have
to make any Loan hereunder.
(b) Unless the Agent receives notice from the Company prior to the due
date for any payment hereunder that the Company does not intend to make such
payment, the Agent may assume that the Company has made such payment and, in
reliance upon such assumption, make available to each Lender its share of such
payment. If and to the extent that the Company has not made any such payment to
the Agent, each Lender which received a share of such payment shall repay such
share (or the relevant portion thereof) to the Agent forthwith on demand,
together with interest thereon at the Prime Rate (or, in the case of any Lender
which repays such amount within three Business Days, the Federal Funds Rate).
Nothing set forth in this clause (b) shall relieve the Company of any obligation
it may have to make any payment hereunder.
SECTION 13 GENERAL.
13.1 Waiver; Amendments. No delay on the part of the Agent or any Lender
in the exercise of any right, power or remedy shall operate as a waiver thereof,
nor shall any single or partial exercise by any of them of any right, power or
remedy preclude other or further exercise thereof, or the exercise of any other
right, power or remedy. No amendment, modification or waiver of, or consent with
respect to, any provision of this Agreement or the Notes shall in any event be
effective unless the same shall be in writing and signed and delivered by
Lenders having an aggregate Pro Rata Share of not less than the aggregate Pro
Rata Share expressly designated herein with respect thereto or, in the absence
of such designation as to any provision of this Agreement or the Notes, by the
Required Lenders, and then any such amendment, modification, waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, the Lenders authorize the Agent to act within its
discretion (and without notice to or the consent of any Lender) to waive or
forbear on behalf of all Lenders any noncompliance by the Company (other than a
waiver of, or forbearance with respect to, any Event of Default under Section
11.1.4) with this Agreement (provided that no such waiver shall be for a period
in excess of 90 days). No amendment, modification, waiver or consent shall
change the Pro Rata Share of any Lender without the consent of such Lender. No
amendment, modification, waiver or consent shall (i) increase the Revolving
Commitment Amount or the Acquisition Commitment Amount, (ii) extend the date for
payment of any principal of or interest on the Loans or any fees payable
hereunder, (iii) reduce the principal amount of any Loan, the rate of interest
thereon or any fees payable hereunder, (iv) release the Guaranty or all or any
substantial part of the collateral granted under the Collateral Documents, (v)
amend or modify Section 9.6.1 so as to increase the maximum ratio of Funded Debt
to Stockholder's Equity permitted at any time, (vi) amend or modify Section
9.6.2 so as to increase the maximum ratio of Funded Debt (less Debt under Floor
Plan Financings) to Stockholder's Equity permitted at any time, (vii) amend or
modify Section 9.6.4 so as to permit any Subsidiary to maintain working capital
at levels less than the requirements set forth in such Subsidiary's franchise
agreements, (viii) amend or modify Section 9.6.3 so as to increase the maximum
Funded Debt to EBITDA Ratio permitted at any time, (ix) amend, modify or waive
Section 11.1.2 to the extent such Section expressly refers to
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Floor Plan Financings, (x) amend, modify or waive Section 6.3(b) or (xi) reduce
the aggregate Pro Rata Share required to effect an amendment, modification,
waiver or consent without, in each case, the consent of all Lenders. No
provision of Section 12 or other provision of this Agreement affecting the Agent
in its capacity as such shall be amended, modified or waived without the consent
of the Agent. No provision of this Agreement relating to the rights or duties of
the Issuing Lender in its capacity as such shall be amended, modified or waived
without the consent of the Issuing Lender.
13.2 Confirmations. The Company and each holder of a Note agree from
time to time, upon written request received by it from the other, to confirm to
the other in writing (with a copy of each such confirmation to the Agent) the
aggregate unpaid principal amount of the Loans then outstanding under such Note.
13.3 Notices. Except as otherwise provided in Section 2.2, all notices
hereunder shall be in writing (including facsimile transmission) and shall be
sent to the applicable party at its address shown on Schedule 13.3 or at such
other address as such party may, by written notice received by the other
parties, have designated as its address for such purpose. Notices sent by
facsimile transmission shall be deemed to have been given when sent; notices
sent by mail shall be deemed to have been given three Business Days after the
date when sent by registered or certified mail, postage prepaid; and notices
sent by hand delivery or overnight courier service shall be deemed to have been
given when received. For purposes of Section 2.2, the Agent shall be entitled to
rely on telephonic instructions from any person that the Agent in good faith
believes is an authorized officer or employee of the Company, and the Company
shall hold the Agent and each other Lender harmless from any loss, cost or
expense resulting from any such reliance.
13.4 Computations. Where the character or amount of any asset or
liability or item of income or expense is required to be determined, or any
consolidation or other accounting computation is required to be made, for the
purpose of this Agreement, such determination or calculation shall, to the
extent applicable and except as otherwise specified in this Agreement, be made
in accordance with GAAP, consistently applied; provided that if the Company
notifies the Agent that the Company wishes to amend any covenant in Section 9 to
eliminate or to take into account the effect of any change in GAAP on the
operation of such covenant (or if the Agent notifies the Company that the
Required Lenders wish to amend Section 9 for such purpose), then the Company's
compliance with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory to
the Company and the Required Lenders.
13.5 Regulation U. Each Lender represents that it in good faith is not
relying, either directly or indirectly, upon any Margin Stock as collateral
security for the extension or maintenance by it of any credit provided for in
this Agreement.
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13.6 Costs, Expenses and Taxes. The Company agrees to pay on demand all
reasonable out-of-pocket costs and expenses of the Agent (including Attorney
Costs) in connection with the preparation, execution, syndication, delivery and
administration of this Agreement, the other Loan Documents and all other
documents provided for herein or delivered or to be delivered hereunder or in
connection herewith (including any amendment, supplement or waiver to any Loan
Document), and all out-of-pocket costs and expenses (including Attorney Costs)
incurred by the Agent and each Lender after an Event of Default in connection
with the enforcement of this Agreement, the other Loan Documents or any such
other documents. In addition, the Company agrees to pay, and to save the Agent
and the Lenders harmless from all liability for, (a) any stamp or other taxes
(excluding income taxes and franchise taxes based on net income) which may be
payable in connection with the execution and delivery of this Agreement, the
borrowings hereunder, the issuance of the Notes or the execution and delivery of
any other Loan Document or any other document provided for herein or delivered
or to be delivered hereunder or in connection herewith and (b) any fees of the
Company's auditors in connection with any reasonable exercise by the Agent and
the Lenders of their rights pursuant to Section 9.2. All obligations provided
for in this Section 13.6 shall survive repayment of the Loans, cancellation of
the Notes, expiration or termination of the Letters of Credit and termination of
this Agreement.
13.7 Subsidiary References. The provisions of this Agreement relating
to Subsidiaries shall apply only during such times as the Company has one or
more Subsidiaries.
13.8 Captions. Section captions used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
13.9 Assignments; Participations.
13.9.1 Assignments. Any Lender may, with the prior written consents of
the Issuing Lender and the Agent and (so long as no Event of Default exists) the
Company (which consents shall not be unreasonably delayed or withheld and, in
any event, shall not be required for an assignment by a Lender to one of its
Affiliates), at any time assign and delegate to one or more commercial banks or
other Persons (any Person to whom such an assignment and delegation is to be
made being herein called an "Assignee") all or any fraction of such Lender's
Loans and Commitment (which assignment and delegation shall be of a constant,
and not a varying, percentage of all the assigning Lender's Loans and
Commitment) in a minimum aggregate amount equal to the lesser of (i) the amount
of the assigning Lender's Pro Rata Share of the Revolving Commitment Amount and
the Acquisition Commitment Amount plus the unpaid amount of such Lender's Term
Loans and (ii) $25,000,000; provided that (a) no assignment and delegation may
be made to any Person if, at the time of such assignment and delegation, the
Company would be obligated to pay any greater amount under Section 7.6 to the
Assignee than the Company is then obligated to pay to the assigning Lender under
such Section (and if any assignment is made in violation of the foregoing, the
Company will not be required to pay the incremental amounts) and (b) the Company
and the Agent shall be entitled to continue to deal solely and directly with
such
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Lender in connection with the interests so assigned and delegated to an Assignee
until the date when all of the following conditions shall have been met:
(x) five Business Days (or such lesser period of time as the
Agent and the assigning Lender shall agree) shall have passed after
written notice of such assignment and delegation, together with payment
instructions, addresses and related information with respect to such
Assignee, shall have been given to the Company and the Agent by such
assigning Lender and the Assignee,
(y) the assigning Lender and the Assignee shall have executed and
delivered to the Company and the Agent an assignment agreement
substantially in the form of Exhibit G (an "Assignment Agreement"),
together with any documents required to be delivered thereunder, which
Assignment Agreement shall have been accepted by the Agent, and
(z) except in the case of an assignment by a Lender to one of its
Affiliates, the assigning Lender or the Assignee shall have paid the
Agent a processing fee of $3,500.
From and after the date on which the conditions described above have been met,
(x) such Assignee shall be deemed automatically to have become a party hereto
and, to the extent that rights and obligations hereunder have been assigned and
delegated to such Assignee pursuant to such Assignment Agreement, shall have the
rights and obligations of a Lender hereunder and (y) the assigning Lender, to
the extent that rights and obligations hereunder have been assigned and
delegated by it pursuant to such Assignment Agreement, shall be released from
its obligations hereunder. Within five Business Days after effectiveness of any
assignment and delegation, the Company shall execute and deliver to the Agent
(for delivery to the Assignee). Each such Note shall be dated the effective date
of such assignment. The assigning Lender shall xxxx the predecessor Note
"exchanged" and deliver it to the Company. Accrued interest on that part of the
predecessor Note being assigned shall be paid as provided in the Assignment
Agreement. Accrued interest and fees on that part of the predecessor Note not
being assigned shall be paid to the assigning Lender. Accrued interest and
accrued fees shall be paid at the same time or times provided in the predecessor
Note and in this Agreement. Any attempted assignment and delegation not made in
accordance with this Section 13.9.1 shall be null and void.
Notwithstanding the foregoing provisions of this Section 13.9.1 or any
other provision of this Agreement, any Lender may at any time assign all or any
portion of its Loans and its Note to a Federal Reserve Bank (but no such
assignment shall release any Lender from any of its obligations hereunder).
13.9.2 Participations. Any Lender may at any time sell to one or more
commercial banks or other Persons participating interests in any Loan owing to
such Lender, the Note held by such Lender, the Commitment of such Lender, the
interest of such Lender in any Letter of Credit or any other interest of such
Lender hereunder (any Person purchasing any such participating interest being
herein called a "Participant"). In the event of a sale by a Lender of a
participating interest to
52
60
a Participant, (x) such Lender shall remain the holder of its Note for all
purposes of this Agreement, (y) the Company and the Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations hereunder and (z) all amounts payable by the Company shall be
determined as if such Lender had not sold such participation and shall be paid
directly to such Lender. No Participant shall have any direct or indirect voting
rights hereunder except with respect to any of the events described in the
fourth sentence of Section 13.1. Each Lender agrees to incorporate the
requirements of the preceding sentence into each participation agreement which
such Lender enters into with any Participant. The Company agrees that if amounts
outstanding under this Agreement and the Notes are due and payable (as a result
of acceleration or otherwise), each Participant shall be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement and any Note to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement or such Note; provided that such right of setoff shall be subject to
the obligation of each Participant to share with the Lenders, and the Lenders
agree to share with each Participant, as provided in Section 7.5. The Company
also agrees that each Participant shall be entitled to the benefits of Section
7.6 as if it were a Lender (provided that no Participant shall receive any
greater compensation pursuant to Section 7.6 than would have been paid to the
participating Lender if no participation had been sold).
13.10 Governing Law. This Agreement and each Note shall be a contract
made under and governed by the laws of the State of New York applicable to
contracts made and to be performed entirely within such State. Whenever possible
each provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement. All obligations of the Company and rights of the Agent and the
Lenders expressed herein or in any other Loan Document shall be in addition to
and not in limitation of those provided by applicable law.
13.11 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement.
13.12 Successors and Assigns. This Agreement shall be binding upon the
Company, the Lenders and the Agent and their respective successors and assigns,
and shall inure to the benefit of the Company, the Lenders and the Agent and the
successors and assigns of the Lenders and the Agent.
53
61
13.13 Indemnification by the Company. In consideration of the execution
and delivery of this Agreement by the Agent and the Lenders and the agreement to
extend the Commitments provided hereunder, the Company hereby agrees to
indemnify, exonerate and hold the Agent, each Lender and each of the officers,
directors, employees, Affiliates and agents of the Agent and each Lender (each a
"Lender Party") free and harmless from and against any and all actions, causes
of action, suits, losses, liabilities, damages and expenses, including Attorney
Costs (collectively, the "Indemnified Liabilities"), incurred by the Lender
Parties or any of them as a result of, or arising out of, or relating to (i) any
tender offer, merger, purchase of stock, purchase of assets or other similar
transaction financed or proposed to be financed in whole or in part, directly or
indirectly, with the proceeds of any of the Loans, (ii) the use, handling,
release, emission, discharge, transportation, storage, treatment or disposal of
any hazardous substance at any property owned or leased by the Company or any
Subsidiary, (iii) any violation of any Environmental Laws with respect to
conditions at any property owned or leased by the Company or any Subsidiary or
the operations conducted thereon, (iv) the investigation, cleanup or remediation
of offsite locations at which the Company or any Subsidiary or their respective
predecessors are alleged to have directly or indirectly disposed of hazardous
substances or (v) the execution, delivery, performance or enforcement of this
Agreement or any other Loan Document by any of the Lender Parties, except for
any such Indemnified Liabilities arising on account of the applicable Lender
Party's gross negligence or willful misconduct. If and to the extent that the
foregoing undertaking may be unenforceable for any reason, the Company hereby
agrees to make the maximum contribution to the payment and satisfaction of each
of the Indemnified Liabilities which is permissible under applicable law. All
obligations provided for in this Section 13.13 shall survive repayment of the
Loans, cancellation of the Notes, expiration or termination of the Letters of
Credit, any foreclosure under, or any modification, release or discharge of, any
or all of the Collateral Documents and termination of this Agreement.
13.14 Nonliability of Lenders. The relationship between the Company on
the one hand and the Lenders and the Agent on the other hand shall be solely
that of borrower and lender. Neither the Agent nor any Lender shall have any
fiduciary responsibility to the Company. Neither the Agent nor any Lender
undertakes any responsibility to the Company to review or inform the Company of
any matter in connection with any phase of the Company's business or operations.
The Company agrees that neither the Agent nor any Lender shall have liability to
the Company (whether sounding in tort, contract or otherwise) for losses
suffered by the Company in connection with, arising out of, or in any way
related to the transactions contemplated and the relationship established by the
Loan Documents, or any act, omission or event occurring in connection therewith,
unless it is determined in a final non-appealable judgment by a court of
competent jurisdiction that such losses resulted from the gross negligence or
willful misconduct of the party from which recovery is sought. Neither the Agent
nor any Lender shall have any liability with respect to, and the Company hereby
waives, releases and agrees not to xxx for, any special, indirect or
consequential damages suffered by the Company in connection with, arising out
of, or in any way related to the Loan Documents or the transactions contemplated
thereby.
54
62
13.15 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK; PROVIDED THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE AGENT'S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT
THE STATE OF NEW YORK. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED
TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
13.16 WAIVER OF JURY TRIAL. EACH OF THE COMPANY, THE AGENT AND EACH
LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN
DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING
FROM ANY LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING,
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
13.17 CFC Right of First Refusal on Floor Plan Financing. Each Subsidiary
that is engaged in the retail sale or lease of motor vehicle inventory shall not
obtain any wholesale motor vehicle financing from any Person other than CFC (and
other than Floor Plan Financings permitted under Section 9.7(h)) unless and
until it shall have submitted a bona fide written proposal (a "Proposal") to CFC
for such financing and CFC has declined to provide the same. Each Proposal shall
set forth all salient terms of the underlying financing. For purposes hereof,
CFC will be deemed to have declined to provide the financing described in a
Proposal if it shall have failed to respond to the Subsidiary that submitted the
Proposal within ten Business Days of receiving such Proposal. If CFC declines to
provide any financing described in a Proposal, the Subsidiary that submitted the
Proposal may then obtain the financing described in the Proposal
55
63
from another Person on terms no more favorable to such Person than those
contained in the Proposal and otherwise on terms substantially identical to
those in the Proposal.
13.18 Confidentiality. Each Lender agrees to take, and to cause its
Affiliates to take, normal and reasonable precautions and exercise due care to
maintain the confidentiality of all non-public information provided to it by the
Company or any Subsidiary, or by the Agent on the Company's or any Subsidiary's
behalf, under this Agreement or any other Loan Document, and neither such Lender
nor any of its Affiliates shall use any such information other than in
connection with or in enforcement of this Agreement and the other Loan Documents
or in connection with other business now or hereafter existing or contemplated
with the Company or any Subsidiary, except to the extent such information was or
becomes generally available to the public other than as a result of disclosure
by such Lender or was or becomes available on a non-confidential basis from a
source other than the Company (provided that such source is not bound by a
confidentiality agreement with the Company or any Subsidiary known to such
Lender); provided, however, that any Lender may disclose such information (A) at
the request or pursuant to any requirement of any governmental authority to
which such Lender is subject or in connection with an examination of such Lender
by any such authority, (B) pursuant to subpoena or other court process, when
required to do so in accordance with the provisions of any applicable
requirement of law, (C) to the extent reasonably required in connection with any
litigation or proceeding to which the Agent or any Lender or any of their
respective Affiliates may be party, (D) to the extent reasonably required in
connection with the exercise of any remedy hereunder or under any other Loan
Document, (E) to such Lender's independent auditors and other professional
advisors, (F) to any participant or assignee, actual or potential, provided that
such Person agrees in writing to keep such information confidential to the same
extent required of the Lenders hereunder, (G) as to any Lender or its Affiliate,
as expressly permitted under the terms of any other document or agreement
regarding confidentiality to which the Company or any Subsidiary is party or is
deemed party with such Lender or such Affiliate, (H) to its Affiliates and (I)
any nationally recognized rating agency that requires access to information
about such Lender's investment portfolio in connection with ratings issued to
such Lender.
56
64
Delivered at Detroit, Michigan as of the day and year first above written.
UNITED AUTO GROUP, INC.
By
-----------------------------------------
Title
-------------------------------------
CHRYSLER FINANCIAL COMPANY L.L.C., as Agent
and as a Lender
By
-----------------------------------------
Title
--------------------------------------
TOYOTA MOTOR CREDIT CORPORATION,
as a Lender
By
-----------------------------------------
Title
--------------------------------------
57
65
SCHEDULE 2.1
LENDERS AND PRO RATA SHARES
Pro Rata Share Pro Rata Share
of Revolving of Acquisition
Commitment Commitment Pro Rata
Lender Amount Amount Term Loans Share
------ ------ ------ ---------- -----
Chrysler Financial $ 76,250,000 $317,200,000 $113,460,000 61%
Company L.L.C.
Toyota Motor $ 48,750,000 $202,800,000 $ 72,540,000 39%
Credit Corporation
TOTALS $125,000,000 $520,000,000 $186,000,000 100%
66
SCHEDULE 8.6
LITIGATION AND CONTINGENT LIABILITIES
67
SCHEDULE 8.8
SUBSIDIARIES
68
SCHEDULE 8.15
ENVIRONMENTAL MATTERS
69
SCHEDULE 8.16
INSURANCE
70
SCHEDULE 8.19
BURDENSOME OBLIGATIONS
71
SCHEDULE 8.20
LABOR MATTERS
72
SCHEDULE 9.7
PERMITTED EXISTING DEBT
73
SCHEDULE 9.8
PERMITTED EXISTING LIENS
74
SCHEDULE 9.17
PERMITTED RESTRICTIONS
75
SCHEDULE 9.19
INVESTMENTS
76
SCHEDULE 13.3
ADDRESSES FOR NOTICES
UNITED AUTO GROUP, INC.
0 Xxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxxx, Xx., Esquire
Executive Vice President and General Counsel
United Auto Group, Inc.
00000 Xxxxx Xxxxx, Xxxx
Xxxxx X-00
Xxxxxxx, XX 00000-0000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
CHRYSLER FINANCIAL COMPANY L.L.C., as Agent and a Lender
Notices of Borrowing and Requests for Letter of Credit Issuance
00000 Xxxxxxxx Xxxx, 00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
All Other Notices
00000 Xxxxxxxx Xxxx, 00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
77
TOYOTA MOTOR CREDIT CORPORATION, as a Lender
00000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a Copy To
00000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
78
EXHIBIT A
FORM OF
NOTE
, 200
Detroit, Michigan
The undersigned, for value received, promises to pay to the order of
(the "Lender") at the principal office of Chrysler Financial
Company L.L.C. (the "Agent") in Southfield, Michigan the aggregate unpaid amount
of all Loans made to the undersigned by the Lender pursuant to the Credit
Agreement referred to below (as shown on the schedule attached hereto (and any
continuation thereof) or in the records of the Lender), such principal amount to
be payable on the dates set forth in the Credit Agreement.
The undersigned further promises to pay interest on the unpaid principal
amount of each Loan from the date of such Loan until such Loan is paid in full,
payable at the rate(s) and at the time(s) set forth in the Credit Agreement.
Payments of both principal and interest are to be made in lawful money of the
United States of America.
This Note evidences indebtedness incurred under, and is subject to the
terms and provisions of, the Amended and Restated Credit Agreement, dated as of
December 22, 2000 (as amended or otherwise modified from time to time, the
"Credit Agreement"; capitalized terms not otherwise defined herein are used
herein as defined in the Credit Agreement), among the undersigned, certain
financial institutions (including the Lender) and the Agent, to which Credit
Agreement reference is hereby made for a statement of the terms and provisions
under which this Note may or must be paid prior to its due date or its due date
accelerated.
This Note is made under and governed by the laws of the State of New
York applicable to contracts made and to be performed entirely within such
State.
UNITED AUTO GROUP, INC.
By:
--------------------------------
Title:
---------------------------
79
Schedule attached to Note dated , 200 of UNITED AUTO GROUP, INC.
payable to the order of
Date and Date and Unpaid
Amount of Amount of Maturity Principal Notation
Loan Repayment Date Balance Made by
---- --------- ---- ------- -------
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80
EXHIBIT H
FORM OF REAFFIRMATION OF
LOAN DOCUMENTS
December 22, 2000
Chrysler Financial Company L.L.C., as Agent
and the other parties
to the Amended and Restated Credit Agreement
referred to below
00000 Xxxxxxxx Xxxx, 00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxxx
RE: REAFFIRMATION OF LOAN DOCUMENTS
Ladies and Gentlemen:
Please refer to:
(a) The Security Agreement dated as of October 8, 1999 (the "Security
Agreement") among United Auto Group, Inc. (the "Company"), its subsidiaries and
Chrysler Financial Company L.L.C. in its capacity as Agent (in such capacity,
the "Agent");
(b) The Guaranty dated as of October 8, 1999 (the "Guaranty") executed in
favor of the Agent and various other parties by all subsidiaries of the Company;
and
(c) The Pledge Agreement dated as of October 8, 1999 (the "Pledge
Agreement") executed by the Company and certain of its subsidiaries.
The Security Agreement, the Guaranty and the Pledge Agreement, in each case
as heretofore amended, are collectively referred to herein as the "Loan
Documents". Capitalized terms not otherwise defined herein will have the
meanings given in the Credit Agreement referred to below.
Each of the undersigned acknowledges that the Company, the Lenders and the
Agent have executed the Amended and Restated Credit Agreement (the "Amended
Agreement") to the Credit Agreement dated as of August 3, 1999 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement").
81
Each of the undersigned hereby confirms that each Loan Document to which
such undersigned is a party remains in full force and effect after giving effect
to the effectiveness of the Amendment and that, upon such effectiveness, all
references in such Loan Document to the "Credit Agreement" shall be references
to the Credit Agreement as amended and restated by the Amended Agreement.
The letter agreement may be signed in counterparts and by the various
parties as herein on separate counterparts. This letter agreement shall be
governed by the laws of the State of New York applicable to contracts made and
to be performed entirely within such State.
UAG NORTHEAST, INC.
DIFEO PARTNERSHIP, INC.
UAG XXXXXX, INC.
SOMERSET MOTORS INC.
UAG NORTHEAST BODY SHOP, INC.
UNITED XXXXXXX, INC.
XXXXXXX AUTO SALES, INC.
XXXXXXX UNITED AUTO GROUP NO. 2, INC.
XXXXXXX UNITED AUTO GROUP NO. 6, INC.
XXXXXXX BUICK-PONTIAC, INC.
XXXXXXX FORD NORTH, INC.
UNITED AUTO GROUP, INC.
UAG SOUTHEAST, INC.
UAG DULUTH, INC.
UNITED NISSAN, INC. (GA)
UNITED NISSAN, INC. (NV)
UNITED NISSAN, INC. (TN)
PEACHTREE NISSAN, INC.
UAG TENNESSEE, INC.
UAG WEST, INC.
SA AUTOMOTIVE, LTD.
SL AUTOMOTIVE, LTD.
SPA AUTOMOTIVE, LTD.
LRP, LTD.
SUN MOTORS, LTD.
SCOTTSDALE MANAGEMENT GROUP, LTD.
SAU AUTOMOTIVE, LTD.
SK MOTORS, LTD.
KMT/UAG, INC.
RELENTLESS PURSUIT ENTERPRISES, INC.
TRI-CITY LEASING, INC.
HT AUTOMOTIVE LTD.
B-I-2
82
UAG TEXAS, INC.
UAG TEXAS II, INC.
UAG EAST, INC.
WESTBURY SUPERSTORE, LTD.
PALM AUTO PLAZA, INC.
FLORIDA CHRYSLER PLYMOUTH, INC.
WEST PALM NISSAN, INC.
WEST PALM INFINITI, INC.
NORTHLAKE AUTO FINISH, INC.
J & S AUTO REFINISHING, LTD.
JS IMPORTS, INC.
WEST PALM AUTO MALL, INC.
AUTO MALL PAYROLL SERVICES, INC.
AMITY AUTO PLAZA, LTD.
AMITY NISSAN OF MASSAPEQUA, LTD.
UAG CAROLINA, INC.
XXXX-XXXXXXX CHEVROLET, INC.
XXXXXXX CHEVROLET-OLDSMOBILE, INC.
XXXX XXXX CHEVROLET, INC.
UNITEDAUTO DODGE OF SHREVEPORT, INC.
XXXXXXXXX PIKE DODGE, INC.
THE NEW GRACELAND DODGE, INC.
UAG GRACELAND II, INC.
UAG MEMPHIS II, INC.
UAG MEMPHIS IV, INC.
UAG MEMPHIS V, INC.
UAG-CARIBBEAN, INC.
XXX XXXXX CHEVROLET INC.
YOUNG MANAGEMENT GROUP, INC.
UAG YOUNG II, INC.
UAG PARAMOUNT MOTORS, INC.
UAG KISSIMMEE MOTORS, INC.
UAG CITRUS, INC.
UAG CLASSIC, INC.
CLASSIC AUTO GROUP, INC.
CHERRY HILL CLASSIC CARS, INC.
CLASSIC OF CHERRY HILL, INC.
CLASSIC MANAGEMENT COMPANY, INC.
CLASSIC CHEVROLET, INC.
CLASSIC AUTO GROUP HOLDINGS, INC.
CLASSIC IMPORTS, INC.
UNITEDAUTO ENTERPRISES, INC.
B-I-3
83
UNITED AUTOCARE, INC.
UNITED AUTOCARE PRODUCTS, INC.
UNITEDAUTO FOURTH FUNDING INC.
UNITEDAUTO FIFTH FUNDING INC.
UAG FINANCE COMPANY, INC.
CLASSIC MOTOR SALES LLC
X. XXXXX CHEVROLET LLC
XXX XXXXX MOTORS LLC
UAG YOUNG AUTOMOTIVE GROUP LLC
YOUNG AUTOMOTIVE HOLDINGS LLC
EUROPA AUTO IMPORTS, INC.
UAG LAKE XXXXXX, LLC
UAG INDIANAPOLIS, LLC
MOTORCARS ACQUISITION, LLC
MOTORCARS ACQUISITION II, LLC
MOTORCARS ACQUISITION III, LLC
SCOTTSDALE FERRARI, LLC
UAG OLDSMOBILE OF INDIANA, LLC
ATLANTIC AUTO FUNDING CORPORATION
ATLANTIC AUTO SECOND FUNDING CORPORATION
ATLANTIC AUTO THIRD FUNDING CORPORATION
XXXXXXX NORTH, LLC
XXXXXXX PONTIAC GMC, LLC
XXXXXXX SPRING BRANCH, LLC
PIONEER FORD WEST, LLC
UAG CERRITOS, LLC
UAG CONNECTICUT, LLC
UAG CONNECTICUT REALTY, LLC
UAG FAIRFIELD CA, LLC
UAG FAIRFIELD CM, LLC
UAG FAIRFIELD CP, LLC
UAG HOUSTON ACQUISITION, LLC
UAG INTERNATIONAL HOLDINGS, INC.
UAG XXXXXXX SPRINGDALE, LLC
UAG MENTOR ACQUISITION, LLC
UAG MICHIGAN CADILLAC, LLC
UAG MICHIGAN PONTIAC-GMC, LLC
UAG MICHIGAN T1, LLC
UAG MICHIGAN TMV, LLC
UAG PHOENIX VC, LLC
UAG REALTY, LLC
B-I-4
84
UAG SPRING, LLC
UNITED AUTO FINANCE, INC.
UNITED RANCH AUTOMOTIVE, LLC
By:
-------------------------------------
Title:
----------------------------------
DIFEO HYUNDAI PARTNERSHIP
DIFEO NISSAN PARTNERSHIP
DIFEO CHRYSLER PLYMOUTH JEEP EAGLE
PARTNERSHIP
DIFEO LEASING PARTNERSHIP
DANBURY AUTO PARTNERSHIP
DIFEO TENAFLY PARTNERSHIP
OCT PARTNERSHIP
XXXXXX MOTORS PARTNERSHIP
COUNTY AUTO GROUP PARTNERSHIP
SOMERSET MOTORS PARTNERSHIP
By: DIFEO PARTNERSHIP, INC.
a general partner
By:
------------------------------------
Title:
---------------------------------
B-I-5
85
XXXXXXX AUTOMOTIVE, LTD.
By: UAG TEXAS, INC.
a general partner
By:
--------------------------------------
Title:
-----------------------------------
UAG CITRUS MOTORS, LLC
By: UAG CITRUS, INC.
Member
By:
--------------------------------------
Title:
-----------------------------------
CLASSIC ENTERPRISES, LLC
CLASSIC NISSAN OF TURNERSVILLE, LLC
By: UAG CLASSIC, INC.
Member
By:
--------------------------------------
Title:
-----------------------------------
XXXXXXX FORD, INC
NATIONAL CITY FORD, INC.
CENTRAL FORD CENTER, INC.
PIONEER FORD SALES, INC.
By:
--------------------------------------
Title:
-----------------------------------
B-I-6
86
ACKNOWLEDGED AND AGREED
as of the date first written above
CHRYSLER FINANCIAL COMPANY, L.L.C.,
as Agent
By:
------------------------------
Title:
---------------------------
B-I-7
87
EXHIBIT I
SUBORDINATION PROVISIONS APPLICABLE TO
SUBORDINATED DEBT
The indebtedness evidenced by the subordinated notes shall at all times be
wholly subordinate and junior in right or payment to any and all Superior
Indebtedness (as defined below) in the manner and with the force and effect
hereafter set forth:
(a) In the event of any liquidation, dissolution or winding up of the Company,
or of any execution sale, receivership, insolvency, bankruptcy, reorganization
or other similar proceeding relative to the Company or its property, all
principal, interest, fees, reimbursement obligations and other amounts owing on
all Superior Indebtedness shall first be paid in full before any payment is made
upon the indebtedness evidenced by the subordinated notes; and in any such event
any payment or distribution of any kind or character, whether in cash, property
or securities (other than in securities or other evidences of indebtedness, the
payment of which is subordinated to the same extent as the indebtedness
evidenced hereby to the payment of all Superior Indebtedness which may at the
time be outstanding) which shall be made upon or in respect of the subordinated
notes shall be paid over to the holders of such Superior Indebtedness, pro rata,
for application in payment thereof until such Superior Indebtedness shall have
been paid or satisfied in full.
(b) During the continuance of any default in any agreement pursuant to which any
Superior Indebtedness is issued which arises from the failure to pay when due
(whether by acceleration or otherwise) any principal of, premium, if any,
interest on, fees or other amounts in respect of such Superior Indebtedness (a
"Superior Payment Default"), no payment of principal, premium or interest shall
be made on the subordinated notes if either (i) notice in writing of such
default has been given to the Company by any holder or holders of any Superior
Indebtedness or (ii) judicial proceedings shall be pending in respect of such
default.
(c) During the continuance of any event of default or unmatured event of default
in any agreement pursuant to which any Superior Indebtedness is issued other
than a Superior Payment Default (a "Superior Non-Payment Default") as to which
the Company has received notice in writing from any holder or holders of
Superior Indebtedness, no payment of principal, premium or interest shall be
made on the subordinated notes for a period (each, a "Payment Blockage Period")
commencing on the date of receipt by the Company of such notice and terminating
on the earliest to occur of the following dates: (i) the date of acceleration of
the Superior Indebtedness, (ii) 180 days after the Company's receipt of such
written notice, (iii) the date such Superior Non-Payment Default shall have been
cured or waived, or shall have ceased to exist, (iv) the date the Superior
Indebtedness shall have been discharged or paid in full in cash or (v) the date
such Payment Blockage Period shall have been terminated by written notice to the
Company from the holder or holders of Superior Indebtedness initiating such
Payment Blockage
1
88
Period, after which, in the case of clauses (ii), (iii), (iv) and (v), the
Company shall resume making payments in respect of the subordinated notes,
unless clause (a) or (b) above is then applicable.
(d) If the subordinated notes are declared or become due and payable because of
the occurrence of any default thereunder or under the agreement or instrument
under which they are issued or otherwise than at the option of the Company,
under circumstances when clause (a) above shall not be applicable, the holders
of the subordinated notes shall not be entitled to payments until sixty (60)
days after such event and then only if such payment is permitted under clauses
(a) and (b) above.
(e) The holder of each subordinated note undertakes and agrees for the benefit
of each holder of Superior Indebtedness to execute, verify, deliver and file any
proof of claim, consent, assignment or other instrument which any holder of
Superior Indebtedness may at any time require in order to prove and realize upon
any right or claim pertaining to the subordinated notes and to effectuate the
full benefit of the subordination contained herein; and upon failure of the
holder of any subordinated note so to do any such holder of Superior
Indebtedness shall be deemed to be irrevocably appointed the agent and
attorney-in-fact of the holder of such note to execute, verify, deliver and file
any such proof of claim, consent, assignment or other instrument.
(f) No right of any holder of any Superior Indebtedness to enforce subordination
as herein provided shall at any time or in any way be affected or impaired by
any failure to act on the part of the Company or any holder of Superior
Indebtedness, or by any non-compliance by the Company with any term, provision
or covenant of the subordinated notes or the agreement under which they are
issued, regardless of any knowledge thereof that any such holder of Superior
Indebtedness may have or be otherwise charged with.
(g) The Company agrees, for the benefit of the holders of Superior Indebtedness,
that in the event that any subordinated note is declared due and payable before
its expressed maturity because of the occurrence of a default thereunder or
under the agreement under which it was issued, the Company will give prompt
notice in writing of such happening to the holders of Superior Indebtedness.
(h) "Superior Indebtedness" means (a) all obligations of the Company under or in
connection with the Amended and Restated Credit Agreement, dated as of December
22, 2000 among the Company, various financial institutions and Chrysler
Financial Company L.L.C. ("CFC"), as agent (as amended, restated, amended and
restated or otherwise modified from time to time, the "Credit Agreement"),
whether for principal, interest (including any interest that would accrue but
for the filing of a petition initiating any bankruptcy, insolvency or like
proceeding, whether or not such interest is an allowed claim enforceable against
the debtor), fees, expenses or otherwise and (b) all other obligations of the
Company to CFC, howsoever arising or evidenced.
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89
EXHIBIT J
FORM OF
L/C APPLICATION
TO: CHRYSLER FINANCIAL COMPANY L.L.C.
00000 Xxxxxxxx Xxxx, 00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telephone:(000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxx
Ladies and Gentlemen:
We hereby request Chrysler Financial Company L.L.C., as Issuing Lender
under the Credit Agreement referred to below, to establish a Letter of Credit
(the "Credit") for our account as follows:
BENEFICIARY:
APPLICANT:
AMOUNT:
EXPIRY DATE:
AVAILABLE BY SIGHT DRAFTS TO BE ACCOMPANIED BY:
SPECIAL INSTRUCTIONS:
90
Chrysler Financial Company L.L.C.,
as Issuing Lender
, 200
Page 2 of 2
PURPOSE OF CREDIT:
The Credit is subject to the terms and provisions of the Amended and
Restated Credit Agreement, dated as of December 22, 2000 (as amended or
otherwise modified from time to time, the "Credit Agreement"; capitalized terms
not otherwise defined herein are used herein as defined in the Credit
Agreement), among the undersigned, certain financial institutions and the
Issuing Lender, to which Credit Agreement reference is hereby made for a
statement of the terms and provisions regarding the issuance of Letters of
Credit and the reimbursement obligations arising in connection therewith.
The undersigned hereby confirms that, both before and after giving effect
to the issuance of the Credit, (a) the representations and warranties of the
undersigned and each Subsidiary set forth in the Credit Agreement and the other
Loan Documents are true and correct in all material respects with the same
effect as if made on the date hereof (except to the extent such representations
and warranties relate to a specific earlier date) and (b) no Event of Default or
Unmatured Event of Default has occurred or is continuing.
Dated this day of , 200 .
UNITED AUTO GROUP, INC.
By:
---------------------
Its:
--------------------
91
EXHIBIT K
FORM OF ACCOUNTANT'S LETTER
INDEPENDENT ACCOUNTANTS' REPORT ON APPLYING AGREED-UPON PROCEDURES
United Auto Group, Inc.
Xxx Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
We have performed the procedures enumerated below, solely to assist you in
evaluating United Auto Group, Inc.'s (the "Company") compliance with the
financial covenants of the Amended and Restated Credit Agreement dated as of
December 22, 2000, as amended, with Chrysler Financial Company L.L.C. ("Chrysler
Financial") and Section 4.04 of the Series A Subordinated Notes Indenture and
Section 4.4 of the Series B Subordinated Notes Indenture, as of March 31, 2001.
This engagement to apply agreed-upon procedures was performed in accordance with
standards established by the American Institute of Certified Public Accountants.
The sufficiency of the procedures is solely the responsibility of the Company.
Consequently, we make no representation regarding the sufficiency of the
procedures described below either for the purpose for which this report has been
requested or for any other purpose.
The procedures that we performed and our findings are as follows:
1-We obtained Exhibit A, prepared by the Company's accounting personnel,
detailing the financial covenant calculations of Sections 9.6.1, 9.6.2, 9.6.3,
9.7 and 9.9 of the Amended and Restated Credit Agreement dated as of December
22, 2000, as amended, with Chrysler Financial and Section 4.04 of the Series A
Subordinated Notes Indenture and Section 4.4 of the Series B Subordinated Notes
Indenture (collectively the "Debt Agreements"), as of March 31, 2001. We proved
the arithmetic accuracy of the computations in Exhibit A.
2-Where appropriate, we compared the amounts included in Exhibit A to the
Company's financial statements as of and for the three months ended March 31,
2001 or to the trial balance at that date, and noted that they were in
agreement.
3-We compared the proforma amounts contained in the financial covenant
calculations of Sections 9.6.3 and 4.04 to underlying data provided to us by
management of the Company and noted that they were in agreement.
4-We compared the required financial covenant amounts included in Exhibit A
to the respective sections of the Debt Agreements referred to in 1- above and
noted that they were in agreement.
3
92
We were not engaged to, and did not, perform an audit, the objective of
which would be the expression of an opinion on the specified elements, or items
included in Exhibit A. Accordingly, we do not express such an opinion. Had we
performed additional procedures, other matters might have come to our attention
that would have been reported to you.
This report is intended solely for the information and use of the Company
and Chrysler Financial and is not intended to be and should not be used by
anyone other than these specified parties.
DELOITTE & TOUCHE LLP
Date
4
