FIRST AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of June 6, 2003
among
XXXXXX AUTOMOTIVE GROUP, INC. and
XXXXXX AUTOMOTIVE GROUP HOLDINGS, INC.
as Borrower
and
FORD MOTOR CREDIT COMPANY,
DAIMLERCHRYSLER SERVICES NORTH AMERICA LLC,
GENERAL MOTORS ACCEPTANCE CORPORATION,
and
the other Lenders party hereto,
as the Lenders
and
FORD MOTOR CREDIT COMPANY,
as Agent.
TABLE OF CONTENTS
Section Page
Article I: Definitions 4
Article II: The Loan Facilities 28
Article III: Conditions 40
Article IV: Representations and Warranties 45
Article V: Covenants 50
Article VI: Events of Default 69
Article VII: The Agent 71
Article VIII: General Provisions 75
Article IX: Benefit of Agreement; 82
Assignments; Participations
Article X: Notices 85
Article XI: Counterparts 85
EXHIBITS AND SCHEDULES
Exhibits
EXHIBIT A -- Form of Note
EXHIBIT B -- Form of Borrowing Notice
EXHIBIT C -- Form of Guaranty
EXHIBIT D -- Form of Security Agreement
EXHIBIT E -- Closing Statement
EXHIBIT F -- Form of Officer's Certificate
EXHIBIT G -- Form of Waiver, Guaranty and Disbursement Agreement
EXHIBIT H -- Form of Pledged Account Agreement
Schedules
Schedule 1.1.1 -- Permitted Existing Indebtedness
Schedule 1.1.2 -- Permitted Existing Investments
Schedule 1.1.3 -- Permitted Existing Liens
Schedule 1.1.4 -- Lenders' Commitments
Schedule 1.1.5 -- Dealership Guarantors
Schedule 1.1.6 -- Existing Xxxxxx Obligations
Schedule 1.1.7 -- Pending Acquisitions
Schedule 1.1.8 -- Subsidiaries Not Wholly Owned
Schedule 3.1 -- Disclosed Litigation
Schedule 4.8 -- Subsidiaries
Schedule 4.9 -- ERISA
Schedule 5.3(F) -- Entities with a Minority Holder of Equity Interest
Schedule 9.3 -- Form of Assignment & Acceptance
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
This First Amended and Restated Credit Agreement dated as of June 6,
2003 is entered into among XXXXXX AUTOMOTIVE GROUP, INC., a Delaware
corporation, XXXXXX AUTOMOTIVE GROUP HOLDINGS, INC., a Delaware corporation,
jointly and severally, together with any successor permitted hereunder
(individually and collectively, the "Borrower"), FORD MOTOR CREDIT COMPANY, a
Delaware corporation ("Ford Credit"), DAIMLERCHRSYLER SERVICES NORTH AMERICA
LLC, a Michigan limited liability company ("Chrysler Financial"), GENERAL MOTORS
ACCEPTANCE CORPORATION, a Delaware corporation ("GMAC"), the other Lenders from
time to time party hereto, and Ford Credit, as administrative agent and
collateral agent (in such capacity and together with any Successor Agent
appointed pursuant to Article VII, the "Agent") for the Secured Parties (as
defined below).
This Agreement amends and restates in its entirety that certain Credit
Agreement dated January 17, 2001 among Xxxxxx Automotive Group L.L.C., Xxxxxx
Automotive Group Holdings, Inc. and Xxxxxx Automotive Group, Inc., Ford Credit,
Chrysler Financial, GMAC and Agent, as amended July 29, 2002 and September 25,
2002 (the "Original Credit Agreement").
The parties hereto agree as follows:
ARTICLE I: DEFINITIONS
1.1 Certain Defined Terms. The following terms used in this
Agreement shall have the following meanings, applicable both to the
singular and the plural forms of the terms defined.
As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of the Original Credit Agreement,
by which the Borrower or a Transaction Party (i) acquires any ongoing business
or all or substantially all of the assets of any automobile dealership and/or
related operations (including, without limitation, body shop and service repair
centers), whether through purchase of assets, merger or otherwise or (ii)
directly or indirectly acquires (in one or a series of transactions) at least a
majority of the Voting Interests of any Person.
"Acquisition Advance" is defined in Section 5.2 (K) hereof.
"Acquisition Cost" means the purchase price to be paid by Borrower or
any Subsidiary of Borrower for a Permitted Acquisition (including, without
limitation, (i) the maximum amount of any deferred portion thereof or
contingency payments payable in connection therewith, (ii) reasonable fees and
expenses incurred in connection therewith but only to the extent such fees and
expenses were not paid to, or for the benefit of, an Affiliate or any
Transaction Party, and (iii) that portion of the amount requested by Borrower,
as an Acquisition Advance, which must be used by Borrower to ensure that the
business being acquired will, on the date of the applicable Acquisition Advance,
meet the minimum working capital requirement established by the automotive
manufacturer(s) whose approval is a pre-condition to such Permitted Acquisition,
it being understood that if said business did not meet such working capital
4
requirement, said manufacturer would not consent to the Acquisition), but
excluding therefrom (a) that portion of the purchase price, of a particular
Permitted Acquisition, specifically allocated to real property, (b) that portion
of the purchase price, of any particular Permitted Acquisition, paid in Seller
Paper, and (c) the value of any Equity Interests of the Borrower issued to the
seller in connection with a particular Permitted Acquisition) (computed with any
non-cash portion of the acquisition price being valued at the Fair Value thereof
as of the date of computation).
"Acquisition Documents" means all documents, instruments and agreements
entered into in connection with any Acquisition.
"Acquisition Price" means, the acquisition price to be paid by Borrower
or any Subsidiary of Borrower for a Permitted Acquisition (including, without
limitation, the maximum amount of any deferred portion thereof or contingency
payments payable in connection therewith (and reasonable fees and expenses
incurred in connection therewith but only to the extent such fees and expenses
were not paid to, or for the benefit of, an Affiliate of any Transaction Party),
computed with any non-cash portion of the acquisition price being valued at the
Fair Value thereof as of the date of computation).
"Advance" means any Working Capital Advance, Acquisition Advance or any
Cash Management Advance made under Section 2.1 hereof or otherwise deemed made
under the Loan Documents.
"Adjusted Leverage Ratio" is defined in Section 5.4(c) hereof.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934, as amended) of greater than five percent (5%) or more of any class of
voting securities (or other voting interests) of the controlled Person or
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies of the controlled Person, whether through ownership
of Capital Stock, by contract or otherwise. For purposes of clarity
Asbury-Everest is an Affiliate.
"Agent" has the meaning set forth in the recital of parties to this
Agreement, together with any successor Agent.
"Agent's Account" means any account maintained in the name of the Agent
of which the Agent gives written notice to the Borrower or any Lender, as
applicable, that such account is the Agent's Account.
"Agreement" means this Credit Agreement, as it may be amended, restated
or otherwise modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles in effect from time to time, applied in a manner consistent with that
used in preparing the financial statements referred to in Section 5.1(A) hereof.
"Anniversary Date" means January 17, 2004 and each January 17 of each
calendar year thereafter during the term of this Agreement.
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"Applicable LIBOR Rate" means as of any Payment Date, the LIBOR Rate
plus a percentage margin per annum as determined by reference to (i) the
following ratios, and (ii) the corresponding percentages listed below (such
percentage is referred to herein as the "Margin").
-----------------------------------------------------------
Adjusted Leverage Ratio Margin
-----------------------------------------------------------
Level 1 4.00%
Greater than 4.00:1
-----------------------------------------------------------
Xxxxx 0 3.75%
Greater than 3.50:1 but
equal to or less than 4.00:1
-----------------------------------------------------------
Xxxxx 0 3.50%
Greater than 3.00:1 but
equal to or less than 3.50:1
-----------------------------------------------------------
Xxxxx 0 3.25%
Greater than 2.50:1 but
equal to or less than 3.00:1
-----------------------------------------------------------
Xxxxx 0 3.00%
Greater than 1.75:1 but
equal to or less than 2.50:1
-----------------------------------------------------------
Xxxxx 0 2.75%
Equal to or less than 1.75:1
-----------------------------------------------------------
The Applicable LIBOR Rate for each month shall be based on the LIBOR
Rate in effect on the first Business Day of such month. All changes in the
Applicable LIBOR Rate (due to a change in the LIBOR Rate) shall become effective
on the first day of a calendar month and shall be deemed in effect throughout
such month. The Applicable LIBOR Rate for each month shall be determined by
reference to the Adjusted Leverage Ratio in effect on the first Business Day of
such month; provided, however, that (A) no change in the Applicable LIBOR Rate
(which is based upon a change in the Adjusted Leverage Ratio) shall be effective
until the first Business Day of the first month following the date on which the
Agent receives the financial statements required to be delivered pursuant to
Section 5.1 (A) (i) and the Officer's Certificate required to be delivered
pursuant to Section 5.1 (A) (iv), and (B) the Applicable LIBOR Rate shall be at
LIBOR plus 4.25% for so long as the Borrower has not submitted to the Agent the
information described in clause (A) of this proviso as and when required under
Section 5.1 (A).
"Xxxxxx Everest" means individually and collectively, Asbury-Everest
Holdings L.L.C., a Delaware limited liability company, and Xxxxxx Internet
Holdings L.L.C., a Delaware limited liability company.
"Xxxxxx Group" means the Borrower and each other Transaction Party.
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"Asset Sale" means, with respect to any Person, the sale, lease,
conveyance, disposition or other transfer by such Person of any of its assets
(including by way of a sale-leaseback transaction and including the sale or
other transfer of any of the Equity Interests of any Subsidiary of such Person).
"Assignment and Acceptance" is defined in Section 9.3 (a) hereof.
"Authorized Officer" means, with respect to the Borrower or any of its
Subsidiaries, the chief executive officer, president, chief financial officer,
chief accounting officer, treasurer or assistant treasurer, acting singly.
"Balance Due" means the then current (as of the Payment Reconciliation
Date) outstanding aggregate principal amount of Cash Management Advances under
the Agreement and the Notes.
"Benefit Plan" means a defined benefit plan as defined in Section 3(35)
of ERISA (other than a Multi-employer Plan) in respect of which the Borrower or
any other member of the Controlled Group is, or within the immediately preceding
six (6) years was, an "employer" as defined in Section 3(5) of ERISA.
"Borrower" means, jointly and severally, Xxxxxx Automotive Group, Inc.,
a Delaware corporation and Xxxxxx Automotive Group Holdings, Inc., a Delaware
corporation, together with their permitted successors and assigns, including a
debtor-in-possession on behalf of the Borrower.
"Borrower's Account" means such account as the Borrower may specify in
writing to the Agent.
"Borrower Pledge" means each of (i) that certain Amended and Restated
Pledge Agreement, dated as of even date herewith, from the Borrower to the Agent
pursuant to which the Borrower pledges the Capital Stock of certain corporate
Subsidiaries, the Capital Stock of certain limited liability company
Subsidiaries, and the Capital Stock of certain partnership Subsidiaries, as it
may be amended, restated or otherwise modified and in effect from time to time,
and (ii) any other pledge of Capital Stock delivered by Borrower from time to
time to the Agent, in each case delivered to the Agent, for the benefit of the
Lenders, to secure the Obligations.
"Borrower Security Agreement" means that certain Second Amended and
Restated Security Agreement, dated as of even date herewith from the Borrower to
the Agent, for the benefit of the Lenders, pursuant to which the Borrower has
pledged all of its assets to secure the Obligations hereunder, as it may be
amended, restated or otherwise modified and in effect from time to time.
"Borrowing" means a borrowing consisting of any Advance under Section
2.1.
"Borrowing Spread" is defined in Section 2.1 (C) hereof.
"Borrowing Date" means a date on which an Advance is made hereunder.
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"Borrowing Notice" is defined in Section 2.1 (B) hereof.
"Business Day" means a day (other than a Saturday or Sunday) on which
commercial banks are open for business in New York , New York and Dearborn,
Michigan.
"Capital Expenditures" of a Person means, for any period, the aggregate
of all expenditures (other than in connection with Permitted Acquisitions),
whether paid in cash or accrued as liabilities, including Capitalized Lease
Obligations, during that period that, in conformity with Agreement Accounting
Principles, are required to be included in or reflected by the property, plant,
equipment or similar fixed asset accounts reflected in the consolidated balance
sheet of such Person.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company, any and all membership interests or other equivalents (however
designated) and (v) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Capitalized Lease" of a Person means any lease of property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be capitalized
on a balance sheet of such Person prepared in accordance with Agreement
Accounting Principles.
"Cash Equivalents" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government; (ii) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances and
floating rate certificates of deposit issued by any commercial bank organized
under the laws of the United States, any state thereof, the District of
Columbia, or its branches or agencies; (iii) shares of money market, mutual or
similar funds having assets in excess of $100,000,000.00 and the investments of
which are limited to investment grade securities (i.e., securities rated at
least Baa by Xxxxx'x Investors Service, Inc. or at least BBB by Standard &
Poor's Corporation); (iv) commercial paper of United States and foreign banks
and bank holding companies and their subsidiaries and United States and foreign
finance, commercial industrial or utility companies which, at the time of
acquisition, are rated A-1 (or better) by Standard & Poor's Ratings Group or P-1
(or better) by Xxxxx'x Investors Services, Inc.; (v) corporate bonds,
mortgage-backed securities and municipal bonds in each case of a domestic issuer
rated at the date of acquisition not less than Aaa by Xxxxx'x Investor Services,
Inc. or AAA by Standard & Poor's Corporation with maturities of no more than two
(2) years from the date of acquisition; (vi) repurchase obligations of any
Lender or of any commercial bank satisfying the requirements of clause (ii) of
this definition, with respect to securities issued or fully guaranteed or
insured by the United States government; and (vii) money market funds with
respect to which not less than 90% of such funds are invested in the type of
investments specified in clauses (i) through (v) above; provided, unless the
context otherwise requires, the maturities of such Cash Equivalents shall not
exceed 365 days.
8
"Cash Management Advance" means an Advance specified by Borrower to be
a Cash Management Advance.
"Cash Management Availability" means an amount equal to the sum of all
Cash Management Payments less the sum of all Cash Management Advances, provided,
however, in no event shall the Cash Management Availability exceed the lesser of
Seventy Five Million Dollars ($75,000,000.00) or the aggregate amount of
outstanding Advances.
"Cash Management Payment" means a prepayment, in whole or part,
designated by Borrower as a Cash Management Payment, not to exceed, at any one
time, the lesser of Seventy Five Million Dollars ($75,000,000.00) or the
aggregate amount of outstanding Advances.
"Change of Control" means an event or series of events by which:
(i) during any period of 24 consecutive calendar months,
individuals:
(a) who were directors of the Borrower on the first
day of such period, or
(b) whose election or nomination for election to the
board of directors of the Borrower was recommended or approved
by at least a majority of the directors then still in office
who were directors of the Borrower on the first day of such
period, or whose election or nomination for election was so
approved,
shall cease to constitute a majority of the board of directors of the
Borrower;
(ii) the Borrower consolidates with or merges into another
corporation or conveys, transfers or leases all or substantially all of
its property to any Person, or any corporation consolidates with or
merges into the Borrower, in either event pursuant to a transaction in
which the outstanding Capital Stock of the Borrower is reclassified or
changed into or exchanged for (A) cash or Cash Equivalents or (B)
securities, and the holders of the Capital Stock in the Borrower
immediately prior to such transaction do not, as a result of such
transaction, own, directly or indirectly, more than fifty percent (50%)
of the combined voting power of the Borrower's Capital Stock or the
Capital Stock of its successor entity in such transaction; or
(iii) other than as a result of transactions otherwise
permitted by the terms of this Agreement, the Borrower ceases to own,
directly or indirectly, 100% of the Voting Interests in a Subsidiary
other than a Subsidiary operating under a Restricted Franchise
Agreement (as defined herein), and except as set forth on Schedule
1.1.8 hereto.
"Charter Documents" means (i) in the case of a corporation, such
entity's articles or certificate of incorporation and by-laws, (ii) in the case
of a limited liability company, such entity's articles of organization and
limited liability company operating agreement or equivalent (however
designated), (iii) in the case of a partnership, such entity's partnership
agreement or equivalent (however designated) and (iv) in the case of an
association or other business entity not described above, such entity's founding
documents (however designated).
9
"Chrysler Financial" means DaimlerChrysler Services North America LLC,
a Michigan limited liability company, and its successors and assigns.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, or any successor statute.
"Collateral" means all property and interests in property now or
hereafter acquired by covered by, or subject to, any Collateral Document.
"Collateral Documents" means all agreements, instruments and documents
executed in connection with this Agreement that are intended to create or
evidence Liens to secure the Obligations, including, without limitation, the
Loan Party Security Agreements, the Loan Party Pledges, the Cross Agreement, the
Waiver, Guaranty and Disbursement Agreement, the Pledged Account Agreements, and
all other security agreements, mortgages, deeds of trust, loan agreements,
notes, guaranties, subordination agreements, pledges, powers of attorney,
consents, assignments, contracts, fee letters, notices, leases, financing
statements and all other written matter whether heretofore, now, or hereafter
executed by or on behalf of the Borrower, any of its Subsidiaries or any other
Person and delivered to the Agent, together with all agreements and documents
referred to therein or contemplated thereby, as amended, restated or otherwise
modified and in effect from time to time.
"Commission" means the United States Securities and Exchange Commission
and any Person succeeding to the functions thereof.
"Commitment" means (a) with respect to any Lender (other than Ford
Credit) at any time, the amount set forth opposite such Lender's name on
Schedule 1.1.4 hereto under the caption "Commitment" or, if such Lender has
entered into one or more Assignment and Acceptances, set forth for such Lender
in the Register maintained by the Agent pursuant to Section 9.3 and (b) with
respect to Ford Credit at any time, $192,000,000.00 plus the Cash Management
Availability, as any such amount may be reduced pursuant to Section 2.3.
"Consolidated Net Worth" means, at a particular date, the amount by
which the total consolidated assets of the Borrower and its consolidated
Subsidiaries exceeds the total consolidated liabilities of the Borrower and its
consolidated Subsidiaries.
"Contaminant" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls ("PCBs"), or any
constituent of any such substance or waste, and includes but is not limited to
these terms as defined under or regulated by any Environmental, Health or Safety
Requirements of Law.
"Contingent Obligation", as applied to any Person, means any direct or
indirect obligation of that Person with respect to any Indebtedness of another
or other obligation or liability of another, including, without limitation, any
such Indebtedness, obligation or liability of another directly or indirectly
guaranteed, endorsed (otherwise than for collection or deposit in the ordinary
course of business), co-made or discounted or sold with recourse by that Person,
or in respect of which that Person is otherwise directly or indirectly liable,
including obligations (contingent or otherwise) arising through any contract,
agreement or instrument, or any agreement to purchase, repurchase, or otherwise
acquire such Indebtedness, obligation or liability or any security therefore, or
10
to provide funds for the payment or discharge thereof (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain solvency, assets, level of income, or other financial condition, or to
make payment other than for value received.
"Contractual Obligation" as applied to any Person, means any material
provision of any equity or debt securities issued by that Person or any material
indenture, mortgage, deed of trust, security agreement, pledge agreement,
guaranty, contract, undertaking, agreement or instrument, in each case in
writing, to which that Person is a party or by which it or any of its properties
is bound, or to which it or any of its properties is subject.
"Controlled Group" means the group consisting of (i) any corporation
which is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code) as the Borrower; (ii) a partnership or
other trade or business (whether or not incorporated) which is under common
control (within the meaning of Section 414(c) of the Code) with the Borrower;
and (iii) a member of the same affiliated service group (within the meaning of
Section 414(m) of the Code) as the Borrower, any corporation described in clause
(i) above or any partnership or trade or business described in clause (ii)
above.
"Controlled Subsidiary" of any Person means a Subsidiary of such Person
(i) 80% or more of the total Equity Interests or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more wholly-owned Subsidiaries of such Person or (ii)
of which such Person possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies, whether through the ownership
of voting securities, by agreement or otherwise.
"Cross Agreement" means that certain Second Amended and Restated Cross
Default Agreement dated as of even date herewith, by and among the Transaction
Parties, the Lenders and the Agent, together with any other Cross Default
Agreement entered into by and among any of the Transaction Parties or an Xxxxxx
Group Affiliate, the Lenders and Agent, as such agreements may be amended,
restated or otherwise modified from time to time.
"Current Assets" means, at a particular date, all amounts which would,
in conformity with Agreement Accounting Principles, be included under current
assets on a balance sheet as of such date, plus LIFO reserve, if applicable.
"Current Liabilities" means, at a particular date, all amounts which
would, in conformity with Agreement Accounting Principles, be included under
current liabilities on a balance sheet plus the amount of outstanding Working
Capital Advances hereunder as of such date.
"Current Ratio" is defined in Section 5.4(A) hereof.
"Customary Permitted Liens" means:
(i) Liens (other than environmental Liens and Liens in favor
of the PBGC) with respect to the payment of taxes, assessments or
governmental charges, in all cases which are not yet due or (if
foreclosure, distraint, sale or other similar proceedings shall not
have been commenced) which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with
Agreement Accounting Principles;
11
(ii) statutory Liens of landlords and Liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other
similar Liens imposed by law created in the ordinary course of business
for amounts not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with
Agreement Accounting Principles;
(iii) Liens incurred or deposits made, in each case, in the
ordinary course of business in connection with worker's compensation,
unemployment insurance or other types of social security benefits or to
secure the performance of bids, tenders, sales, contracts (other than
for the repayment of borrowed money), surety, appeal and performance
bonds; provided that (A) all such Liens do not in the aggregate
materially detract from the value of the Borrower's or such
Subsidiary's assets or property taken as a whole or materially impair
the use thereof in the operation of the businesses taken as a whole,
and (B) with respect to Liens securing bonds to stay judgments or in
connection with appeals, such Liens do not secure at any time an
aggregate amount exceeding $500,000.00;
(iv) Liens arising with respect to zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility
easements, building restrictions and other similar charges or
encumbrances on the use of real property which do not in any case
materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the business of the Borrower or
any of its Subsidiaries;
(v) Liens of attachment or judgment with respect to judgments,
writs or warrants of attachment, or similar process against the
Borrower or any of its Subsidiaries which do not constitute an Event of
Default under Section 6.1(h) hereof;
(vi) any interest or title of the lessor in the property
subject to any operating lease entered into by the Borrower or any of
its Subsidiaries in the ordinary course of business;
(vii) Liens related to precautionary U.C.C. financing
statement filings with respect to Capitalized Leases or consignment
arrangements otherwise permitted under this Agreement entered into by
the Borrower or any of its Subsidiaries in the ordinary course of
business, provided, however, that any such Liens may not encumber
assets other than those that are the subject of such Capitalized Lease
or consignment arrangement, as the case may be; and
(viii) Liens in favor of a banking institution arising by
operation of law encumbering deposits (including the right of set-off)
held by such banking institutions incurred in the ordinary course of
business and that are within the general parameters customary in the
banking industry; provided, however, that (A) any such Lien must be
subordinated (on terms acceptable to Agent and the Required Lenders) to
the Liens evidenced by the Collateral Documents and (B) any such right
of set-off must be waived in favor of the Agent.
"Dealership" means any Subsidiary that is an automobile dealership
and/or related body shop or service repair center owned, operated or acquired by
any Transaction Party.
"Dealership Guarantors" means each Person listed on Schedule 1.1.5
hereof providing a Dealership Guaranty, a Dealership Security Agreement and a
Dealership Pledge to the Agent, for the benefit of the Lenders, and each other
Person providing a Dealership Guaranty, a Dealership Security Agreement and a
Dealership Pledge to Agent, for the benefit of the Lenders, pursuant to Section
5.2 (L) of this Agreement, and their respective successors and assigns.
12
"Dealership Guaranty" means each Guaranty in the form attached hereto
as Exhibit C, provided by a Dealership to the Agent, for the benefit of the
Lenders, as the same may be amended, modified, supplemented, reaffirmed and/or
restated, and as in effect from time to time.
"Dealership Pledge" means each Pledge Agreement delivered by any
Dealership to the Agent, for the benefit of the Lenders, pursuant to which such
Person pledges to the Agent, for the benefit of the Lenders, its Capital Stock
of certain corporation, limited liability company and/or partnership
Subsidiaries, as such Pledge Agreement may be amended, restated or otherwise
modified from time to time.
"Dealership Security Agreement" means any Security Agreement in the
form attached hereto as Exhibit D, pursuant to which a Dealership grants the
Agent, for the benefit of the Lenders, a security interest in all of its assets,
as the same may be amended, modified, supplemented and/or restated, and as in
effect from time to time.
"Decision Period" is defined in Section 5.2(G) hereof.
"Decision Reserve" is defined in Section 5.2(G) hereof.
"Defaulted Advance" means, with respect to any Lender at any time, the
portion of any Advance required to be made by such Lender to the Borrower
pursuant to Section 2.1 at or prior to such time that has not been made by such
Lender or the Agent for the account of such Lender pursuant to Section 2.1 as of
such time, or which otherwise is required to be made by such Lender at or prior
to such time that has not been made by such Lender as of such time.
"Defaulted Amount" means, with respect to any Lender, any amount
required to be paid by such Lender to the Agent or any other Lender hereunder or
under any other Loan Document at or prior to such time that has not been so paid
as of such time. In the event that a portion of a Defaulted Amount shall be
deemed paid pursuant to Section 2.13, the remaining portion of such Defaulted
Amount shall be considered a Defaulted Amount originally required to be paid
hereunder or under any other Loan Document on the same date as the Defaulted
Amount so deemed paid in part.
"Defaulting Lender" means, at any time, any Lender that, at such time,
(a) owes a Defaulted Advance or a Defaulted Amount or (b) shall take any action
or be the subject of any action or proceeding of a type described in Section
6.1(f) or Section 6.1(g).
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the Termination Date.
13
"DOL" means the United States Department of Labor and any Person
succeeding to the functions thereof.
"Dollar" and "$" means dollars in the lawful currency of the United
States.
"EBITDA" means, for any period, on a consolidated basis for the
Borrower and its Subsidiaries, the sum of the amounts for such period, without
duplication, of:
(i) Net Income,
plus (ii) Interest Expense, to the extent deducted in computing Net
Income,
plus (iii) charges against income for foreign, federal, state and
local taxes, to the extent deducted in computing Net Income,
plus (iv) depreciation expense, to the extent deducted in computing
Net Income,
plus (v) amortization expense, including, without limitation,
amortization of goodwill, other intangible assets and
Transaction Costs, to the extent deducted in computing Net
Income,
plus (vi) other non-cash charges classified as long-term deferrals
in accordance with Agreement Accounting Principles, to the extent
deducted in computing Net Income,
plus (vii) all extraordinary losses (which have been included in the
determination of Net Income),
minus (viii) all extraordinary gains (which have been included in the
determination of Net Income).
EBITDA shall be calculated for any period by including the actual amount for the
applicable period ending on such day, including the EBITDA attributable to
Permitted Acquisitions occurring during such period on a pro forma basis for the
period from the first day of the applicable period through the date of the
closing of each Permitted Acquisition, utilizing (a) where available or required
pursuant to the terms of this Agreement, historical audited and/or reviewed
unaudited financial statements obtained from the seller, broken down by fiscal
quarter in the Borrower's reasonable judgment or (b) unaudited financial
statements (where no audited or reviewed financial statements are required
pursuant to the terms of this Agreement) reviewed internally by the Borrower,
broken down in the Borrower's reasonable judgment.
"EBITDAR" means, for any period, on a consolidated basis for the
Borrower and its Subsidiaries, the sum of the amounts for such period, without
duplication, of (i) EBITDA and (ii) Rentals.
"Effective Date" is defined in Section 1.3 hereof.
14
"Eligible Assignee" is defined in Section 9.3 hereof.
"Environmental, Health or Safety Requirements of Law" means all
Requirements of Law derived from or relating to federal, state and local laws or
regulations relating to or addressing pollution or protection of the
environment, or protection of worker health or safety, including, but not
limited to, the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. ss. 9601 et seq., the Occupational Safety and Health Act of 1970,
29 U.S.C. ss. 651 et seq., and the Resource Conservation and Recovery Act of
1976, 42 U.S.C. ss. 6901 et seq., in each case including any amendments thereto,
any successor statutes, and any regulations or guidance promulgated thereunder,
and any state or local equivalent thereof.
"Environmental Property Transfer Act" means any applicable Requirement
of Law that conditions, restricts, prohibits or requires any notification or
disclosure triggered by the closure of any property or the transfer, sale or
lease of any property or deed or title for any property for environmental
reasons, including, but not limited to, any so-called "Industrial Site Recovery
Act" or "Responsible Property Transfer Act."
"Equipment" of a Person means all of such Person's present and future
furniture, machinery, service vehicles, supplies and other equipment and any and
all accessions, parts and appurtenances attached to any of the foregoing or used
in connection therewith, and any substitutions therefore and replacements,
products and proceeds thereof.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
"Event of Default" means an event described in Section 6.1 hereof.
"Excluded Tax" is defined in Section 2.9 (A) hereof.
"Existing Xxxxxx Obligations" is defined in Schedule 1.1.6 hereof.
"Extraordinary Receipt" means extraordinary gains (and any nonrecurring
unusual gains arising in or outside of the ordinary course of business) not
included in extraordinary gains determined in accordance with Agreement
Accounting Principles.
"Fair Value" means (a) with respect to the Capital Stock of the
Borrower, the closing price for such Capital Stock on the trading date
immediately preceding the date of determination; and (b) with respect to other
assets, the value of the relevant asset as of the date of acquisition or sale as
would be obtained in an arm's-length transaction conducted in good faith between
an informed and willing buyer and an informed and willing seller each under no
compulsion to buy or sell.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
15
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day for such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Fixed Charge Coverage Ratio" is defined in Section 5.4(B) hereof.
"Floor Plan Indebtedness" means any and all loans, advances, debts,
liabilities and obligations, owing by any Dealership to any Lender (or any
Affiliate or Subsidiary thereof), of any kind or nature, present or future,
arising under a Wholesale Line, whether or not evidenced by any note, guaranty
or other instrument, whether or not for the payment of money, whether arising by
reason of an extension of credit, loan, guaranty, indemnification, or in any
other manner, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired. The term includes, without limitation,
all interest, charges, expenses, fees, attorneys' fees and disbursements and
paralegals' fees, and any other sum chargeable to the Borrower or a Dealership
under any documents, instruments or agreements executed by the Borrower or a
Dealership in connection with a Wholesale Line.
"Ford Credit" means Ford Motor Credit Company, a Delaware corporation,
and its successors and assigns.
"GMAC" means General Motors Acceptance Corporation, a Delaware
corporation, and its successors and assigns.
"Governmental Authority" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantor" means each Dealership Guarantor and Non Dealership
Subsidiary Company Guarantor except Xxxxxx Everest.
"Guaranty" means each Dealership Guaranty and Non Dealership Subsidiary
Company Guaranty.
"Hedging Obligations" of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefore), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such Person's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"Indebtedness" of any Person means, without duplication, such Person's
(a) obligations for borrowed money, (b) obligations representing the deferred
purchase price of property or services (other than accounts payable arising in
the ordinary course of such Person's business payable on terms customary in the
16
trade), (c) obligations which are evidenced by notes, acceptances or other
similar instruments, (d) Capitalized Lease Obligations, (e) reimbursement
obligations with respect to letters of credit (other than commercial letters of
credit) issued for the account of such Person, (f) Hedging Obligations, (g)
Contingent Obligations in respect of obligations of another Person of the type
described in the foregoing clauses (a) through (f). The amount of Indebtedness
of any Person at any date shall be without duplication (i) the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability of any such Contingent Obligations at such date and (ii) in
the case of Indebtedness of others secured by a Lien to which the property or
assets owned or held by such Person is subject, the lesser of the fair market
value at such date of any asset subject to a Lien securing the Indebtedness of
others and the amount of the Indebtedness secured. For the avoidance of doubt,
in the case of the Borrower and its Subsidiaries, the term "Indebtedness"
includes all Floor Plan Indebtedness.
"Indemnified Matters" is defined in Section 8.7 (B) hereof.
"Indemnified Taxes" is defined in Section 2.9 (A) hereof.
"Indemnitees" is defined in Section 8.7 (B) hereof.
"Interest Expense" means, for any period, the total interest expense of
the Borrower and its consolidated Subsidiaries, whether paid or accrued
(including the interest component of Capitalized Leases, commitment and letter
of credit fees), but excluding (1) interest expense not payable in cash
(including amortization of discount) (2) Floor Plan Indebtedness and (3)
wholesale financing indebtedness of Xxxxxx Automotive Atlanta L.L.C. d/b/a
Xxxxxx Motor Trucks payable to each of Comerica Bank, a Michigan banking
corporation, Navistar International Corporation and Navistar Financial
Corporation, all as determined in conformity with Agreement Accounting
Principles.
"Inventory" of a Person means any and all present and future motor
vehicles, tractors, trailers, service parts and accessories and all other
property of such Person held for sale or lease in the ordinary course of
business of such Person.
"Investment" of a Person means, (i) any purchase or other acquisition
by that Person of any Indebtedness, Equity Interests or other securities, or of
a beneficial interest in any Indebtedness, Equity Interests or other securities,
issued by any other Person, (ii) any purchase by that Person of all or
substantially all of the assets of a business conducted by another Person, and
(iii) any loan, advance (other than deposits with financial institutions
available for withdrawal on demand, prepaid expenses, accounts receivable,
advances to officers, directors, sales representatives and employees and similar
items made or incurred in the ordinary course of business) or capital
contribution by that Person to any other Person, including all Indebtedness to
such Person arising from a sale of property by such Person other than in the
ordinary course of its business.
"IRS" means the United States Internal Revenue Service and any Person
succeeding to the functions thereof.
"Lenders" means, collectively, Ford Credit, Chrysler Financial, GMAC
and their respective successors and Eligible Assignees that shall become a party
17
to this Agreement pursuant to Section 9.3 hereof; in each case for so long as
such Lender or Person shall be a party to this Agreement.
"Lender's Commitment" means, with respect to any Lender at any time,
the amount set forth opposite such Lender's name on Schedule 1.1.4 hereto under
the caption "Commitment" or, if such Lender has entered into one or more
Assignment and Acceptances, set forth for such Lender in the Register maintained
by the Agent pursuant to Section 9.3 (d) hereof as such lender's "Commitment,"
as such amount may be reduced pursuant to Section 2.3.
"LIBOR Rate" means, for any given calendar month, the monthly
arithmetic average, as determined on the first Business Day of that particular
calendar month, of the per annum interest rate announced from time to time as
the one month London Interbank Offered Rate quoted each of the four Mondays
immediately preceding the date of determination (for the Friday immediately
preceding such Monday) under the Money Rates Column of The Wall Street Journal,
or, if The Wall Street Journal is unavailable for any reason, as published in
such other publications as the Agent may designate. In the event such rate is
not quoted on Monday for the previous Friday, the rate quoted on the first
business day of the week for the last business day of the previous week shall be
utilized.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, encumbrance or security agreement or preferential
arrangements of any kind or nature whatsoever (including, without limitation,
the interest of a vendor or lessor under any conditional sale, Capitalized Lease
or other title retention agreement).
"Loan Documents" means this Agreement, the Notes, the Loan Party
Guaranties, the Collateral Documents and all other documents, instruments and
agreements executed in connection herewith or contemplated hereby (other than
any Wholesale Line), as the same may be amended, restated or otherwise modified
and in effect from time to time.
"Loan Party" means the Borrower and each other Person that has executed
a Loan Document in favor of the Agent at any time prior to, on or after the
Effective Date except Xxxxxx Everest.
"Loan Party Guaranties" means each Non Dealership Subsidiary Company
Guaranty and each Dealership Guaranty executed by a Loan Party.
"Loan Party Pledges" means each of (i) the Borrower Pledge, (ii) the
Dealership Pledge, (iii) the Non Dealership Subsidiary Company Pledge, and (iv)
any other pledge of Capital Stock delivered by a Loan Party from time to time to
the Agent, for the benefit of the Lenders.
"Loan Party Security Agreements" means each of (i) the Borrower
Security Agreement, (ii) the Dealership Security Agreement, (iii) the Non
Dealership Subsidiary Company Security Agreement, and (iv) any other security
agreement delivered by a Loan Party from time to time to the Agent, for the
benefit of the Lenders.
"MAI Appraisal" means an appraisal of real property performed by a
Member, Appraisal Institute appraiser who meets the requirements of American
Institute of Real Estate Appraisers.
18
"Margin Stock" shall have the meaning ascribed to such term in
Regulation U.
"Material Adverse Change" means either (i) for so long as the structure
of the Xxxxxx Group involves Platforms (as defined herein), any material adverse
change in the business, financial condition, operations, performance, properties
or prospects of any Platform, or (ii) in the event that the structure of the
Xxxxxx Group involves geographic structures other than Platforms, a material
adverse change in the business, financial condition, operations, performance,
properties or prospects of any aggregation of Transaction Parties which such
aggregation, taken as a whole, equals the lesser of (A) the geographic
organizational component of the Xxxxxx Group that replaces the Platform
structure or (B) ten percent (10%) of the total number of Transaction Parties.
"Material Adverse Effect" means a material adverse effect upon (a) the
business, financial condition, operations, performance, properties or prospects
of the Borrower and its Subsidiaries, taken as a whole, (b) the ability of any
Loan Party to perform its respective obligations under the Loan Documents in any
material respect, or (c) the ability of the Agent or any Lender to enforce in
any material respect the Obligations or its rights with respect to the Loan
Documents.
"Material Subsidiary" means (i) any "Significant Subsidiary" as defined
in Regulation S-X issued pursuant to the Securities and Exchange Act of 1933, as
amended, or (ii) any Subsidiary of the Borrower that is a Loan Party.
"Maximum Availability" means $450,000,000.00, as such amount may be
reduced pursuant to Section 2.3 hereof.
"Maximum Rate" means the maximum nonusurious interest rate under
applicable law.
"Minority Holder" means any holder of an Equity Interest in a
Subsidiary, which Equity Interest does not exceed 20% of the Capital Stock of
such Subsidiary.
"Multi-employer Plan" means a "Multi-employer Plan" as defined in
Section 4001(a)(3) of ERISA which is, or within the immediately preceding six
(6) years was, contributed to by either the Borrower or any member of the
Controlled Group.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer or
other disposition of any asset or the incurrence or issuance of any Indebtedness
or the sale or issuance of any Equity Interests (including, without limitation,
any capital contribution) by any Person, or any Extraordinary Receipt received
by or paid to or for the account of any Person, the aggregate amount of cash
received from time to time (whether as initial consideration or through payment
or disposition of deferred consideration) by or on behalf of such Person in
connection with such transaction after deducting therefrom only (without
duplication) (a) reasonable and customary brokerage commissions, underwriting
fees and discounts, legal fees, finder's fees and other similar fees,
disbursements and commissions, (b) the amount of taxes and other governmental
costs and expenses payable in connection with or as a result of such transaction
(c) the amount of any Indebtedness secured by a Lien on such asset that, by the
terms of the agreement or instrument governing such Indebtedness, is required to
be repaid upon such disposition, and (d) reserves for purchase price adjustments
and retained fixed liabilities that are payable by Borrower or such Subsidiary
in cash to the extent required under Agreement Accounting Principles in
19
connection with such sale, lease, transfer or disposition (it being understood
that immediately upon expiration of the retention period for such reserves,
amounts held as reserves must be paid as a mandatory prepayment of the Revolving
Credit Obligations pursuant to Section 2.2 (B) hereof); provided, however, that
in the case of items (a) and (c) above, to the extent, but only to the extent,
that the amounts so deducted are, at the time of receipt of such cash, actually
paid either (a) to a Person that is not an Affiliate of such Person, or (b) to
Ripplewood Partners L.P. (with the prior written consent of the Required
Lenders, which such consent may not be unreasonably withheld), and are properly
attributable to such transaction or to the asset that is the subject thereof.
"Net Income" means, for any period, the net earnings (or loss) after
taxes of the Borrower and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with
Agreement Accounting Principles.
"New Subsidiary" is defined in Section 5.3(F)(ii) hereof.
"Non Dealership Subsidiary Companies" means each Subsidiary of Borrower
which is not a Dealership, including but not limited to those Subsidiaries which
own any Equity Interests in any other Person in the Xxxxxx Group, in each case
together with its successors and assigns.
"Non Dealership Subsidiary Company Guaranty" means each Guaranty in the
form attached hereto as Exhibit C, provided by a Non Dealership Subsidiary
Company to Agent, for the benefit of the Lenders, as the same may be amended,
modified, supplemented, reaffirmed and/or restated, and in effect from time to
time.
"Non Dealership Subsidiary Company Pledge" means each Pledge Agreement
delivered by any Non Dealership Subsidiary Company to the Agent, for the benefit
of the Lenders, pursuant to which such Person pledges their Capital Stock of
certain corporation, limited liability company and/or partnership Subsidiaries,
as such pledge agreement may be amended, restated or otherwise modified from
time to time.
"Non Dealership Subsidiary Company Security Agreement" means any
Security Agreement in the form attached hereto as Exhibit D, pursuant to which a
Non Dealership Subsidiary Company grants the Agent, for the benefit of the
Lenders, a security interest in all of its assets, as the same may be amended,
modified, supplemented and/or restated, and in effect from time to time.
"Notes" means collectively, all promissory notes of the Borrower
payable to the order of a Lender, in substantially the form of Exhibit A hereto,
evidencing the indebtedness of the Borrower to such Lender, including any
amendment, restatement, modification, renewal, increase or replacement thereof.
"Obligations" means all Advances, debts, liabilities, obligations,
covenants and duties owing by a Loan Party to the Agent or any of the Lenders or
any Indemnitee, of any kind or nature, present or future, arising under any Loan
Document, whether or not evidenced by any note, guaranty or other instrument,
whether or not for the payment of money, whether arising by reason of an
extension of credit, loan, guaranty, indemnification, or in any other manner,
whether direct or indirect (including those acquired by assignment), absolute or
20
contingent, due or to become due, now existing or hereafter arising and however
acquired. The term includes, without limitation, all interest, charges,
expenses, fees, attorneys' fees and disbursements, paralegals' fees, and any
other sum chargeable to any Loan Party under any Loan Document.
"Off Balance Sheet Liabilities" of a Person means (a) any repurchase
obligation or liability of such Person or any of its Subsidiaries with respect
to accounts or notes receivable sold by such Person or any of its Subsidiaries,
(b) any liability under any sale and leaseback transactions which do not create
a liability on the consolidated balance sheet of such Person, (c) any liability
under any financing lease or so-called "synthetic" lease transaction, or (d) any
obligations arising with respect to any other transaction which is the
functional equivalent of borrowing but which does not constitute a liability on
the consolidated balance sheets of such Person and its Subsidiaries.
"Other Taxes" is defined in Section 2.9(B) hereof.
"Over Borrowing" means any Borrowing which, if funded, would not exceed
the Revolving Credit Availability at such time, but which, when allocated among
the Lenders in accordance with their respective Ratable Shares, would cause any
one or more of the Lenders to exceed its respective Unused Commitment at such
time.
"Participants" is defined in Section 9.2(A) hereof.
"Payment Date" means the fifteenth day of each calendar month,
provided, however if such day is not a Business Day, then the Payment Date shall
be the next succeeding Business Day following such fifteenth day.
"Payment Due Lenders" is defined in Section 2.5 (A) hereof.
"Payment Reconciliation Date" means, in the case of a distribution of
principal payments under an Acquisition Advance or Working Capital Advance, the
first Business Day after Agent's receipt of such principal payments, and, in the
case of any other distribution or collection, the fifteenth day of each month,
or if the fifteenth day is not a Business Day, the next Business Day thereafter.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Pending Acquisition" means any Acquisition set forth on Schedule 1.1.7
hereto.
"Permitted Acquisition" is defined in Section 5.3(F)(iii) hereof.
"Permitted Existing Indebtedness" means the Indebtedness of the
Borrower and its Subsidiaries identified as such on Schedule 1.1.1 to this
Agreement.
"Permitted Existing Investments" means the Investments of the Borrower
and its Subsidiaries identified as such on Schedule 1.1.2 to this Agreement.
"Permitted Existing Liens" means the Liens on assets of the Borrower
and its Subsidiaries identified as such on Schedule 1.1.3 to this Agreement.
21
"Permitted Refinancing Indebtedness" means any replacement, renewal,
refinancing or extension of any Indebtedness permitted by this Agreement that
(i) does not exceed the aggregate principal amount (plus associated fees and
expenses) of the Indebtedness being replaced, renewed, refinanced or extended,
except to the extent permitted by Section 5.3 (A) (xi), (ii) does not rank at
the time of such replacement, renewal, refinancing or extension senior to the
Indebtedness being replaced, renewed, refinanced or extended, and (iii) does not
contain terms (including, without limitation, terms relating to security,
amortization, interest rate, premiums, fees, covenants, event of default and
remedies) materially less favorable to the Borrower or to the Lenders than those
applicable to the Indebtedness being replaced, renewed, refinanced or extended.
"Permitted Subordinated Indebtedness" means Indebtedness issued by the
Borrower (whether in a Rule 144A or private placement offering, an SEC
registered public offering or otherwise) that is consented to by the Agent and
the Required Lenders in writing (which such consent may not be unreasonably
withheld) and that is subordinated to the Obligations and the Wholesale Lines on
terms consented to by the Agent and the Required Lenders in writing (which such
consent may not be unreasonably withheld).
"Person" means any individual, corporation, firm, enterprise,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, limited liability company or other entity of any kind, or
any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" means an employee benefit plan defined in Section 3(3) of ERISA
in respect of which the Borrower or any member of the Controlled Group is, or
within the immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA.
"Platform" means each of (i) collectively, Xxxxxx Automotive Arkansas
L.L.C., a Delaware limited liability company, and each entity it owns, directly
or indirectly, (ii) collectively, Xxxxxx Automotive Atlanta L.L.C., a Delaware
liability company, and each entity it owns, directly or indirectly, (iii)
collectively, Xxxxxx Automotive Jacksonville, L.P., a Delaware limited
partnership, and each entity it owns, directly or indirectly, (iv) collectively,
Xxxxxx Automotive North Carolina L.L.C., a Delaware limited liability company,
Xxxxxx Automotive North Carolina Real Estate Holdings L.L.C., a Delaware limited
liability company, and Camco Finance, L.L.C., a Delaware limited liability
company, and each entity any of the foregoing owns, directly or indirectly, (v)
collectively, Xxxxxx Automotive St. Louis L.L.C., a Delaware limited liability
company, Xxxxxx Automotive St. Louis Gen. L.L.C., a Delaware limited liability
company, and Xxxxxx Automotive St. Louis LR L.L.C., a Delaware limited liability
company, and each entity any of the foregoing owns, directly or indirectly, (vi)
collectively, Xxxxxx Automotive Tampa L.P., a Delaware limited partnership,
Xxxxxx Tampa Management L.L.C., a Delaware limited liability company, Xxxxxx
Automotive Tampa GP, L.L.C., a Delaware limited liability company, and each
entity any of the foregoing owns, directly or indirectly, (vii) collectively,
Xxxxxx Automotive Texas L.L.C., a Delaware limited liability company, and each
entity it owns, directly or indirectly, (viii) Xxxxxx Automotive Oregon
Dealership Holdings L.L.C., a Delaware limited liability company, and each
entity it owns, directly or indirectly, (ix) Xxxxxx Automotive Mississippi
L.L.C., a Delaware limited liability company, and each entity it owns, directly
or indirectly, (x) Xxxxxx Automotive San Diego L.L.C., a Delaware limited
liability company, and each entity it owns, directly or indirectly (xi) Xxxxxx
Automotive Fresno L.L.C., a Delaware limited liability company, and each entity
it owns, directly or indirectly, and (xii) those entities acquired in connection
with any Permitted Acquisition of a group of Dealerships, operating under
22
multiple franchise agreements with multiple automobile manufacturers operating
in a specific geographic region.
"Pledged Account Agreements" means, collectively, any Pledged Account
Agreement in the form attached hereto as Exhibit H, pursuant to which a
Transaction Party grants the Agent, for the benefit of the Lenders, a security
interest in all of its depository accounts, as the same may be amended,
modified, supplemented and/or restated, and as in effect from time to time.
"Property" is defined in Section 3.3 hereof.
"Ratable Share" means with respect to any Lender at any time, a
percentage represented by a fraction the numerator of which is the amount of
such Lender's Commitment at such time and the denominator of which is the sum of
all Commitments at such time, in either case as reduced pursuant to the terms
hereof. Notwithstanding the foregoing for purposes of determining the
denominator, Ford Credit's Commitment shall be $192,000,000.00 (or such lesser
amount as may be required as a result of the reduction in the Aggregate
Commitments pursuant to Section 2.3 hereof) for purposes of calculating such
Lender's Ratable Share.
"Reallocated Borrowing" means, as to any Lender at the time of a
request for an Over Borrowing, such Lender's Ratable Share of the given Over
Borrowing minus such Lender's Unused Commitment at such time.
"Reallocating Lender" is defined in Section 2.1 (C) hereof.
"Receivable(s)" of a Person means all of such Person's presently
existing and hereafter arising or acquired accounts, contract rights, chattel
paper, instruments, notes, letters of credit, documents, documents of title,
investment property, deposit accounts, other bank accounts, general intangibles,
tax refunds and other obligations of other Persons of any kind, now or hereafter
existing, including, but not limited to, those arising out of or in connection
with the sale or lease of goods, the rendering of services or otherwise, and all
rights now or hereafter existing in and to all security agreements, leases, and
other contracts securing or otherwise relating to any such accounts, contract
rights, chattel paper, instruments, notes, letters of credit, documents,
documents of title, investment property, deposit accounts, other bank accounts,
general intangibles, tax refunds or of other Persons.
"Register" is defined in Section 9.3 (d) hereof.
"Regulation T" means Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by and to brokers and dealers of securities for the purpose
of purchasing or carrying margin stock (as defined therein).
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit for the purpose of purchasing or carrying Margin Stock
applicable to member banks of the Federal Reserve System.
23
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).
"REIT" means a real estate investment trust, a Person that becomes a
real estate investment trust or any of such Person's affiliates or subsidiaries.
"REIT Transaction" is defined in Section 5.3(I) hereof.
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, including the movement of Contaminants
through or in the air, soil, surface water or groundwater.
"Rentals" of a Person means the aggregate fixed amounts payable by such
Person under any lease of real or personal property but does not include any
amounts payable under Capitalized Leases of such Person.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days after
such event occurs, provided, however, that a failure to meet the minimum funding
standards of Section 412 of the Code and of Section 302 of ERISA shall be a
Reportable Event regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or Section 412(d)
of the Code.
"Required Lenders" means, at any time, the Lenders owed or holding at
least 65% of the sum of (a) the aggregate principal amount of the Advances
outstanding at such time, and (b) the Unused Commitments at such time (such sum
is referred to as the "Credit"); provided, however, that if at any given time no
one Lender is owed or holds 25% or more of the Credit, "Required Lender" at such
time will meanthe Lenders owed or holding at least 51% of the Credit; provided,
further, however, that if any Lender shall be a Defaulting Lender at any such
time, there shall be excluded from the determination of Required Lenders at such
time (X) the aggregate principal amount of the Advances owing to such Lender (in
its capacity as a Lender) and outstanding at such time, and (Y) the Unused
Commitment of such Lender at such time. Notwithstanding the foregoing, the sum
of Ford Credit's Commitment and Unused Commitment shall not exceed
$192,000,000.00 (or such lesser amount as may be required as a result of a
reduction in the Aggregate Commitments pursuant to Section 2.3 hereof) for
purposes of calculating the foregoing percentage, after giving effect to Section
2.1.
"Requirements of Law" means, as to any Person, the charter and by-laws
or other organizational or governing documents of such Person, and any law, rule
or regulation, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is subject
including, without limitation, the Securities Act of 1933, the Securities
Exchange Act of 1934, Regulations T, U and X, ERISA, the Fair Labor Standards
Act, the Worker Adjustment and Retraining Notification Act, Americans with
Disabilities Act of 1990, and any certificate of occupancy, zoning ordinance,
24
building, environmental or land use requirement or permit or environmental,
labor, employment, occupational safety or health law, rule or regulation.
"Responsible Officer" means any officer of any Transaction Party.
"Restricted Franchise Agreement" is defined in Section 5.3(F)(iii)(b)
hereof.
"Restricted Payment" means (i) any dividend or other distribution,
direct or indirect, on account of any Equity Interests of the Borrower now or
hereafter outstanding, except a dividend payable solely in the Borrower's
Capital Stock (other than Disqualified Stock) or in options, warrants or other
rights to purchase such Capital Stock, (ii) any redemption, retirement, purchase
or other acquisition for value, direct or indirect, of any Equity Interests of
the Borrower or any of its Subsidiaries now or hereafter outstanding, other than
in exchange for, or out of the proceeds of, the substantially concurrent sale
(other than to a Transaction Party) of other Equity Interests of the Borrower
(other than Disqualified Stock), and (iii) any payment of a claim for the
rescission of the purchase or sale of, or for material damages arising from the
purchase or sale of any Equity Interests of the Borrower or any of the
Borrower's Subsidiaries, or of a claim for reimbursement, indemnification or
contribution arising out of or related to any such claim for damages or
rescission.
"Revolving Credit Availability" means, at any particular time, the
difference between the Maximum Availability at such time and the Revolving
Credit Obligations at such time.
"Revolving Credit Obligations" means, at any particular time, the sum
of the outstanding principal amount of all Advances at such time.
"Secretary's Certificate" with respect to any Person, means any
certificate, delivered by a secretary, assistant secretary, managing member,
general partner or governor of such Person which certifies (i) the names and
true signatures of the incumbent officers or managers of such Person authorized
to sign each Transaction Document to which it is a party and the other documents
to be executed thereunder, (ii) a true and correct copy of such Person's
Certificate of Incorporation, or similar charter document and all amendments
thereto, (iii) a true and correct copy of the by-laws or similar governing
document of such entity and all amendments thereto, and (iv) a true and correct
copy of the resolutions of such Person's board of directors or members approving
and authorizing the execution, delivery and performance by such entity of each
Transaction Document to which it is a party and the other documents to be
executed thereunder.
"Secured Parties" means the Agent, for itself and the other Lenders.
"Seller Paper" means purchase price obligations of any Loan Party to a
seller of Equity Interests or assets in connection with a Permitted Acquisition,
provided that (i) the incurrence of such obligations must have been consented to
by the Agent and the Required Lenders, which consent may not be unreasonably
withheld, (ii) such obligations are subordinated in right of payment to the
prior payment in full of the Obligations and the Wholesale Lines, and (iii) such
obligations are subordinate to the Obligations and the Wholesale Lines in any
distributions made in any bankruptcy, insolvency or reorganization proceedings;
with respect to each of (ii) and (iii) on terms acceptable to the Agent and the
Required Lenders and otherwise in form reasonably acceptable to the Required
Lenders.
25
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Solvent" means, with respect to any Person on a particular date, that
on such date (a) the present fair saleable value of the property of such Person
is greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, after giving effect to the expected
value of rights of indemnity, contribution and subrogation (b) the present fair
salable value of the assets of such Person is not less than the amount that will
be required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay such debts and liabilities as they mature and (d) such Person is not engaged
in business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an unreasonably
small amount of capital. The amount of contingent liabilities at any time shall
be computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability, after giving effect to the expected value
of rights of indemnity, contribution and subrogation.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a
Subsidiary of the Borrower.
"Successor Agent" is defined in Section 7.6 hereof.
"Termination Date" means the earlier of (a) January 16, 2006 or such
other "Termination Date" specified in an Extension Notice and agreed to by the
Lenders and (b) the date of termination of the Commitment pursuant to either of
Section 2.3 or Section 6.2 hereof.
"Termination Event" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of the Borrower or any member of the
Controlled Group from a Benefit Plan during a plan year in which the Borrower or
such Controlled Group member was a "substantial employer" as defined in Section
4001(a)(2) of ERISA or the cessation of operations which results in the
termination of employment of twenty percent (20%) of Benefit Plan participants
who are employees of the Borrower or any member of the Controlled Group; (iii)
the imposition of an obligation on the Borrower or any member of the Controlled
Group under Section 4041 of ERISA to provide affected parties written notice of
intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to
terminate a Benefit Plan; (v) any event or condition which might constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Benefit Plan; or (vi) the partial or complete
withdrawal of the Borrower or any member of the Controlled Group from a
Multi-employer Plan.
"Total Adjusted Debt" means, for any period, on a consolidated basis
for the Borrower and its Subsidiaries, the amount of Total Debt less (i) any
Floor Plan Indebtedness and (ii) Permitted Subordinated Indebtedness.
26
"Total Debt" means, for any period, on a consolidated basis for the
Borrower and its Subsidiaries, the sum of Indebtedness of the Borrower and its
Subsidiaries, other than Hedging Obligations and Contingent Obligations.
"Transaction Costs" means the fees, costs and expenses payable by the
Borrower in connection with the execution, delivery and performance of the
Transaction Documents.
"Transaction Parties" means each of the Loan Parties and any Subsidiary
of the Borrower that is not yet a Loan Party.
"Transaction Documents" means the Loan Documents and the Acquisition
Documents.
"United States Person" means any Person that is resident in or
organized under the laws of the United States or any political subdivision
thereof, as each of these is determined for United States Federal tax purposes.
"Unmatured Default" means an event which, but for the lapse of time or
the giving of notice, or both, would constitute an Event of Default.
"Unused Commitment" means, with respect to any Lender, such Lender's
Commitment at such time minus the aggregate principal amount of Advances made by
such Lender and outstanding at such time.
"Voting Interests" means shares of Capital Stock in any Person, the
holders of which are ordinarily, in the absence of contingencies, entitled to
vote for the election of directors, or persons performing similar functions of
such Person, even if the right to vote has been suspended by the happening of
such contingency.
"Waiver, Guaranty and Disbursement Agreement" means each Waiver,
Guaranty and Disbursement Agreement in the form attached hereto as Exhibit G,
delivered by any Loan Party to the Agent, for the benefit of the Lenders, as the
same may be amended, restated, or otherwise modified from time to time.
"Wholesale Line" means any automotive floor plan wholesale credit line
made by Ford Credit, Chrysler Financial, GMAC or any Lender or any Affiliate or
subsidiary thereof to a dealership.
"Working Capital Advance" is defined in Section 5.2 (K) hereof.
Any accounting terms used in this Agreement which are not specifically
defined herein shall have the meanings customarily given them in accordance with
generally accepted accounting principles in existence as of the date hereof.
1.2 References. The existence throughout the Agreement of references to
the Borrower's Subsidiaries is for a matter of convenience only. Any references
to Subsidiaries of the Borrower set forth herein shall (i) with respect to
representations and warranties which deal with historical matters be deemed to
27
include each of the Subsidiaries existing on the date the particular
representation and warranty is deemed made; and (ii) shall not in any way be
construed as consent by a Lender to the establishment, maintenance or
acquisition of any Subsidiary, except as may otherwise be permitted hereunder.
1.3 Effectiveness of this Agreement. This Agreement shall
become effective on June 6, 2003 ("Effective Date") .
ARTICLE II: THE LOAN FACILITIES
2.1 Making Advances; Repayment of Advances.
(A) Upon satisfaction of the conditions precedent set forth in
Sections 3.1 and 3.2, from and including the Effective Date of this Agreement
and prior to the Termination Date, each Lender severally agrees, on the terms
and conditions hereinafter set forth, to make Advances to the Borrower from time
to time on any Business Day during the period from the Effective Date until the
Termination Date in an amount for each such Advance not to exceed such Lender's
Unused Commitment at such time; provided, however, at no time shall the
Revolving Credit Obligations exceed the Commitment at such time. Each Borrowing
shall be in an aggregate amount no less than $500,000.00 and in multiples of
$10,000.00 if in excess thereof. Within the limits of each Lender's Unused
Commitments in effect from time to time, and subject to the terms of this
Agreement, the Borrower may borrow under this Section 2.1, prepay pursuant to
Section 2.2 and reborrow under this Section 2.1.
(B) Borrowing Notice. Each Borrowing shall be made on notice,
given not later than 11:00 A.M. (Eastern Standard Time) on (x) the third
Business Day prior to the date of the proposed Borrowing in the case of an
Acquisition Advance or a Working Capital Advance and (y) one Business Day prior
to the date of the proposed Borrowing in the case of a Cash Management Advance,
by the Borrower to the Agent. Each such notice of a Borrowing (a "Borrowing
Notice") must be by telephone, confirmed immediately in writing, telex or
telecopier, in substantially the form of Exhibit B hereto, specifying therein
the requested (i) date of such Borrowing, (ii) aggregate amount of such
Borrowing, (iii) use of proceeds of such Borrowing, and (iv) account or accounts
into which the Advances comprising such Borrowing should be funded. Each
Borrowing Notice shall be irrevocable and binding on the Borrower. The Borrower
shall indemnify each Lender against any loss, cost or expense incurred by such
Lender as a result of any failure to fulfill on or before the date specified in
such Borrowing Notice for such Borrowing the applicable conditions set forth in
Article III, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the
Advance to be made by such Lender as part of such Borrowing when such Advance,
as a result of such failure, is not made on such date. Not later than 2:00 p.m.
(Eastern Standard Time) on each Borrowing Date, the Agent (on behalf of each
Lender) shall make available the Advance (if Agent has received funds from the
Lenders (x) in the case of an Acquisition Advance or a Working Capital Advance
under Section 2.1B(1) and (y) in the case of a Cash Management Advance under
Section 2.1(B)(2), in funds immediately available to the Borrower at such
account or accounts as shall have been notified to the Agent. Each Advance shall
bear interest from and including the date of the making of such Advance to (but
not including) the date of repayment thereof at the Applicable LIBOR Rate,
changing when and as the underlying LIBOR Rate changes, which interest shall be
payable in accordance with Section 2.7(B).
(1) Acquisition Advances and Working Capital Advances. In the
case of a Borrowing to fund an Acquisition Advance or a Working Capital Advance,
28
Agent shall give notice to each Lender on the same Business Day it receives a
Borrowing Notice by telex or telecopier and each Lender shall, before 11:00 A.M.
(Eastern Standard Time) on the date of such Borrowing, make available to the
Agent, at the Agent's Account, in same day funds, such Lender's Ratable Share of
such Borrowing in accordance with the respective Commitments not to exceed such
Lender's Unused Commitment at any time. After giving effect to all Advances
under Section 2.1, Ford Credit's Commitment shall not exceed $192,000,000.00 at
any time. After the Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Agent will make such funds
available to the Borrower by crediting the Borrower's Account. Borrower agrees
that it will provide Agent with all documents, as required by Section 5.2(L),
prior to submitting to Agent a Borrowing Notice for an Acquisition Advance.
(2) Cash Management Advances. In the case of a Borrowing to
fund a Cash Management Advance, subject to there being Cash Management
Availability, Agent will make such Advance available to the Borrower on the date
of Borrowing by crediting the Borrower's Account upon fulfillment of the
applicable conditions set forth in Article III; provided, however, in no event
shall a Cash Management Advance be made more than one time in a calendar week.
(C) Reallocation. (1) Notwithstanding the provisions of
Sections 2.1 and 2.5 to the contrary, should Borrower submit a Borrowing Notice
which, if honored, would result in an Over Borrowing, any Lender being asked to
exceed its Unused Commitment at such time (any such Lender is referred to herein
as a "Reallocating Lender") shall be required to make available to the Agent
only that portion of such Reallocating Lender's Ratable Share of the Over
Borrowing equal to such Reallocating Lender's Unused Commitment at such time;
any amounts not made available to the Agent by any such Reallocating Lender
(because such amounts would exceed such Lender's Unused Commitment at such time)
will be reallocated and made available to the Agent by the Lenders which are not
Reallocating Lenders (the reallocation of such amounts is referred to herein as
the "Borrowing Spread"). Any such Reallocated Borrowing shall be reallocated as
follows: (a) if more than one Lender is not a Reallocating Lender then each of
such Lenders shall make equal portions of the Reallocated Borrowing available to
the Agent, not in excess of each such Lender's Unused Commitment at such time,
and (b) if only one Lender is not a Reallocating Lender then such Lender shall
make the full amount of the Reallocated Borrowing available to the Agent, not in
excess of its Unused Commitment at such time. If after the first Borrowing
Spread, the full amount of the Over Borrowing has not been reallocated, any such
amount shall be reallocated in another Borrowing Spread in the same manner as
described in the immediately preceding sentence; this process will continue
through as many Borrowing Spreads as are required to reallocate the full amount
of the Over Borrowing.
(2) In addition, Agent may make demand upon other Lenders under
Section 2.5 (B) on any Business Day on which the aggregate Revolving Credit
Obligations owing to Agent on such Business Day (after giving effect to any
Advances to be made by Agent on such Business Day or the immediately following
Business Day) exceed $192,000,000.00, subject to the limitations set forth in
Section 2.5 (B). Each Lender shall remit such payments to Agent on the first
Business Day after receipt of such demand by Agent.
(D) Unless the Agent shall have received notice from a Lender
prior to the date of any Borrowing that such Lender will not make available to
the Agent such Lender's ratable portion of such Borrowing, the Agent may assume
that such Lender has made such portion available to the Agent on the date of
such Borrowing in accordance with this Section 2.1 and the Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
29
corresponding amount. If and to the extent that such Lender shall not have so
made such ratable portion available to the Agent, such Lender and the Borrower
severally agree to repay or pay to the Agent forthwith on demand such
corresponding amount and to pay interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid or paid to the Agent, at (i) in the case of the Borrower, the Applicable
LIBOR Rate, and (ii) in the case of such Lender (x) for the first three days
after demand, at the Federal Funds Rate from time to time in effect, and (y)
thereafter the Applicable LIBOR Rate. If such Lender shall pay to the Agent such
corresponding amount, such amount so paid shall constitute such Lender's Advance
as part of such Borrowing for all purposes.
(E) The failure of any Lender to make the Advance to be made
by it as part of any Borrowing shall not relieve any other Lender of its
obligation hereunder to make its Advance on the date of such Borrowing, but no
Lender shall be responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on the date of any Borrowing.
2.2 Optional Payments; Mandatory Prepayments
(A) Optional Payments. Except as otherwise provided herein, the
Borrower may from time to time repay or prepay, without penalty or premium, all
or any part of outstanding Advances; provided, however, that the Borrower may
not so prepay Advances unless it shall have provided written notice to Agent not
less than (x) in the case of prepayment of an Acquisition Advance or Working
Capital Advance three (3) Business Days prior to the date of such prepayment and
(y) in the case of a Cash Management Payment one (1) Business Day prior to the
date of such prepayment stating, in each case, the proposed date, the type of
Advance and the aggregate principal amount of the prepayment. In the case of
Cash Management Advances, Borrower may make no more than one Cash Management
Payment and receive no more than one Cash Management Advance in a calendar week.
The amount of any partial prepayment (including, without limitation, Cash
Management Payments) must be no less than $500,000.00, and in multiples of
$100,000.00 if in excess thereof. If Borrower specifies that a prepayment is a
Cash Management Payment, such prepayment shall be applied to reduce the amount
of Cash Management Advances outstanding. Cash Management Payments shall be
applied to outstanding Working Capital Advances only after the outstanding
amount of Cash Management Advances has been reduced to zero. Unless Borrower
specifies that a prepayment is a Cash Management Payment, any prepayments shall
be applied first to reduce Working Capital Advances hereunder. Prepayments
(including, without limitation, Cash Management Payments) shall be applied to
outstanding Acquisition Advances only after the outstanding amount of Working
Capital Advances has been reduced to zero.
(B) Mandatory Prepayments. If at any time and for any reason the
Revolving Credit Obligations are greater than the Commitment, the Borrower shall
immediately make a mandatory prepayment of the Obligations in an amount equal to
such excess. Amounts equal to (i) Net Cash Proceeds of an Asset Sale shall be
mandatorily applied against the Revolving Credit Obligations and (ii) a Decision
Reserve in connection with or following restoration, rebuilding or replacement
of insured property shall be mandatorily applied against the Revolving Credit
Obligations in the amounts and in the manner set forth in Section 5.2(G) hereof.
The Borrower must also make mandatory prepayments against the Revolving Credit
Obligations of the following amounts: (i) eighty percent (80%) of the Net Cash
Proceeds received by Borrower as a direct result of any offering of equity
30
securities of Borrower and (ii) one hundred percent (100%) of the Net Cash
Proceeds received by Borrower as a direct result of Permitted Subordinated
Indebtedness. Any Mandatory Prepayments shall be applied first to reduce
outstanding Working Capital Advances. Prepayments shall be applied to
outstanding Acquisition Advances only after the outstanding amount of Working
Capital Advances has been reduced to zero.
(C) Allocation of Prepayments. The Agent will allocate the amount of
all prepayments among the Lenders in accordance with each Lender's respective
Ratable Share.
2.3 Changes in the Commitment. Termination of Commitment. The Borrower
may permanently reduce the Commitment in whole, or in part, in an aggregate
minimum amount of $50,000,000.00 and integral multiples of $10,000,000.00 in
excess of that amount (unless the Commitment is reduced in whole); any
reductions in the Commitment will be made ratably among the Lenders in
accordance with each Lender's Commitment. Any such reduction may be made only
upon at least three (3) Business Day's written notice to the Agent, which notice
shall specify the amount of any such reduction, and, in the event that the
Commitment is terminated in whole, upon payment of a termination fee (payable to
the Agent for the account of each Lender) equal to the amount by which the
Commitment is reduced multiplied by:
(a) two percent (2.0%), if Borrower terminates the Commitment on or before the
first Anniversary Date ; or (b) one percent (1.0%), if Borrower terminates the
Commitment after the first Anniversary Date but on or before the second
Anniversary Date.
Notwithstanding the foregoing, the amount of the Commitment may not be
reduced below the aggregate principal amount of the outstanding
Revolving Credit Obligations. All accrued commitment fees and
termination fees shall be payable on the effective date of any complete
termination of the obligations of the Lenders to make Advances
hereunder. Lenders will share in any termination fee paid under this
Section 2.3 in proportion with each such Lender's Commitment. On the
first Business Day following the Agent's receipt of a termination fee
hereunder, the Agent will remit to each Lender its portion of the
termination fee received by the Agent hereunder.
2.4 Default Rate: Late Payment Fee. After the occurrence and during the
continuation of an Event of Default, at the option of the Required Lenders, the
interest rate(s) applicable to the Advances shall be equal to the Applicable
LIBOR Rate plus two percent (2.0%) per annum. To the extent not in excess of the
Maximum Rate and in accordance with applicable law, any amount not paid by the
Borrower when due shall accrue interest at an additional two percent (2.0%) per
annum above the rate applicable thereto until such amounts have been paid in
full and shall be payable on demand by the Agent, at the direction of the
Required Lenders, and in no event later than the next succeeding Payment Date.
2.5 Method of Payment. (A) All payments of principal, interest, and
fees hereunder shall be made, without setoff, deduction or counterclaim, in
immediately available funds to the Agent at the Agent's address specified
pursuant to Article XI, at any other address specified in writing by the Agent
to the Borrower, or via wire transfer pursuant to wire transfer instructions
provided by the Agent from time to time, by 12:00 noon (Eastern Standard Time)
on the date when due. The Agent will promptly thereafter cause like funds to be
distributed on the Payment Reconciliation Date (1) if such payment by the
Borrower is in respect of principal, interest, commitment fees or any other
31
Obligation then payable hereunder and under the Notes to more than one Lender,
to such Lender for its account ratably in accordance with its share of the
amounts of such respective Obligations then payable to such Lenders (with
respect to each Lender, such Lender's share of the amount payable hereunder and
under the Notes is referred to herein as the "Payment Due Lenders") and (2) if
such payment by the Borrower is in respect of any Obligation then payable
hereunder to one Lender, to such Lender for its account, in each case to be
applied in accordance with the terms of this Agreement; provided, however that
the Administration Fee due to the Agent (pursuant to Section 2.11 hereof) for
the month immediately preceding such date will be netted out of such amounts and
be maintained in or remitted to the Agent's Account by and for the benefit of
the Agent. For purposes of this Section 2.5, as between the Lenders, the
Payments Due Lenders owing to each Lender shall be determined based upon funds
advanced by such Lender to Agent from time to time and such Payment Due Lenders
shall not be increased or decreased based upon either Cash Management Advances
or Cash Management Payments by Borrower unless and until such Cash Management
Advances and Cash Management Payments have been reconciled between the Lenders
and Agent. Notwithstanding the foregoing, if Borrower makes a prepayment which
would cause the amount of outstanding Obligations due to Agent, in its capacity
as Lender, to be less than zero, Agent shall, as soon as practicable after
receipt of such prepayment, allocate the amount of such prepayment to Lenders in
accordance with each Lender's Ratable Share.
(B) No later than 1:00 p.m. (Eastern Standard Time) on the Payment
Reconciliation Date, each Lender will purchase or sell, as the case may be to
the extent necessary to maintain its Ratable Share, and Agent shall purchase or
sell and assign to each Lender (including, without limitation, Ford Credit as a
Lender) its Ratable Share of the Balance Due not theretofore sold by Agent to,
or otherwise held by such Lender, by making available to Agent, in same day
funds, an amount equal to the portion of the Balance Due to be purchased by such
Lender, provided, however, that the aggregate principal amount of all Advances
purchased by any Lender may not at any time exceed the amount of such Lender's
Commitment. Upon any such assignment by Agent to any other Lender of a portion
of an Advance pursuant to this Section 2.5, Agent represents and warrants to
such other Lender that Agent is the legal and beneficial owner of such interest
being assigned by it, but makes no other representation or warranty and assumes
no responsibility with respect to such Advance, the Loan Documents, the Borrower
or its Subsidiaries. If and to the extent that any Lender shall not have so made
the amount of such Advance available, such Lender shall become a Defaulting
Lender. If such Lender shall have made such amount available to Agent, such
amount so paid in respect of principal shall constitute an Advance made by such
Lender on such Business Day for purposes of this Agreement, and the aggregate
outstanding principal amount of the Advances made by Agent shall be reduced by
such amount on such Business Day. Agent will provide notice to each Lender on or
before 1 p.m. (Eastern Standard Time) on the date that is two Business Days
prior to any Payment Reconciliation Date specifying the amounts due to Agent
hereunder.
(C) If Agent fails to remit to any Lender its portion of the Payment
Due Lenders or any amount of principal, commitment fees or any other Obligation
as required under Section 2.5, the Agent agrees to pay to each such Lender
interest on such Lender's portion of all such amounts (x) for the first three
days after the first Business Day following the Agent's failure to remit, at the
Federal Funds Rate from time to time in effect, and (y) thereafter at the
Applicable LIBOR Rate. Upon its acceptance of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant to
Section 9.3, from and after the effective date of such Assignment and
Acceptance, the Agent shall make all payments hereunder and under the Notes in
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respect of the interest assigned thereby to the Lender assignee thereunder, and
the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly
between themselves.
(D) Unless the Agent shall have received notice from the Borrower prior
to the date on which any payment is due to any Lender hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may (but shall not be obligated to), in reliance upon such assumption, cause to
be distributed to each such Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrower shall not have so
made such payment in full to the Agent, each such Lender shall repay to the
Agent forthwith on demand such amount distributed to such Lender together with
interest thereon, (x) for the first three days after such amount is distributed
to such Lender until the date such Lender repays such amount to the Agent, at
the Federal Funds Rate from time to time in effect, and (y) thereafter until the
date such Lender repays such amount to the Agent, at the Applicable LIBOR Rate.
2.6 Advances, Telephonic Notices. The Lenders are authorized to record
the principal amount of each Advance and each repayment with respect to its
Advances on the schedules attached to the Notes; provided, however, that the
failure to so record shall not affect the Borrower's obligations under the
Notes; and provided further that notwithstanding the face amount of any Note,
the aggregate principal amount of all Advances outstanding at any time to a
Lender under a Note shall not exceed the aggregate principal amount of all
Advances outstanding to such Lender. The Borrower authorizes the Lenders to
extend Advances and the Agent to transfer funds based on telephonic notices made
by any Authorized Officer the Agent reasonably and in good faith believes to be
acting on behalf of the Borrower. The Borrower agrees to deliver promptly to the
Agent a written confirmation, signed by an Authorized Officer, if such
confirmation is requested by the Agent, of each telephonic notice. If the
written confirmation differs in any material respect from the action taken by
the Agent, (i) the telephonic notice shall govern absent manifest error and (ii)
the Agent shall promptly notify the Authorized Officer who provided such
confirmation of such difference.
2.7 Promise to Pay; Interest and Commitment Fees; Interest Payment
Dates; Interest and Fee Basis.
(A) Promise to Pay. The Borrower shall repay to the Agent, for the
ratable account of the Lenders, on the Termination Date, the aggregate principal
amount of the Advances then outstanding. The Borrower unconditionally promises
to pay when due the principal amount of each Advance and all other Obligations
incurred by it, and to pay all unpaid interest accrued thereon and other amounts
due hereunder, in accordance with the terms of this Agreement, the Notes and the
other Loan Documents.
(B) Interest Payment Date.
(i) Interest Payable on Advances. Interest accrued on each
Advance, owing to each Lender shall be payable to the Agent on each Payment
Date, commencing with the first such date to occur after the date hereof and on
the Termination Date (whether by acceleration or otherwise). Borrower will make
interest payments to the Agent on each Payment Date via wire transfer (pursuant
33
to wire transfer instructions provided to Borrower by the Agent from time to
time).
(ii) Interest on other Obligations. Interest accrued on the
principal balance of all other Obligations shall be payable in arrears (i) on
the last Business Day of each calendar month, commencing on the first such day
following the incurrence of such Obligation, (ii) upon repayment of all
Obligations in full or in part, and (iii) if not theretofore paid in full, at
the time such other Obligation becomes due and payable (whether by acceleration
or otherwise).
(C) Commitment Fees; Accounting for Commitment Fees.
(i) Commitment Fees. The Borrower shall pay to the Agent, for
the account of the Lenders, from and after the date hereof, and from the
effective date specified in the Assignment and Acceptance pursuant to which it
became a Lender, in the case of each other Lender, until the date on which the
Commitment shall be terminated in whole, a commitment fee equal to thirty five
hundredths of one percent (0.35%) per annum, on the Unused Commitments in effect
from time to time, provided, however, that any commitment fee accrued with
respect to any of the Commitments of a Defaulting Lender during the period prior
to the time such Lender became a Defaulting Lender and unpaid at such time shall
not be payable by the Borrower so long as such Lender shall be a Defaulting
Lender except to the extent that such commitment fee shall otherwise have been
due and payable by the Borrower prior to such time; and provided, further that
no commitment fee shall accrue on any of the Commitments of a Defaulting Lender
so long as such Lender shall be a Defaulting Lender. All such commitment fees
payable under this clause (C) shall be payable annually in arrears (via wire
transfer, pursuant to wire transfer instructions provided to Borrower by the
Agent in writing from time to time) on each Anniversary Date occurring after the
Effective Date (provided, however, that if any such Anniversary Date is not a
Business Day, the commitment fee must be paid on the next succeeding Business
Day) and, in addition, on the date on which the Commitment shall be terminated
in whole.
(ii) Accounting for Commitment Fees. On the first Business Day
after the Agent's receipt of a payment of the commitment fee provided for in the
preceding section, the Agent will remit to each Lender such Lender's share of
the commitment fee received by Agent, based on each such Lender's Unused
Commitment (via wire transfer, pursuant to wire transfer instructions provided
to the Agent by Lender in writing from time to time).
(D) Interest and Fee Basis. The Agent will calculate interest and fees
for actual days elapsed on the basis of a 365 day year. Interest shall be
payable for the day an Obligation is incurred but not for the day of any payment
on the amount paid if payment is received prior to 12:00 noon (Eastern Standard
Time) at the place of payment. If any payment of principal of or interest on an
Advance or any payment of any other Obligations shall become due on a day which
is not a Business Day, such payment shall be made on the next succeeding
Business Day and, in the case of a principal payment, such extension of time
shall be included in computing interest in connection with such payment. Absent
manifest error, each determination by the Agent of an interest rate, fee or
commission hereunder shall be conclusive and binding for all purposes.
2.8 Termination Date. This Agreement shall be effective until the
Termination Date. The Borrower shall have the right to submit a notice (an
"Extension Notice") requesting an extension of the Termination Date for
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additional one-year periods. The Borrower shall deliver the Extension Notice to
the Agent on or before the date that is at least 45 and not more than 90 days
prior to the first Anniversary Date (and each subsequent Anniversary Date
thereafter in which such option is available). The Agent shall, on or before
December 31 of the year in which Agent receives an Extension Notice, and acting
in accordance with instructions received from all Lenders, notify the Borrower
in writing whether the then applicable Termination Date is extended for one
year; provided, however, failure to give such notice shall mean that no such
extension shall have been granted; and provided further, nothing herein shall
obligate the Lenders to extend the initial Termination Date or any other
Termination Date and any determination whether or not to so extend the
Termination Date shall be made by each Lender in its sole and absolute
discretion. Notwithstanding the termination of this Agreement on the Termination
Date, until all of the Obligations (other than contingent indemnity obligations,
but including all Floor Plan Indebtedness owed to any Lender or any of its
Subsidiaries or Affiliates) shall have been fully and indefeasibly paid and
satisfied and all financing arrangements between the Borrower and each Lender in
connection with this Agreement shall have been terminated (other than with
respect to Hedging Obligations), all of the rights and remedies under this
Agreement and the other Loan Documents shall survive and each Lender shall be
entitled to retain its security interest in and to all existing and future
Collateral.
2.9 Taxes. (A) Any and all payments by the Borrower hereunder shall be
made free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings or any liabilities
with respect thereto including, but not limited to, those arising after the date
hereof as a result of the adoption of or any change in any law, treaty, rule,
regulation, guideline or determination of a Governmental Authority or any change
in the interpretation or application thereof by a Governmental Authority, but
excluding (a) such taxes (including income taxes, franchise taxes and branch
profit taxes) as are imposed on or measured by any Lender's income by (i) the
United States of America (or any political subdivision thereof) or (ii) any
Governmental Authority of the jurisdiction under the laws of which any Lender is
organized or in which its principal office is located or having jurisdiction
over any Lender by virtue of any Lender's location(s) or of any Lender
conducting business in such jurisdiction (other than solely as a result of the
transaction evidenced by this Agreement) and (b) in the case of a Lender that is
not a United States Person (a "Non-U.S. Lender"), any withholding tax imposed by
the United States of America that (i) is in effect and would apply to amounts
payable to such Non-U.S. Lender at the time such Non-U.S. Lender becomes a party
to this Agreement (or designates a new lending office) or (ii) is attributable
to such Non-U.S. Lender's failure to comply with Section 2.9 (D) or (E) (either
of (a) or (b) is referred to as an "Excluded Tax" and all such items other than
Excluded Taxes, "Indemnified Taxes."). If the Borrower shall be required by law
to deduct any Indemnified Taxes from or in respect of any sum payable hereunder
or under the other Loan Documents to any Lender, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.9(A)) any Lender receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions,
and (iii) the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
(B) In addition, the Borrower agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges, or similar
levies which arise from any payment made hereunder or from the execution,
35
delivery or registration of, or otherwise with respect to, this Agreement, the
other Loan Documents, the Commitment or the Advances (hereinafter referred to as
"Other Taxes").
(C) The Borrower indemnifies each Lender for the full amount of
Indemnified Taxes and Other Taxes (including, without limitation, any
Indemnified Taxes or Other Taxes imposed by any Governmental Authority on
amounts payable under this Section 2.9) paid by any Lender and any liability
(including penalties, interest, and expenses) arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within thirty (30) days
after the date a Lender makes written demand therefor. A certificate as to any
additional amount payable to a Lender under this Section 2.9 submitted to the
Borrower by such Lender shall show in reasonable detail the amount payable and
the calculations used to determine such amount and shall, absent manifest error,
be final, conclusive and binding upon each of the parties hereto. With respect
to any deduction or withholding for or on account of any Indemnified Taxes or
payment of any Other Taxes and to confirm that all such Indemnified Taxes or
Other Taxes have been paid to the appropriate Governmental Authorities, the
Borrower shall promptly (and in any event not later than thirty (30) days after
receipt) furnish to such Lender such certificates, receipts or other documents
reasonably satisfactory to the Lenders as evidencing payment thereof.
(D) Any Non-U.S. Lender that is entitled to an exemption from or
reduction of withholding tax under the laws of the United States (or any other
jurisdiction in which the Borrower is located), or any treaty to which the
United States (or any such other jurisdiction) is a party, with respect to
payments under this Agreement shall deliver to the Borrower, within 30 days
after receipt of a written request by Borrower, such properly completed and
executed documentation as will permit such payments to be made without
withholding or at a reduced rate, provided that such Non-U.S. Lender is lawfully
able to do so.
(E) Each Lender organized under the laws of a jurisdiction outside the
United States shall, on or prior to the date of its execution and delivery of
this Agreement or on or prior to the date of the Assignment and Acceptance
pursuant to which it becomes a Lender, and from time to time thereafter as
reasonably requested in writing by the Borrower (but only so long thereafter as
such Lender remains lawfully able to do so), provide each of the Agent and the
Borrower with either two original Internal Revenue Service Forms W-8BEN, W-8IMY
or W-8ECI, as appropriate, or any successor or other form prescribed by the
Internal Revenue Service or in the case of a Lender that has certified in
writing to the Agent that it is not (i) a "bank" (as defined in Section 881 (c)
(3) (A) of the Code), (ii) a 10 percent shareholder (within the meaning of
Section 871 (h) (3) (B) of the Code) or (iii) a controlled foreign corporation
related to the Borrower (within the meaning of Section 864 (d) (4) of the Code),
an Internal Revenue Service Form W-8BEN or Form W-8IMY as appropriate, or any
successor or other form prescribed by the Internal Revenue Service, certifying
that such Lender is exempt from or entitled to a reduced rate of United States
withholding tax on payments pursuant to this Agreement or any other Loan
Document or, in the case of a Lender that is not a "bank" as described above,
certifying that such Lender is a foreign corporation, partnership, estate or
trust. If the forms provided by a Lender at the time such Lender first becomes a
party to this Agreement indicate a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered Excluded
Taxes; provided, however, that if at the date of the Assignment and Acceptance
pursuant to which a Lender becomes a party to this Agreement, the Lender
assignor was entitled to payments under this Section 2.9 (A) in respect of
United States withholding tax with respect to interest paid at such date, then,
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to such extent, the term Indemnified Taxes shall include United States
withholding tax, if any, applicable with respect to the Lender assignor on such
date.
(F) For any period with respect to which a Non-United States Lender has
failed to provide the Borrower or the Agent with the appropriate form,
certificate or other document described in subsection (E) above, the Borrower
shall take such steps (at no cost to it) as such Lender shall reasonably request
to assist such Lender to recover such Taxes.
(G) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower, the Agent
and each Lender contained in this Section 2.9 shall survive the payment in full
of principal and interest hereunder and the termination of this Agreement.
2.10. Mitigation Obligations; Replacement of Lenders. (A) If the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.9 in
respect of United States withholding tax, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.9 in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.
(B) If any Lender requests compensation under Section 2.9 in respect of
United States withholding tax, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 2.9 in respect of United States withholding tax,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Agent, require such Lender to assign and delegate, without recourse, all its
interests, rights and obligations under this Agreement to an assignee that shall
assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrower shall have received the
prior written consent of the Agent, which consent shall not unreasonably be
withheld, (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts) and (iii) such assignment will result in a
reduction in payments required to be made pursuant to Section 2.9.
2.11 Loan Account. Each Lender may maintain, in accordance with its
respective usual practices, an account or accounts (a "Loan Account") evidencing
the Obligations of the Borrower owing to such Lender from time to time,
including the amount of principal, interest and fees payable and paid to such
Lender from time to time hereunder and under the Notes. The entries made in any
Loan Account maintained by the Lenders shall be conclusive and binding for all
purposes, absent manifest error, unless the Borrower objects to information
contained in such Loan Account within thirty (30) days of the Borrower's receipt
of such information. Any Lender's failure to maintain such an account will not
affect the Borrower's obligations under the Notes.
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2.12 Loan Administration Fee. On each Payment Reconciliation Date, each
Lender will pay the Agent a fee in consideration for the Agent's performance of
the administrative functions more particularly described herein (the
"Administration Fee"). With respect to each Lender, such fee will be in an
amount equal to one tenth of one percent (0.1%) per annum on the outstanding
aggregate principal balance of all Advances(made by such Lender) for the month
immediately preceding such Payment Reconciliation Date. Each Lender agrees to
pay the Agent the Administration Fee, on each Payment Reconciliation Date, by
allowing the Agent to net the Administration Fee out of the Payment Due Lenders.
2.13 Defaulting Lenders. (A) In the event that, at any time, (i) any
Lender shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a
Defaulted Amount or a Defaulted Advance to the Agent or any of the other Lenders
and (iii) the Borrower shall make any payment hereunder or under any other Loan
Document to the Agent for the account of such Defaulting Lender, then the Agent
may, on its behalf or on behalf of the other Lenders and to the fullest extent
permitted by applicable law, apply at such time the amount so paid by the
Borrower to or for the account of such Defaulting Lender to the payment of each
such Defaulted Amount or Defaulted Advance to the extent required to pay such
Defaulted Amount or Defaulted Advance. In the event that the Agent shall so
apply any such amount to the payment of any such Defaulted Amount or Defaulted
Advance on any date, the amount so applied by the Agent shall constitute for all
purposes of this Agreement and the other Loan Documents payment, to such extent,
of such Defaulted Amount or Defaulted Advance on such date. Any such amount so
applied by the Agent shall be retained by the Agent or distributed by the Agent
to the Lenders, ratably in accordance with the respective portions of such
Defaulted Amounts or Defaulted Advances payable at such time to the Agent and
the Lenders and, if the amount of such payment made by the Borrower shall at
such time be insufficient to pay all Defaulted Amounts and Defaulted Advances
owing at such time to the Agent, and the Lenders, in the following order of
priority:
(i) first, to the Agent for any Defaulted Amounts or Defaulted
Advances then owing to it, in its capacity as Agent; and
(ii) second, to the Lenders (including Agent in its capacity
as a Lender) for any Defaulted Amounts and Defaulted Advances then owing to the
Lenders, ratably in accordance with such respective Defaulted Amounts and
Defaulted Advances then owing to the Lenders.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Agent pursuant to this subsection (a), shall be applied by the Agent as
specified in subsection (b) of this Section 2.13.
(B) In the event that, at any one time, (i) any Lender shall be a
Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted Advance
or a Defaulted Amount and (iii) the Borrower, any Agent or any other Lender
shall be required to pay or distribute any amount hereunder or under any other
Loan Document to or for the account of such Defaulting Lender, then the Borrower
or such Agent or such other Lender shall pay such amount to the Agent to be held
by the Agent, to the fullest extent permitted by applicable law, in escrow or
the Agent shall, to the fullest extent permitted by applicable law, hold in
escrow such amount otherwise held by it. Any funds held by the Agent in escrow
under this subsection (b) shall be deposited by the Agent in an account with an
escrow agent (which is a bank or financial institution which acts as escrow
agent in the ordinary course of its business and is reasonably acceptable to the
38
Agent and the Required Lenders), in the name and under the control of the Agent,
but subject to the provisions of this subsection (B). The terms applicable to
such escrow account, including the rate of interest payable with respect to the
credit balance of such account from time to time, shall be such escrow agent's
standard terms applicable to escrow accounts maintained with it. Any interest
credited to such account from time to time shall be held by the Agent in escrow
under, and applied by the Agent from time to time in accordance with the
provisions of, this subsection (B). The Agent shall, to the fullest extent
permitted by applicable law, apply all funds so held in escrow from time to time
to the extent necessary to make any Advances required to be made by such
Defaulting Lender and to pay any amount payable by such Defaulting Lender
hereunder and under the other Loan Documents to the Agent or any other Lender,
as and when such Advances or amounts are required to be made or paid and, if the
amount so held in escrow shall at any time be insufficient to make and pay all
such Advances and amounts required to be made or paid at such time, in the
following order of priority:
(i) first, to the Agent for any amounts then due and payable
by such Defaulting Lender to it hereunder, in its capacity as such; and
(ii) second, to the Lenders (including Agent in its capacity
as a Lender) for any amount then due and payable by such Defaulting Lender to
the Lenders hereunder, ratably in accordance with such respective amounts then
due and payable to the Lenders.
In the event that any Lender that is a Defaulting Lender shall, at any time,
cease to be a Defaulting Lender, any funds held by the Agent in escrow at such
time with respect to such Lender shall be distributed by the Agent to such
Lender and applied by such Lender to the Obligations owing to such Lender at
such time under this Agreement and the other Loan Documents ratably in
accordance with the respective amounts of such Obligations outstanding at such
time.
(C) The rights and remedies against a Defaulting Lender under this
Section 2.13 are in addition to other rights and remedies that the Borrower may
have against such Defaulting Lender with respect to any Defaulted Advance and
that any Agent or any Lender may have against such Defaulting Lender with
respect to any Defaulted Amount.
2.14 Evidence of Debt. (A) The Register maintained by the Agent
pursuant to Section 9.3 shall record (i) the date and amount of each Advance
made hereunder, (ii) the terms of each Assignment and Acceptance delivered to
and accepted by it, (iii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder,
and (iv) the amount of any sum received by the Agent from the Borrower hereunder
and each Lender's share thereof.
(B) Entries made in good faith by the Agent in the Register pursuant to
subsection (A) above, shall be prima facie evidence of the amount of principal
and interest due and payable or to become due and payable from the Borrower to,
in the case of the Register, each Lender and, in the case of such account or
accounts, such Lender, under this Agreement, absent manifest error; provided,
however, that the failure of the Agent or such Lender to make an entry, or any
finding that an entry is incorrect, in the Register shall not limit or otherwise
affect the obligations of the Borrower under this Agreement.
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2.15. Sharing of Payments. If any Lender shall obtain at any time any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise, other than as a result of an assignment pursuant to
Section 9.3) (a) on account of Obligations due and payable to such Lender
hereunder and under the Notes at such time in excess of its Ratable Share
(according to the proportion of (i) the amount of such Obligations due and
payable to such Lender at such time to (ii) the aggregate amount of the
Obligations due and payable to all Lenders hereunder and under the Notes at such
time) of payments on account of the Obligations due and payable to all Lenders
hereunder and under the Notes at such time obtained by all the Lenders at such
time or (b) on account of Obligations owing (but not due and payable) to such
Lender hereunder and under the Notes at such time in excess of its Ratable Share
(according to the proportion of (i) the amount of such Obligations owing to such
Lender at such time to (ii) the aggregate amount of the Obligations owing (but
not due and payable) to all Lenders hereunder and under the Notes at such time)
of payments on account of the Obligations owing (but not due and payable) to all
Lenders hereunder and under the Notes at such time obtained by all of the
Lenders at such time, such Lender shall forthwith purchase from the other
Lenders such interests or participating interests in the Obligations due and
payable or owing to them, as the case may be, as shall be necessary to cause
such purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each other
Lenders shall be rescinded and such other Lenders shall repay to the purchasing
Lender the purchase price to the extent of each Lender's Ratable Share
(according to the proportion of (i) the purchase price paid to each Lender to
(ii) the aggregate purchase price paid to all Lenders) of such recovery together
with an amount equal to each Lender's Ratable Share (according to the proportion
of (i) the amount of such other Lender's required repayment to (ii) the total
amount so recovered from the purchasing Lenders) of any interest or other amount
paid or payable by the purchasing Lender in respect of the total amount so
recovered. The Borrower agrees that any Lender so purchasing an interest or
participating interest from another Lender pursuant to this Section 2.15 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such interest or participating
interest, as the case may be, as fully as if such Lender were the direct
creditor of the Borrower in the amount of such interest or participating
interest, as the case may be.
ARTICLE III: CONDITIONS
3.1 Conditions of Effectiveness. All of the following conditions shall
have been satisfied or waived by the Agent prior to the Effective Date:
(A) the Lenders shall have completed a due diligence
investigation of the Transaction Parties in scope, and with results
satisfactory to the Lenders, and nothing shall have come to the
attention of the Lenders during the course of such due diligence
investigation to lead them to believe (i) that any information provided
by the Transaction Parties to any Lender was or has become misleading,
incorrect or incomplete in any material respect, (ii) that, as of the
Effective Date, the Transaction Parties would not have good and
marketable title to all of the material assets reflected in the
information provided by them to any Lender and (iii) that the financing
contemplated hereby will have a Material Adverse Effect; without
limiting the generality of the foregoing, the Lenders shall have been
given such access to the management, records, books of account,
contracts and properties of the Transaction Parties as they shall have
requested;
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(B) all due diligence materials requested by the Lenders from
the Borrower shall have been delivered to the Lenders and such due
diligence materials shall be in form and substance satisfactory to the
Lenders;
(C) the Borrower has furnished to the Agent each of the
following, all in form and substance satisfactory to the Agent:
(i) this Agreement, duly executed by the Borrower;
(ii) the Notes duly executed by the Borrower in favor of each
Lender;
(iii) the Cross Agreement duly executed by Borrower, each
Guarantor and Xxxxxx Everest;
(iv) a Dealership Guaranty, Non Dealership Subsidiary Company
Guaranty and/or a Reaffirmation of Guaranty, duly executed by each
Dealership and Non Dealership Subsidiary Company, respectively, and a
Non Dealership Subsidiary Company Guaranty and/or a Reaffirmation of
Guaranty duly executed by Xxxxxx Everest, in each case, to the Agent;
(v) the Borrower Security Agreement, a Dealership Security
Agreement and a Non Dealership Subsidiary Company Security Agreement
executed by Borrower, each Dealership, each Non Dealership Subsidiary
Company and Xxxxxx Everest to the Agent, and a Pledged Account
Agreement executed by each Transaction Party and Xxxxxx Everest,
together with:
(A) acknowledgment copies of proper
financing statements (to be duly filed by the Agent
on or before the Effective Date), under the Uniform
Commercial Code of all jurisdictions that the Agent
may deem necessary or desirable in order to perfect
and protect the first priority liens and security
interests created under the Collateral Documents,
covering the Collateral described in the Collateral
Documents,
(B) completed requests for information,
dated on or before the Effective Date, listing the
financing statements referred to in clause (A) above
and all other effective financing statements filed in
the jurisdictions referred to in clause (A) above
that name the relevant Loan Party as debtor, together
with copies of such other financing statements,
(C) evidence of the completion of all other
recordings and filings of or with respect to each
relevant Loan Party and Xxxxxx Everest that the Agent
may deem necessary or desirable in order to perfect
and protect the Liens created thereby,
(D) evidence of the insurance required by
the terms of the Loan Documents,
(E) evidence that all other action that the
Agent may deem necessary or desirable in order to
perfect and protect the first priority liens and
security interests created under the Collateral
Documents has been taken (including, without
41
limitation, receipt of duly executed payoff letters,
UCC-3 termination statements and landlords' and
bailees' waiver and consent agreements).
(vi) the Borrower Pledge, the Dealership Pledge and the Non
Dealership Subsidiary Company Pledge, executed by each of Borrower,
each Dealership, each Non Dealership Subsidiary Company and Xxxxxx
Everest, respectively, to the Agent (for the benefit of the Lenders)
together, with (A) stock certificates evidencing the pledged Equity
Interests referred to therein and undated stock powers executed in
blank, and (B) acknowledgment copies of Uniform Commercial Code
financing statements covering "Investment Property";
(vii) to the extent the Borrower, any Dealership or Non
Dealership Subsidiary Company has any Indebtedness other than Permitted
Existing Indebtedness and Liens other than Permitted Existing Liens,
pay-out letters, releases and UCC-3 Termination Statements, where
applicable, from all third-party creditors releasing all Liens securing
any such Indebtedness;
(viii) a certificate, in form and substance satisfactory to
the Lender, signed by the chief financial officer of the Borrower
stating that as of the Effective Date, no Event of Default or Unmatured
Default has occurred and is continuing, and the representations and
warranties of the Borrower are true and correct with full force and
effect as if made on the Effective Date;
(ix) to the extent not included in the foregoing, the
documents, instruments and agreements set forth on the closing list
attached as Exhibit E hereto;
(x) such consents, waivers or other documents as any Lender or
its counsel may have reasonably requested;
(xi) the loss payable endorsements referenced in Section
5.2 (G) shall have been delivered to the Agent;
(xii) the Agent shall be satisfied with the corporate and
legal structure and capitalization of each Transaction Party, including
the terms and conditions of the Charter Documents of each such Person
and of each agreement or instrument relating to such structure or
capitalization;
(xiii) there shall exist no action, suit, investigation,
litigation or proceeding affecting any Transaction Party pending or
threatened before any Governmental Authority or arbitrator that (i)
could be reasonably likely to have a Material Adverse Effect other than
the matters described on Schedule 3.1 hereto (the "Disclosed
Litigation") or (ii) purports to affect the legality, validity or
enforceability of any Loan Document or the consummation of the
transactions contemplated thereby;
(xiv) all material governmental and third party consents and approvals
necessary in connection with the Loan Documents shall have been
obtained (without the imposition of any conditions that are not
acceptable to the Required Lenders) and shall remain in effect; all
applicable waiting periods in connection with the Loan Documents or the
consummation of the transactions contemplated thereby shall have
42
expired without any action being taken by any competent authority, and
no law or regulation shall be applicable in the reasonable judgment of
the Agent, in each case that restrains, prevents or imposes materially
adverse conditions upon the Loan Documents or the consummation of the
transactions contemplated thereby or the rights of the Transaction
Parties freely to transfer or otherwise dispose of, or to create any
Lien on, any properties now owned or hereafter acquired by any of them;
(xv) Borrower shall have paid all reasonable accrued fees of
the Agent and the Lenders and all reasonable accrued expenses of the
Agent and the Lenders (including the reasonable accrued fees and
expenses of counsel to the Agent and each Lender); and
(xvi) the Agent shall be satisfied with the amount, parties,
terms and conditions and prospects for performance of all Acquisition
Documents then in existence with respect to any Pending Acquisition by
the Borrower or any of its Subsidiaries which the Borrower reasonably
expects, as of the date hereof, to consummate after the day of the
Effective Date; and the Agent shall be satisfied with all aspects of
such Pending Acquisitions.
3.2 Conditions Precedent to Each Advance. No Lender shall be
required to make any Advance, unless on the applicable Borrowing Date:
(i) There exists no Event of Default or Unmatured Default; and
(ii) The representations and warranties contained in Article
IV are true and correct as of such Borrowing Date (unless such
representation and warranty expressly relates to an earlier date).
Each Borrowing Notice with respect to each such Advance shall
constitute a representation and warranty by the Borrower that the conditions
contained in Sections 3.2(i) and (ii) have been satisfied.
3.3 Second Mortgages. Borrower shall deliver, or cause Guarantor to
deliver, no later than the date hereof, in form and substance reasonably
acceptable to Lenders:
(a) A first or, if already subject to a first deed of trust or
mortgage, a second deed of trust or mortgage on all real
property owned by Borrower or any Guarantor (the "Property");
and
(b) A first or, if already subject to a first security
interest, a second security interest in all fixtures now owned
or hereafter acquired by Borrower and or Guarantor and used in
the operation of the Property and the proceeds thereof; and
(c) A first or, if already subject to a first collateral
assignment, a second collateral assignment to Agent of (i) the
lease agreement to be dated on or before the date of the deed
of trust or mortgage from Borrower/Guarantors covering the
property named in subparagraph (a), and (ii) the rentals due
43
under such lease, which lease shall be subordinate to the
rights of Agent under its deed of trust or mortgage on such
property named in subparagraph (a) and, if applicable, may
also be subordinated to the obligations secured by any first
collateral assignment of such lease(s), in the case of clauses
(a), (b), and (c) above.
To the extent permitted under the applicable state law, Lenders expressly agree
that, to the extent the amount of the mortgage or property valuation affects the
amount of documentary tax due in connection with mortgages on property located
in Florida, Georgia and Virginia, the property valuation shall be equal to one
hundred twenty-five percent of the sum of: the most recent appraised value plus
the value of any improvements less the amount of the current outstanding balance
under any prior liens. In exchange for such agreement, Borrower and Guarantor
hereby waive any requirement that Lenders marshal assets on property located in
Virginia, Florida and Georgia. Notwithstanding the foregoing, and subject to
Section 5.3 hereof, Borrower and Guarantor agree to amend the mortgage from time
to time, at the request of Lenders, as the property valuation increases over
time, due to the decrease in the outstanding balance under a prior lien, the
removal of a prior lien, an increase in appraised value of the property or any
other circumstance.
Notwithstanding the foregoing or anything else in this Agreement to the
contrary, neither Borrower nor any Guarantor will be obligated to deliver any
deed of trust, mortgage, security interest or collateral assignment described
herein to Agent if doing so would violate or conflict with, or create a default
or right of termination or acceleration under, any agreement (including but not
limited to any existing deed of trust or mortgage relating to any Property)
binding on Borrower or any Guarantor or any of their assets, or result in the
creation or imposition of any lien on such assets (other than the liens
expressly contemplated hereby); provided that the Borrower and any Guarantor
shall use their best efforts to secure permission of the first secured party to
permit such delivery.
Each Lender hereby consents to the liens to be granted pursuant to this Section
3.3 and, notwithstanding anything to the contrary contained in any other
agreement or document entered into by Borrower or any Guarantor with or for the
benefit of such Lender, hereby waives any default or event of default and any
right of termination or acceleration under any such other agreement or document
caused solely as a result of Borrower's or any Guarantor's granting the liens
and complying with its other obligations hereunder, as contemplated by this
Section 3.3; provided however, that any second security interest granted to
Agent shall, at all times, remain subject to and subordinate to the first
priority security interest of any Lender in any such property.
All reasonable out-of-pocket, actual, cash expenses incurred by Lenders in
connection with the mortgages and the transactions contemplated hereby,
including, without limitation, reasonable fees and disbursements of special
counsel, title search reports, intangible taxes, documentary stamp charges
(calculated as set forth above) and recording fees, shall be paid by Borrower on
demand by Lenders, whether or not the mortgages shall be executed or recorded.
Borrower or Guarantor shall not be obligated to pay the cost of any new
appraisals on any property if Borrower or any Guarantor provides Lenders with
the most recent appraisal of such property which is in form and substance
reasonably acceptable to the Agent. In addition, Lenders agree that neither
Borrower nor any Guarantor is obligated to provide Lenders with either a survey
or title insurance in connection with such mortgages.
The Borrower shall deliver, and cause each Guarantor to deliver, as soon as
practical, but no later than 45 days after the acquisition of Property by a
Borrower or Guarantor, mortgages and applicable collateral assignments on such
44
future acquisitions as set forth above in each case, in form and substance
reasonably acceptable to the Agent.
ARTICLE IV: REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as of the Effective Date and on
the date of each Advance as follows to the Lenders:
4.1 Organization; Corporate Powers. Each Transaction Party (i) is a
corporation, limited liability company or limited partnership duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (ii) is duly qualified to do business and is in good standing
under the laws of each jurisdiction in which failure to be so qualified and in
good standing could not reasonably be expected to have a Material Adverse Effect
and (iii) has all requisite corporate, company or partnership power and
authority to own, operate and encumber its property and to conduct its business
as presently conducted and as proposed to be conducted.
4.2 Authority.
(A) The execution, delivery, performance and filing, as the case may
be, of each of the Transaction Documents which must be executed or filed by any
Transaction Party or which have been executed or filed as required by this
Agreement and to which each Transaction Party is party, and the consummation of
the transactions contemplated thereby, have been duly approved by the respective
boards of directors or managers, or by the partners, as applicable, and, if
necessary, the shareholders, members or partners, as applicable, of each
Transaction Party, and such approvals have not been rescinded. No other
corporate, company or partnership action or proceedings on the part of any
Transaction Party is necessary to consummate such transactions contemplated by
the Transaction Documents.
(B) Each of the Transaction Documents to which each Transaction Party
is a party has been duly executed, delivered or filed, as the case may be, by
such party and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, is in full force and effect and no
material term or condition thereof has been amended, modified or waived without
the prior written consent of the Required Lenders, and to the Borrower's
knowledge, each of the Transaction Parties has, and, all other parties thereto
have, performed and complied with all the material terms, provisions, agreements
and conditions set forth therein and required to be performed or complied with
by such parties on or before the date hereof, and no Event of Default, Unmatured
Default or breach of any material covenant by any such Transaction Party exists
thereunder.
4.3 No Conflict; Governmental Consents. The execution, delivery and
performance of each of the Transaction Documents to which each Transaction Party
is a party do not and will not (i) conflict with the Charter Documents of any of
the Transaction Parties, (ii) to the Borrower's knowledge, constitute a tortious
interference with any Contractual Obligation of any Person or conflict with,
result in a breach of or constitute (with or without notice or lapse of time or
both) a default under any Requirement of Law (including, without limitation, any
Environmental Property Transfer Act) or Contractual Obligation of any Person, or
require termination of any Contractual Obligation, (iii) result in or require
the creation or imposition of any Lien whatsoever upon any of the property or
assets of any Transaction Party, other than Liens permitted by the Loan
45
Documents, or (iv) require any approval of the shareholders, members or partners
of any Transaction Party except such as have been obtained. The execution,
delivery and performance of each of the Transaction Documents to which each
Transaction Party is a party do not and will not require any registration with,
consent or approval of, or notice to, or other action to, with or by any
Governmental Authority, including under any Environmental Property Transfer Act,
except (i) filings, consents or notices which have been made, obtained or given,
or which, if not made, obtained or given, individually or in the aggregate could
not reasonably be expected to have a Material Adverse Effect and (ii) filings
necessary to create or perfect security interests in the Collateral.
4.4 Financial Statements. All balance sheets, statements of profit and
loss and other financial data that have been given to each Lender and the Agent
by or on behalf of the Transaction Parties (the "Financial Information") are
complete and correct in all material respects, fairly present the financial
condition of the Transaction Parties as of such dates, and the results of each
of their operations for the periods specified in the Financial Information, and
have been prepared in accordance with Agreement Accounting Principles
consistently followed throughout the periods covered thereby. Except as
specifically disclosed (as to creditor, debtor, amount and security) by the
Financial Information and as set forth on Schedule 1.1.1 hereto, the Transaction
Parties do not have outstanding any loan or Indebtedness, direct or contingent,
to any party, other than the Indebtedness due and owing to Lenders, and none of
their assets is subject to any security interest, lien or other encumbrance in
favor of anyone other than Agent (except for the Permitted Existing Liens).
Since March 31, 2003 there has been no change in the assets, liabilities or
financial condition of any Transaction Party from that set forth in the
Financial Information other than changes in the ordinary course of affairs, none
of which changes has had or could reasonably be expected to have a Material
Adverse Effect.
4.5 No Material Adverse Effect. Since the date hereof, there has
occurred no event or circumstance which has had or could reasonably be expected
to have a Material Adverse Effect.
4.6 Taxes.
(A) Tax Examinations. All material deficiencies which have been
asserted against the Transaction Parties as a result of any federal, state,
local or foreign tax examination for each taxable year in respect of which an
examination has been conducted have been fully paid or finally settled or are
being contested in good faith, and as of the date hereof no issue has been
raised by any taxing authority in any such examination which, by application of
similar principles, reasonably can be expected to result in assertion by such
taxing authority of a material deficiency for any other year not so examined
which has not been reserved for in the consolidated financial statements of the
applicable Transaction Party to the extent, if any, required by Agreement
Accounting Principles.
(B) Payment of Taxes. All tax returns and reports of each Transaction
Party required to be filed have been timely filed, and all taxes, assessments,
fees and other governmental charges thereupon and upon their respective
property, assets, income and franchises which are shown in such returns or
reports to be due and payable by such Transaction Party have been paid except
those items which are being contested in good faith and have been reserved for
in accordance with Agreement Accounting Principles or for which the failure to
file could not be reasonably expected to result in the payment of amounts by the
46
Transaction Parties in the aggregate in excess of $250,000.00. The Borrower has
no knowledge of any proposed tax assessment against any Transaction Party that
will have or could reasonably be expected to have a Material Adverse Effect.
4.7 Litigation; Loss Contingencies and Violations. There is no action,
suit, proceeding, arbitration or (to the Borrower's knowledge after diligent
inquiry) investigation before or by any Governmental Authority or private
arbitrator pending or, to the Borrower's knowledge after diligent inquiry,
threatened against any Transaction Party or any property of any of them (i)
challenging the validity or the enforceability of any material provision of the
Transaction Documents or (ii) which could reasonably be expected to have a
Material Adverse Effect. There is no material loss contingency within the
meaning of Agreement Accounting Principles which has not been reflected in the
consolidated financial statements of the Transaction Parties prepared and
delivered pursuant to Section 5.1 for the fiscal period during which such
material loss contingency was incurred. No Transaction Party is (A) in violation
of any applicable Requirements of Law which violation could reasonably be
expected to have a Material Adverse Effect, or (B) subject to or in default with
respect to any final judgment, writ, injunction, restraining order or order of
any nature, decree, rule or regulation of any court or Governmental Authority
which could reasonably be expected to have a Material Adverse Effect.
4.8 Subsidiaries. Schedule 4.8 to this Agreement, as of the Effective
Date, the date of any supplement thereto or the date of a Borrowing Notice, as
the case may be, (i) contains a description as of the such date of the corporate
structure of, each Transaction Party and any other Person in which a Transaction
Party holds an Equity Interest; and (ii) accurately sets forth as of such date
(A) the correct legal name, the jurisdiction of incorporation or formation and
the jurisdictions in which each of the Transaction Parties is qualified to
transact business as a foreign corporation or other foreign entity and (B) a
summary of the direct and indirect partnership, joint venture, or other Equity
Interests, if any, of each Transaction Party in any Person that is not a
corporation. Promptly after (a) the formation or acquisition of any New
Subsidiary permitted under Section 5.3(F)(ii),(b) a change in the Equity
Interest of any Transaction Party, or (c) a change under Section 5.3 (H) the
Borrower shall provide a supplement to Schedule 4.8 to this Agreement. None of
the issued and outstanding Capital Stock of any Transaction Party is subject to
any redemption or repurchase agreement. The outstanding Capital Stock of the
Borrower and each Transaction Party is duly authorized, validly issued, fully
paid and nonassessable. The Borrower has no Subsidiaries other than (i) the
Subsidiaries set forth on Schedule 4.8 and (ii) any Subsidiaries acquired in
connection with a Permitted Acquisition, in connection with which the Borrower
shall have provided all of the documents, instruments and agreements as required
by this Agreement.
4.9 ERISA. No Benefit Plan has incurred any material accumulated
funding deficiency (as defined in Sections 302(a)(2) of ERISA and 412(a) of the
Code) whether or not waived. Neither the Borrower nor any member of the
Controlled Group has incurred any material liability to the PBGC which remains
outstanding other than the payment of premiums, and there are no premium
payments which have become due which are unpaid. Schedule B to the most recent
annual report filed with the IRS with respect to each Benefit Plan and, if so
requested, furnished to the Agent, is complete and accurate. Since the date of
each such Schedule B, there has been no material adverse change in the funding
status or financial condition of the Benefit Plan relating to such Schedule B.
Neither the Borrower nor any member of the Controlled Group has (i) failed to
47
make a required contribution or payment to a Multiemployer Plan or (ii) made a
complete or partial withdrawal under Sections 4203 or 4205 of ERISA from a
Multiemployer Plan, in either event which could result in any material
liability. Neither the Borrower nor any member of the Controlled Group has
failed to make a required installment or any other required payment under
Section 412 of the Code, in either case involving any material amount, on or
before the due date for such installment or other payment. Neither the Borrower
nor any member of the Controlled Group is required to provide security to a
Benefit Plan under Section 401(a)(29) of the Code due to a Plan amendment that
results in an increase in current liability for the plan year. No Transaction
Party maintains or contributes to any employee welfare benefit plan within the
meaning of Section 3(1) of ERISA which provides benefits to employees after
termination of employment other than as required by Section 601 of ERISA or as
set forth on Schedule 4.9 hereto. Each Plan which is intended to be qualified
under Section 401(a) of the Code has received a favorable determination letter
from the Internal Revenue Service to the effect that it is so qualified and that
each trust related to such Plan is exempt from federal income tax under Section
501 (a) of the Code, and, to the best knowledge of the Borrower or any
Subsidiary, there is no event or condition, including any amendment to any such
Plan, that would cause the loss of such qualification or exemption. Each
Transaction Party is in compliance in all material respects with the
responsibilities, obligations and duties imposed on them by ERISA and the Code
with respect to all Plans. No Transaction Party nor any fiduciary of any Plan
has engaged in a nonexempt prohibited transaction described in Sections 406 of
ERISA or 4975 of the Code which could reasonably be expected to subject the
Borrower or any Dealership Guarantor to material liability. Neither the Borrower
nor any member of the Controlled Group has taken or failed to take any action
which would constitute or result in a Termination Event, which action or
inaction could reasonably be expected to subject the Borrower to material
liability. Neither the Borrower nor any Subsidiary is subject to any liability
under Sections 4063, 4064, 4069, 4204 or 4212(c) of ERISA and no other member of
the Controlled Group is subject to any liability under Sections 4063, 4064,
4069, 4204 or 4212(c) of ERISA which could reasonably be expected to subject the
Borrower or any Dealership Guarantor to material liability. No Transaction Party
has, by reason of the transactions contemplated hereby, any obligation to make
any payment to any employee pursuant to any Plan or existing contract or
arrangement. For purposes of this Section 4.9 "material" means any noncompliance
or basis for liability which could reasonably be likely to subject any
Transaction Party to liability individually or in the aggregate for all such
matters in excess of $250,000.00.
4.10 Accuracy of Information. The information, exhibits and reports
furnished by or on behalf of the Transaction Parties to the Lenders in
connection with the negotiation of, or compliance with, the Transaction
Documents, the representations and warranties of the Transaction Parties
contained in the Transaction Documents, and all certificates and documents
delivered to the Lenders pursuant to the terms thereof, taken as a whole, do not
contain as of the date furnished any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements contained
herein or therein, taken as a whole, in light of the circumstances under which
they were made, not misleading.
4.11 Securities Activities. No Transaction Party is engaged in the
business of extending credit for the purpose of purchasing or carrying Margin
Stock.
4.12 Material Agreements. No Transaction Party is a party to any
Contractual Obligation or subject to any charter or other corporate restriction
which individually or in the aggregate will have or could reasonably be expected
to have a Material Adverse Effect. No Transaction Party has received notice or
has knowledge that (i) it is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
Contractual Obligation applicable to it, or (ii) any condition exists which,
48
with the giving of notice or the lapse of time or both, would constitute a
default with respect to any such Contractual Obligation, in each case, except
where such default or defaults, if any, individually or in the aggregate will
not have or could not reasonably be expected to have a Material Adverse Effect.
4.13 Compliance with Laws; Compliance with Franchise Agreements. The Transaction
Parties are in compliance with all Requirements of Law applicable to them and
their respective businesses, in each case where the failure to so comply
individually or in the aggregate could reasonably be expected to have a Material
Adverse Effect. The execution, delivery and performance by each Transaction
Party of any Loan Document to which it is a party does not conflict with the
franchise agreement to which it is a party.
4.14 Assets and Properties. Each Transaction Party has good and
marketable title to all of its assets and properties (tangible and intangible,
real or personal) owned by it or a valid leasehold interest in all of its leased
assets (except insofar as marketability may be limited by any laws or
regulations of any Governmental Authority affecting such assets), except where
the failure to have any such title or leasehold interest, as the case may be,
will not have or could not reasonably be expected to have a Material Adverse
Effect, and all such assets and property are free and clear of all Liens, except
Liens permitted under Section 5.3(C). Substantially all of the assets and
properties owned by, leased to or used by each such Transaction Party are in
adequate operating condition and repair, ordinary wear and tear excepted.
Neither this Agreement nor any other Transaction Document, nor any transaction
contemplated under any such agreement, will affect any right, title or interest
of any Transaction Party in and to any of its assets in a manner that will have
or could reasonably be expected to have a Material Adverse Effect.
4.15 Statutory Indebtedness Restrictions. No Transaction Party is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act, or the Investment Company Act of
1940, or any other federal, state or local statute, ordinance or regulation
which limits its ability to incur indebtedness or its ability to consummate the
transactions contemplated hereby.
4.16 Insurance. The insurance policies and programs of each Transaction
Party reflect coverage that is reasonably consistent with prudent industry
practice.
4.17 Labor Matters. As of the date hereof, to the knowledge of each
Transaction Party, there are no material labor disputes to which any Transaction
Party may become a party, including, without limitation, any strikes, lockouts
or other disputes relating to such Persons' plants and other facilities.
4.18 Environmental Matters. (a) (i) The operations of each
Transaction Party comply in all material respects with Environmental, Health or
Safety Requirements of Law;
(ii) each Transaction Party has all material permits, licenses
or other authorizations required under Environmental, Health or Safety
Requirements of Law and are in material compliance with such permits;
(iii) neither any Transaction Party, nor any of their
respective present property or operations, or, to the best of the
knowledge of the Transaction Parties, any of their respective past
property or operations, are subject to or the subject of, any
49
investigation known to any of the Transaction Parties, any judicial or
administrative proceeding, order, judgment, decree, settlement or other
agreement respecting: (A) any material violation of Environmental,
Health or Safety Requirements of Law; (B) any material remedial action;
or (C) any material claims or liabilities arising from the Release or
threatened Release of a Contaminant into the environment;
(iv) there is not now, nor to the best knowledge of any
Transaction Party has there ever been on or in the property of any
Transaction Party any landfill, waste pile, underground storage tanks,
aboveground storage tanks, surface impoundment or hazardous waste
storage facility of any kind, any polychlorinated biphenyls (PCBs) used
in hydraulic oils, electric transformers or other equipment, or any
asbestos containing material that in the case of any of the foregoing
could be reasonably expected to result in any material claims or
liabilities; and
(v) no Transaction Party has any material Contingent
Obligation in connection with any Release or threatened Release of a
Contaminant into the environment.
(b) For purposes of this Section 4.18 "material" means any
noncompliance or basis for liability which could reasonably be likely to subject
any Transaction Party to liability individually or in the aggregate in excess of
$500,000.00.
4.19 Benefits. Each Transaction Party will benefit from the financing
arrangement established by this Agreement. Each Lender has stated and the
Borrower acknowledges that, but for the agreement by each Transaction Party to
execute and deliver their respective Loan Documents, no Lender would have made
available the credit facilities established hereby on the terms set forth
herein.
4.20 Solvency. Before and after giving effect to the execution,
delivery and performance of the Transaction Documents and at the time of each
Advance, each Transaction Party is Solvent.
ARTICLE V: COVENANTS
The Borrower covenants and agrees that so long as any Commitment is
outstanding and thereafter until payment in full of all of the Obligations
(other than contingent indemnity obligations, unless each Lender shall otherwise
give its prior written consent (or, in those instances as more particularly
described in Section 7.1 hereof, the Agent shall otherwise give its prior
written consent):
5.1 Reporting. The Borrower shall:
---------
(A) Financial Reporting. Furnish to the Agent (with sufficient copies
for each Lender), or with respect to subsection (iii) below, to each Lender in
the manner more particularly set forth therein:
(i) Quarterly Reports. As soon as practicable, and in any
event within fifty (50) days after the end of each fiscal quarter in
each fiscal year, the consolidated and consolidating balance sheet of
the Borrower and its Subsidiaries as at the end of such period
50
and the related consolidated and consolidating statements of
income and the related consolidated statements of cash flows of the
Borrower and its Subsidiaries for such fiscal quarter and for the
period from the beginning of the then current fiscal year to the end
of such fiscal quarter, certified by the chief financial officer of
the Borrower or on behalf of the Borrower as fairly presenting the
consolidated and consolidating financial position of the Borrower
and its Subsidiaries, as at the dates indicated and the results of
their operations and cash flows for the periods indicated in
accordance with Agreement Accounting Principles, subject to
normal year end adjustments.
(ii) Annual Reports. As soon as practicable, and in any event
within ninety (90) days after the end of each fiscal year, (a) the
consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as at the end of such fiscal year and the related
consolidated and consolidating statements of income and the related
consolidated statements of cash flows of the Borrower and its
Subsidiaries for such fiscal year, and in comparative form the
corresponding figures for the previous fiscal year and (b) an audit
report on the items listed in clause (a) hereof (other than the
consolidating statements) of independent certified public accountants
of recognized national standing, which audit report shall be
unqualified and shall state that such financial statements fairly
present the consolidated financial position of the Borrower and its
Subsidiaries as of the dates indicated and the results of their
operations and cash flows for the periods indicated in conformity with
Agreement Accounting Principles and that the examination by such
accountants in connection with such consolidated financial statements
has been made in accordance with generally accepted auditing standards.
The deliveries made pursuant to this clause (ii) shall be accompanied
by any management letter prepared by the above-referenced accountants.
(iii) Monthly Statements. As soon as practicable after a
Lender's request, and in any event within five (5) Business Days after
such request, with respect to any Dealership with which such Lender has
outstanding a Wholesale Line, certified copies of direct (factory)
statements provided by such Dealership to a manufacturer.
(iv) Xxxxxx Everest. Notwithstanding anything herein to the
contrary, with respect to Xxxxxx Everest, as soon as practicable, and
in any event within ninety (90) days after the end of each fiscal year
(A) the consolidated and consolidating balance sheet of Xxxxxx Everest
as at the end of such fiscal year and the related consolidated and
consolidating statements of income of Xxxxxx Everest for such fiscal
year, and in comparative form the corresponding figures for the
previous fiscal year, as prepared by Xxxxxx Everest and certified by
the chief financial officer of Xxxxxx Everest or on behalf of Xxxxxx
Everest as fairly presenting the consolidated financial position of
Xxxxxx Everest as of the dates indicated and the results of their
operations for the periods indicated in conformity with Agreement
Accounting Principles and (B) the annual tax return(s) for Xxxxxx
Everest covering such fiscal year. Agent may request, in writing, that
Xxxxxx Everest deliver, within thirty (30) days of such request, the
consolidated and consolidating balance sheet of Xxxxxx Everest as at
the end of the fiscal quarter preceding Agent's request and the related
consolidated and consolidating statements of income of Xxxxxx Everest
for such fiscal quarter, certified by the chief financial officer of
Xxxxxx Everest or on behalf of Xxxxxx Everest as fairly presenting the
consolidated and consolidating financial position of Xxxxxx Everest, as
at the dates indicated and the results of their operations and cash
flows for the periods indicated in accordance with Agreement Accounting
Principles. Notwithstanding the foregoing, Borrower shall not permit
Xxxxxx Everest to sell or otherwise dispose of any assets without the
51
prior written consent of the Lenders. Borrower shall also provide Agent
with notice, at least ten days prior, of the acquisition of any assets
by Xxxxxx Everest.
(v) Officer's Certificate. Together with each delivery of any financial
statement pursuant to clauses (i) and (ii) of this Section 5.1(A), an
Officer's Certificate of the Borrower, or Xxxxxx Everest, as
applicable, substantially in the form of Exhibit F attached hereto and
made a part hereof, stating that no Event of Default or Unmatured
Default exists, or if any Event of Default or Unmatured Default exists,
stating the nature and status thereof and setting forth (X) such
financial statements and information as shall be reasonably acceptable
to the Agent and (Y) upon the request of Agent, a written valuation of
the Collateral.
(B) Notice of Event of Default. Promptly upon any of the chief
executive officer, chief operating officer, chief accounting officer, treasurer
or controller of the Borrower or any of its Subsidiaries obtaining knowledge (i)
of any condition or event which constitutes an Event of Default or Unmatured
Default, or (ii) that any Person has given any written notice to the Borrower or
any Transaction Party or taken any other action with respect to an Event of
Default or event or condition of the type referred to in Section 6.1(e), deliver
to the Agent a notice specifying (a) the nature and period of existence of any
such Event of Default or Unmatured Default (if the aggregate amount of the
Indebtedness which is the subject of the Unmatured Default exceeds $25,000.00),
condition or event, (b) the notice given or action taken by such Person in
connection therewith, and (c) what action the Borrower has taken, is taking and
proposes to take with respect thereto.
(C) Lawsuits. (i) Promptly upon the Borrower obtaining knowledge of the
institution of, or written threat of, any action, suit, proceeding, governmental
investigation or arbitration against or affecting any Transaction Party or any
property of any Transaction Party, which action, suit, proceeding, governmental
investigation or arbitration exposes, or in the case of multiple actions, suits,
proceedings, governmental investigations or arbitrations arising out of the same
general allegations or circumstances which expose, in the Borrower's reasonable
judgment, the Transaction Party to liability in an amount aggregating
$500,000.00 or more, give written notice thereof to the Agent and provide such
other information as may be reasonably available to enable each Lender and its
respective counsel to evaluate such matters; and (ii) in addition to the
requirements set forth in clause (i) of this Section 5.1(C), upon request of the
Agent, promptly give written notice of the status of any action, suit,
proceeding, governmental investigation or arbitration covered by a report
delivered pursuant to clause (i) above or disclosed in any filing with the
Commission and provide such other information as may be reasonably available to
it that would not violate any attorney-client privilege by disclosure to each
Lender and the Agent to enable each Lender or the Agent and its counsel to
evaluate such matters.
(D) ERISA Notices. Deliver or cause to be delivered to the Agent, at
the Borrower's expense, the following information and notices as soon as
reasonably possible, and in any event:
(i) (a) within ten (10) Business Days after the Borrower
obtains knowledge that a Termination Event has occurred, a written
statement of the chief financial officer of the Borrower describing
such Termination Event and the action, if any, which the Borrower has
taken, is taking or proposes to take with respect thereto, and when
known, any action taken or threatened by the IRS, DOL or PBGC with
52
respect thereto and (b) within ten (10) Business Days after any member
of the Controlled Group obtains knowledge that a Termination Event has
occurred which could reasonably be expected to subject the Borrower or
any member of the Controlled Group to liability individually or in the
aggregate in excess of $2,500,000.00, a written statement of the chief
financial officer of the Borrower describing such Termination Event and
the action, if any, which the member of the Controlled Group has taken,
is taking or proposes to take with respect thereto, and when known, any
action taken or threatened by the IRS, DOL or PBGC with respect
thereto;
(ii) within ten (10) Business Days after the Borrower or any
of its Subsidiaries obtains knowledge that a prohibited transaction
(defined in Sections 406 of ERISA and Section 4975 of the Code) has
occurred, a statement of the chief financial officer of the Borrower
describing such transaction and the action which the Borrower or such
Subsidiary has taken, is taking or proposes to take with respect
thereto;
(iii) within ten (10) Business Days after the Borrower or any
of its Subsidiaries receives notice of any unfavorable determination
letter from the IRS regarding the qualification of a Plan under Section
401(a) of the Code, copies of each such letter;
(iv) within ten (10) Business Days after the filing thereof
with the IRS, a copy of each funding waiver request filed with respect
to any Benefit Plan and all communications received by the Borrower or
a member of the Controlled Group with respect to such request;
(v) within ten (10) Business Days after receipt by the
Borrower or any member of the Controlled Group of the PBGC's intention
to terminate a Benefit Plan or to have a trustee appointed to
administer a Benefit Plan, copies of each such notice;
(vi) within ten (10) Business Days after receipt by the
Borrower or any member of the Controlled Group of a notice from a
Multi-employer Plan regarding the imposition of withdrawal liability,
copies of each such notice;
(vii) within ten (10) Business Days after the Borrower or any
member of the Controlled Group fails to make a required installment or
any other required payment under Section 412 of the Code on or before
the due date for such installment or payment, a notification of such
failure; and
(viii) within ten (10) Business Days after the Borrower or any
member of the Controlled Group knows or has reason to know that (a) a
Multi-employer Plan has been terminated, (b) the administrator or plan
sponsor of a Multi-employer Plan intends to terminate a Multi-employer
Plan, or (c) the PBGC has instituted or will institute proceedings
under Section 4042 of ERISA to terminate a Multi-employer Plan.
For purposes of this Section 5.1(D), the Borrower, any of its Subsidiaries and
any member of the Controlled Group shall be deemed to know all facts known by
the Administrator of any Plan of which the Borrower or any member of the
Controlled Group or such Subsidiary is the plan sponsor.
53
(E) Labor Matters. Notify the Agent in writing, promptly upon the
Borrower's learning thereof, of (i) any material labor dispute to which the
Borrower or any of its Subsidiaries may become a party, including, without
limitation, any strikes, lockouts or other disputes relating to such Persons'
plants and other facilities and (ii) any material liability incurred under the
Worker Adjustment and Retraining Notification Act with respect to the closing of
any plant or other facility of the Borrower or any of its Subsidiaries.
(F) Other Indebtedness. Deliver, or cause to be delivered, to the Agent
(i) a copy of each notice or communication regarding actual defaults (including
any accompanying officer's certificate) delivered by or on behalf of any
Transaction Party to the holders of funded Indebtedness pursuant to the terms of
the agreements governing such Indebtedness, such delivery to be made at the same
time and by the same means as such notice or other communication is delivered to
such holders, and (ii) a copy of each notice or other communication regarding
actual defaults received by any Transaction Party from the holders of funded
Indebtedness pursuant to the terms of such Indebtedness, such delivery to be
made promptly after such notice or other communication is received by any
Transaction Party.
(G) Other Reports. After an incurrence of Permitted Subordinated
Indebtedness, deliver or cause to be delivered to the Agent copies of all
financial statements, reports and notices, if any, sent or made available
generally by the Borrower to its securities holders or filed with the Commission
by the Borrower, all press releases made available generally by the Borrower or
any other Transaction Party to the public concerning material developments in
the business of the Borrower or any other Transaction Party and all
notifications received from the Commission by the any Transaction Party pursuant
to the Securities Exchange Act of 1934 and the rules promulgated thereunder
(other than customary comment letters received in connection with registration
statements or other routine communications between the Commission and the
Borrower).
(H) Environmental Notices. Deliver, or cause to be delivered, as soon
as possible and in any event within ten (10) days after receipt by any
Transaction Party, a copy of (i) any notice or claim to the effect that such
Transaction Party is or may be liable to any Person as a result of the Release
by such Transaction Party, or any other Person of any Contaminant into the
environment, and (ii) any notice alleging any violation of any Environmental,
Health or Safety Requirements of Law by such Transaction Party if, in either
case, such notice or claim relates to an event which could reasonably be
expected to subject such Transaction Party to liability individually or in the
aggregate in excess of $500,000.00.
(I) Other Information. Promptly upon receiving a request therefore from
the Agent, prepare and deliver to the Agent such other information with respect
to any Transaction Party, or the Collateral, including, without limitation,
schedules identifying and describing the Collateral and any dispositions
thereof, as from time to time may be reasonably requested by the Agent.
(J) Real Estate. (i) Prior to the Effective Date of this Agreement,
Borrower shall have delivered to Agent, or cause to have been delivered to
Agent, a summary, in form and substance acceptable to Lenders, of the most
recent MAI appraisal for each piece of property which is the subject of Sections
3.3 and/or 5.3 (A)(xiv) and a report of the following information: (1) the
physical address of such property, (2) the appraised value of such property (as
set forth in the most current MAI Appraisal performed at the request of a
Transaction Party), (3) the date of the most current MAI Appraisal of such
property, performed at the request of a Transaction Party, and name of the
appraiser who prepared the MAI Appraisal, (4) the reasonable cost of
54
improvements made to such property after the date of the most current MAI
Appraisal performed at the request of a Transaction Party, (5) principal amount
of Indebtedness secured by such property, (6) the name of the lender holding the
first lien on such property and (7) a title report, showing all liens and
judgments, on each piece of property.
(ii) On each Anniversary Date (or if any such day is not a Business
Day, on the next succeeding Business Day), deliver to Agent, or cause to be
delivered to Agent, a supplement to the report referenced in clause (i) of this
Section 5.1 (J), which must identify any changes to information previously
reported, and report the following information with respect to any piece of real
property which had not been the subject of a previous report and which is the
subject of Sections 3.3 and/or 5.3 (A) (xiv) of this Agreement: (1) the physical
address of such property, (2) the appraised value of such property (as set forth
in the most current MAI Appraisal performed at the request of a Transaction
Party), (3) the date of the most current MAI Appraisal of such property,
performed at the request of a Transaction Party, and name of the appraiser who
prepared the MAI Appraisal, (4) the reasonable cost of improvements made to such
property after the date of the most recent MAI Appraisal performed at the
request of a Transaction Party, (5) principal amount of Indebtedness secured by
such property, and (6) the name of the lender holding the first lien on such
property. In addition, on each piece of real property which had not been subject
of a previous report and which is the subject of Sections 3.3 and/or 5.3(A)(xiv)
of this Agreement, Borrower will deliver the following to Agent (1) a summary,
in form and substance acceptable to Lenders, of the most recent MAI appraisal
for any new property and (2) a title report, showing all liens and judgments, on
each new parcel of property.
(K) Meetings. The Borrower shall cause its chief executive officer and
chief financial officer to attend all meetings scheduled by the Agent pursuant
to Section 7.1 (d) of this Agreement.
5.2 Affirmative Covenants.
(A) Existence, Etc. Except for mergers permitted pursuant to Section
5.3(H) , the Borrower shall, and shall cause each of its Subsidiaries to, at all
times maintain its corporate, company or partnership existence, as applicable,
and preserve and keep, or cause to be preserved and kept, in full force and
effect its rights and franchises material to its businesses. It is understood
and agreed that any Subsidiary of the Borrower may be dissolved in the ordinary
course of business so long as the Borrower gives prior notice to the Agent of
such dissolution and the assets and obligations of such dissolved Subsidiary are
transferred to another Loan Party.
(B) Powers; Conduct of Business. The Borrower shall, and shall cause
each of its Subsidiaries to, qualify and remain qualified to do business in each
jurisdiction in which the nature of its business requires it to be so qualified
and where the failure to be so qualified will have or could reasonably be
expected to have a Material Adverse Effect. The Borrower will, and will cause
each Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted.
(C) Compliance with Laws, etc The Borrower shall, and shall cause its
Subsidiaries to, (a) comply with all Requirements of Law and all restrictive
covenants affecting such Person or the business, properties, assets or
operations of such Person, and (b) obtain as needed all permits necessary for
55
its operations and maintain such permits in good standing, unless failure to
comply or obtain could not reasonably be expected to have a Material Adverse
Effect.
(D) Payment of Taxes and Claims. The Borrower shall pay, and cause each
of its Subsidiaries to pay, (i) all taxes, assessments and other governmental
charges required to be paid by it or its Subsidiaries, as the case may be, and
(ii) all claims (including, without limitation, claims for labor, services,
materials and supplies) for sums which have become due and payable and which by
law have or may become a Lien (other than a Lien permitted by Section 5.3(C))
upon any of the Borrower's or such Subsidiary's property or assets, prior to the
time when any penalty or fine shall be incurred with respect thereto; provided,
however, that no such taxes, assessments and governmental charges referred to in
clause (i) above or claims referred to in clause (ii) above (and interest,
penalties or fines relating thereto) need be paid if being contested in good
faith by appropriate proceedings diligently instituted and conducted and if such
reserve or other appropriate provision, if any, as shall be required in
conformity with Agreement Accounting Principles shall have been made therefore.
(E) Insurance. The Borrower shall maintain for itself and its
Subsidiaries, or shall cause each of its Subsidiaries to maintain in full force
and effect, insurance policies and programs reflecting coverage that is
reasonably consistent with prudent industry practice (it being understood that,
to the extent consistent with prudent business practice of Persons carrying on a
similar business in a similar location, with the prior written consent of the
Required Lenders (which such consent will not be unreasonably withheld) a
program of self-insurance for first or other loss layers may be utilized).
(F) Inspection of Property; Books and Records; Discussions. The
Borrower shall permit and cause each of the Borrower's Subsidiaries to permit,
any authorized representative(s) designated by the Agent or any Lender to visit
and inspect any of the properties of the Borrower or any of its Subsidiaries, to
examine, audit, check and make copies of their respective financial and
accounting records, books, journals, orders, receipts and any correspondence and
other data relating to their respective businesses or the transactions
contemplated hereby or by the Acquisitions (including, without limitation, in
connection with environmental compliance, hazard or liability), and to discuss
their affairs, finances and accounts with their officers and independent
certified public accountants (it being understood that (i) the right of
inspection is subject to the confidentiality limitation set forth in Section 9.4
hereof, (ii) the Agent and the Lenders may speak with the Borrower's certified
public accountants so long as a representative of the Borrower is present, but
not otherwise, and (iii) Borrower will make a representative present for such a
discussion at the reasonable request of the Agent or any Lender), all upon
reasonable notice and at such reasonable times during normal business hours, as
often as may be reasonably requested; provided, that while no Event of Default
exists, all of the foregoing shall be at the joint expense of the Lenders. The
Borrower shall keep and maintain, and cause each of the Borrower's Subsidiaries
to keep and maintain, in all material respects, proper books of record and
account in which entries in conformity with Agreement Accounting Principles
shall be made of all dealings and transactions in relation to their respective
businesses and activities, including, without limitation, transactions and other
dealings with respect to the Collateral. If an Event of Default has occurred and
is continuing, the Borrower, upon the request of the Agent or any Lender, shall
turn over any such records to the Agent, such Lender, or their respective
representatives.
(G) Insurance and Condemnation Proceeds. Subject to the rights of
Lenders under any Floor Plan Indebtedness to receive and/or apply any insurance
proceeds for any loss with respect to the Collateral, the Borrower shall direct
56
(and, if applicable, shall cause its Subsidiaries to direct) all insurers under
policies of property damage, boiler and machinery and business interruption
insurance and payors of any condemnation claim or award relating to the
Collateral to pay all proceeds payable under such policies or with respect to
such claim or award directly to the Agent (for the benefit of the Lenders);
provided, however, in the event that such proceeds or award are less than
$500,000.00 ("Excluded Proceeds"), unless an Event of Default shall have
occurred and be continuing, the Agent shall remit such Excluded Proceeds to the
Borrower or Subsidiary, as applicable. Each such policy shall contain a
long-form loss-payable endorsement naming the Agent (for the benefit of the
Lenders) as loss payee, which endorsement shall be in form and substance
acceptable to the Agent and shall provide for all losses with respect to the
Collateral to be paid on behalf of Agent and the applicable Transaction Party as
their respective interests may appear and each policy for property damage
insurance shall provide for all losses to be paid directly to the Agent. Each
such policy shall in addition (i) name the applicable Transaction Party and the
Agent (for the benefit of the Lenders) as insured parties thereunder (without
any representation or warranty by or obligation upon the Agent) as their
interests may appear, (ii) contain the agreement by the insurer that any loss
thereunder shall be payable to the Agent (for the benefit of the Lenders)
notwithstanding any action, inaction or breach of representation or warranty by
the Transaction Party, (iii) provide that there shall be no recourse against the
Agent or the Lenders for payment of premiums or other amounts with respect
thereto and (iv) provide that at least ten days' prior written notice of
cancellation or of lapse shall be given to Agent by the insurer. Each
Transaction Party shall, if so requested by the Agent, deliver to the Agent
original or duplicate policies of such insurance and, as often as the Agent may
reasonably request, a report of a reputable insurance broker with respect to
such insurance. Further each Transaction Party shall, at the request of the
Agent, duly execute and deliver instruments of assignment of such insurance
policies to comply with the requirements of Section 5.2 (N) and cause the
insurers to acknowledge notice of such assignment. The Agent shall, upon receipt
of such proceeds (other than Excluded Proceeds) and at the Borrower's direction,
either apply the same to the principal amount of the Advances outstanding at the
time of such receipt and create a corresponding reserve against the Commitment
in an amount equal to such application (the "Decision Reserve") or hold them as
cash Collateral for the Obligations in an interest bearing account. For up to
150 days from the date of any loss (the "Decision Period"), the Borrower may
notify Agent that it intends to restore, rebuild or replace the property subject
to any insurance payment or condemnation award and shall, as soon as practicable
thereafter, provide Agent detailed information, including a construction
schedule and cost estimates. Should an Event of Default occur at any time during
the Decision Period, should the Borrower notify the Agent that it has decided
not to rebuild or replace such property during the Decision Period, or should
the Borrower fail to notify the Agent of the Borrower's decision during the
Decision Period, then the amounts held as cash collateral pursuant to this
Section 5.2(G) or as the Decision Reserve shall be applied as a mandatory
prepayment of the Advances pursuant to Section 2.2(B). Proceeds held as cash
collateral pursuant to this Section 5.2(G) or constituting the Decision Reserve
shall be disbursed as payments for restoration, rebuilding or replacement of
such property become due; provided, however, should an Event of Default occur
after the Borrower has notified the Agent that it intends to rebuild or replace
the property, the Decision Reserve or amounts held as cash collateral shall be
applied as a mandatory prepayment of the Advances pursuant to Section 2.2(B). In
the event the Decision Reserve is to be applied as a mandatory prepayment to the
Advances, the Borrower shall be deemed to have requested Advances in an amount
equal to the Decision Reserve, and such Advances shall be made regardless of any
failure of the Borrower to meet the conditions precedent set forth in Article
III. Upon completion of the restoration, rebuilding or replacement of such
property, the unused proceeds shall constitute net cash proceeds of an Asset
57
Sale and shall be applied as a mandatory prepayment of the Advances pursuant to
Section 2.2(B).
(H) ERISA Compliance. The Borrower shall, and shall cause each of the
Borrower's Subsidiaries to, establish, maintain and operate all Plans, if any,
to comply in all material respects with the provisions of ERISA, the Code, all
other applicable laws, and the regulations and interpretations thereunder and
the respective requirements of the governing documents for such Plans, except
where the failure to comply could not reasonably be expected to subject the
Borrower and its Subsidiaries to liability individually or in the aggregate in
excess of $250,000.00.
(I) Maintenance of Property. The Borrower shall cause all property used
or useful in the conduct of its business or the business of any Subsidiary to be
maintained and kept in good condition, repair and working order and, and
supplied with all necessary equipment and shall cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as in
the judgment of the Borrower may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section 5.2(I) shall prevent the
Borrower from discontinuing the operation or maintenance of any of such property
if such discontinuance is, in the judgment of the Borrower, desirable in the
conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to any Lender. Each Transaction Party
shall promptly furnish to the Agent a statement respecting any material loss or
damage to its respective collective Equipment, taken as a whole.
(J) Environmental Compliance. The Borrower and its Subsidiaries shall
comply with all Environmental, Health or Safety Requirements of Law, except
where noncompliance could not reasonably be expected to subject the Borrower and
its Subsidiaries to liability individually or in the aggregate in excess of
$500,000.00. Neither the Borrower nor any of its Subsidiaries shall be the
subject of any proceeding or investigation pertaining to (i) the Release by the
Borrower or any of its Subsidiaries of any Contaminant into the environment or
(ii) the liability of the Borrower or any of its Subsidiaries arising from the
Release by any other Person of any Contaminant into the environment, which, in
either case, subjects or is reasonably likely to subject the Borrower and its
Subsidiaries individually or in the aggregate to liability in excess of the
amount set forth above.
(K) Use of Proceeds. Except as otherwise provided in Section 2.1
hereof, the Borrower shall use the proceeds of Advances to (i) fund cash
management needs (each such Advance is referred to as a "Cash Management
Advance"), provided however, that at no time may the aggregate amount of Cash
Management Advances outstanding exceed Seventy Five Million Dollars; (ii) fund
the Acquisition Costs of Permitted Acquisitions (together with the initial
advance made January 17, 2001, each such Advance is referred to herein as an
"Acquisition Advance") and (iii) provide funds for working capital needs and
other general corporate purposes of the Borrower and the Guarantors (each such
Advance is referred to as a "Working Capital Advance"), provided, however, that
at no time may the aggregate amount of Working Capital Advances outstanding
exceed Fifty Million Dollars. The proceeds of Advances hereunder may not be used
to make any mandatory prepayment under Section 2.2(B). The Borrower will not,
nor will it permit any Subsidiary to, use any of the proceeds of the Loans to
purchase or carry any "Margin Stock" or to make any Acquisition, other than any
Permitted Acquisition pursuant to Section 5.3(F).
58
(L) Addition of Guarantors. The Borrower shall cause each present and
future Non Dealership Subsidiary Company and each Dealership which has not
heretofore provided a Non Dealership Subsidiary Company Guaranty or a Dealership
Guaranty to the Agent, to deliver to the Agent, for the benefit of the Lenders,
a Secretary's Certificate, a Guaranty, in the form of Exhibit C, together with
Pledged Account Agreements and such other appropriate Collateral Documents, so
as to xxxxx x Xxxx on all of its bank accounts, property and assets, together
with UCC-1 Financing Statements, an acknowledgment to be bound by the Cross
Agreement, together with appropriate corporate resolutions, opinions and other
documentation in form and substance reasonably satisfactory to the Agent. Each
Non Dealership Subsidiary Company and each Dealership shall provide such
Secretary's Certificate, Non Dealership Subsidiary Company Guaranty or
Dealership Guaranty, Pledged Account Agreement and other Collateral Documents
prior to or simultaneously with its Acquisition.
(M) Material Adverse Change. Promptly upon the occurrence of any
Material Adverse Change, Borrower will give the Agent written notice of such
Material Adverse Change, describing the nature of such Material Adverse Change
and the entities affected by such Material Adverse Change, and present Agent
with an action plan Borrower intends to implement to address such Material
Adverse Change.
(N) Further Assurances. Borrower, the Agent and the Lenders agree to,
promptly upon request by the Agent or the Borrower, as applicable, (i) correct,
and cause each of its Subsidiaries promptly to correct, any material defect or
error that may be discovered in any Loan Document or in the execution,
acknowledgment, filing or recordation thereof, and (ii) do, execute,
acknowledge, deliver, record, re-record, file, re-file, register and re-register
any and all such further acts, deeds, conveyances, pledge agreements, mortgages,
deeds of trust, trust deeds, assignments, financing statements and continuations
thereof, termination statements, notices of assignment, transfers, certificates,
assurances and other instruments as the Agent may reasonably require from time
to time in order to (1) carry out more effectively the purposes of the Loan
Documents, (2) to the fullest extent permitted by applicable law, subject any
Loan Party's properties, assets, rights or interests to the Liens now or
hereafter intended to be covered by any of the Collateral Documents, (3) perfect
and maintain the validity, effectiveness and priority of any of the Collateral
Documents and any of the Liens intended to be created thereunder and (4) assure,
convey, grant, assign, transfer, preserve, protect and confirm more effectively
unto the Lenders the rights granted or now or hereafter intended to be granted
to the Lenders under any Loan Document or under any other instrument executed in
connection with any Loan Document to which any Lender is or is to be a party,
and cause each of its Subsidiaries to do so.
(O) Franchise Agreements. The Borrower shall use its reasonable best
efforts to obtain waivers under existing and future franchise agreements on
terms and conditions acceptable to the Lenders sufficient to permit the Liens
contemplated hereunder. To the extent any franchise agreement materially limits
the Liens contemplated hereunder or under any Collateral Document (other than
the Liens contemplated by the Borrower Pledges, Dealership Pledges and/or Non
Dealership Subsidiary Company Pledges), the Borrower shall notify the Agent of
such restriction or limitation and to the extent such franchise agreement
relates to an Acquisition to be effected by the Borrower, prior to such
Acquisition becoming a Permitted Acquisition, the Required Lenders shall have
provided their written approval of such franchise agreement.
59
(P) Pledge of Capital Stock. The Borrower shall, and shall cause each
of the Non Dealership Subsidiary Companies to, pledge to and grant to the Agent,
for the benefit of the Lenders, a first perfected and first priority Lien in all
of its Equity Interests in each Dealership and/or other Non Dealership
Subsidiary Company, as the case may be; provided, however, such Equity Interest
will be required to be pledged only to the extent not prohibited by the
manufacturer under the applicable franchise agreement. In the event that a
manufacturer refuses to consent to the pledge by the Borrower or a Non
Dealership Subsidiary Company of the Borrower's or Non Dealership Subsidiary
Companies' Capital Stock in a Dealership or other Non Dealership Subsidiary
Company, the Borrower and/or Non Dealership Subsidiary Company must execute a
Waiver, Guaranty and Disbursement Agreement.
5.3 Negative Covenants.
(A) Indebtedness. Neither the Borrower nor any of its Subsidiaries
shall directly or indirectly create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness, except:
(i) the Obligations;
(ii) Permitted Existing Indebtedness and Permitted Refinancing
Indebtedness;
(iii) Indebtedness in respect of obligations secured by
Customary Permitted Liens;
(iv) Indebtedness constituting Contingent Obligations in
respect of Indebtedness otherwise permitted hereunder;
(v) Indebtedness arising from intercompany loans from the
Borrower to any Guarantor or from any Subsidiary to the Borrower or any
Guarantor; provided that in each case such Indebtedness is subordinated
upon terms satisfactory to the Required Lenders to the obligations of
the Borrower and its Subsidiaries with respect to the Obligations;
(vi) Indebtedness with respect to surety, appeal and
performance bonds obtained by the Borrower or any of its Subsidiaries
in the ordinary course of business;
(vii) Indebtedness not in excess of $25,000,000.00, in the
aggregate outstanding at any time, in connection with the Liens set
forth in Section 5.3(C)(v);
(viii) contingent obligations of the Guarantors incurred in
connection with sales in the ordinary course of business of vehicle
chattel paper;
(ix) Floor Plan Indebtedness incurred by a Loan Party;
(x) Indebtedness incurred from time to time in connection with
Capital Expenditures, provided, however, that the aggregate of such
Indebtedness incurred during any twelve month period (with the first
such twelve month period beginning on the Effective Date, and each
subsequent twelve month period beginning on each succeeding anniversary
60
day of the Effective Date), may not exceed $20,000,000.00, and
provided, further, that if during any given twelve month period such
Indebtedness is less than $20,000,000.00 (the difference between
$20,000,000.00 and the actual amount of such Indebtedness incurred
during a given twelve month period not in excess of $5,000,000.00 being
referred to herein as the "Carry-Over Amount"), such Carry-Over Amount
may be carried either forward or back into any twelve month period
during the term of this Agreement and added to the amount of
Indebtedness that may be or may have been (as the case may be) incurred
during such twelve month period in connection with Capital
Expenditures;
(xi) other Indebtedness in an aggregate principal amount
outstanding at any time not in excess of $7,500,000.00;
(xii) Indebtedness incurred hereunder in connection with a
Permitted Acquisition;
(xiii) Hedging Obligations permitted under Section 5.3 (P);
(xiv) Indebtedness incurred from time to time and secured only
by the Liens described in Section 5.3 (C) (vi), provided, however, that
with respect to any such given Indebtedness, (1) the aggregate
principal amount of such Indebtedness may not exceed 100% of the value
of the real property, fixtures and improvements collateralizing such
Indebtedness (for purposes of this Section 5.3 (A) (xiv), the value of
the real property will be determined by adding the appraised value of
the real property as reported in the most current MAI Appraisal
performed at the request of a Transaction Party and the Dollar amount
reported in Section 5.1 (J) hereof as the cost of improvements made to
such real property after the date of such MAI Appraisal) , and (2) no
Transaction Party may guaranty such Indebtedness;
(xv) Permitted Subordinated Indebtedness; and
(xvi) obligations in respect of Seller Paper, provided,
however, that (i) the aggregate amount of Indebtedness outstanding in
respect of Seller Paper at any given time may not exceed
$25,000,000.00, and (ii) obligations in respect of Seller Paper
incurred in connection with any given Permitted Acquisition may not
exceed 20% of the Acquisition Price of such Permitted Acquisition.
(B) Sales of Assets. Neither the Borrower nor any of its Subsidiaries
shall sell, assign, transfer, lease, convey or otherwise dispose of any property
(including the Capital Stock of any Subsidiary), whether now owned or hereafter
acquired, or any income or profits therefrom, or enter into any agreement to do
so, except:
(i) sales of Inventory in the ordinary course of business;
(ii) the disposition in the ordinary course of business of (A)
vehicle chattel paper or sales contracts (provided that to the extent
such chattel paper and/or sales contracts are proceeds of motor
vehicles financed under the Floor Plan Indebtedness, the portion of the
Floor Plan Indebtedness related to such motor vehicles shall be retired
in full) and (B) equipment or other personal property that is obsolete,
excess, condemned, worn out or no longer useful in the Borrower's or
its Subsidiaries' business;
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(iii) sales, assignments, transfers, leases, conveyances or
other dispositions of other assets if (A) such transaction (1) is for
all cash consideration, (2) is for not less than Fair Value, and (3)
when combined with all such other transactions (each such transaction
being valued at book value) during the immediately preceding
twelve-month period, represents the disposition of not greater than
$5,000,000.00, and (B) the Net Cash Proceeds of any such sale,
assignment, transfer, lease conveyance or other disposition of assets
are either (1) applied in their entirety to reduce the Revolving Credit
Obligations, or (2) reinvested, substantially in whole with the prior
written consent of Agent and the Required Lenders (which may not be
unreasonably withheld), in long-term assets necessary or useful in the
operation of the Xxxxxx Group's business;
(iv) dispositions permitted by Sections 5.3 (G) and 5.3 (H);
(v) the sale of equipment to the extent such equipment is
exchanged for credit against the purchase price of materially similar
replacement equipment, or the proceeds of such sale are reasonably
promptly applied to the purchase price of such replacement equipment;
(vi) dispositions of assets by any Transaction Party to any
other Transaction Party that is also a Loan Party;
(vii) sales of real property or the right to acquire real
property in connection with any REIT Transaction (as defined in Section
5.3 (I) (ii)) hereof), provided that the Net Cash Proceeds of any such
sale are applied as a mandatory prepayment of the Obligations under
Section 2.2 (B) hereof: and
(viii) the sale of accounts receivable to Compass Bank, an
Alabama bank d/b/a Commercial Billing Services ("Commercial Billing"),
provided, however, that the aggregate amount of the purchase price of
such sales, when combined with the aggregate amount of the purchase
price of all other sales of accounts receivable to Commercial Billing
during the immediately preceding twelve-month period, is not greater
than $25,000,000.00, and further, provided, however, that any such
sales may be made only pursuant to an agreement in materially the same
form and substance as the Merchant Agreement dated May 11, 1999 between
Crown Fordham LLC and Commercial Billing.
(C) Liens. Neither the Borrower nor any of its Subsidiaries shall
directly or indirectly create, incur, assume or permit to exist any Lien on or
with respect to any of their respective property or assets, except:
(i) Permitted Existing Liens;
(ii) Customary Permitted Liens;
(iii) Liens securing the Obligations;
(iv) Liens securing Floor Plan Indebtedness;
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(v) Liens (other than on the stock, real property and fixtures
of any Subsidiaries) securing other obligations not exceeding
$25,000,000.00 in the aggregate at any time outstanding;
(vi) Liens (encumbering only real property, fixtures, and
improvements whether such real property, fixtures and improvements are
now owned, under construction or hereafter acquired), which the
applicable Transaction Party reasonably purported to grant as first
priority Liens, securing the Indebtedness described in Section 5.3 (A)
(xiv);
(vii) Liens securing Capital Expenditures permitted under
Section 5.3 (A) (x), provided any such Liens are limited in scope to
cover only that property which is the subject of the particular Capital
Expenditure; and
(viii) Liens securing Permitted Refinancing Indebtedness
permitted under Section 5.3 (A) (ii).
In addition, neither the Borrower nor any of its Subsidiaries shall become a
party to any agreement, note, indenture or other instrument, or take any other
action, which would prohibit the creation of a Lien on any of its properties or
other assets in favor of the Agent (for the benefit of the Lenders), as
collateral for the Obligations; provided that any agreement, note, indenture or
other instrument in connection with Liens permitted pursuant to clause (i) above
may prohibit the creation of a Lien in favor of the Agent (for the benefit of
the Lenders) on the items of property subject to such Lien.
(D) Investments. Except to the extent permitted pursuant to paragraph
(G) below, neither the Borrower nor any of its Subsidiaries shall directly or
indirectly make or own any Investment except:
(i) Investments in Cash Equivalents;
(ii) Permitted Existing Investments in an amount not greater
than the amount thereof on the date hereof;
(iii) Investments in trade receivables or received in
connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary course
of business;
(iv) Investments from the Borrower to any Subsidiary or from
any Subsidiary to the Borrower or any other Subsidiary permitted by
Section 5.3(A)(v);
(v) Investments in any Guarantor;
(vi) Investments constituting Permitted Acquisitions; and
(vii) Investments of any type in addition to those referred to
elsewhere in this Section 5.3(D) in an amount not to exceed
$10,000,000.00 in the aggregate at any time outstanding;
63
provided, however, that the Investments described in clauses (vi) through (vii)
above shall not be permitted if either an Event of Default or Unmatured Default
shall have occurred and be continuing on the date thereof or would result
therefrom.
(E) Restricted Payments. Neither the Borrower nor any of its
Subsidiaries shall declare or make any Restricted Payments, except:
(i) where the consideration therefore consists solely of Equity Interests
(but excluding Disqualified Stock) of the Borrower or its Subsidiaries
provided no Change of Control would occur as a result thereof;
(ii) Restricted Payments by a Subsidiary to the Borrower or to the Non
Dealership Subsidiary Company that is a parent of such Subsidiary;
(iii) annual management fees to Borrower or its Affiliates
in an aggregate amount not in excess of $1,000,000.00 in any fiscal
year;
(iv) so long as no Event of Default or Unmatured Default has
occurred and is continuing, Borrower may redeem or repurchase any
Equity Interests of the Borrower and/or options to purchase Equity
Interest of the Borrower held by the directors, executive officers,
members of management or employees of the Borrower or any of its
subsidiaries upon the death or termination of such directors,
executive, officer, member or management or employee.
(F) Conduct of Business; Subsidiaries; Acquisitions. (i)
Neither the Borrower nor any of its Subsidiaries shall engage in any
business other than the businesses engaged in by the Borrower and such
Subsidiaries on the date hereof and any business or activities which
are substantially similar, related or incidental thereto.
(ii) The Borrower may create, acquire and/or capitalize any
Subsidiary (a "New Subsidiary") after the date hereof pursuant to any
transaction that is permitted by or not otherwise prohibited by this
Agreement; provided that upon the creation or acquisition of each New
Subsidiary, the requirements set forth in Section 5.2(L) hereof shall
have been satisfied and all New Subsidiaries that are Material
Subsidiaries shall be Controlled Subsidiaries. Only those Subsidiaries
(i) listed on Schedule 5.3 (F) hereto, or (ii) operating under a
Restricted Franchise Agreement may have any Equity Interests issued to
a Minority Holder, and, in the case of those entities operating under a
Restricted Franchise Agreement, only to the extent required by such
Restricted Franchise Agreement.
(iii) The Borrower shall not make any Acquisitions, other than
Acquisitions meeting the following requirements (each such Acquisition
constituting a "Permitted Acquisition"):
(a) no Event of Default or Unmatured Default shall have
occurred and be continuing or would result from such Acquisition or the
incurrence of any Indebtedness in connection therewith;
(b) in the case of an Acquisition of Equity Interests of an
entity, such Acquisition shall be of one hundred percent (100%) of the
Equity Interests of such entity or if so restricted by such entity's
franchise agreement (a "Restricted Franchise Agreement"), such
Acquisition shall be of at least eighty percent (80%) of the Equity
64
Interests of such entity, provided, however, that the Borrower shall
use reasonable efforts to cause such Equity Interests of Minority
Holders to be pledged directly to the Agent, for the benefit of the
Lenders, simultaneously with such Acquisition;
(c) the business or businesses being acquired shall be
substantially similar, related or incidental to the businesses or
activities engaged in by the Borrower and its Subsidiaries on the date
hereof;
(d) within thirty (30) days prior to the anticipated closing
date of a contemplated Acquisition, the Borrower shall deliver to the
Agent a certificate from one of the Authorized Officers, demonstrating
to the reasonable satisfaction of the Agent that after giving effect to
such Acquisition and the incurrence of any Indebtedness hereunder and
in connection herewith, on a pro forma basis (both historically and on
a projected basis), as if the Acquisition and such incurrence of
Indebtedness had occurred on the first day of the twelve-month period
ending on the last day of the Borrower's most recently completed fiscal
quarter, the Borrower would have been in compliance with all of the
covenants contained in this Agreement, including, without limitation,
the financial covenants set forth in Section 5.4;
(e) after giving effect to such Acquisition, the
representations and warranties set forth in Article IV hereof shall be
true and correct in all material respects on and as of the date of such
Acquisition with the same effect as though made on and as of such date;
(f) the Borrower shall have obtained (and shall have based the
calculations set forth above on) historical audited financial
statements for the target and/or reviewed unaudited financial
statements (in each case to the extent available) for the target for a
period of not less than (A) two (2) years for Acquisitions in excess of
$30,000,000.00 and (B) one (1) year for Acquisitions in excess of
$2,000,000.00, together with tax returns for the one year prior to such
year, in each case obtained from the seller or provided by independent
certified public accountants retained for the purposes of such
Acquisition, broken down by fiscal quarter in the Borrower's reasonable
judgment, copies of which shall be provided to the Agent;
(g) the Borrower shall have obtained either (i) a new
franchise agreement between the Dealership and the manufacturer on
substantially the same terms as the franchise agreement entered into
between the manufacturer and the entity to be acquired in such
Permitted Acquisition or (ii) any consent required from a manufacturer
for the continued enforceability and validity of such franchise
agreement after the completion of a Permitted Acquisition shall have
been obtained; and
(h) all material consents from applicable Governmental
Authorities, and all other material consents necessary to permit, the
Acquisitions shall have been obtained.
(G) Transactions with Shareholders and Affiliates. Neither the Borrower
nor any Subsidiary shall directly or indirectly enter into or permit to exist
any transaction (including, without limitation, the purchase, sale, lease or
exchange of any property or the rendering of any service) with any holder or
holders of any of the Equity Interests of the Borrower, or with any Affiliate of
the Borrower which is not a Guarantor, on terms that are less favorable to the
Borrower or any of its Subsidiaries, as applicable, than those that might be
65
obtained in an arm's length transaction at the time from Persons who are not
such a holder or Affiliate, except that employment agreements from time to time
with senior management of Borrower and its Subsidiaries for services rendered
shall be permitted, and (ii) the Shareholders Agreement dated March 1, 2002,
among Xxxxxx Automotive Group, Inc., Xxxxxx Automotive Group L.L.C., a Delaware
limited Liability company, and other stockholders listed on signature pages
thereto, and any amendments thereto shall be permitted.
(H) Restriction on Fundamental Changes. Neither the Borrower nor any of
its Subsidiaries shall enter into any merger or consolidation, or liquidate,
wind-up or dissolve (or suffer any liquidation or dissolution), or convey,
lease, sell, transfer or otherwise dispose of, in one transaction or series of
transactions, all or substantially all of the Borrower's or any such
Subsidiary's business or property, whether now or hereafter acquired, except (i)
transactions permitted under Sections 5.3(B) or 5.3(G), (ii) the merger of a
Transaction Party (other than the Borrower) and a Person acquired in connection
with a Permitted Acquisition; (iii) the merger of a wholly-owned Transaction
Party with and into the Borrower; (iv) the merger of a Transaction Party (other
than the Borrower) with another Transaction Party; and (v) the conveyance,
lease, sale, transfer or other disposition of any or all of the assets of a
Subsidiary (upon voluntary liquidation or otherwise) to the Borrower or any
Guarantor; provided, however, (x) with respect to any such permitted mergers
involving any Guarantor, the surviving corporation in the merger shall also be
or become a Guarantor; and (y) after the consummation of any such transaction,
the Borrower shall be in compliance with the provisions of Sections 5.2(L) and
5.3(E).
(I) Sales and Leasebacks
(i) Except for REIT Transactions, neither the Borrower nor any
of its Subsidiaries shall become liable, directly, by assumption or by
Contingent Obligation, with respect to any lease, whether an operating
lease or a Capitalized Lease, of any property (whether real or personal
or mixed) (i) which it or one of its Subsidiaries sold or transferred
or is to sell or transfer to any other Person, or (ii) which it or one
of its Subsidiaries intends to use for substantially the same purposes
as any other property which has been or is to be sold or transferred by
it or one of its Subsidiaries to any other Person in connection with
such lease.
(ii) The Borrower and Subsidiaries may engage in transactions
involving (a)(1) the sale of real property and any fixtures and
improvements thereon owned by Borrower or Subsidiary to the REIT or (2)
the assignment or other transfer by the Borrower or Subsidiary to the
REIT of the right to acquire real property and any fixtures and
improvements thereon and (b) the lease from the REIT by the Borrower or
Subsidiary of such real property and any improvements and fixtures
thereon from the REIT ((a) and (b) individually and collectively "REIT
Transaction"). No consent from the Lenders, shall, notwithstanding any
provisions to the contrary, be required for (I) any REIT Transaction by
the Borrower or any Subsidiary or (II) the execution and delivery by
Borrower or any Subsidiary or both of a guaranty of the lease payment
obligation of Borrower or any Subsidiary in any REIT Transaction. The
lease payment obligations under any such guaranty shall be in addition
to any Indebtedness permitted hereunder.
(J) Margin Regulations. Neither the Borrower nor any of its
Subsidiaries, shall use all or any portion of the proceeds of any credit
extended under this Agreement to purchase or carry Margin Stock.
66
(K) ERISA. The Borrower shall not
(i) engage, or permit any of its Subsidiaries to engage, in
any prohibited transaction described in Sections 406 of ERISA or 4975
of the Code for which a statutory or class exemption is not available
or a private exemption has not been previously obtained from the DOL;
(ii) permit to exist any accumulated funding deficiency (as
defined in Sections 302 of ERISA and 412 of the Code), with respect to
any Benefit Plan, whether or not waived;
(iii) fail, or permit any Controlled Group member to fail, to
pay timely required contributions or annual installments due with
respect to any waived funding deficiency to any Benefit Plan;
(iv) terminate, or permit any Controlled Group member to
terminate, any Benefit Plan which would result in any liability of the
Borrower or any Controlled Group member under Title IV of ERISA;
(v) fail to make any contribution or payment to any
Multiemployer Plan which the Borrower or any Controlled Group member
may be required to make under any agreement relating to such
Multiemployer Plan, or any law pertaining thereto;
(vi) fail, or permit any Controlled Group member to fail, to
pay any required installment or any other payment required under
Section 412 of the Code on or before the due date for such installment
or other payment; or
(vii) amend, or permit any Controlled Group member to amend, a
Plan resulting in an increase in current liability for the plan year
such that the Borrower or any Controlled Group member is required to
provide security to such Plan under Section 401(a)(29) of the Code,
except where such transactions, events, circumstances, or failures will not have
or is not reasonably likely to subject the Borrower and its Subsidiaries to
liability individually or in the aggregate in excess of $250,000.00.
(L) Issuance of Equity Interests. None of the Borrower's Subsidiaries
shall issue any Equity Interests other than to the Borrower or if required by
the applicable manufacturer in connection with a Restricted Franchise Agreement
or the state motor vehicle dealer licensing authority, to Minority Holders whose
Equity Interests (i) do not exceed 20% of the Equity Interests of such
Subsidiary and (ii) have been pledged to the Lenders; provided, however, that no
such issuance of Equity Interests shall be permitted hereunder unless the
Subsidiary to which such issuance pertains operates only under a Restricted
Franchise Agreement.
(M) Corporate Documents; Franchise Agreements. Neither the Borrower nor
any of its Subsidiaries shall amend, modify or otherwise change any of the terms
or provisions in any of their respective constituent documents as in effect on
the date hereof in any manner adverse in any material respect to the interests
of any Lender without the prior written consent of such Lender. The Borrower
shall not permit any Dealership to amend, modify or otherwise change any of the
terms or provisions of such Dealership's franchise agreement in any manner
67
adverse in any material respect to the interests of any Lender without the prior
written consent of such Lender. It is understood and agreed that should any
manufacturer require the Borrower or any of its Subsidiaries to amend, modify or
otherwise change any of the foregoing documents, except to the extent that any
such amendment, modification or change may result in a Material Adverse Effect,
it shall not result in a breach of this Section 5.3 (M).
(N) Fiscal Year. Except as may be required by law, neither the Borrower
nor any of its consolidated Subsidiaries shall change its fiscal year for
accounting or tax purposes from a period consisting of the 12-month period
ending on December 31 of each calendar year.
(O) Subsidiary Covenants. The Borrower will not, and will not permit
any Subsidiary to, create or otherwise cause to become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary to pay
dividends or make any other distribution on its stock, or make any other
Restricted Payment, pay any Indebtedness or other Obligation owed to the
Borrower or any other Subsidiary, make loans or advances or other Investments in
the Borrower or any other Subsidiary, or sell, transfer or otherwise convey any
of its property to the Borrower or any other Subsidiary.
(P) Hedging Obligations. The Borrower shall not and shall not permit
any of its Subsidiaries to enter into any Hedging Obligations, other than
interest rate, foreign currency or commodity exchange, swap, collar, cap or
similar agreements entered into by the Borrower or a Subsidiary pursuant to
which the Borrower or such Subsidiary has hedged its actual interest rate,
foreign currency or commodity exposure.
5.4 Financial Covenants. The Borrower shall comply with the following:
(A) Current Ratio. The Borrower shall not permit the ratio (the
"Current Ratio") of Current Assets of the Xxxxxx Group on a consolidated basis
to Current Liabilities of the Xxxxxx Group on a consolidated basis to be less
than 1.20 : 1. In each case, the Current Ratio shall be determined as of the
last day of each fiscal quarter.
(B) Fixed Charge Coverage Ratio. The Borrower shall maintain a ratio
("Fixed Charge Coverage Ratio") of (i) EBITDAR less Capital Expenditures (to the
extent no Indebtedness was incurred to finance such Capital Expenditures), to
(ii) the sum of (a) Interest Expense plus (b) scheduled amortization of the
principal portion of all Indebtedness for money borrowed plus (c) Rentals plus
(d) taxes paid in cash during such period of the Borrower and its consolidated
Subsidiaries of at least 1.20 : 1 for each fiscal quarter ending from and after
the Effective Date. In each case the Fixed Charge Coverage Ratio shall be
determined as of the last day of each fiscal quarter for the four-quarter period
ending on such day.
(C) Total Adjusted Debt to EBITDA Ratio. The Borrower shall not permit
the ratio (the "Adjusted Leverage Ratio") of (i) Total Adjusted Debt of the
Borrower and its consolidated Subsidiaries to (ii) EBITDA of the Borrower and
its consolidated Subsidiaries, to be greater than 4.40 : 1. The Adjusted
Leverage Ratio shall be calculated, in each case, determined as of the last day
of each fiscal quarter based upon (a) for Total Adjusted Debt, Total Adjusted
Debt as of the last day of each such fiscal quarter; and (b) for EBITDA, EBITDA
for the twelve-month period ending on such day calculated as set forth in the
definition thereof.
All financial covenants set forth in this Section 5.4 shall be
calculated by the Agent based on the calculations set forth in and the financial
statements attached to Officer's Certificates delivered hereunder and shall be
68
binding on the Borrower for all purposes of this Agreement absent manifest
error.
ARTICLE VI: EVENTS OF DEFAULTS
6.1 Events of Defaults. Each of the following occurrences shall
constitute an Event of Default under this Agreement:
(a) Failure to Make Payments When Due. The Borrower or any Loan Party
shall (i) fail to pay when due any of the Obligations consisting of principal
with respect to the Advances or (ii) fail to pay within ten (10) days of the
date when due any of the other Obligations under the Loan Documents.
(b) Breach of Certain Covenants. The Borrower shall fail duly and
punctually to perform or observe any agreement, covenant or obligation binding
on the Borrower under Sections 5.2(F), 5.2(K), 5.3 or 5.4.
(c) Breach of Representation or Warranty. Any representation or
warranty made or deemed made by any Loan Party in any Loan Documents or in any
written statement or certificate at any time given by any such Person pursuant
to any Loan Document shall be false or misleading in any material respect on the
date as of which made (or deemed made).
(d) Other Defaults. The Borrower shall default in the performance of or
compliance with any term contained in this Agreement (other than as covered by
paragraphs (a), (b) or (c) of this Section 6.1), or any Loan Party shall default
in the performance of or compliance with any term contained in any of the other
Loan Documents, and, in either case, such default shall continue for thirty (30)
days after the occurrence thereof.
(e) Default as to Other Indebtedness. Any Loan Party shall fail to make
any payment when due, after giving effect to any applicable grace periods,
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise) with respect to any Indebtedness (other than Indebtedness
constituting the deferred portion of the purchase price of an asset which is
subject to a good faith dispute, which, together with all such other outstanding
disputed Indebtedness, is not in excess of $500,000.00 and which is being
contested by any Loan Party, and provided that the Loan Party has set aside
adequate reserves covering such disputed Indebtedness) the aggregate outstanding
principal amount of which Indebtedness is in excess of $500,000.00; or any
breach, default or event of default shall occur, or any other condition shall
exist under any instrument, agreement or indenture pertaining to any such
Indebtedness, if the effect thereof is to cause an acceleration, mandatory
redemption, a requirement that the Loan Party offer to purchase such
Indebtedness or other required repurchase of such Indebtedness, or permit the
holder(s) of such Indebtedness to accelerate the maturity of any such
Indebtedness or require a redemption or other repurchase of such Indebtedness;
or any such Indebtedness shall be otherwise declared to be due and payable (by
acceleration or otherwise) or required to be prepaid, redeemed or otherwise
repurchased by any Loan Party (other than by a regularly scheduled required
prepayment) prior to the stated maturity thereof.
(f) Involuntary Bankruptcy; Appointment of Receiver, Etc.
(i) An involuntary case shall be commenced against any
Transaction Party and the petition shall not be dismissed, stayed,
bonded or discharged within sixty (60) days after commencement of the
69
case; or a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of any Transaction Party in an
involuntary case, under any applicable bankruptcy, insolvency or other
similar law now or hereinafter in effect; or any other similar relief
shall be granted under any applicable federal, state, local or foreign
law.
(ii) (A) A decree or order of a court having jurisdiction in
the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers
over any Transaction Party or over all or a substantial part of the
property of any Transaction Party shall be entered; (B) or an interim
receiver, trustee or other custodian of any Transaction Party or of all
or a substantial part of the property of any Transaction Party shall be
appointed or (C) a warrant of attachment, execution or similar process
against any substantial part of the property of any Transaction Party
shall be issued and any such event described in subsection (A), (B), or
(C) of this paragraph shall not be stayed, dismissed, bonded or
discharged within sixty (60) days after entry, appointment or issuance.
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. Any Transaction
Party shall (i) commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, (ii) consent to the
entry of an order for relief in an involuntary case, or to the conversion of an
involuntary case to a voluntary case, under any such law, (iii) consent to the
appointment of or taking possession by a receiver, trustee or other similar
custodian for the benefit of creditors for all or a substantial part of its
property, (iv) make any assignment for the benefit of creditors or (v) take any
corporate action to authorize any of the foregoing.
(h) Judgments and Attachments. Any money judgment(s) (other than a
money judgment covered by insurance as to which the insurance company has not
disclaimed coverage or if it has reserved the right to disclaim coverage, such
letter reserving the right to disclaim coverage is outstanding twelve months
after such money judgment was rendered), writ or warrant of attachment, or
similar process against any Transaction Party or any of their respective assets
involving in any single case or in the aggregate an amount in excess of
$500,000.00 is or are entered and shall remain undischarged, unvacated, unbonded
or unstayed for a period of sixty (60) days or in any event later than fifteen
(15) days prior to the date of any proposed sale thereunder.
(i) Dissolution. Any order, judgment or decree shall be entered against
any Transaction Party decreeing its involuntary dissolution or split up and such
order shall remain undischarged and unstayed for a period in excess of sixty
(60) days; or any Transaction Party shall otherwise dissolve or cease to exist
except as specifically permitted by this Agreement or with the consent of the
Required Lenders.
(j) Loan Documents; Failure of. At any time, for any reason, (i) any
provision of any Loan Document ceases to be valid and binding on or enforceable
against any Loan Party or any Loan Party seeks to repudiate its obligations
thereunder or the Liens intended to be created thereby are, or any Transaction
Party seeks to render such Liens, invalid or unperfected, or (ii) any Lien on
Collateral in favor of the Agent (for the benefit of the Lenders) contemplated
by the Loan Documents shall, at any time, for any reason, be invalidated or
otherwise cease to be perfected or in full force and effect or such Lien shall
not have the priority contemplated by this Agreement or the Loan Documents and
such failure shall continue for three (3) days after the occurrence thereof.
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(k) Termination Event. Any Termination Event occurs which is reasonably
likely to subject the Borrower or any of its Subsidiaries to liability
individually or in the aggregate in excess of $250,000.00, and such Termination
Event shall continue for three (3) days after the occurrence thereof, provided
however, if such Termination Event is a Reportable Event, then prior to such
Termination Event causing an Event of Default under this Section 6.1(k), such
Termination Event shall continue for ten (10) days after the occurrence thereof.
(l) Waiver of Minimum Funding Standard. If the plan administrator of
any Plan applies under Section 412(d) of the Code for a waiver of the minimum
funding standards of Section 412(a) of the Code and the Lenders believe the
substantial business hardship upon which the application for the waiver is based
could reasonably be expected to subject either the Borrower or any Controlled
Group member to liability individually or in the aggregate in excess of
$250,000.00.
(m) Change of Control. A Change of Control shall occur.
(n) Material Adverse Effect. In the reasonable determination of the
Required Lenders, a Material Adverse Effect shall occur.
An Event of Default shall be deemed "continuing" until cured or until
waived in writing.
6.2. Remedies Upon Default. (A) Termination of Commitments;
Acceleration. If any Event of Default described in Section 6.1(f) or 6.1(g)
occurs, the obligations of any Lender to make Advances hereunder shall
automatically terminate and the Obligations shall immediately become due and
payable without any election or action on the part of any Lender. If any other
Event of Default occurs, the Agent may, with the consent of the Required
Lenders, and shall at the request of the Required Lenders (i) declare the
obligations of the Lenders to make Advances hereunder to be terminated,
whereupon the same shall be terminated and (ii) declare the Obligations to be
due and payable whereupon, after written notice to the Borrower, the Obligations
shall become immediately due and payable, without presentment, demand, protest
or other notice of any kind, all of which the Borrower expressly waives.
(B) Preservation of Rights. No delay or omission of any
Lender or the Agent to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Event of Default or an
acquiescence therein, and the making of an Advance notwithstanding the existence
of an Event of Default or the inability of the Borrower to satisfy the
conditions precedent to such Advance shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Required Lenders, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to any Lender until the
Obligations have been paid in full.
ARTICLE VII: THE AGENT
7.1 Authorization and Action. (a) Each Lender hereby appoints and
authorizes the Agent to take such action as Agent on its own behalf and to
exercise such powers and discretion under this Agreement and the other Loan
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Documents as are delegated to the Agent by the terms hereof and thereof,
together with such powers and discretion as are reasonably incidental thereto.
As to any matters not expressly provided for by the Loan Documents (including,
without limitation, enforcement or collection of the Notes), the Agent shall be
required to exercise only such discretion or take only such action as is: (a) in
accordance with the manner in which the Agent acts or refrains from acting (and
shall be fully protected in so acting or refraining from acting, except with
respect to Agent's gross negligence or willful misconduct) in connection with
matters in which it is the sole lender, and (b) jointly agreed upon by the Agent
and the Lenders, or the Required Lenders, as the case may be, in writing (such
agreement will be binding upon each Lender and all holders of the Notes);
provided, however, that the Agent shall not be required to take any action that
exposes it to personal liability or that is contrary to this Agreement or
applicable law.
(b) For so long as Ford Credit is acting as the Agent
hereunder, each Lender agrees that Ford Credit may unilaterally grant requests
for and waivers of, the following matters only, provided, however, that Ford
Credit must notify each Lender prior to issuing such consents or waivers to
Borrower:
(1) any Event of Default (as set forth in Article VI
hereof) which by its nature can be cured, and which based upon
the representation of Borrower (which Ford Credit believes in
good faith) will be cured, within ninety (90) days from the
date upon which Ford Credit will have learned of the
occurrence of such Event of Default. With respect to any Event
of Default which, by its nature, cannot be cured within ninety
(90) days from the date upon which Ford Credit will have
learned of the occurrence of such Event of Default, Ford
Credit may not respond unilaterally to any request made by
Borrower. If any such Event of Default is not cured within
such ninety (90) day period, Ford Credit may not take any
further action unilaterally;
(2) noncompliance with any covenant or obligation
binding on the Borrower, provided Borrower has represented to
Ford Credit (and Ford Credit in good faith believes) that the
condition causing such noncompliance will last for no more
than ninety (90) days. If any such condition causing
noncompliance lasts more than ninety (90) days, Ford Credit
may not take any further action unilaterally.
Nothing contained in this Section 7.1 (b) may be construed to obligate either
Ford Credit or a Lender to grant any such consents or forbear from exercising
any of its rights with respect to any Event of Default or non-compliance which
may occur from time to time. The rights and powers set forth in this Section 7.1
(b) apply only to Ford Credit acting as Agent and are not intended to benefit
any Successor Agent.
(c) The Agent will provide to each Lender the following:
(1) copies of all reports, certificates and
notices furnished by Borrower to the Agent pursuant to the
Loan Documents (to the extent such reports and parties were
not furnished directly to any Lender), within 5 Business Days
after the Agent's receipt thereof;
(2) reports of all calculations made by the Agent
pursuant to Section 5.4 hereof, within 5 Business Days after
the Agent will have made such calculations; and
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(3) copies of all documents delivered to the Agent by
Borrower pursuant to Sections 5.2 (L), 5.2 (O) and 5.3 (F)
hereof, within 5 Business Days after the Agent's receipt
thereof.
(d) The Agent will make reasonable efforts to schedule informational
meetings with the Borrower. Any such meeting will be attended by a
representative of Agent (deemed appropriate by Agent in its discretion) and the
chief executive officer and chief financial officer of Borrower, and which may
be attended by the Lenders. The Agent will schedule such meetings (1) no more
frequently than twice per year (unless there is an Unmatured Default or an Event
of Default, in which case such meetings may be called more frequently), (2) with
prior written notice to Borrower and the Lenders, which such notice will be
given by March 1 of each year for any meeting called before the end of the
second calendar quarter of such year, and by September 1 of each year for any
meeting called before the end of the fourth calendar quarter of such year, and
(3) to be conducted at a reasonable time and at a reasonable location.
7.2 Agent's Reliance, Etc. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable for any action taken or omitted to
be taken by it or them under or in connection with the Loan Documents, except
for its or their own gross negligence or willful misconduct. Without limiting
the generality of the foregoing, the Agent: (a) may treat the payee of the Note
as the holder thereof until it receives written notice of the assignment thereof
signed by such payee and including the agreement of the assignee to be bound
thereby as it would have been if it had been an original party to this
Agreement, in form satisfactory to the Agent, as provided for in Section 9.3;
(b) may consult with legal counsel (including counsel for any Lender),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (c) makes no
warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations (whether written or
oral) made in or in connection with the Loan Documents; (d) shall not, other
than as specifically set forth in the Loan Documents, have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of any Loan Document on the part of any party to any of the Loan
Documents or to inspect the property of any party to any of the Loan Documents;
(e) shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported to
be created under or in connection with, any Loan Document or any other
instrument or document furnished pursuant thereto; and (f) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telegram,
telecopy or telex) reasonably believed by it to be genuine and signed or sent by
the proper party or parties.
7.3 Agent and Affiliates. With respect to its Commitments, the Advances
made by it and the Notes issued to it, the Agent shall have the same rights and
powers under the Loan Documents as any other Lender and may exercise the same as
though it were not an agent.
7.4 Lender Credit Decision. Each Lender acknowledges that (i) it has,
independently and without reliance upon the Agent and based on the financial
statements referred to in Section 4.4 and such other documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement and the other Loan Documents, (ii) 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
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decisions in taking or not taking action under this Agreement, and (iii) there
is no fiduciary relationship between the Agent and the Lenders.
7.5 Indemnification. (a) Each Lender agrees to indemnify the Agent and
its directors, officers, agents and employees (to the extent not promptly
reimbursed by the Borrower) from and against each Lender's Ratable Share
(determined as provided below) of any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against the Agent in any way relating to or arising out of the Loan
Documents or any action taken or omitted by the Agent under the Loan Documents
(collectively, the "Indemnified Costs"); provided, however, that no Lender shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Agent's gross negligence or willful misconduct as found in a final,
non-appealable judgment by a court of competent jurisdiction. Without limiting
the foregoing, each Lender agrees to reimburse Agent promptly upon demand for
its Ratable Share of any costs and expenses (including, without limitation, fees
and expenses of counsel) payable by the Borrower under Section 8.7 (A) , to the
extent that the Agent is not promptly reimbursed for such costs and expenses by
the Borrower. In the case of any investigation, litigation or proceeding giving
rise to any Indemnified Costs, this Section 7.5 applies whether any such
investigation, litigation or proceeding is brought by any Lender or any other
Person.
(b) For purposes of this Section 7.5, each Lender's Ratable Share of
any amount shall be determined, at any time, according to the aggregate
principal amount of the Advances outstanding at such time and owing to the
respective Lender plus such Lender's Unused Commitment. Without prejudice to the
survival of any other agreement of any Lender hereunder, the agreement and
obligations of the Lenders contained in this Section 7.5 shall survive the
payment in full of principal, interest and all other amounts payable hereunder
and under the other Loan Documents.
7.6 Successor Agents. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, which resignation will
become effective at such times as more specifically set forth in this Section
7.6. Upon any such resignation, the Required Lenders shall have the right to
appoint a successor agent, provided, however, that any such appointment of a
successor agent must have been consented to in writing by Borrower, which
consent shall not be unreasonably withheld or delayed, unless an Event of
Default shall have occurred and be continuing, in which case no consent of
Borrower shall be required. If no successor agent shall have been so appointed
by the Lenders, and shall have accepted such appointment, within 30 days after
the Agent's giving of notice of resignation, then the Agent may, on behalf of
the Lenders, appoint a successor agent (from among the Lenders), which shall be
a commercial bank or finance company organized under the laws of the United
States or of any State thereof and having a combined capital and surplus of at
least $250,000,000 (any successor agent appointed under this Section 7.6 is
referred to herein as a "Successor Agent"). Upon the acceptance of any
appointment as the Agent hereunder by a Successor Agent, such Successor Agent
shall succeed to and become vested with such rights, powers, discretion,
privileges and duties of the Agent in its capacity as agent, and Agent shall be
discharged from such duties and obligations as the Agent under the Loan
Documents. If within 45 days after written notice is given of the retiring the
Agent's resignation under this Section 7.6 no Successor Agent shall have been
appointed and shall have accepted such appointment, then on such 45th day (a)
the Agent's resignation shall become effective, (b) Agent shall thereupon be
discharged from such agency duties and obligations under the Loan Documents and
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as identified in its notice of resignation and (c) the Lenders shall thereafter
perform all duties of the Agent under the Loan Documents until such time, if
any, as the Lenders appoint a Successor Agent as provided above. After the
Agent's resignation hereunder as agent shall have become effective, the
provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was acting in its capacity as agent
under this Agreement.
ARTICLE VIII: GENERAL PROVISIONS
8.1 Amendments. Other than as specifically set forth in Section 7.1 of
this Agreement, no amendment or waiver of any provision of this Agreement or the
Notes or any other Loan Document, nor consent to any departure, therefrom by any
Transaction Party party thereto shall in any event be effective unless the same
shall be in writing and signed (or, in the case of the Collateral Documents,
consented to) by the Required Lenders and each Transaction Party party to the
relevant Loan Document or Xxxxxx Everest, as the case may be, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that (a) no amendment,
waiver or consent shall, unless in writing and signed by all of the Lenders
(other than any Lender that is, at such time, a Defaulting Lender), do any of
the following at any time: (i) waive any of the conditions specified in Section
3.1 , (ii) change the Ratable Share of any Lender, the number of Lenders or the
percentage of (x) the Commitments or (y) the aggregate unpaid principal amount
of the Advances that, in each case, shall be required for the Lenders or any of
them to take any action hereunder, (iii) amend the terms of any Guarantor's
Guaranty in a manner that -reduces or limits the payment obligations of any
Guarantor or otherwise limits such Guarantor's liability with respect to payment
of the Obligations owing to the Agent and the Lenders, (iv) release a material
portion of the Collateral in any transaction or series of related transactions
except to the extent permitted under the Loan Documents, (v) amend this Section
8.1, (vi) increase the Commitments of the Lenders other than in accordance with
terms of the Loan Documents, (vii) reduce the principal of, or interest on, the
Notes or any fees or other amounts scheduled to be payable hereunder, (viii)
postpone any date scheduled for any payment of principal of, or interest on, the
Notes or any date fixed for payment of fees or other amounts payable hereunder,
and (b) no amendment, waiver or consent shall, unless in writing and signed by
the Agent, affect the rights or duties of the Agent under this Agreement or the
other Loan Documents.
8.2 Survival of Representations. All representations and warranties of
the Borrower contained in the Loan Documents shall survive delivery of the Notes
and the making of the Advances herein contemplated.
8.3 Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit to
the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
8.4 Performance of Obligations. The Borrower agrees that the Agent may,
at the direction of the Required Lenders, but shall have no obligation to (i) at
any time, pay or discharge taxes, liens, security interests or other
encumbrances levied or placed on or threatened against any Collateral, unless
such claims are being contested in good faith by the Borrower and the Borrower
has set aside adequate reserves covering such tax, lien, security interest or
other encumbrance and no Event of Default has occurred and is outstanding and
(ii) after the occurrence and during the continuance of an Event of Default,
75
make any payment or perform any act required of any Loan Party under any Loan
Document or take any other action which the Required Lenders, in their
reasonable discretion, deem necessary or desirable to protect or preserve the
Collateral, including, without limitation, any action to (y) effect any repairs
or obtain any insurance called for by the terms of any of the Loan Documents and
to pay all or any part of the premiums therefore and the costs thereof and (z)
pay any rents payable by any Loan Party which are more than 30 days past due, or
as to which the landlord has given notice of termination, under any lease. The
Agent shall use its reasonable efforts to give the Borrower notice of any action
taken under this Section 8.4 prior to the taking of such action or promptly
thereafter provided the failure to give such notice shall not affect the
Borrower's obligations in respect thereof. The Borrower agrees to pay the Agent
(for the benefit of the Lenders), upon demand, the principal amount of all funds
advanced by each Lender under this Section 8.4, together with interest thereon
at the rate from time to time applicable to Advances from the date of such
advance until the outstanding principal balance thereof is paid in full. All
outstanding principal of, and interest on, advances made under this Section 8.4
shall constitute Obligations for purposes hereof.
8.5 Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
8.6 Entire Agreement. The Loan Documents embody the entire agreement
and understanding among the Loan Parties and Xxxxxx Everest and the Lenders with
respect to matters covered by the Loan Documents, and the Loan Documents
delivered on the Effective Date supersede all such prior agreements and
understandings among the Borrower and Lenders relating to the subject matter
thereof.
8.7 Expenses; Indemnification.
(A) Expenses. The Borrower shall reimburse the Agent and each Lender
for any reasonable costs, internal charges and out-of-pocket expenses (including
reasonable attorneys' and paralegals' fees and time charges of attorneys and
paralegals for the Agent or any Lender, which attorneys and paralegals may be
employees of the Agent or any Lender) paid or incurred by the Agent or any
Lender in connection with the preparation, negotiation, execution, delivery,
review, amendment, modification, and administration of the Loan Documents. The
Borrower also agrees to reimburse the Agent and each Lender for any reasonable
costs, and out-of-pocket expenses (including attorneys' and paralegals' fees and
time charges of attorneys and paralegals for the Agent and each Lender, which
attorneys and paralegals may be employees of the Agent or any Lender) paid or
incurred by the Agent or any Lender in connection with the collection of the
Obligations and enforcement of the Loan Documents. In addition to expenses set
forth above, the Borrower agrees to reimburse the Agent and each Lender,
promptly after the Agent's or any Lender's request therefor, for each audit or
other business analysis performed by it in connection with this Agreement or the
other Loan Documents at a time when an Unmatured Default or Event of Default
exists in an amount equal to the Agent's or a Lender's then reasonable and
customary charges for each person employed to perform such audit or analysis,
plus all costs and expenses (including without limitation, travel expenses)
incurred by the Agent or a Lender in the performance of such audit or analysis.
The Agent or the Lender shall provide the Borrower with a detailed statement of
all reimbursements requested under this Section 8.7(A).
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(B) Indemnity. The Borrower further agrees to defend, protect,
indemnify, and hold harmless the Agent, each Lender and each of its respective
Affiliates, and each of the Agent's, Lender's, or Affiliate's respective
officers, directors, employees, attorneys and agents (including, without
limitation, those retained in connection with the satisfaction or attempted
satisfaction of any of the conditions set forth in Article III) (collectively,
the "Indemnitees") from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
of any kind or nature whatsoever (including, without limitation, the fees and
disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding, whether or not such
Indemnitees shall be designated a party thereto), imposed on, incurred by, or
asserted against such Indemnitees in any manner relating to or arising out of:
(i) this Agreement, the other Loan Documents or any of the
Transaction Documents, or any act, event or transaction related or
attendant thereto, the making of the Advances, hereunder, the
management of such Advances, the use or intended use of the proceeds of
the Advances hereunder, or any of the other transactions contemplated
by the Transaction Documents;
(ii) any liabilities, obligations, responsibilities, losses,
damages, personal injury, death, punitive damages, economic damages,
consequential damages, treble damages, intentional, willful or wanton
injury, damage or threat to the environment, natural resources or
public health or welfare, costs and expenses (including, without
limitation, attorney, expert and consulting fees and costs of
investigation, feasibility or remedial action studies), fines,
penalties and monetary sanctions, interest, direct or indirect, known
or unknown, absolute or contingent, past, present or future relating to
violation of any Environmental, Health or Safety Requirements of Law
arising from or in connection with the past, present or future
operations of the Borrower, its Subsidiaries, its Affiliates, or any of
their respective predecessors in interest, or, the past, present or
future environmental, health or safety condition of any respective
property of the Borrower, its Subsidiaries or its Affiliates, the
presence of asbestos-containing materials at any respective property of
the Borrower, its Subsidiaries or its Affiliates or the Release or
threatened Release of any Contaminant into the environment
(collectively, the "Indemnified Matters");
provided, however, the Borrower shall have no obligation to an Indemnitee
hereunder with respect to Indemnified Matters caused by or resulting from the
willful misconduct or gross negligence of such Indemnitee as determined by the
final non-appealed judgment of a court of competent jurisdiction. If the
undertaking to indemnify, pay and hold harmless set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, the Borrower shall contribute the maximum portion which it is permitted
to pay and satisfy under applicable law, to the payment and satisfaction of all
Indemnified Matters incurred by the Indemnitees. It is understood and agreed
that, to the extent not precluded by a conflict of interest, each Indemnitee
shall endeavor to work cooperatively with the Borrower with a view toward
minimizing the legal and other expenses associated with any defense and any
potential settlement or judgment. Settlement of any claim or litigation
involving any material indemnified amount will require the approval of the
Borrower (which may not be unreasonably withheld).
(C) Waiver of Certain Claims; Settlement of Claims. The Borrower
further agrees to assert no claim against any of the Indemnitees on any theory
of liability for consequential, special, indirect, exemplary or punitive
damages. No settlement shall be entered into by the Borrower or any if its
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Subsidiaries with respect to any claim, litigation, arbitration or other
proceeding relating to or arising out of the transactions evidenced by this
Agreement, the other Loan Documents (whether or not any Lender or any Indemnitee
is a party thereto) unless such settlement releases all Indemnitees from any and
all liability with respect thereto.
(D) Survival of Agreements. The obligations and agreements of the
Borrower under this Section 8.7 shall survive the termination of this Agreement.
8.8 Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
8.9 Severability of Provisions. Any provision in any Loan Document that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
8.10 Nonliability of Lender. The relationship between the Borrower and
each Lender shall be solely that of borrower and lender. No Lender shall have
fiduciary responsibilities to any Loan Party and no Lender takes any
responsibility to any Loan Party to review or inform any Loan Party of any
matter in connection with any phase of any Loan Party's business or operations.
8.11 GOVERNING LAW. ANY DISPUTE BETWEEN THE BORROWER AND A LENDER, OR
ANY INDEMNITEE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT
REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF NEW YORK.
8.12 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL. (A) NON
EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH OF THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR
FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN NEW YORK CITY, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS , OR FOR RECOGNITION OR ENFORCEMENT
OF ANY JUDGMENT , AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH NEW YORK STATE COURT OR, TO
THE FULLEST EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES
HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY
RIGHT THAT ANY PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
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RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS IN THE COURTS OF
ANY JURISDICTION. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY IN ANY NEW YORK STATE OR FEDERAL
COURT. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE
OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(B) OTHER JURISDICTIONS. THE BORROWER AGREES THAT ANY LENDER OR ANY
INDEMNITEE SHALL HAVE THE RIGHT TO PROCEED AGAINST THE BORROWER OR ITS PROPERTY
IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL
JURISDICTION OVER THE BORROWER OR (2) REALIZE ON THE COLLATERAL OR ANY OTHER
SECURITY FOR THE OBLIGATIONS OR ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED
IN FAVOR OF SUCH PERSON THE BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO
THE LOCATION OF THE COURT IN WHICH SUCH PERSON HAS COMMENCED A PROCEEDING
DESCRIBED IN THIS SUBSECTION (B).
(C) SERVICE OF PROCESS. THE BORROWER WAIVES PERSONAL SERVICE OF ANY
PROCESS UPON IT AND IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY WRITS,
PROCESS OR SUMMONSES IN ANY SUIT, ACTION OR PROCEEDING BY THE MAILING THEREOF BY
AGENT BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER
ADDRESSED AS PROVIDED HEREIN. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT
THE ABILITY OF AGENT TO SERVE ANY SUCH WRITS, PROCESS OR SUMMONSES IN ANY OTHER
MANNER PERMITTED BY APPLICABLE LAW. THE BORROWER IRREVOCABLY WAIVES ANY
OBJECTION (INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH IN ANY JURISDICTION SET FORTH ABOVE.
(D) APPOINTMENT OF AGENT FOR SERVICE OF PROCESS. THE BORROWER AND THE
LENDERS AGREE THAT PROCESS SERVED EITHER PERSONALLY OR BY REGISTERED MAIL,
RETURN RECEIPT REQUESTED, SHALL, TO THE EXTENT PERMITTED BY LAW, CONSTITUTE
ADEQUATE SERVICE OF PROCESS IN ANY SUCH PROCEEDING. THE BORROWER HEREBY
APPOINTS, IN THE CASE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN THE COURTS OF
OR IN THE STATE OF NEW YORK, CT CORPORATION SYSTEM, WITH OFFICES ON THE DATE
HEREOF AT 000 XXXXXX XXXXXX, XXX XXXX, XXX XXXX 00000, TO RECEIVE, FOR IT AND ON
ITS BEHALF, SERVICE OF PROCESS IN THE STATE OF NEW YORK WITH RESPECT THERETO,
PROVIDED THAT THE BORROWER MAY APPOINT ANY OTHER PERSON WITH OFFICES IN THE
STATE OF NEW YORK TO REPLACE SUCH AGENT FOR SERVICE OF PROCESS UPON DELIVERY TO
THE REPRESENTATIVE HOLDER AND THE COLLATERAL TRUSTEE OF NOTICE HEREOF.
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(E) WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE
LAW, EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY
AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(F) WAIVER OF BOND. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW,
THE BORROWER WAIVES THE POSTING OF ANY BOND OTHERWISE REQUIRED OF ANY PARTY
HERETO IN CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS OR TO ENFORCE ANY JUDGMENT
OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PARTY, OR TO ENFORCE BY SPECIFIC
PERFORMANCE, TEMPORARY RESTRAINING ORDER, PRELIMINARY OR PERMANENT INJUNCTION,
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
(G) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH OTHER
PARTY HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE
PROVISIONS OF THIS SECTION 8.12, WITH ITS COUNSEL.
8.13 No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of the Loan Documents. In the event an
ambiguity or question of intent or interpretation arises, the Loan Documents
shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.
8.14 Subordination of Intercompany Indebtedness. The Borrower agrees
that any and all claims of the Borrower against any Loan Party, any endorser or
any other guarantor of all or any part of the Obligations, or against any of its
properties, including, without limitation, pursuant to the any intercompany
Indebtedness permitted under Section 5.3(A)(v), shall be subordinate and subject
in right of payment to the prior payment, in full and in cash, of all
Obligations. Notwithstanding any right of the Borrower to ask, demand, xxx for,
take or receive any payment from any Loan Party, all rights, liens and security
interests of the Borrower, whether now or hereafter arising and howsoever
existing, in any assets of any Loan Party shall be and are subordinated to the
rights, if any, of the Agent and the Lenders in those assets. The Borrower shall
have no right to possession of any such asset or to foreclose upon any such
asset, whether by judicial action or otherwise, unless and until all of the
Obligations shall have been paid in full in cash and satisfied and all financing
arrangements under this Agreement and the other Loan Documents between the
Borrower, the Agent and each Lender have been terminated. If, during the
continuance of an Event of Default, all or any part of the assets of any Loan
Party, or the proceeds thereof, are subject to any distribution, division or
application to the creditors of any Loan Party, whether partial or complete,
voluntary or involuntary, and whether by reason of liquidation, bankruptcy,
arrangement, receivership, assignment for the benefit of creditors or any other
action or proceeding, then, and in any such event, any payment or distribution
80
of any kind or character, either in cash, securities or other property, which
shall be payable or deliverable upon or with respect to any indebtedness of any
Loan Party to the Borrower, including, without limitation, pursuant to the any
intercompany Indebtedness permitted under Section 5.3(A)(v) ("Intercompany
Indebtedness") shall be paid or delivered directly to the Agent (for the benefit
of the Lenders) for application on any of the Obligations, due or to become due,
until such Obligations shall have first been paid in full in cash and satisfied;
provided, however, ordinary course payments or distributions made by any Loan
Party to the Borrower shall be required to be paid or delivered to the Agent
(for the benefit of the Lenders) only upon the Agent's request. The Borrower
irrevocably authorizes and empowers the Agent (if directed to do so by the
Required Lenders) to demand, xxx for, collect and receive every such payment or
distribution and give acquittance therefor and to make and present for and on
behalf of the Borrower such proofs of claim and take such other action, in the
Agent's own name or in the name of the Borrower or otherwise, as Required
Lenders may deem necessary or advisable for the enforcement of this Section
8.14. Agent may vote such proofs of claim in any such proceeding, receive and
collect any and all dividends or other payments or disbursements made thereon in
whatever form the same may be paid or issued and apply the same on account of
any of the Obligations. Should any payment, distribution, security or instrument
or proceeds thereof be received by the Borrower upon or with respect to the
Intercompany Indebtedness during the continuance of an Event of Default and
prior to the satisfaction of all of the Obligations and the termination of all
financing arrangements under this Agreement and the other Loan Documents between
the Borrower and the Lenders, the Borrower shall receive and hold the same in
trust, as trustee, for the benefit of each Lender and shall forthwith deliver
the same to the Agent (for the benefit of the Lenders), in precisely the form
received (except for the endorsement or assignment of the Borrower where
necessary), for application to any of the Obligations, due or not due, and,
until so delivered, the same shall be held in trust by the Borrower as the
property of each Lender; provided, however, ordinary course payments or
distributions made to or by any Loan Party to the Borrower shall be required to
be paid or delivered to the Agent (for the benefit of the Lenders) only upon the
Agent's request after the occurrence and continuance of an Event of Default. If
the Borrower fails to make any such endorsement or assignment to the Agent (for
the benefit of the Lenders), the Agent or any of its officers or employees are
irrevocably authorized to make the same. The Borrower agrees that until the
Obligations have been paid in full in cash and satisfied and all financing
arrangements under this Agreement and the other Loan Documents between the
Borrower and the Lender have been terminated, the Borrower will not assign or
transfer to any Person (other than the Agent (for the benefit of the Lenders))
any claim the Borrower has or may have against any Loan Party.
8.15 Usury Not Intended. It is the intent of the Borrower and each Lender
in the execution and performance of this Agreement and the other Loan Documents
to contract in strict compliance with applicable usury laws, including conflicts
of law concepts, governing the Advances of each Lender including such applicable
laws of the State of New York and the United States of America from time-to-time
in effect. In furtherance thereof, each Lender and the Borrower stipulate and
agree that none of the terms and provisions contained in this Agreement or the
other Loan Documents shall ever be construed to create a contract to pay, as
consideration for the use, forbearance or detention of money, interest at a rate
in excess of the Maximum Rate and that for purposes hereof "interest" shall
include the aggregate of all charges which constitute interest under such laws
that are contracted for, charged or received under this Agreement; and in the
event that, notwithstanding the foregoing, under any circumstances the aggregate
amounts taken, reserved, charged, received or paid on the Advances, include
81
amounts which by applicable law are deemed interest which would exceed the
Maximum Rate, then such excess shall be deemed to be a mistake and each Lender
receiving same shall credit the same on the principal of the Notes (or if the
Notes shall have been paid in full, refund said excess to the Borrower). In the
event that the maturity of the Notes is accelerated by reason of any election of
the holder thereof resulting from any Event of Default under this Agreement or
otherwise, or in the event of any required or permitted prepayment, then such
consideration that constitutes interest may never include more than the Maximum
Rate and excess interest, if any, provided for in this Agreement or otherwise
shall be canceled automatically as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited on the applicable Notes
(or, if the Notes shall have been paid in full, refunded to the Borrower of such
interest). In determining whether or not the interest paid or payable under any
specific contingencies exceeds the Maximum Rate, the Borrower and each Lender
shall to the maximum extent permitted under applicable law amortize, prorate,
allocate and spread in equal parts during the period of the full stated term of
the Notes all amounts considered to be interest under applicable law at any time
contracted for, charged, received or reserved in connection with the
Obligations. The provisions of this Section shall control over all other
provisions of this Agreement or the other Loan Documents which may be in
apparent conflict herewith.
8.16 Reimbursement Among Borrowers. To the extent that any Borrower
shall be required to pay a portion of any Borrower's Obligations created under
this Agreement of any other Borrower which shall exceed the amount of loans,
advances or other extensions of credit received by any such Borrower and all
interest, costs, fees and expenses attributable to such loans, advance or other
extensions of credit, then such Borrower shall be reimbursed by the other
Borrower for the amount of such excess pro rata, based on their respective net
worth as of the date hereof. This Section 8.16 is intended only to define the
relative rights of each Borrower among the Borrowers and nothing set forth in
this Section 8.16 is intended to or shall impair the obligations of Borrowers,
jointly and severally, to pay the Obligations of the Borrowers to the Agent and
the Lenders as and when the same shall become due and payable in accordance with
the terms hereof.
ARTICLE IX: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
9.1 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower, each
Lender and their respective successors and assigns, except that the Borrower
shall not have the right to assign its rights or obligations under the Loan
Documents.
9.2 Participations.
(A) Permitted Participants; Effect. Subject to the terms set forth in
this Section 9.2, any Lender may, in accordance with applicable law, at any time
sell to one or more banks or other financial institutions ("Participants")
participating interests in any Advance owing to such Lender, the Notes, the
Commitment or any other interest of such Lender under the Loan Documents on a
pro rata or non-pro rata basis. Notice of such participation to the other
Lenders and to the Borrower shall be required prior to any participation
becoming effective. In the event of any such sale by any Lender of participating
interests to a Participant, such Lender's obligations under the Loan Documents
shall remain unchanged, such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Lender shall remain
the holder of the Note for all purposes under the Loan Documents, all amounts
payable by the Borrower under this Agreement shall be determined as if such
82
Lender had not sold such participating interests, and the Borrower shall
continue to deal solely and directly with Agent in connection with each Lender's
rights and obligations under the Loan Documents, except to the extent permitted
by the Loan Documents.
(B) Voting Rights. No participant under any such participation shall
have any right to approve any amendment or waiver of any provision of any Loan
Document, or any consent to any departure by any Loan Party therefrom, except to
the extent that such amendment, waiver or consent would reduce the principal of,
or interest on, the Notes or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation, postpone any date fixed
for any payment of principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, or release all or substantially all of the Collateral.
(C) Taxes. Any Participant under any such participation shall not be
entitled to receive any greater payment under Section 2.9 than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower's prior written consent. A Participant
that would be a Non-U.S. Lender if it were a Lender shall not be entitled to the
benefits of Section 2.9 unless the Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 2.9 as though it were a Lender.
9.3 Assignments. (a) Each Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to one or
more banks or other financial institutions in the United States approved in
writing by the Borrower and each other Lender (each referred to as an "Eligible
Assignee") within 10 days of notice to the Borrower and the Lenders by such
Lender of such assignment (which such approval shall not be unreasonably
withheld) all or a portion of its rights and obligations under this Agreement
and the other Loan Documents (including, without limitation, its Commitment and
all Advances owing to it) pursuant to an assignment and acceptance agreement in
the form attached hereto as Schedule 9.3 (each referred to as an "Assignment and
Acceptance"). Notwithstanding the foregoing, (i) the Borrower shall not have any
right to approve an assignee or receive notice of assignment under this Section
9.3, after the occurrence and continuance of an Event of Default, and (ii) the
Borrower shall have a right to receive notice of an assignment under this
Section 9.3, but not an approval right with respect to such assignment, if the
assignee is an entity which has merged with a particular Lender and such
assignee has by operation of law succeeded to all of the obligations,
liabilities and rights of the particular Lender, provided, however, that to the
extent any Lender assigns its obligations hereunder (including any assignment by
operation of law), such Eligible Assignee shall be a United States Person.
(b) Upon such execution, delivery and acceptance of, and from and after
the effective date specified in such Assignment and Acceptance, (i) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (ii) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights (other than its rights under Sections 2.9 and 8.7 to the
extent any claim thereunder relates to an event arising prior to such
assignment) and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all of the remaining portion
83
of an assigning Lender's rights and obligation xxxxxx this Agreement, such
Lender shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, each
Lender assignor thereunder and each assignee thereunder confirm to and agree
with each other and the other parties thereto and hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any lien or security
interest created or purported to be created under or in connection with, any
Loan Document or any other instrument or document furnished pursuant thereto;
(ii) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party, or the
performance or observance by any Loan Party of any of its obligations under any
Loan Document or any other instrument or document furnished pursuant thereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Section 4.4 and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the Agent, such
assigning Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (v) such assignee
confirms that it is an Eligible Assignee; (vi) such assignee appoints and
authorizes Agent to take such action as agent on its behalf and to exercise such
powers and discretion under the Loan Documents as are delegated to such Agent by
the terms hereof and thereof, together with such powers and discretion as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of this Agreement are required to be performed by it as a Lender.
(d) The Agent, acting for this purpose (but only for this purpose) as
the agent of the Borrower, shall maintain at its address a copy of each
Assignment and Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lender and the Commitment of, and
principal amount of the Advances owing to, each Lender from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for
purposes of this Section 9.3, absent manifest error, and the Borrower, the Agent
and the Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or the Agent or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an assignment and acceptance agreement executed
pursuant to the preceding subsection (a), together with any Note or Notes
subject to such assignment, the Agent will (i) accept such Assignment and
Acceptance executed pursuant to the preceding subsection (a), (ii) record the
information contained therein in the Register, and (iii) give prompt notice
thereof to Borrower. In the case of any assignment by a Lender, within five (5)
Business Days after its receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Agent in exchange for the surrendered
Note or Notes a new Note to the order of such Eligible Assignee in an amount
equal to the Lender's Commitment assumed by it pursuant to such Assignment and
Acceptance agreement and, if any assigning Lender has retained a commitment
hereunder, a new Note to the order of such assigning Lender in an amount equal
84
to such assigning Lender's Commitment retained by it hereunder. Such new Note or
Notes shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such assignment and acceptance agreement and shall be in substantially the form
of Exhibit A hereto.
9.4 Confidentiality. Subject to Sections 9.3 and 9.5, each Lender shall
hold all nonpublic information obtained pursuant to the requirements of this
Agreement and identified as such by the Borrower in accordance with each
respective Lender's customary procedures for handling confidential information
of this nature and in any event may make disclosure reasonably required by a
prospective Transferee (as defined in Section 9.5) in connection with the
contemplated participation or as required or requested by any Governmental
Authority or representative thereof or pursuant to legal process and shall
require any such Transferee to agree (and require any of its Transferees to
agree) to comply with this Section 9.4. In no event shall any Lender be
obligated or required to return any materials furnished by the Borrower;
provided, however, each prospective Transferee shall be required to agree that
if it does not become a participant it shall return all materials furnished to
it by or on behalf of the Borrower in connection with this Agreement. In the
event that any Lender is requested to make a disclosure to a Governmental
Authority or representative thereof or pursuant to legal process, such Lender
will use reasonable efforts to give Borrower prior notice of such disclosure.
9.5 Dissemination of Information. The Borrower authorizes each Lender
to disclose to any Participant or Eligible Assignee or any other Person
acquiring an interest in the Loan Documents by operation of law (each a
"Transferee") and any prospective Transferee any and all information in the
Lender's possession concerning the Borrower and its Subsidiaries; provided that
prior to any such disclosure, such prospective Transferee shall agree to
preserve in accordance with Section 9.4 the confidentiality of any confidential
information described therein.
ARTICLE X: NOTICES
10.1 Giving Notice. Except as otherwise permitted by Section 2.1 with
respect to borrowing notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Documents shall be in
writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address as may
be designated by such party in a notice to the other parties. Any notice, if
mailed and properly addressed with postage prepaid, shall be deemed given when
received; any notice, if transmitted by telex or facsimile, shall be deemed
given when transmitted (answerback confirmed in the case of telexes).
10.2 Change of Address. The Borrower, the Agent and each Lender may
each change the address for service of notice upon it by a notice in writing to
the other parties hereto.
ARTICLE XI: COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower and each
Lender.
85
IN WITNESS WHEREOF, the Borrower, the Agent and each Lender have
executed this Agreement as of the date first above written.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGES TO FOLLOW]
86
XXXXXX AUTOMOTIVE GROUP, INC.,
as the Borrower
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President and CFO
Address:
0 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: CEO
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
XXXXXX AUTOMOTIVE GROUP HOLDINGS, INC., as the Borrower
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President and CFO
Address:
0 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: CEO
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
[SIGNATURE PAGE TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT]
87
FORD MOTOR CREDIT COMPANY,
as Lender, and as Agent
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Director, Major Accounts
Address:
Ford Motor Credit Company
The American Road
Major Accounts Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Director, Major Accounts
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
[SIGNATURE PAGE TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT]
88
DAIMLERCHRYSLER SERVICES NORTH AMERICA LLC, as Lender
By: /s/ X.X. Xxxxxx
Name: X.X. Xxxxxx
Title: Vice President
Address:
DaimlerChrysler
Services North
America LLC CIMS
405-23-05 00000
Xxxxxxx Xxxx
Xxxxxxxxxx Xxxxx, XX
00000-0000
Attention: Dealer Credit-National Accounts
Telephone No.:(000)000-0000
Facsimile: (000) 000-0000
[SIGNATURE PAGE TO FIRST AMENDED AND RESTATED CREDIT AGREEMENT]
89
GENERAL MOTORS ACCEPTANCE CORPORATION, as Lender
By: /s/ Xxxxxxx X. XxXxxx
Name: Xxxxxxx X. XxXxxx
Title: Vice President, GMAC National Accounts
Address:
Mail Code 482-B10-C76
000 Xxxxxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. XxXxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
90
EXHIBIT A
[Form of Note]
SECOND AMENDED AND RESTATED PROMISSORY NOTE
(Acquisition/Revolving Line of Credit)
(LIBOR Rate)
$________ Dearborn, Michigan
___________, 2003
FOR VALUE RECEIVED, XXXXXX AUTOMOTIVE GROUP, INC., a Delaware
corporation and XXXXXX AUTOMOTIVE GROUP HOLDINGS, INC., a Delaware corporation
(individually and collectively, the "Borrower"), whose address is 0 Xxxxxxxx
Xxxxxx - Xxxxx 000, Xxxxxxxx, Xxxxxxxxxxx 00000, each jointly and severally,
promises to pay to ______________, a ________, ("Lender") or order, at
_______________ or at such other place as Lender may from time to time in
writing designate, in lawful money of the United States of America, the
principal sum of _____________ MILLION AND 00/100 DOLLARS ($___,000,000.00), or
such lesser amount as may be advanced from time to time by the Lender to the
Borrower pursuant to the First Amended and Restated Credit Agreement dated as of
even date herewith among the Borrower, the Agent and the Lenders who are parties
thereto, as amended, modified or restated from time to time (the "Agreement";
terms defined therein, unless otherwise defined herein, being used herein as
therein defined). The entire outstanding unpaid principal balance of this Note
(the "Principal Balance") shall be payable in full on the Termination Date.
The Borrower promises to pay interest on the Principal Balance,
adjusted monthly, on the Principal Balance outstanding from time to time, until
such Principal Balance is paid in full, at the Applicable LIBOR Rate (as defined
in the Agreement) in effect from time to time, and payable at such times, as are
specified in the Agreement.
This Note amends and restates and shall not constitute a novation of
that certain Amended and Restated Promissory Note dated July 29, 2002 (the
"Prior Note"), in the original principal amount of $___________ from Borrower
and Xxxxxx Automotive Group L.L.C. payable to Lender. Any interest accrued on
such Promissory Note as of the date hereof will be included in the next monthly
payment due hereunder. The outstanding amount of principal under the Prior Note
as of the date hereof is hereby deemed indebtedness evidenced by this Note and
incorporated herein by reference.
Both principal and interest are payable in lawful money of the United
States of America to the Agent under the Agreement, in same day funds. Each
Advance owing to the Lender by the Borrower, and all payments made on account of
principal thereof, shall be recorded by the Lender and, prior to any transfer
hereof, endorsed on the grid attached hereto, which is part of this Note;
provided, however, that the failure of the Lender to make any such recordation
or endorsement will not affect the Obligations of the Borrower under this Note.
1
This Note is one of the Notes referred to in, and is entitled to the
benefits of, the Agreement. The Agreement, among other things, (i) provides for
the making of Advances by the Lenders to or for the benefit of the Borrower from
time to time in an aggregate amount not to exceed at any time outstanding the
U.S. dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events and also for prepayments on account of principal hereof prior to
the Termination Date upon the terms and conditions therein specified. The
Obligations of Borrower under this Note and the Loan Documents, and the
obligations of the other Loan Parties are secured by the Collateral as provided
in the Loan Documents.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
IN WITNESS WHEREOF, Borrower, intending to be legally bound hereby, has
duly executed this Note under seal, the day and year first above written.
XXXXXX AUTOMOTIVE GROUP HOLDINGS, INC.,
a Delaware corporation, and XXXXXX AUTOMOTIVE
GROUP, INC., a Delaware corporation, each a Borrower
By: ___________________________ (SEAL)
Name:_______________________
Title: _______________________
2
SCHEDULE OF REVOLVING LOANS AND PAYMENTS OR PREPAYMENTS
Amount of
Principal Unpaid
Amount of Paid or Principal Notation
Date Advance Prepaid Balance Made By
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EXHIBIT B
[Form of Borrowing Notice]
Borrowing Notice
TO: FORD MOTOR CREDIT COMPANY (the "Agent") under that certain First
Amended and Restated Credit Agreement dated as of _________, 2003 (as
amended, restated or modified from time to time, the "Credit Agreement")
by and among XXXXXX AUTOMOTIVE GROUP, INC. and XXXXXX AUTOMOTIVE GROUP
HOLDINGS, INC. (individually and collectively, the "Borrower"), Agent
and the lenders more specifically identified therein.
I, the undersigned, hereby certify that I am the ______________ of the
Borrower. On behalf of the Borrower, I hereby give to the Agent a Borrowing
Notice pursuant to Section 2 of the Credit Agreement, and Borrower hereby
requests to borrow on ________________, _____ (the "Borrowing Date") an
aggregate principal --------------- amount of $____________ in ____________
Advances under loan # ____________ to be funded to account ____________________
for the purpose of ____________________________________________________________
The undersigned hereby certifies that (i) the representations and
warranties of the Borrower contained in Section 4 of the Credit Agreement are
and shall be true and correct in all material respects on and as of the date
hereof and on and as of the Borrowing Date, except for representations and
warranties expressly stated to relate to a specific earlier date, in which case
such representations and warranties are true and correct in all material
respects as of such earlier date; (ii) I have reviewed the terms of the Credit
Agreement and I have made, or have caused to be made under my supervision, a
detailed review of the transactions and conditions of the Borrower and its
Subsidiaries and Xxxxxx Everest during the accounting period covered by the
attached financial statements; (iii) the examinations described in section (ii)
did not disclose, and I have no knowledge of, the existence of any condition or
event which constitutes an Event of Default or Unmatured Default and which has
occurred and is continuing on the date hereof or on the Borrowing Date will
result from the making of the proposed Advances and (iv) in the case of an
Acquisition Advance, all required documentation as set forth in Section 5.2(L)
has been provided to Agent.
Unless otherwise defined herein, terms defined in the Credit Agreement
shall have the same meanings in this Borrowing Notice.
Date: ______________, 200__
XXXXXX AUTOMOTIVE GROUP, INC. and
XXXXXX AUTOMOTIVE GROUP
HOLDINGS, INC.
By: ______________________________
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Name:_________________________
Title: __________________________
5
EXHIBIT C
[Form of Guaranty]
GUARANTY
GUARANTY (this "Guaranty") dated _______________, 200_ made by
each of the entities listed on the signature pages hereto, jointly and
severally, (each referred to individually herein as a "Guarantor," and
collectively, the "Guarantors"), in favor of FORD MOTOR CREDIT COMPANY (the
"Agent"), as agent for the lenders (the "Lenders") under the Credit Agreement
defined below. Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings given to such terms in the Credit Agreement
defined below.
PRELIMINARY STATEMENTS
WHEREAS, pursuant to the terms of a certain First Amended and Restated
Credit Agreement dated as of June 6, 2003, the Lenders extended to Xxxxxx
Automotive Group, Inc., a Delaware corporation, and Xxxxxx Automotive Group
Holdings, Inc., a Delaware corporation, the entities which exercise control
(directly or indirectly) over the Guarantors (individually and collectively,
"Borrower"), a revolving credit facility in an amount not to exceed
$450,000,000.00 (as such agreement may be amended, restated, supplemented,
refinanced, increased or otherwise modified from time to time, the "Credit
Agreement");
WHEREAS, the Credit Agreement is evidenced by the Notes as defined in
the Credit Agreement (the "Notes"); and
WHEREAS, it is a condition precedent to the making of loans under the
Credit Agreement, that each Guarantor executes and delivers this Guaranty;
NOW, THEREFORE, in consideration of the premises and in order to induce
each Lender to make Advances under the Credit Agreement, each Guarantor hereby
agrees as follows:
Section 1. Guaranty. (a) Each Guarantor hereby unconditionally and
irrevocably guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all obligations of each other Loan
Party now or hereafter existing under or in respect of the Loan Documents
(including, without limitation, any extensions, modifications, substitutions,
amendments or renewals of any or all of the foregoing obligations), whether
direct or indirect, absolute or contingent, and whether for principal, interest,
premiums, fees, indemnities, contract causes of action, costs, expenses or
otherwise (such obligations being the "Guaranteed Obligations"), and agrees to
pay any and all expenses (including reasonable counsel fees and expenses)
incurred by the Agent or the Lenders in enforcing any rights under this
Guaranty. Without limiting the generality of the foregoing, each Guarantor's
liability shall extend to all amounts that constitute part of the Guaranteed
Obligations and would be owed by any Loan Party to any Lender but for the fact
that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving such Loan Party.
<
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(b) Each Guarantor, and by its acceptance of this Guaranty, the Agent
and each Lender, hereby confirms that it is the intention of all such Persons
that this Guaranty and the obligations of each Guarantor hereunder not
constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law
(as hereinafter defined), the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar foreign, federal or state law to the
extent applicable to this Guaranty and the obligations of each Guarantor
hereunder. To effectuate the foregoing intention, the Agent, the Lenders and the
Guarantors hereby irrevocably agree that the obligations of each Guarantor under
this Guaranty at any time shall be limited to the maximum amount as will result
in the obligations of such Guarantor under this Guaranty not constituting a
fraudulent transfer or conveyance. For purposes hereof, "Bankruptcy Law" means
any proceeding of the type referred to in Section 6.1(f) and (g) of the Credit
Agreement or Title 11, U.S. Code, or any similar foreign, federal or state law
for the relief of debtors.
(c) Each Guarantor hereby unconditionally and irrevocably agrees that,
in the event any payment shall be required to be made to any Lender under this
Guaranty or any other guaranty (in respect of the Guaranteed Obligations and/or
any and all expenses (including reasonable counsel fees and expenses) incurred
by the Agent or the Lenders in enforcing any rights under this Guaranty), such
Guarantor will contribute, to the maximum extent permitted by law, such amounts
to each other Guarantor and each other guarantor so as to maximize the aggregate
amount paid to the Lenders under or in respect of the Loan Documents
Section 2. Guaranty Absolute. Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Loan Documents, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Agent or the Lenders with respect thereto. The obligations of each Guarantor
under this Guaranty are independent of the Guaranteed Obligations or any other
obligations of any other party under the Loan Documents, and a separate action
or actions may be brought and prosecuted against each Guarantor to enforce this
Guaranty, irrespective of whether any action is brought against the Borrower or
any other Loan Party or whether the Borrower or any other Loan Party is joined
in any such action or actions. This Guaranty is a guaranty of payment and
performance and not of collection. The liability of each Guarantor under this
Guaranty shall be irrevocable, absolute and unconditional irrespective of, and
each Guarantor hereby irrevocably waives any defenses it may now or hereafter
have in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Loan
Document or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Guaranteed Obligations, or any
other amendment or waiver of or any consent to departure from any Loan
Document, including, without limitation, any increase in the Guaranteed
Obligations resulting from the extension of additional credit to
Borrower or any other Loan Party or otherwise;
(c) any taking, exchange, release or non-perfection of any
Collateral, or any taking, release or amendment or waiver of or consent
to departure from any other guaranty, for all or any of the Guaranteed
Obligations;
(d) any manner of application of Collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of
7
sale or other disposition of any Collateral for all or any of the
Guaranteed Obligations under the Loan Documents or any other assets of
any Loan Party;
(e) any change, restructuring or termination of the corporate
structure or existence of any Loan Party;
(f) any failure of the Agent or any Lender to disclose to any
Loan Party any information relating to the business, condition
(financial or otherwise), operations, performance, properties or
prospects of any other Loan Party now or hereafter known to the Agent
or such Lender (each Guarantor waiving any duty on the part of the
Agent and the Lenders to disclose such information);
(g) the failure of any other Person to execute or deliver this
Guaranty or any other guaranty or agreement or the release or reduction
of liability of any Guarantor or other guarantor or surety with respect
to the Guaranteed Obligations; or
(h) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any
representation by the Agent or any Lender that might otherwise
constitute a defense available to, or a discharge of, any Loan Party or
any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Agent or any Lender or any other person
upon the insolvency, bankruptcy or reorganization of any Loan Party or
otherwise, all as though such payment had not been made.
Section 3. Waivers and Acknowledgments. (a) Each Guarantor hereby
waives promptness, diligence, notice of acceptance and any other notice with
respect to any of the Guaranteed Obligations and this Guaranty and any
requirement that the Agent or any Lender protect, secure, perfect or insure any
lien or any property subject thereto or exhaust any right or take any action
against any Loan Party or any other Person or any Collateral.
(b) Each Guarantor hereby waives any right to revoke this
Guaranty, and acknowledges that this Guaranty is continuing in nature
and applies to all Guaranteed Obligations, whether existing now or in
the future.
(c) Each Guarantor acknowledges that it will receive
substantial direct and indirect benefits from the financing
arrangements contemplated by the Loan Documents and that the waivers
set forth in this Guaranty are knowingly made in contemplation of such
benefits.
(d) Each Guarantor hereby unconditionally and irrevocably
waives (i) any defense arising by reason of any claim or defense based
upon an election of remedies by the Agent or the Lenders that in any
manner impairs, reduces, releases or otherwise adversely affects the
subrogation, reimbursement, exoneration, contribution or
indemnification rights of such Guarantor or other rights of such
Guarantor to proceed against any of the other Loan Parties, any other
guarantor or any other Person or any Collateral and (ii) any defense
based on any right of set-off or counterclaim against or in respect of
the obligations of such Guarantor hereunder.
8
(e) Each Guarantor hereby unconditionally and irrevocably
waives any duty on the part of the Agent or the Lenders to disclose to
such Guarantor any matter, fact or thing relating to the business,
condition (financial or otherwise), operations, performance, properties
or prospects of any other Loan Party or any of its Subsidiaries now or
hereafter known by the Agent or the Lenders.
Section 4. Subrogation. No Guarantor will exercise any rights that it
may now or hereafter acquire against any Loan Party that arise from the
existence, payment, performance or enforcement of the Guarantor's obligations
under this Guaranty, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Agent or any Lender against any Loan
Party or any Collateral, whether or not such claim, remedy or right arises in
equity or under contract, statute or common law, including, without limitation,
the right to take or receive from any Loan Party directly or indirectly, in cash
or other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right, unless and until all of the Guaranteed
Obligations and all other amounts payable under this Guaranty shall have been
paid in full in cash in accordance with the terms of the Loan Documents. If any
amount shall be paid to any Guarantor in violation of the preceding sentence at
any time prior to the payment in full in cash of the Guaranteed Obligations and
all other amounts payable under this Guaranty, such amount shall be held in
trust for the benefit of the Agent and shall forthwith be paid to the Agent to
be credited and applied to the Guaranteed Obligations and all other amounts
payable under this Guaranty, whether matured or unmatured, in accordance with
the terms of the Loan Documents, or to be held as Collateral for any Guaranteed
Obligations or other amounts payable under this Guaranty thereafter arising. If
(i) any Guarantor shall make payment to the Agent or any Lender of all or any
part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and
all other amounts payable under this Guaranty shall be paid in full in cash and
(iii) the Loan Documents shall have terminated in accordance with their own
terms, the Agent and the Lenders will, at the Guarantors' request and expense,
execute and deliver to the Guarantors appropriate documents, without recourse
and without representation or warranty, necessary to evidence the transfer by
subrogation to the Guarantors of an interest in the Guaranteed Obligations
resulting from such payment by the Guarantor.
Section 5. Representations and Warranties. Each Guarantor hereby
represents and warrants as of the date hereof and as of the date of each Advance
as follows:
(a) Each Guarantor (i) is a corporation, limited liability
company or limited partnership duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization,
(ii) is duly qualified and in good standing in each other jurisdiction
in which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed except where the
failure to so qualify or be licensed would not have a Material Adverse
Effect (as defined in the Credit Agreement), and (iii) has all
requisite power and authority to own or lease and operate its
properties and to carry on its business as now conducted and as
proposed to be conducted.
(b) The execution, delivery and performance by each Guarantor
of this Guaranty and the other Loan Documents executed by the Guarantor
are within each such Guarantor's powers, have been duly authorized by
all necessary corporate, limited liability company, or limited
partnership action, and do not (i) contravene each such Guarantor's
charter or bylaws or similar organizational documents, (ii) violate any
law (including, without limitation, the Securities Exchange Act of 1934
9
and the Racketeer Influenced and Corrupt Organizations Chapter of the
Organized Crime Control Act of 1970), rule, regulation (including,
without limitation, Regulations T, U and X of the Board of Governors of
the Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach of,
or constitute a default under, any loan agreement, contract, indenture,
mortgage, deed of trust, lease or other instrument binding on or
affecting such Guarantor or any of its properties, the effect of which
conflict, breach or default is reasonably likely to have a Material
Adverse Effect, or (iv) except for the liens permitted under the Loan
Documents, result in or require the creation or imposition of any lien
upon or with respect to any of the properties of any such Guarantor. No
Guarantor is in violation of any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award, or in
breach of any such contract, loan agreement, indenture, mortgage, deed
of trust, lease or other instrument, the violation or breach of which
would be reasonably likely to have a Material Adverse Effect.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or any other third party is required for (i) the due execution,
delivery, recordation, filing or performance by any Guarantor of this
Guaranty and the other Loan Documents executed by the Guarantor, and
(ii) the exercise by the Agent or the Lenders of their rights under
this Guaranty and the other Loan Documents executed by the Guarantor in
each case, except for (a) those that have been made, obtained or given,
and (b) filings necessary to create or perfect security interests in
the Collateral.
(d) This Guaranty and the other Loan Documents executed by the
Guarantor have been duly executed and delivered by such Guarantor. This
Guaranty and the other Loan Documents executed by the Guarantor are the
legal, valid and binding obligation of such Guarantor, enforceable
against such Guarantor in accordance with their terms except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or limiting
creditors' rights or by equitable principles generally.
(e) There are no conditions precedent to the effectiveness of
this Guaranty and the other Loan Documents executed by the Guarantor
that have not been satisfied or waived.
(f) Each Guarantor has, independently and without reliance
upon the Agent or any Lender, and based on such documents and
information as it has deemed appropriate, made its own decision to
enter into this Guaranty and the other Loan Documents executed by the
Guarantor.
Section 6. Covenants. Each Guarantor covenants and agrees that, so long
as any part of the Guaranteed Obligations shall remain unpaid or any Loan
Document shall be in effect, such Guarantor will perform and observe, and cause
each of its Subsidiaries to perform and observe, all of the terms, covenants and
agreements set forth in the Loan Documents on its or their part to be performed
or observed or that the Borrower has agreed to cause such Guarantor or such
Subsidiaries to perform or observe.
Section 7. No Waiver, Remedies. No failure on the part of the Agent or
any Lender to exercise, and no delay in exercising, any right under any Loan
Document shall operate as a waiver thereof; nor shall any single or partial
10
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies in the Loan Documents are
cumulative and not exclusive of any remedies provided by law.
Section 8. Indemnification. (a) Each Guarantor agrees to defend,
protect, indemnify, and hold harmless the Agent, each Lender and each of its
respective Affiliates, and each of the Agent's, Lender's, or Affiliate's
respective officers, directors, employees, attorneys and agents (including,
without limitation, those retained in connection with the satisfaction or
attempted satisfaction of any of the conditions set forth in Article III)
(collectively, the "Indemnified Parties" and each an "Indemnified Party") from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses of any kind or nature
whatsoever (including, without limitation, the fees and disbursements of counsel
for such Indemnitees in connection with any investigative, administrative or
judicial proceeding, whether or not such Indemnitees shall be designated a party
thereto), imposed on, incurred by, or asserted against such Indemnitees in any
manner relating to or arising out of:
(i) this Guaranty, the other Loan Documents or any of the
Transaction Documents, or any act, event or transaction related or
attendant thereto, the making of the Advances, under the Credit
Agreement, the management of such Advances, the use or intended use of
the proceeds of the Advances under the Credit Agreement, or any of the
other transactions contemplated by the Transaction Documents;
(ii) any liabilities, obligations, responsibilities, losses,
damages, personal injury, death, punitive damages, economic damages,
consequential damages, treble damages, intentional, willful or wanton
injury, damage or threat to the environment, natural resources or
public health or welfare, costs and expenses (including, without
limitation, attorney, expert and consulting fees and costs of
investigation, feasibility or remedial action studies), fines,
penalties and monetary sanctions, interest, direct or indirect, known
or unknown, absolute or contingent, past, present or future relating to
violation of any Environmental, Health or Safety Requirements of Law
arising from or in connection with the past, present or future
operations of the Borrower, any Guarantor or any of their respective
predecessors in interest, or, the past, present or future
environmental, health or safety condition of any respective property of
the Borrower or any Guarantor, the presence of asbestos-containing
materials at any respective property of the Borrower any Guarantor, or
the Release or threatened Release of any Contaminant into the
environment (collectively, the "Indemnified Matters");
provided, however, that no Guarantor shall have any obligation to an Indemnified
Party hereunder with respect to any of the aforementioned indemnified matters
caused by or resulting from the willful misconduct or gross negligence of such
Indemnified Party as determined by the final non-appealed judgment of a court of
competent jurisdiction. If the undertaking to indemnify, pay and hold harmless
set forth in the preceding sentence may be unenforceable because it is violative
of any law or public policy, each Guarantor shall contribute the maximum portion
which it is permitted to pay and satisfy under applicable law, to the payment
and satisfaction of all Indemnified Matters incurred by the Indemnified Parties.
It is understood and agreed that, to the extent not precluded by a conflict of
interest, each Indemnitee shall endeavor to work cooperatively with the Borrower
with a view toward minimizing the legal and other expenses associated with any
defense and any potential settlement or judgment. Settlement of any claim or
litigation involving any material indemnified amount will require the approval
of the Borrower (which may not be unreasonably withheld), provided, however,
11
that no Guarantor shall have any obligation to an Indemnified Party hereunder
with respect to any of the aforementioned indemnified matters caused by or
resulting from the willful misconduct or gross negligence of such Indemnified
Party as determined by the final non-appealed judgment of a court of competent
jurisdiction.
(b) Each Guarantor hereby also agrees that none of the Indemnified
Parties shall have any liability (whether direct or indirect, in contract, tort
or otherwise) to any of the Guarantors or any of their respective Affiliates or
any of their respective officers, directors, employees, agents and advisors, and
each Guarantor hereby agrees not to assert any claim against any Indemnified
Party on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to the Loan Documents, the
actual or proposed use of the proceeds of the advances made under the Loan
Documents, the Loan Documents or any of the transactions contemplated by the
Loan Documents.
(c) Without prejudice to the survival of any of the other agreements of
any Guarantor under this Guaranty or any of the other Loan Documents, the
agreements and obligations of each Guarantor contained in Section 1(a) (with
respect to enforcement expenses), the last sentence of Section 2 and this
Section 8 shall survive the payment in full of the Guaranteed Obligations and
all of the other amounts payable under this Guaranty.
Section 9. Subordination. Each Guarantor hereby subordinates any and
all debts, liabilities and other Obligations owed to such Guarantor by each
other Loan Party (the "Subordinated Obligations") to the Guaranteed Obligations
to the extent and in the manner hereinafter set forth in this Section 9:
(a) Prohibited Payments. Except during the
continuance of an Event of Default (including the commencement and
continuation of any proceeding under any Bankruptcy Law relating to any
Loan Party), to the extent permitted by the Credit Agreement, each
Guarantor may receive regularly scheduled payments from any other Loan
Party on account of the Subordinated Obligations. After the occurrence
and during the continuance of any Event of Default (including the
commencement and continuation of any proceeding under any Bankruptcy
Law relating to any Loan Party), however, unless the Agent otherwise
agrees, no Guarantor shall demand, accept or take any action to collect
any payment on account of the Subordinated Obligations.
(b) Prior Payment of Guaranteed Obligations. In any
proceeding under any Bankruptcy Law relating to any Loan Party, each
Guarantor agrees that the Lenders shall be entitled to receive payment
in full in cash of all Guaranteed Obligations (including all interest
and expenses accruing after the commencement of a proceeding under any
Bankruptcy Law, whether or not constituting an allowed claim in such
proceeding ("Post Petition Interest")) before such Guarantor receives
payment of any Subordinated Obligations.
(c) Turn-Over. After the occurrence and during the
continuance of any Event of Default (including the commencement and
continuation of any proceeding under any Bankruptcy Law relating to any
Loan Party), each Guarantor shall, if the Agent so requests, collect,
enforce and receive payments on account of the Subordinated Obligations
as trustee for the Lenders and deliver such payments to the Agent on
account of the Guaranteed Obligations (including all Post Petition
Interest), together with any necessary endorsements or other
12
instruments of transfer, but without reducing or affecting in any
manner the liability of such Guarantor under the other provisions of
this Guaranty and the other Loan Documents executed by the Guarantor.
(d) Administrative Agent Authorization. After the
occurrence and during the continuance of any Event of Default
(including the commencement and continuation of any proceeding under
any Bankruptcy Law relating to any Loan Party), the Agent is authorized
and empowered (but without any obligation to so do), in its discretion,
(i) in the name of each Guarantor, to collect and enforce, and to
submit claims in respect of, Subordinated Obligations and to apply any
amounts received thereon to the Guaranteed Obligations (including any
and all Post Petition Interest), and (ii) to require each Guarantor (A)
to collect and enforce, and to submit claims in respect of,
Subordinated Obligations and (B) to pay any amounts received on such
obligations to the Agent for application to the Guaranteed Obligations
(including any and all Post Petition Interest).
Section 10. Continuing Guaranty. This Guaranty is a continuing guaranty
and shall (a) remain in full force and effect until the later of the payment in
full in cash of the Guaranteed Obligations and all other amounts payable under
this Guaranty and the date the Loan Documents shall have terminated in
accordance with their own terms, (b) be binding upon each Guarantor, its
successors and assigns, and (c) inure to the benefit of and be enforceable by
the Agent and any Lender and its successors, transferees and assigns.
Section 11. Definitions. With respect to all Loan Documents executed by
the Guarantor, the singular shall include the plural and vice versa and any
gender shall include any other gender as the context may require.
Section 12. Successors and Assigns. This Guaranty and the other Loan
Documents executed by the Guarantor shall be binding upon and inure to the
benefit of the Guarantor, the Agent and the Lenders, and their respective
successors and assigns. The Guarantor's successors and assigns shall include,
without limitation, a receiver, trustee or debtor-in-possession of or for the
Guarantor. Without limiting the generality of the foregoing clause, any Lender
may assign or otherwise transfer all or any portion of its rights and
obligations under the Loan Documents (including, without limitation, all or any
portion of its Commitment, the Advances owing to it and any Note held by it) to
any other Person, and such other Person shall thereupon become vested with all
the benefits in respect thereof granted to such Lender herein or otherwise,
subject, however to the provisions of Article VII of the Credit Agreement.
Section 13. Governing Law; Severability. This Guaranty and the other
Loan Documents executed by the Guarantor shall be governed by, and construed in
accordance with, the internal laws (as opposed to conflict of laws provisions)
of the State of New York. Whenever possible, each provision of this Guaranty and
the other Loan Documents executed by the Guarantor shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Guaranty or the other Loan Documents executed by the Guarantor shall be
held to be prohibited or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Guaranty and the other Loan Documents executed by the Guarantor.
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Section 14. Advice of Counsel. The Guarantor represents and warrants to
the Agent that it has consulted with its legal counsel regarding all waivers
under the Loan Documents, it believes that it fully understands all rights that
it is waiving and the effect of such waivers, that it assumes the risk of any
misunderstanding that it may have regarding any of the foregoing, and that it
intends that such waivers shall be a material inducement to Lenders to extend
the indebtedness secured hereby.
Section 15. Further Assurances. The Guarantor agrees that it will
cooperate with the Agent and the Lenders and will execute and deliver, or cause
to be executed and delivered, all such other agreements, instruments, documents,
stock powers and proxies and will take all such other actions, including,
without limitation, the execution and filing of financing statements, as the
Agent may reasonably request from time to time in order to carry out the
provisions and purposes of the Loan Documents executed by the Guarantor.
Section 16. Costs and Expenses. The Guarantor will upon demand pay to
the Agent the amount of any and all reasonable expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, which
the Agent may incur in connection with (i) the administration of the Loan
Documents executed by the Guarantor, (ii) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the Pledged
Collateral, (iii) the exercise or enforcement of any of the rights of the Agent
or the Lenders under the Loan Documents executed by the Guarantor, or (iv) the
failure by the Guarantor to perform or observe any of the provisions of the Loan
Documents executed by the Guarantor.
Section 17. Notices. All notices and other communications provided for
under any Loan Documents executed by the Guarantor shall be in writing
(including telecopier, telegraphic, telex or cable communication) and mailed,
telecopied, telegraphed, telexed, cabled or delivered, if to the Guarantor, care
of Borrower at its address at 0 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxxxxxxx 00000, if to the Agent, at its address specified in the Credit
Agreement; or, as to each party, at such other address as shall be designated by
such party in a written notice to the other party. All such notices and
communications shall be effective, upon receipt, or in the case of (i) notice by
mail, five days after being deposited in the United States mails, first class
postage prepaid, (ii) notice by overnight courier, one business day after being
deposited with a national overnight courier service, (iii) notice by telex, when
telexed against receipt of answer back or (iv) notice by facsimile copy, when
transmitted against mechanical confirmation of successful transmission.
Section 18. Amendments, Waivers and Consents. No amendment or waiver of
any provision of any Loan Document executed by the Guarantor nor consent to any
departure by the Guarantor therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Agent and then such amendment, waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given.
Section 19. Section Headings. The section headings in the Loan
Documents executed by the Guarantor are for convenience of reference only, and
shall not affect in any way the interpretation of any of the provisions hereof.
Section 20. Execution in Counterparts. The Loan Documents executed by
the Guarantor may be executed in any number of counterparts, each of which shall
be an original, but all of which shall together constitute one and the same
agreement.
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Section 21. Merger. This Loan Documents executed by the Guarantor
represent the final agreement of the Guarantor with respect to the matters
contained herein and may not be contradicted by evidence of prior or
contemporaneous agreements, or subsequent oral agreements, between the Guarantor
and the Agent and the Lenders.
Section 22. No Strict Construction. The parties to the Loan Documents
have participated jointly in the negotiation and drafting of the Loan Documents.
In the event an ambiguity or question of intent or interpretation arises, the
Loan Documents shall be construed as if drafted jointly by the parties hereto
and no presumption or burden or proof shall arise favoring or disfavoring any
party by virtue of the authorship of any provisions of the Loan Documents.
Section 23. Waiver of Jury Trial. To the maximum extent of applicable
law, each of the Guarantors waives any right to trial by jury in any dispute,
whether sounding in contract, tort, or otherwise, between the Agent, the Lenders
any Guarantor or any other Person arising out of or related to this Guaranty or
the other Loan Documents executed by the Guarantor and the transactions
contemplated by this Guaranty and the other Loan Documents executed by the
Guarantor or any other instrument, document or agreement executed or delivered
in connection herewith or therewith. The Guarantors or the Agent or the Lenders
may file an original counterpart or a copy of this Guaranty with any court as
written evidence of the consent of the parties hereto to the waiver of their
right to trial by jury.
Section 24. Consent to Jurisdiction; Service of Process; Jury Trial.
(a) Non Exclusive Jurisdiction. Each Guarantor irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York state court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Guaranty and the other Loan
Documents or arising out of or relating to the relationship established among
them in connection with this Guaranty or any of the other Loan Documents, or for
recognition or enforcement of any judgment, and each Guarantor irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York state court or, to
the fullest extent permitted by law, in such federal court. Each Guarantor
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Guaranty shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Guaranty or any of the other Loan Documents in the courts of
any jurisdiction. Each Guarantor irrevocably and unconditionally waives, to the
fullest extend it may legally and effectively do so, any objection that it may
nor or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Guaranty or any of the other Loan Documents
to which it is a party in any New York state or federal court. Each Guarantor
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(b) Other Jurisdictions. Each of Agent and the Lenders shall
have the right to proceed against any Guarantor or its real or personal property
in a court in any location to enable the Agent or the Lenders to obtain personal
jurisdiction over the Guarantor, to realize on the Collateral or any other
security for the obligations or to enforce a judgment or other court order
entered in favor of the Agent or the Lenders. No Guarantor shall assert any
permissive counterclaims in any proceeding brought by the Agent or the Lenders
under this Section 24.
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(c) Venue; Forum Non Conveniens. Each of the Agent and the
Guarantors waives any objection that it may have (including, without limitation,
any objection to the laying of venue or based on forum non conveniens) to the
location of the court in which any proceeding is commenced in accordance with
this Section 24.
Section 25. Service of Process. Each Guarantor waives personal
service of any process upon it and, as security for the Guaranteed Obligations,
irrevocably appoints CT Corporation Systems as its registered agent for the
purpose of accepting service of process issued by any court in connection with
any dispute between any Guarantor, the Agent and the Lenders arising out of or
related to the Loan Documents or the relationship established between them in
connection with the Loan Documents or any other document to which any Guarantor
is a party.
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to
be duly executed under seal and delivered by its officer thereunto duly
authorized as of the date first above written.
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EXHIBIT D
[Form of Security Agreement]
FIRST AMENDED AND RESTATED SECURITY AGREEMENT
SECURITY AGREEMENT (the "Agreement") dated ______________, 200_, made
by each of the entities listed on the signature pages hereto, jointly and
severally, (each referred to individually herein as a "Grantor," and
collectively, the "Grantors"), to FORD MOTOR CREDIT COMPANY, as agent (the
"Agent") for the lenders (the "Lenders") under the Credit Agreement defined
below. Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings given to such terms in the Credit Agreement defined
below.
PRELIMINARY STATEMENTS:
WHEREAS, Xxxxxx Automotive Group, Inc., a Delaware
corporation, and Xxxxxx Automotive Group Holdings, Inc., a Delaware corporation
(individually and collectively, the "Borrower"), the Agent and the Lenders have
entered into a certain First Amended and Restated Credit Agreement dated as of
June 6, 2003, pursuant to which the Lenders agreed, subject to certain
conditions precedent, to make loans and other financial accommodations to the
Borrower from time to time in an amount not to exceed $450,000,000.00 (as such
agreement may be further amended, restated, supplemented, refinanced, increased
or otherwise modified from time to time, the "Credit Agreement") and;
WHEREAS, the Grantors have entered into a Guaranty dated
January 17, 2001 or thereafter (the "Guaranty"), pursuant to which each Grantor
guaranties all of the obligations of the Borrower under the Credit Agreement to
the Lenders; and
WHEREAS, in order to comply with the terms of the Credit
Agreement, the Grantors must execute and deliver this Agreement;
NOW, THEREFORE, for and in consideration of the foregoing and
of any financial accommodations or extensions of credit (including, without
limitation, any loan or advance by renewal, refinancing or extension of the
agreements described hereinabove or otherwise) heretofore, now or hereafter made
to or for the benefit of the Borrower pursuant to the Credit Agreement or, any
other agreement, instrument or document executed pursuant to or in connection
therewith, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Grantor hereby agrees with
Agent, for the benefit of the Lenders, as follows:
SECTION 1. Grant of Security. Each Grantor, severally, hereby
assigns and pledges to Agent, for the benefit of the Lenders, and hereby grants
to Agent, for the benefit of the Lenders, a security interest in, all of its
respective right, title and interest in and to the following, whether now owned
or hereafter acquired (collectively, the "Collateral"):
(a) all equipment in all of its forms, including furniture,
machinery, service vehicles, supplies and other equipment (the
"Equipment");
(b) all inventory in all of its forms, including motor
vehicles, tractors, trailers, service parts and accessories and other
inventory ("Inventory");
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(c) all Accounts (as defined in the Code as defined herein),
contract rights, chattel paper, instruments, notes, letters of credit,
documents, documents of title, investment property, deposit accounts,
other bank accounts, General Intangibles (as defined in the Code), tax
refunds and other obligations of third persons of any kind, now or
hereafter existing, whether or not arising out of or in connection with
the sale or lease of goods, the rendering of services or otherwise, and
all rights now or hereafter existing in and to all security agreements,
leases, and other contracts securing or otherwise relating to any such
accounts, contract rights, chattel paper, instruments, notes, letters
of credit, documents, documents of title, investment property, deposit
accounts, other bank accounts, general intangibles, tax refunds or
obligations of third persons (any and all such accounts, contract
rights, chattel paper, instruments, notes, letters of credit,
documents, documents of title, investment property, deposit accounts,
other bank accounts, general intangibles, tax refunds and obligations
of third persons being the "Receivables", and any and all such leases,
security agreements and other contracts being the "Related Contracts");
(d) all of the Grantor's governmental approvals and
authorizations to the maximum extent permitted by applicable law;
(e) all property and interests in property of the Grantor now
or hereafter coming into the actual possession, custody or control of
the Agent or a Lender in any way or for any purpose (whether for
safekeeping, deposit, custody, pledge, transmission, collection or
otherwise);
(f) leasehold interests in and fixtures located on any real
property;
(g) all security entitlements;
(h) all intellectual property;
(i) all goods and all computer hardware and software;
(j) all Commercial Tort Claims as described in Schedule 1(j);
(k) Electronic Chattel Paper, Letter-of-Credit Rights, Payment
Intangibles, Supporting Obligations and Tangible Chattel Paper (each as
defined in the Code);
(l) records and other books relating to the foregoing; and
(m) all accessions and additions to, substitutions for, and
replacements, products and proceeds of any of the foregoing (including,
without limitation, proceeds which constitute property of the types
described in clauses (a) through (k) of this Section 1 and, to the
extent not otherwise included, all (i) payments under insurance
(whether or not the Agent or a Lender is the loss payee thereof), or
any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral
and (ii) cash.
Provided that the foregoing shall exclude (A) any Contract
Rights (other than any Contract Rights pursuant to a franchise
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agreement between Borrower and an automobile manufacturer) or General
Intangibles of the Grantor to the extent the Grantor may not grant a
security interest in the same without breach of the terms thereof and
(B) unless the relevant automobile manufacturer grants its consent
thereto, any Contract Rights or General Intangibles related to a
franchise agreement with an automobile manufacturer if the granting of
the foregoing security interest would permit such automobile
manufacturer to terminate or materially alter such franchise agreement
or any related agreements with the Borrower, provided that Grantor
shall use commercially reasonable efforts to obtain agreements from the
relevant manufacturers (a) permitting the grant of a security interest
described in subsection (A) above and (b) granting the consent
described in subsection (B) above.
It is hereby acknowledged that certain of the franchise
agreements and other related agreements between the various automobile
manufacturers and the Grantors contain (i) restrictions on the ability
of each Grantor to transfer its ownership interest in any Dealership
without the consent of the relevant automobile manufacturer, (ii)
provisions giving the automobile manufacturer a right of first refusal
over any proposed sale or transfer of the ownership interests in any
Dealership or any portion of the assets of any Dealership (provided,
however, that for the purposes of this acknowledgment, the
interpretation of the Agent and the Lenders is that "transfer" does not
include the granting of a security interest in assets other than
ownership interests in a Dealership and contract rights under franchise
agreements) and (iii) requirements that under certain circumstances
(including, without limitation, upon termination of the relevant
franchise agreement) the Grantor must sell certain property (consisting
primarily of a particular manufacturer's vehicles, parts, accessories,
signs, tools and other similar items) to the manufacturer free and
clear of any liens and encumbrances. It is understood and agreed that
the existence or occurrence of any of the foregoing shall not result in
a breach of or default under this Agreement, provided, however, that it
is understood that for purposes of this acknowledgment, the
interpretation of the Agent and the Lenders is that nothing contained
in clause (iii) of the preceding sentence may be construed as
invalidating the Liens evidenced by, or the terms of, any of the
Collateral Documents.
SECTION 2. Security for Obligations. This Agreement secures
the payment of (i) all obligations of the Grantors now or hereafter existing
under the Guaranty, whether for principal, interest, fees, expenses or
otherwise, and (ii) all obligations of any Grantor hereafter existing under this
Agreement (all such obligations of the Grantors and the Borrower being the
"Obligations"). Without limiting the generality of the foregoing, this Agreement
secures the payment of all amounts which constitute part of the Obligations and
would be owed by any Grantor to any Lender under the Credit Agreement but for
the fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving any Grantor or the
Borrower.
SECTION 3. Grantors Remain Liable. Anything herein to the
contrary notwithstanding, (a) each Grantor shall remain liable under the
contracts and agreements included in the Collateral to the extent set forth
therein to perform all of its respective duties and obligations thereunder to
the same extent as if this Agreement had not been executed, (b) the exercise by
Agent of any of the rights hereunder shall not release any Grantor from any of
its respective duties or obligations under the contracts and agreements included
in the Collateral, and (c) neither the Agent nor the Lenders shall have any
obligation or liability under the contracts and agreements included in the
Collateral by reason of this Agreement, nor shall the Agent or the Lenders be
obligated to perform any of the obligations or duties of any Grantor thereunder
19
or to take any action to collect or enforce any claim for payment assigned
hereunder.
SECTION 4. Representations and Warranties. Each Grantor
represents and warrants as follows as of the date hereof and as of the date of
each Advance:
(a) All of its Equipment and Inventory is located at the
places specified on Schedule 4 (a) hereto. The chief place of business and chief
executive office of each Grantor and the office where the Grantor keeps its
records concerning the Receivables, and the originals of all chattel paper that
evidence Receivables, are located at the address specified in Section 16. None
of the Receivables is evidenced by a promissory note or other instrument.
(b) Each Grantor is the legal and beneficial owner of its
respective Collateral free and clear of any lien, security interest, option or
other charge or encumbrance except for (i) the security interest created by this
Agreement, and (ii) any security interests consented to by the Lenders in the
Credit Agreement (collectively, the "Permitted Liens"). Other than financing
statements with respect to Permitted Liens, no effective financing statement or
other document similar in effect covering all or any part of the Collateral is
on file in any recording office, except such as may have been filed in favor of
the Agent relating to this Agreement.
(c) Each Grantor has exclusive possession and control of its
Equipment and Inventory.
(d) Subject to the Permitted Liens, this Agreement creates a
valid and perfected first priority security interest in the Collateral, securing
the payment of the Obligations, and all filings and other actions necessary or
desirable to perfect and protect such security interest have been duly taken or
are being taken substantially contemporaneously with the execution and delivery
of this Agreement.
(e) No consent of any other Person and no authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required (i) for the grant by the Grantors of
the security interest granted hereby or for the execution, delivery or
performance of this Agreement by the Grantors, (ii) for the perfection or
maintenance of the security interest created hereby (including the first
priority nature of such security interest) or (iii) for the exercise by the
Agent (for the benefit of the Lenders) of its rights and remedies hereunder, in
each case, except for (i) filings made or to be made with respect to Agent's
security interest in the Collateral, and (ii) those that have been made,
obtained or given.
(f) There are no conditions precedent to the effectiveness of
this Agreement that have not been satisfied or waived.
(g) Each Grantor has, independently and without reliance upon
the Agent or any Lender and based on such documents and information as it has
deemed appropriate, made its own decision to enter into this Agreement.
Grantor's state of organization, type of organization and organizational
identification number are as set forth on Schedule 4 (g).
SECTION 5. Further Assurances. (a) Each Grantor agrees that
from time to time, at its expense, it will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Agent may reasonably request, in order to
perfect and protect any security interest granted or purported to be granted
20
hereby or to enable the Agent (acting for the benefit of the Lenders) to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, each Grantor will
upon such reasonable request: (i) xxxx conspicuously each item of chattel paper
included in the Receivables and each Related Contract and, at the request of the
Agent, each of its records pertaining to the Collateral with a legend, in form
and substance satisfactory to the Agent, indicating that such document, chattel
paper, Related Contract or Collateral is subject to the security interest
granted hereby; (ii) if any Receivable shall be evidenced by a promissory note
or other instrument or chattel paper, deliver and pledge to the Agent (for the
benefit of the Lenders) hereunder such note or instrument or chattel paper duly
endorsed and accompanied by duly executed instruments of transfer or assignment,
all in form and substance satisfactory to the Agent; and (iii) execute and file
such financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Agent may
reasonably request, in order to perfect and preserve the security interest
granted or purported to be granted hereby.
(b) Each Grantor hereby authorizes the Agent to file one or
more financing or continuation statements, and amendments thereto, relating to
all or any part of the Collateral without its signature where permitted by law.
A photocopy or other reproduction of this Agreement or any financing statement
covering the Collateral or any part thereof shall be sufficient as a financing
statement where permitted by law.
(c) Each Grantor will furnish to the Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Agent may reasonably
request, all in reasonable detail.
(d) Grantor shall promptly (i) notify Agent, in writing, of the existence of any
Collateral consisting of deposit accounts, investment property, Letter-of-Credit
Rights, or Electronic Chattel Paper and shall, upon the reasonable request of
Agent, promptly execute such other documents, and do such other acts or things
deemed appropriate by Agent to deliver to Agent control with respect to such
Collateral; provided, however, that the Grantor is only obligated to take action
pursuant to this Section 5(d)(i) with respect to Letter-of-Credit Rights that
(together with Borrower and any other Guarantor) exceed $500,000.00, in
aggregate, (ii) with respect to Collateral in the possession of a third party,
other than certificated securities and goods covered by a document, an
acknowledgment from the third party that it is holding the Collateral for
benefit of the Agent; and (iii) promptly notify Agent, in writing, upon
incurring or otherwise obtaining a Commercial Tort Claim in excess of One
Million Dollars ($1,000,000.00) after the date hereof against any third party,
and upon the request of Agent, will promptly enter into an amendment to this
Agreement, and do such other acts or things deemed appropriate by Agent to give
Agent a security interest in such Commercial Tort Claim.
SECTION 6. As to Equipment and Inventory. (a) Each Grantor
shall keep its Equipment and Inventory at the locations referred to on Section
4(a) or, upon 30 days' prior written notice to the Agent, at such other places
in the United States of America in jurisdictions where all action required by
Section 5 shall have been taken with respect to its Equipment and Inventory.
SECTION 7. As to Receivables. (a) Each Grantor shall keep its
chief place of business and chief executive office and the office where it keeps
its records concerning the Receivables, and the originals of all chattel paper
21
that evidence Receivables, if any, at the location therefor referred to in
Section 4(a) or, upon 30 days' prior written notice to Agent, at any other
locations in the United States of America in a jurisdiction where all action
required by Section 5 shall have been taken with respect to the Receivables.
Each Grantor will hold and preserve such records and chattel paper and will
permit representatives of the Agent at any time during normal business hours to
inspect and make abstracts from such records and chattel paper. No Grantor shall
change its name, identity or corporate structure to such an extent that any
financing statement filed in connection with this Agreement would become
seriously misleading, unless the Borrower shall have given the Agent at least 30
days prior written notice thereof and prior to effecting any such change, taken
such steps, at Borrower's expense, as Agent may deem necessary or desirable to
continue the perfecting and priority of the liens in favor of the Agent granted
in connection herewith.
(b) Except as otherwise provided in this subsection (b), the Grantor
shall continue to collect, at its own expense, all amounts due or to become due
the Grantor under the Receivables. In connection with such collections, the
Grantor may take (and, at the Agent's direction, shall take) such action as the
Grantor or the Agent may reasonably deem necessary or advisable to enforce
collection of the Receivables; provided, however, that the Agent shall have the
right at any time, upon the occurrence and during the continuance of an Event of
Default or an Unmatured Default and upon written notice to the Grantor of its
intention to do so, to notify the account debtors or obligors under any
Receivables of the assignment of such Receivables to the Agent and to direct
such account debtors or obligors to make payment of all amounts due or to become
due to the Grantor thereunder directly to the Agent and, upon such notification
and at the expense of the Grantor, to enforce collection of any such
Receivables, and to adjust, settle or compromise the amount or payment thereof,
in the same manner and to the same extent as the Grantor might have done. After
receipt by the Grantor of the notice from the Agent referred to in the proviso
to the preceding sentence, (i) all amounts and proceeds (including instruments)
received by the Grantor in respect of the Receivables shall be received in trust
for the benefit of the Agent hereunder, shall be segregated from other funds of
the Grantor and shall be forthwith paid over to the Agent in the same form as so
received (with any necessary endorsement) to be held as cash collateral and
either (A) released to the Grantor so long as no Event of Default shall have
occurred and be continuing or (B) if any Event of Default shall have occurred
and be continuing, applied as provided by Section 12(b), and (ii) the Grantor
shall not adjust, settle or compromise the amount or payment of any Receivable,
release wholly or partly any account debtor or obligor thereof, or allow any
credit or discount thereon, except in the ordinary course of business consistent
with past practice.
SECTION 8. Transfers and Other Liens. No Grantor may (i) sell,
assign (by operation of law or otherwise) or otherwise dispose of, or grant any
option with respect to, any of the Collateral, or (ii) create or permit to exist
any lien, security interest, option or other charge or encumbrance upon or with
respect to any of the Collateral, except for the security interest under this
Agreement and Liens permitted by the Credit Agreement.
SECTION 9. Agent Appointed Attorney-in-Fact. Each Grantor
hereby irrevocably appoints Agent such Grantor's attorney-in-fact, with full
authority in the place and stead of the Grantor and in the name of the Grantor,
the Lenders or otherwise, from time to time in the Agent's discretion, upon the
occurrence and continuance of an Unmatured Default or an Event of Default to
take any action and to execute any instrument which the Agent may deem necessary
or advisable to accomplish the purposes of this Agreement, including, without
limitation:
22
(a) to obtain and adjust insurance required to be paid to the
Agent pursuant to Section 7,
(b) to ask, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in connection with the Collateral,
(c) to receive, indorse, and collect any drafts or other
instruments, documents and chattel paper, in connection therewith, and
(d) to file any claims or take any action or institute any
proceedings which the Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights
of the Agent or the Lenders with respect to any of the Collateral.
SECTION 10. Agent May Perform. If any Grantor fails to perform
any agreement contained herein, the Agent may itself perform, or cause
performance of, such agreement, and the expenses of the Agent or the Lenders
incurred in connection therewith shall be payable by the Grantors upon demand.
SECTION 11. Agent's Duties. The powers conferred on the Agent
hereunder are solely to protect its interest (in its capacity as agent on behalf
of the Lenders) in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the safe
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, Agent shall have no duty as to any Collateral
or as to the taking of any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral. Agent shall be deemed
to have exercised reasonable care in the custody and preservation of any
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which Agent accords its own property.
SECTION 12. Remedies. If any Event of Default shall have
occurred and be continuing:
(a) Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on
default under the Uniform Commercial Code in effect in the State of New
York at that time (the "Code") (whether or not the Code applies to the
affected Collateral), and also may (i) require any of the Grantors to,
and each of the Grantors hereby agrees that it will at its expense and
upon request of Agent forthwith, assemble all or part of the Collateral
as directed by the Agent and make it available to Agent at a place to
be designated by Agent which is reasonably convenient to both parties
and (ii) without notice except as specified below, sell the Collateral
or any part thereof in one or more parcels at public or private sale,
at any of the Agent's or Lender's offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as the Agent
may deem commercially reasonable. Each Grantor agrees that, to the
extent notice of sale shall be required by law, at least ten days'
notice to the applicable Grantor of the time and place of any public
sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Agent shall not be obligated to
make any sale of Collateral regardless of notice of sale having been
given. The Agent may adjourn any public or private sale from time to
23
time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to
which it was so adjourned.
(b) Any cash held by Agent as Collateral and all cash proceeds
received by the Agent in respect of any sale of, collection from, or
other realization upon all or any part of the Collateral may, in the
discretion of the Agent, be held by the Agent as collateral for, and/or
then or at any time thereafter be applied (after payment of any amounts
payable to the Agent or the Lenders pursuant to any indemnity in the
Guaranty) in whole or in part by the Agent against, all or any part of
the Obligations in such order as the Agent shall elect. Any surplus of
such cash or cash proceeds held by the Agent and remaining after
payment in full in cash of all the Obligations shall be paid over to
the Grantors or to whomsoever may be lawfully entitled to receive such
surplus.
SECTION 13. Continuing Security Interest; Assignments under
Credit Agreement. This Agreement shall create a continuing assignment of and
security interest in the Collateral and shall (i) remain in full force and
effect until the payment in full in cash of the Obligations and all other
amounts payable under this Agreement and termination of the Loan Documents (such
date, the "Security Termination Date"), (ii) be binding upon each Grantor, and
such Grantor's successors and assigns and (iii) inure to the benefit of, and be
enforceable by, the Agent and its successors, transferees and assigns. On the
Security Termination Date, the security interest granted hereby shall terminate
and all rights to the Collateral shall revert to the Grantor. Upon any such
termination, the Agent will, at the Grantors' expense, execute and deliver to
each Grantor such documents as it shall reasonably request to evidence such
termination.
SECTION 14. Security Interest Absolute. The obligations of the
Grantor under this Agreement are independent of the Obligations, and a separate
action or actions may be brought and prosecuted against the Grantor to enforce
this Agreement, irrespective of whether any action is brought against any other
Loan Party or whether any other Loan Party is joined in any such action or
actions. All rights of the Agent and security interests hereunder, and all
obligations of the Grantor hereunder, shall be absolute and unconditional,
irrespective of:
(a) any lack of validity or enforceability of any
Loan Document or any other agreement or instrument relating
thereto;
(b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any
consent to any departure from any Loan Document, including,
without limitation, any increase in the Obligations resulting
from the extension of additional credit to any Loan Party or
any of its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection
of any other collateral, or any taking, release or amendment
or waiver of or consent to departure from any guaranty, for
all or any of the Obligations;
(d) any manner of application of collateral, or
proceeds thereof, to all or any of the Obligations, or any
manner of sale or other disposition of any Collateral for all
24
or any of the Obligations or any other assets of any loan
Party or any of its Subsidiaries;
(e) any change, restructuring or termination of the
corporate structure or existence of any loan Party or any of
its Subsidiaries; or
(f) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, any
Loan Party or a third party grantor of a security interest.
SECTION 15. Amendment and Restatement. This Agreement amends and restates those
certain Security Agreements dated January 17, 2001 or thereafter, pursuant to
which Grantor granted a security interest in certain assets to Agent under the
Credit Agreement.
IN WITNESS WHEREOF, the Grantors have caused this Agreement
to be duly executed under seal and delivered by its
officer thereunto duly authorized as of the date first
above written.
25
Schedule 4(a)
LOCATION OF EQUIPMENT AND INVENTORY
OF THE BORROWER
26
Schedule 4(g)
State of Organization Type of Organization Organizational
Identification Number
27
EXHIBIT E
REVOLVING LOAN FACILITY
CLOSING STATEMENT
Closing statement for revolving loan facility in the original principal
amount of $450,000,000.00 (the "Loan") to be made by FORD MOTOR CREDIT COMPANY
("Ford Credit" or "Agent"), GENERAL MOTORS ACCEPTANCE CORPORATION ("GMAC"),
DAIMLERCHRYSLER SERVICES NORTH AMERICA LLC ("Chrysler Financial"), and together
with Ford Credit, Chrysler Financial, GMAC and any and all other lenders under
the Credit Agreement, the "Lender") to XXXXXX AUTOMOTIVE GROUP, Inc., a Delaware
corporation, and Xxxxxx Automotive Group Holdings, Inc., a Delaware corporation
(individually and collectively, "Borrower"), and guaranteed by each of the
following (collectively, "Guarantor"):
AF Motors, L.L.C.
ALM Motors, L.L.C.
ANL, X.X.
Xxxxxx Atlanta AC L.L.C.
Xxxxxx Atlanta AU L.L.C.
Xxxxxx Atlanta Chevrolet L.L.C.
Xxxxxx Atlanta Hon L.L.C.
Xxxxxx Atlanta Infiniti L.L.C.
Xxxxxx Atlanta Jaguar L.L.C.
Xxxxxx Atlanta Lex L.L.C.
Xxxxxx Automotive Arkansas Dealership Holdings L.L.C.
Xxxxxx Automotive Arkansas L.L.C.
Xxxxxx Automotive Atlanta L.L.C.
Xxxxxx Automotive Xxxxxxx, X.X.
Xxxxxx Automotive Central Florida, L.L.C.
Xxxxxx Automotive Deland, L.L.C.
Xxxxxx Automotive Fresno, L.L.C.
Xxxxxx Automotive Financial Services, Inc.
Xxxxxx Automotive Group L.L.C.
Xxxxxx Automotive Jacksonville GP L.L.C.
Xxxxxx Automotive Jacksonville, X.X.
Xxxxxx Automotive Management L.L.C.
Xxxxxx Automotive Mississippi L.L.C.
Xxxxxx Automotive North Carolina Dealership Holdings L.L.C.
Xxxxxx Automotive North Carolina L.L.C.
Xxxxxx Automotive North Carolina Management L.L.C.
Xxxxxx Automotive North Carolina Real Estate Holdings L.L.C.
Xxxxxx Automotive Oregon L.L.C.
Xxxxxx Automotive Oregon Management L.L.C.
Xxxxxx Automotive San Diego L.L.C.
Xxxxxx Automotive St. Louis, L.L.C.
Xxxxxx Automotive Tampa GP L.L.C.
Xxxxxx Automotive Tampa, L.P.
28
Xxxxxx Automotive Texas Holdings L.L.C.
Xxxxxx Automotive Texas L.L.C.
Xxxxxx Automotive Texas Real Estate Holdings, L.P (formerly XxXxxxx
Communications, L.P.)
Xxxxxx Automotive Used Car Centers L.L.C.
Xxxxxx Automotive Used Car Centers Texas GP L.L.C.
Xxxxxx Automotive Used Car Centers Texas X.X.
Xxxxxx Deland Imports 2, L.L.C.
Asbury-Everest Holdings L.L.C.
Xxxxxx-Fresno Imports L.L.C.
Xxxxxx Internet Holdings L.L.C.
Xxxxxx Jax Holdings, X.X.
Xxxxxx Jax Management L.L.C.
Xxxxxx XX Xxxx-Xxxxxxx L.L.C.
Xxxxxx MS Metro L.L.C.
Xxxxxx XX Xxxxxx L.L.C.
Xxxxxx St. Louis Cadillac L.L.C.
Xxxxxx St. Xxxxx Gen L.L.C.
Xxxxxx St. Xxxxx Xxx L.L.C.
Xxxxxx St. Louis LR L.L.C.
Xxxxxx Tampa Management L.L.C.
Xxxxxx Texas Management L.L.C.
Xxxxxx-Xxxxxx Imports, L.L.C.
Atlanta Real Estate Holdings L.L.C.
Avenues Motors, Ltd.
Bayway Financial Services, L.P.
C&O Properties, Ltd.
Camco Finance II L.L.C.
Camco Finance L.L.C.
CFP Motors, Ltd.
CH Motors, Ltd.
CHO Partnership, Ltd.
CK Chevrolet L.L.C.
CK Motors L.L.C.
CN Motors, Ltd.
Xxxxxx Automotive Corp.
Xxxxxx Cars L.L.C.
Xxxxxx Chevrolet L.L.C.
Xxxxxx Management, X.X.
Xxxxxx Orlando Properties L.L.C.
CP-GMC Motors, Ltd.
Crown Acura/Nissan, LLC
Crown Battleground L.L.C.
Crown CHH L.L.C.
Crown CHO L.L.C.
Crown CHV L.L.C.
Crown Dodge, LLC
Crown FDO L.L.C.
Crown FFO Holdings L.L.C.
Crown FFO L.L.C.
Crown Fordham L.L.C.
00
Xxxxx XXX X.X.X.
Xxxxx XXX X.X.X.
Xxxxx XXX L.L.C.
Crown GCA L.L.C.
Crown GCH L.L.C.
Crown GDO L.L.C.
Crown GHO L.L.C.
Crown GKI L.L.C.
Crown GMI L.L.C.
Crown GNI L.L.C.
Crown GPG,L.L.C.
Crown GVO L.L.C.
Crown Honda, LLC
Crown Honda-Volvo, LLC
Crown Mitsubishi, LLC
Crown Motorcar Company L.L.C.
Crown Raleigh L.L.C.
Crown RIA L.L.C.
Crown RIB L.L.C.
Crown RIS L.L.C.
Crown Royal Pontiac, LLC
Crown RPG L.L.C.
CSA Imports L.L.C.
Xxxxxxx Ford Co.
Dealer Profit Systems L.L.C.
Escude-D L.L.C.
Escude-M L.L.C.
Escude-MO L.L.C.
Escude-NN L.L.C.
Escude-NS L.L.C.
Escude-T L.L.C.
HFP Motors L.L.C.
Hope CPD L.L.C.
Hope FLM L.L.C.
KP Motors L.L.C.
Internet Holdings L.L.C.
XxXxxxx Auction, X.X.
XxXxxxx Austin-Acra, X.X.
XxXxxxx Frisco-Hon, X.X.
XxXxxxx Grande, X.X.
XxXxxxx Houston-Hon, X.X.
XxXxxxx Houston-Kia, X.X.
XxXxxxx Xxxxxxx-Xxxx, X.X.
XxXxxxx Xxxxxxx-Xxxx, X.X.
XxXxxxx Xxxxxx-Hon, L.P.
XxXxxxx Xxxxxx-PB&G, X.X.
XxXxxxx Xxxxxx-Xxx, X.X.
XxXxxxx Outfitters, X.X.
XxXxxxx Plano-Acra, L.P.
NP FLM L.L.C.
30
NP MZD L.L.C.
NP VKW L.L.C.
Plano Lincoln-Mercury, Inc.
Precision Computer Services, Inc.
Precision Enterprises Tampa, Inc.
Precision Infiniti, Inc.
Precision Motorcars, Inc.
Precision Nissan, Inc.
Premier LM L.L.C.
Premier NSN L.L.C.
Premier Pon L.L.C.
Prestige Bay L.L.C.
Prestige TOY L.L.C.
RER Properties, LLC
RWIJ Properties, LLC
Spectrum Insurance Services L.L.C.
Tampa Hund, L.P.
Tampa Kia, L.P.
Tampa LM, L.P.
Tampa Mit, L.P.
Tampa Suzu, X.X.
Xxxxxxxx Auto Credit Northwest, Inc.
Xxxxxxxx Dam L.L.C.
Xxxxxxxx Frd L.L.C.
Xxxxxxxx Hon L.L.C.
Xxxxxxxx Xxxx L.L.C.
Xxxxxxxx Maz L.L.C.
Xxxxxxxx Xxxx L.L.C.
Xxxxxxxx on Canyon, L.L.C.
Xxxxxxxx Outfitters L.L.C.
Xxxxxxxx Pontiac-GMC L.L.C.
Xxxxxxxx Sub L.L.C.
Xxxxxxxx Suzu L.L.C.
Xxxxxxxx XX L.L.C.
Xxxxxxxx Xxx L.L.C.
TXK CPD, L.P.
TXK FRD, L.P.
TXK L.L.C.
WMZ Xxxxxxx Motors, L.P.
WMZ Motors, L.P.
WTY Motors, L.P.
SECTION I - CONDITIONS PRECEDENT TO CLOSING
The items set forth below must be delivered to Agent in form and
substance acceptable to Agent prior to closing:BORROWER'S RESPONSIBILITIES
A. Updated Schedule 1.1.1 to Credit Agreement (Outstanding Indebtedness)
31
B. Updated Schedule 1.1.2 to Credit Agreement (Permitted Existing Investments)
C. Updated Schedule 1.1.3 to Credit Agreement (Permitted Existing Liens)
D. Updated Schedule 1.1.5 to Credit Agreement (Dealership Guarantors)
E. Updated Schedule 1.1.6 to Credit Agreement (Existing Xxxxxx Obligations)
F. Updated Schedule 1.1.7 to Credit Agreement (Pending Acquisitions)
G. Updated Schedule 1.1.8 to Credit Agreement (Subsidiaries Not Wholly Owned)
H. Updated Schedule 3.1 to Credit Agreement (Disclosed Litigation)
I. Updated Schedule 4.8 to Credit Agreement (Subsidiaries)
J. Updated Schedule 4.9 to Credit Agreement (ERISA)
K. Updated Schedule 5.3(F) to Credit Agreement (Entities with Minority Holders)
L. Updated Exhibit F (Officer's Certificate)
M. Schedule 1(j) for each Security Agreement (Borrower and each Guarantor)
N. Schedule 4(a) for each Security Agreement (Borrower and each Guarantor)
O. Schedule 4(g) for each Security Agreement (Borrower and each Guarantor)
P. Signature Blocks for Amended and Restated Security Agreement
P. Signature Blocks for Reaffirmation of Guaranty
Q. Exhibit A for the Borrower Pledge
R. Exhibit A for the Xxxxxx LLC Pledge
S. Exhibit A for the Xxxxxx Everest 1Pledge)
T. Signature Blocks for Acknowledgement and Consent (Borrower Pledge)
U. Signature Blocks for Acknowledgement and Consent (Xxxxxx LLC Pledge)
V. Signature Blocks for Acknowledgement and Consent (Xxxxxx Everest Pledge)
W. Perfection Certificate and binders for Xxxxxx Everest2
X. Real Estate Documents (See section 5.4(J))
LENDER'S RESPONSIBILITIES
A. Settlement Statement (between Lenders)
B. UCC's (Xxxxxx Everest)
SECTION II - DOCUMENTS TO BE EXECUTED
1. (Second) Amended and Restated Promissory Notes (Ford Credit, Chrysler,
GMAC)
2. First Amended and Restated Credit Agreement
3. Reaffirmation of Guaranty (all existing Guarantors)
4. Guaranty (Xxxxxx LLC)
5. Guaranty Internet Holdings)
32
6. Amended and Restated Security Agreement (Borrower)
7. Amended and Restated Security Agreement (Xxxxxx LLC)
8. Security Agreement (Internet Holdings)
9. Amended and Restated Cross-Default Agreement (Borrower)
10. Amended and Restated Cross-Default Agreement (Xxxxxx LLC)
11. Cross-Default Agreement (Internet Holdings)
12. Amended and Restated Pledge Agreement (Borrower) including Stock Powers
executed in blank and Acknowledgement and Consent
13. Amended and Restated Pledge Agreement (Xxxxxx LLC) including Stock
Powers executed in blank and Acknowledgement and Consent
14. Pledge Agreement (Xxxxxx Everest including Internet Holdings) including
Stock Powers executed in blank and Acknowledgement and Consent
15. Amended and Restated Security Agreement (existing Guarantors, including
Xxxxxx Everest and San Diego)
16. Officer's Certificate
17. Second Amended and Restated Intercreditor Agreement
18. Wholesale Documents for Internet Holdings (Guaranty and Security
Agreement)
The conditions set forth in Section I hereof and the documents
set forth in Section II hereof are subject to change and may be added
to or otherwise modified by Ford Credit in its sole and absolute
discretion as the transaction progresses.
33
EXHIBIT F
[Form of Officer's Certificate]
OFFICER'S CERTIFICATE
I, the undersigned, hereby certify that I am the ____________________
of XXXXXX AUTOMOTIVE GROUP, INC. and XXXXXX AUTOMOTIVE GROUP HOLDINGS, INC.,
each a corporation duly organized and existing under the laws of the State of
Delaware (the "Borrower"). Capitalized terms used herein and not otherwise
defined herein are as defined in that certain First Amended and Restated Credit
Agreement dated June 6, 2003, between the Borrower and FORD MOTOR CREDIT COMPANY
(the "Agent") and each of the lenders as more specifically set forth therein (as
amended, restated, supplemented or modified from time to time, the "Credit
Agreement").
I further certify that, pursuant to Section 3.2 of the Credit
Agreement, as of the date hereof:
1. The representations and warranties of the Borrower contained in
Section 4 of the Credit Agreement are true and correct in all material respects
on and as of the date hereof with the same effect as if made on the date hereof,
except for representations and warranties expressly stated to relate to a
specific earlier date, in which case such representations and warranties are
true and correct in all material respects as of such earlier date;
2. I have reviewed the terms of the Credit Agreement and I have made,
or have caused to be made under my supervision, a detailed review of the
transactions and conditions of the Borrower and its Subsidiaries during the
accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
and Event of Default or Unmatured Default during or at the end of the accounting
period covered by the attached financial statements or as of the date of this
Certificate, except as set forth below:
(Describe nature and status of Event of Default) _______________________________
________________________________________________________________________________
4. The current outstanding dollar amount of all Off Balance Sheet
Liabilities of the Xxxxxx Group is $_________________________.
IN WITNESS WHEREOF, I hereby subscribe my name on behalf of the
Borrower on this _____ day of _____________, _________.
Xxxxxx Automotive Group, Inc. and
Xxxxxx Automotive Group Holdings, Inc.
By ________________________
Name _______________________
Title ________________________
34
EXHIBIT G
[Form of Waiver, Guaranty and Disbursement Agreement]
WAIVER, GUARANTY AND DISBURSEMENT AGREEMENT
THIS WAIVER, GUARANTY AND DISBURSEMENT AGREEMENT (the "Agreement"),
dated as of ______________, is made by and among _______________________________
(the "Subsidiary"), ____________________________ (the "Agent") for the lenders
(the "Lenders") under the Credit Agreement defined below (the "Agent"), and
______________________, as borrower ("Borrower").
A. The Borrower, Agent and the Lender have entered into that certain
First Amended and Restated Credit Agreement dated as of
__________________________, (as the same may have been or may be amended,
restated or otherwise modified from time to time, the "Credit Agreement")
pursuant to which the Lender has agreed to finance the acquisition by the
Borrower of automobile dealerships. Unless defined herein to the contrary, all
of the defined terms in the Credit Agreement are incorporated herein by
reference.
B. The Borrower has entered into a contract under which the Subsidiary
will acquire all or substantially all of the tangible and intangible assets
(collectively, the "Acquired Assets") of an existing automobile dealership which
will then be used by the Subsidiary to operate as an Xxxxxx Dealership3. This
acquisition has been approved, and will be financed, by the Lender. The Borrower
is required by the Credit Agreement to pledge its Capital Stock in the
Subsidiary to the Lender. The applicable manufacturer, which must consent to the
acquisition by the Borrower or the Subsidiary of the Acquired Assets, has
generally consented to the acquisition but has refused to consent to the pledge
by the Borrower of the Borrower's Capital Stock in the Subsidiary. The Borrower
has requested that the Lender waive its requirement of the pledge, and the
Lender is willing to do so on the terms set forth in this Agreement.
Accordingly, the Subsidiary, the Lender and the Borrower, in
consideration of the foregoing and other good and valuable consideration, hereby
agree as follows:
1. Direct Disbursement; Status as Advance. An Advance in the amount of
$_____________________ (the "Direct Disbursement") has been requested to finance
the acquisition of the Acquired Assets. The Direct Disbursement shall be made
directly to, or as directed by, the Subsidiary, and shall be used by the
Subsidiary to finance the acquisition of the Acquired Assets. The Borrower
acknowledges and agrees that the Direct Disbursement is and shall constitute an
Advance for all purposes under the Credit Agreement.
2. Waiver of Requirement of Pledge of Capital Stock. The Lender waives
the requirement that the Borrower pledge its Capital Stock in the Subsidiary as
collateral for the Borrower's obligations to the Lender. In consideration of
this waiver, the Borrower shall not pledge the Capital Stock of the Subsidiary
to any person other than the Lender for any purpose. Should the applicable
manufacturer subsequently allow the pledging by the Borrower to the Lender of
the Borrower's Capital Stock in the Subsidiary, the Borrower shall promptly upon
the request of the Lender execute and deliver a Borrower Pledge of the
Borrower's Capital Stock in the Subsidiary.
35
3. Conditions Precedent. Unless otherwise waived by the Lender, all of
the conditions precedent to an Advance under the Credit Agreement including,
without limitation, the execution and delivery by the Subsidiary of a Dealership
Guaranty and a Dealership Security Agreement, shall be delivered to the Lender.
4. Acknowledgment of Benefit; Guaranty. The making of the Direct
Disbursement will allow the Subsidiary to finance the acquisition of the
Acquired Assets, which acquisition clearly constitutes a direct, pecuniary
benefit to the Subsidiary. Without limiting the Subsidiary's obligations under
the Dealership Guaranty executed or to be executed by the Subsidiary, the
Subsidiary hereby (i) guarantees to the Lender prompt payment of the Direct
Disbursement in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration or otherwise) strictly in accordance with the terms
of the Credit Agreement with respect to the Revolving Credit Obligations and
(ii) agrees that if any of the Direct Disbursement is not paid in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration or
otherwise), the Subsidiary will promptly pay and perform the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of the Revolving Credit Obligations, the Direct Disbursement
will be promptly paid in full when due (whether at extended maturity, as a
mandatory prepayment, by acceleration or otherwise) in accordance with the terms
of such extension or renewal.
5. Terms Not Changed; General. Unless expressly modified or waived by
the terms of this Agreement, all of the terms and conditions of the Credit
Agreement and the other Loan Documents shall remain in full force and effect.
This Agreement may be executed in two or more counterparts, each of which shall
constitute an original but all of which when taken together shall constitute one
contract.
IN WITNESS WHEREOF, the Subsidiary, the Borrower and the Agent have
each caused this Waiver, Guaranty and Disbursement Agreement to be duly executed
by its authorized officers as of the day and year first above written.
36
EXHIBIT H
[Form of Pledged Account Agreement]
PLEDGED ACCOUNT AGREEMENT
THIS PLEDGED ACCOUNT AGREEMENT (this "Agreement") is made and entered
into as of this ____ day of _____________________, 200_, by and among [NAME OF
BANK], a national banking association (the "Bank"), [NAME OF XXXXXX ENTITY], (a)
(an) ____________________ corporation/limited liability company/limited
partnership (the "Company"), and FORD MOTOR CREDIT COMPANY, a Delaware
corporation, as agent (the "Agent") for the lenders (collectively, the
"Lenders") from time to time party to the Credit Agreement described below.
Pursuant to that certain First Amended and Restated Credit Agreement
dated as of June 6, 2003 among Xxxxxx Automotive Group Inc., a Delaware
corporation, and Xxxxxx Automotive Group Holdings, Inc., a Delaware corporation
(the entities which directly or indirectly own and control the Company;
individually and collectively, the "Borrower"), the Lenders and the Agent (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), the Lenders have agreed to make loans and extend other financial
accommodations to the Borrower. The Company guarantees the obligations of
Borrower under the Credit Agreement pursuant to the terms of a Guaranty (as
defined in the Credit Agreement) from the Company to the Agent, for the benefit
of the Lenders.
The Company has established deposit accounts with the Bank as more
specifically identified on Schedule I attached hereto (collectively the "Pledged
Accounts" and each, a "Pledged Account").
The parties hereto desire to enter into this Agreement in order to set
forth their relative rights and duties with respect to the Pledged Accounts and
all funds on deposit therein from time to time.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
1. Effectiveness. This Agreement shall take effect immediately upon its
execution by all parties hereto and shall supersede any blocked account or
similar agreement in effect with respect to any Pledged Account.
2. Security Interest; Agency. As collateral security for all
obligations of the Company to the Agent and the Lenders now or hereafter
existing under the Company's Guaranty, whether for principal, interest, fees,
expenses or otherwise, the Company hereby grants to the Agent, for its own
benefit and the ratable benefit of the Lenders, a present and continuing
security interest in (a) the Pledged Accounts, (b) all contract rights, claims
and privileges in respect of the Pledged Accounts, and (c) all cash, checks,
money orders, instruments, all investment property and other items of value of
the Company now or hereafter paid, deposited, credited, held (whether for
collection, provisionally or otherwise) or otherwise in the possession or under
the control of, or in transit to, the Bank or any agent, bailee or custodian
37
thereof (collectively, "Receipts"), and all proceeds of the foregoing, and the
Bank acknowledges that this Agreement constitutes notice of the Agent's security
interest in such collateral and does hereby consent thereto. The Agent hereby
appoints the Bank as the Agent's bailee and pledgee-in-possession for the
Pledged Accounts and all Receipts, and the Bank hereby accepts such appointment
and agrees to be bound by the terms of this Agreement. The Company hereby agrees
to such appointment and further agrees that the Bank, on behalf of the Agent,
shall be entitled to exercise, upon the written instructions of the Agent
(without any further consent from the Company), any and all rights which the
Agent may have under the Guaranty, the Credit Agreement, the other Loan
Documents described therein or under applicable law with respect to the Pledged
Accounts, all Receipts and all other collateral described in this paragraph 2;
provided, that the Agent and the Company acknowledge that the Bank shall not be
obligated to exercise any such rights which the Agent may have except as
specifically required under this Agreement. The Bank agrees to comply with
instructions originated by the Agent directing disposition of the funds in the
Pledged Accounts without further consent by the Company.
3. Control of Pledged Accounts. Each Pledged Account shall be under the
sole dominion and control of the Agent and shall be maintained by the Bank in
the name of [NAME OF XXXXXX ENTITY]; provided, however, that unless and until
notice in writing to the contrary is provided by the Agent, in its sole
discretion, to the Bank, the Company shall have the right from time to time to
write checks against amounts from the Pledged Accounts and to make transfers and
withdrawals of funds from the Pledged Accounts. If so directed in such notice
(without the need of any further consent from the Company), all checks received
by the Bank on or after the second Banking Day (a day on which the Bank is open
to conduct its regular banking business, other than a Saturday, Sunday or public
holiday) after the Banking Day on which the Bank receives such notice will be
returned unpaid to the presenter marked "REFER TO MAKER". The Bank will comply
with any written instructions it receives from the Agent (without any further
consent from the Company) to transfer immediately all collected funds then on
deposit in any or all Pledged Accounts and to close such Pledged Account(s).
4. Statements and Other Information. Upon the Agent's request, the Bank
shall provide the Agent with copies of the regular monthly bank statements
provided to the Company and such other information relating to each Pledged
Account as shall reasonably be requested by the Agent. Bank shall also deliver a
copy of all notices and statements required to be sent to Company pursuant to
any agreement governing or related to each Pledged Account to the Agent at such
times as provided therein.
5. Fees. The Company agrees to pay on demand all usual and customary
service charges, transfer fees and account maintenance fees (collectively,
"Fees") of the Bank in connection with the Pledged Accounts. In the event the
Company fails to timely make a payment to the Bank of any Fees, the Bank may
thereafter exercise its right of set-off against the Pledged Accounts for such
amounts. The Agent shall not have any responsibility or liability for the
payment of any Fees.
38
6. Set-off; Subordination. The Bank hereby agrees that it will not
exercise or claim any right of set-off or banker's lien against any Pledged
Account or any Receipts on deposit therein, and Bank hereby further waives any
such right or lien which it may have against any Receipts deposited in the
Pledged Accounts, except (a) for debits to cover the full amount of any check or
other item credited to a Pledged Account and then returned unpaid for any
reason, and (b) to the extent expressly set forth in paragraph 5 above. The Bank
hereby subordinates any security interest it now has or may hereafter acquire in
the Pledged Accounts and/or the Receipts and agrees that the security interest
granted to the Agent (for the benefit of the Lenders) pursuant to paragraph 2 of
this Agreement shall at all times be prior to any security interest of the Bank
in the Pledged Accounts and/or the Receipts. The priorities set forth herein
shall apply notwithstanding the time or order of attachment or perfection of any
security interest or the rules of priority established under the Uniform
Commercial Code as adopted in New York or other applicable law.
7. Exculpation of Bank; Indemnification by Company. The Company and the
Agent agree that the Bank shall have no liability to either of them for any loss
or damage that either or both may claim to have suffered or incurred, either
directly or indirectly, by reason of this Agreement or any transaction or
service contemplated by the provisions hereof, unless occasioned by the gross
negligence or willful misconduct of the Bank. In no event shall the Bank be
liable for losses or delays resulting from computer malfunction, interruption of
communication facilities, labor difficulties or other causes beyond the Bank's
reasonable control or for indirect, special, punitive or consequential damages.
The Company agrees to indemnify the Bank and hold it harmless from and against
any and all claims, other than those ultimately determined to be founded on
gross negligence or willful misconduct of the Bank, and from and against any
damages, penalties, judgments, liabilities, losses or expenses (including
reasonable attorney's fees and disbursements) incurred as a result of the
assertion of any claim, by any person or entity, arising out of, or otherwise
related to, any transaction conducted or service provided by the Bank through
the use of any account at the Bank pursuant to the procedures provided for or
contemplated by this Agreement.
8. Termination. This Agreement may be terminated by the Company only
upon delivery to the Bank of a written notification thereof jointly executed by
the Company and the Agent. This Agreement may be terminated by the Agent at any
time, with or without cause, upon its delivery of written notice thereof to each
of the Company and the Bank. This Agreement may be terminated by the Bank at any
time on not less than 60 days prior written notice delivered to each of the
Company and the Agent. Upon delivery or receipt of such notice of termination to
or by the Bank, the Bank will (without any further consent from the Company):
(a) immediately transmit to such account as the Agent may direct (i) all
collected funds, if any, then on deposit in, or otherwise to the credit of, each
Pledged Account, and (ii) upon receipt, all funds received after such notice for
deposit in, or otherwise to the credit of, each Pledged Account; and (b) deliver
directly to the Agent all Receipts consisting of checks, money orders, drafts
and other instruments or items of value, whether then in the possession of the
Bank or received by the Bank after such notice, without depositing such Receipts
in any Pledged Account or any other account. The provisions of paragraphs 2, 3
and 6 shall survive termination of this Agreement unless and until specifically
released by the Agent in writing. All rights of Bank under paragraphs 5 and 7
shall survive any termination of this Agreement.
39
9. Irrevocable Agreements. The Company acknowledges that the agreements
made by it and the authorizations granted by it in paragraphs 2 and 3 hereof are
irrevocable and that the authorizations granted in paragraphs 2 and 3 hereof are
powers coupled with an interest and may be exercised by Agent with no need for
any authorization by the Company beyond the authorizations as set forth herein.
10. Notices. All notices, requests or other communications given to the
Company, Agent or Bank shall be given in writing (including by facsimile) at the
address specified below:
Agent:
FORD MOTOR CREDIT COMPANY
Xxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Director, Major Accounts
Telephone: (____) _____-________
Facsimile: (____) _____-________
Bank:
_________________________________
_________________________________
Attention: _____________________
Telephone: (____) _____-________
Facsimile: (____) ______-_______
Company:
Xxxxxx Automotive Group, Inc.
C/o Asbury Automotive Group L.L.C.
0 Xxxxxxxx Xxxxxx - Xxxxx 000
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx, President & CEO
Telephone: (000) 000-0000
Facsimile: (____) _____-_________
Any party may change its address for notices hereunder by notice to each other
party hereunder given in accordance with this paragraph 10. Each notice, request
or other communication shall be effective (a) if given by facsimile, when such
facsimile is transmitted to the facsimile number specified in this paragraph 10
and confirmation of receipt is made by the appropriate party, (b) if given by
overnight courier, 24 hours after such communication is deposited with the
overnight courier for delivery, addressed as aforesaid, or (c) if given by any
other means, when delivered at the address specified in this paragraph 10.
40
11. Miscellaneous.
(a) This Agreement may be amended only by a written instrument
executed by the Agent, the Bank and the Company acting by their respective duly
authorized representatives.
(b) This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and assigns,
but neither the Company nor the Bank shall be entitled to assign or delegate any
of its rights or duties hereunder without first obtaining the express prior
written consent of the Agent.
(c) This Agreement may be executed in any number of several
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(d) THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK (WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW RULES).
(e) Severability. Any provision in this Agreement that is held
to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to
that jurisdiction, be inoperative, unenforceable, or invalid without affecting
the remaining provisions in that jurisdiction or the operation, enforceability,
or validity of that provision in any other jurisdiction, and to this end, the
provisions of this Agreement are declared to be severable.
IN WITNESS WHEREOF, each of the parties has executed and
delivered this Agreement as of the day and year first above set forth.
41
Schedule 1.1.1
See attached excel spread sheet
1
Schedule 1.1.2
Permitted Existing Investments
NONE
2
Schedule 1.1.3
[Permitted Existing Liens]
3
Schedule 1.1.4
[Lender's Commitments]
"Commitment"
Ford Motor Credit Company $192,000,000.00
DaimlerChrysler Services North America LLC $192,000,000.00
General Motors Acceptance Corporation $66,000,000.00
4
Schedule 1.1.5
Dealership Guarantors
Arkansas Platform
Escude-M L.L.C.
Escude-NN L.L.C.
Escude-NS L.L.C.
Hope FLM L.L.C.
NP MZD L.L.C.
Premier Pon L.L.C.
Prestige TOY L.L.C.
TXK FRD, X.X.
Xxxxxx XX Xxxx-Xxxxxxx L.L.C.
Xxxxxx MS Metro L.L.C.
Total Dealership Guarantors in Arkansas 10
5
Schedule 1.1.5
Dealership Guarantors
Atlanta Platform
Xxxxxx Atlanta AC L.L.C.
Xxxxxx Atlanta Chevrolet L.L.C.
Xxxxxx Atlanta Hon L.L.C.
Xxxxxx Atlanta Jaguar L.L.C.
Xxxxxx Atlanta Lex L.L.C.
Xxxxxx Automotive Atlanta L.L.C.
Xxxxxx Atlanta AU L.L.C.
Xxxxxx Atlanta Infiniti L.L.C.
Total Dealership Guarantors in Atlanta 8
6
Schedule 1.1.5
Dealership Guarantors
Jacksonville Platform
AF Motors, L.L.C.
ALM Motors, L.L.C.
Xxxxxx-Xxxxxx Imports, L.L.C.
Avenues Motors, Ltd.
CFP Motors, Ltd.
CH Motors, Ltd.
CHO Partnership, Ltd.
CN Motors, Ltd.
Xxxxxx Cars L.L.C.
Xxxxxx Chevrolet L.L.C.
CK Chevrolet LLC
CK Motors LLC
CP-GMC Motors, Ltd.
CSA Imports L.L.C.
KP Motors L.L.C.
HFP Motors L.L.C.
Total Dealership Guarantors in Jacksonville 16
7
Schedule 1.1.5
Dealership Guarantors
Mississippi
Xxxxxx XX Xxxxxx L.L.C.
Escude-T L.L.C.
Total Dealership Guarantors in Mississippi 2
8
Schedule 1.1.5
Dealership Guarantors
North Carolina Platform
Crown CHH L.L.C.
Crown CHV L.L.C.
Crown Dodge, LLC
Crown FFO L.L.C.
Crown GAC L.L.C.
Crown GAU L.L.C.
Crown GBM L.L.C.
Crown GDO L.L.C.
Crown GHO L.L.C.
Crown GKI L.L.C.
Crown GMI L.L.C.
Crown GNI L.L.C.
Crown GPG L.L.C.
Crown GVO L.L.C.
Crown RIA L.L.C.
Crown RIB L.L.C.
Crown Motorcar Company L.L.C.
Crown FDO L.L.C.
Crown GCH L.L.C.
Crown GCA L.L.C.
Crown CHO L.L.C.
Total Dealership Guarantors in North Carolina 21
9
Schedule 1.1.5
Dealership Guarantors
Oregon Platform
*Xxxxxxx Ford Co.
Xxxxxxxx Dam L.L.C.
Xxxxxxxx Frd L.L.C.
Xxxxxxxx Hon L.L.C.
Xxxxxxxx Xxxx L.L.C.
Xxxxxxxx Maz L.L.C.
Xxxxxxxx Xxxx L.L.C.
Xxxxxxxx on Canyon, L.L.C.
Xxxxxxxx XX L.L.C.
Xxxxxxxx Xxx L.L.C.
Xxxxxxxx Pontiac-GMC L.L.C.
Total Dealership Guarantors in Oregon 11
*This entity is owned 100% by Precision Enterprises Tampa, Inc. However,
operationally it is still part of the Oregon Platform.
10
Schedule 1.1.5
Dealership Guarantors
St. Louis Platform
Xxxxxx Automotive St. Louis, L.L.C.
Xxxxxx St. Xxxxx Cadillac L.L.C.
Xxxxxx St. Xxxxx Xxx L.L.C.
Xxxxxx St. Louis LR L.L.C.
Total Dealership Guarantors in St. Louis 4
11
Schedule 1.1.5
Dealership Guarantors
Tampa Platform
Xxxxxx Automotive Xxxxxxx, X.X.
Xxxxxx Automotive Tampa, L.P.
Precision Infiniti, Inc.
Precision Motorcars, Inc.
Precision Nissan, Inc.
Tampa Hund, L.P.
Tampa Kia, L.P.
Tampa LM, L.P.
Tampa Mit, L.P.
Tampa Suzu, L.P.
WMZ Xxxxxxx Motors, L.P.
WMZ Motors, L.P.
WTY Motors, L.P.
Total Dealership Guarantors in Tampa 13
12
Schedule 1.1.5
Dealership Guarantors
Texas Platform
XxXxxxx Xxxxxx-Acra, X.X.
XxXxxxx Houston-Hon, X.X.
XxXxxxx Houston-Kia, X.X.
XxXxxxx Xxxxxxx-Xxxx, X.X.
XxXxxxx Xxxxxx-Hon, L.P.
XxXxxxx Xxxxxx-PB&G, X.X.
XxXxxxx Xxxxxx-Xxx, X.X.
XxXxxxx Plano-Acra, L.P.
*Plano Lincoln-Mercury, Inc.
XxXxxxx Frisco-Hon, L.P.
Total Dealership Guarantors in Texas 10
*This entity is owned 100% by Precision Enterprises Tampa, Inc. However,
operationally it is still part of the Texas Platform.
13
Schedule 1.1.5
Dealership Guarantors
Fresno Platform
Xxxxxx Fresno Imports L.L.C.
Total Dealership Guarantors in Fresno 1
Total Dealership Guarantors 96
14
Schedule 1.1.6
"Existing Xxxxxx Obligations" means, collectively, all outstanding amounts of
principal and accrued interest, plus other amounts due and owing on the
Effective Date under each of the following obligations:
None
15
Schedule 1.1.7
Pending Acquisitions
Expected Expected
Store Name Platform Closing Date Purchase Price
-------------------------- ----------- -------------- -------------------
Xxx Xxxxx Enterprises, San Diego February 2003 $88,000,000
Inc.
-------------------------- ----------- -------------- -------------------
Xxxxx Imports of Marietta,
Inc. and Xxxxx Motors Atlanta August 2003 $29,000,000
Corporation
-------------------------- ----------- -------------- -------------------
Xxxxx Xxxx Management Co.
Inc. d/b/a Yazoo Motor Mississippi August 2003 8,500,000.000
Company
-------------------------- ----------- -------------- -------------------
16
Schedule 1.1.8
Subsidiaries Not Wholly Owned
St. Louis Platform
Xxxxxx St. Xxxxx XX L.L.C.
Total Subsidiaries in Platform 1
Total Subsidiaries no wholly owned: 1
17
Schedule 3.1
Disclosed Litigation
Xxxxxxx Xxx Xxxxxxxx, as Executrix of the Estate of Xxxxx X. Xxxxxxxx x. Xxxxxx
Automotive Management, L.L.C. and Xxxxxx Automotive Group, Inc., an arbitration
proceeding pending under the auspices of the American Arbitration Association in
New York, NY, as No 13Y 160 007852, commenced in March 2002.
18
Schedule 4.8
Subsidiaries
19
Schedule 4.9
ERISA: employee welfare benefit plans
NONE
20
Schedule 5.3(F)
Entities with a Minority Holder of Equity Interests
St. Louis Platform
Xxxxxx St. Xxxxx XX L.L.C.
Total Subsidiaries in Platform 1
21
SCHEDULE 9.3
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the First Amended and Restated Credit Agreement dated
as of __________ , 2003 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"; the terms defined
therein, unless otherwise defined herein, being used herein as therein defined)
among ____________________, a _______________ corporation (the "Borrower"),
the Lender Parties party thereto, _______________, as Administrative Agent for
the Lender Parties.
Each "Assignor" referred to on Schedule 1 hereto (each, an "Assignor")
and each "Assignee" referred to on Schedule 1 hereto (each, an "Assignee")
agrees severally with respect to all information relating to it and its
assignment hereunder and on Schedule 1 hereto as follows:
1. Such Assignor hereby sells and assigns, without recourse except as
to the representations and warranties made by it herein, to such Assignee, and
such Assignee hereby purchases and assumes from such Assignor, an interest in
and to such Assignor's rights and obligations under the Credit Agreement as of
the date hereof equal to the percentage interest specified on Schedule 1 hereto
of all outstanding rights and obligations under the Credit Agreement [Facility
or Facilities specified on Schedule 1 hereto]. After giving effort to such sale
and assignment, such Assignee's Commitments and the amount of the Advances owing
to such Assignee will be as set forth on Schedule 1 hereto.
2. Such Assignor (i) represents and warrants that its name set forth on
Schedule 1 hereto is its legal name, that it is the legal and beneficial owner
of the interest or interests being assigned by it hereunder and that such
interest or interests are free and clear of any adverse claim; (ii) make no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any lien or security
interest created or purported to be created under or in connection with any Loan
Document or any other instrument or document furnished pursuant thereto; (iii)
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of any Loan Party or the performance or observance by
any Loan Party of any of its obligations under any Loan Document or any other
instrument or document furnished pursuant thereto; and (iv) attaches the Note or
Notes held by such Assignor and requests that the Administrative Agent exchange
such Note or Notes for a new Note or Notes payable to the order of such Assignee
in an amount equal to the Commitments assumed by such Assignee pursuant hereto
or new Notes payable to the order of such Assignee in an amount equal to the
Commitments assumed by such Assignee pursuant hereto and such Assignor in an
amount equal to the Commitments retained by such Assignor under the Credit
Agreement, respectively, as specified on Schedule 1 hereto.
3. Such Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.4 thereof and such other documents and information as it has deemed
22
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon any Agent, any Assignor or any other Lender Party and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (iii) represents and warrants that its name set forth on
Schedule 1 hereto is its legal name; (iv) confirms that it is an Eligible
Assignee; (v) appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers and discretion under the Loan Documents
as are delegated to such Agent by the terms thereof, together with such powers
and discretion as are reasonably incidental thereto; (vi) agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of the Credit Agreement are required to be performed by it as a Lender Party;
and (vii) attaches any U.S. Internal Revenue Service forms required under
Section 2.12 of the Credit Agreement.
4. Following the execution of this Assignment and Acceptance, it will
be delivered to the Administrative Agent for acceptance and recording by the
Administrative Agent. The effective date for this Assignment and Acceptance (the
"Effective Date") shall be the date of the acceptance hereof by the
Administrative Agent, unless otherwise specified on Schedule 1 hereto.
5. Upon such acceptance and recording by the Administrative Agent, as
of the Effective Date, (i) such Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Acceptance, have
the rights and obligations of a Lender Party thereunder and (ii) such Assignor
shall, to the extent provided in this Agreement and Acceptance, relinquish its
rights and be released from its obligations under the Credit Agreement (other
than its rights and obligations under the Loan Documents that are specified
under the terms of such Loan Documents to survive the payment in full of the
Obligations of the Loan Parties under the Loan Documents to the extent any claim
thereunder relates to an event arising prior to the Effective Date of this
Assignment and Acceptance) and, if this Assignment and Acceptance covers all of
the remaining portion of the rights and obligations of such Assignor under the
Credit Agreement, such Assignor shall cease to be a party thereto.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Notes in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment fees with respect
thereto) to such Assignee. Such Assignor and such Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the Notes for
periods prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of an original executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, each Assignor and each Assignee have
caused Schedule 1 to this Assignment and Acceptance to be executed by their
officers thereunto duly authorized as of the date specified thereon.
23
Effective Date (if other than date of acceptance by Administrative Agent):
-------------- -----, ------
Assignors
Assignees
Accepted [and Approved] this ______
day of _______________, _______
[NAME OF AGENT],
as Agent
By ________________________________
Title:
[Approved this ____ day
of _______________, ______
[NAME OF BORROWER]
By________________________________
Title:]
--------
24
