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EXHIBIT 10.39
October 16, 1997
Central Financial Acceptance Corporation
0000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxx X. Xxxxxx, Chief Executive Officer
Re: Proposed Junior Subordinated Deferrable Interest Debentures
Dear Xxxx:
Reference is made to (a) that certain Revolving Loan Agreement dated as
of June 13, 1997 among Central Financial Acceptance Corporation, a Delaware
corporation ("Borrower"), the Lenders party thereto, and Xxxxx Fargo Bank,
National Association, as the Agent (the "Loan Agreement") and (b) the draft
Amendment No. 1 to Loan Agreement attached hereto (the "Draft Amendment").
Capitalized terms used but not defined herein are used with the meanings
specified for such terms in the Loan Agreement or the Draft Amendment, as
applicable.
Xxxxxxxx has advised the Agent and the Lenders that it has formed (or is
about to form) a Delaware business trust ("CFAC Capital I") for the purpose of
facilitating a public subordinated debt offering (the "Offering"). In connection
with the proposed Offering, Xxxxxxxx has submitted to the Agent and the Lenders,
among other documents, drafts of an "Indenture," "CFAC Capital Trust Agreement"
and "CFAC Guaranties" (as such terms are defined in the Draft Amendment)
(collectively, together with all other documents and instruments relating
thereto, the "Subordinated Debt Documents"). Xxxxxxxx has requested that the
Lenders consent to the transactions described in the Subordinated Debt Documents
and, specifically, to the issuance by Borrower and CFAC Capital I of certain
junior subordinated debt and trust securities as more particularly described in
the Subordinated Debt Documents (the "Junior Subordinated Debt").
Subject to the conditions set forth below, this letter confirms that
Xxxxx Fargo, in its capacity as a Lender under the Loan Agreement, consents to
the Offering and to the issuance of the Junior Subordinated Debt provided that
(a) the terms related to the Junior Subordinated Debt are not amended, modified
or waived in any material manner from the terms set forth with
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Central Financial Acceptance Corporation
October 16, 1997
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respect thereto in the draft Subordinated Debt Documents dated as of September
17, 1997, and (b) upon Xxxxxxxx's receipt of any proceeds in connection with
such Offering, (i) all amounts owed to Xxxxx Fargo, as a Lender, under the Loan
Agreement and the other Loan Documents, shall be repaid in full, (ii) Xxxxx
Fargo's Pro Rata Share of the Commitment shall be reduced to 0.00% and Xxxxx
Fargo shall cease to be a Lender under and with respect to the Loan Agreement
and the other Loan Documents, and (iii) Borrower, the Remaining Lenders and the
Agent shall have executed and entered into an amendment to the Loan Agreement
substantially in the form of the Draft Amendment, with all blanks filled in and
other conforming modifications made thereto.
Except as expressly provided herein, all terms and conditions of the
Loan Agreement and the other Loan Documents shall continue in full force and
effect, without waiver or modification, and Xxxxx Fargo reserves all of its
rights, privileges and remedies in connection therewith. Without limiting the
generality of the foregoing, Wells Fargo may continue to act as Agent until such
time as it resigns (whether voluntarily or at the request of the Requisite
Lenders) pursuant to the terms of Section 10.8 of the Loan Agreement.
XXXXX FARGO BANK,
NATIONAL ASSOCIATION
By: /s/ XXXXX XXXXXX
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Xxxxx Xxxxxx
Vice President
