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Exhibit (4)(i)
THIRD AMENDMENT TO LIMITED TERM EXTENSION
This Third Amendment to Limited Term Extension (the "Third
Amendment") is entered into as of this 29th day of May, 1998 between National
Auto Credit, Inc. ("National"), as borrower, NAC, Inc. and NAC Investment
Company, as guarantors, The First National Bank of Chicago ("First Chicago"),
Xxxxxx Guaranty Trust Company of New York ("Xxxxxx"), The Bank of New York
("BNY"), First Union National Bank ("First Union"), The Huntington National Bank
("Huntington"), Allstate Life Insurance Company ("Allstate"), Connecticut
General Life Insurance Company (on behalf of itself and one or more separate
accounts, collectively "Connecticut General"), Principal Mutual Life Insurance
Company ("Principal Mutual"), New York Life Insurance Company ("New York Life"),
New York Life Insurance and Annuity Corporation ("New York Annuity"), Lincoln
National Life Insurance Company ("Lincoln National") and Lincoln Life & Annuity
Company of New York ("Lincoln Life"), as lenders, and NBD Bank, ("NBD") as
issuer of letters of credit. Capitalized terms not otherwise defined herein
shall have the meanings ascribed to such terms in that certain Limited Term
Extension dated as of February 13, 1998 (as amended to the date hereof, the
"Extension").
RECITALS
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WHEREAS, National presently owes (i) approximately $29.7
million in Principal Obligations on Loans extended by the Banks pursuant to the
Credit Agreement, and (ii) approximately $35.1 million in Principal Obligations
on loans extended by the Insurance Companies pursuant to the terms of the Note
Purchase Agreement and Notes.
WHEREAS, on February 13, 1998, National, the Lenders and NBD
entered into the Extension pursuant to which the Banks granted National a
limited extension of maturities and the Insurance Companies granted National a
limited extension of the Waiver Extension, all on the terms and conditions
specifically set forth therein.
WHEREAS, pursuant to the terms of the Extension, all Lender
Obligations became due and payable in full on March 6, 1998.
WHEREAS, on March 6, 1998 and March 16, 1998, National, the
Lenders and NBD entered into the First Amendment to Limited Term Extension (the
"First Amendment") and the Second Amendment to Limited Term Extension (the
"Second Amendment"), respectively, pursuant to which the Lenders granted
National additional limited extensions of maturities and the Insurance Companies
granted National additional limited extensions of the Waiver Extension, all on
the terms and conditions specifically set forth therein.
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WHEREAS, National has requested the Lenders and NBD for an
additional extension of the Extension Termination Date.
WHEREAS, the Lenders and NBD are prepared to extend the
Extension Termination Date until September 30, 1998 on the terms and conditions
contained herein.
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree to amend the Extension as follows:
1. The definition of "Extension Termination Date" is amended
in its entirety so that, as amended, it provides as follows:
"EXTENSION TERMINATION DATE" means the earlier to occur of (i)
September 30, 1998, and (ii) the occurrence of an Extension Default.
2. The following definition is added:
"PRIME RATE" means the rate of interest announced from time to time by
the Agent as its prime rate.
3. Paragraph 3 of the Extension is amended in its entirety so
that, as amended, it provides as follows:
"3. From January 31, 1998 through May 29, 1998, interest will
accrue on the unpaid balance of all Lender Obligations at a per annum
rate (computed on the basis of a 360-day year of twelve 30-day months)
equal to the higher of (i) the Floating Rate, and (ii) 7.66%. After May
29, 1998, interest will accrue on the unpaid balance of all Lender
Obligations at a per annum rate (computed on the basis of a 360-day
year of twelve 30-day months) equal to the higher of (i) the Prime Rate
plus 2%, and (ii) 9.66%. Commencing on March 20, 1998 interest will be
payable to all Lenders weekly, in arrears, on Friday of each week. From
and after May 29, 1998 interest will accrue on the unpaid balance of
any overdue Credit Agreement Obligation or Note Obligation at a per
annum rate (computed on the basis of a 360-day year of twelve 30-day
months) equal to the Prime Rate plus 4%."
4. Paragraph 4 of the Extension is amended in its entirety so
that, as amended, it provides as follows:
"4. Subject to the provisions of paragraph 17 below, National
shall make principal payments to the Lenders and NBD on the following
dates and in the following amounts:
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February 19, 1998 $1,000,000
March 6, 1998 $5,500,000
March 16, 1998 $6,000,000
May 29, 1998 $9,000,000
Additionally, National shall make payments to the Lenders and NBD on
the dates and in the amounts set forth on Exhibit A, to be applied
first to accrued and unpaid interest, and the balance to principal.
Until all Lender Obligations and the Reimbursement Obligation have been
paid in full, National shall also remit to the Lenders all tax refunds
received by National (except as otherwise provided in the security
agreement to be executed by the parties), when and as such refunds are
received. Each principal payment (and such tax refunds) will be
distributed to the Lenders and NBD on a Pro Rata basis and will be
applied by the Lenders, except as provided in paragraph 17 below,
against the Principal Obligations. Principal payments distributed to
NBD in respect of the Reimbursement Obligation will be held by NBD as
cash collateral to secure payment of the Reimbursement Obligation until
the Letters of Credit are drawn. If one or more Letters of Credit
expires or is returned to NBD undrawn, NBD will distribute the cash
collateral then held by NBD in respect of such Letter(s) of Credit to
all Lenders (and, to the extent that other Letters of Credit remain
outstanding, to NBD) for reduction of Principal Obligations on a Pro
Rata basis. The remaining balance of all Lender Obligations shall be
due and payable in full on the Extension Termination Date; provided,
however, that to the extent payment of the Note Obligations is
voluntarily waived or extended by the Insurance Companies beyond the
Extension Termination Date, the Extension Termination Date shall not
constitute a "Settlement Date" for purposes of Section 8.6 of the Note
Purchase Agreement."
5. Paragraph 9 of the Extension is amended in its entirety so
that, as amended, it provides as follows:
"9. Notwithstanding any prior or future waiver of defaults by
the Lenders (and without waiving or modifying rights available to the
Lenders under the Credit Agreement and the Note Purchase Agreement),
(i) National will, on a monthly basis or such shorter time as the
Lenders may request, promptly pay statements for the reasonable fees
and expenses incurred on behalf of the Lenders by the firms of Xxxxxxxx
& Xxxxx, LLC, O'Melveny & Xxxxx LLP, and Sidley & Austin, and (ii)
National will, on a monthly basis, reimburse each Lender for its
reasonable fees and expenses (including reasonable fees and expenses
for outside and in-house counsel as well as travel and other expenses
for each Lender's personnel) incurred by such Lender in connection with
such Lender's loans to National in accordance with the terms of the
Credit Agreement and the Note Purchase Agreement, as the case may be.
Additionally, it is an express condition to the effectiveness of this
Amendment that all outstanding statements for fees and expenses
incurred by Xxxxxxxx & Xxxxx, LLC, O'Melveny & Xxxxx LLP, and Sidley &
Austin shall have been paid in full in connection with the matters set
forth herein. The Lenders will provide National with
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copies of the billing information submitted to the Lenders by Xxxxxxxx
& Xxxxx, LLC, O'Melveny & Xxxxx LLP, and Sidley & Austin; provided,
however, that the Lenders shall be entitled to redact information which
the Lenders believe to be subject to privilege or to be otherwise
confidential."
6. The following paragraphs shall be added to the Extension as
paragraphs 16 and 17, respectively:
"16. National, NAC, Inc and NAC Investment Company shall each
execute (and shall cause their affiliate, ARAC, Inc. ("ARAC") to
execute) security agreements substantially in the form of attached
Exhibit A and shall thereby each grant to the Lenders and NBD a
security interest in and lien upon all of their respective right, title
and interest in and to federal and state income tax refunds to secure
payment of the Reimbursement Obligation and all Lender Obligations, as
well as NAC, Inc.'s and NAC Investment Company's guaranties of the
Lender Obligations."
"17. If NAC fails to pay the Lender Obligations in full on or
before September 30, 1998, the Lenders shall be entitled to receive
from NAC, on September 30, 1998, an amendment fee in the amount of
$500,000. In such event, (i) the amendment fee shall be deemed to have
been paid with $500,000 of the monies paid to the Lenders on May 29,
1998, (ii) $500,000 of Principal Obligations previously paid with such
sum shall automatically reinstate, effective as of May 29, 1998, and
(iii) NAC shall immediately pay to the Lenders interest accrued on the
reinstated principal from May 29, 1998 through the date of payment at
the rate specified in paragraph 3 above."
7. Except to the extent that they are amended by the terms of
this Third Amendment, the terms and provisions of the Extension shall remain in
full force and effect.
8. This Third Amendment is a contract made under, and shall be
governed by and construed in accordance with, the law of the State of Illinois
applicable to contracts made and to be performed entirely within such State and
without giving effect to choice of law principles of such State.
NATIONAL AUTO CREDIT, INC.
By:
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Its
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NAC, INC.
By:
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Its
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NAC INVESTMENT COMPANY
By:
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Its
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THE FIRST NATIONAL BANK OF CHICAGO, as
administrative Agent and as a Lender
By:
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Its
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XXXXXX GUARANTY TRUST COMPANY OF
NEW YORK, as Documentation Agent and as
a Lender
By:
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Its
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THE BANK OF NEW YORK
By:
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Its
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FIRST UNION NATIONAL BANK (formerly known
as First Union National Bank of North
Carolina)
By:
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Its
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THE HUNTINGTON NATIONAL BANK
By:
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Its
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ALLSTATE LIFE INSURANCE COMPANY
By:
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Its
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By:
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Its
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CONNECTICUT GENERAL LIFE INSURANCE
COMPANY
BY CIGNA INVESTMENTS, INC.
By:
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Its
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By:
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Its
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CONNECTICUT GENERAL LIFE INSURANCE
COMPANY ON BEHALF OF ONE OR MORE SEPARATE
ACCOUNTS BY CIGNA INVESTMENTS, INC.
By:
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Its
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PRINCIPAL MUTUAL LIFE INSURANCE COMPANY
By:
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Its
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By:
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Its
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NEW YORK LIFE INSURANCE COMPANY
By:
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Its
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NEW YORK LIFE INSURANCE AND ANNUITY
CORPORATION BY NEW YORK LIFE INSURANCE
COMPANY
By:
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Its
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LINCOLN NATIONAL LIFE INSURANCE COMPANY
By:
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Its
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LINCOLN LIFE & ANNUITY COMPANY OF
NEW YORK
By:
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Its
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NBD BANK
By:
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Its
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EXHIBIT A
SCHEDULE OF REQUIRED WEEKLY PAYMENTS
March 20, 1998 $625,000
March 27, 1998 $625,000
April 3, 1998 $625,000
April 10, 1998 $625,000
April 17, 1998 $625,000
April 24, 1998 $625,000
May 1, 1998 $625,000
May 8, 1998 $625,000
May 15, 1998 $625,000
May 22, 1998 $625,000
May 29, 1998 $625,000
June 5, 1998 $1,000,000
June 12, 1998 $1,000,000
June 19, 1998 $1,000,000
June 26, 1998 $1,000,000
July 3, 1998 $1,000,000
July 10, 1998 $1,000,000
July 17, 1998 $1,000,000
July 24, 1998 $1,000,000
July 31, 1998 $1,000,000
August 7, 1998 $1,000,000
August 14, 1998 $1,000,000
August 21, 1998 $1,000,000
August 28, 1998 $1,000,000
September 4, 1998 $1,000,000
September 11, 1998 $1,000,000
September 18, 1998 $1,000,000
September 25, 1998 $1,000,000
