AMENDMENT NO. 14 TO LOAN AND SECURITY AGREEMENT
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AM GENERAL CORPORATION
000 Xxxxx Xxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxx 00000-0000
December 21, 1999
Congress Financial Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
Congress Financial Corporation ("Lender") and AM General Corporation
("Borrower") have entered into financing arrangements pursuant to which Lender
may make loans and advances and provide other financial accommodations to
Borrower as set forth in the Loan and Security Agreement, dated as of April 30,
1992, by and between Lender, Borrower, AM General Sales Corporation ("AM Sales")
and General Engine Products, Inc. ("General Engine"), as amended pursuant to
Amendment No. 1 to Loan and Security Agreement, dated July 10, 1992, Amendment
No. 2 to Loan and Security Agreement, dated October 27, 1992, Amendment No. 3 to
Loan and Security Agreement, dated September 15, 1993, Amendment No. 4 to Loan
and Security Agreement, dated November 16, 1994, Amendment No. 5 to Loan and
Security Agreement, dated December 14, 1994, Amendment No. 6 to Loan and
Security Agreement, dated February 23, 1995, Amendment No. 7 to Loan and
Security Agreement, dated April 25, 1995, Amendment No. 8 to Loan and Security
Agreement, dated April 27, 1995, Amendment No. 9 to Loan and Security Agreement,
dated June 26, 1996, Amendment No. 10 to Loan and Security Agreement, dated
August 22, 1996, Amendment No. 11 to Loan and Security Agreement, dated December
17, 1996, Amendment No. 12 to Loan and Security Agreement, dated March 14, 1997
and Amendment No. 13 to Loan and Security Agreement, dated as of October 30,
1998 (as the same may hereafter be further amended, modified, supplemented,
extended, renewed, restated or replaced, the "Loan Agreement," and together with
all agreements, documents and instruments at any time executed and/or delivered
in connection therewith or related thereto, collectively, the "Financing
Agreements").
Borrower designs and manufactures High-Mobility Multipurpose Wheeled
Vehicles for sale to the U.S. and foreign military services (the "HUMVEE").
Borrower also designs and manufactures a commercial version of the HUMVEE under
the name, "HUMMER" (the "Current Vehicle").
Borrower has advised Lender that it may acquire its current plant and
property located in Mishawaka, Indiana (the "Existing Facility") and enter into
mortgage financing for such acquisition secured by a lien on the Existing
Facility.
Borrower is also entering into arrangements with General Motors
Corporation, a Delaware corporation ("GM"), pursuant to which GM will, at its
expense, design, engineer, certify and release a new generation vehicle based
upon an existing GM platform bearing the HUMMER trademark (the "New Vehicle")
and retain Borrower to assemble the New Vehicle. In connection with these
arrangements, GM will make a non-interest bearing, secured loan to Borrower in
the approximate amount set forth in Exhibit A hereto ("GM Loan"). Borrower will
use the proceeds of the GM Loan to finance: (i) the engineering and construction
of a new addition on to the Existing Facility (the "HUMMER Annex"); (ii) the
purchase of certain machinery and equipment for use in the production of the New
Vehicle and to be installed in the HUMMER Annex; and (iii) costs required for
Borrower to prepare to assemble the New Vehicles (except for the cost of the
time of Borrower's management and employees dedicated to the performance of the
activities contemplated by the GM Agreements (as such term is hereinafter
defined)). Borrower will repay the GM Loan with a portion of the fee it receives
from GM for the delivery by Borrower to GM of an assembled New Vehicle. At
certain times, GM has the option to convert all or part of the outstanding
balance of the GM Loan into capital stock of Borrower, subject to certain
limitations as set forth in the GM Equity Conversion Agreement (as hereinafter
defined). Borrower will also assign all of its right, title and interest to the
HUMMER Trademark (as hereinafter defined) to GM and GM will license such
trademark to Borrower for Borrower to continue to use in connection with the
manufacture and distribution of the Current Vehicle.
Borrower has requested that Lender consent to: (i) the assignment by
Borrower to GM of the HUMMER Trademark pursuant to the GM Assignment, (ii) the
Indebtedness of Borrower to GM arising pursuant to the GM Loan, (iii) the grant
of a security interest in and lien upon the GM Collateral (as hereinafter
defined) by Borrower to GM to secure the GM Loan, (iv) the release by Lender of
its liens on the HUMMER Trademark, (v) certain amendments to the Senior Note
Indenture required by the arrangements of Borrower with GM, (vi) the issuance of
additional shares of common stock by Borrower to GM pursuant to the GM Equity
Conversion Agreement, (vii) the grant by Borrower to GM of the right to use the
GM Collateral and the right to use or occupy certain assets of Borrower pursuant
to the GM Right of Access Agreement, (viii) the amendment to the Loan Agreement
with respect to the amount of Capital Expenditures permitted thereunder, (ix)
contract assembly work by Borrower, and (x) certain other amendments to the Loan
Agreement as set forth herein.
1. Definitions
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1.1 Additional Definitions. As used herein, the following terms shall have
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the respective meanings given to them below and the Loan Agreement shall be
deemed and is hereby amended to include, in addition and not in limitation of,
each of the following definitions:
(1) "Amendment No. 14" shall mean this Amendment No. 14 to the Loan
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and Security Agreement by and among Borrower, AM Sales, General Engine and
Lender.
(2) "Current Vehicle" shall have the meaning set forth above.
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(3) "Eligible HUMVEE Finished Goods Inventory" shall mean Inventory of
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Borrower which is otherwise Eligible Inventory consisting of HUMVEES which are
first quality finished goods held for resale in the ordinary course of the
business of Borrower, which do not use or bear any of the HUMMER Trademarks.
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(4) "Eligible HUMVEE Service Parts Inventory" shall mean engines,
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transmissions, wheels, doors, tires, panels, and other components, parts,
appliances, accessories, accessions, attachments or other equipment to be
incorporated in, affixed or attached to, installed on or otherwise related to
the HUMVEES constituting current service parts, which do not use or bear any of
the HUMMER Trademarks.
(5) "Eligible HUMVEE Work-In-Process Inventory" shall mean engines,
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transmissions, wheels, doors, tires, panels and other components, parts,
appliances, accessories, accessions, attachments or other equipment to be
incorporated in, affixed or attached to, installed on or otherwise related to
the HUMVEES constituting current work-in-process, which do not use or bear any
of the HUMMER Trademarks.
(6) "GM" shall mean General Motors Corporation, a Delaware
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corporation, and its successors and assigns.
(7) "GM Agreements" shall mean, collectively, the following (as the
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same now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced): (i) the GM Note, (ii) the GM Security Agreement,
(iii) the GM Right of Access Agreement, (iv) the GM Assignment, (v) the GM
Equity Conversion Agreement, (vi) the GM Assembly Agreement, (vii) the GM
License Agreement, and (viii) all agreements, documents and instruments executed
and/or delivered in connection therewith; the foregoing may sometimes be
referred to herein, individually, as a "GM Agreement".
(8) "GM Assembly Agreement" shall mean the New Vehicle Assembly
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Agreement, dated on or about the date hereof, by and between GM and Borrower, as
the same now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.
(9) "GM Assignment" shall mean the Assignment Agreement, dated on or
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about the date hereof, by and between Borrower, as assignor and GM, as assignee,
with respect to the HUMMER Trademark as the same now exists and may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.
(10) "GM Collateral" shall mean the equipment and the HUMMER Annex
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acquired by Borrower after the date hereof, with the proceeds of the GM Loan,
used in the production of the New Vehicles; provided, that, in no event shall
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the "GM Collateral" include: (i) any of the assets and properties of Borrower
existing as of the date hereof, (ii) any existing or hereafter arising or
acquired accounts receivable, chattel paper, documents, instruments, letters of
credit, deposit accounts, inventory or general intangibles of Borrower (other
than general intangibles relating specifically and directly to the equipment and
real property constituting the GM Collateral), and (iii) any amounts at any time
deposited in or received in the lockbox or blocked account established by
Borrower in connection with its financing arrangements with Lender for the
handling of collections of accounts or other assets and the remittance thereof
to Lender or any other amounts at any time paid to Lender in respect of the
obligations of Borrower to Lender.
(11) "GM Equity Conversion Agreement" shall mean the Equity Conversion
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Agreement, dated on or about the date hereof, by and between Borrower and GM, as
the same now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.
(12) "GM Note" shall mean the Promissory Note, dated on or about the
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date hereof, issued by Borrower payable to GM in the original principal amount
set forth in Exhibit A hereto as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.
(13) "GM Right of Access Agreement" shall mean the Right of Access
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Agreement, dated on or about the date hereof, by and between Borrower and GM, as
the same now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.
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(14) "GM Security Agreement" shall mean the Security Agreement, dated
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on or about the date hereof, by Borrower in favor of GM with respect to the GM
Collateral, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
(15) "HUMMER Annex" shall have the meaning set forth above.
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(16) "HUMVEE" shall have the meaning set forth above.
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(17) "HUMMER Trademark" shall mean the trademarks, marks, words, names,
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letters, numbers, symbols, emblems, shapes, designs, devices and trade dress, or
any combination thereof listed on Exhibit B hereto.
(18) "New Vehicle" shall have the meaning set forth above.
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(19) "Supplemental Senior Note Indenture" shall mean the Supplement to
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Indenture, dated on or about the date hereof, by and between Borrower and
Trustee.
1.2 Amendment to Definition.
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(1) The term "Eligible Non-Hummer Part Inventory" shall be amended to
add the following on the end of that definition immediately before the period:
"and HUMVEES."
(2) The term "Hummers" in the Loan Agreement shall be amended to add
the following clause on the end of such definition:
", excluding any HUMVEE vehicles (as each such term is defined in Amendment
No. 14)."
(3) The term "Inventory" shall be amended to add the word ", HUMVEES"
after each time that the word "Hummer" appears in such definition.
1.3 Interpretation.
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(1) For purposes of this Amendment, all terms used herein, including
but not limited to, those terms used and/or defined herein or in the recitals
hereto shall have the respective meanings assigned thereto in the Loan
Agreement.
(2) Until the execution and delivery of any GM Agreement, any
reference to such GM Agreement herein shall refer to the most recent draft of
such agreement provided by Borrower to Lender prior to the date hereof;
provided, that, in each case, to the extent such agreement contains any terms
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which are different in any material respect (in the determination of Lender)
from such drafts (including any terms in such draft which have not been
completed as of the date of such draft), such new or different terms must be
acceptable to Lender. On and after the execution and delivery of such GM
Agreement, the delivery to Lender of a true, correct and complete copy thereof
and the appraisal by Lender of changed terms as described above, any reference
to such agreement shall be to the agreement as so executed and delivered.
1. Consents and Acknowledgment.
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1.4 Consents. Subject to the satisfaction of each of the terms and
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conditions contained herein, Lender hereby consents to the following:
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(1) the assignment by Borrower to GM of the HUMMER Trademark pursuant
to the GM Assignment;
(2) the Indebtedness of Borrower to GM arising pursuant to the GM Loan
evidenced by the GM Note to the extent permitted under Section 6.3(r) of the
Loan Agreement;
(3) the grant of a security interest in, and lien upon, the GM
Collateral by Borrower to GM to secure the Indebtedness of Borrower to GM
arising pursuant to the GM Loan evidenced by GM Note;
(4) the amendments to the Senior Note Indenture pursuant to the
Supplemental Senior Note Indenture (as in effect on the date hereof);
(5) the issuance of additional shares of common stock of Borrower to
GM pursuant to the GM Equity Conversion Agreement;
(6) Indebtedness of Borrower to a financial institution up to
$5,500,000 to be incurred in connection with Borrower's acquisition of the
Existing Facility and the grant of a lien and security interest upon the
Existing Facility to such financial institution to secure such indebtedness;
provided, that, Borrower complies with the terms of Sections 4.7, 6.3(d) and
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6.5(e) of the Loan Agreement;
(7) the Capital Expenditures by Borrower in connection with the
acquisition of the Existing Facility, construction of the HUMMER Annex and
otherwise under the GM Agreements as permitted pursuant to Section 3.4 hereof;
and
(8) contract assembly work by Borrower for GM pursuant to the GM
Agreements.
1.5 Acknowledgments.
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(1) The grant by Borrower to GM of the right to use the GM Collateral,
the Equipment, the Real Property and de minimus amounts of consumable supplies
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of Borrower which shall in no event constitute Eligible Inventory shall be
permitted under Section 4.7 of the Loan Agreement and the Lender acknowledges
that the requirements of Section 4.7 of the Loan Agreement have been satisfied
so long as (i) Lender shall have received true, correct and complete copies of
the GM Agreements, duly authorized, executed and delivered by GM and Borrower
and such agreement is in full force and effect and GM and Borrower have complied
with the terms thereof, and (ii) GM shall only have the right to use such
Equipment, Real Property and de minimus amounts of consumable supplies of
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Borrower to the extent that it is reasonably necessary for the production of New
Vehicles by GM after the occurrence of the events set forth in the GM Right of
Access Agreement which entitles GM to the right to use such assets.
(2) Subject to the terms of this Amendment No. 14, the performance by
Borrower of the GM Agreements shall be permitted under Section 6.11 of the Loan
Agreement.
2. Amendments.
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1.6 Loans.
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(1) Section 2.1 (a) of the Loan Agreement is hereby amended and
restated as follows:
"(a) Subject to, and upon the terms and conditions contained herein,
at Borrower's request, Lender shall, in its discretion, make Loans to Borrower,
in such amounts from time to time as Lender shall determine, in its discretion,
of up to:
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(1) ninety (90%) percent of the Net Amount of Eligible Accounts
(or such greater or lesser percentage thereof as Lender
may determine from time to time); plus
(2) fifty (50%) percent of the value of Eligible HUMVEE Finished
Goods Inventory (or such greater or lesser percentage
thereof as Lender may determine from time to time);
plus
(3) fifty (50%) percent of the value of Eligible HUMVEE Service
Parts Inventory (or such greater or lesser percentage
thereof as Lender may determine from time to time);
plus
(4) twenty (20%) percent of the value of Eligible HUMVEE Work-in-
Process Inventory (or such greater or lesser percentage
thereof as Lender may determine from time to time);
plus
(5) thirty-five (35%) percent of the value of Eligible Non-Hummer
Parts Inventory (or such greater or lesser percentage
thereof as Lender may determine from time to time)."
(2) Section 2.1(d) of the Loan Agreement is hereby amended to delete
the reference to Sections 2.1(a)(ii), (iii), (iv), (v) and (vii) therein and
replace it with the following reference: "Sections 2.1 (ii), (iii), (iv) and
(v)".
1.7 Indebtedness.
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(1) Section 6.3 of the Loan Agreement is hereby amended to add the
following to the end of Section 6.3(d) of the Loan Agreement:
", except, that, Borrower may also incur Indebtedness to a financial
institution in an amount not to exceed $5,500,000 in connection with the
acquisition of the Existing Facility so long as Borrower complies with
Sections 4.7 and 6.5 (e) of the Loan Agreement;"
(a) Section 6.3 of the Loan Agreement is hereby amended to add a new
Section 6.3(r) to the Loan Agreement:
"(r) Indebtedness of Borrower to GM arising after the date hereof pursuant
to loans in cash or immediately available funds by GM to Borrower as
evidenced by the GM Note, provided, that, (i) such Indebtedness shall not
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bear any interest, (ii) such Indebtedness is, and shall only be secured by,
the security interests and liens upon the GM Collateral as permitted under
Section 6.5(k) hereof, (iii) the rights and remedies of GM arising in
connection with or pursuant to the GM Loan are limited to recourse against
the GM Collateral and Borrower does not have any personal liability to GM
in respect of the obligations of Borrower to GM arising pursuant to the GM
Loan (such that Borrower does not have any liability in the event of any
deficiency for amounts owing to GM after GM has exercised its rights and
remedies with respect to the GM Collateral), (iv) the terms and conditions
of such Indebtedness shall be acceptable in all respects to Lender, (v) the
proceeds of the loan giving rise to such Indebtedness shall be used for:
(A) the engineering and construction of the HUMMER Annex, (B) the purchase
of certain machinery and equipment for use in the production of the New
Vehicle; and (C) costs required for Borrower to prepare to assemble the New
Vehicles (except for the cost of the time of Borrower's management and
employees dedicated to the performance of the activities contemplated by
the GM Agreements), (vi) such Indebtedness shall not exceed approximately
the amount set forth in Exhibit A hereto
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(less the aggregate amount of all repayments or repurchases of principal in
respect thereof), (vii) Borrower shall not, directly or indirectly, make
any payments with respect to such Indebtedness, including, but not limited
to any prepayments or any non-mandatory payments, except that (A) GM may
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obtain payments in respect of such Indebtedness by offsetting against the
assembly fee otherwise payable to Borrower pursuant to the terms of the GM
Assembly Agreement in an amount equal to the aggregate principal amount of
the GM Loan made to Borrower divided by the number of New Vehicles set
forth in Exhibit A hereto for each New Vehicle delivered by Borrower to GM
pursuant to the GM Assembly Agreement, and (B) Borrower may make
prepayments in respect of the GM Note pursuant to the terms of the GM
Equity Conversion Agreement so long as (1) as of the date of any such
prepayment and after giving effect thereto, the Excess Availability shall
not have been less than $10,000,000, and for each of the thirty (30)
consecutive days immediately prior to any such prepayment, Excess
Availability shall not be less than $10,000,000, (2) Lender shall have
received not less that seven (7) days prior written notice of the intention
of Borrower to make such prepayment, together with such information with
respect thereto as Lender may request, and (3) as of the date of any such
prepayment and after giving effect thereto, no Event of Default or act,
condition or event which with notice or passage of time or both would
constitute an Event of Default shall exist or have occurred, (viii)
Borrower shall not, directly or indirectly, (A) amend, modify, alter or
change any terms of such Indebtedness or any of the GM Agreements, or (B)
redeem, retire, defease, purchase or otherwise acquire such Indebtedness,
or set aside or otherwise deposit or invest any sums for such purpose, and
(ix) Borrower shall furnish to Lender all notices or demands in connection
with such Indebtedness either received by Borrower or on its behalf,
promptly after the receipt thereof or sent by Borrower or on its behalf
concurrently with the sending thereof, as the case may be."
1.8 Limitations on Liens. Section 6.5 of the Loan Agreement is hereby
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amended to add a new Section 6.5(j) as follows:
"(j) the purchase money mortgages or other purchase money liens or
security interests upon the GM Collateral in favor of GM pursuant to the GM
Security Agreement to secure the Indebtedness of Borrower to GM permitted
under Section 6.3(r) above."
1.9 Sale of Assets, Consolidation, Merger, Dissolution, Etc. Section 6.11
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of the Loan Agreement is hereby amended to add the following clause to the end
of Section 6.11(b):
"except, that, Borrower may assign the HUMMER Trademark to GM pursuant
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to the GM Assignment (as in effect on the date of Amendment No. 14) and may
issue stock to GM pursuant to the GM Equity Conversion Agreement,"
2.1 Capital Expenditures. Section 6.14 of the Loan Agreement is hereby
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amended to add the following clause to the end of Section 6.14(b) immediately
before the period:
"provided, that, such limitation shall not apply to the Capital
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Expenditures by Borrower (i) of up to $5,500,000 for the purpose of
acquiring the Existing Facility, and (ii) made with the proceeds of the GM
Loan utilized to construct the HUMMER Annex and for Capital Expenditures
pursuant to Borrower's arrangements with GM under the GM Agreements."
2.2 Properties in Good Condition. Section 6.17 of the Loan Agreement is
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hereby amended to add on the following clause to the end of the third sentence
of Section 6.17(b):
"provided, that, Borrower may obtain certain parts and supplies on
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consignment from GM needed for use in the assembly of the New Vehicles so
long as such parts and supplies shall at all times be segregated and
separately identifiable as consigned goods and in any report with respect
to the Inventory
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delivered to Lender under Section 6.21(a)(v) hereof, such parts and
supplies shall be separately and clearly identified."
2. Eligible Accounts. Without limiting any right of Lender to determine
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whether an Account is an Eligible Account or the amount of such Account which
may be an Eligible Account (including any Accounts which may be owing by GM to
Borrower), any Account payable by GM shall only be an Eligible Account to the
extent of the amount owing by GM to Borrower after reduction by the amount which
GM has the right to set off against such Account under the terms of the GM
Assembly Agreement in payment of amounts owing to GM under the GM Note or
otherwise, and shall constitute an Eligible Account so long as such Account
would other otherwise satisfy the requirements of the definition of Eligible
Accounts.
3. Collateral.
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3.1 GM Collateral. Notwithstanding anything to the contrary contained in
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Section 4 of the Loan Agreement, upon the satisfaction of each of the conditions
to the effectiveness of this Amendment No. 14, Lender hereby agrees that the
Collateral shall not include the GM Collateral.
3.2 Release of HUMMER Trademark. Upon the satisfaction of each of the
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conditions to the effectiveness of this Amendment No. 14, Lender shall at
Borrower's cost and expense release its security interest in and lien upon the
HUMMER Trademark (identified in Exhibit B hereto) to the extent such assets have
been validly transferred and assigned to GM pursuant to the GM Assignment.
3. Representations, Warranties and Covenants. In addition to the
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continuing representations, warranties and covenants at any time made by
Borrower to Lender pursuant to the other Financing Agreements, Borrower hereby
represents, warrants and covenants with and to the Lender as follows (which
representations, warranties and covenants are continuing and shall survive the
execution and delivery hereof and shall be incorporated into and made a part of
the Financing Agreements):
3.3 GM Agreements.
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(1) The latest drafts of the GM Agreements have been delivered to
Lender and have been annexed hereto as Exhibit C and the final form of such
agreements shall be the same as such drafts or shall contain such new or
different terms as Lender may otherwise specifically agree pursuant to Section
1.3(b) of this Amendment No. 14.
(2) Borrower has received all necessary consents and approvals of third
parties, to the transactions contemplated by the GM Agreements including, the
Trustee and the holders of the Senior Notes.
(3) No court of competent jurisdiction has issued any injunction,
restraining order or other order which prohibits consummation of the
transactions described in the GM Agreements and no governmental or other action
or proceeding has been threatened or commenced, seeking any injunction,
restraining order or other order which seeks to void or otherwise modify the
transactions described in the GM Agreements.
(4) None of the Collateral shall be located in the HUMMER Annex except,
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that, a total of eighteen (18) Hummers, at any one time, may be located therein
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while such vehicles are in the process of being painted.
(5) The only assets of Borrower which may be subject to the GM Right of
Access Agreement are the assets which constitute the GM Collateral and certain
of the Equipment, Real Property and de minimus amounts of consumable supplies of
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Borrower which shall in no event constitute Eligible Inventory; provided, that,
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(i) GM shall only have the right to use any of such Equipment, Real Property
and de minimus amounts of consumable supplies of Borrower to the extent that it
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is reasonably necessary for the production of New Vehicles by GM after the
occurrence of the events set forth in the GM Right of Access Agreement which
entitle GM to the right to use such assets, (ii) the use thereof by GM does not
impair, hinder, delay or interfere with the ability of Borrower, Lender or its
designees to manufacture, distribute, produce, sell or otherwise deal with any
of the Collateral or of
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Lender to sell or otherwise realize on the Collateral, and (iii) such Equipment
or Real Property is not then being used by Borrower, Lender or on its behalf or
anticipated to be used by Borrower, Lender or on its behalf shortly thereafter
in the manufacture, distribution, production, sale of, or to otherwise deal
with, any of the Collateral.
(6) The proceeds of the GM Loan are and shall be sufficient for the
construction of the HUMMER Annex and the purchase of the machinery and equipment
required for the assembly of the New Vehicle by Borrower in accordance with the
terms of the GM Agreements. Borrower shall have good and marketable title to
all assets purchased with the proceeds of the GM Loan and otherwise relating to
the HUMMER Annex. GM shall provide Borrower with all of the parts and supplies
(except for de minimus amounts of consumable supplies) needed for the assembly
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of the New Vehicle. All of such parts and direct materials shall at all times
be segregated and separately identifiable as assets of GM. In no event shall
any report with respect to the Inventory include any such parts, supplies or de
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minimus amounts of consumable supplies, except to the extent separately and
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clearly identified.
(7) Within thirty (30) days after the end of each month, Borrower shall
deliver a report to Lender setting forth the outstanding balance of the GM Loan.
3.4 Supplemental Senior Note Indenture. Borrower has received all consents
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required in order for the Supplemental Senior Note Indenture to be binding and
enforceable with respect to the Trustee and each of the holders of the Senior
Notes which consents are valid and in full force and effect.
3.5 No Default. No Event of Default exists on the date of Amendment No. 14
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immediately after giving effect to the amendments to the Loan Agreement made by
the provisions of Amendment No. 14.
3.6 Corporate Power and Authority. This Amendment has been duly executed
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and delivered by Borrower, AM Sales and General Engine and is in full force and
effect as of the date of Amendment No. 14 and the agreements and obligations of
Borrower contained herein constitute legal, valid and binding obligations of
Borrower enforceable against Borrower in accordance with their respective terms.
3.7 Additional Items to be Delivered.
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(1) Borrower hereby agrees that, in addition to all other terms,
conditions and provisions set forth in the other Financing Agreements, Borrower
shall deliver or cause to be delivered to Lender, the following items, each in
form and substance satisfactory to Lender, as soon as possible, but in any
event, by no later than January 1, 2000:
(i) true, correct and complete copies of all of the GM Agreements,
each duly authorized, executed and delivered by GM and Borrower and evidence
that the transactions to be performed by the date of such delivery under each of
the GM Agreements have been performed in accordance with the terms thereof in
all respects, including the fulfillment (not merely the waiver, except as have
been disclosed to Lender and consented to in writing by Lender) of all
conditions precedent set forth therein; and
(ii) evidence that all actions and proceedings required to be
performed by the date of such delivery under the GM Agreements, applicable law
or regulation have been taken and the transactions contemplated thereunder have
been duly and validly consummated.
4. Conditions Precedent. The effectiveness of the consents, waivers and
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other terms and conditions contained herein shall be subject to the receipt by
Lender of each of the following, in form and substance satisfactory to Lender:
4.1 true, correct and complete copies of the Supplemental Senior Note
Indenture and all related agreements, duly authorized, executed and delivered by
Borrower, Trustee and any other party required for the effectiveness thereof;
and
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4.2 an original of Amendment No. 14, duly authorized, executed and
delivered by Borrower, AM Sales and General Engine.
4. Additional Events of Default. The parties hereto acknowledge, confirm
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and agree that the failure of Borrower to comply with the covenants, conditions
and agreements contained herein shall constitute an Event of Default under the
Financing Agreements (subject to the applicable cure period, if any, with
respect thereto provided for in the Loan Agreement as in effect on the date
hereof). In addition, any default by Borrower or GM under any of the GM
Agreements (subject to any applicable cure period set forth therein) or the
termination of any of the GM Agreements, shall constitute an Event of Default
under the Financing Agreements, except as Lender may otherwise agree.
5. Effect of this Amendment. Except as modified pursuant hereto, no other
------------------------
waivers, changes or modifications to the Financing Agreements are intended or
implied, and in all other respects, the Financing Agreements are hereby
specifically ratified, restated and confirmed by all parties hereto as of
effective date hereof. Any acknowledgment or consent contained herein shall not
be construed to constitute a consent to any other or further action by Borrower
or to entitle Borrower to any other consent. The Loan Agreement and this
Amendment shall be read and construed as one agreement. To the extent of
conflict between the terms of this Amendment and the other Financing Agreements,
the terms of this Amendment shall control.
6. Further Assurances. The parties hereto shall execute and deliver such
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additional documents and take such additional actions as may be necessary to
effectuate the provisions and purposes of this Amendment.
7. Governing Law. The rights and obligations hereunder of each of the
-------------
parties hereto shall be governed by and interpreted and determined in accordance
with the laws of the State of New York.
8. Binding Agreement. Without limiting any other provision in this
-----------------
Agreement, this agreement shall be binding upon and inure to the benefit of each
of the parties hereto and their respective successors and assigns.
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9. Counterparts. This letter agreement may be executed in counterparts,
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but all of such counterparts shall together constitute but one and the same
agreement. In making proof of this letter agreement, it shall not be necessary
to produce or account for more than one counterpart thereof signed by each of
the parties thereto.
Very truly yours,
AM GENERAL CORPORATION
By: /s/ Xxxx Xxxxxxx
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Title: Vice President & Chief Financial Officer
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ACKNOWLEDGED AND AGREED
AM GENERAL SALES CORPORATION
By: /s/ Xxxx Xxxxxxx
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Title: Vice President & Chief Financial Officer
----------------------------------------
GENERAL ENGINE PRODUCTS, INC.
By: /s/ Xxxx Xxxxxxx
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Title: Vice President & Chief Financial Officer
-----------------------------------------
AGREED:
CONGRESS FINANCIAL CORPORATION
By: /s/ Xxxxx Last
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Title: First Vice President
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