EXHIBIT 10.9
Note: Certain material has been omitted from this document pursuant to a request
for confidential treatment and has been filed separately with the SEC. Notations
of [REDACTED]* have been used to indicate such an omission.
CREDIT AGREEMENT
Dated as of January 17, 2001
between
XXXXXX AUTOMOTIVE GROUP L.L.C.
as Borrower
and
FORD MOTOR CREDIT COMPANY,
CHRYSLER FINANCIAL COMPANY, L.L.C.,
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 3
Article II: Loan Facilities 23
Article III: Conditions Precedent 28
Article IV: Representations and Warranties 30
Article V: Covenants 36
Article VI: Events of Default 51
Article VII: Agent 54
Article VII: Acceleration, Waivers, 54
Amendments and Remedies
Article IX: General Provisions 54
Article X: Benefit of Agreement; 61
Assignments; Participations
Article XI: Notices 62
Article XII: Counterparts 62
2
EXHIBITS AND SCHEDULES
Exhibits
EXHIBIT A -- Form of Note
EXHIBIT B -- Form of Borrowing Notice
EXHIBIT C-1 -- Form of Dealership Guaranty
EXHIBIT C-2 -- Form of Subsidiary Holding Company Guaranty
EXHIBIT C-3 -- Form of Non-Dealership Guaranty
EXHIBIT D-1 -- Form of Dealership Security Agreement
EXHIBIT D-2 -- Form of Subsidiary Holding Company Security Agreement
EXHIBIT D-3 -- Form of Non-Dealership 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
3
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 -- Lender's 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 9.3 -- Assignment & Acceptance
4
CREDIT AGREEMENT
This Credit Agreement dated January 17, 2001 is entered into among XXXXXX
AUTOMOTIVE GROUP, L.L.C., a Delaware limited liability company, (together with
any successor permitted hereunder, the "Borrower"), FORD MOTOR CREDIT COMPANY, a
Delaware corporation, ("Ford Credit") CHRYSLER FINANCIAL COMPANY, L.L.C., 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. 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 this 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 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 an Affiliate of any Transaction Party), but excluding therefrom
(i) that portion of the purchase price, of a particular Permitted Acquisition,
specifically allocated to real property, (ii) that portion of the purchase
price, of any particular Permitted Acquisition, paid in Seller Paper, and (iii)
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
5
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 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 and any Acquisition 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.
"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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
6
Note: Certain material has been omitted from this document pursuant to a request
for confidential treatment and has been filed separately with the SEC. Notations
of [REDACTED]* have been used to indicate such an omission.
"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 percentages listed (A) under Tier A if and for so long as
the Revolving Credit Obligations are greater than the Target Amount (as defined
herein) and (B) under Tier B if and for so long as the Revolving Credit
Obligations are equal to or less than the Target Amount (such percentage is
referred to herein as the "Margin").
TIER A TIER B
-------------------------------------------------------------------------------
Adjusted Leverage Margin Adjusted Leverage Margin
Ratio Ratio
-------------------------------------------------------------------------------
[REDACTED]* [REDACTED]*
Xxxxx 0 Xxxxx 0 Greater than
Greater than [REDACTED]* [REDACTED]*
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Xxxxx 0 [XXXXXXXX]* Xxxxx 0 [REDACTED]*
Greater than [REDACTED]* but Greater than [REDACTED]* but
equal to or less than equal to or less than
[REDACTED]* [REDACTED]*
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Xxxxx 0 [XXXXXXXX]* Xxxxx 0 [REDACTED]*
Greater than [REDACTED]* but Greater than [REDACTED]* but
equal to or less than equal to or less than
[REDACTED]* [REDACTED]*
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Xxxxx 0 [XXXXXXXX]* Xxxxx 0 [REDACTED]*
Greater than [REDACTED]* but Greater than [REDACTED]* but
equal to or less than equal to or less than
[REDACTED]* [REDACTED]*
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Xxxxx 0 [XXXXXXXX]* Xxxxx 0 [REDACTED]*
Greater than [REDACTED]* but Greater than [REDACTED]* but
equal to or less than equal to or less than
[REDACTED]* [REDACTED]*
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Xxxxx 0 [XXXXXXXX]* Xxxxx 0 [REDACTED]*
Equal to or less than Equal to or less than
[REDACTED]* [REDACTED]*
-------------------------------------------------------------------------------
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 and Tier 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), (B) changes in the Applicable LIBOR Rate based
on the Target Amount shall be made only on the first day of a calendar quarter,
and (C) the Applicable LIBOR Rate shall be at Tier A, Level 1 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).
7
"Xxxxxx Group" means the Borrower and each other Transaction Party.
"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" has the meaning set forth 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.
"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 Xxxxxx Automotive Group L.L.C., a Delaware limited
liability company, together with its 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 LLC Agreement" means the Third Amended and Restated Limited
Liability Company Agreement of Borrower, dated as of February 1, 2000, including
any amendments or restatements subsequent to the date hereof.
"Borrower Pledges" means each of (i) that certain 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, as it may
be amended, restated or otherwise modified and in effect from time to time, (ii)
that certain 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
limited liability company Subsidiaries, as it may be amended, restated or
otherwise modified and in effect from time to time, (iii) that certain 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 partnership
Subsidiaries, as it may be amended, restated or otherwise modified and in effect
from time to time, and (iv) 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 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 either (i) the Initial
Borrowing pursuant to Section 2.1 (A) (1) or (ii) any Advance under Section
2.1(A) (2).
8
"Borrowing Spread" is defined in Section 2.1 (A) (2) (c) hereof.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.1 (A) (2) (b) hereof.
"Business Day" means a day (other than a Saturday or Sunday) on which
commercial banks are open for business in New York City 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 Moody's 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
9
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.
"Change of Control" means an event or series of events, not including the
events constituting the Roll-Up Transaction, 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) other than as might be permitted under the terms hereof in
connection with a Permitted IPO Conversion (as defined herein) 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;
(iii) prior to an Initial Public Offering, Xxxxxx Automotive Holdings
L.L.C. ceases to control the board of directors of Borrower (which such
control is more fully described in Section 3.01 of the Borrower LLC
Agreement), and after an Initial Public Offering, Xxxxxx Automotive
Holdings L.L.C. ceases to exercise voting control over the Shares (as
defined in the Shareholders Agreement), as such control is more fully
described in Section 3.01 of the Shareholders Agreement; or
(iv) 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).
10
"Chrysler Financial" means Chrysler Financial Company, L.L.C., a Michigan
limited liability company, and its successors and assigns.
"Closing Fee" is defined in Section 3.1(C) (xxi) of this Agreement.
"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.
"Commission" means the United States Securities and Exchange Commission and
any Person succeeding to the functions thereof.
"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, 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
11
agreement to purchase, repurchase, or otherwise acquire such Indebtedness,
obligation or liability or any security therefore, or 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 Cross Default Agreement dated as of
even date herewith, by and among the Transactions Parties, the Lenders and the
Agent, as such agreement 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 at 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 as at 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;
12
(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;
(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.
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"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.
"Dealership Guaranty" means each Guaranty in the form attached hereto as
Exhibit C-1, 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-1, 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 2.12, 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).
14
"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.
"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.
15
"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.
"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
(after the Initial Public Offering), the closing price for such Capital Stock on
the trading date immediately preceding the date of determination; and (b) with
respect to the Capital Stock of the Borrower
16
(prior to the Initial Public Offering) and 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 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 Subsidiary Holding Company
Guarantor.
"Guaranty" means each Dealership Guaranty and Subsidiary Holding 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
17
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
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.
"Initial Borrowing" is defined in Section 2.1 (A) (1) hereof.
"Initial Public Offering" means an initial public offering of equity
securities of Borrower (or another entity formed in connection with a Permitted
IPO Conversion (as defined herein)) registered under the Securities Act of 1933,
as amended.
"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 interest expense not payable in cash (including
amortization of discount), and excluding Floor Plan Indebtedness, all as
determined in conformity with Agreement Accounting Principles.
"Interest Reconciliation Date" is defined in Section 2.5 hereof.
"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
18
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 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 (b) 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 on or after the Effective Date.
"Loan Party Guaranties" means each Subsidiary Holding Company Guaranty and
each Dealership Guaranty.
19
"Loan Party Pledges" means each of (i) the Borrower Pledge, (ii) the
Dealership Pledge, (iii) the Subsidiary Holding 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 Subsidiary Holding
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.
"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 Act and the Exchange Act, or
(ii) any Subsidiary of the Borrower that is a Loan Party.
"Maximum Availability" means $550,000,000.00, 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.
20
"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
(including the amount of taxes payable by such Person's direct and indirect
owners if such Person is treated as a flow through entity for tax purposes as
determined for purposes of making Tax Distributions pursuant to Section 6.01 (c)
of the Borrower LLC Agreement), (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 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), 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,; provided, however, that in the case of taxes that are
deductible under clause (b) above but for the fact that, at the time of receipt
of such cash, such taxes or any Tax Distribution related thereto have not been
actually paid or are not then payable, such Person or Affiliate may deduct an
amount (the "Reserved Amount") equal to the amount reserved in accordance with
Agreement Accounting Principles for such party's reasonable estimate of such
taxes or any Tax Distribution, other than taxes of such party for which such
party is indemnified, provided further, however, that, at the time such taxes or
any Tax Distribution are paid, an amount equal to the amount, if any, by which
the Reserved Amount for such taxes or any Tax Distribution exceeds the amount of
such taxes or any Tax Distribution actually paid shall constitute "Net Cash
Proceeds" of the type for which such taxes were reserved for all purposes
hereunder.
"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).
"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.
21
"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
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.
"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.
"Permitted IPO Conversion" means, any of the following, occurring as a
precursor to an initial public offering of securities in the Borrower, (A) a
transfer of all of (x) the assets of
22
Borrower or (y) the Equity Interests in Borrower owned by the members of
Borrower, to a newly organized stock corporation or other business entity (any
such entity is referred to herein as a "Newco"), (B) a merger or consolidation
of Borrower into or with a Newco, (C) the conversion of Borrower into a
corporation or other type of entity, or (D) another restructuring of all of the
assets of or Equity Interests in Borrower owned by the members of Borrower into
a Newco; provided, however that such actions described in (A) through (D) may
occur only if (i) consented to in writing by the Agent and the Required Lenders
prior to the consummation of such actions, which such consent may not be
unreasonably withheld, (ii) any such Newco is a Person organized under the laws
of the United States, any State thereof or the District of Columbia, (iii) any
such Newco (A) expressly assumes the Obligations of the Borrower and performance
of the Borrower's covenants under the Loan Documents, by becoming a party
thereto, and (B) takes or has taken all action required by Section 5 of the
Borrower Security Agreement, and takes or has taken such other action as may be
necessary or desirable, or as the Agent may reasonably request, in order to
preserve the Liens, and continue the perfection thereof with the same priority,
as granted and provided for or purported to be granted and provided for by the
Borrower Security Agreement, and (iv) immediately after giving effect to such
transaction, no event shall occur and be continuing that constitutes an Event of
Default or Unmatured Default. From and after completion of a Permitted IPO
Conversion, references in the Loan Documents to "Borrower" shall constitute
references to Newco.
"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,
23
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 it 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, and (ix)
those entities acquired in connection with any Permitted Acquisition of a group
of Dealerships, operating under 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.
"Ratable Portion-Initial Advance" means with respect to Ford Credit 45.7%,
with respect to Chrysler Financial 40%, and with respect to GMAC 14.3%.
"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.
"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 (A) (2) (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.
24
"Register" has the meaning set forth in Section 9.3 (b).
"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.
"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).
"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, 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
mean 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.
25
"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, 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).
"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) any Tax Distribution, or (b) 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.
"Roll-Up Transaction" has the meaning assigned to it in the Borrower LLC
Agreement.
"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.
26
"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) incurrence of such obligations must have been consented to by
the Agent and the Required Lenders, which such 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.
"Shareholders Agreement" has the meaning assigned to such term in the
Borrower LLC Agreement.
"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.
"Subsidiary Holding Companies" means and any Subsidiary of Borrower which
owns any Equity Interests in any other Person in the Xxxxxx Group, in each case
together with its successors and assigns.
"Subsidiary Holding Company Guaranty" means each Guaranty in the form
attached hereto as Exhibit C-2, provided by a Subsidiary Holding 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.
"Subsidiary Holding Company Pledge" means each Pledge Agreement delivered
by any Subsidiary Holding 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.
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"Subsidiary Holding Company Security Agreement" means any Security
Agreement in the form attached hereto as exhibit D-2, pursuant to which a
Subsidiary Holding 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.
"Successor Agent" is defined in Section 7.6 of this Agreement.
"Target Amount" means a Dollar amount equal to (i) the Dollar amount of the
Initial Borrowing less the Closing Fee, plus (ii) the aggregate Dollar amount of
prepayments of the Revolving Credit Obligations made by Borrower from time to
time; provided, however, that only prepayments made with the following types of
funds may be included in (ii) above (the "Allowable Prepayments"): (A) Net Cash
Proceeds received by Borrower as a direct result of an Initial Public Offering
or any secondary public offering of equity securities of Borrower registered
under the Securities Act of 1933, (B) Net Cash Proceeds received by Borrower as
a direct result of Permitted Subordinated Indebtedness, (C) Net Cash Proceeds of
an Asset Sale, or (D) Borrower's after tax net income, as determined in
accordance with Agreement Accounting Principles. The Target Amount for each
quarter shall be based on the Target Amount in effect on the first Business Day
of such quarter and shall be determined by Agent in its sole discretion by
taking into account all Allowable Prepayments made on or prior to such date. All
changes in the Target Amount shall become effective on the first Business Day of
a calendar quarter and shall be deemed in effect throughout such calendar
quarter.
"Tax Distribution" means any distribution by the Borrower pursuant to
section 6.01 (c) of the Borrower LLC Agreement.
"Termination Date" means the earlier of (a) three years less one day after
the Effective Date 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
28
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.
"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 Advances" is defined in Section 5.2 (K) hereof.
29
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
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. Upon the satisfaction of all of the
conditions precedent set forth in Section 3.1 of this Agreement (the date upon
which such conditions precedent are satisfied being hereinafter referred to as
the "Effective Date"), this Agreement shall become effective.
ARTICLE II: THE LOAN FACILITIES
2.1 Making Advances; Repayment of Advances.
(A) Making Advances.
(1) Initial Advance. No later than 11:00 A.M. (Eastern Standard Time)
on the Effective Date, each Lender severally agrees to make available to the
Agent, in same day funds, such Lender's Ratable Portion-Initial Advance of the
Existing Xxxxxx Obligations (plus such Lender's Ratable Portion-Initial Advance
of the Closing Fee (as defined in Section 3.1 (xxi)). If funds are made
available to Agent by the Lenders as required herein, no later than 2:00 P.M.
(Eastern Standard Time) on the Effective Date, the Agent will make Advances on
Borrower's behalf in an aggregate amount sufficient to retire the Existing
Xxxxxx Obligations (such Advances are referred to collectively as the "Initial
Borrowing"); Borrower acknowledges that a portion of the Advances comprising
such Initial Borrowing, in an amount sufficient to retire the Existing Xxxxxx
Obligations owing to Agent, will be in the form of internal balance transfers
performed by Agent.
(2) Additional 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 and will consist of Advances made
simultaneously by the Lenders in accordance with Section 2.1 (A) (2) (b). 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 (A) (2), prepay pursuant to Section 2.2 and reborrow under this
Section 2.1 (A) (2).
30
(b) Borrowing Notice. Each Borrowing shall be made on notice, given
not later than 11:00 A.M. (Eastern Standard Time) on the third Business Day
prior to the date of the proposed Borrowing, by the Borrower to the Agent, which
shall give notice to each Lender thereof on the same Business Day by telex or
telecopier. 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) the aggregate amount of such Borrowing, (iii) the
use of proceeds of such Borrowing, and (iv) the account or accounts into which
the Advances comprising such Borrowing should be funded. 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 such 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. 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 as required herein), 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 or
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).
(c) Reallocation. Notwithstanding the provisions of the foregoing
Section 2.1 (A) (2) (b) 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: (1) 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,
(2) 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
31
will continue through as many Borrowing Spreads as are required to reallocate
the full amount of the Over-Borrowing.
(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 subsection (a) of this Section 2.1 (A) (2) and the
Agent may, in reliance upon such assumption, make available to the Borrower on
such date a 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.
(B) The Borrower shall repay in full to the Agent, for the ratable account
of the Lenders, on the Termination Date the aggregate principal amount of
Advances then outstanding.
2.2 Optional Payments; Mandatory Prepayments
2.2 (A) Optional Payments. 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 3 Business Days prior to the
date of such prepayment stating the proposed date and the aggregate principal
amount of the prepayment. The amount of any such partial prepayment must be no
less than $500,000.00, and in multiples of $100,000.00 if in excess thereof.
(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 an Initial Public Offering
or any other offering of equity securities of
32
Borrower,and (ii) one hundred percent (100%) of the Net Cash Proceeds received
by Borrower as a direct result of Permitted Subordinated Indebtedness.
(C) Allocation of Prepayments. Until such time as the aggregate amount of
all prepayments made under this Section 2.2 equals the amount of the Initial
Borrowing made under Section 2.1 (A) (1), the Agent will allocate the amount of
all prepayments among the Lenders in accordance with each Lender's respective
Ratable Portion-Initial Advance. From and after the time that the aggregate
amount of all prepayments made under this Section 2.2 equals the amount of the
Initial Borrowing made under Section 2.1 (A) (1), 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) three percent (3.0%), if Borrower terminates the Commitment on or
before the first anniversary of the Effective Date; or
(b) two percent (2.0%), if Borrower terminates the Commitment after the
first anniversary of the Effective Date but before the second
anniversary of the Effective Date; or
(c) one percent (1.0%), if Borrower terminates the Commitment after the
second anniversary of the Effective Date before the third anniversary
of the Effective 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.
33
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 first Business Day after the receipt of any such payment (the
date of such distribution is referred to herein as the "Interest Reconciliation
Date") (i) if such payment by the Borrower is in respect of principal, interest,
commitment fees or any other Obligation then payable hereunder and under the
Notes to more than one Lender, to such Lender for its account ratably in
accordance with the amounts of such respective Obligations then payable to such
Lenders (with respect to each Lender, such Lender's Ratable Share of the
interest payable hereunder and under the Notes is referred to herein as the
"Interest Due Lenders") and (ii) 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. If Agent fails to remit to
any Lender its portion of the Interest Due Lenders or any amount of principal,
commitment fees or any other Obligation as required above, 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
receipt of any such payment, at the Federal Funds Rate from time to time in
effect, and (y) thereafter 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 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.
(B) 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
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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
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
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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 of the
Effective Date occurring after the Effective Date (provided, however, that if
any such anniversary day 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
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 of the Effective Date (and each like period in
each subsequent year thereafter in which such option is available). The Agent
shall, on or before the date that is 30 days after receipt of any such 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
36
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,
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
37
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,
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. For purposes of this Section 2.9,
the entry into force of the final U. S. Department of Treasury regulations
promulgated under Sections 1441 and 1442 of the Code, published but not yet
effective as of the date of this Agreement, will not be considered a change in
the applicable law or in the interpretation or application thereof.
(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,
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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.
2.12 Loan Administration Fee. On each Interest 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 Interest Reconciliation Date. Each Lender agrees to
pay the Agent the Administration Fee, on each Interest Reconciliation Date, by
allowing the Agent to net the Administration Fee out of the Interest 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
39
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
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
40
(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.
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
41
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 PRECEDENT
3.1 Conditions of Effectiveness. The Effective Date of this Agreement shall
be the date on which all of the following conditions shall have been satisfied
or waived by the Agent:
(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;
(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 and each
Guarantor;
42
(iv) a Dealership Guaranty and Subsidiary Holding Company Guaranty,
duly executed by each Dealership and Subsidiary Holding Company,
respectively, to the Agent;
(v) the Borrower Security Agreement, a Dealership Security Agreement
and a Subsidiary Holding Company Security Agreement executed by Borrower,
each Dealership and each Subsidiary Holding Company to the Agent, and a
Pledged Account Agreement executed by each Transaction Party, together
with:
(A) acknowledgment copies of proper financing statements (to be
duly filed by the Agent on or before the day of the Initial
Borrowing), 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
date of the initial Borrowing, 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 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 limitation, receipt of
duly executed payoff letters, UCC-3 termination statements and
landlords' and bailees' waiver and consent agreements).
(vi) the Borrower Pledges, the Dealership Pledge and the Subsidiary
Holding Company Pledge, executed by each of Borrower, each Dealership and
each Subsidiary Holding Company, 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 Subsidiary Holding
Company has any Indebtedness other than Permitted Existing Indebtedness and
Liens other than Permitted Existing Liens, pay-out letters, releases and
UCC-3 Termination
43
Statements, where applicable, from all third-party creditors releasing all
Liens securing any such Indebtedness;
(viii) Certificates of good standing for each Transaction Party from
its jurisdiction of incorporation and each other jurisdiction where the
nature of its business requires it to be qualified as a foreign
corporation;
(ix) a copy of a certificate of the Secretary of State of the
jurisdiction of incorporation of each Transaction Party, dated reasonably
near the date of the initial Borrowing, certifying (A) as to a true and
correct copy of the certificate of incorporation (or other Charter
Documents) of such Person and each amendment thereto on file in such
Secretary's office and (B) that (1) such amendments are the only amendments
to such Person's certificate of incorporation (or other Charter Documents)
on file in such Secretary's office, (2) such Person has paid all franchise
taxes to the date of such certificate and (C) such Person is duly
incorporated and in good standing or presently subsisting under the laws of
the State of the jurisdiction of its incorporation;
(x) a Secretary's Certificate and a Solvency Certificate from each
Transaction Party;
(xi) 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;
(xii) to the extent not included in the foregoing, the documents,
instruments and agreements set forth on the closing list attached as
Exhibit E hereto;
(xiii) such consents, waivers or other documents as any Lender or its
counsel may have reasonably requested;
(xiv) favorable opinions of counsel for each Loan Party in form and
substance satisfactory to the Agent;
(xv) the loss payable endorsements referenced in Section 5.2 (G) shall
have been delivered to the Agent;
(xvi) 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;
(xvii) there shall have occurred and be continuing no Material Adverse
Change since November 30, 2000;
(xviii) 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
44
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;
(xix) 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 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;
(xx) Borrower shall have paid a fee in the amount of $11,000,000.00
(the "Closing Fee") to the Lenders (which will be distributed among the
Lenders pursuant to the terms of a separate agreement among the Lenders),
and all other 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);
(xxi) 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.
45
ARTICLE IV: REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as of the date of this Agreement 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
Documents, or (iv) require any approval of the shareholders, members or partners
of any Transaction Party except such as have been obtained. The
46
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
November 30, 2000 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 Transaction
Parties in the aggregate in excess of $250,000.00. The Borrower has no knowledge
of any proposed tax
47
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(A) 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 (i) contains a description
as of the Effective Date (or as of the date of any supplement thereto) 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
the Effective Date (or as of the date of any supplement thereto) (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. After the formation
or acquisition of any New Subsidiary permitted under Section 5.3(F)(ii), if
requested by the Agent, 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 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
48
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,
with
49
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
50
of their respective past property or operations, are subject to or the
subject of, any 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
51
consolidating balance sheet of the Borrower and its Subsidiaries as at the
end of such period 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 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) 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, 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 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
52
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 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;
53
(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.
(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 Initial Public Offering or 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
54
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) Within thirty (30) days after the Effective Date of
this Agreement, Borrower shall have delivered to Agent, or cause to have been
delivered to Agent, a report of the following information with respect to each
piece of real property which is the subject of Section 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 first MAI Appraisal performed at the request
of a Transaction Party), (3) the date of the first 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 first 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.
(ii) On each anniversary day of the Effective 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 Section 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 first MAI Appraisal performed at the request of a Transaction
Party), (3) the date of the first 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 first 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.
55
(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)
and except for a Permitted IPO Conversion, 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
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
56
(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 (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
57
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
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
58
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 (A) (1)
hereof, the Borrower shall use the proceeds of Advances to (i) fund the
Acquisition Costs of Permitted Acquisitions (each such Advance is referred to
herein as an "Acquisition Advance") and (ii) 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 four percent (4%) of the Revolving Credit Obligations. 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).
(L) Addition of Guarantors. The Borrower shall cause each present and
future Subsidiary Holding Company and each Dealership which has not heretofore
provided a Subsidiary Holding Company Guaranty or a Dealership Guaranty to the
Agent, to deliver to the Agent, for the benefit of the Lenders, a Subsidiary
Holding Company Guaranty, in the form of Exhibit C-2, or a Dealership Guaranty,
in the form of Exhibit C-1, 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 Subsidiary Holding Company and each
Dealership shall provide such Subsidiary Holding 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
59
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
Subsidiary Holding 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.
(P) Pledge of Capital Stock. The Borrower shall, and shall cause each of
the Subsidiary Holding 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 Subsidiary Holding 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 Subsidiary Holding Company of the
Borrower's or Subsidiary Holding Companies' Capital Stock in a Dealership or
other Subsidiary Holding Company, the Borrower and/or Subsidiary Holding 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;
60
(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 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
61
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 first 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;
(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; and
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(vii) sales of real property in connection with any REIT Transaction
(as defined in Section 5.3 (G) 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.
(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;
(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;
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(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;
(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; and
(viii) any Estate Tax Loan (as defined in the Borrower LLC Agreement)
required to be made pursuant to Section 7.07 of the Borrower LLC Agreement.
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
Subsidiary Holding 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, the Borrower may repurchase (for value as described in
Article VII of the Borrower LLC Agreement) Equity Interests of the Borrower
and/or options to purchase Equity Interests of the Borrower held by
directors, executive officers, members of management or employees of the
Borrower or any of its Subsidiaries upon the death or termination of such
director, 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
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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 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; and
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(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.
(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
obtained in an arm's length transaction at the time from Persons who are not
such a holder or Affiliate, except that (i) employment agreements from time to
time with senior management of Borrower and its Subsidiaries for services
rendered shall be permitted, and (ii) the Shareholder Agreement shall be
permitted and (iii) the sale by the owner of property leased to the Borrower or
any of its Subsidiaries to a public real estate investment trust or to a Person
that becomes a public real estate investment trust (a "REIT Transaction") and
leases of real property related to dealerships from the public real estate
investment trust formed in connection with the REIT Transaction 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).
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Notwithstanding the foregoing, this Section 5.3 (H) shall not apply to a
Permitted IPO Conversion.
(I) Sales and Leasebacks. 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.
(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.
(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,
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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 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.
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(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
binding on the Borrower for all purposes of this Agreement absent manifest
error.
ARTICLE VI: EVENT OF DEFAULTS
6.1 Event 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,
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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 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
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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.
(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
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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
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;
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(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
(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 limitation
of 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)
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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
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 limitation
of 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
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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 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, 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 or, in the case of the initial Borrowing,
Section 3.2, (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
75
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,
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 the Lenders with respect to matters
covered by the Loan Documents, and the Loan Documents delivered on the Effective
Date supersede all prior agreements and understandings among the Borrower and
the Lenders relating to the subject matter thereof.
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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).
(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
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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 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 its Subsidiaries, the presence of
asbestos-containing materials at any respective property of the Borrower or
its Subsidiaries 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 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.
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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 JURISDICITION 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
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
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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.
(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.
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(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
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
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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
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.
ARTICLE IX: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
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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
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
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(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
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.
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(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
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.
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ARTICLE X: NOTICES
10.1 Giving Notice. Except as otherwise permitted by Section 2.1 (a) (2)
(b) 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.
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]
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XXXXXX AUTOMOTIVE GROUP, L.L.C.,
as the Borrower
By: /s/ Xxxxx Xxxxxxxx
---------------------------
Name: Xxxxx Xxxxxxxx
Title: President
Address:
Xxxxxx Automotive Group
0 Xxxxxxxx Xxxxxx - Xxxxx 000
Xxxxxxxx, XX 00000
Attention:
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
[SIGNATURE PAGE TO CREDIT AGREEMENT]
87
FORD MOTOR CREDIT COMPANY,
as Lender, and as Agent
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxx
Title: National Account Manager
Address:
Ford Motor Credit Company
The American Road
Major Accounts Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
[SIGNATURE PAGE TO CREDIT AGREEMENT]
88
CHRYSLER FINANCIAL COMPANY, LLC,
as Lender
By: /s/ X.X. Xxxxxx
---------------------------
Name: X.X. Xxxxxx
Title: Vice President
Address:
Chrysler Financial Company L.L.C.
00000 Xxxxxxxx Xxxx, 00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx
Telephone No.: -----------
Facsimile: (000) 000-0000
[SIGNATURE PAGE TO 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
[SIGNATURE PAGE TO CREDIT AGREEMENT]
90
EXHIBIT A
[Form of Note]
PROMISSORY NOTE
(Acquisition/Revolving Line of Credit)
(LIBOR Rate)
$--------------------- ----------------, -----------
------------------------, 2000
FOR VALUE RECEIVED, XXXXXX AUTOMOTIVE GROUP, L.L.C, a Delaware limited
liability company ("Borrower"), whose address is ------------------, promises to
pay to --------------------------------, ("Lender"), or order, at
----------------------------------, or at such other place as Lender may from
time to time in writing designate, in lawful money of the United States of
America, the principal sum of --------------------------- DOLLARS
($--------------),or such lesser amount as may be advanced from time to time by
the Lender to the Borrower pursuant to the Credit Agreement dated as of even
date herewith, among the Borrower, the Agent and the Lenders who are parties
thereto (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 such interest rates, and payable at such
times, as are specified in the Agreement.
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.
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
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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, L.L.C.,
a Delaware limited liability company
By: ___________________________ (SEAL)
Name:
Title:
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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 Credit
Agreement dated _______________, 2000 (the "Credit ----- -------
Agreement") by and between Xxxxxx Automotive Group, L.L.C. (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 2.4 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 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 and 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.
Unless otherwise defined herein, terms defined in the Credit Agreement
shall have the same meanings in this Borrowing Notice.
Date: ______________, 200_____ XXXXXX AUTOMOTIVE GROUP, L.L.C.
By: ______________________________
Name:_________________________
Tile: __________________________
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EXHIBIT C-1
[Form of Dealership Guaranty]
GUARANTY
GUARANTY (this "Guaranty") dated _______________, 2000 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 Credit Agreement dated
as of even date herewith, the Lenders extended to Xxxxxx Automotive Group
L.L.C., a Delaware limited liability company, and the entity which exercises
control (directly or indirectly) over the Guarantors ("Borrower"), a revolving
credit facility in an amount not to exceed $550,000,000.00 (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;
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(d) any manner of application of Collateral, or proceeds thereof, to
all or any of the Guaranteed Obligations, or any manner of 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
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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.
(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 partnerhsip 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.
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(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
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,
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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 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 or 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,
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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, 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
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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 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
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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.
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
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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.
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
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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.
(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 C-2
[Form of Subsidiary Holding Company Guaranty]
GUARANTY
GUARANTY (this "Guaranty") dated _______________, 2000 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 Credit Agreement dated
as of even date herewith, the Lenders extended to Xxxxxx Automotive Group
L.L.C., a Delaware limited liability company, and the entity which exercises
control (directly or indirectly) over the Guarantors ("Borrower"), a revolving
credit facility in an amount not to exceed $550,000,000.00 (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
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to the existence of a bankruptcy, reorganization or similar proceeding
involving such Loan Party.
(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;
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(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 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
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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.
(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 partnerhsip 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),
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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
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.
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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 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 or any Guarantor
or the Release or threatened Release of any Contaminant into the
environment (collectively, the "Indemnified Matters");
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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, 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
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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 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.
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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.
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.
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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.
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
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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.
(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-1
[Form of Dealership Security Agreement]
SECURITY AGREEMENT
SECURITY AGREEMENT (the "Agreement") dated ______________, 2000,
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 L.L.C., a Delaware limited
liability company, (the "Borrower"), the Agent and the Lenders have entered
into a certain Credit Agreement dated as of even date herewith, 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 $550,000,000.00 (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 of even date
herewith (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, 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 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) records and other books and records relating to the foregoing;
(h) all intellectual property;
(i) all goods;
(j) all UCC references;
(k) all security entitlements; and
(l) 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 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
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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 or to take any action to collect or enforce any claim for payment
assigned hereunder.
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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.
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 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
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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.
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
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
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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
indorsement) 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:
(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.
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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
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.
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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 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. Revised Article 9. It is the intention of the parties to
this Agreement that the priorities and agreements herein contained continue to
apply after the enactment by the various States of Revised Article 9 --
Secured Transactions (with conforming amendments to Articles 1, 2, 2a, 4, 5,
6, 7 and 8) to the UCC as approved by The American Law Institute in 1998 and
approved and recommended for enactment in all the States by the
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National Conference of Commissioners for Uniform State Laws in 1998 ("Revised
Article 9") and the effectiveness of Revised Article 9 in any State. After the
effectiveness of Revised Article 9 in any State governing perfection and the
effect of perfection or non-perfection of a security interest in any
Collateral, as to such State and such Collateral, (i) all section references
herein to, and all defined terms used herein defined in, Article 9 of the UCC
as currently in effect shall be deemed to be to any corresponding Section or
definition of Revised Article 9, (ii) if any definition used herein by
reference to Revised Article 9 is broader than the corresponding definition
used in current Article 9 of the UCC, such broader definition will apply
herein.
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EXHIBIT D-2
[Form of Subsidiary Holding Company Security Agreement]
SECURITY AGREEMENT
SECURITY AGREEMENT (the "Agreement") dated ______________, 2000,
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 L.L.C., a Delaware limited
liability company, (the "Borrower"), the Agent and the Lenders have entered
into a certain Credit Agreement dated as of even date herewith, 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 $550,000,000.00 (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 of even date
herewith (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, 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 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) records and other books and records relating to the foregoing;
(h) all intellectual property;
(i) all goods;
(j) all UCC references;
(k) all security entitlements; and
(l) 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 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
127
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 or to take any action to collect or enforce any claim for payment
assigned hereunder.
128
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.
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 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
129
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.
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
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
130
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
indorsement) 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:
(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.
131
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
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
132
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 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. Revised Article 9. It is the intention of the parties to
this Agreement that the priorities and agreements herein contained continue to
apply after the enactment by the various States of Revised Article 9 --
Secured Transactions (with conforming amendments to Articles 1, 2, 2a, 4, 5,
6, 7 and 8) to the UCC as approved by The American Law Institute in 1998 and
approved and recommended for enactment in all the States by the National
Conference of Commissioners for Uniform State Laws in 1998 ("Revised Article
9") and the effectiveness of Revised Article 9 in any State. After the
effectiveness of Revised Article 9 in any State governing perfection and the
effect of perfection or non-perfection of a
133
security interest in any Collateral, as to such State and such Collateral, (i)
all section references herein to, and all defined terms used herein defined
in, Article 9 of the UCC as currently in effect shall be deemed to be to any
corresponding Section or definition of Revised Article 9, (ii) if any
definition used herein by reference to Revised Article 9 is broader than the
corresponding definition used in current Article 9 of the UCC, such broader
definition will apply herein.
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.
134
EXHIBIT E
EXHIBIT E
REVOLVING LOAN FACILITY
CLOSING STATEMENT
Closing statement for revolving loan facility in the original
principal amount of $550,000,000.00 (the "Loan") to be made by FORD MOTOR
CREDIT COMPANY ("Ford Credit" or "Agent"), GENERAL MOTORS ACCEPTANCE
CORPORATION ("GMAC"), CHRYSLER FINANCIAL COMPANY, L.L.C. ("Chrysler
Financial," and together with Ford Credit, GMAC and any and all other lenders
under the Credit Agreement, the "Lender") to XXXXXX AUTOMOTIVE GROUP, L.L.C. a
Delaware limited liability company ("Borrower"), and guaranteed by each of the
following (collectively, "Guarantor"):
NORTH CAROLINA PLATFORM:
-----------------------
Xxxxxx Automotive North Carolina L.L.C
Xxxxxx Automotive North Carolina Dealership Holdings L.L.C Crown CPG L.L.C.
Crown CHH L.L.C.
Crown GBM L.L.C
Crown CHV L.L.C
Crown GAU L.L.C.
Crown RPG L.L.C.
Crown GKI L.L.C.
Crown RIS L.L.C.
Crown GMI L.L.C.
Crown RIM L.L.C.
Crown GDO L.L.C.
Crown RIB L.L.C.
Crown GNI L.L.C.
Crown RIA L.L.C.
Crown GAC L.L.C.
Xxxxxx Automotive North Carolina Management L.L.C.
Crown GHO L.L.C.
Xxxxxx Automotive North Carolina Real Estate Management L.L.C.
Crown Used Car Mall L.L.C.
Crown FFO Holdings L.L.C.
Crown FFO L.L.C.
Camco Finance L.L.C.
135
OREGON PLATFORM:
---------------
Xxxxxx Automotive Oregon Dealership Holdings L.L.C.
Xxxxxxxx FRD L.L.C.
Xxxxxxxx XX L.L.C.
Xxxxxxxx SUZU L.L.C.
Xxxxxxxx Hon L.L.C.
Xxxxxxxx Sub L.L.C.
Xxxxxxxx XXXX L.L.C.
Xxxxxxxx NISS L.L.C.
Xxxxxxxx MAZ L.L.C.
Xxxxxxxx XXX L.L.C.
Xxxxxxxx On Canyon L.L.C.
Xxxxxxxx Auto Credit Northwest, Inc.
Xxxxxx Automotive Oregon Management L.L.C.
Xxxxxx Automotive Oregon Real Estate Management L.L.C.
Xxxxxxxx Dam L.L.C.
Xxxxxx Automotive North Carolina Real Estate Holdings L.L.C.
ATLANTA PLATFORM:
-----------------
Xxxxxx Automotive Atlanta L.L.C.
Xxxxxx Atlanta Hon L.L.C.
Xxxxxx Atlanta Chevrolet L.L.C.
Xxxxxx Atlanta LEX L.L.C.
Xxxxxx Atlanta AC L.L.C.
ST. LOUIS PLATFORM:
-------------------
Xxxxxx Automotive St. Louis L.L.C.
Xxxxxx St. Xxxxx XXX L.L.C.
Xxxxxx St. Louis Cadillac L.L.C.
Xxxxxx St. Xxxxx XX L.L.C.
Xxxxxx St. Louis Gen L.L.C.
136
TEXAS PLATFORM:
--------------
Xxxxxx Automotive Texas L.L.C.
Xxxxxx Texas Management L.L.C.
Xxxxxx Automotive Texas Holdings L.L.C.
XxXxxxx Grande X.X.
XxXxxxx Auction X.X.
XxXxxxx Outfitters X.X.
XxXxxxx Houston Xxx X.X.
XxXxxxx Houston NISS X.X.
XxXxxxx Houston Kia L.P.
XxXxxxx Xxxxxx PG&G X.X.
XxXxxxx Xxxxxx XXX X.X.
XxXxxxx Plano Acura X.X.
XxXxxxx Austin Acura X.X.
XxXxxxx Communications L.P.
XxXxxxx Xxxxxx - Hon L.P.
Plano Lincoln-Mercury, Inc.
TAMPA PLATFORM:
--------------
Xxxxxx Villanova II L.L.C.
Xxxxxx Automotive Tampa GP L.L.C.
Xxxxxx Automotive Tampa X.X.
Xxxxxx Tampa Management L.L.C.
Tampa XXXX X.X.
Tampa Kia L.P.
Tampa LM L.P.
Tampa MIT L.P.
Tampa SUZU L.P.
WMZ Motors L.P.
WMZ Xxxxxxx Motors L.P.
WTY Motors L.P.
Tampa Pontiac GMC X.X.
Xxxxxx Automotive Brandon L.P.
Precision Enterprises Tampa, Inc.
Precision Nissan, Inc.
Precision Computer Services, Inc
Precision Motorcars, Inc.
Precision Infiniti, Inc.
137
JACKSONVILLE PLATFORM:
---------------------
Xxxxxx Automotive Jacksonville GP L.L.C.
Xxxxxx Automotive Jacksonville X.X.
Xxxxxx Jax Holdings X.X.
Xxxxxx Automotive Corp.
CN Motors Ltd.
CP-GMC Motors Ltd.
CFP Motors Ltd.
Avenues Motors Ltd.
CH Motors Ltd.
CHO Partnership Ltd.
Xxxxxx Automotive Central Fl, L.L.C.
Xxxxxx Xxxxxxxx Chevrolet L.L.C.
Xxxxxx Xxxxxxxx Chevrolet Olds, L.L.C.
Xxxxxx Jax Management L.L.C.
ANL L.P.
Bayway Financial Service X.X.
Xxxxxx Management L.P.
C & O Properties Ltd.
Xxxxxx Xxxxxx Imports 2, L.L.C.
Xxxxxx-Xxxxxx Imports, L.L.C.
Xxxxxx Automotive Deland, L.L.C.
AF Motors, L.L.C.
ALM Motors, L.L.C.
Xxxxxx Cars L.L.C.
CSA Imports L.L.C.
Xxxxxx Chevrolet L.L.C.
138
ARKANSAS PLATFORM:
-----------------
Xxxxxx Villanova V L.L.C.
Xxxxxx Automotive Arkansas L.L.C.
Xxxxxx Automotive Arkansas Dealership Holdings L.L.C.
NP FLM L.L.C.
NP VKW L.L.C.
Prestige TOY L.L.C.
Premier NSN L.L.C.
Premier Lm L.L.C.
Hope FLM L.L.C.
NP MZD L.L.C.
Prestige Bay L.L.C.
Premier PON L.L.C.
Hope CPD L.L.C.
TXK L.L.C.
TXK FRD L.P.
TXK CPD L.P.
Hope FLM L.L.C.
Escude NN L.L.C.
Escude T L.L.C.
Escude M L.L.C.
Escude Ns L.L.C.
Escude D L.L.C.
Xxxxxx Management L.L.C.
Xxxxxx Everest Holdings L.L.C.
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.
139
EXHIBIT F
[Form of Officer's Certificate]
OFFICER'S CERTIFICATE
I, the undersigned, hereby certify that I am the ____________________ of
XXXXXX AUTOMOTIVE GROUP, L.L.C., a limited liability company 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 Credit Agreement dated ______________, 2000, 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, L.L.C.
By ________________________
Name _______________________
Title ________________________
140
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
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 a Xxxxxx Dealership.
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.
141
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.
142
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 _____________________, 2000, 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 COMPNY, 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 Credit Agreement dated as of
___________________________ among Xxxxxx Automotive Group L.L.C., a Delaware
limited liability company, (the entity which directly or indirectly owns and
controls the Company; 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
143
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.
144
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.
145
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: Xxxxxxx Xxxxxx
Telephone: (____) _____-_______
Facsimile: (____) _____-_______
Bank:
_______________________________
Attention: ___________________
Telephone: (____) _____-_______
Facsimile: (____) ______-______
Company:
_____________
c/o Asbury Automotive Group L.L.C.
0 Xxxxxxxx Xxxxxx - Xxxxx 000
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx, 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.
146
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) Revised Article 9. It is the intention of the parties to this
Agreement that the priorities and agreements herein contained continue to
apply after the enactment by the various States of Revised Article 9 - Secured
Transactions (with conforming amendments to Articles 1, 2, 2a, 4, 5, 6, 7, and
8) to the UCC as approved by The American Law Institute in 1998 and approved
and recommended for enactment in all the States by the National Conference of
Commissioners for Uniform State Laws in 1998 ("Revised Article 9") and the
effectiveness of Revised Article 9 in any State. After the effectiveness of
Revised Article 9 in any State governing perfection and the effect of
perfection or non-perfection of a security interest in a Pledged Account, as
to such State and such Pledged Account, (i) all section references herein to,
and all defined terms used herein defined in, Article 9 of the UCC as
currently in effect shall be deemed to be any corresponding Section or
definition of Revised Article 9, (ii) if any definition used herein by
reference to Revised Article 9 is broader than the corresponding definition
used in current Article 9 of the UCC, such broader definition will apply.
(f) 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.
147
Schedule 1.1.1
[Permitted Existing Indebtedness]
148
Schedule 1.1.2
[Permitted Existing Investments]
149
Schedule 1.1.3
[Permitted Existing Liens]
150
Schedule 1.1.4
[Lender's Commitment]
"Commitment"
Ford Motor Credit Company $235,000,000.00
Chrysler Financial Company, L.L.C. $235,000,000.00
General Motors Acceptance Corporation $80,000,000.00
151
Schedule 1.1.5
[Dealership Guarantors]
152
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:
1.
2.
3.
4.
153
Schedule 1.1.7
[Pending Acquisitions]
NONE
154
Schedule 1.1.8
[Subsidiaries not wholly owned]
155
Schedule 3.1
"Disclosed Litigation"
156
Schedule 4.8
[Subsidiaries]
157
Schedule 4.9
[ERISA: employee welfare benefit plans]
NONE
158
Schedule 5.3 (F)
[Entities with a Minority Holder of Equity Interests]
Jacksonville Platform
Xxxxxx Automotive Central Florida, L.L.C.
Xxxxxx Automotive Deland, L.L.C.
Xxxxxx Xxxxxx Imports 2, L.L.C.
3 Total Subsidiaries in Platform
St. Louis Platform
Xxxxxx St. Xxxxx XX L.L.C.
1 Total Subsidiaries in Platform
159
SCHEDULE 9.3
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of __________ ____,
____ (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
160
documents and information as it has deemed 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.
161
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.
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:]
162
