EXHIBIT 10.40
EIGHTH AMENDMENT AND CONSENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS EIGHTH AMENDMENT AND CONSENT TO AMENDED AND RESTATED CREDIT
AGREEMENT, dated as of July 31, 2001 (this "Amendment"), is made by and among
BUDGET GROUP, INC., a Delaware corporation (the "Borrower"), the Lenders (such
capitalized term and all other capitalized terms not otherwise defined herein
shall have the meanings provided for in Article I below) parties hereto and
CREDIT SUISSE FIRST BOSTON, as administrative agent (in such capacity, the
"Administrative Agent") for the Lenders.
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders and the Agents have heretofore entered
into that certain Amended and Restated Credit Agreement, dated as of June 19,
1998 (as amended by the First Amendment to Amended and Restated Credit Agreement
dated as of September 11, 1998, the Second Amendment to Amended and Restated
Credit Agreement dated as of March 18, 1999, the Third Amendment to Amended and
Restated Credit Agreement dated as of December 22, 1999, the Fourth Amendment
and Waiver to Amended and Restated Credit Agreement dated as of September 30,
2000, the Fifth Amendment to Amended and Restated Credit Agreement, dated as of
January 10, 2001, the Sixth Amendment to Amended and Restated Credit Agreement,
dated as of February 9, 2001, the Seventh Amendment and Consent to Amended and
Restated Credit Agreement, dated as of June 19, 2001, and as further amended,
supplemented, amended and restated or otherwise modified prior to the date
hereof, the "Credit Agreement");
WHEREAS, effective with the calculation of the Borrowing Base Amount as of
the last day of July 2001, the Borrower will only be permitted to include in the
Borrowing Base Amount (as provided in the definition thereof) (i) 50% of the
Appraised Value of Eligible Trademarks (as opposed to 60% previously), (ii) 30%
of the Net Book Value of Eligible Real Estate (as opposed to 50% previously) and
(iii) the sum of the applicable percentages of Eligible Trademarks, Eligible
FF&E and Eligible Real Estate solely to the extent such sum does not exceed the
sum of the applicable permitted percentages of Eligible Receivables, Eligible
Cash and Cash Equivalents, Eligible Repurchase Vehicles and Eligible
Non-Repurchase Vehicles;
WHEREAS, as a result of the operation of these provisions in the
definition of Borrowing Base Amount that become effective with the determination
of the Borrowing Base Amount as of the last day of July 2001, the aggregate
unpaid principal amount of all loans and Letter of Credit Outstandings may
exceed the Borrowing Base Amount;
WHEREAS, the Borrower may wish to redeem, purchase or acquire, or cause
the redemption, purchase or acquisition of, Convertible Preferred Securities
(and the related
principal amount of High Tides Debentures) and/or 1999 Senior Notes by issuing
shares of its common stock as sole consideration therefor;
WHEREAS, the Seventh Amendment provided the Borrower with the ability to
sell all of the Capital Stock of its indirect, Wholly-Owned Subsidiary, Compact
Rent A Car Ltd., a corporation organized under the laws of the province of
Quebec and engaged in the renting of passenger automobiles and trucks in Quebec
("Compact"), so long as, among other things, the Commitment Amount would be
reduced to $525,000,000 upon the closing of such sale;
WHEREAS, the Compact Sale (as specifically defined in the Seventh
Amendment) has not yet occurred and is not likely to occur, but the Borrower
desires to retain the flexibility to sell the Compact business in the future;
WHEREAS, the Borrower desires certain consents from the requisite Lenders
in connection with the foregoing; and
WHEREAS, the requisite Lenders are willing, on and subject to the terms
and conditions set forth below (including, without limitation, an amendment to
the Commitment Amount), to grant the consents provided below (the Credit
Agreement, as amended and otherwise modified pursuant to the terms of this
Amendment, being referred to as the "Amended Credit Agreement");
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the Borrower and the requisite Lenders hereby agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Definitions. The following terms (whether or not
underscored) when used in this Amendment shall have the following meanings (such
meanings to be equally applicable to the singular and plural forms thereof):
"Administrative Agent" is defined in the preamble.
"Amended Credit Agreement" is defined in the eighth recital.
"Amendment" is defined in the preamble.
"Borrower" is defined in the preamble.
"Credit Agreement" is defined in the first recital.
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SECTION 1.2. Other Definitions. Terms for which meanings are provided in
the Amended Credit Agreement are, unless otherwise defined herein or the context
otherwise requires, used in this Amendment with such meanings.
ARTICLE II
AMENDMENTS AND CONSENTS
SECTION 2.1. Amendments. Subject to the satisfaction of the conditions set
forth in Article III, the Credit Agreement is hereby amended in accordance with
this Section 2.1.
SECTION 2.1.1. Amendment to Section 1.1 of the Credit Agreement. (a) In
the event the closing of the Compact Sale (as defined in the Seventh Amendment)
has not occurred prior to the effectiveness of this Amendment, the Commitment
Amount shall be reduced from $550,000,000 to $500,000,000 (with the reference in
the definition of "Commitment Amount" to "$550,000,000" being amended to be a
reference to "$500,000,000"), which reduction shall be allocated pro rata among
the Lenders at the time of such reduction.
(a) In the event the closing of the Compact Sale (as defined in the
Seventh Amendment) has occurred prior to the effectiveness of this Amendment,
the Commitment Amount shall be reduced from $525,000,000 to $500,000,000 (with
the reference in the definition of "Commitment Amount" to "$525,000,000" being
amended to be a reference to "$500,000,000"), which reduction shall be allocated
pro rata among the Lenders at the time of such reduction.
SECTION 2.1.2. Additional Amendments to Section 1.1 ("Defined Terms") of
the Credit Agreement. Section 1.1 of the Credit Agreement is hereby amended by
inserting in such Section the following definitions in the appropriate
alphabetical order:
"'Eighth Amendment' means the Eighth Amendment and Consent to
Amended and Restated Credit Agreement, dated as of July 31, 2001
among the Borrower, the Lenders parties thereto and the
Administrative Agent."
"'Permitted Compact Sale' means the sale of all of the Capital
Stock of the Borrower's indirect, Wholly-Owned Subsidiary, Compact
Rent A Car Ltd., a corporation organized under the laws of the
province of Quebec and engaged in the renting of passenger
automobiles and trucks in Quebec ("Compact"), or the sale of all or
substantially all of the assets of Compact, so long as the following
conditions are satisfied on or prior to the closing of such sale:
(i) the repayment in cash of all obligations of Compact to the
Borrower and its Subsidiaries (other than Compact), (ii) the
repayment of all Indebtedness incurred by Compact with respect to
which the provider or providers of such Indebtedness have recourse
against the Borrower or any of its Subsidiaries (other than
Compact), whether pursuant to a guaranty or otherwise, and (iii) the
entry by Compact (or, in the case
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of an asset sale, the acquirer of the assets of Compact) into a
franchise agreement with Budget Rent-A-Car Corporation having terms
similar to other franchise agreements entered into by Budget
Rent-A-Car Corporation with other franchisees."
"'Seventh Amendment' means the Seventh Amendment and Consent
to Amended and Restated Credit Agreement, dated as of June 19, 2001,
among the Borrower, the Lenders parties thereto and the
Administrative Agent."
SECTION 2.2. Consents. Subject to the satisfaction of the conditions set
forth in Article III, the Lenders, as of the date hereof, hereby:
(a) consent to the Borrowing Base Amount calculated as of the last day of
July 2001 and as of the last day of August 2001 to be less than the aggregate
unpaid principal amount of all Loans and Letter of Credit Outstandings
outstanding during the period in which such Borrowing Base Amount is in effect
under the terms of the Credit Agreement, without requiring any mandatory
prepayments and/or cash collateralization under clause (b) of Section 3.1.1 of
the Credit Agreement; provided that such Borrowing Base Amount is not less than
$426,000,000 as of the last day of July 2001 and not less than $452,000,000 as
of the last day of August 2001;
(b) (i) waive (i) to the extent necessary to permit a Permitted Compact
Sale, the restrictions set forth in Section 8.2.10 of the Credit Agreement
("Asset Dispositions, etc.") and (ii) the requirements of Section 2.2.2 of the
Credit Agreement ("Reduction of the Commitment Amount - Mandatory") with respect
to such proceeds of such Permitted Compact Sale (it being understood and agreed
that proceeds of such Permitted Compact Sale may be used by the Borrower and its
Subsidiaries for general corporate purposes), and
(ii) consent and agree that no portion of the fair market value of
Compact shall be counted for purposes of computing the aggregate amount
set forth in clause (c)(ii) of Section 8.2.10 of the Credit Agreement;
provided that the Administrative Agent, for the benefit of the Secured
Parties, shall have, upon consummation of the Permitted Compact Sale, a
perfected, first-priority security interest in all non-cash consideration
received by the Borrower and its Subsidiaries in respect of the Permitted
Compact Sale; and
(c) waive the restrictions set forth in clause (c) of Section 8.2.6 and in
Section 8.2.5 of the Credit Agreement to the extent necessary to permit the
Borrower to redeem, purchase or otherwise acquire, or cause the redemption,
purchase or other acquisition of, Convertible Preferred Securities (and the
related principal amount of High Tides Debentures) and/or 1999 Senior Notes;
provided that (i) the sole consideration in any such redemption, purchase or
acquisition are shares of the common stock of the Borrower and (ii)(A) in the
case of the Convertible Preferred Securities (and the related principal amount
of High Tides Debentures), Indebtedness of the Borrower in respect of the High
Tides Debentures and any guaranty issued
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with respect to the same shall be cancelled to the extent necessary so that the
aggregate amount of such Indebtedness (without duplication) does not exceed the
amount of Indebtedness permitted by clause (c) of Section 8.2.2 of the Credit
Agreement and (B) in the case of the 1999 Senior Notes, Indebtedness of the
Borrower in respect of the 1999 Senior Notes so redeemed, purchased or otherwise
acquired shall be cancelled and the aggregate principal amount of Indebtedness
permitted to be outstanding under clause (o) of Section 8.2.2 of the Credit
Agreement shall be reduced accordingly.
ARTICLE III
CONDITIONS TO EFFECTIVENESS
This Amendment, and the amendments and modifications contained herein,
shall be and shall become effective as of the date hereof subject to the
satisfaction of each of the conditions set forth in this Article III to the
satisfaction of the Administrative Agent.
SECTION 3.1. Execution of Counterparts. The Administrative Agent shall
have received counterparts of this Amendment, duly executed and delivered on
behalf of the Borrower and each of the requisite Lenders.
SECTION 3.2. Closing Date Certificate. The Administrative Agent shall have
received, with counterparts for each Lender, a certificate, dated the effective
date of this Amendment, appropriately completed and duly executed and delivered
by an Authorized Officer of the Borrower in which certificate the Borrower shall
agree and acknowledge that the statements made therein shall be deemed to be
true and correct representations and warranties of the Borrower made as of such
date and, at the time such certificate is delivered, such statements shall in
fact be true and correct.
SECTION 3.3. Execution of Affirmation and Acknowledgment. The
Administrative Agent shall have received an affirmation and acknowledgment,
dated the effective date of this Amendment and in form and substance
satisfactory to it, duly executed and delivered by each Guarantor and any other
Obligor that has granted a Lien pursuant to any Loan Document.
SECTION 3.4. Amendment Fee. The Administrative Agent shall have received
the amendment fees due and payable pursuant to Section 5.4.
SECTION 3.5. Fees and Expenses. The Administrative Agent shall have
received all fees and expenses due and payable pursuant to Section 5.5 (to the
extent then invoiced) and pursuant to the Credit Agreement (including all
previously invoiced fees and expenses).
ARTICLE IV
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REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Representations and Warranties. In order to induce the
requisite Lenders and the Administrative Agent to enter into this Amendment, the
Borrower hereby represents and warrants to the Administrative Agent, the Issuer
and each Lender, as of the date hereof, as follows:
(a) the representations and warranties set forth in Article VII of the
Credit Agreement (excluding, however, those contained in Section 7.7 of the
Credit Agreement) and in each other Loan Document are, in each case, true and
correct (unless stated to relate solely to an earlier date, in which case such
representations and warranties are true and correct as of such earlier date);
(b) except as disclosed by the Borrower to the Agents, the Issuer and the
Lenders pursuant to Section 7.7 of the Credit Agreement
(i) no labor controversy, litigation, arbitration or
governmental investigation or proceeding is pending or, to the best
knowledge of the Borrower, threatened against the Borrower or any of
its Subsidiaries which might materially adversely affect the
Borrower's consolidated business, operations, assets, revenues,
properties or prospects or which purports to affect the legality,
validity or enforceability of this Agreement, the Notes or any other
Loan Document; and
(ii) no development has occurred in any labor controversy,
litigation, arbitration or governmental investigation or proceeding
disclosed pursuant to Section 7.7 of the Credit Agreement which
might materially adversely affect the consolidated businesses,
operations, assets, revenues, properties or prospects of the
Borrower and its Subsidiaries;
(c) after giving effect to this Amendment, no Default has occurred and is
continuing, and neither the Borrower nor any of its Subsidiaries nor any other
Obligor is in material violation of any law or governmental regulation or court
order or decree;
(d) this Amendment has been duly authorized, executed and delivered by the
Borrower and constitutes a legal, valid and binding obligation of the Borrower,
enforceable against it in accordance with its terms, except to the extent the
enforceability hereof may be limited by (i) the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting the rights and remedies of creditors generally
and (ii) the effect of general principles of equity, whether enforcement is
considered in a proceeding in equity or at law; and
(e) the execution, delivery and performance by the Borrower and its
Subsidiaries of this Amendment and each other Loan Document executed or to be
executed by any of them in connection therewith are within the Borrower's and
each such Subsidiary's corporate powers,
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have been duly authorized by all necessary corporate action, and do not (i)
contravene the Borrower's or such Subsidiary's Organic Documents, (ii)
contravene any contractual restriction, law or governmental regulation or court
decree or order binding on or affecting the Borrower or such Subsidiary or (iii)
result in, or require the creation or imposition of, any Lien (other than the
Liens created under the Loan Documents in favor of the Administrative Agent for
the benefit of the Secured Parties) on any of the Borrower's or such
Subsidiary's properties.
SECTION 4.2. Full Disclosure. Except as corrected by written information
delivered to the Agents and the Lenders reasonably prior to the date on which
this representation is made, all factual information heretofore or
contemporaneously furnished by the Borrower in writing to any Agent, the Issuer
or any Lender for purposes of or in connection with this Amendment or any
transaction contemplated hereby is true and accurate in every material respect
and such information is not incomplete by omitting to state any material fact
necessary to make such information not misleading. All projections delivered to
any Agent or any Lender by or on behalf of the Borrower have been prepared in
good faith by the Borrower and represent the best estimates of the Borrower, as
of the date hereof, of the reasonably expected future performance of the
businesses reflected in such projections.
SECTION 4.3. Compliance with Credit Agreement. After giving effect to this
Amendment, each Obligor is in compliance with all the terms and conditions of
the Credit Agreement and the other Loan Documents to be observed or performed by
it thereunder, and no Default has occurred and is continuing.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Full Force and Effect; Limited Amendment. Except as expressly
provided herein, all of the representations, warranties, terms, covenants,
conditions and other provisions of the Credit Agreement and the other Loan
Documents shall remain in full force and effect in accordance with their
respective terms and are in all respects hereby ratified and confirmed. The
amendments and consents set forth herein shall be limited precisely as provided
for herein to the provisions expressly amended herein, waived hereby or
consented to hereby and shall not be deemed to be an amendment to, waiver of,
consent to or modification of any other term or provision of the Credit
Agreement, any other Loan Document referred to therein or herein or of any
transaction or further or future action on the part of the Borrower or any other
Obligor which would require the consent of any of the Lenders under the Credit
Agreement or any of the other Loan Documents.
SECTION 5.2. Loan Document Pursuant to Credit Agreement. This Amendment is
a Loan Document executed pursuant to the Credit Agreement and shall be
construed, administered and applied in accordance with all of the terms and
provisions of the Credit Agreement (and, following the date hereof, the Amended
Credit Agreement). Any breach of any representation or
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warranty or covenant or agreement contained in this Amendment shall be deemed to
be an Event of Default for all purposes of the Credit Agreement and the other
Loan Documents.
SECTION 5.3. Further Assurances. The Borrower hereby agrees that it will
take any action that from time to time may be reasonably necessary to effectuate
the amendments contemplated herein.
SECTION 5.4. Amendment Fee. Upon satisfaction of the condition set forth
in Section 3.1, the Borrower shall pay, without setoff, deduction or
counterclaim, a non-refundable amendment fee for the account of each Lender that
has executed and delivered (including delivery by way of facsimile) a copy of
this Amendment to the attention of ▇▇▇ ▇▇▇▇▇▇▇▇ at ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (19th floor), telecopy number ▇▇▇-▇▇▇-▇▇▇▇ at
or prior to 5:00 p.m., New York time, on September 5, 2001 (as such time may be
extended by the Borrower), in the amount of 15 basis points of such Lender's
Commitment as of the date hereof. The aggregate amount of such amendment fee
shall be paid at or prior to noon, New York time, on September 6, 2001 (or, in
the event the date in the immediately preceding sentence has been extended, the
Business Day that immediately succeeds such extended date) to the Administrative
Agent for the pro rata account of the Lenders entitled to receive such amendment
fee.
SECTION 5.5. Fees and Expenses. The Borrower shall pay all reasonable
out-of-pocket expenses incurred by the Administrative Agent in connection with
the preparation, negotiation, execution and delivery of this Amendment and the
documents and transactions contemplated hereby, including the reasonable fees
and disbursements of Mayer, Brown, and ▇▇▇▇▇, as counsel for the Administrative
Agent.
SECTION 5.6. Headings. The various headings of this Amendment are inserted
for convenience only and shall not affect the meaning or interpretation of this
Amendment or any provisions hereof.
SECTION 5.7. Execution in Counterparts. This Amendment may be executed by
the parties hereto in counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
SECTION 5.8. Cross-References. References in this Amendment to any Article
or Section are, unless otherwise specified or otherwise required by the context,
to such Article or Section of this Amendment.
SECTION 5.9. Severability. Any provision of this Amendment which is
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Amendment
or affecting the validity or enforceability of such provision in any other
jurisdiction.
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SECTION 5.10. Successors and Assigns. This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
SECTION 5.11. GOVERNING LAW. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers or general partners (or their respective
officers) thereunto duly authorized as of the day and year first above written.
BUDGET GROUP, INC.
By
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Name:
Title:
CREDIT SUISSE FIRST BOSTON, as a Lender
and the Administrative Agent
By
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Name:
Title:
By
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Name:
Title:
BANK OF AMERICA, N.A.
By
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Name:
Title:
BANK OF MONTREAL
By
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Name:
Title:
▇-▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
By
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Name:
Title:
THE BANK OF NOVA SCOTIA
By
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Name:
Title:
THE BANK OF TOKYO-MITSUBISHI, LTD.,
NEW YORK BRANCH
By
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Name:
Title:
BANK POLSKA KASA OPIEKI S.A. - PEKAO
S.A. GROUP, NEW YORK BRANCH
By
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Name:
Title:
WASHINGTON MUTUAL BANK, F.A. (as
successor in interest to BANK UNITED)
By
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Name:
Title:
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BANKERS TRUST COMPANY
By
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Name:
Title:
BNP PARIBAS
By
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Name:
Title:
By
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Name:
Title:
BANQUE WORMS CAPITAL CORPORATION
By
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Name:
Title:
BHF (USA) CAPITAL CORPORATION
By
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Name:
Title:
By
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Name:
Title:
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CERBERUS PARTNERS L.P.
By
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Name:
Title:
CREDIT INDUSTRIEL ET COMMERCIAL
By
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Name:
Title:
By
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Name:
Title:
COMMERZBANK AKTIENGESELLSCHAFT,
CHICAGO BRANCH
By
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Name:
Title:
By
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Name:
Title:
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CREDIT AGRICOLE INDOSUEZ
By
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Name:
Title:
By
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Name:
Title:
CREDIT LYONNAIS CHICAGO BRANCH
By
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Name:
Title:
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By
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Name:
Title:
By
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Name:
Title:
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ERSTE BANK DER OESTERREICHISCHEN
SPARKASSEN AG
By
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Name:
Title:
By
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Name:
Title:
FLEET BANK, N.A.
By
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Name:
Title:
THE FUJI BANK, LIMITED
By
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Name:
Title:
IMPERIAL BANK
By
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Name:
Title:
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GENERAL ELECTRIC CAPITAL CORPORATION
By
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Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.
By
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Name:
Title:
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By
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Name:
Title:
NATEXIS BANQUE
By
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Name:
Title:
By
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Name:
Title:
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SATELLITE DISTRESSED CREDITS FUND, LLC
By: Satellite Asset Management, L.P., its
Investment Manager
By
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Name:
Title:
SOUTHERN PACIFIC BANK
By
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Name:
Title:
SUMITOMO MITSUI BANKING CORPORATION
By
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Name:
Title:
SUNTRUST BANK
By
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Name:
Title:
DK ACQUISITION PARTNERS LP
By
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Name:
Title:
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