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EXHIBIT 10.5
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$225,000,000
AMENDED AND RESTATED
SENIOR LOAN AGREEMENT
AMONG
ANC RENTAL CORPORATION,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
▇▇▇▇▇▇ BROTHERS INC.,
AS ARRANGER
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
AS SYNDICATION AGENT
AND
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
AS ADMINISTRATIVE AGENT
DATED AS OF JUNE 30, 2000
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS.....................................................................................1
1.1 Defined Terms...................................................................................1
1.2 Other Definitional Provisions..................................................................32
SECTION 2. AMOUNT AND TERMS OF LOANS......................................................................32
2.1 Loans..........................................................................................32
2.2 Procedure for Borrowing........................................................................33
2.3 Maturity and Exchange Notes....................................................................33
2.4 Repayment of Loans.............................................................................34
2.5 Optional and Mandatory Prepayments.............................................................34
2.6 Interest Rates and Payment Dates...............................................................35
2.7 Computation of Interest and Fees...............................................................35
2.8 Pro Rata Treatment and Payments................................................................35
2.9 Requirements of Law............................................................................36
2.10 Taxes..........................................................................................37
SECTION 3. REPRESENTATIONS AND WARRANTIES.................................................................39
3.1 Financial Condition............................................................................39
3.2 No Change......................................................................................40
3.3 Corporate Existence; Compliance with Law.......................................................40
3.4 Corporate Power; Authorization; Enforceable Obligations........................................41
3.5 No Legal Bar...................................................................................41
3.6 No Material Litigation.........................................................................41
3.7 No Default.....................................................................................41
3.8 Ownership of Property; Liens...................................................................41
3.9 Intellectual Property..........................................................................41
3.10 Taxes..........................................................................................42
3.11 Federal Regulations............................................................................42
3.12 Labor Matters..................................................................................42
3.13 ERISA..........................................................................................43
3.14 Investment Company Act; Other Regulations......................................................43
3.15 Subsidiaries...................................................................................43
3.16 Use of Proceeds................................................................................43
3.17 Environmental Matters..........................................................................43
3.18 Accuracy of Information, etc...................................................................45
3.19 Solvency.......................................................................................45
3.20 Customer and Trade Relations...................................................................45
SECTION 4. CONDITIONS PRECEDENT...........................................................................45
4.1 Conditions to Closing..........................................................................45
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4.2 Conditions to Funding..........................................................................46
4.3 Conditions to Rollover Term Loans..............................................................49
SECTION 5. AFFIRMATIVE COVENANTS..........................................................................49
5.1 Financial Statements...........................................................................49
5.2 Certificates; Other Information................................................................50
5.3 Payment of Obligations.........................................................................51
5.4 Conduct of Business and Maintenance of Existence, etc..........................................51
5.5 Maintenance of Property; Insurance.............................................................51
5.6 Inspection of Property; Books and Records; Discussions.........................................51
5.7 Notices........................................................................................51
5.8 Environmental Laws.............................................................................52
5.9 Exchange Notes.................................................................................52
5.10 Compliance with Commitment Documents...........................................................53
5.11 Compliance with Escrow Agreement...............................................................53
SECTION 6. NEGATIVE COVENANTS.............................................................................53
6.1 Financial Condition Covenants..................................................................53
6.2 Limitation on Restricted Payments..............................................................54
6.3 Limitation on Indebtedness and Issuance of Preferred Stock.....................................58
6.4 Limitation on Permitted Vehicle Indebtedness...................................................62
6.5 Asset Sales....................................................................................63
6.6 Limitation on Liens............................................................................63
6.7 Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries........63
6.8 Change of Control..............................................................................67
6.9 Merger, Consolidation, etc.....................................................................68
6.10 Limitation on Affiliate Transactions...........................................................69
6.11 Sale and Leaseback Transactions................................................................71
6.12 Limitation on Subsidiary Guarantees............................................................72
6.13 Limitation on Business Activities..............................................................73
6.14 Designation of an Unrestricted Subsidiary......................................................73
SECTION 7. EVENTS OF DEFAULT..............................................................................73
SECTION 8. THE AGENTS.....................................................................................76
8.1 Appointment....................................................................................76
8.2 Delegation of Duties...........................................................................77
8.3 Exculpatory Provisions.........................................................................77
8.4 Reliance by Agents.............................................................................77
8.5 Notice of Default..............................................................................78
8.6 Non-Reliance on Agents and Other Lenders.......................................................78
8.7 Indemnification................................................................................79
8.8 Agent in Its Individual Capacity...............................................................79
8.9 Successor Administrative Agent.................................................................79
8.10 Authorization to Release Guarantees............................................................80
8.11 The Arranger; the Syndication Agent............................................................80
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SECTION 9. MISCELLANEOUS..................................................................................81
9.1 Amendments and Waivers.........................................................................81
9.2 Notices........................................................................................81
9.3 No Waiver; Cumulative Remedies.................................................................82
9.4 Survival of Representations and Warranties.....................................................82
9.5 Payment of Expenses and Taxes..................................................................83
9.6 Successors and Assigns; Participations and Assignments.........................................83
9.7 Adjustments; Set-off...........................................................................86
9.8 Counterparts...................................................................................86
9.9 Severability...................................................................................86
9.10 Integration....................................................................................86
9.11 Governing Law..................................................................................87
9.12 Submission to Jurisdiction; Waivers............................................................87
9.13 Acknowledgements...............................................................................87
9.14 Confidentiality................................................................................88
9.15 Release of Guarantee Obligations...............................................................88
9.16 Accounting Changes.............................................................................89
9.17 Waivers of Jury Trial..........................................................................89
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SCHEDULES:
2.1 Commitments
3.4 Consents
3.15 Subsidiaries
6.5 Excluded Assets
EXHIBITS:
EXHIBIT A Form of Subsidiary Guarantee
EXHIBIT B Form of Senior Note Indenture
EXHIBIT C-1 Form of Equity Registration Rights Agreement
EXHIBIT C-2 Form of Debt Registration Rights Agreement
EXHIBIT D Form of Warrant Agreement
EXHIBIT E Form of Escrow Agreement
EXHIBIT F Form of Assignment and Acceptance
EXHIBIT G-1 Form of Initial Loan Note
EXHIBIT G-2 Form of Rollover Term Note
EXHIBIT H Form of Closing Certificate
EXHIBIT I Form of Exemption Certificate
EXHIBIT J Form of Funding Certificate
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AMENDED AND RESTATED SENIOR LOAN AGREEMENT, dated as of June
30, 2000, among ANC RENTAL CORPORATION, a Delaware corporation (the "COMPANY"),
the several banks and other financial institutions or entities from time to time
parties to this Agreement (the "LENDERS"), ▇▇▇▇▇▇ BROTHERS INC., as sole
advisor, sole arranger and sole book manager (in such capacity, the "ARRANGER"),
▇▇▇▇▇▇ COMMERCIAL PAPER INC., as syndication agent (in such capacity, the
"SYNDICATION AGENT"), and ▇▇▇▇▇▇ COMMERCIAL PAPER INC., as administrative agent
(in such capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H :
WHEREAS, AutoNation, Inc., a Delaware corporation
("AUTONATION"), intends to distribute to its shareholders through a tax-free
spin-off (the "SPIN-OFF") 100% of the shares of common stock of the Company;
WHEREAS, after giving effect to the Spin-Off, the Company will
need financing to provide for the repayment of certain existing indebtedness of
the Company and to provide for the Company's ongoing working capital and general
corporate needs;
WHEREAS, to provide such financing, the Borrower entered into
a Senior Loan Agreement, dated as of May 26, 2000 (the "Existing Senior Loan
Agreement"), among the Borrower, the lenders from time to time parties thereto,
▇▇▇▇▇▇ Brothers Inc., as arranger and ▇▇▇▇▇▇ Commercial Paper Inc., as
syndication agent and administrative agent;
WHEREAS, the parties to the Existing Senior Loan Agreement
have agreed to amend and restate the Existing Senior Loan Agreement in its
entirety;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, the parties hereto hereby agree to amend and restate
the Existing Senior Loan Agreement in its entirety as follows:
SECTION 1. DEFINITIONS.
1.1 DEFINED TERMS. As used in this Agreement, the following
terms shall have the following meanings:
"ACQUIRED DEBT": with respect to any specified Person, (a)
Indebtedness of any other Person existing at the time such other Person
is merged with or into or became a Restricted Subsidiary of such
specified Person, including, without limitation, Indebtedness incurred
in connection with, or in contemplation of, such other Person merging
with or into or becoming a Restricted Subsidiary of such specified
Person, and (b) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"ADJUSTED MARGIN": means 0.50% on the Initial Maturity Date;
PROVIDED that after the Initial Maturity Date the Adjusted Margin shall
increase by 0.50% upon the last day of each of March, June, September
and December; PROVIDED further that in no event shall the Adjusted
Margin exceed 4.5%.
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"ADMINISTRATIVE AGENT": as defined in the preamble hereto.
"AFFILIATE": with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person. For
purposes of this definition, "control " (including, with correlative
meanings, the terms "controlling," "controlled by" and "under common
control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through
the ownership of voting securities, by agreement or otherwise; PROVIDED
that beneficial ownership of 10% or more of the voting securities of a
Person shall be deemed to be control; PROVIDED that, for purposes of
this Agreement, other than Section 6.10, AutoNation and its Affiliates
(after giving effect to the Spin-Off) shall not be deemed Affiliates of
the Loan Parties.
"AGENTS": the collective reference to the Syndication Agent
and the Administrative Agent.
"AGREEMENT": this Senior Loan Agreement, as amended,
supplemented or otherwise modified from time to time.
"ASSET SALE": means
(a) the sale, lease, conveyance or other disposition of any
assets or rights (including, without limitation, by way of a sale and
leaseback) other than in the ordinary course of business, provided
that, the sale, lease, conveyance or other disposition of all or
substantially all of the assets of the Company and its Restricted
Subsidiaries taken as a whole will be governed by the provisions of
Section 6.8 hereof and the provisions of Section 6.9 hereof and not by
the provisions of Section 6.5 hereof; and
(b) the issue or sale by the Company or any of its Restricted
Subsidiaries of Equity Interests of any the Company's Restricted
Subsidiaries,
in the case of either clause (a) or (b), whether in a single
transaction or a series of related transactions (i) that have a fair
market value in excess of $1.0 million or (ii) for Net Proceeds in
excess of $1.0 million.
Notwithstanding the foregoing, the following will not be
deemed to constitute an "Asset Sale":
(a) a transfer or other disposition of assets or property by
the Company to a Restricted Subsidiary of the Company or by a
Restricted Subsidiary of the Company to the Company or to a Restricted
Subsidiary of the Company;
(b) an issuance or sale of Equity Interests by a Restricted
Subsidiary of the Company to the Company or to a Restricted Subsidiary
of the Company;
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(c) any dividend, distribution, advance, Restricted Payment or
Permitted Investment, in each case that is not prohibited by the
provisions of Section 6.2 hereof;
(d) a sale or other disposition of Eligible Vehicles or
service vehicles in the ordinary course of business;
(e) the sale or other disposition of Cash Equivalents;
(f) the sale or lease of obsolete or worn out equipment or
other assets that are no longer being used by the Company or any of its
Restricted Subsidiaries;
(g) any issue or sale of directors' qualifying shares or
shares or investments required by applicable law to be held by a Person
other than the Company or a Restricted Subsidiary;
(h) the grant of a Lien which is not prohibited by the
covenant described under Section 6.6 hereof;
(i) any sale, lease or other disposition of inventory or
accounts receivable in the ordinary course of business;
(j) any foreclosure on assets in connection with Permitted
Liens;
(k) any sale, transfer or other disposition of all or a
portion of the assets of the Company or any of its Restricted
Subsidiaries with respect to its Australian business; or
(l) any sale, transfer or other disposition of all or a
portion of the assets of the Company or any of its Restricted
Subsidiaries with respect to the Company's Minneapolis headquarters and
other assets listed on Schedule 6.5 hereto.
"ASSIGNEE": as defined in Section 9.6(c).
"ATTRIBUTABLE DEBT": in respect of a sale and leaseback
transaction means, at the time of determination, the present value
(discounted at the rate of interest implicit in such transaction,
determined in accordance with GAAP) of the obligation of the lessee for
net rental payments during the remaining term of the lease included in
such sale and leaseback transaction (including any period for which
such lease has been extended).
"AUTONATION": as defined in the recitals hereto.
"AUTONATION SUBORDINATED DEBT": means Indebtedness of the
Company pursuant to the AutoNation Reimbursement Agreement.
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"AUTONATION REIMBURSEMENT AGREEMENT": means the AutoNation
Reimbursement Agreement and related Subordination Agreement, each
entered into by the Company and AutoNation on the Spin-Off Date, as the
same may be amended, supplemented or otherwise modified in accordance
with Section 6.10.
"BENEFITS AGREEMENT": the Benefits Agreement entered into by
the Company and AutoNation on the Spin-Off Date, as the same may be
amended, supplemented or otherwise modified in accordance with Section
6.10.
"BENEFITTED LENDER": as defined in Section 9.7(a).
"BOARD": means the Board of Governors of the Federal Reserve
System (or any successor thereto).
"BOARD OF DIRECTORS": means, with respect to a corporation,
the Board of Directors of such corporation or a duly constituted and
acting committee of such Board of Directors, and, with respect to any
other Person, the Board of Directors or committee of such Person
serving a similar function.
"BOARD RESOLUTION": means a resolution duly adopted by the
Board of Directors.
"BORROWING BASE": means the "Borrowing Base" as defined in the
New Credit Facility.
"BUSINESS DAY": means a day other than a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or
required by law to close.
"CAPITAL LEASE OBLIGATION": with respect to any Person at the
time any determination thereof is to be made, the amount of the
liability of such Person in respect of a capital lease that would at
such time be required to be capitalized on a balance sheet of such
Person in accordance with GAAP.
"CAPITAL STOCK": means any and all shares, interests,
participations or other equivalents, however designated, of corporate
stock or other equity participations, including partnership interests,
whether general or limited, of the Person, excluding any debt
securities convertible into such Capital Stock.
"CASH EQUIVALENTS": means:
(a) securities issued or directly and fully guaranteed or
insured by the United States government or the U.K., France or Germany,
Australia, Canada, Belgium, Holland, Switzerland, Italy or Spain or any
other member state of the European Union or any agency or
instrumentality thereof, or by any European Union central bank, in each
case having maturities of not more than one year from the date of
acquisition;
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(b) certificates of deposit, time deposits and eurodollar time
deposits with maturities of not more than one year from the date of
acquisition, bankers' acceptances with maturities of not more than one
year from the date of acquisition and overnight bank deposits (or, with
respect to foreign banks, similar instruments), in each case with any
lender under the New Credit Facilities or with any commercial bank
having combined capital and surplus in excess of $500.0 million (or the
foreign equivalent thereof) and whose long-term debt is rated at the
time of acquisition thereof at least "A" or the equivalent thereof by
Standard & Poor's or at least "A" or the equivalent thereof by ▇▇▇▇▇'▇
(or the foreign equivalents thereof);
(c) repurchase obligations with a term of not more than 60
days for underlying securities of the types described in clauses (a)
and (b) above entered into with any financial institution meeting the
qualifications specified in clause (b) above;
(d) commercial paper rated at least P-2 by ▇▇▇▇▇'▇ or at least
A-2 by Standard & Poor's (or, in their absence, an equivalent rating
from another nationally recognized securities rating agency), with
maturities of not more than one year from the date of purchase;
(e) investments in securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States, or any political
subdivision or taxing authority of any such state, commonwealth or
territory, or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least "A" by
Standard & Poor's or at least "A" by ▇▇▇▇▇'▇;
(f) securities with maturities of one year or less from the
date of acquisition backed by standby letters of credit issued by any
lender under the New Credit Facility or any commercial bank satisfying
the criteria of clause (b) of this definition;
(g) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (a)
through (f) of this definition; and
(h) Investments with maturities of one year or less made by
Foreign Subsidiaries in accordance with their normal investment
practices for cash management, PROVIDED that those instruments are
rated at least "P-2" by ▇▇▇▇▇'▇ or "A-2" by Standard & Poor's (or, in
their absence, an equivalent rating from another nationally recognized
securities rating agency).
"CHANGE OF CONTROL": means the occurrence of any of the
following:
(a) the sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the assets of the
Company and its Restricted Subsidiaries, taken as a whole to any
"person" (as such term is defined in Section 13 (d) (3) of the Exchange
Act);
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(b) the adoption of a plan relating to the liquidation or
dissolution of the Company other than in a transaction which complies
with the covenant described under Section 6.9 hereof;
(c) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that
any "person" (as defined above) becomes the "beneficial owners" (as
such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange
Act), directly or indirectly, of, (i) if prior to or on the Initial
Maturity Date, more than 35% of the total of the Voting Stock of the
Company (measured by voting power rather than number of shares), or
(ii) more than 50% of the total of the Voting Stock thereafter;
(d) the first day on which a majority of the members of the
Board of Directors are not Continuing Directors; or
(e) the Company consolidates with, or merges with or into, any
Person, or sells, assigns, conveys, transfers, leases or otherwise
disposes of all or substantially all of its assets to any Person, or
any Person consolidates with, or merges with or into, the Company, in
any such event pursuant to a transaction in which any of the
outstanding Voting Stock of the Company is converted into or exchanged
for cash, securities or other property, other than any such transaction
where the Voting Stock of the Company outstanding immediately prior to
such transaction is converted into or exchanged for Voting Stock (other
than Disqualified Stock) of the surviving or transferee Person
constituting a majority of the outstanding shares of such Voting Stock
of such surviving or transferee Person (immediately after giving effect
to such issuance).
For avoidance of doubt, the Spin-Off shall not constitute a
Change of Control under this Agreement.
"CLOSING DATE": the date on which the conditions precedent set
forth in Section 4.1 were satisfied, which occurred on May 26, 2000.
"CODE": the Internal Revenue Code of 1986, as amended from
time to time.
"COMMITMENT": as to any Lender, its obligation to make an
Initial Loan to the Company on the Closing Date in an amount equal to
the amount set forth in SCHEDULE 2.1 under the heading "Commitment";
collectively, as to all such Lenders, the "COMMITMENTS".
"COMMITMENT PERCENTAGE": as to any Lender at any time, the
percentage of the aggregate Commitments then constituted by such
Lender's Commitment (or, after the Initial Loans are made, the
percentage of the aggregate principal amount of Loans then constituted
by such Lender's Loans).
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"COMMONLY CONTROLLED ENTITY": an entity, whether or not
incorporated, which is under common control with the Company within the
meaning of Section 4001 of ERISA or is part of a group which includes
the Company and which is treated as a single employer under Section 414
of the Code.
"COMPANY": has the meaning assigned to it in the preamble to
this Agreement.
"CONSOLIDATED CASH FLOW AFTER FLEET COSTS": means, with
respect to any Person for any period, the Consolidated Net Income of
such Person for such period plus:
(a) an amount equal to any extraordinary loss plus any net
loss realized in connection with an Asset Sale (to the extent such
losses were deducted in computing such Consolidated Net Income); plus
(b) provision for taxes based on income or profits of such
Person and its Restricted Subsidiaries for such period, to the extent
that such provision for taxes was included in computing such
Consolidated Net Income; plus
(c) consolidated interest expense of such Person and its
Restricted Subsidiaries for such period (except with respect to
Permitted Vehicle Indebtedness), whether paid or accrued and whether or
not capitalized (including, without limitation, amortization of debt
issuance costs and original issue discount, non-cash interest payments,
the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease
Obligations, commissions, discounts and other fees and charges incurred
in respect of letter of credit or bankers' acceptance financings, and
net payments (if any) pursuant to Hedging Obligations), to the extent
that any such expense was deducted in computing such Consolidated Net
Income; plus
(d) non-vehicle related depreciation and amortization
(including amortization of goodwill and other intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior period)
of such Person and its Restricted Subsidiaries for such period to the
extent that such depreciation and amortization were deducted in
computing such Consolidated Net Income; plus
(e) all one-time fees, costs and expenses (including cash
compensation payments) incurred by the Company and its Restricted
Subsidiaries in connection with the Spin-Off, plus
(f) any non-cash compensation charge arising from the grant or
issuance of stock, stock options or other equity based awards; minus
(g) non-vehicle related non-cash items increasing such
Consolidated Net Income for such period (other than items that were
accrued in the ordinary course of business), in each case, on a
consolidated basis and determined in accordance with GAAP.
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Notwithstanding the foregoing, the provision for taxes on the
income or profits of, and the non-vehicle related depreciation and
amortization and other non-cash charges of, a Restricted Subsidiary of
the Company shall be added to Consolidated Net Income to compute
Consolidated Cash Flow After Fleet Costs of the Company only to the
extent (and in same proportion) that the Net Income of such Restricted
Subsidiary was included in calculating the Consolidated Net Income of
such Person and only if a corresponding amount would be permitted at
the date of determination to be dividended to the Company by such
Restricted Subsidiary without prior governmental approval (that has not
been obtained), and without direct or indirect restriction pursuant to
the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations
applicable to that Restricted Subsidiary or its stockholders.
"CONSOLIDATED NET INCOME": means, with respect to any Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries (for such period, on a consolidated basis,
determined in accordance with GAAP); PROVIDED that:
(i) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of
dividends or distributions paid in cash to the referent Person or a
Wholly Owned Subsidiary;
(ii) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that Net Income
is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its
stockholders;
(iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such
acquisition shall be excluded; and
(iv) the cumulative effect of a change in accounting
principles shall be excluded.
"CONSOLIDATED TANGIBLE ASSETS": means, as applied to the
Company, the total consolidated tangible assets of the Company and its
Restricted Subsidiaries less the amount of revenue earning vehicles,
net, all as calculated on a consolidated basis in accordance with GAAP.
"CONTINUING DIRECTOR": means, as of any date of determination,
any member of the Board of Directors of the Company who (1) was a board
member on the Spin-Off Date or (2) was nominated for election or
elected to such Board of Directors with the approval of a majority of
the Continuing Directors who were members of such Board of Directors at
the time of such nomination or election.
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"CONTINUING OBLIGATIONS": means all obligations of the Company
and its Restricted Subsidiaries, currently existing or entered into in
the future, including reimbursement, indemnification and loan
obligations, to AutoNation, Inc. and any of its subsidiaries, as a
result of payments made by AutoNation, Inc. and any of its subsidiaries
under (1) the Credit Agreement, as amended and restated on March 26,
1999, among Republic Industries Autovermietung GmbH, Commerzbank AG,
Bremen Branch and the other parties thereto, (2) the Loan Note
Instrument, dated October 15, 1997, by Republic Industries (UK) PLC,
with respect to Floating Rate Guaranteed Unsecured Loan Notes 2003, (3)
the leases, dated as of July 8, 1997, between Value Rent-A-Car, Inc.,
as tenant, and Mitsubishi Motor Sales of America, Inc., as landlord,
(4) the Motor Vehicle Lease Agreement, dated as of July 1997, between
Mitsubishi Motor Sales of America, Inc., Value Rent-A-Car, Inc., Alamo
Rent-A-Car, Inc., National Car Rental System, Inc., Spirit Rent-A-Car,
Inc. and Republic Industries, Inc. and (5) the General Motors Letter of
Credit, each as amended through and as in effect on the date of this
Agreement.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any
of its property is bound.
"CREDIT FACILITY" or "CREDIT FACILITIES": means, with respect
to the Company or a Restricted Subsidiary, one or more debt facilities
(including, without limitation, the New Credit Facility) or commercial
paper facilities with banks or other institutional lenders providing
for revolving credit loans, receivables financing (including through
the sale of receivables to such lenders or to special purpose entities
formed to borrow from such lenders against such receivables) or letters
of credit, in each case, as amended, restated, modified, renewed,
restructured, extended, supplemented, refunded, replaced or refinanced
in whole or in part from time to time, including without limitation any
amendment extending the maturity of any Indebtedness incurred
thereunder, increasing the amount incurred or available thereunder in
accordance with the terms hereof or deleting, adding or substituting
one or more parties thereto, but excluding any debt securities.
"CUSTOMER LEASE FINANCING LOANS": has the meaning set forth in
the definition of "Specified Financing Subsidiary."
"DEBT REGISTRATION RIGHTS AGREEMENT": shall mean the agreement
dated the Spin-Off Date among ANC Rental Corporation, the Guarantors
and ▇▇▇▇▇▇ Commercial Paper Inc. as administrative agent, as amended
from time to time, relating to the registration rights with respect to
the Exchange Notes.
"DEBT SHELF REGISTRATION STATEMENT": means the Shelf
Registration Statement as defined in the Debt Registration Rights
Agreement.
"DEFAULT": any event that is or with the passage of time or
the giving of notice (or both) would be an Event of Default.
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"DESIGNATED NONCASH CONSIDERATION": means the fair market
value of non-cash consideration received by the Company or any of its
Restricted Subsidiaries in connection with an Asset Sale that is so
designated pursuant to an officer's certificate, setting forth the
basis of the valuation. The aggregate fair market value of the
Designated Noncash Consideration, taken together with the fair market
value at the time of receipt of all other Designated Noncash
Consideration received, must be less than 5% of the Company's
Consolidated Tangible Assets at the time of the receipt of the
Designated Noncash Consideration (with the fair market value being
measured at the time received and without giving effect to subsequent
changes in value).
"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 at the option of the holder thereof), 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 (other than as a
result of the death or disability of the holder thereof or the
termination of the employment with the Company or one of the Company's
Restricted Subsidiaries of the holder thereof), on or prior to the date
that is 91 days after the Final Maturity Date, except to the extent
that such Capital Stock is solely redeemable with, or solely
exchangeable for, any Capital Stock of such Person that is not
Disqualified Stock. Notwithstanding the preceding sentence, any Capital
Stock that would constitute Disqualified Stock solely because the
holders thereof have the right to require the Company to repurchase
such Capital Stock upon the occurrence of a change of control or an
asset sale shall not constitute Disqualified Stock if the terms of such
Capital Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such repurchase
or redemption complies with the covenant described under Section 6.2
hereof.
"DOLLAR" and "$": dollars in lawful currency of the United
States of America.
"DOMESTIC SUBSIDIARY": any Subsidiary of the Company organized
under the laws of the United States or any state thereof or the
District of Columbia.
"ELIGIBLE VEHICLES": shall mean the motor vehicle inventory of
the Company and its Restricted Subsidiaries, in each case, whether held
for sale, lease or rental purposes, together with service vehicles.
"ENGAGEMENT LETTER": means the Interim Loan Engagement Letter
dated May 11, 2000, between ▇▇▇▇▇▇ Commercial Paper Inc., ▇▇▇▇▇▇
Brothers Inc. and ANC Rental Corporation.
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"ENVIRONMENTAL LAWS": any and all laws, rules, orders,
regulations, statutes, ordinances, published and legally binding
guidelines, codes, decrees, or other legally enforceable requirements
(including, without limitation, common law) of any international
authority, foreign government, the United States, or any state, local,
municipal or other governmental authority, regulating, relating to or
imposing liability or standards of conduct concerning protection of the
environment or of human health, or employee health and safety, as has
been, is now, or may at any time hereafter be, in effect.
"ENVIRONMENTAL PERMITS": any and all permits, licenses,
approvals, registrations, notifications, exemptions and other
authorizations required under any Environmental Law.
"EQUITY INTERESTS": 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).
"EQUITY REGISTRATION RIGHTS AGREEMENT": shall mean the
agreement dated the Spin-Off Date among ANC Rental Corporation and
▇▇▇▇▇▇ Commercial Paper Inc., as administrative agent, as amended from
time to time, relating to the registration rights with respect to the
Warrants.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ESCROW AGENT": shall mean The Bank of New York pursuant to
the Escrow Agreement.
"ESCROW AGREEMENT": the Warrants and Exchange Notes Escrow
Agreement, substantially in the form of EXHIBIT E, to be executed and
delivered by the Company and the Escrow Agent, as amended in any manner
not adverse to the Lenders.
"EVENT OF DEFAULT": any of the events specified in Section 7,
PROVIDED that all requirements for the giving of notice, the lapse of
time, or both, and any other conditions, have been satisfied.
"EXCHANGE ACT": the Securities Exchange Act of 1934, as
amended.
"EXCHANGE NOTE": each note issued under the Indenture
delivered pursuant to Section 2.3 and 5.9.
"EXCHANGE REQUEST": as defined in Section 5.9.
"EXISTING INDEBTEDNESS": means Indebtedness of the Company and
its Restricted Subsidiaries committed or in existence on the Closing
Date.
"FINAL MATURITY DATE": the sixth anniversary of the Initial
Maturity Date.
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"FINANCE COMPANIES": means Republic Industries Funding Corp.,
National Car Rental Financing Corp., National Car Rental Financing LP,
CarTemps Financing, LLC, Snappy Fleet Finance Corp., Snappy Funding
Corp., Snappy Funding, LP, Alamo Financing, LP, Alamo Financing, LLC,
ARG Funding Corporation, ANC Financial GP Corporation, ANC Financial
Corporation, CarTemps Financing, LP, Spirit Leasing, Inc. and any of
their successors and any other finance subsidiary of the Company
currently existing or established in the future.
"FIXED CHARGE COVERAGE RATIO": means with respect to any
Person for any period, the ratio of the Consolidated Cash Flow After
Fleet Costs of such Person for such period to the Fixed Charges After
Fleet Costs of such Person for such period. In the event that the
Company or any of its Restricted Subsidiaries incurs, assumes,
Guarantees or repurchases, repays, defeases or otherwise redeems any
Indebtedness (other than revolving credit borrowings under any Credit
Facility unless such Indebtedness has been permanently repaid and has
not been replaced) or issues, repurchases or redeems preferred stock
subsequent to the commencement of the period for which the Fixed Charge
Coverage Ratio is being calculated but on or prior to the date on which
the event for which the calculation of the Fixed Charge Coverage Ratio
is made (the "CALCULATION DATE"), then the Fixed Charge Coverage Ratio
shall be calculated giving pro forma effect to such incurrence,
assumption, Guarantee, repurchase, repayment, defeasance or redemption
of Indebtedness, or such issuance, repurchase or redemption of
preferred stock, and the use of the proceeds therefrom, including to
refinance other Indebtedness, as if the same had occurred at the
beginning of the applicable four-quarter reference period (except that,
in making such computation, the amount of Indebtedness under any
revolving credit facility shall be computed based on the average daily
balance of such Indebtedness during such period). In addition, for
purposes of making the computation referred to above:
(i) acquisitions that have been made by the Company or any of
its Restricted Subsidiaries, including through mergers or
consolidations and including any related financing transactions, during
the four-quarter reference period or subsequent to such reference
period and on or prior to the Calculation Date shall be deemed to have
occurred on the first day of the four-quarter reference period and
Consolidated Cash Flow After Fleet Costs for such reference period
shall be calculated without giving effect to clause (iii) of the
proviso set forth in the definition of Consolidated Net Income;
(ii) the Consolidated Cash Flow After Fleet Costs directly
attributable to discontinued operations, as determined in accordance
with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded; and
(iii) the Fixed Charges After Fleet Costs directly
attributable to discontinued operations, as determined in accordance
with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, but only to the extent that the
obligations giving rise to such Fixed Charges After Fleet Costs will
not be obligations of the referent Person or any of its Restricted
Subsidiaries following the Calculation Date.
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For purposes of calculating the Fixed Charge Coverage Ratio,
(a) acquisitions, Investments and dispositions which have been made by
any Person which has become a Restricted Subsidiary of the Company or
been merged with or into the Company or any Restricted Subsidiary of
the Company during the reference period, or subsequent to the reference
period but prior to the Calculation Date, shall be calculated on a pro
forma basis, including all of the calculations referred to above,
assuming that such acquisitions and dispositions occurred on the first
day of the reference period; and (b) for purposes of determining the
pro forma effect of any acquisitions referred to in (i) above,
Consolidated Cash Flow After Fleet Costs may be determined in good
faith by a responsible financial or accounting officer of the Company
to give effect to the pro forma effect of expense and cost reductions
provided that such calculations are done on a basis that is consistent
with Regulation S-X under the Securities Act.
"FIXED CHARGES AFTER FLEET COSTS": means, with respect to any
Person for any period, the sum, without duplication, of:
(a) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period (except with respect to
Permitted Vehicle Indebtedness), whether paid or accrued (including,
without limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest component of
any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations (excluding any
interest component of a capitalized lease in respect of that portion of
a Capital Lease Obligation of a Restricted Subsidiary that is
non-recourse to such Person), commissions, discounts and other fees and
charges incurred in respect of letter of credit or bankers' acceptance
financings, and net payments, if any, pursuant to Hedging Obligations);
(b) the consolidated interest of such Person and its
Restricted Subsidiaries that was capitalized during such period (except
with respect to Permitted Vehicle Indebtedness);
(c) any interest expense actually paid on Indebtedness of
another Person that is Guaranteed by such Person or one of its
Restricted Subsidiaries or secured by a Lien on assets of such Person
or one of its Restricted Subsidiaries (whether or not such Guarantee or
Lien is called upon); and
(d) the product of (i) all dividend payments, whether or not
in cash, on any series of preferred stock of such Person or any of its
Restricted Subsidiaries, other than dividend payments on Equity
Interests payable solely in Equity Interests of the Company (other than
Disqualified Stock), multiplied by (ii) a fraction, the numerator of
which is one and the denominator of which is one minus the then current
combined federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in
accordance with GAAP.
"FOREIGN SUBSIDIARY": means either (a) any Subsidiary of the
Company that is not a Domestic Subsidiary or (b) a Domestic Subsidiary
whose only assets are the Capital Stock of one or more Foreign
Subsidiaries.
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"FORM 10 REGISTRATION STATEMENT": the Company's Registration
Statement on Form 10 (Registration No. 1-30776) as it became effective
under the Exchange Act on June 16, 2000.
"FQ1", "FQ2", "FQ3", and "FQ4": when used with a numerical
year designation, means the first, second, third or fourth fiscal
quarters, respectively, of such fiscal year of the Company (e.g., FQ2
2000 means the second fiscal quarter of the Company's 2000 fiscal year,
which fiscal quarter ends June 30, 2000).
"FUNDING OFFICE": the office specified from time to time by
the Administrative Agent as its funding office by notice to the Company
and the Lenders.
"GAAP": generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants, the statements
and pronouncements of the Financial Accounting Standards Board and such
other statements by such other entities as have been approved by a
significant segment of the accounting profession, which are applicable
(1) at the Closing Date and (2) with respect to periodic reporting
requirements, as in effect from time to time.
"GENERAL MOTORS LETTER OF CREDIT": the letters of credit, in
the aggregate face amounts of $60,000,000 issued by Deutsche Bank and
West LB for the benefit of The Bank of New York, as agent.
"GOVERNMENTAL AUTHORITY": any nation or government, any state,
province or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"GUARANTEE": a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of
business), direct or indirect, in any manner (including, without
limitation, letters of credit and reimbursement agreements in respect
thereof), of all or any part of any Indebtedness. The amount of any
Guarantee shall be deemed to be the lower of (a) an amount equal to the
stated or determinable amount of the primary obligation in respect of
which such Guarantee is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee, unless such primary obligation and
the maximum amount for which such guaranteeing person may be liable are
not stated or determinable, in which case the amount of such guarantee
shall be such guaranteeing person's maximum reasonably anticipated
liability in respect thereof as determined by the Company in good
faith.
"GUARANTORS": each Subsidiary Guarantor.
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"GUARANTOR SUBORDINATED OBLIGATIONS": with respect to a
Guarantor, any Indebtedness of such Guarantor (whether outstanding on
the Closing Date or thereafter incurred) which is expressly subordinate
in right of payment to the obligations of such Guarantor under such
Guarantor's Subsidiary Guarantee pursuant to a written agreement.
"HEDGING OBLIGATIONS": means, with respect to any Person, the
net payment Obligations of such Person under:
(a) interest rate swap agreements, interest rate cap and floor
agreements and interest rate collar agreements;
(b) foreign exchange contracts and currency swap agreements;
and
(c) other agreements or arrangements in the ordinary course of
business designed to protect such Person against fluctuations in
commodity prices, interest rates or currency exchange rates.
"HOLDER" or "NOTEHOLDER": the Person in whose name a Loan (and
any corresponding Note(s)) is registered.
"INACTIVE SUBSIDIARY": each Subsidiary of the Company that has
total net assets (as shown on the most recent balance sheet of such
Subsidiary delivered to the Agents) of $100,000 or less.
"INDEBTEDNESS": means, with respect to any Person, any
indebtedness of such Person, whether or not contingent, in respect of
borrowed money or evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in
respect thereof) or banker's acceptances or representing Capital Lease
Obligations or the balance deferred and unpaid of the purchase price,
which purchase price is due more than six months after the date of
placing such property in service or taking delivery thereof, of any
property or representing any Hedging Obligations, except any such
balance that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) appears as a liability upon a balance
sheet of such Person prepared in accordance with GAAP, as well as all
Indebtedness of others secured by a Lien on any asset of such Person
(whether or not such Indebtedness is assumed by such Person), provided
that for purposes of determining the amount of any such secured
Indebtedness, the amount of such Indebtedness shall be limited to the
lesser of the fair market value of such asset or the amount of such
Indebtedness and, to the extent not otherwise included, the Guarantee
by such Person of any Indebtedness of any other Person. The amount of
any Indebtedness outstanding as of any date shall be:
(i) the accreted value thereof, in the case of any
Indebtedness that does not require current payments of interest; and
(ii) the principal amount thereof, together with any interest
thereon that is more than 45 days past due, in the case of any other
Indebtedness.
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"INDENTURE": the Indenture, substantially in the form of
Exhibit B (with such changes therein as the Company may request and
Administrative Agent may approve, such approval not to be unreasonably
withheld), if and when executed and delivered by the Company and the
Trustee thereunder, as amended, waived, supplemented or otherwise
modified from time to time.
"INITIAL LOAN": as defined in Section 2.1(a).
"INITIAL MATURITY DATE": June 30, 2001.
"INSOLVENCY": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INSURANCE COMPANIES": means International AutoNation Group
Insurance Company, Ltd. and its successors and any other captive
insurance subsidiary of the Company currently existing or established
in the future.
"INTELLECTUAL PROPERTY": the collective reference to all
rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or
otherwise, including copyrights, copyright licenses, patents, patent
licenses, trademarks, trademark licenses, technology, know-how and
processes, and all rights to ▇▇▇ at law or in equity for any
infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.
"INTEREST PAYMENT DATE": (a) as to the Initial Loans, the last
day of each March, June, September and December to occur while the
Initial Loans are outstanding beginning September 30, 2000 and the
Initial Maturity Date, (b) as to the Rollover Term Loans, the last day
of each March, June, September and December to occur while the Rollover
Term Loans are outstanding and the Final Maturity Date and (c) as to
any Loan, the date of any repayment or prepayment made in respect
thereof.
"INTERIM LOAN COMMITMENT LETTER": means the Interim Loan
Commitment Letter dated May 11, 2000, between ▇▇▇▇▇▇ Commercial Paper
Inc., ▇▇▇▇▇▇ Brothers Inc. and ANC Rental Corporation.
"INTERIM LOAN FEE LETTER": means the Interim Loan Fee Letter
dated May 11, 2000, between ▇▇▇▇▇▇ Commercial Paper Inc., ▇▇▇▇▇▇
Brothers Inc. and ANC Rental Corporation.
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"INVESTMENTS": means, with respect to any Person, all
investments by such Person in other Persons (including Affiliates) in
the forms of direct or indirect loans (including Guarantees of
Indebtedness or other Obligations), advances of assets or capital
contributions (excluding commissions, travel and entertainment, moving,
and similar advances or loans to officers, directors, consultants and
employees made in the ordinary course of business), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or
other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance
with GAAP. Investment shall exclude: (i) extensions of trade credit in
the ordinary course of business; (ii) deposits or partial payments made
in anticipation of a purchase or acquisition that would be a Permitted
Investment when consummated; (iii) security deposits or prepayments
with respect to operating leases; and (iv) payments made in connection
with the renewals or exercise of any option to renew an operating
lease. If the Company or any of its Restricted Subsidiaries sells or
otherwise disposes of any Equity Interests of any direct or indirect
Restricted Subsidiary of the Company such that, after giving effect to
any such sale or disposition, such Person is no longer a direct or
indirect Restricted Subsidiary of the Company, the Company or such
Restricted Subsidiary, as the case may be, shall be deemed to have made
an Investment on the date of any such sale or disposition equal to the
fair market value of the Equity Interests of such Restricted Subsidiary
not sold or disposed of in an amount determined as provided in the
penultimate paragraph of the covenant described in Section 6.2.
"LENDERS": as defined in the preamble to this Agreement.
"LIEN": with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under
applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other
agreement to sell or give a security interest in any asset and any
filing of or agreement to give any financing statement under the
Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"LOANS": as defined in Section 2.1(b).
"LOAN DOCUMENTS": this Agreement, the Warrant Agreement, the
Escrow Agreement, the Debt Registration Rights Agreement, Equity
Registration Rights Agreement, the Loan Notes and the Subsidiary
Guarantee.
"LOAN NOTES": the collective reference to the Rollover Term
Notes and the Original Initial Notes.
"LOAN PARTICIPANTS": as defined in Section 9.6(b).
"LOAN PARTIES": the collective reference to the Company and
each of its Subsidiaries which from time to time is a party to any Loan
Document.
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"MATERIAL ADVERSE EFFECT": a material adverse effect on (a)
the business, assets, property, condition (financial or otherwise) or
prospects of the Company and its Subsidiaries taken as a whole or (b)
the validity or enforceability of the Agreement or any other Loan
Document, or any New Credit Facility Documents or the rights or
remedies of the Lenders hereunder or thereunder.
"MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products, polychlorinated biphenyls, urea-formaldehyde insulation,
asbestos, pollutants, contaminants, radioactivity, and any other
substances of any kind, whether or not any such substance is defined as
hazardous or toxic under any Environmental Law, that is regulated
pursuant to or could give rise to liability under any Environmental
Law.
"MOODY'S": ▇▇▇▇▇'▇ Investors Service, Inc., and its
successors.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NET INCOME": with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before
any reduction in respect of preferred stock dividends, excluding,
however,
(a) any gain (or loss), together with any related provision
for taxes on such gain (or loss), realized in connection with (i) any
Asset Sale (including, without limitation, dispositions pursuant to
sale and leaseback transactions) or (ii) the disposition of any
securities by such Person or any of its Restricted Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its
Restricted Subsidiaries;
(b) any extraordinary gain (or loss), together with any
related provision for taxes on such extraordinary gain (or loss); and
(c) any gain or loss realized upon the termination of any
employee pension benefit plan shall be excluded.
"NET PROCEEDS": means the aggregate cash proceeds or Cash
Equivalents received by the Company or any of its Restricted
Subsidiaries in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of
(i) all costs relating to such Asset Sale (including,
without limitation, legal, accounting, investment banking and
brokers fees, and sales and underwriting commissions) and any
relocation expenses incurred as a result thereof;
(ii) taxes paid or payable as a result thereof (after
taking into account any available tax credits or deductions
and any tax sharing arrangements);
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(iii) all distributions and other payments required
to be made to minority interest holders in Restricted
Subsidiaries or joint ventures as a result of the Asset Sale;
(iv) all payments made on any Indebtedness which is
secured by any assets subject to such Asset Sale, in
accordance with the terms of any Lien upon or other security
agreement of any kind with respect to such assets, or which
must by its terms, or in order to obtain a necessary consent
to such Asset Sale, or by applicable law, be repaid out of the
proceeds from such Asset Sale;
(v) appropriate amounts to be provided by the Company
or any Restricted Subsidiary thereof as a reserve in
accordance with GAAP against any liabilities associated with
such assets and retained by the Company or any Restricted
Subsidiary thereof after the Asset Sale, including without
limitation liabilities under any indemnification obligations
and severance and other employee termination costs associated
with the Asset Sale; and
(vi) any portion of the purchase price from an Asset
Sale required by the terms of such Asset Sale to be placed in
escrow (whether as a reserve for a purchase price adjustment,
for satisfaction of indemnity or otherwise), provided that
upon termination of such escrow Net Proceeds will be increased
by any portion of the funds therein released to the Company or
any Restricted Subsidiary of the Company.
"NEW CREDIT FACILITY": means (a) the $175 million secured
credit facility pursuant to the Amended and Restated Credit Agreement,
dated as of June 30, 2000, among the Company, the lenders parties
thereto, Congress Financial Corporation (Florida), as administrative
agent, and others, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith,
and in each case as amended, amended and restated, modified, refunded,
replaced or refinanced from time to time including without limitation
any amendment extending the maturity of any Indebtedness incurred
thereunder, increasing the amount incurred or available thereunder in
accordance with the terms hereof or deleting, adding or substituting
one or more parties thereto and (b) the $40 million secured credit
facility pursuant to the Amended and Restated Credit Agreement, dated
as of June 30, 2000, among the Company, the lenders parties thereto,
▇▇▇▇▇▇ Commercial Paper Inc., as administrative agent, and others,
including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in
each case as amended, amended and restated, modified, refunded,
replaced or refinanced from time to time including without limitation
any amendment extending the maturity of any Indebtedness incurred
thereunder, increasing the amount incurred or available thereunder in
accordance with the terms hereof or deleting, adding or substituting
one or more parties thereto.
"NEW CREDIT FACILITY DOCUMENTS": the New Credit Facility and
the Loan Documents referred to therein.
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"NON-RECOURSE DEBT": means Indebtedness:
(a) as to which neither the Company nor any of its Restricted
Subsidiaries (i) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness
but excluding any agreement to provide managerial support), other than
a pledge of Equity Interests of any Unrestricted Subsidiary; (ii) is
directly or indirectly liable (as a guarantor or otherwise); or (iii)
constitutes the lender,
(b) no default with respect to which (including any rights
that the holders thereof may have to take enforcement action against an
Unrestricted Subsidiary) would permit (upon notice, lapse of time or
both) any holder of any other Indebtedness (other than the Notes being
offered hereby) of the Company or any of its Restricted Subsidiaries to
declare a default on such other Indebtedness or cause the payment
thereof to be accelerated or payable prior to its stated maturity; and
(c) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or assets of the Company
or any of its Restricted Subsidiaries.
"NON-U.S. LENDER": as defined in Section 2.10(d).
"NOTES": the Loan Notes and the Exchange Notes, as originally
executed or as subsequently amended from time to time pursuant to the
applicable provisions hereof.
"OBLIGATIONS": any principal, premium, if any, interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company or its
Restricted Subsidiaries whether or not a claim for post-filing interest
is allowed in such proceeding), penalties, fees, charges, expenses,
indemnifications, reimbursement obligations, damages (including
liquidated damages, if any), guarantees and other liabilities or
amounts payable under the documentation governing any Indebtedness or
in respect thereof.
"OFFICERS' CERTIFICATE": means a certificate signed on behalf
of any Person by either the principal executive officer, the principal
financial officer, the general counsel, the treasurer, the principal
accounting officer, a Senior Vice President, or other Responsible
Officer.
"ORIGINAL INITIAL NOTES": as defined in Section 9.6(f).
"ORIGINAL ROLLOVER TERM NOTES": as defined in Section 9.6(g).
"OTHER TAXES": means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or
similar levies arising from any payment made hereunder or from the
execution, delivery or enforcement, or otherwise with respect to, this
Agreement or any other Loan Document.
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"PAYMENT DEFAULT": as defined in Section 7(f).
"PAYMENT OFFICE": the office specified from time to time by
the Administrative Agent as its payment office by notice to the Company
and the Lenders.
"PAYMENT SHARING NOTICE": a written notice from the Company or
any Lender informing the Administrative Agent that an Event of Default
has occurred and is continuing and directing the Administrative Agent
to allocate payments thereafter received from or on behalf of the
Company in accordance with the provisions of Section 2.8(b)(ii).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor thereto).
"PERMITTED BUSINESS": means the lines of business conducted by
the Company and its Restricted Subsidiaries on the date hereof and
businesses reasonably related, complimentary or ancillary thereto,
including reasonably related extensions or expansions thereof.
"PERMITTED INVESTMENTS": means:
(a) any Investment in the Company or in a Restricted
Subsidiary of the Company (including the acquisition of any Equity
Interest in a Restricted Subsidiary);
(b) any Investment in cash or Cash Equivalents;
(c) any Investment by the Company or any Restricted Subsidiary
of the Company in a Person engaged in a Permitted Business if as a
result of such Investment:
(i) such Person becomes a Restricted Subsidiary of
the Company: or
(ii) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the
Company or a Restricted Subsidiary;
(d) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with the covenant described under Section 6.5 hereof or the
disposition of assets not constituting an Asset Sale;
(e) any acquisition of Capital Stock or other securities for
consideration to the extent such consideration consists of Equity
Interests (other than Disqualified Stock) of the Company;
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(f) other Investments by the Company or any of its Restricted
Subsidiaries in any Person having an aggregate fair market value
(measured as of the date made and without giving effect to subsequent
changes in value), when taken together with all other Investments made
pursuant to this clause (f) that are at that time outstanding, not to
exceed $25 million during the period prior to the Initial Maturity Date
or 5% of the Company's Consolidated Tangible Assets thereafter;
(g) Investments arising in connection with Hedging Obligations
that are incurred in the ordinary course of business for the purpose of
fixing or hedging currency, equity, commodity or interest rate risk
(including with respect to any floating rate Indebtedness that is
permitted by the terms of the Indenture to be outstanding) in
connection with the conduct of the business of the Company and its
Restricted Subsidiaries;
(h) receivables owing to the Company or any Restricted
Subsidiary created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms;
provided, however, that such trade terms may include such concessionary
trade terms as the Company or any such Restricted Subsidiary deems
reasonable under the circumstances;
(i) payroll, travel, relocation and similar advances to cover
matters that are expected at the time of such advances ultimately to be
treated as expenses for accounting purposes and that are made in the
ordinary course of business;
(j) loans or advances to employees made in the ordinary course
of business of the Company or such Restricted Subsidiary;
(k) stock, obligations or securities received in settlement of
debts created in the ordinary course of business and owing to the
Company or any Restricted Subsidiary or in satisfaction of judgments or
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of a debtor (including customers and
suppliers) or an Investment acquired by the Company or a Restricted
Subsidiary of the Company as a result of the transfer of title with
respect to any secured Investment in default as a result of a
foreclosure by the Company or any of its Restricted Subsidiaries with
respect to such secured Investment;
(l) any Investment existing on the Closing Date and any
amendment, modification, restatement, supplement, extension, renewal,
refunding, replacement, refinancing, in whole or in part, thereof;
(m) guarantees of Indebtedness permitted under the covenant
described under Section 6.3 hereof;
(n) Investment in prepaid expenses, negotiable instruments
held for collection and lease, utility and worker's compensation,
performance and other similar deposits;
(o) Investments in any of the Notes;
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(p) Investments made by any of the Company's insurance
subsidiaries in the ordinary course of their business to the extent
such Investments are not made with funds provided by the Company or any
Restricted Subsidiary solely for the purpose of making such
Investments; and
(q) the purchase by the Company or one of its Restricted
Subsidiaries of warrants to purchase preferred stock of E-Travel, Inc.
and the exercise of such warrants for an aggregate amount not to exceed
$1.75 million.
"PERMITTED LIENS" means:
(a) Liens on assets of the Company or any Restricted
Subsidiary to secure Indebtedness permitted by clause (i), (ii) or (xx)
of Section 6.3(b);
(b) Liens on the assets of the Company or any of its
Restricted Subsidiaries to secure Hedging Obligations, provided that
the Liens are only secured by property or assets that secure the
Indebtedness relating to the Hedging Obligation or the property
securing Indebtedness under any Credit Facility permitted by this
Agreement to be incurred;
(c) Liens on property, assets or Equity Interests of a Person
existing at the time such Person is merged into or consolidated with
the Company or any Restricted Subsidiary of the Company; provided that
such Liens were in existence prior to the contemplation of such merger
or consolidation and do not extend to any assets other than those of
the Person merged into or consolidated with the Company;
(d) Liens on property existing at the time of acquisition
thereof by the Company or any Restricted Subsidiary of the Company,
provided that, such Liens were in existence prior to the contemplation
of such acquisition and only extend to the property so acquired;
(e) Liens existing on the Closing Date;
(f) Liens securing Permitted Refinancing Indebtedness incurred
to refinance Indebtedness that was previously so secured, provided that
any such Lien is limited to all or part of the same property or assets
(plus improvements, accessions, proceeds or dividends or distributions
in respect thereof) that secured (or, under the written arrangements
under which the original Lien arose, could secure) the Indebtedness
being refinanced or is in respect of property that is the security for
a Permitted Lien hereunder;
(g) Liens in favor of the Company or any Restricted
Subsidiary, including Liens securing Indebtedness or other obligations
of a Restricted Subsidiary owing to the Company or Restricted
Subsidiary;
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(h) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds, letters of credit permitted
by the Indenture, deposits to secure the performance of bids, trade
contracts, government contracts, leases or licenses or other
obligations of a like nature incurred in the ordinary course of
business (including, without limitation, landlord Liens on leased
properties);
(i) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good
faith by appropriate proceedings, provided that any reserve or other
appropriate provision as shall be required to conform with GAAP shall
have been made therefor;
(j) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (iv) of Section 6.3(b) hereof covering
only the assets acquired with such Indebtedness;
(k) liens imposed by law, such as carriers', warehousemen's,
mechanics', landlords', materialmen's, repairmen's or other like Liens,
in each case, arising in the ordinary course of business in respect of
obligations not overdue for a period in excess of 60 days or which are
being contested in good faith by appropriate proceedings promptly
instituted and diligently prosecuted; PROVIDED that any reserve or
other appropriate provision as shall be required to conform with GAAP
shall have been made therefor;
(l) easements, rights-of-way, minor survey exceptions, zoning
and similar restrictions and other similar encumbrances or title
defects incurred, or leases or subleases granted to others, in the
ordinary course of business, which do not in any case materially
detract from the value of the property subject thereto or do not
interfere with or adversely affect in any material respect the ordinary
conduct of the business of the Company and its Restricted Subsidiaries
taken as a whole;
(m) Liens in favor of customs and revenue authorities to
secure payment of customs duties in connection with the importation of
goods in the ordinary course of business and other similar Liens
arising in the ordinary course of business;
(n) leases or subleases granted to third Persons not
interfering with the ordinary course of business of the Company or any
of its Restricted Subsidiaries and not otherwise prohibited by this
Agreement;
(o) Liens (other than any Lien imposed by the Employee
Retirement Income Security Act of 1974, as amended, or any rule or
regulation promulgated thereunder) incurred or deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance, and other types of social security benefits or
obligations, public or statutory obligations or other obligations of a
like general nature incurred in the ordinary course of business;
(p) any attachment or judgment Lien not constituting an Event
of Default under clause (g) of Section 7;
(q) any interest or title of a lessor or sublessor under any
operating lease;
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(r) Liens on any airport concession agreements or permits to
secure loans extended to finance tenant improvements used in connection
with the concession agreement or permit subject to such Lien;
(s) Liens on Permitted Vehicle Collateral securing Permitted
Vehicle Indebtedness and liens on cash collateral or Cash Equivalents
as permitted by the terms of the documentation governing the Permitted
Vehicle Indebtedness;
(t) Liens securing Customer Lease Financing Loans incurred
without violation of the Indenture;
(u) Liens on the assets or Equity Interests of Unrestricted
Subsidiaries that secure Non-Recourse Debt of Unrestricted Subsidiaries
not otherwise prohibited by this Agreement;
(v) Liens (not in respect of Indebtedness) arising from
financing statements filed under the Uniform Commercial Code for
informational purposes with respect to leases incurred in the ordinary
course of business; and
(w) Liens on assets so long as neither (i) the aggregate
outstanding principal amount of the obligations secured thereby nor
(ii) the aggregate fair market value (determined in the case of each
such Lien, as of the date such Lien is incurred) of the assets subject
thereto (as to the Company and all Restricted Subsidiaries) exceeds $5
million at any one time.
"PERMITTED REFINANCING INDEBTEDNESS": means any Indebtedness
of the Company or any of its Restricted Subsidiaries issued in exchange
for, or the net proceeds of which are used to extend, refinance, renew,
replace, restructure, supplement, defease or refund other Indebtedness
of the Company or any of its Restricted Subsidiaries (other than
intercompany Indebtedness); provided that:
(i) principal amount (or accreted value, if
applicable) of such Permitted Refinancing Indebtedness does
not exceed the principal amount of (or accreted value, if
applicable), plus accrued and unpaid interest on, any
Indebtedness so extended, refinanced, renewed, replaced,
restructured, supplemented, defeased or refunded (plus the
amount of expenses and premiums incurred in connection
therewith);
(ii) such Permitted Refinancing Indebtedness has a
final maturity date later than the final maturity date of, and
has a Weighted Average Life to Maturity equal to or greater
than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded;
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(iii) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in
right of payment to the Loans, such Permitted Refinancing
Indebtedness has a final maturity date later than the final
maturity date of, and is subordinated in right of payment to,
the Loans on terms at least as favorable to the Holders as
those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; and
(iv) such Indebtedness is incurred either by the
Company or a Restricted Subsidiary who is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded or a Guarantor.
"PERMITTED VEHICLE COLLATERAL": means, as of any Determination
Date or at any other time, the collateral securing Permitted Vehicle
Indebtedness and covering cash collateral deposits, vehicles and assets
attributable to, or directly associated with, vehicles, such as
manufacturers' obligations to repurchase such vehicles, rental
receivables and receivables arising on the disposition of vehicles,
proceeds of insurance covering such vehicles, and any other property of
a type customarily securing Permitted Vehicle Indebtedness.
"PERMITTED VEHICLE INDEBTEDNESS": means (i) Indebtedness
incurred by the Company or any Restricted Subsidiary to finance or
refinance, directly or indirectly, Eligible Vehicles (but only to the
extent actually used to finance or refinance Eligible Vehicles) and
(ii) Indebtedness of the Company or any Restricted Subsidiary secured
by Permitted Vehicle Collateral; provided, however, that any
Indebtedness redesignated pursuant to clause (iii) of Section 6.4(b)
shall not constitute Permitted Vehicle Indebtedness; and provided,
further, that the Loans shall not be deemed to constitute Permitted
Vehicle Indebtedness when incurred.
"PERSON": any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof
or any other entity.
"PIK INTEREST AMOUNT": as defined in Section 2.6(c).
"PLAN": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Company or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"PROPERTY": any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible
or intangible, including, without limitation, Capital Stock.
"REGISTER": as defined in Section 9.6(d).
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"REGISTRATION RIGHTS AGREEMENTS": mean the Equity Registration
Rights Agreement and the Debt Registration Rights Agreement.
"REGULATION U": Regulation U of the Board of Governors as in
effect from time to time.
"REGULATION X": Regulation X of the Board of Governors as in
effect from time to time.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section
4043(c) of ERISA and the regulations thereunder, other than those
events as to which the thirty day notice period is waived under
subsections .22, .23, .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC
Reg. ' 4043.
"REQUIRED LENDERS": at any time, Lenders holding more than 50%
in principal amount of outstanding Loans (or, prior to the Closing
Date, more than 50% of the Commitments).
"REQUIREMENT OF LAW": as to any Person, the certificate of
incorporation and by-laws or other organizational or governing
documents of such Person, and any present or future law, treaty,
statute, rule, 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.
"RESPONSIBLE OFFICER": as to any Person, any of the following
officers of such Person: (i) the chief executive officer or the
president of such Person and, with respect to financial matters, the
chief financial officer, the senior vice president - finance, the
treasurer or the controller of such Person, (ii) any vice president of
such Person or, with respect to financial matters, any assistant
treasurer or assistant controller of such Person who has been
designated in writing to the Administrative Agent as a Responsible
Officer by such chief executive officer or president of such Person or,
with respect to financial matters, such chief financial officer of such
Person, (iii) with respect to Section 5.7 and without limiting the
foregoing, the general counsel of such Person and (iv) with respect to
ERISA matters, the senior vice president - human resources (or
substantial equivalent) of such Person.
"RESTRICTED INVESTMENT": an Investment other than a Permitted
Investment.
"RESTRICTED PAYMENTS": as defined in Section 6.2(a).
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"RESTRICTED SUBSIDIARY": with respect to a Person, any
Subsidiary of such Person that is not an Unrestricted Subsidiary;
PROVIDED that, on the Closing Date, all Subsidiaries of the Company
shall be Restricted Subsidiaries of the Company.
"RISK MANAGEMENT SUBSIDIARY": each of Post Retirement
Liability Management, Inc., a Florida corporation, and Rental Liability
Management, Inc., a Florida corporation.
"ROLLOVER TERM LOAN": as defined in Section 2.1(b).
"ROLLOVER TERM NOTES": as defined in Section 9.6(g).
"SEC": the Securities and Exchange Commission or any successor
agency or body.
"SECURITIES ACT": the Securities Act of 1933, as amended from
time to time.
"SEPARATION AND DISTRIBUTION AGREEMENT": the Separation and
Distribution Agreement entered into by the Company and AutoNation on
the Spin-Off Date, as the same may be amended, supplemented or
otherwise modified in accordance with Section 6.10.
"SIGNIFICANT SUBSIDIARY": means any Subsidiary of the Company
that is a "significant subsidiary" as that term is defined under Rule
405 of the Securities Act.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"SOLVENT": with respect to any Person, as of any date of
determination, (a) the amount of the "present fair saleable value" of
the assets of such Person will, as of such date, exceed the amount of
all "liabilities of such Person, contingent or otherwise," as of such
date, as such quoted terms are determined in accordance with applicable
federal and state laws governing determinations of the insolvency of
debtors, (b) the present fair saleable value of the assets of such
Person will, as of such date, be greater than the amount that will be
required to pay the liability of such Person on its debts as such debts
become absolute and matured, (c) such Person will not have, as of such
date, an unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they
mature. For purposes of this definition, (i) "debt" means liability on
a "claim," and (ii) "claim" means any (x) right to payment, whether or
not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal,
equitable, secured or unsecured or (y) right to an equitable remedy for
breach of performance if such breach gives rise to a right to payment,
whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
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"SPECIFIED FINANCING SUBSIDIARY": means a Wholly Owned
Subsidiary of the Company (into which the Company or a Restricted
Subsidiary has directly or indirectly contributed only nominal equity)
that is solely engaged in the business of acquiring vehicles for and
then leasing such vehicles to, a specified customer (the "CUSTOMER");
PROVIDED that:
(i) such vehicles are purchased solely with the
proceeds of loans made by the Customer to such Specified
Financing Subsidiary (the "CUSTOMER LEASE FINANCING LOANS");
(ii) neither the Company nor any Restricted
Subsidiary of the Company provides the Specified Financing
Subsidiary any guarantee or credit support of any kind
(including any undertaking, guarantee, indemnity, agreement or
instrument that would constitute Indebtedness) or is directly
or indirectly liable (as a guarantor or otherwise) for such
Customer Lease Financing Loans; and
(iii) the explicit terms of such Customer Lease
Financing Loans provide that there shall be no recourse
against any of the assets of the Company or its Restricted
Subsidiaries.
"SPIN-OFF": means the proposed distribution by AutoNation to
its shareholders in a tax-free spin-off of 100% of the shares of common
stock of the Company on or prior to July 31, 2000.
"SPIN-OFF DATE": the date, on or before July 31, 2000, upon
which the Spin-Off occurs and all of the conditions in Section 4.2 are
satisfied.
"SPIN-OFF DOCUMENTS": the AutoNation Reimbursement Agreement,
the Transitional Services Agreement, the Tax Sharing Agreement, the
Separation and Distribution Agreement and the Benefits Agreement.
"STANDARD &POOR'S": Standard & Poor's Ratings Service and its
successors.
"STATED MATURITY": with respect to any installment of interest
or principal on any series of Indebtedness, the date on which such
payment of interest or principal was scheduled to be paid in the New
Credit Facility or other original documentation governing such
Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the
date originally scheduled for the payment thereof.
"SUBORDINATED OBLIGATION": any Indebtedness of the Company
(whether outstanding on the date of this Agreement or thereafter
incurred or arising) which is subordinate or junior in right of payment
to the Loans pursuant to a written agreement.
"SUBSEQUENT ROLLOVER TERM NOTE": as defined in Section 9.6(g).
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"SUBSIDIARY": with respect to any Person,
(i) any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at
the time owned or controlled, directly or indirectly, by such Person
and
(ii) any partnership (a) the sole general partner or the
managing general partner of which is such Person or an entity described
in clause (i) and related to such Person or (b) the only general
partners of which are such Person or of one or more entities described
in clause (i) and related to such Person (or any combination thereof).
"SUBSIDIARY GUARANTEE": means any Guarantee, substantially in
the form of Exhibit A, to be executed by the Subsidiary Guarantors.
"SUBSIDIARY GUARANTOR": means any Restricted Subsidiary that
signs a Subsidiary Guarantee pursuant to Section 6.12.
"TAX SHARING AGREEMENT": the Tax Sharing Agreement to be
entered into by the Company and AutoNation on or before the Spin-Off
Date, substantially in the form of such agreement delivered to the
Agents on the Closing Date pursuant to Section 4.1(c), as the same may
be amended, supplemented or otherwise modified in accordance with
Section 6.10.
"TRANSACTION DOCUMENTS": the collective reference to the
Separation and Distribution Agreement, the Tax Sharing Agreement, the
Transitional Services Agreement, the Loan Documents, the Benefits
Agreement, the AutoNation Reimbursement Agreement, the New Credit
Facility Documents, the Indenture and the Exchange Notes.
"TRANSACTIONS": the collective reference to the Spin-Off, the
issuances of Indebtedness under this Agreement, the New Credit Facility
and the Indenture.
"TRANSFEREE": as defined in Section 9.6(h).
"TRANSITIONAL SERVICES AGREEMENT": the Transitional Services
Agreement entered into by the Company and AutoNation on the Spin-Off
Date, as the same may be amended, supplemented or otherwise modified in
accordance with Section 6.10.
"TRUSTEE": as defined in Section 5.9(a).
"UNRESTRICTED SUBSIDIARY": means any Subsidiary that is
designated by the Board of Directors as an Unrestricted Subsidiary
pursuant to a Board Resolution; but only to the extent that such
Subsidiary:
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(i) has no Indebtedness other than Non-Recourse Debt;
(ii) is not party to any agreement, contract,
arrangement or understanding with the Company or any
Restricted Subsidiary of the Company (other than in connection
with the pledge of the Equity Interests of an Unrestricted
Subsidiary) unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the
Company or such Restricted Subsidiary than those that might be
obtained at the time from Persons who are not Affiliates of
the Company;
(iii) is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct
or indirect obligation (x) to subscribe for additional Equity
Interests or (y) to maintain or preserve such Person's
financial condition or to cause such Person to achieve any
specified levels of operating results;
(iv) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the
Company or any of its Restricted Subsidiaries other than the
Loans; and
(v) has at least one director on its board of
directors that is not a director or executive officer of the
Company or any Restricted Subsidiary and has at least one
executive officer that is not a director or executive officer
of the Company or any of its Restricted Subsidiaries;
provided that, the provisions set forth in clauses (iii) and (iv) of
this definition of "Unrestricted Subsidiary" shall not be applicable if
any of the foregoing are permitted by Section 6.2 hereof.
"VOTING STOCK": of any Person as of any date, the Capital
Stock of such Person that is at the time entitled to vote in the
election of the Board of Directors of such Person.
"WARRANT AGREEMENT": the Warrant Agreement, substantially in
the form of EXHIBIT D, to be executed and delivered by the Company and
The Bank of New York, as warrant agent with respect to the Warrants on
or before the Spin-Off Date.
"WARRANTS": the warrants of the Company as described in the
Warrant Agreement.
"WEIGHTED AVERAGE LIFE TO MATURITY": when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(i) the sum of the products obtained by multiplying
(a) the amount of each then remaining installment, sinking
fund, serial maturity or other required payments of principal,
including payment at final maturity, in respect thereof, by
(b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making
of such payment, by
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(ii) the then outstanding principal amount of such
Indebtedness.
"WHOLLY-OWNED SUBSIDIARY": means a Restricted Subsidiary, 100%
of the outstanding Capital Stock and other Equity Interests of which is
directly or indirectly owned by the Company or by one or more Wholly
Owned Subsidiaries of such Person other than director's qualifying
shares or shares held by citizens or nationals of a foreign
jurisdiction pursuant to regulatory requirements.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in any Notes, any other Loan Document or any certificate or
other document made or delivered pursuant hereto.
(b) As used herein and in any Notes and any other Loan
Document, and any certificate or other document made or delivered pursuant
hereto or thereto, accounting terms relating to the Company and its Subsidiaries
not defined in Section 1.1 and accounting terms partly defined in Section 1.1,
to the extent not defined, shall have the respective meanings given to them
under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule, Annex and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(e) All calculations of financial ratios set forth in Section
6.1 shall be calculated to the same number of decimal places as the relevant
ratios are expressed in and shall be rounded upward if the number in the decimal
place immediately following the last calculated decimal place is five or
greater. For example, if the relevant ratio is to be calculated to the hundredth
decimal place and the calculation of the ratio is 5.126, the ratio will be
rounded up to 5.13.
(f) Unless otherwise specified herein or therein, any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document,
as from time to time amended, supplemented or modified (subject to any
restrictions on such amendments, supplements or modifications contained herein).
SECTION 2. AMOUNT AND TERMS OF LOANS.
2.1 LOANS. (a) Subject to the terms and conditions hereof,
each Lender severally agrees to make a loan (individually, an "INITIAL LOAN" and
collectively, the "INITIAL LOANS") to the Company on the Spin-Off Date in a
principal amount equal to such Lender's Commitment set forth on Schedule 2.1.
Any Commitments not drawn on the Spin-Off Date shall terminate.
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(b) Subject to the terms and conditions hereof, each Lender
severally agrees, if the Initial Loans have not been repaid on the Initial
Maturity Date, to convert the then outstanding principal amount of its Initial
Loans into loans (individually, a "ROLLOVER TERM LOAN" and collectively, the
"ROLLOVER TERM LOANS"; the Initial Loans and the Rollover Term Loans,
collectively, the "LOANS") to the Company, on or before the Initial Maturity
Date, in aggregate principal amount equal to then outstanding principal amount
of the Initial Loans then held by such Lender. Upon the conversion by each
Lender of Initial Loans into Rollover Term Loans, such Lender shall cancel on
its records a principal amount of the Initial Loans held by such Lender
corresponding to the principal amount of Rollover Term Loan resulting from such
conversion, which corresponding principal amount of the Initial Loans shall be
satisfied by the conversion thereof into Rollover Term Loans.
2.2 PROCEDURE FOR BORROWING. The Company shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 10:00 A.M., New York City time, two Business Days
prior to the anticipated Spin-Off Date) requesting that the Lenders make the
Initial Loans on the Spin-Off Date. Upon receipt of such notice the
Administrative Agent shall promptly notify each Lender thereof. Not later than
12:00 Noon, New York City time, on the Spin-Off Date each Lender shall make
available to the Administrative Agent at the Funding Office an amount in
immediately available funds equal to the principal amount of the Initial Loans
to be made by such Lender. The Administrative Agent shall then make the proceeds
of the Initial Loans available to the Company.
2.3 MATURITY AND EXCHANGE NOTES. (a) The Initial Loans will
mature on the Initial Maturity Date.
(b) The Rollover Term Loans will mature on the Final Maturity
Date.
(c) Each Lender will have the option on or after the Initial
Maturity Date at any time or from time to time to receive Exchange Notes in
exchange for the Rollover Term Loans or, on the Initial Maturity Date, the
Initial Loans, of such Lender then outstanding in accordance with Section 5.9.
The principal amount of the Exchange Notes will equal 100.0% of the aggregate
principal amount (including any PIK Interest Amount) of the Loans for which they
are exchanged. If a Default (but not an Event of Default) shall have occurred
and be continuing on the date of such exchange, any notices given or cure
periods commenced while the Loan was outstanding shall be deemed given or
commenced (as of the actual dates thereof) for all purposes with respect to the
Exchange Note (with the same effect as if the Exchange Note had been outstanding
as of the actual dates thereof). Notwithstanding any other provision hereof, the
terms of any Loan that has been tendered to the Escrow Agent for exchange for
Exchange Notes pursuant to Section 2(a) of the Escrow Agreement shall be amended
as follows: (i) any prepayment of such Loan must be made at a price equal to the
applicable redemption price pursuant to Section 3.1 of the Indenture for the
Exchange Note that is required to be delivered to the holder of such Loan
pursuant to the Escrow Agreement and (ii) the interest rate of such Loan shall
equal the interest rate on the Exchange Note that is required to be delivered to
the holder of such Loan pursuant to the Escrow Agreement.
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2.4 REPAYMENT OF LOANS. The Company hereby unconditionally
promises to pay to the Administrative Agent for the account of each Lender the
then unpaid principal amount of each Loan when due in accordance with the terms
hereof and of the Loan Notes. The Company hereby further agrees to pay to the
Administrative Agent for the account of each Lender interest on the unpaid
principal amount of the Loans from time to time outstanding from the date hereof
until payment in full thereof at the rates per annum, and on the dates, set
forth in Section 2.6.
2.5 OPTIONAL AND MANDATORY PREPAYMENTS.(a) The Company may at
any time and from time to time prepay the Loans, in whole or in part, without
premium or penalty, upon irrevocable notice delivered to the Administrative
Agent at least three Business Days prior thereto, which notice shall specify the
date and amount of prepayment. Upon receipt of any such notice the
Administrative Agent shall promptly notify each Lender thereof. If any such
notice is given, the amount specified in such notice shall be due and payable on
the date specified therein, together with accrued interest to such date on the
amount prepaid. Partial prepayments of Loans shall be in an aggregate principal
amount equal to the lesser of (A) $1,000,000, or a whole multiple thereof and
(B) the aggregate unpaid principal amount of the Loans.
(b) If, subsequent to the Closing Date, the Company or any of
its Restricted Subsidiaries shall issue any Indebtedness (other than
Indebtedness incurred pursuant to Section 6.3(b)) or Capital Stock (other than
shares of Capital Stock (i) of a Restricted Subsidiary issued to the Company or
any Wholly-Owned Subsidiary of the Company; (ii) of the Company or any
Restricted Subsidiary issued pursuant to employee stock option plans and other
bona fide employment-related arrangements; (iii) issued to fund all or part of
the purchase price of the acquisition by the Company or any Subsidiary of the
Company of any franchisee (whether by acquisition of stock or assets, merger or
otherwise) from any Person not to exceed $25.0 million in the aggregate; (iv)
issued to any lender or other entity that is not an Affiliate of the Company
providing financing to the Company or any Subsidiary in connection with a bona
fide financing transaction permitted pursuant to Section 6.3(b), in an amount
that is necessary to raise such financing; (v) issued pursuant to the options,
warrants and other convertible securities of the Company or any Subsidiary
existing on the date hereof or permitted pursuant to the foregoing clauses (ii)
through (iv), inclusive; (vi) issued pursuant to the exercise of the Warrants or
(vii) with a fair market value at the time of issuance of no more than $5.0
million, in the aggregate), an amount equal to 100% of the net proceeds thereof
shall be promptly applied toward the prepayment of the Loans; PROVIDED, HOWEVER,
that such net proceeds need not be applied to the prepayment of the Loans to the
extent that such net proceeds are (x) required to be and are applied pursuant to
the New Credit Facility in satisfaction of Obligations thereunder and shall
cause the related loan commitment (if any) to be permanently reduced in an
amount equal to the principal amount of the Obligations so satisfied or (y) are
applied after the Initial Maturity Date to repay any subordinated obligations of
the Company to AutoNation with respect to the General Motors Letter of Credit.
(c) The Company shall give the Administrative Agent (which
shall promptly notify each Lender) at least three Business Days' prior written
notice, or telephone notice promptly confirmed in writing, of each prepayment in
whole or in part pursuant to this Agreement setting forth the date and amount
thereof.
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(d) Accrued and unpaid interest on the amount of any principal
of the Loans prepaid under this Section 2.5 shall be paid to and on the date of
such prepayment.
2.6 INTEREST RATES AND PAYMENT DATES. (a) Each Initial Loan
shall bear interest at a rate per annum equal to 13.5%.
(b) Each Rollover Term Loan shall bear interest for each day
during the period from and including the Initial Maturity Date to, but
excluding, the Final Maturity Date or date of exchange for an Exchange Note on
the unpaid principal thereof at a rate per annum equal to 13.5% plus the
Adjusted Margin in effect for such day.
(c) Notwithstanding the foregoing clause (b), the interest
rate borne by the Loans shall not exceed the lesser of (i) 18% per annum and
(ii) the maximum interest rate permitted by law. To the extent the interest on
any Loan for the period ending on any Interest Payment Date exceeds a rate of
14% per annum, the Company may elect to capitalize such excess interest (or
portion thereof) as principal and thereby add such capitalized interest to the
principal amount of the applicable Loans. Such interest capitalized as principal
and thereby added to the principal amount of the applicable Loans shall be
referred to as "PIK INTEREST AMOUNT." If requested by any Lender, the Company
shall issue Subsequent Rollover Term Notes in an aggregate principal amount
equal to such PIK Interest Amount or all or a portion of such excess interest to
be paid, as the case may be.
(d) If all or a portion of (i) the principal amount of any of
the Loans, (ii) any interest payable thereon, or (iii) any commitment fee or
other amount payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise, but taking into account any applicable
grace period under Section 7(b)), such Loan and any such overdue amount shall,
without limiting the rights of the Lenders under Section 7, bear interest at a
rate per annum which is (x) in the case of overdue principal, the rate that
would otherwise be applicable thereto pursuant to the foregoing provisions of
this Section plus 2% or (y) in the case of overdue interest, commitment fees or
other amounts due and payable hereunder, the applicable rate hereunder for any
Loan (but without giving effect to the foregoing clause (x)) plus 2%, in each
case, from the date of such non-payment until such amount is paid in full.
(e) Subject to Section 2.6(c), interest shall be payable in
arrears on each Interest Payment Date, the Initial Maturity Date and upon the
Final Maturity Date of the Loan in respect of which any such interest is
accruing, PROVIDED that interest accruing pursuant to Section 2.6(d) shall be
payable from time to time on demand.
2.7 COMPUTATION OF INTEREST AND FEES. Interest, fees and
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed.
2.8 PRO RATA TREATMENT AND PAYMENTS. (a) Except to the extent
otherwise provided herein, each borrowing of Loans by the Company from the
Lenders and any reduction of the Commitments of the Lenders hereunder shall be
made PRO RATA according to the Commitment Percentages of the Lenders.
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(b) All payments (including prepayments) to be made by the
Company on account of principal, interest and fees shall be made without setoff
or counterclaim and shall be made prior to 12:00 Noon, New York City time, on
the due date thereof to the Administrative Agent, for the account of the Lenders
at the Payment Office in lawful money of the United States of America and in
immediately available funds. The Administrative Agent shall distribute such
payments promptly upon receipt in like funds as received. If any payment
hereunder becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day. In the case of
any extension of any payment of principal pursuant to the preceding sentence,
interest thereon shall be payable at the then applicable rate during such
extension.
2.9 REQUIREMENTS OF LAW. (a) If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement or any other Loan Document or change the
basis of taxation of payments to such Lender in respect thereof (except
for taxes covered by Section 2.10 and changes in the rate of tax on the
overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, continuing, or
maintaining its Loans or to reduce any amount receivable hereunder in respect
thereof, then, in either case, the Company shall promptly pay such Lender, upon
its demand, any additional amounts necessary to compensate such Lender for such
increased cost or reduced amount receivable. If any Lender becomes entitled to
claim any additional amounts pursuant to Section 2.9(a), it shall promptly
notify the Company (with a copy to the Administrative Agent) of the event by
reason of which it has become so entitled.
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(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such change or compliance
(taking into consideration such Lender's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time, after submission by such Lender to the Company (with a
copy to the Administrative Agent) of a prompt written request therefor, the
Company shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such reduction.
(c) A certificate as to any additional amounts payable
pursuant to this Section 2.9 submitted by any Lender to the Company (with a copy
to the Administrative Agent) shall be conclusive in the absence of manifest
error. The obligations of the Company pursuant to this Section 2.9 shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
2.10 TAXES. (a) All payments made by the Company under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding franchise taxes and taxes imposed on or measured by net
income, receipts or capital imposed by reason of any connection between, as
applicable, any Agent, any Lender, any Assignee or Participant or other
recipient and the relevant taxing jurisdiction, including, without limitation, a
connection arising from such Person being or having been a citizen, domiciliary,
or resident of such jurisdiction, being organized in such jurisdiction, or
having or having had a permanent establishment or fixed place of business
therein, but excluding a connection arising solely from such Person having
executed, delivered, performed its obligations or received any payment under
this Agreement. If any such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions or withholdings ("NON-EXCLUDED TAXES") or any Other
Taxes are required to be withheld from any amounts payable to any Agent or any
Lender hereunder, the amounts so payable to such Agent or such Lender shall be
increased to the extent necessary to yield to such Agent or such Lender (after
payment of all Non-Excluded Taxes and Other Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement; PROVIDED, however, that the Company shall not be required to increase
any such amounts payable to any Lender with respect to any Non-Excluded Taxes
(i) that are attributable to such Lender's failure to comply with the
requirements of paragraph (d) or (e) of this Section or (ii) that are United
States withholding taxes imposed on amounts payable to such Lender at the time
such Lender becomes a party to this Agreement, except to the extent that such
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Company with respect to such Non-Excluded Taxes
pursuant to this paragraph (a).
(b) In addition, the Company shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
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(c) Whenever any Non-Excluded Taxes or Other Taxes are payable
by the Company, as promptly as possible thereafter the Company shall send to the
Administrative Agent for the account of the relevant Agent or Lender, as the
case may be, a certified copy of an original official receipt received by the
Company showing payment thereof. If the Company fails to pay any Non-Excluded
Taxes or Other Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Company shall indemnify the Agents and the Lenders for
any incremental taxes, interest or penalties that may become payable by any
Agent or any Lender as a result of any such failure. The agreements in this
Section shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
(d) Each Lender (or Transferee) that is not a citizen or
resident of the United States of America, a corporation, partnership or other
entity created or organized in or under the laws of the United States of America
(or any jurisdiction thereof), or any estate or trust that is subject to federal
income taxation regardless of the source of its income (a "NON-U.S. LENDER")
shall deliver to the Company and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two duly completed and signed copies of either U.S. Internal Revenue
Service Form W-8BEN or Form W-8ECI, including, where applicable, any such forms
required to be provided to certify to such exemption on behalf of such Non-U.S.
Lender's beneficial owners or, in the case of a Non-U.S. Lender claiming
exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of
the Code with respect to payments of "portfolio interest" a statement
substantially in the form of Exhibit I attached hereto and a Form W-8BEN, or any
subsequent versions thereof or successors thereto duly completed and signed and
duly executed by such Non-U.S. Lender (and where applicable, its beneficial
owners) claiming complete exemption from, or a reduced rate of, U.S. federal
withholding tax on all payments by the Company under this Agreement and the
other Loan Documents. Such forms shall be delivered by each Non-U.S. Lender on
or before the date it becomes a party to this Agreement (or, in the case of any
Participant, on or before the date such Participant purchases the related
participation). In addition, each Non-U.S. Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered by
such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the Company at
any time it determines that it is no longer in a position to provide any
previously delivered certificate to the Company (or any other form of
certification adopted by the U.S. taxing authorities for such purpose). Each
Lender, Assignee and Participant which is not a Non-U.S. Lender shall deliver to
the Company and the Administrative Agent (and if applicable the assigning or
Participating Lender) two duly completed and signed copies of United States
Internal Revenue Service Form W-9 (or applicable successor form) unless it
establishes to the satisfaction of the Company that it is otherwise eligible for
an exemption from backup withholding tax or other applicable withholding tax.
Each such Lender, Assignee and Participant shall deliver to the Company and the
Administrative Agent and, if applicable, the assigning or Participating Lender
two further duly completed and signed forms and statements (or successor forms)
at or before the time any such form or statement becomes obsolete.
Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall
not be required to deliver any form pursuant to this paragraph that such
Non-U.S. Lender is not legally able to deliver.
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(e) A Lender that is entitled to an exemption from or
reduction of non-U.S. withholding tax under the law of the jurisdiction in which
the Company is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Company (with
a copy to the Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Company, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate, PROVIDED that such
Lender is legally entitled to complete, execute and deliver such documentation
and in such Lender's reasonable judgment such completion, execution or
submission would not materially prejudice the legal position of such Lender.
(f) If the Administrative Agent or any Lender receives a
refund, or otherwise would have received a refund but for the offset of the
amount of the refund against the Lender's Non-Excluded or Other Taxes ("TAX
REFUND"), which in the reasonable judgment of such Lender is allocable to
Non-Excluded Taxes or Other Taxes paid by the Company, it shall promptly pay
such Tax Refund, together with any other amounts paid by the relevant Company in
connection with such Tax Refund to such Company, net of all out-of-pocket
expenses of such Lender incurred in obtaining such Tax Refund, PROVIDED,
HOWEVER, that such Company agrees to promptly return such Tax Refund to the
Administrative Agent or the applicable Lender, as the case may be, if it
receives notice from the Administrative Agent or applicable Lender that the
Administrative Agent or such Lender is required to repay such Tax Refund.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this
Agreement and to make the Loans, the Company hereby represents and warrants to
each Agent and each Lender that:
3.1 FINANCIAL CONDITION. (a) The unaudited PRO FORMA
consolidated balance sheet of the Company and its consolidated Subsidiaries as
at March 31, 2000 (including the notes thereto) (the "PRO FORMA BALANCE SHEET"),
copies of which have heretofore been furnished to each Lender, has been prepared
giving effect (as if such events had occurred on such date) to (i) the
consummation of the Spin-Off, (ii) the Loans to be made on the Spin-Off Date and
the use of proceeds thereof, (iii) the incurrence of Indebtedness under the New
Credit Facility and the application of the proceeds thereof on the Spin-Off Date
and (iv) the payment of fees and expenses in connection with the foregoing. The
Pro Forma Balance Sheet has been prepared based on the best information
available to the Company as of the date of delivery thereof, and presents fairly
on a PRO FORMA basis the estimated financial position of the Company and its
consolidated Subsidiaries as at March 31, 2000, assuming that the events
specified in the preceding sentence had actually occurred at such date.
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(b) The audited consolidated balance sheets of the Company as
at December 31, 1997, December 31, 1998 and December 31, 1999, and the related
consolidated statements of income and of cash flows for the fiscal years ended
on such dates, reported on by and accompanied by an unqualified report from
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, present fairly the consolidated financial condition of the
Company as at such date, and the consolidated results of its operations and its
consolidated cash flows for the respective fiscal years then ended. The
unaudited consolidated balance sheet of the Company as at March 31, 2000, and
the related unaudited consolidated statements of income and cash flows for the
three-month period ended on such date, present fairly the consolidated financial
condition of the Company as at such date, and the consolidated results of its
operations and its consolidated cash flows for such periods (subject to normal
year-end audit adjustments). All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein). The Company and its
Subsidiaries do not have any material Guarantee obligations, contingent
liabilities and liabilities for taxes, or any material long-term leases or
unusual forward or long-term commitments, including, without limitation, any
interest rate or foreign currency swap or exchange transaction or other
obligation in respect of derivatives, that are not reflected or referred to in
the most recent financial statements, including the related schedules and notes
thereto, referred to in this paragraph. Except as disclosed in the Form 10
Registration Statement, during the period from December 31, 1999 to and
including the date hereof there has been no Disposition by the Company of any
material part of its business or property.
3.2 NO CHANGE. Except as disclosed in the Form 10 Registration
Statement, since December 31, 1999 there has been no development or event that
has had or could reasonably be expected to have a Material Adverse Effect.
3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of the
Company and its Subsidiaries (other than Foreign Subsidiaries and Inactive
Subsidiaries) (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization (except on or prior to the
Closing Date), (b) has the corporate power and authority, and the legal right,
to own and operate its Property, to lease the Property it operates as lessee and
to conduct the business in which it is currently engaged, (c) is duly qualified
as a foreign corporation and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of Property or the conduct
of its business requires such qualification except to the extent that the
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect and (d) is in compliance with all Requirements
of Law except to the extent that the failure to comply therewith could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect.
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3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each Loan Party has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents to which it is a party and, in the
case of the Company, to borrow hereunder. Each Loan Party has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Loan Documents to which it is a party and, in the case of the Company, to
authorize the borrowings on the terms and conditions of this Agreement. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the Spin-Off, the borrowings hereunder or the execution,
delivery, performance, validity or enforceability of this Agreement or any of
the other Loan Documents, except consents, authorizations, filings and notices
described in Schedule 3.4, which consents, authorizations, filings and notices
have been obtained or made and are in full force and effect, except to the
extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect. Each Loan Document has been, or will have been as of
the Spin-Off Date, duly executed and delivered on behalf of each Loan Party that
is a party thereto. This Agreement constitutes, and each other Loan Document
upon execution will constitute, a legal, valid and binding obligation of each
Loan Party that is a party thereto, enforceable against each such Loan Party in
accordance with its terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
3.5 NO LEGAL BAR. The execution, delivery and performance of
this Agreement and the other Loan Documents, the borrowings hereunder and the
use of the proceeds thereof will not violate any Requirement of Law or any
Contractual Obligation of the Company or any of its Subsidiaries and will not
result in, or require, the creation or imposition of any Lien on any of their
respective properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation (other than Permitted Liens, the Liens created by the
security documents under the New Credit Facility and immaterial Liens). No
Requirement of Law or Contractual Obligation applicable to the Company or any of
its Subsidiaries could reasonably be expected to have a Material Adverse Effect.
3.6 NO MATERIAL LITIGATION. Except as disclosed in the Form
10 Registration Statement, no litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the knowledge
of the Company, threatened by or against the Company or any of its Subsidiaries
or against any of their respective properties or revenues (a) with respect to
any of the Loan Documents or any of the transactions contemplated hereby or
thereby, or (b) that could reasonably be expected to have a Material Adverse
Effect.
3.7 NO DEFAULT. Except as disclosed in the Form 10
Registration Statement, neither the Company or any of its Subsidiaries is in
default under or with respect to any of its Contractual Obligations in any
respect that could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
3.8 OWNERSHIP OF PROPERTY; LIENS. Each of the Company and its
Subsidiaries has title in fee simple to, or a valid leasehold interest in, all
its material real property, and good title to, or a valid leasehold interest in,
all its other material property, and none of such property is subject to any
Lien except for Permitted Liens.
3.9 INTELLECTUAL PROPERTY. The Company and each of its
Subsidiaries owns, or is licensed to use, all Intellectual Property necessary
for the conduct of its business as currently conducted, except to the extent the
failure to do so could not reasonably be expected to have a Material Adverse
Effect. No claim that could reasonably be expected to have a Material Adverse
Effect has been asserted and is pending by any Person challenging or questioning
the use of any Intellectual Property or the validity or effectiveness of any
Intellectual Property, nor does the Company know of any valid basis for any such
claim. To the knowledge of the Company, the use of Intellectual Property by the
Company and its Subsidiaries does not infringe on the rights of any Person in
any material respect.
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3.10 TAXES. Each of AutoNation (with respect to any years in
which the Company would be deemed a part of the same consolidated group with
AutoNation for purposes of U.S. income taxes), the Company and each of its
Subsidiaries has filed or caused to be filed all Federal, state and other
material tax returns that are required to be filed and has paid all taxes shown
to be due and payable on said returns or on any assessments made against it or
any of its Property and all other taxes, fees or other charges imposed on it or
any of its Property by any Governmental Authority (other than any tax, fee or
charge, the amount or validity of which is currently being contested in good
faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of AutoNation, the Company
or its Subsidiaries, as the case may be); and no tax Lien has been filed, and,
to the knowledge of the Company, no claim is being asserted, with respect to any
such tax, fee or other charge.
3.11 FEDERAL REGULATIONS. No part of the proceeds of any
Loans will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U as now and
from time to time hereafter in effect or for any purpose that violates the
provisions of the Regulations of the Board. If requested by any Lender or the
Administrative Agent, the Company will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1 referred to in Regulation U.
3.12 LABOR MATTERS. There are no strikes or other labor
disputes against the Company or any of its Subsidiaries pending or, to the
knowledge of the Company, threatened that (individually or in the aggregate)
could reasonably be expected to have a Material Adverse Effect. To the knowledge
of the Company, hours worked by and payment made to employees of the Company and
its Subsidiaries have not been in violation of the Fair Labor Standards Act or
any other applicable Requirement of Law dealing with such matters that
(individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect. All payments due from the Company or any of its
Subsidiaries on account of employee health and welfare insurance that
(individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect if not paid have been paid or accrued as a liability on
the books of the Company or the relevant Subsidiary.
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3.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code except to the extent that the failure to comply could not,
in the aggregate, reasonably be expected to have a Material Adverse Effect. No
termination of a Single Employer Plan has occurred, and no Lien in favor of the
PBGC or a Plan has arisen, during such five-year period, in either case that
resulted in a material liability. The present value of all accrued benefits
under each Single Employer Plan (based on those assumptions used to fund such
Plans) did not, as of the last annual valuation date prior to the date on which
this representation is made or deemed made, exceed the value of the assets of
such Plan allocable to such accrued benefits by a material amount. Neither the
Company nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan that has resulted or could reasonably be
expected to result in a material liability under ERISA, and neither the Company
nor any Commonly Controlled Entity would become subject to any material
liability under ERISA that could reasonably be expected to result in a Material
Adverse Effect if the Company or any such Commonly Controlled Entity were to
withdraw completely from all Multiemployer Plans as of the valuation date most
closely preceding the date on which this representation is made or deemed made.
To the knowledge of the Company, no such Multiemployer Plan is in Reorganization
or Insolvent, which Reorganization or Insolvency could reasonably be expected to
result in a Material Adverse Effect.
3.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS. No Loan Party
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to incur Indebtedness.
3.15 SUBSIDIARIES. The Subsidiaries listed on Schedule 3.15
constitute all the Subsidiaries of the Company at the date hereof. Schedule 3.15
sets forth as of the Closing Date the name and jurisdiction of incorporation of
each Subsidiary and, as to each Subsidiary, the percentage of each class of
Capital Stock owned by each Loan Party.
3.16 USE OF PROCEEDS. The proceeds of the Loans shall be used
to repay vehicle debt, increase restricted cash and cash equivalents, repay a
loan from AutoNation and pay fees and expenses in connection with the New Credit
Facility, as further described in the Form 10 Registration Statement.
3.17 ENVIRONMENTAL MATTERS. Other than exceptions to any of
the following that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect:
(a) the Company and its Subsidiaries: (i) are, and within the
period of all applicable statutes of limitation have been, in
compliance with all applicable Environmental Laws; (ii) hold all
Environmental Permits (each of which is in full force and effect)
required to be held by any of them for any of their current or intended
operations or for any property owned, leased, or otherwise operated by
any of them; (iii) are, and within the period of all applicable
statutes of limitation have been, in compliance with all of their
Environmental Permits; and (iv) reasonably believe that: each of their
Environmental Permits will be timely renewed and complied with, without
material expense; any additional Environmental Permits that may be
required of any of them will be timely obtained and complied with,
without material expense; and compliance with any Environmental Law
that is or is expected to become applicable to any of them will be
timely attained and maintained, without material expense.
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(b) Materials of Environmental Concern are not present at, on,
under, in, or about any real property now or formerly owned, leased or
operated by the Company or any of its Subsidiaries, or at any other
location (including, without limitation, any location to which
Materials of Environmental Concern have been sent for re-use or
recycling or for treatment, storage, or disposal) which could
reasonably be expected to (i) give rise to liability of the Company or
any of its Subsidiaries under any applicable Environmental Law or
otherwise result in costs to the Company or any of its Subsidiaries, or
(ii) interfere with the Company's or any of its Subsidiaries' continued
operations, or (iii) impair the fair saleable value of any real
property owned or leased by the Company or any of its Subsidiaries.
(c) There is no judicial, administrative, or arbitral
proceeding (including any notice of violation or alleged violation)
under or relating to any Environmental Law to which the Company or any
of its Subsidiaries is, or to the knowledge of the Company or any of
its Subsidiaries will be, named as a party that is pending or, to the
knowledge of the Company or any of its Subsidiaries, threatened.
(d) Neither the Company nor any of its Subsidiaries has
received any written request for information, or been notified that it
is a potentially responsible party under or relating to the federal
Comprehensive Environmental Response, Compensation, and Liability Act
or any similar Environmental Law, or with respect to any Materials of
Environmental Concern.
(e) Neither the Company nor any of its Subsidiaries has
entered into or agreed to any consent decree, order, or settlement or
other agreement, or is subject to any judgment, decree, or order or
other agreement, in any judicial, administrative, arbitral, or other
forum for dispute resolution, relating to compliance with or liability
under any Environmental Law.
(f) Neither the Company nor any of its Subsidiaries has
assumed or retained, by contract or operation of law, any liabilities
of any kind, fixed or contingent, known or unknown, under any
Environmental Law or with respect to any Material of Environmental
Concern.
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3.18 ACCURACY OF INFORMATION, ETC. No statement or information
contained in this Agreement, any other Loan Document, the Form 10 Registration
Statement or any other document, certificate or statement furnished to the
Administrative Agent or the Lenders or any of them, by or on behalf of any Loan
Party for use in connection with the transactions contemplated by this Agreement
or the other Loan Documents, contained as of the date such statement,
information, document or certificate was so furnished any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements contained herein or therein not misleading. The projections and PRO
FORMA financial information contained in the materials referenced above are
based upon good faith estimates and assumptions believed by management of the
Company to be reasonable at the time made, it being recognized by the Lenders
that such financial information as it relates to future events is not to be
viewed as fact and that actual results during the period or periods covered by
such financial information may differ from the projected results set forth
therein by a material amount. There is no fact known to any Loan Party that
could reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents, in the Form 10
Registration Statement or in any other documents, certificates and statements
furnished to the Agents and the Lenders for use in connection with the
transactions contemplated hereby and by the other Loan Documents including,
without limitation, any notice delivered pursuant to Section 5.7.
3.19 SOLVENCY. The Company and its Subsidiaries, on a
consolidated basis, are and after giving effect to the Spin-Off and the
incurrence of all Indebtedness and obligations being incurred in connection
herewith and therewith will be and will continue to be, Solvent.
3.20 CUSTOMER AND TRADE RELATIONS. As of the Closing Date,
there exists no actual or, to the knowledge of the Company, threatened
termination or cancellation of, or any material adverse modification or change
in the business relationship of the Company with General Motors.
SECTION 4. CONDITIONS PRECEDENT.
4.1 CONDITIONS TO CLOSING. The Closing Date shall be the date
on which the following conditions precedent shall have been satisfied by the
Company or waived by the Administrative Agent as shall be evidenced by a written
acknowledgment of the Administrative Agent, which Closing Date occurred on May
26, 2000:
(a) The Administrative Agent shall have received this
Agreement, executed and delivered by a duly authorized officer of the
Company with a counterpart for each Lender.
(b) The Lenders shall have received a complete and correct
copy of the New Credit Facility, in form and substance satisfactory to
the Lenders certified as to authenticity by the Company; the New Credit
Facility shall be in full force and effect and none of the provisions
thereof shall have been amended, waived, supplemented, or otherwise
modified without the prior written consent of the Administrative Agent.
(c) The forms of (i) the Separation and Distribution
Agreement, (ii) the Tax Sharing Agreement, (iii) the Transitional
Services Agreement, (iv) the Benefits Agreement and (v) the AutoNation
Reimbursement Agreement to be entered into by the Company and
AutoNation at the time of the Spin-Off shall be reasonably satisfactory
to the Administrative Agent.
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(d) There shall not have occurred or become known to the
Lenders any event, development or circumstance since December 31, 1999
(the date of the most recent audited financial statements delivered to
the Lenders as of the date hereof) that has caused or could reasonably
be expected to cause a material adverse condition or material adverse
change in or affecting (i) the Spin-Off, (ii) the condition (financial
or otherwise), results of operation, assets, liabilities, management,
prospects or value of the Company and its subsidiaries, taken as a
whole, or that calls into question in any material respect the
projections previously supplied to the Lenders or any of the material
assumptions on which the projections were prepared or (iii) the
validity or enforceability of any of the documents relating to the
Loans or the rights and remedies of the Administrative Agent and the
Lenders thereunder. The Lenders shall not have become aware after the
date hereof of any information or other matter affecting the Company or
the transactions contemplated hereby that is inconsistent in a material
and adverse manner with any such information or other matter disclosed
to the Lenders prior to the date hereof.
(e) Each of the representations and warranties made in or
pursuant to Section 3 or that are contained in any other Loan Document
shall be true and correct in all material respects on and as of the
Closing Date (unless stated to relate to a specific earlier date, in
which case, such representations and warranties shall be true and
correct in all material respects as of such earlier date).
(f) No Default or Event of Default shall have occurred and be
continuing on the Closing Date or after giving effect to the Initial
Loans to be made on the Closing Date.
(g) All fees and expenses required to be paid by the Company
on or before the Closing Date shall have been paid or provision for
payment thereof shall have been made.
(h) The Administrative Agent shall have received an Officer's
Certificate from the Company dated the Closing Date in the form of
Exhibit H.
4.2 CONDITIONS TO FUNDING. On the Spin-Off Date, the proceeds
from the Loan shall be made available to the Company only upon satisfaction by
the Company or waiver by the Administrative Agent of the following conditions
precedent:
(a) Either (i) the Spin-Off shall have been consummated
substantially in accordance with the description thereof set forth in
the Form 10 Registration Statement, and the Administrative Agent shall
have received such evidence thereof as it shall reasonably request or
(ii) the Spin-Off shall be scheduled to occur on the date hereof and
the Administrative Agent shall have received (A) a certificate, in form
and substance reasonably satisfactory to the Administrative Agent,
executed by a responsible officer of AutoNation certifying that (1) all
of the conditions to effectiveness of the Spin-Off pursuant to the
Spin-Off Documentation have been satisfied (except for the distribution
of shares of common stock of the Company to the shareholders of
AutoNation) and (2) AutoNation has given instructions to the
Distribution Agent (under and as defined in the Spin-Off Documentation)
to distribute the shares of common stock of the Company to the
shareholders of AutoNation and (B) a guarantee, in form and substance
reasonably satisfactory to the Administrative Agent, executed by
AutoNation to guarantee the Obligations, such guarantee to become
effective only if the Spin-Off does not occur on the date hereof.
(b) The Company shall have complied with all of its
obligations under and agreements in the Interim Loan Commitment Letter,
the Engagement Letter and the Interim Loan Fee Letter.
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(c) The Administrative Agent shall have received for the
account of each Lender requesting the same, (i) a Loan Note conforming
to the requirements hereof and executed by a duly authorized officer of
the Company and (ii) the Subsidiary Guarantee, executed and delivered
by a duly authorized officer of each Guarantor.
(d) After giving effect to the consummation of the Spin-Off,
the shareholders' equity of the Company, determined in accordance with
GAAP, shall be not less than $851,000,000, and the Administrative Agent
shall have received evidence thereof as they shall reasonably request
evidence thereof in the form of a certificate to such effect, in form
and substance reasonably satisfactory to the Administrative Agent,
executed by a Senior Vice President or Treasurer of the Company and a
Senior Vice President or Treasurer of AutoNation.
(e) After giving effect to the consummation of the Spin-Off
and the debt financing contemplated hereby, (i) there shall not exist
any default or event of default under the New Credit Facility or under
any other material indebtedness or agreement of the Company (other than
any default or event of default arising out of a breach of any
representation or warranty with respect to a material adverse change)
and (ii) the representations and warranties of the Credit Parties (as
defined in the New Credit Facility) included in the New Credit Facility
Documents (other than any representation or warranty with respect to a
material adverse change) shall be true and correct in all material
respects; provided that the obligation of the Administrative Agent to
make the proceeds of the Loan available to the Company on the Spin-Off
Date shall not be subject to the condition that the representations and
warranties contained in Sections 4.2, 4.6, 4.12, 4.13 and 4.17 of the
New Credit Facility and the last sentence of Section 4.18 of the New
Credit Facility be true and correct in any respect so long as the
failure of any such representation or warranty to be true and correct
(x) does not arise out of a conscious action or inaction of any Loan
Party and (y) the Company or any other Loan Party is actively,
diligently and in good faith proceeding with continuity to remedy such
failure to the extent that remedying such failure does not involve the
payment of money in an amount that is material to the business of the
Loan Parties taken as a whole.
(f) Each of the Separation and Distribution Agreement, the Tax
Sharing Agreement, the Transitional Services Agreement, the Benefits
Agreement and the AutoNation Reimbursement Agreement (i) shall have
been entered into in substantially the form approved by the
Administrative Agent on or prior to the Closing Date pursuant to
Section 4.1(c); and (ii) shall be in full force and effect and shall
not have been amended or otherwise modified in any material respect.
(g) All government and third party approvals necessary in
connection with the Spin-off, the continuing operations of the Company
and its subsidiaries and the transactions contemplated thereby (other
than any approvals necessary to be obtained by the Administrative
Agent) shall have been obtained and be in full force and effect, except
to the extent the failure to do so could not reasonably be expected to
have a Material Adverse Effect.
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(h) The Administrative Agent shall have received a certificate
of each Loan Party, dated the Spin-Off Date substantially in the form
of Exhibit J, with appropriate insertions and attachments.
(i) The Administrative Agent shall have received the following
executed legal opinions, dated the Spin-Off Date, in form and substance
reasonably satisfactory to the Lenders:
(i) the legal opinion of Fried ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel to the Company and its Subsidiaries; and
(ii) the legal opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.,
general counsel of the Company and its Subsidiaries.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent
may reasonably require.
(j) The amounts available to be drawn under the New Credit
Facility to meet the ongoing working capital needs of the Company from
the date of the Spin-off through the maturity of the New Credit
Facilities shall not be less than such amounts determined by the
Lenders on the Closing Date to be sufficient.
(k) The Warrant Agreement, the Registration Rights Agreements,
the Exchange Notes, the Indenture and the Escrow Agreement, shall each
have been executed and delivered by a duly authorized officer of the
Company; and the Company shall have executed and placed in escrow under
the Escrow Agreement Exchange Notes and Warrants representing 7.5% of
the fully diluted common stock outstanding on the Spin-Off Date
(calculated after giving effect to the exercise of such Warrants and
all options, warrants and rights to acquire common stock and the
conversion of all convertible securities for the maximum number of
shares of common stock obtainable whether or not such convertible
securities are then convertible securities).
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(l) Each of the representations and warranties made in or
pursuant to Section 3 or that are contained in any other Loan Document
(other than Section 3.2) shall be true and correct in all material
respects on and as of the date of such Loan as if made on and as of
such date (unless stated to relate to a specific earlier date, in which
case, such representations and warranties shall be true and correct in
all material respects as of such earlier date); provided that the
obligation of the Administrative Agent to make the proceeds of the Loan
available to the Company on the Spin-Off Date shall not be subject to
the condition that the representations and warranties contained in
Sections 3.2, 3.6, 3.12, 3.13, 3.17, and the last sentence of Section
3.18 be true and correct in any respect so long as the failure of any
such representation or warranty to be true and correct (x) does not
arise out of a conscious action or inaction of any Loan Party and (y)
the Company or any other Loan Party is actively, diligently and in good
faith proceeding with continuity to remedy such failure to the extent
that remedying such failure does not involve the payment of money in an
amount that is material to the business of the Loan Parties taken as a
whole.
(m) No Default or Event of Default shall have occurred and be
continuing on the Closing Date or after giving effect to the Initial
Loans to be made on the Spin-Off Date.
(n) All fees and expenses required to be paid by the Company
on or before the Spin-Off Date shall have been paid or provision for
payment shall have been made.
(o) The Administrative Agent shall have received true and
correct copies of the Subordinated Notes executed by the obligor
thereunder, certificated as to authenticity by a Responsible Officer.
4.3 CONDITIONS TO ROLLOVER TERM LOANS. The obligation of each
Lender to convert its Initial Loans to Rollover Term Loans is subject to the
following conditions:
(a) No Default, Event of Default or event which with the
giving of notice or the lapse of time, or both, would become an Event
of Default shall have occurred and be continuing under this Agreement
and no payment default shall have occurred and be continuing under the
New Credit Facility.
(b) The Company shall have paid in immediately available funds
all accrued and unpaid interest with respect to the Initial Loans and
all fees then due and owing, in accordance with this Agreement and the
Commitment Documents.
(c) The Debt Shelf Registration Statement with respect to the
Exchange Notes shall have been filed with the SEC.
SECTION 5. AFFIRMATIVE COVENANTS
The Company hereby agrees that, so long as any Loan or other
amount is owing to any Lender or any Agent hereunder the Company shall, and
shall cause each of its Subsidiaries to:
5.1 FINANCIAL STATEMENTS. Furnish to the Administrative
Agent:
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(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Company, a copy of the audited
consolidated balance sheet of the Company and its consolidated Subsidiaries as
at the end of such year and the related audited consolidated statements of
income and of cash flows for such year, setting forth in each case in
comparative form the figures as of the end of and for the previous year,
reported on without a "going concern" or like qualification or exception, or
qualification arising out of the scope of the audit, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or
other independent certified public accountants of nationally recognized standing
provided that the delivery of the Company's annual report on Form 10-K shall be
deemed to satisfy the requirements of this paragraph; and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each fiscal
year of the Company, a copy of the unaudited consolidated balance sheet of the
Company and its consolidated Subsidiaries as at the end of such quarter and the
related unaudited consolidated statements of income and of cash flows for such
quarter and the portion of the fiscal year through the end of such quarter,
setting forth in each case in comparative form the figures as of the end of and
for the corresponding period in the previous year, certified by a Responsible
Officer as being fairly stated in all material respects (subject to normal
year-end audit adjustments), provided that the delivery of the Company's
quarterly reports on Form 10-Q shall be deemed to satisfy the requirements of
this paragraph;
all such financial statements to be prepared in reasonable detail and in
accordance with GAAP applied consistently throughout the periods reflected
therein and with prior periods (except as approved by such accountants or
officer, as the case may be, and disclosed therein).
5.2 CERTIFICATES; OTHER INFORMATION. Furnish to the
Administrative Agent, or, in the case of clause (h), to the relevant Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 5.1(a), a certificate of the independent certified public
accountants reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default, except as specified in such certificate (it being understood that
such certificate shall be limited to the items that independent certified public
accountants are permitted to cover in such certificates pursuant to their
professional standards and customs of the profession);
(b) concurrently with the delivery of any financial statements
pursuant to Section 5.1, (i) a certificate of a Responsible Officer stating
that, to the best of such Responsible Officer's knowledge, each Loan Party
during such period has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Agreement and the
other Loan Documents to which it is a party to be observed, performed or
satisfied by it, and that such Responsible Officer has obtained no knowledge of
any Default or Event of Default except as specified in such certificate and (ii)
in the case of quarterly or annual financial statements, an Officers'
Certificate containing all information and calculations necessary for
determining compliance by the Company and its Subsidiaries with the provisions
of this Agreement referred to therein as of the last day of the fiscal quarter
or fiscal year of the Company, as the case may be;
(c) no later than 10 Business Days prior to the effectiveness
thereof, copies of substantially final drafts of any proposed amendment,
supplement, waiver or other modification with respect to the AutoNation
Guarantee documentation or the General Motors Letter of Credit documentation;
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(d) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
5.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Company or its Subsidiaries, as the case may be.
5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE, ETC. (a)
(i) Preserve, renew and keep in full force and effect its corporate, limited
liability company or partnership existence and (ii) take all reasonable action
to maintain all rights, privileges and franchises necessary or desirable in the
normal conduct of its business, except, in each case, as otherwise permitted by
Section 6.9 and except, in the case of clause (ii) above, to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (b) comply with all Contractual Obligations and Requirements of Law,
except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
5.5 MAINTENANCE OF PROPERTY; INSURANCE. (a) Keep all Property
and systems useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted and (b) maintain with financially
sound and reputable insurance companies insurance on all its Property in at
least such amounts and against at least such risks (but including in any event
public liability, product liability and business interruption) as are usually
insured against in the same general area by companies engaged in the same or a
similar business.
5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
(a) Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities and (b)
permit representatives of any Lender (at the expense of such Lender unless an
Event of Default has occurred and is continuing, in which case, at the expense
of the Company) to visit and inspect any of its properties and examine and make
abstracts from any of its books and records at any reasonable time and as often
as may reasonably be desired and to discuss the business, operations, properties
and financial and other condition of the Company and its Subsidiaries with
officers and employees of the Company and its Subsidiaries and with its
independent certified public accountants (subject to the confidentiality
provisions contained in Section 9.14).
5.7 NOTICES. Promptly give notice to the Administrative Agent
and each Lender of:
(a) the occurrence of any Default or Event of Default;
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(b) any (i) default or event of default under any Contractual
Obligation of the Company or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the Company or
any of its Subsidiaries and any Governmental Authority, that in either case (i)
or (ii), if not cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Company or any
of its Subsidiaries in which the amount involved is $5,000,000 or more and not
covered by insurance or in which injunctive or similar relief is sought;
(d) the following events, as soon as possible and in any event
within 30 days after the Company knows or has reason to know thereof: (i) the
occurrence of any Reportable Event with respect to any Single Employer Plan, a
failure to make any required contribution to a Plan, the creation of any Lien in
favor of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution
of proceedings or the taking of any other action by the PBGC or the Company or
any Commonly Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the termination, Reorganization or Insolvency of, any Plan
that, in either case could reasonably be expected to result in liability in
excess of $5,000,000; and
(e) any development or event that has had or could reasonably
be expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Company or the relevant Subsidiary proposes to take
with respect thereto.
5.8 ENVIRONMENTAL LAWS. (a) Comply in all material respects
with, and ensure compliance in all material respects by all tenants and
subtenants, if any, with, all applicable Environmental Laws, and obtain and
comply in all material respects with and maintain, and ensure that all tenants
and subtenants obtain and comply in all material respects with and maintain, any
and all Environmental Permits.
(b) Conduct and complete in all material respects all
investigations, studies, sampling and testing, and all remedial, removal and
other actions required under Environmental Laws and promptly comply in all
material respects with all lawful orders and directives of all Governmental
Authorities regarding Environmental Laws.
5.9 EXCHANGE NOTES. (a) At any time on or prior to the
Spin-Off Date, enter into the Indenture with a bank or trust company acting as
indenture trustee thereunder (the "TRUSTEE"), which shall be a corporation
organized and doing business under the laws of the United States of America or
any state thereof, in good standing, which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by
Federal or state authority and which has a combined capital and surplus of not
less than $50,000,000.
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(b) At any time on or after the Initial Maturity Date on or
prior to the third Business Day following the written request (the "EXCHANGE
REQUEST") of any Lender execute, and cause the Trustee to authenticate, and
deliver to such Lender in accordance with the Indenture an Exchange Note bearing
interest then in effect on such Lender's Rollover Term Loan in exchange for such
Lender's Rollover Term Loan dated the date of the issuance of such Exchange
Note, registered in the name specified by such Lender, in the principal amount
equal to 100% of the aggregate principal amount (including any accrued and
unpaid interest not required to be paid in cash) of the Rollover Term Loans for
which they are exchanged. Each Exchange Request shall specify the principal
amount of the Rollover Term Loans to be exchanged pursuant to this Section 5.9,
which shall be at least $1,000,000 and in integral multiples of $100,000 in
excess thereof and, if such Lender holds Rollover Term Notes, be accompanied by
the Rollover Term Notes to be exchanged for Exchange Notes. The Exchange Notes
shall mature on the sixth anniversary of the Initial Maturity Date. Any Loan
Notes delivered to Company under this Section 5.9 in exchange for Exchange Notes
shall be canceled by the Company and the corresponding amount of the Lender's
Loan deemed repaid and the Exchange Notes shall be governed by and construed in
accordance with the terms of the Indenture.
5.10 COMPLIANCE WITH COMMITMENT DOCUMENTS. The Company shall
comply with all of its obligations under and agreements in the Interim Loan Fee
Letter.
5.11 COMPLIANCE WITH ESCROW AGREEMENT. The Company shall
comply with all of its obligations under and agreements in Section 2 of the
Escrow Agreement.
SECTION 6. NEGATIVE COVENANTS
The Company hereby agrees that, so long as any Commitments
remain in effect, or any Loans or other amount is owing to any Lenders or any
Agents hereunder, the Company shall comply with the provisions of this Section 6
(PROVIDED THAT, nothing contained herein shall limit the ability of the Company
and its Subsidiaries to enter into and consummate the Spin-Off and transactions
that are set forth in or expressly permitted by the Spin-Off Documents in the
forms provided pursuant to Sections 4.1(c)):
6.1 FINANCIAL CONDITION COVENANTS.
(a) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. The Company
shall not, and shall not permit any of its Restricted Subsidiaries to, directly
or indirectly, permit the Consolidated Fixed Charge Coverage Ratio for any
period of four consecutive fiscal quarters of the Company ending with any fiscal
quarter set forth below to be less than the ratio set forth below opposite such
fiscal quarter:
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CONSOLIDATED FIXED
FISCAL QUARTER CHARGE COVERAGE RATIO
-------------- ---------------------
FQ3 2000 1.00:1.00
FQ4 2000 1.00:1.00
FQ1 2001 1.05:1.00
(b) CONSOLIDATED ADJUSTED FUNDED DEBT RATIO. The Company will
not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, permit the Consolidated Adjusted Funded Debt Ratio as at the last
day of any period of four consecutive fiscal quarters of the Company ending with
any fiscal quarter set forth below to exceed the ratio set forth below opposite
such fiscal quarter:
CONSOLIDATED ADJUSTED
FISCAL QUARTER FUNDED DEBT RATIO
-------------- ---------------------
FQ3 2000 4.00:1.00
FQ4 2000 3.75:1.00
FQ1 2001 3.75:1.00
For purposes of the foregoing covenants, the definitions and calculations used
in this Section 6.1 shall have the meanings and methodology assigned to them in
the New Credit Facility, as of the date hereof.
6.2 LIMITATION ON RESTRICTED PAYMENTS.
(a) On or prior to the Initial Maturity Date, the Company will
not, and will not permit any of its Restricted Subsidiaries, directly or
indirectly, to
(i) declare or pay any dividend or make any other
payment or distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (including, without
limitation, any payment in connection with any merger or consolidation
involving the Company) other than dividends or distributions to the
Company or any Guarantor or payable in Equity Interests (other than
Disqualified Stock) of the Company;
(ii) purchase, redeem or otherwise acquire or retire
for value (including without limitation, in connection with any merger
or consolidation involving the Company) any Equity Interests of the
Company, any entity that beneficially owns a majority of the Voting
Stock of the Company or any entity through which such entity
beneficially owns such stock;
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(iii) purchase, redeem, defease or otherwise acquire
or retire for value any Indebtedness that is subordinated in right of
payment to the Loans (other than (a) the purchase, repurchase or other
acquisition of Indebtedness that is subordinated to the Loans in
anticipation of satisfying a sinking fund obligation, principal
installment or any payment at final maturity, in each case, due within
one year of the date of such purchase, repurchase or other acquisition,
and (b) Indebtedness that is permitted under clause (vi) of Section
6.3(b)); or
(iv) make any Restricted Investment (all such
payments and other actions set forth in clauses (i) through (iv) above
being collectively referred to as "RESTRICTED PAYMENTS").
The foregoing provisions shall not prohibit Restricted
Payments in an aggregate amount prior to the Initial Maturity Date not to exceed
$5 million.
(b) After the Initial Maturity Date, the Company will not, and
will not permit any of its Restricted Subsidiaries, directly or indirectly, to
make any Restricted Payment unless, at the time of and after giving effect to
such Restricted Payment:
(i) no Default or Event of Default shall have
occurred and be continuing or would occur as a consequence thereof; and
(ii) the Company would, at the time of such
Restricted Payment and after giving pro forma effect thereto as if such
Restricted Payment had been made at the beginning of the applicable
four-quarter period, have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in Section 6.3(a); and
(iii) such Restricted Payment, together with the
aggregate amount of all other Restricted Payments made by the Company
or any of its Restricted Subsidiaries after the Initial Maturity Date
(excluding Restricted Payments permitted by clauses (ii), (iii), (iv),
(vii) or (viii) of the next succeeding paragraph), is less than the sum
of:
(1) 50% of the Consolidated Net Income of
the Company for the period (taken as one accounting period)
from the beginning of the first fiscal quarter immediately
following the Initial Maturity Date to the end of the
Company's most recently ended fiscal quarter for which
internal financial statements are available at the time of
such Restricted Payment (or, if such Consolidated Net Income
for such period is a deficit, less 100% of such deficit), plus
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(2) 100% of the aggregate net cash proceeds
or the fair market value of property other than cash received
by the Company as a contribution to its common equity capital
or from the issue or sale since the Initial Maturity Date of
Equity Interests of the Company (other than Disqualified
Stock), or of Disqualified Stock or debt securities of the
Company that have been converted into or exchanged for such
Equity Interests (other than Equity Interests (or Disqualified
Stock or convertible debt securities) sold to a Restricted
Subsidiary of the Company and other than Disqualified Stock or
convertible debt securities that have been converted into
Disqualified Stock), plus
(3) to the extent not already included in
Consolidated Net Income of the Company for such period without
duplication, any Restricted Investment that was made by the
Company or any of its Restricted Subsidiaries after the
Closing Date is sold for cash or otherwise liquidated or
repaid for cash, or any Unrestricted Subsidiary which is
designated as an Unrestricted Subsidiary subsequent to the
Closing Date is sold for cash or otherwise liquidated or
repaid for cash, the lesser of (A) the cash return of capital
with respect to such Restricted Investment or Unrestricted
Subsidiary (less the cost of disposition, if any) and (B) the
initial amount of such Restricted Investment or designated
amount of such Unrestricted Subsidiary; plus
(4) an amount equal to the net reduction in
Investments in Unrestricted Subsidiaries resulting from
dividends, repayments of loans or advances or other transfers
of assets, in each case to the Company or any Restricted
Subsidiary from any Unrestricted Subsidiary; plus
(5) any amount which previously was treated
as a Restricted Payment on account of any Guarantee entered
into by the Company or any Restricted Subsidiary to the extent
that such Guarantee has not been called upon and the
obligation arising under such Guarantee no longer exists.
The foregoing provisions of this paragraph (b) shall not
prohibit:
(i) the payment of any dividend within 60 days after
the date of declaration thereof, if at the date of declaration such
payment would have complied with the provisions of this Agreement;
(ii) the redemption, repurchase, retirement,
defeasance or other acquisition of Indebtedness to AutoNation with
respect to the General Motors letter of credit which is subordinated to
the Loans in exchange for, or out of the net cash proceeds of the
substantially concurrent sale (other than to a Restricted Subsidiary of
the Company) of, Equity Interests of the Company (other than any
Disqualified Stock); PROVIDED that the amount of any such net cash
proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition shall be excluded from
clause (b)(iii)(2) of the preceding paragraph;
(iii) the defeasance, redemption, repurchase or other
acquisition of Indebtedness which is subordinated to the Loans in
exchange for or with the net cash proceeds from an incurrence of
Permitted Refinancing Indebtedness;
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(iv) the payment of any dividend or distribution by a
Restricted Subsidiary of the Company to the holders of its common
Equity Interests so long as the Company or another Restricted
Subsidiary receives at least its pro rata share of such dividend or
distribution in accordance with its Equity Interests;
(v) so long as no Default or Event of Default has
occurred and is continuing, the repurchase, redemption or other
acquisition or retirement of any Equity Interests of the Company or any
of its Restricted Subsidiaries from employees, former employees,
directors, former directors, consultants and former consultants of the
Company or any of its Restricted Subsidiaries (or permitted transferees
of any of such persons), pursuant to the terms of the agreements,
including employment agreements, equity subscription agreements or
stock option agreements, or plans or amendments thereto; PROVIDED,
HOWEVER, that the aggregate amount of such repurchases, redemptions and
other acquisitions or retirements (other than in the case of death or
disability) shall not exceed $5.0 million in any calendar year plus the
net proceeds received from the sale of Equity Interests to employees
during such twelve-month period plus the proceeds of key person life
insurance policies received after the date of this Agreement (with
amounts not used in any twelve-month period carried forward to
succeeding twelve month periods);
(vi) so long as no Default or Event of Default has
occurred and is continuing, the repurchase of any subordinated
Indebtedness of the Company at a purchase price not greater than 101%
of the principal amount of such subordinated Indebtedness in the event
of a change of control pursuant to a provision similar to Section 6.8;
PROVIDED that prior to consummating such repurchase, the Company has
made the change of control offer as provided in Section 6.8 and has
repaid Loans in connection with such change of control offer;
(vii) repurchases of Capital Stock (or warrants or
options convertible into or exchangeable for such Capital Stock) deemed
to occur upon exercise of stock options to the extent that shares of
such Capital Stock (or warrants or options convertible into or
exchangeable for such Capital Stock) represent a portion of the
exercise price of such options;
(viii) the declaration and payment of dividends or
distributions to holders of any class or series of Disqualified Stock
of the Company or preferred stock of its Restricted Subsidiaries issued
or incurred in accordance with the covenant described under Section 6.3
hereof to the extent such dividends or distributions are included in
the definition of Fixed Charges After Fleet Costs;
(ix) the redemption by either Risk Management
Subsidiary of the shares of its minority shareholder to the extent
required pursuant to the charter documents (as in effect on the date
hereof) governing such Risk Management Subsidiary for cash
consideration not to exceed $1,700,000 in the aggregate; and
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(x) other Restricted Payments in an aggregate amount
since the Closing Date not to exceed $25.0 million.
The amount of all Restricted Payments (other than cash) shall
be the fair market value on the date of such Restricted Payment of the assets or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary of the Company pursuant to such Restricted Payment. Not
later than 10 days after the date of making any Restricted Payment in excess of
$2.5 million, the Company shall deliver to the Administrative Agent an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by the covenant described under
Section 6.2 hereof were computed, together with a copy of (1) a resolution of
the Board of Directors determining the fair market value of any non-cash
Restricted Payment in excess of $5.0 million and (2) an opinion or appraisal
issued by an investment banking, accounting or appraisal firm of national
standing if such fair market value exceeds $10.0 million.
If the Company makes a Restricted Payment which, at the time
of the making of such Restricted Payment, would in the good faith determination
of the Company be permitted under the requirements of this Agreement, such
Restricted Payment shall be deemed to have been made in compliance with this
Agreement notwithstanding any subsequent adjustments made in good faith to the
Company's financial statements affecting the Company's Consolidated Net Income
for any period.
6.3 LIMITATION ON INDEBTEDNESS AND ISSUANCE OF PREFERRED
STOCK. (a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "INCUR") any Indebtedness (including Acquired
Debt), and the Company shall not issue any Disqualified Stock and shall not
permit any of its Restricted Subsidiaries to issue any shares of preferred
stock; PROVIDED, HOWEVER, that on or after the Initial Maturity Date the Company
may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified
Stock, and any Restricted Subsidiary that is a Guarantor or a Foreign Subsidiary
may incur Indebtedness (including Acquired Debt) and issue shares of preferred
stock if the Company's Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which internal financial statements
are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock or Preferred Stock is issued
would have been at least 2.25 to 1, determined on a PRO FORMA basis (including a
PRO FORMA application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred, or the Disqualified Stock had been issued, as
the case may be, at the beginning of such four-quarter period.
(b) The provisions of the foregoing paragraph (a) shall not
apply to the incurrence of any of the following items of Indebtedness
(collectively, "PERMITTED DEBT") so long as no Default has occurred and is
continuing or would be caused thereby:
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(i) the incurrence by the Company or any of its
Restricted Subsidiaries of additional Indebtedness under one or more
Credit Facilities, letters of credit and related Guarantees under the
Credit Facilities; PROVIDED that the aggregate principal amount of all
Indebtedness and letters of credit of the Company and its Restricted
Subsidiaries (with letters of credit being deemed to have a principal
amount equal to the maximum potential liability (excluding interest and
fees) of the Company and its Restricted Subsidiaries thereunder)
incurred pursuant to this clause (i) does not exceed the greater of (x)
$225.0 million and (y) the Borrowing Base, less the aggregate amount of
Asset Sale proceeds applied by the Company and its Restricted
Subsidiaries to permanently reduce the availability of any such
Indebtedness under the New Credit Facility pursuant to the provisions
of Section 6.5;
(ii) the incurrence by the Company and its Restricted
Subsidiaries of the Existing Indebtedness;
(iii) the incurrence by the Company of Indebtedness
under the Loans, Notes and Exchange Notes and the incurrence by the
Guarantors of the Subsidiary Guarantees and Guarantees of the Exchange
Notes;
(iv) the incurrence by the Company, or any of its
Restricted Subsidiaries, of Indebtedness represented by Capital Lease
Obligations, mortgage financings or purchase money obligations, in each
case incurred for the purpose of financing all or any part of the
purchase price, lease expense, cost of construction, repair or
improvement of or addition to property, plant or equipment used in the
business of the Company or such Restricted Subsidiary, the Capital
Stock of a Restricted Subsidiary that owns such property, plant or
equipment, in an aggregate principal amount, including all Permitted
Refinancing Indebtedness incurred to refund, refinance or replace
Indebtedness incurred pursuant to this clause (iv), not to exceed $10.0
million at any time outstanding prior to the Initial Maturity Date or
$25.0 million at any time outstanding thereafter;
(v) the incurrence by the Company or any of its
Restricted Subsidiaries of Permitted Refinancing Indebtedness in
exchange for, or the net proceeds of which are used to refund,
refinance or replace Indebtedness (other than intercompany
Indebtedness) that was incurred under the first paragraph of this
covenant or clauses (ii), (iii), (iv), (v) or, after the Initial
Maturity Date, (xix) of this paragraph;
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(vi) the incurrence by the Company or any of its
Restricted Subsidiaries of intercompany Indebtedness between or among
the Company and any of its Restricted Subsidiaries; PROVIDED, HOWEVER,
that (1) if the Company is the obligor on such Indebtedness, such
Indebtedness is expressly subordinated to the prior payment in full in
cash of all Obligations with respect to the Loans, (2) if a Restricted
Subsidiary of the Company that is a Guarantor is the obligor on such
Indebtedness, such Indebtedness is expressly subordinated to the prior
payment in full in cash of such Restricted Subsidiary's Subsidiary
Guarantee and (3)(A) any subsequent event or issuance or transfer of
Equity Interests that results in any such Indebtedness being held by a
Person other than the Company or a Restricted Subsidiary of the Company
and (B) any sale or other transfer of any such Indebtedness to a Person
that is not either the Company or a Restricted Subsidiary of the
Company shall be deemed, in each case, to constitute an incurrence of
such Indebtedness by the Company or such Restricted Subsidiary, as the
case may be, that was not permitted by this clause (vi);
(vii) the incurrence by the Company or any of its
Restricted Subsidiaries of Hedging Obligations that are incurred in the
normal course of business for the purpose of fixing or hedging
currency, commodity or interest rate risk (including with respect to
any floating rate Indebtedness that is permitted by the terms of the
Indenture to be outstanding in connection with the conduct of their
respective businesses and not for speculative purposes);
(viii) the Guarantee by the Company or any Restricted
Subsidiary of Indebtedness of the Company or a Restricted Subsidiary of
the Company that was permitted to be incurred by another provision of
this Section and is otherwise in accordance with this Agreement;
(ix) Permitted Vehicle Indebtedness and Customer
Lease Financing Loans;
(x) Indebtedness represented by Guarantees or letters
of credit issued to airports and airport and other governmental
authorities for the construction of airport rental or related
facilities to be used by the Company or any Restricted Subsidiary in
the ordinary course of business that do not exceed for the Company and
all Restricted Subsidiaries in the aggregate $50.0 million at any time
outstanding;
(xi) Indebtedness of Foreign Subsidiaries in an
aggregate principal amount that, when taken together with the principal
amount of all other Indebtedness Incurred pursuant to this clause (xi)
(and any Indebtedness Incurred by Foreign Subsidiaries prior to the
Closing Date to finance working capital) and then outstanding, does not
exceed $25.0 million prior to the Initial Maturity Date or $50.0
million thereafter;
(xii) Indebtedness incurred in respect of workers'
compensation claims, self-insurance obligations, performance, surety
and similar bonds and completion guarantees provided by the Company or
a Restricted Subsidiary in the ordinary course of business;
(xiii) Indebtedness arising from agreements of the
Company or a Restricted Subsidiary providing for indemnification,
adjustment of purchase price or similar obligations, in each case,
incurred or assumed in connection with the disposition of any business,
assets or Capital Stock of a Restricted Subsidiary or incurred in
connection with a sale of Capital Stock of the Company;
(xiv) Indebtedness arising from the honoring by a
bank or other financial institution of a check, draft or similar
instrument (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business, PROVIDED,
however, that such Indebtedness is extinguished within five Business
Days of incurrence;
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(xv) Indebtedness of a Restricted Subsidiary incurred
and outstanding on or prior to the date on which such Subsidiary was
acquired by the Company or a Restricted Subsidiary (other than
Indebtedness incurred in connection with or in contemplation of, or to
provide all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant
to which such Subsidiary became a Restricted Subsidiary or was acquired
by the Company or a Restricted Subsidiary), PROVIDED, HOWEVER, that (A)
if such Restricted Subsidiary was a franchisee and if the acquisition
was made prior to the Initial Maturity Date, that the amount of such
Indebtedness, together with all other such Indebtedness of Restricted
Subsidiaries acquired after the Closing Date, does not exceed $10.0
million in the aggregate and (B) if such acquisition was made after the
Initial Maturity Date, on the date of such acquisition and after giving
effect thereto, the Company would have been able to incur at least
$1.00 of additional Indebtedness pursuant to the first paragraph of
this covenant;
(xvi) shares of preferred stock of a Restricted
Subsidiary issued to the Company or another Restricted Subsidiary,
PROVIDED that any subsequent transfer of any Capital Stock or any other
event which results in any such Restricted Subsidiary ceasing to be a
Restricted Subsidiary or any other subsequent transfer of any such
shares of preferred stock (except to the Company or another Restricted
Subsidiary) shall be deemed, in each case, to be an issuance of
preferred stock;
(xvii) letters of credit issued for the account of
any of the Company's insurance subsidiaries in an amount not to exceed
$40.0 million in the aggregate outstanding at any one time;
(xviii) additional notes issued pursuant to and in
accordance with the Loan Note Instrument, dated October 15, 1997, by
Republic Industries (UK) PLC and Republic Industries, Inc. (n/k/a
AutoNation, Inc.), provided that such notes shall not exceed ,6,765,380
in the aggregate;
(xix) the incurrence of Indebtedness of the Company
or a Restricted Subsidiary to AutoNation under subordinated loan,
reimbursement or indemnification obligations with respect to Continuing
Obligations; and
(xx) the incurrence by the Company or any of its
Restricted Subsidiaries of additional Indebtedness in an aggregate
principal amount (or accreted value, as applicable) at any time
outstanding, including all Permitted Refinancing Indebtedness incurred
to refund, refinance or replace any other Indebtedness incurred
pursuant to this clause (xx), not to exceed $25.0 million prior to the
Initial Maturity Date or $50.0 million thereafter.
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(c) Notwithstanding the foregoing, neither the Company nor any
Restricted Subsidiary shall incur any Indebtedness under Section 6.3(b) if the
proceeds thereof are used, directly or indirectly, to refinance any Subordinated
Obligations or Guarantor Subordinated Obligations unless such Indebtedness shall
be subordinated to the Loans to at least the same extent as such Subordinated
Obligations or Guarantor Subordinated Obligations.
(d) For purposes of determining compliance with this covenant,
in the event that an item of proposed Indebtedness meets the criteria of more
than one of the categories of Permitted Debt described in clauses (i) through
(xx) of Section 6.3(b) above as of the date of incurrence thereof or is entitled
to be incurred pursuant to Section 6.3(a) as of the date of incurrence thereof,
the Company shall, in its sole discretion, classify (or later reclassify in
whole or in part, in its sole discretion) such item of Indebtedness in any
manner that complies with this covenant. Accrual of interest, accrual of
dividends, the accretion of accreted value and the payment of interest in the
form of additional Indebtedness and the payment of dividends on Disqualified
Stock or Preferred Stock in the form of additional shares of the same class of
Disqualified Stock or Preferred Stock will not be deemed to be an incurrence of
Indebtedness or an issuance of Disqualified Stock or Preferred Stock for
purposes of this covenant.
For purposes of determining compliance with any U.S.
dollar-denominated restriction on the incurrence of Indebtedness denominated in
a foreign currency, the U.S. dollar-equivalent principal amount of such
Indebtedness incurred pursuant thereto shall be calculated based on the relevant
currency exchange rate in effect on the date that such Indebtedness was
incurred; PROVIDED that if such Indebtedness is incurred to refinance other
Indebtedness denominated in a foreign currency, and such refinancing would cause
the applicable U.S. dollar-denominated restriction to be exceeded if calculated
at the relevant currency exchange in effect on the date of such refinancing,
such U.S. dollar-denominated restriction shall be deemed not to have been
exceeded so long as the principal amount of such refinancing Indebtedness does
not exceed the principal amount of such Indebtedness being refinanced.
6.4 LIMITATION ON PERMITTED VEHICLE INDEBTEDNESS. The
aggregate principal amount of outstanding Permitted Vehicle Indebtedness held by
Persons other than the Company and its Restricted Subsidiaries as of the last
calendar day of each month (the "DETERMINATION DATE") shall not exceed the net
book value of the Permitted Vehicle Collateral securing Permitted Vehicle
Indebtedness held by Persons other than the Company and its Restricted
Subsidiaries on such Determination Date. Notwithstanding the foregoing, if the
Company is not in compliance with the preceding sentence on any Determination
Date, the Company will not be in breach thereof so long as:
(a) within 25 days from the Determination Date (or if such day
is not a Business Day, on the next succeeding Business Day) the Company or its
Restricted Subsidiaries repay sufficient Permitted Vehicle Indebtedness or
deposits as collateral additional Permitted Vehicle Collateral so that the
Company would have been in compliance as of the Determination Date assuming such
repayment or deposit had been made on such date; or
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(b) the Company delivers to the Administrative Agent an
Officers' Certificate setting forth the amount of the shortfall within 25 days
of such Determination Date (or if such day is not a Business Day, on the next
succeeding Business Day) and within 50 days from the Determination Date (or if
such day is not a Business Day, on the next succeeding Business Day) the Company
or one or more of its Restricted Subsidiaries:
(i) repays sufficient Permitted Vehicle Indebtedness;
(ii) deposits as collateral additional Permitted
Vehicle Collateral; or
(iii) redesignates sufficient Permitted Vehicle
Indebtedness that is not secured by an actual Lien on Permitted Vehicle
Collateral to no longer constitute Permitted Vehicle Indebtedness, in
each case so that the Company would have been in compliance as of the
Determination Date assuming such repayment, deposit or redesignation
had been made on such date; PROVIDED, HOWEVER, that, in the case of a
redesignation pursuant to this clause (iii), such redesignation occurs
after the Initial Maturity Date and on the date of such redesignation
and after giving effect thereto as if such redesignated Indebtedness
were Incurred by the Company on such date, the Company would have been
able to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in Section 6.3(a); PROVIDED
FURTHER, HOWEVER, that in determining whether the Company would have
been able to incur such $1.00 of additional Indebtedness, the Company
shall be entitled to exclude an amount of such redesignated
Indebtedness equal to the amount of Indebtedness the Company could have
Incurred on such date pursuant to clause (xx) of Section 6.3(b) hereof,
and such excluded amount shall be deemed to have been Incurred pursuant
to such clause (xx) of Section 6.3(b).
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6.5 ASSET SALES. The Company will not, and will not permit any
of its Restricted Subsidiaries to, consummate any Asset Sale unless the Company
or such Restricted Subsidiary receives consideration at the time of such Asset
Sale at least equal to the fair market value (evidenced by a resolution of the
Board of Directors set forth in an Officers' Certificate delivered to the
Administrative Agent to the extent such Asset Sale involves consideration in
excess of $5.0 million) of the assets or Equity Interests issued, sold,
exchanged or otherwise disposed of, prior to the Initial Maturity Date, at least
90%, and on or after the Initial Maturity Date, at least 75%, of the
consideration thereof received by the Company or such Restricted Subsidiary is
in the form of cash or Cash Equivalents; and an amount equal to 100% of the Net
Proceeds from such Asset Sale is applied by the Company (or such Restricted
Subsidiary, as the case may be): (A) FIRST, to the extent the Company or any
Restricted Subsidiary is required to do so by the terms of any New Credit
Facility, to prepay, repay or purchase such New Credit Facility; PROVIDED,
however, that, in connection with such prepayment, repayment or purchase of
Indebtedness, the Company or such Restricted Subsidiary shall retire such
Indebtedness and shall cause the related loan commitment (if any) to be
permanently reduced in an amount equal to the principal amount so prepaid,
repaid or purchased; and (B) SECOND, to prepay the Loans. Notwithstanding the
foregoing, such Net Proceeds need not be applied to the prepayment of Loans to
the extent that (x) such Net Proceeds are applied after the Initial Maturity
Date to repay any subordinated obligations of the Company to AutoNation with
respect to the General Motors Letter of Credit, (y) such Net Proceeds do not
exceed $5.0 million in any 12-month period and are applied within 365 days of
such Asset Sale: (i) to the acquisition of a controlling interest in another
business, the making of a capital expenditure or the acquisition of other
assets, in each case, in or to be used in a Permitted Business; (ii) to enter
into a legally binding commitment to acquire a controlling interest in another
business or other assets in or to be used in a Permitted Business; PROVIDED that
the transaction contemplated by such agreement must be consummated no later than
120 days after the end of such 365-day period; or (iii) to acquire Capital Stock
constituting a minority interest in any Person that at such time is a Restricted
Subsidiary or (z) no Default or Event of Default has occurred and is continuing
and such Net Proceeds result from the sale of Borrowing Base assets and are
applied within 5 days to purchase other Borrowing Base assets (and during such
period pending repurchase are held in cash or Cash Equivalents).
For the purposes of this covenant, the following will be
deemed to be cash: (x) any liabilities (as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet) of the Company or any
Restricted Subsidiary (other than contingent liabilities and liabilities that
are by their terms subordinated in right of payment to the Loans or any
Guarantee thereof) that are assumed by the transferee, purchaser, a third party
on behalf of the transferee or purchaser or a third party on behalf of the
transferee or purchaser of any such assets pursuant to an agreement that
releases the Company or such Restricted Subsidiary from further liability; (y)
any securities, notes or other obligations received by the Company or any such
Restricted Subsidiary from such transferee that are within 180 days converted,
sold or exchanged by the Company or such Restricted Subsidiary into cash (to the
extent of the cash received); and (z) any Designated Noncash Consideration
received by the Company or any of its Restricted Subsidiaries in the Asset Sale
after the Initial Maturity Date.
6.6 LIMITATION ON LIENS. (a) Prior to the Initial Maturity
Date, the Company will not, and will not permit any Restricted Subsidiary to,
create or cause to exist any consensual Lien (other than Permitted Liens) on any
of its property or assets (including Capital Stock), whether owned on the date
of this Agreement or thereafter acquired, securing any obligation.
(b) After the Initial Maturity Date the Company will not, and
will not permit any Restricted Subsidiary to, create or cause to exist any
consensual Lien (other than Permitted Liens) on any of its property or assets
(including Capital Stock), whether owned on the date of this Agreement or
thereafter acquired, securing any Indebtedness, unless effective provision is
made to secure the Loans equally and ratably with (or prior to in the case of
Liens with respect to Subordinated Obligations) such Indebtedness for so long as
such Indebtedness is so secured. Any Lien created pursuant to the preceding
sentence shall provide by its terms that such Lien shall be automatically and
unconditionally released and discharged upon the release and discharge of the
Lien on the other Indebtedness.
6.7 LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES. The Company will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause to exist or become effective any consensual encumbrance or restriction on
the ability of any Restricted Subsidiary of the Company or the Company to:
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(a) (i) pay dividends or make any other distributions to the
Company or any of its Restricted Subsidiaries (1) on its Capital Stock or (2)
with respect to any other interest or participation in, or measured by, its
profits, or (ii) pay any Indebtedness owed to the Company or any of its
Restricted Subsidiaries that directly or indirectly own any Capital Stock of
such Restricted Subsidiary;
(b) make loans or advances to the Company or any of its
Restricted Subsidiaries that directly or indirectly own any Capital Stock of
such Restricted Subsidiary; or
(c) transfer any of its properties or assets to the Company or
any of its Restricted Subsidiaries that directly or indirectly own any Capital
Stock of such Restricted Subsidiary; except for such encumbrances or
restrictions existing under or by reason of:
(i) Existing Indebtedness and any agreement as in
effect on the Closing Date and any amendments, modifications,
restatements, renewals, increases, supplements, refundings,
replacements or refinancings thereof, PROVIDED that such amendments,
modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings are no more restrictive, taken
as a whole, with respect to dividend and other payment restrictions
than those contained in the agreements as in effect on the Closing
Date;
(ii) the New Credit Facility as in effect as of the
Closing Date, and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or
refinancings thereof or any other Credit Facility, PROVIDED that such
amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacement or refinancings or such other
Credit Facility are no more restrictive, taken as a whole, with respect
to such dividend and other payment restrictions than those contained in
the New Credit Facility as in effect on the Closing Date;
(iii) this Agreement;
(iv) any instrument governing Indebtedness or Capital
Stock of a Person acquired by the Company or any of its Restricted
Subsidiaries as in effect at the time of such acquisition (except to
the extent such Indebtedness was incurred or Capital Stock issued in
connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, PROVIDED that such
Indebtedness was permitted by the terms of the Indenture to be
incurred;
(v) by reason of customary non-assignment provisions
in leases entered into in the ordinary course of business;
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(vi) purchase money obligations for property acquired
in the ordinary course of business that impose restrictions of the
nature described in clause (c) above on the property so acquired;
(vii) Indebtedness of Guarantors, PROVIDED that such
Indebtedness was permitted to be incurred pursuant to the Indenture;
(viii) Permitted Refinancing Indebtedness, PROVIDED
that the restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are no more restrictive, taken as a
whole, than those contained in the agreements governing the
Indebtedness being refinanced;
(ix) restrictions imposed on the obligor of any
Permitted Vehicle Indebtedness;
(x) restrictions on any Specified Financing
Subsidiary pursuant to the terms of the Customer Lease Financing Loans
under which it is obligated;
(xi) any restriction with respect to a Restricted
Subsidiary imposed pursuant to an agreement entered into for the sale
or disposition of all or substantially all the Capital Stock or assets
of such Restricted Subsidiary pending the closing of such sale or
disposition;
(xii) any restriction or encumbrance consisting of
any restriction on the sale or other disposition of assets or property
securing Indebtedness as a result of a Lien permitted to be Incurred
under this Agreement on such asset or property;
(xiii) customary provisions restricting dispositions
of real property interests set forth in any reciprocal easement
agreements of the Company or any Restricted Subsidiary;
(xiv) restrictions on Foreign Subsidiaries pursuant
to arrangements governing Indebtedness of such Foreign Subsidiaries
permitted pursuant to the covenant described under Section 6.3 hereof;
and
(xv) encumbrances or restrictions arising or existing
by reason of applicable law or any applicable rule, regulation or
order, including, without limitation, restrictions on the payment of
dividends on the Company's insurance Subsidiaries imposed by federal or
state government regulations.
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6.8 CHANGE OF CONTROL. Upon a Change of Control each Holder
will have the right to require that the Company repurchase all or any part of
such Holder's Loans at a purchase price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (subject to the right of Holders of record on the relevant record
date to receive interest on the relevant interest payment date), such repurchase
to be made in accordance with Section 6.8(b).
(a) Within 30 days following any such Change of Control, the
Company will mail a notice to each Holder with a copy to the Administrative
Agent stating:
(i) that a Change of Control has occurred and that
such Holder has the right to require the Company to purchase such
Holder's Loans at a purchase price in cash equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest, if
any, to the date of purchase (subject to the right of Holders of record
on a record date to receive interest on the relevant interest payment
date);
(ii) the repurchase date (which shall be no earlier
than 30 days nor later than 60 days from the date such notice is mailed
and shall not be earlier than the date the Change of Control occurs);
and
(iii) the procedures determined by the Company,
consistent with this Section, that a Holder must follow in order to
have its Loans purchased.
(b) Holders electing to have a Loan purchased will be required
to give notice in writing to the Company at the address specified in Section 9.2
at least three Business Days prior to the purchase date. Each Holder will be
entitled to withdraw its election if the Company receives, not later than one
Business Day prior to the purchase date, a telegram, telex, facsimile
transmission or letter from such Holder setting forth the name of such Holder,
the principal amount of the Loan which was to be purchased and a statement that
such Holder is withdrawing its election to have such Loan purchased.
(c) On the purchase date, the Company shall pay the purchase
price for the Loans to be purchased, to the Holders entitled thereto upon, in
the case of Loans evidenced by Loan Notes, surrender of such Loan Notes.
(d) The Company shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Loans pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue thereof.
(e) The Company will not be required to make a Change of
Control offer, as described above, upon a Change of Control if a third party
makes the Change of Control offer in the manner, at the times and otherwise in
compliance with the requirements set forth in this Agreement applicable to a
Change of Control Offer made by the Company and purchases all Notes validly
tendered and not withdrawn under such Change of Control.
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6.9 MERGER, CONSOLIDATION, ETC. (a) Prior to the Initial
Maturity Date, neither the Company nor any of its Restricted Subsidiaries may
merge with or consolidate with any other Person, or permit any other Person to
merge into or consolidate with it, or sell, transfer, lease or otherwise dispose
of (in one transaction or in a series of transactions) all or any substantial
part of its assets (whether now owned or hereafter acquired) or purchase, lease
or otherwise acquire (in one transaction or a series of transactions) all or any
substantial part of the assets of any other Person, except that (i) any
Restricted Subsidiary may merge into or consolidate with the Company, or the
Company may merge with, consolidate into or transfer all or substantially all of
its assets to a Restricted Subsidiary that is a Guarantor in a transaction in
which the Company is the surviving corporation; (ii) any Restricted Subsidiary
may merge into or consolidate with any other Restricted Subsidiary in a
transaction in which the surviving entity is a Restricted Subsidiary, and any
Restricted Subsidiary of the Company may dispose of all or any of its assets
(upon voluntary liquidation or otherwise) to the Company or any Subsidiary
Guarantor; (iii) the Company or any of its Subsidiaries may change the
jurisdiction of its organization so long as the new jurisdiction of the Company
or any Subsidiary that is not a Foreign Subsidiary is in the United States; (iv)
any Foreign Subsidiary may be merged, consolidated with or into, or sell,
transfer, lease or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to, another Foreign Subsidiary; (v) any Finance
Company may be merged, consolidated with or into, or sell, transfer, lease or
otherwise dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to, another Finance Company; (vi) any Insurance Company may be
merged, consolidated with or into, or sell, transfer, lease or other dispose of
any or all of its assets (upon voluntary liquidation or otherwise) to, another
Insurance Company; and (vii) the Company may liquidate any of its Inactive
Subsidiaries.
(b) After the Initial Maturity Date, the Company will not
directly or indirectly consolidate with or merge with or into, or convey,
transfer or lease all or substantially all its assets to, any Person, unless:
(i) the Company is the surviving corporation,
partnership, limited liability company or other entity, or the Person
formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, conveyance or
other disposition shall have been made is a corporation, partnership,
limited liability company or other entity organized or existing under
the laws of the United States, any state thereof or the District of
Columbia;
(ii) the Person formed by or surviving any such
consolidation or merger (if other than the Company) or the Person to
which such sale, assignment, transfer, conveyance or other disposition
shall have been made assumes all the obligations of the Company under
this Agreement and the Loans pursuant to a supplemental agreement in a
form and substance reasonably satisfactory to the Administrative Agent;
(iii) immediately after such transaction no Default
or Event of Default shall have occurred; and
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(iv) except in the case of a merger of the Company
with or into a Restricted Subsidiary of the Company, a merger of a
Restricted Subsidiary with or into the Company or the sale, assignment,
transfer, conveyance, lease or other disposition of assets or
properties among the Company and its Restricted Subsidiaries, the
Company or Person formed by or surviving any such consolidation or
merger (if other than the Company), or to which such sale, assignment,
transfer, conveyance or other disposition shall have been made will
either:
(1) immediately after such transaction after
giving pro forma effect thereto and any related financing
transactions as if the same had occurred at the beginning of
the applicable four-quarter period, be permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in Section 6.3(a) or
(2) immediately following such transaction
after giving pro forma effect thereto and to any related
financing transactions have a Fixed Charge Coverage Ratio
which equals or exceeds the Fixed Charge Coverage Ratio
immediately prior to such transaction.
Notwithstanding this Section 6.9(b), the Company may merge
with an Affiliate incorporated solely for the purpose of reincorporating the
Company in another jurisdiction to realize tax or other benefits.
6.10 LIMITATION ON AFFILIATE TRANSACTIONS. The Company will
not, and will not permit any of its Restricted Subsidiaries to, make any payment
to, or sell, lease, transfer or otherwise dispose of any properties or assets
to, or purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or Guarantee
with, or for the benefit of, any Affiliate of any such Person (each of the
foregoing, an "AFFILIATE TRANSACTION"), unless:
(a) such Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary than those that
would have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person and
(b) the Company delivers to the Administrative Agent:
(i) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate
consideration in excess of $5.0 million, a resolution of its Board of
Directors set forth in an Officer's Certificate certifying that such
Affiliate Transaction complies with clause (a) above and that such
Affiliate Transaction has been approved by a majority of the
disinterested members of its Board of Directors (or if there is only
one disinterested member of the Board of Directors, such disinterested
member); and
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(ii) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate
consideration in excess of $10 million, an opinion as to the fairness
to the Company or such Restricted Subsidiary of such Affiliate
Transaction from a financial point of view, or an opinion that the
terms of the Affiliate Transaction are on terms that are no less
favorable to the Company or the particular Restricted Subsidiary than
those that would have been obtained by the Company or such Restricted
Subsidiary with an unrelated Person, issued by an accounting, appraisal
or investment banking firm of national standing.
The following shall be deemed not to be Affiliate
Transactions or subject to the provisions of the prior paragraph:
(1) any employment, consulting, agency or
other compensation agreement entered into or benefit plan
adopted by the Company or any of its Restricted Subsidiaries
in the ordinary course of business;
(2) transactions between or among the
Company and/or its Restricted Subsidiaries;
(3) any sale or other issuance of Equity
Interests (other than Disqualified Stock) of the Company,
including the issuance of stock options;
(4) Permitted Investments or Restricted
Payments that are permitted by Section 6.2;
(5) fees and compensation paid to members of
the Board of Directors of the Company and its Restricted
Subsidiaries;
(6) loans or advances to employees for
moving, entertainment and travel expenses, drawing accounts
and similar expenditures in the ordinary course of business;
(7) fees and compensation (including the
issuance of stock options) paid to and indemnity provided on
behalf of officers, directors, consultants or employees of the
Company or any of its Restricted Subsidiaries, pursuant to
agreements, statute, charter or by-law provision or otherwise;
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(8) transactions consummated pursuant to, or
contemplated by, and the entering into of the Separation and
Distribution Agreement, Transitional Services Agreement, Tax
Sharing Agreement, the Benefits Agreement, the AutoNation
Reimbursement Agreement, leases, guarantees, parts agreements,
corporate agreements, fleet agreements, association program
agreements, association and affinity agreements, any
agreements evidencing the Continuing Obligations, and other
related agreements and other agreements ancillary to any of
the foregoing, in each case between AutoNation and its
Affiliates, on the one hand, and the Company and its
Restricted Subsidiaries, on the other hand, as such agreements
are in effect on the Spin-Off Date and as such agreements may
be amended from time to time in any manner not materially less
favorable to the Holders;
(9) transactions and agreements in effect on
the date of this Agreement, as such agreements may be amended
or transactions modified from time to time in any manner not
materially less favorable to the Holders;
(10) customary business arrangements
consistent with past practice between the Company and its
Subsidiaries, on the one hand, and Certified Vacations, Inc.
and its affiliates, on the other hand;
(11) the purchase of revenue earning
vehicles from AutoNation, Inc., PROVIDED that (1) the purchase
price for such vehicles is no greater than the purchase price
paid by AutoNation to an unrelated Person for such vehicles
and (2) any processing or other fees paid to AutoNation in
connection with such purchase are customary and consistent
with industry practice;
(12) transactions prior to the Spin-Off Date
between or among the Company and/or its Restricted
Subsidiaries, on the one hand, and AutoNation and/or its
subsidiaries, on the other hand, in connection with the
spin-off of the Company; PROVIDED that such transactions
satisfy the condition set forth in clause (a) of this Section
6.10 and the Company delivers to the Administrative Agent an
Officer's Certificate certifying that such transaction
complies with such clause (a);
(13) any Affiliate Transaction that involves
consideration of $250,000 or less; PROVIDED that such
Affiliate Transactions do not exceed $2.5 million in any
12-month period; and
(14) a registration rights agreement with
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and related entities in respect of the shares
of common stock of the Company distributed to him pursuant to
the Spin-Off, which registration rights agreement shall be on
terms no less favorable to the Company than the existing
registration rights agreement between AutoNation and ▇▇▇▇▇▇▇
▇. ▇▇▇▇.
6.11 SALE AND LEASEBACK TRANSACTIONS. The Company will not,
and will not permit any of its Restricted Subsidiaries to, enter into any sale
and leaseback transaction; PROVIDED that the Company or any Restricted
Subsidiary may enter into a sale and leaseback transaction if:
(a) the Company or that Restricted Subsidiary, as applicable,
could have incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction as Permitted Debt prior to the
Initial Maturity Date or pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 6.3(a) thereafter, and
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(b) the net cash proceeds of such sale and leaseback
transaction are at least equal to the fair market value (as determined in good
faith by the Board of Directors if in excess of $5.0 million) of the property
that is the subject of such sale and leaseback transaction, and
(c) the transfer of assets in such sale and leaseback
transaction is permitted by, and the Company applies the proceeds of such
transaction in compliance with, Section 6.5.
Notwithstanding the preceding sentence, the Company or any of
its Restricted Subsidiaries may enter into a sale and leaseback transaction if
such sale and leaseback transaction is between the Company and any Restricted
Subsidiary or between Restricted Subsidiaries. In addition, the restrictions of
this Section 6.11 shall not apply to sale and leaseback transactions with
respect to revenue-earning or service vehicles.
6.12 LIMITATION ON SUBSIDIARY GUARANTEES. The Company will not
permit any Restricted Subsidiary, directly or indirectly, to guarantee, assume
or in any other manner become liable with respect to any Indebtedness of the
Company unless:
(a) such Restricted Subsidiary simultaneously executes and
delivers a Subsidiary Guarantee in the form of Exhibit A hereto providing for a
Guarantee of all of the Company's obligations under the Loans and this Agreement
on terms substantially similar to the guarantee of such Indebtedness; PROVIDED
that if such Indebtedness is by its express terms subordinated in right of
payment to the Loans, any such assumption, Guarantee or other liability of such
Restricted Subsidiary with respect to such Indebtedness shall be subordinated in
right of payment to such Restricted Subsidiary's assumption, Guarantee or other
liability with respect to the Loans substantially to the same extent as such
Indebtedness is subordinated to the Loans; and
(b) such Restricted Subsidiary waives, and will not in any
manner whatsoever claim to take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Restricted Subsidiary as a result of any payment by such Restricted
Subsidiary under its Guarantee; PROVIDED, HOWEVER, that any Subsidiary may
Guarantee Permitted Vehicle Indebtedness without complying with the foregoing
covenant.
Notwithstanding the foregoing, any Guarantee of all of the
Company's obligations under the Loans and this Agreement by a Restricted
Subsidiary may provide by its terms that it will be automatically and
unconditionally released and discharged upon:
(i) any sale, exchange or transfer, to any Person not
an Affiliate of the Company, of all of the Company's and each
Restricted Subsidiary's Equity Interests in, or all or substantially
all of the assets of, such Restricted Subsidiary (which sale, exchange
or transfer is not prohibited by this Agreement); or
(ii) the release or discharge of the guarantee which
resulted in the creation of such Guarantee, except a discharge or
release by or as a result of payment under such guarantee.
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6.13 LIMITATION ON BUSINESS ACTIVITIES. The Company will not,
and the Company will not permit any of its Restricted Subsidiaries to, directly
or indirectly, engage in any line of business other than a Permitted Business,
except to such extent as would not be material to the Company and its Restricted
Subsidiaries taken as a whole.
6.14 DESIGNATION OF AN UNRESTRICTED SUBSIDIARY. The Company
may designate any Subsidiary to be an "Unrestricted Subsidiary" as provided
below only after the Initial Maturity Date, in which event the Subsidiary and
each other Person that is then, or thereafter becomes, a Subsidiary of the
Subsidiary will be deemed to be an "Unrestricted Subsidiary."
The Company may designate a Subsidiary to be an Unrestricted
Subsidiary if
(i) the conditions set forth in the definitions of an
"Unrestricted Subsidiary" are true on the effective date of such
designation;
(ii) the Company or the Restricted Subsidiary that
owns the Capital Stock of the Subsidiary to be designated an
Unrestricted Subsidiary could make a Restricted Payment in an amount
equal to the greater of the fair market value and the book value of the
Capital Stock of such Subsidiary under Section 6.2; and
(iii) such amount is, as of the effective date of the
designation, deemed to have been paid as a Restricted Payment under
Section 6.2.
The Company may designate an Unrestricted Subsidiary to be a
Restricted Subsidiary if
(i) the Board of Directors takes such action pursuant
to a Board Resolution;
(ii) no Default or Event of Default shall have
occurred and be continuing or would occur as a consequence thereof;
(iii) the Company and its Restricted Subsidiaries
could incur at least $1.00 of additional Indebtedness under Section
6.3(a) on a pro forma basis after taking into account such designation;
and
(iv) any Indebtedness of such Subsidiary is deemed to
have been incurred as of the effective date of such designation.
SECTION 7. EVENTS OF DEFAULT.
If any of the following events shall occur and be continuing:
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(a) default in the payment of any principal of any Loan or any
Note when due in accordance with the terms thereof or hereof, or the failure to
redeem, prepay or purchase Loans when required pursuant to this Agreement or any
Note; or
(b) default in the payment when due or the failure to pay any
interest on any Loan, or any other amount payable hereunder, within 5 days (if
such default is on or prior to the Initial Maturity Date) or 30 days (if such
default after the Initial Maturity Date), after any such interest or other
amount becomes due in accordance with the terms thereof or hereof; or
(c) any representation or warranty made or deemed made by the
Company or any Guarantor herein or in any other Loan Document or which is
contained in any certificate, document, or financial or other statement
furnished by it at any time under or in connection with this Agreement or any
such other Loan Document shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(d) the Company shall default in the observance or performance
of (i) any agreement contained in Section 5.10 or (ii) any agreement contained
in Section 5.11 and, in the case of clause (ii), such default shall continue
unremedied for a period of five Business Days after written notice to the
Company by the Administrative Agent or to the Company and the Administrative
Agent by the holders of 25% of the Loans; or
(e) the Company or any Guarantor shall default in the
observance or performance of any other agreement contained in this Agreement or
the Subsidiary Guarantee (other than as provided in paragraphs (a) through (d)
of this Section 7), and such default shall continue unremedied for a period of
45 days after written notice to the Company by the Administrative Agent or to
the Company and the Administrative Agent by the Holders of 25% of the Loans; or
(f) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries), other than Indebtedness owed to the Company or a
Wholly-Owned Subsidiary, whether such Indebtedness or guarantee now exists, or
is created after the date of this Agreement, which default (i) is caused by a
failure to pay principal of, or premium, if any, on, such Indebtedness prior to
the later of (1) one day following the due date of such principal and (2) the
expiration of the grace period provided in such Indebtedness ("PAYMENT DEFAULT")
or (ii) has resulted in the acceleration of such Indebtedness prior to its
maturity and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under which
there has been a Payment Default or the maturity of which has been so
accelerated, aggregates without duplication $5.0 million or more prior to the
Initial Maturity Date or $25.0 million or more thereafter; or
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(g) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments aggregating in excess of $5.0 million prior
to the Initial Maturity Date or $25.0 million thereafter (excluding amounts
covered by insurance), which judgments are not paid, discharged or stayed for a
period of 60 days; or
(h) (i) the Company or any Significant Subsidiary or group of
Restricted Subsidiaries that, taken together (as of the latest audited
consolidated financial statements for the Company and its Restricted
Subsidiaries), would constitute a Significant Subsidiary thereafter or, prior to
the Initial Maturity Date, any Restricted Subsidiary shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or the
Company or any Restricted Subsidiary prior to the Initial Maturity Date or any
Significant Subsidiary or group of Restricted Subsidiaries that, taken together
(as of the latest audited consolidated financial statements for the Company and
its Restricted Subsidiaries), would constitute a Significant Subsidiary
thereafter shall make a general assignment for the benefit of its creditors; or
(ii) there shall be commenced against the Company or any Significant Subsidiary
or group of Restricted Subsidiaries that, taken together (as of the latest
audited consolidated financial statements for the Company and its Restricted
Subsidiaries), would constitute a Significant Subsidiary thereafter or, prior to
the Initial Maturity Date, any Restricted Subsidiary any case, proceeding or
other action of a nature referred to in clause (i) above which (A) results in
the entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against the Company or any Significant Subsidiary or
group of Restricted Subsidiaries that, taken together (as of the latest audited
consolidated financial statements for the Company and its Restricted
Subsidiaries), would constitute a Significant Subsidiary thereafter or, prior to
the Initial Maturity Date, any Restricted Subsidiary any case, proceeding or
other action seeking issuance of a warrant of attachment, execution, distraint
or similar process against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) the Company or any Significant Subsidiary or group of
Restricted Subsidiaries that, taken together (as of the latest audited
consolidated financial statements for the Company and its Restricted
Subsidiaries), would constitute a Significant Subsidiary thereafter or, prior to
the Initial Maturity Date, any Restricted Subsidiary shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any of the acts set forth in clause (i), (ii), or (iii) above; or (v) the
Company or any Significant Subsidiary or group of Restricted Subsidiaries that,
taken together (as of the latest audited consolidated financial statements for
the Company and its Restricted Subsidiaries), would constitute a Significant
Subsidiary thereafter or, prior to the Initial Maturity Date, any Restricted
Subsidiary shall be generally unable to, or shall admit in writing its inability
to, pay its debts as they become due; or
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(i) at any time prior to the Initial Maturity Date (i) any
Person shall engage in any "PROHIBITED transaction" (as defined in Section 406
of ERISA or Section 4975 of the Code) involving any Plan, (ii) any "ACCUMULATED
FUNDING DEFICIENCY" (as defined in Section 302 of ERISA), whether or not waived,
shall exist with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Company or any Commonly Controlled Entity,
(iii) a Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the reasonable
opinion of the Administrative Agent, likely to result in the termination of such
Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Company or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Administrative
Agent is likely to, incur any liability in connection with a withdrawal from, or
the Insolvency or Reorganization of, a Multiemployer Plan, or (vi) any other
similar event or condition shall occur or exist with respect to a Plan that
could result in a liability (other than in the ordinary course), and in each
case in clauses (i) through (vi) above, such event or condition, together with
all other such events or conditions, if any, could reasonably be expected to
have a Material Adverse Effect; or
(j) Either (i) any Subsidiary Guarantee shall cease, for any
reason, to be in full force and effect (other than pursuant to the terms hereof
or thereof) or any Subsidiary Guarantor shall so assert in writing or (ii) the
subordination provisions applicable to the AutoNation Subordinated Debt shall
cease for any reason to be in effect, or AutoNation, any Loan Party or any
Affiliate of any Loan Party shall so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in paragraph (h) of this Section with respect to the Company, the Loans (with
accrued interest thereon) and all other amounts owing under this Agreement shall
immediately become due and payable, and (B) if such event is any other Event of
Default, with the consent of the Required Lenders, the Administrative Agent may,
or upon the request of the Required Lenders, the Administrative Agent shall, by
notice to the Company declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement to be due and payable
forthwith, whereupon the same shall immediately become due and payable. Except
as expressly provided above in this Section, presentment, demand, protest and
all other notices of any kind are hereby expressly waived.
SECTION 8. THE AGENTS
8.1 APPOINTMENT. Each Lender hereby irrevocably designates
and appoints the Agents as the agents of such Lender under this Agreement and
the other Loan Documents, and each Lender irrevocably authorizes each Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Agent shall have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against any Agent.
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8.2 DELEGATION OF DUTIES. Each Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
8.3 EXCULPATORY PROVISIONS. Neither any Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except to the extent that any of the foregoing are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Loan Party or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agents under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or for any failure
of any Loan Party to perform its obligations hereunder or thereunder. The Agents
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of any Loan Party.
8.4 RELIANCE BY AGENTS. Each Agent shall be entitled to rely,
and shall be fully protected in relying, upon any instrument, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Loan Parties), independent accountants and
other experts selected by such Agent. The Agents may deem and treat the payee of
any Note as the owner thereof for all purposes unless such Note shall have been
transferred in accordance with Section 9.6 and all actions required by such
Section in connection with such transfer shall have been taken. Each Agent shall
be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders (or, if so specified by this Agreement,
all Lenders or any other instructing group of Lenders specified by this
Agreement) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action.
Each Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement and the other Loan Documents in accordance
with a request of the Required Lenders (or, if so specified by this Agreement,
all Lenders or any other instructing group of Lenders specified by this
Agreement), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future Holders of the
Loans.
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8.5 NOTICE OF DEFAULT. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless such Agent shall have received notice from a Lender or the
Company referring to this Agreement, describing such Default or Event of Default
and stating that such notice is a "notice of default." In the event that the
Administrative Agent shall receive such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, if so specified by this Agreement, all
Lenders or any other instructing group of Lenders specified by this Agreement);
PROVIDED that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.
8.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS. Each Lender
expressly acknowledges that neither any of the Agents nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
any Agent hereafter taken, including any review of the affairs of a Loan Party
or any affiliate of a Loan Party, shall be deemed to constitute any
representation or warranty by any Agent to any Lender. Each Lender represents to
the Agents that it has, independently and without reliance upon any Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon any Agent 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 analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their affiliates. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, no Agent shall have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
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8.7 INDEMNIFICATION. The Lenders agree to indemnify each Agent
in its capacity as such (to the extent not reimbursed by the Company and without
limiting the obligation of the Company to do so), ratably according to their
respective Commitment Percentages in effect on the date on which indemnification
is sought under this Section (or, if indemnification is sought after the date
upon which the Commitments shall have terminated and the Loans shall have been
paid in full, ratably in accordance with such Commitment Percentages immediately
prior to such date), for, and to save each Agent harmless from and against, any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever that
may at any time (including, without limitation, at any time following the
payment of the Loans) be imposed on, incurred by or asserted against such Agent
in any way relating to or arising out of, the Commitments, this Agreement, any
of the other Loan Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by such Agent under or in connection with any of the
foregoing; PROVIDED that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from such Agent's gross negligence or willful misconduct. The agreements in this
Section shall survive the payment of the Loans and all other amounts payable
hereunder.
8.8 AGENT IN ITS INDIVIDUAL CAPACITY. Each Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent were not an Agent.
With respect to its Loans made or renewed by it, each Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any
Lender and may exercise the same as though it were not an Agent, and the terms
"Lender" and "Lenders" shall include each Agent in its individual capacity.
8.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent
may resign as Administrative Agent upon 10 days' notice to the Lenders and the
Company. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 7(a) or Section
7(f) with respect to the Company shall have occurred and be continuing) be
subject to approval by the Company (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any Holders of the Loans. If no successor agent
has accepted appointment as Administrative Agent by the date that is 10 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become
effective, and the Lenders shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. The Syndication Agent may, at
any time, by notice to the Lenders and the Administrative Agent, resign as
Syndication Agent hereunder, whereupon the duties, rights, obligations and
responsibilities of the Syndication Agent hereunder shall automatically be
assumed by, and inure to the benefit of, the Administrative Agent, without any
further act by the Syndication Agent, the Administrative Agent or any Lender.
After any retiring Agent's resignation as Agent, the provisions of this Section
8 shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Agent under this Agreement and the other Loan Documents.
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8.10 AUTHORIZATION TO RELEASE GUARANTEES. The Administrative
Agent is hereby irrevocably authorized by each of the Lenders to effect any
release of guarantee obligations contemplated by Section 9.15.
8.11 THE ARRANGER; THE SYNDICATION AGENT. Neither the Arranger
nor the Syndication Agent, in their respective capacities as such, shall have
any duties or responsibilities, and shall incur no liability, under this
Agreement and the other Loan Documents.
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SECTION 9. MISCELLANEOUS.
9.1 AMENDMENTS AND WAIVERS. Neither this Agreement nor any
Loan Note, nor the Subsidiary Guarantee, nor any terms hereof or thereof, may be
amended, supplemented or modified except in accordance with the provisions of
this Section. The Required Lenders may, or, with the written consent of the
Required Lenders, the Administrative Agent may, from time to time, (a) enter
into with the Company and each Loan Party which is a party to the relevant Loan
Documents written amendments, supplements or modifications hereto and to the
Loan Documents for the purpose of adding any provisions to this Agreement or the
other Loan Documents or changing in any manner the rights of the Lenders or of
the Company hereunder or thereunder or (b) waive, on such terms and conditions
as the Required Lenders or the Administrative Agent, as the case may be, may
specify in such instrument, any of the requirements of this Agreement or the
other Loan Documents or any Default or Event of Default and its consequences;
provided, HOWEVER, that no such waiver and no such amendment, supplement, or
modification shall (i) (A) reduce the amount or extend the scheduled date of
maturity of any Loan or of any mandatory prepayment thereof, (B) reduce the
stated rate of any interest thereon or fee payable hereunder or extend the
scheduled date of any payment thereof or increase the aggregate amount or extend
the expiration date of any Lender's Commitment, or (C) restrict the right of any
Lender to exchange Rollover Term Loans, or Initial Loans on and after the
Initial Maturity Date, for Exchange Notes or amend the rate of such exchange, in
each case without the written consent of each Lender directly affected thereby,
(ii) (A) amend, modify, or waive any provision of this Section 9.1, (B) reduce
the percentage specified in the definition of Required Lenders, (C) consent to
the assignment or transfer by the Company of any of its rights and obligations
under the Loan Documents except as expressly permitted hereby, or (D) amend,
modify or waive any provision in the Exchange Notes that requires (or would, if
any Exchange Notes were outstanding, require) the approval of all Holders of
Exchange Notes, in each case without the consent of all of the Lenders, or (iii)
amend, modify or waive any provision of Section 8 without the written consent of
the then Administrative Agent. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Company and the other Loan Parties, the Lenders, the
Administrative Agent, and all future Holders of the Loans. In the case of any
waiver, the Company and the other Loan Parties, the Lenders and the
Administrative Agent shall be restored to their former positions and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereon. The Company shall not and shall not permit any of
its Restricted Subsidiaries to, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Lender
for or as an inducement to any consent, waiver or amendment permitted by Section
9.1 unless such consideration is offered to be paid and is paid to all Lenders
that consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or amendment.
9.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered, or three (3) days
after being deposited in the mail, postage prepaid, or, in the case of telecopy
notice, when received, addressed as follows in the case of the Company and the
Administrative Agent, and as set forth on its signature pages hereto in the case
of the other parties hereto, or to such other address as may be hereafter
notified by the respective parties hereto:
The Company: ANC Rental Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
ANC Rental Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇▇▇▇ Jacob, Esq.
Fried ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
The Syndication Agent: ▇▇▇▇▇▇ Commercial Paper Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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The Administrative Agent: ▇▇▇▇▇▇ Commercial Paper Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
PROVIDED that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to Section 2.2 or 2.5 shall not be effective until
received.
9.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the Loan Notes
or the other Loan Documents shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder, in the Loan Notes and in the
other Loan Documents and in any document, certificate or statement delivered
pursuant hereto or in connection herewith shall survive the execution and
delivery of this Agreement and the making of the Loans hereunder.
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9.5 PAYMENT OF EXPENSES AND TAXES. The Company agrees (a) to
pay or reimburse the Administrative Agent for all reasonable out-of-pocket costs
and expenses incurred in connection with the development, preparation and
execution of, and any amendment, supplement or modification to, the Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent, (b) to pay or reimburse
each Lender and the Administrative Agent for all its reasonable out-of-pocket
costs and expenses incurred in connection with the enforcement or preservation
of any rights under the Loan Documents and any such other documents, including,
without limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent and, at any time after and during the continuance of an
Event of Default, of one counsel to all the Lenders, and (c) to pay, indemnify,
and hold each Lender and the Administrative Agent (and their respective
directors, officers, employees and agents) harmless from, any and all recording
and filing fees and any and all liabilities with respect to, or resulting from
any delay in paying, stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, the Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent (and their respective directors, officers, employees and
agents) harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of the Transaction
Documents or the use of the proceeds of the Loans in connection with the
Transactions and any such other documents (all the foregoing in this clause (d),
collectively, the "INDEMNIFIED LIABILITIES"), PROVIDED that the Company shall
have no obligation hereunder to the Administrative Agent, or any Lender (or
their respective directors, officers, employees and agents) with respect to
indemnified liabilities arising from the gross negligence or wilful misconduct
of the indemnified party or, in the case of indemnified liabilities arising
under the Loan Documents, from material breach by the indemnified party of the
Loan Documents, as the case may be. Subject to the foregoing proviso, and to the
extent permitted by applicable law, the Company agrees not to assert and to
cause its Subsidiaries not to assert, and hereby waives and agrees to cause its
Subsidiaries so to waive, all rights for contribution or any other rights of
recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, (a) under
or related to Environmental Laws or (b) arising from the use by unauthorized
Persons of information or other materials sent through electronic,
telecommunications or other information transmission systems that are
intercepted by such Persons or for any special, indirect, consequential or
punitive damages in connection with the Loans, that any of them might have by
statute or otherwise against any Indemnitee. The agreements in this Section
shall survive repayment of the Loans and all other amounts payable hereunder.
9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS.
(a) This Agreement shall be binding upon and inure to the benefit of the
Company, the Lenders, the Administrative Agent and their respective successors
and assigns, except that the Company may not assign or transfer any of its
rights or obligations under this Agreement without the prior written consent of
each Lender and any assignment or transfer by any Lender of its rights or
obligations under the Loan Documents must be made in compliance with this
Section 9.6 (and any purported assignment in violation of this Section shall be
null and void).
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(b) Any Lender may, in the ordinary course of its lending or
investment business and in accordance with applicable law, at any time sell to
one or more financial institutions or other entities ("LOAN PARTICIPANTS")
participating interests in any Loan owing to such Lender, any Commitment of such
Lender or any other interest of such Lender under the Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Loan
Participant, (i) such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible for the performance thereof, (iii) such Lender shall remain
the Holder of any such Loan (and any Note evidencing such Loan) for all purposes
under the Loan Documents, (iv) the Company and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under the Loan Documents, and (v) no Loan
Participant under any 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 with respect to the matters
described in clauses (i) and (ii) of the proviso to the second sentence of
Section 9.1. The Company agrees that each Loan Participant shall be entitled to
the benefits of Sections 2.9 and 2.10 with respect to its participation in the
Commitments and the Loans outstanding from time to time as if it was a Lender;
PROVIDED that, in the case of Section 2.10 such Loan Participant shall have
complied with the requirements of said Section and PROVIDED, FURTHER, that no
Loan Participant shall be entitled to receive any greater amount pursuant to any
such Section than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Loan Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its lending or
investment business and in accordance with applicable law, at any time and from
time to time assign to any other Lender or any affiliate thereof or to an
additional bank or financial institution (an "ASSIGNEE") all or any part of its
rights and obligations under the Loan Documents pursuant to an Assignment and
Acceptance, substantially in the form of EXHIBIT F, executed by such Assignee,
such assigning Lender (and, in the case of an Assignee that is not then a Lender
or an affiliate thereof, by the Administrative Agent) and delivered to the
Administrative Agent for its acceptance and recording in the Register, PROVIDED
that if such assignment is of less than all of the rights and obligations of the
assigning Lender, the sum of the aggregate principal amount of the Loans, and
the aggregate amount of the unused Commitments (i) being assigned to such
additional bank or financial institution and (ii) remaining with the assigning
Lender are not, in each case, less than $5,000,000 (or such lesser amount as may
be agreed to by the Company and the Administrative Agent). Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder with a Commitment as set
forth therein, and (y) the assigning Lender thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under this Agreement, such assigning Lender shall cease to be a party hereto).
(d) The Administrative Agent, which for purposes of this
Section 9.6(d) only shall be deemed an agent of the Company, shall maintain at
the address of the Administrative Agent referred to in Section 9.2 a copy of
each Assignment and Acceptance delivered to it and a register (the "REGISTER")
for the recordation of the names and addresses of the Lenders and the
Commitments of, and principal amounts of the Loans owing to, each Lender from
time to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Company, the Administrative Agent and the Lenders, shall
treat each Person whose name is recorded in the Register as the owner of a Loan
or other obligation hereunder as the owner thereof for all purposes of the Loan
Documents.
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(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Assignee together with payment to the
Administrative Agent of a registration and processing fee of $3,500, the
Administrative Agent shall (i) promptly accept such Assignment and Acceptance
and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Lenders and the Company. On or prior to such effective
date, the assigning Lender shall surrender any outstanding Loan Notes held by it
all or a portion of which are being assigned, and the Company, at its own
expense, shall, upon a request to the Administrative Agent by the assigning
Lender or the Assignee, as applicable, execute and deliver to the Administrative
Agent (in exchange for outstanding Loan Notes of the assigning Lender, if any) a
new Loan Note to the order of such Assignee in an amount equal to the amount of
such Assignee's Loans after giving effect to such Assignment and Acceptance and,
if the assigning Lender has retained a Loan hereunder, a new Loan Note, to the
order of the assigning Lender in an amount equal to the amount of such Lender's
Loans after giving effect to such Assignment and Acceptance. Any such new Loan
Notes shall be dated the Closing Date and shall otherwise be in the form of the
Loan Note replaced thereby. Any Loan Notes surrendered by the assigning Lender
shall be returned by the Administrative Agent to the Company marked "CANCELLED."
(f) To the extent requested by any Lender, the Company shall
execute and deliver to such Lender an Original Initial Note dated the Closing
Date substantially in the form of Exhibit G-1 hereto to evidence the portion of
the Initial Loan made by such Lender and with appropriate insertions ("ORIGINAL
INITIAL NOTES").
(g) Unless converted to an Exchange Note and, to the extent
requested by any Lender, the Company shall execute and deliver to such Lender a
Rollover Term Note dated the Initial Maturity Date substantially in the form of
Exhibit G-2 hereto to evidence the Rollover Term Loan made on such date, in the
principal amount of the Initial Loans or Initial Loan Notes held by such Lender
on such date and with other appropriate insertions (collectively, the "ORIGINAL
ROLLOVER TERM NOTES"). On or after the Initial Maturity Date, on each Interest
Payment Date, to the extent requested by any Lender, the Company shall execute
and deliver to such Lender on such Interest Payment Date a Rollover Term Note
dated such Interest Payment Date substantially in the form of Exhibit G-2 hereto
in a principal amount equal to such Lender's pro rata portion of such PIK
Interest Amount and with other appropriate insertions (each a "SUBSEQUENT
ROLLOVER TERM NOTE" and, together with the Original Rollover Term Notes, the
"ROLLOVER TERM NOTES"). A Subsequent Rollover Term Note shall bear interest from
the date of its issuance at the same rate borne by all Rollover Term Notes at
the date of issuance and from time to time thereafter.
(h) The Company authorizes each Lender to disclose to any Loan
Participant or Assignee (each, a "TRANSFEREE") and any prospective Transferee
any and all financial information in such Lender's possession concerning the
Company and its Affiliates which has been delivered to such Lender by or on
behalf of the Company pursuant to this Agreement or which has been delivered to
such Lender by or on behalf of the Company in connection with such Lender's
credit evaluation of the Company and its Affiliates prior to becoming a party to
this Agreement.
(i) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section concerning assignments of Loans
and Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests, including, without limitation,
any pledge or assignment by a Lender of any Loan or Note to any Federal Reserve
Bank in accordance with applicable law, PROVIDED that no such assignment,
whether to a Federal Reserve Bank or other entity, shall release a Lender from
any of its obligations hereunder or substitute any such Federal Reserve Bank or
other entity for such Lender as a party hereto or permit an absolute assignment
to occur other than in accordance with such provisions of this Section.
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9.7 ADJUSTMENTS; SET-OFF. (a) If any Lender (a "BENEFITTED
LENDER") shall at any time receive any payment of all or part of its Loans or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Section 7(e), or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of such other Lender's Loans or interest thereon, such Benefitted Lender
shall purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loan, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Lenders;
PROVIDED, HOWEVER, that if all or any portion of such excess payment or benefits
is thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Company, any such notice being expressly waived by the Company to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Company hereunder to set-off and appropriate and apply against such amount any
and all deposits (general or special, time or demand, provisional or final), in
any currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Company. Each Lender agrees
promptly to notify the Company and the Administrative Agent after any such
set-off and application made by such Lender, PROVIDED that the failure to give
such notice shall not affect the validity of such set-off and application.
9.8 COUNTERPARTS. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set of the
copies of this Agreement signed by all the parties shall be lodged with the
Company and the Administrative Agent.
9.9 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without, to
the extent permitted by law, invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not, to the
extent permitted by law, invalidate or render unenforceable such provision in
any other jurisdiction.
9.10 INTEGRATION. This Agreement and the other Loan
Documents represent the agreement of the Company, the Administrative Agent and
the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to the subject matter hereof not expressly set
forth or referred to herein or in the other Loan Documents.
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9.11 GOVERNING LAW THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.12 SUBMISSION TO JURISDICTION; WAIVERS. The Company hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts
from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court or
forum and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Company, at the address specified in Section 9.2 or at
such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
9.13 ACKNOWLEDGEMENTS. The Company hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of the Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Company arising out of or in
connection with the Loan Documents, and the relationship between
Administrative Agent and Lenders, on one hand, and the Company, on the
other hand, in connection herewith or therewith is solely that of
creditor and debtor; and
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(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Company and the
Lenders.
9.14 CONFIDENTIALITY. Each of the Agents and the Lenders
agrees to keep confidential all non-public information provided to it by any
Loan Party pursuant to this Agreement that is designated by such Loan Party as
confidential; PROVIDED that nothing herein shall prevent any Agent or any Lender
from disclosing any such information (a) to the Arranger, any Agent, any other
Lender or any affiliate of any thereof, (b) to any Participant or Assignee
(each, a "TRANSFEREE") or prospective Transferee that agrees to comply with the
provisions of this Section, (c) to any of its employees, directors, agents,
attorneys, accountants and other professional advisors, (d) to any financial
institution that is a direct or indirect contractual counterparty in swap
agreements or such contractual counterparty's professional advisor (so long as
such contractual counterparty or professional advisor to such contractual
counterparty agrees to be bound by the provisions of this Section), (e) upon the
request or demand of any Governmental Authority having jurisdiction over it, (f)
in response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law, (g) in connection with
any litigation or similar proceeding, (h) that has been publicly disclosed other
than in breach of this Section, (i) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender's investment portfolio
in connection with ratings issued with respect to such Lender or (j) in
connection with the exercise of any remedy hereunder or under any other Loan
Document.
9.15 RELEASE OF GUARANTEE OBLIGATIONS.
(a) Notwithstanding anything to the contrary contained herein
or in any other Loan Document, upon request of the Company in
connection with any disposition of property permitted by the Loan
Documents, the Administrative Agent shall (without notice to, or vote
or consent of, any Lender, or any affiliate of any Lender) take such
actions as shall be required to release any guarantee obligations under
any Loan Document of any Person being disposed of in such disposition,
to the extent necessary to permit consummation of such disposition in
accordance with the Loan Documents.
(b) Notwithstanding anything to the contrary contained herein
or any other Loan Document, when all Obligations have been paid in
full, all Commitments have terminated or expired, upon request of the
Company, the Administrative Agent shall (without notice to, or vote or
consent of, any Lender, or any affiliate of any Lender) take such
actions as shall be required to release all guarantee obligations under
any Loan Document.
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(c) Any such release of guarantee obligations shall be deemed
subject to the provision that such guarantee obligations shall be
reinstated if after such release any portion of any payment in respect
of the Obligations guaranteed thereby shall be rescinded or must
otherwise be restored or returned upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Company or any
Guarantor, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, the
Company or any Guarantor or any substantial part of its property, or
otherwise, all as though such payment had not been made.
9.16 ACCOUNTING CHANGES. In the event that any "Accounting
Change" (as defined below) shall occur and such change results in a change in
the method of calculation of financial covenants, standards or terms in this
Agreement, then the Company may, by notice to the Agents, request that such
provisions of this Agreement be interpreted so as to equitably reflect such
Accounting Change with the desired result that the criteria for evaluating the
Company's financial condition shall be the same after such Accounting Change as
if such Accounting Change had not been made. Until such time as such notice
shall have been delivered by the Company, all financial covenants, standards and
terms in this Agreement shall continue to be calculated or construed as if such
Accounting Change had not occurred. "Accounting Change" refers to any change in
accounting principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board of the
American Institute of Certified Public Accountants, or, if applicable, the SEC.
9.17 WAIVERS OF JURY TRIAL THE COMPANY, THE AGENTS AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
ANC RENTAL CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Treasurer
▇▇▇▇▇▇ BROTHERS INC.,
as Arranger
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
▇▇▇▇▇▇ COMMERCIAL PAPER INC., as
Syndication Agent
By: /s/ G. ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: G. ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Signatory
▇▇▇▇▇▇ COMMERCIAL PAPER INC., as
Administrative Agent and Lender
By: /s/ G. ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: G. ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Signatory
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SCHEDULE 2.1 TO
SENIOR LOAN AGREEMENT
COMMITMENTS
LENDERS
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▇▇▇▇▇▇ Commercial Paper Inc. $225,000,000
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