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EXHIBIT 10.1
EXECUTION COPY
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$175,000,000
AMENDED AND RESTATED CREDIT 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
BANKERS TRUST COMPANY,
as Documentation Agent
and
CONGRESS FINANCIAL CORPORATION (FLORIDA),
as Administrative Agent
Dated as of June 30, 2000
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS ..........................................................................................1
1.1 Defined Terms.......................................................................................1
1.2 Other Definitional Provisions......................................................................28
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS......................................................................29
2.1 Revolving Credit Commitments.......................................................................29
2.2 Procedure for Revolving Credit Borrowing...........................................................30
2.3 Borrowing Base Calculations; Inclusion of Additional Assets in Borrowing Base......................31
2.4 Swing Line Commitment..............................................................................35
2.5 Procedure for Swing Line Borrowing; Refunding of Swing Line Loans..................................36
2.6 Repayment of Loans; Evidence of Debt...............................................................37
2.7 Commitment Fees, etc...............................................................................38
2.8 Termination or Reduction of Revolving Credit Commitments...........................................38
2.9 Optional Prepayments...............................................................................39
2.10 Mandatory Prepayments and Commitment Reductions...................................................39
2.11 Conversion and Continuation Options...............................................................40
2.12 Minimum Amounts and Maximum Number of Eurodollar Tranches.........................................41
2.13 Interest Rates and Payment Dates..................................................................41
2.14 Computation of Interest and Fees..................................................................42
2.15 Inability to Determine Interest Rate..............................................................42
2.16 Pro Rata Treatment and Payments...................................................................43
2.17 Requirements of Law...............................................................................44
2.18 Taxes.............................................................................................45
2.19 Indemnity.........................................................................................47
2.20 Illegality........................................................................................48
2.21 Change of Lending Office..........................................................................48
SECTION 3. LETTERS OF CREDIT....................................................................................48
3.1 L/C Commitment.....................................................................................48
3.2 Procedure for Issuance of Letter of Credit.........................................................49
3.3 Fees and Other Charges.............................................................................50
3.4 L/C Participations.................................................................................50
3.5 Reimbursement Obligation of the Borrower...........................................................51
3.6 Obligations Absolute...............................................................................52
3.7 Letter of Credit Payments..........................................................................53
3.8 Applications.......................................................................................53
3.9 Cash Collateral....................................................................................53
3.10 Letters of Credit Denominated in Available Foreign Currencies.....................................54
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SECTION 4. REPRESENTATIONS AND WARRANTIES.......................................................................55
4.1 Financial Condition................................................................................55
4.2 No Change..........................................................................................56
4.3 Corporate Existence; Compliance with Law...........................................................56
4.4 Corporate Power; Authorization; Enforceable Obligations............................................56
4.5 No Legal Bar.......................................................................................56
4.6 No Material Litigation.............................................................................57
4.7 No Default.........................................................................................57
4.8 Ownership of Property; Liens.......................................................................57
4.9 Intellectual Property..............................................................................57
4.10 Taxes.............................................................................................57
4.11 Federal Regulations...............................................................................58
4.12 Labor Matters.....................................................................................58
4.13 ERISA.............................................................................................58
4.14 Investment Company Act; Other Regulations.........................................................59
4.15 Subsidiaries......................................................................................59
4.16 Use of Proceeds...................................................................................59
4.17 Environmental Matters.............................................................................59
4.18 Accuracy of Information, etc......................................................................60
4.19 Security Documents................................................................................61
4.20 Solvency..........................................................................................61
4.21 Regulation H......................................................................................61
4.22 Customer and Trade Relations......................................................................62
4.23 Credit Card Agreements............................................................................62
SECTION 5. CONDITIONS PRECEDENT.................................................................................63
5.1 Conditions to Closing Date.........................................................................63
5.2 Conditions to Initial Extension of Credit..........................................................64
5.3 Conditions to Each Extension of Credit.............................................................68
SECTION 6. AFFIRMATIVE COVENANTS................................................................................69
6.1 Financial Statements...............................................................................69
6.2 Certificates; Other Information....................................................................70
6.3 Payment of Obligations.............................................................................71
6.4 Conduct of Business and Maintenance of Existence, etc..............................................71
6.5 Maintenance of Property; Insurance.................................................................71
6.6 Inspection of Property; Books and Records; Discussions.............................................71
6.7 Notices............................................................................................72
6.8 Environmental Laws.................................................................................72
6.9 Additional Collateral, etc.........................................................................73
6.10 Borrowing Base Certificate........................................................................74
6.11 Cash Management Systems...........................................................................76
6.12 Further Assurances................................................................................77
SECTION 7. NEGATIVE COVENANTS...................................................................................78
7.1 Financial Condition Covenants......................................................................78
7.2 Limitation on Indebtedness.........................................................................79
7.3 Limitation on Liens................................................................................82
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7.4 Limitation on Fundamental Changes..................................................................84
7.5 Limitation on Disposition of Property..............................................................84
7.6 Limitation on Restricted Payments..................................................................86
7.7 Limitation on Capital Expenditures.................................................................87
7.8 Limitation on Investments..........................................................................87
7.9 Limitation on Optional Payments and Modifications of Debt Instruments, etc.........................89
7.10 Limitation on Transactions with Affiliates........................................................89
7.11 Limitation on Sales and Leasebacks................................................................90
7.12 Limitation on Changes in Fiscal Periods...........................................................91
7.13 Limitation on Negative Pledge Clauses.............................................................91
7.14 Limitation on Restrictions on Subsidiary Distributions............................................91
7.15 Limitation on Lines of Business...................................................................92
7.16 Limitation on Amendments to Certain Instruments...................................................92
7.17 Subordinated Notes................................................................................92
7.18 Further Assurances................................................................................92
SECTION 8. EVENTS OF DEFAULT....................................................................................92
SECTION 9. THE AGENTS...........................................................................................96
9.1 Appointment........................................................................................96
9.2 Delegation of Duties...............................................................................96
9.3 Exculpatory Provisions.............................................................................96
9.4 Reliance by Agents.................................................................................96
9.5 Notice of Default..................................................................................97
9.6 Non-Reliance on Agents and Other Lenders...........................................................97
9.7 Indemnification....................................................................................98
9.8 Agent in Its Individual Capacity...................................................................98
9.9 Successor Administrative Agent.....................................................................98
9.10 Authorization to Release Liens and Guarantees.....................................................99
9.11 The Arranger......................................................................................99
9.12 Additional Loans..................................................................................99
9.13 Field Audit and Examination Reports; Disclaimer by Lenders.......................................100
9.14 Collateral Matters...............................................................................100
9.15 Agency for Perfection............................................................................101
SECTION 10. MISCELLANEOUS......................................................................................101
10.1 Amendments and Waivers...........................................................................101
10.2 Notices..........................................................................................103
10.3 No Waiver; Cumulative Remedies...................................................................104
10.4 Survival of Representations and Warranties.......................................................104
10.5 Payment of Expenses..............................................................................104
10.6 Successors and Assigns; Participations and Assignments...........................................105
10.7 Adjustments; Set-off.............................................................................108
10.8 Counterparts.....................................................................................108
10.9 Severability.....................................................................................108
10.10 Integration.....................................................................................109
10.11 GOVERNING LAW...................................................................................109
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10.12 Submission To Jurisdiction; Waivers.............................................................109
10.13 Acknowledgments.................................................................................109
10.14 Confidentiality.................................................................................110
10.15 Release of Collateral and Guarantee Obligations.................................................110
10.16 Accounting Changes..............................................................................111
10.17 Delivery of Lender Addenda......................................................................111
10.18 WAIVERS OF JURY TRIAL...........................................................................111
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ANNEXES:
A Pricing Grid
SCHEDULES:
1.1(a) Mortgaged Property (Spin-Off Date)
1.1(b) Credit Card Agreements
1.1(c) Existing Hedge Agreements
1.1(d) Borrowing Base Definitions
1.1(e) Consolidated EBITDA Adjustments
1.1(f) Excluded Indebtedness
2.2 Loan Account
4.4 Consents, Authorizations, Filings and Notices
4.6 Material Litigation
4.8 Material Real Property
4.15 Subsidiaries
4.19(a)-1 UCC Filing Jurisdictions
4.19(a)-2 UCC Financing Statements to Remain on File
4.19(a)-3 UCC Financing Statements to be Terminated
4.19(b) Mortgage Filing Jurisdictions (Spin-Off Date)
6.11 Investment, Securities, Deposit and Other Accounts
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
7.5(k) Permitted Dispositions
7.8 Existing Investments
7.18 Post-Closing Deliveries
EXHIBITS:
A Form of Compliance Certificate
B Form of Closing Certificate
C Form of Assignment and Acceptance
D-1 Form of Revolving Credit Note
D-2 Form of Swing Line Note
E Form of Exemption Certificate
F Form of Lender Addendum
G Form of Borrowing Notice
H Form of Borrowing Base Certificate
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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 30,
2000, among ANC RENTAL CORPORATION, a Delaware corporation (the "Borrower"), the
several banks and other financial institutions or entities from time to time
parties to this Agreement (the "Lenders"), ▇▇▇▇▇▇ BROTHERS INC., as advisor,
lead arranger and book manager (in such capacity, the "Arranger"), ▇▇▇▇▇▇
COMMERCIAL PAPER INC., as syndication agent (in such capacity, the "Syndication
Agent"), BANKERS TRUST COMPANY, as documentation agent (in such capacity, the
"Documentation Agent"), and CONGRESS FINANCIAL CORPORATION (FLORIDA), as
administrative agent and collateral agent (in such capacities, 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 Borrower;
WHEREAS, after giving effect to the Spin-Off, the Borrower
will need financing to provide for the repayment of certain existing
indebtedness of the Borrower and to provide for the Borrower's ongoing working
capital and general corporate needs, including the issuance of letters of
credit;
WHEREAS, to provide such financing, the Borrower entered into
a Credit Agreement, dated as of May 26, 2000 (the "Existing Credit Agreement"),
among the Borrower, the lenders from time to time parties thereto, ▇▇▇▇▇▇
Brothers Inc., as arranger, ▇▇▇▇▇▇ Commercial Paper Inc., as syndication agent,
and Congress Financial Corporation (Florida), as administrative agent;
WHEREAS, the parties to the Existing Credit Agreement have
agreed to amend and restate the Existing Credit Agreement in its entirety;
NOW, THEREFORE, in consideration of the premises and the
agreements hereinafter set forth, the parties hereto hereby agree to amend and
restate the Existing Credit Agreement in its entirety as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed
in this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"Accounts": as defined in Schedule 1.1(d).
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"Accounts Receivable Turnover": as defined in Schedule 1.1(d).
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": as defined in the preamble hereto.
"Affiliate": as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition, "control"
of a Person means the power, directly or indirectly, either to (a) vote
10% or more of the securities having ordinary voting power for the
election of directors (or persons performing similar functions) of such
Person or (b) direct or cause the direction of the management and
policies of such Person, whether by contract or otherwise; provided
that, for purposes of this Agreement (other than Section 7.10),
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.
"Aggregate Exposure": with respect to any Lender at any time,
an amount equal to the amount of such Lender's Revolving Credit
Commitment at such time or, if the Revolving Credit Commitments have
been terminated, the amount of such Lender's Revolving Extensions of
Credit then outstanding.
"Aggregate Exposure Percentage": with respect to any Lender at
any time, the ratio (expressed as a percentage) of such Lender's
Aggregate Exposure at such time to the sum of the Aggregate Exposures
of all Lenders at such time.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Applicable Margin": (a) 1.50%, in the case of Base Rate Loans
and (b) 2.75%, in the case of Eurodollar Loans; provided, that on and
after the first Adjustment Date occurring after the completion of two
full fiscal quarters of the Borrower after the Initial Funding Date,
the Applicable Margin with respect to each Type of Loan will be
determined pursuant to the Pricing Grid.
"Application": an application, in such form as the relevant
Issuing Lender may specify from time to time, requesting such Issuing
Lender to issue a Letter of Credit.
"Appraisal": (a) with respect to the Mortgaged Properties
described in Schedule 1.1(a), the most recent appraisal of such
Mortgaged Properties reasonably acceptable to the Agents, performed by
an appraiser reasonably acceptable to the Agents and delivered to the
Agents pursuant to Section 2.3 or 5.2 and (b) with respect to any other
parcel of real property becoming a Mortgaged Property after the
Spin-Off Date, the appraisal of such Mortgaged Property reasonably
acceptable to the Agents, performed by
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an appraiser reasonably acceptable to the Agents and delivered to the
Agents pursuant to Section 2.3; in the case of any appraisal delivered
pursuant to the foregoing clauses (a) and (b), the Agents shall be
authorized by the relevant appraisers to rely thereon.
"Appraised Value": with respect to any Mortgaged Property, at
any time, the appraised fair market value of such Mortgaged Property
determined in the Appraisal thereof.
"Arranger": as defined in the preamble hereto.
"Assignee": as defined in Section 10.6(c).
"Assignor": as defined in Section 10.6(c).
"Attributable Debt": in respect of a sale and leaseback
transaction, 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": Indebtedness of the Borrower
to AutoNation pursuant to the AutoNation Support Agreement or the
General Motors Letters of Credit Documentation and permitted by Section
7.2(i).
"AutoNation Support Agreement": the AutoNation Support
Agreement and the related Subordination Agreement to be entered into by
the Borrower and AutoNation on the Spin-Off Date, substantially in the
forms of such agreements delivered to the Agents on the Closing Date
pursuant to Section 5.1, as the same may be amended, supplemented or
otherwise modified in accordance with Section 7.9.
"Available Foreign Currencies": euro, Canadian Dollar, Swiss
Franc, Pound Sterling, Deutsche ▇▇▇▇ and any other available and
freely-convertible non-Dollar currency selected by the Borrower as the
currency in which a Letter of Credit issued hereunder is to be
denominated and approved by the Administrative Agent and the Issuing
Lender that is requested to issue such Letter of Credit.
"Available Revolving Credit Commitment": with respect to any
Lender at any time, an amount equal to the excess, if any, of (a) such
Lender's Revolving Credit Commitment then in effect over (b) such
Lender's Revolving Extensions of Credit then outstanding; provided,
that in calculating any Lender's Revolving Extensions of Credit for the
purpose of determining such Lender's Available Revolving Credit
Commitment
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pursuant to Section 2.7(a), the aggregate principal amount of Swing
Line Loans then outstanding shall be deemed to be zero.
"Base Rate": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 2 of 1%. For purposes hereof: "Prime Rate" shall mean the
rate of interest per annum publicly announced from time to time by the
Reference Lender as its prime or base rate in effect at its principal
office in Charlotte, North Carolina (the Prime Rate not being intended
to be the lowest rate of interest charged by the Reference Lender in
connection with extensions of credit to debtors); "Base CD Rate" shall
mean the sum of (a) the product of (i) the Three-Month Secondary CD
Rate and (ii) a fraction, the numerator of which is one and the
denominator of which is one minus the C/D Reserve Percentage and (b)
the C/D Assessment Rate; and "Three-Month Secondary CD Rate" shall
mean, for any day, the secondary market rate for three-month
certificates of deposit reported as being in effect on such day (or, if
such day shall not be a Business Day, the next preceding Business Day)
by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current
practices of the Board, be published in Federal Reserve Statistical
Release H.15(519) during the week following such day), or, if such rate
shall not be so reported on such day or such next preceding Business
Day, the average of the secondary market quotations for three-month
certificates of deposit of major money center banks in New York City
received at approximately 10:00 A.M., New York City time, on such day
(or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Reference Lender from three New York City
negotiable certificate of deposit dealers of recognized standing
selected by it. Any change in the Base Rate due to a change in the
Prime Rate, the Base CD Rate or the Federal Funds Effective Rate shall
be effective as of the opening of business on the effective day of such
change in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate, respectively.
"Base Rate Loans": Loans for which the applicable rate of
interest is based upon the Base Rate.
"Benefitted Lender": as defined in Section 10.7(a).
"Board": the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Borrower": as defined in the preamble hereto.
"Borrowing Base": as defined in Schedule 1.1(d).
"Borrowing Base Certificate": a borrowing base certificate
substantially in the form of Exhibit H, as the form of which may be
modified from time to time as agreed by
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the Borrower and the Administrative Agent; Borrowing Base Certificates
shall be delivered as required by Section 6.10 and may be delivered by
the Borrower at any other time.
"Borrowing Date": any Business Day specified by the Borrower
as a date on which the Borrower requests the relevant Lenders to make
Loans hereunder.
"Borrowing Notice": with respect to any request for borrowing
of Loans hereunder, a notice from the Borrower, substantially in the
form of, and containing the information prescribed by, Exhibit G,
delivered to the Administrative Agent.
"Business Day": (a) for all purposes other than as covered by
clause (b) below, 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 and (b) with respect to all notices and determinations in
connection with, and payments of principal and interest on, Eurodollar
Loans, any day which is a Business Day described in clause (a) and
which is also a day for trading by and between banks in Dollar deposits
in the interbank eurodollar market.
"Capital Expenditures": for any period, with respect to any
Person, the aggregate of all expenditures by such Person for the
acquisition or leasing (pursuant to a capital lease) of fixed or
capital assets or additions to equipment (including replacements,
capitalized repairs and improvements during such period) which are
required to be capitalized under GAAP on a balance sheet of such
Person, other than expenditures by such Person for the acquisition of
Vehicles with the proceeds of Vehicle Debt.
"Capital Lease Obligations": with respect to any Person, the
obligations of such Person to pay rent or other amounts under any lease
of (or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to
be classified and accounted for as capital leases on a balance sheet of
such Person under GAAP; and, for the purposes of this Agreement, the
amount of such obligations at any time shall be the capitalized amount
thereof at such time determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants, rights or options
to purchase any of the foregoing.
"Cash Collateral Account": as defined in Section 3.9(a).
"Cash Equivalents": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of
the United States, in each case maturing within one year from the date
of acquisition; (b) certificates of deposit, time deposits,
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eurodollar time deposits or bankers' acceptances having maturities of
one year or less from the date of acquisition and overnight bank
deposits (or with respect to foreign banks, similar instruments) issued
by any Lender or by any commercial bank having combined capital and
surplus of not less than $500,000,000 (or the foreign equivalent
thereof) and whose long-term debt is rated at the time of the
acquisition thereof at least A or the equivalent thereof by Standard &
Poor's Ratings Services ("S&P") or at least A or the equivalent thereof
by ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's") (or the foreign
equivalents thereof); (c) commercial paper of an issuer rated at least
A-2 by S&P or P-2 by Moody's, or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of commercial paper issuers
generally, and maturing within one year from the date of acquisition;
(d) repurchase obligations of any Lender or of any commercial bank
satisfying the requirements of clause (b) of this definition, having a
term of not more than 60 days with respect to securities described in
clauses (a) and (b); (e) 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, by 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 S&P or
A by Moody's; (f) securities with maturities of one year or less from
the date of acquisition backed by standby letters of credit issued by
any Lender or any commercial bank satisfying the requirements of clause
(b) of this definition; (g) shares of money market mutual or similar
funds which invest exclusively in assets satisfying the requirements of
clauses (a) through (f) of this definition; and (h) Investments with
maturities of one year or less made by Excluded Foreign Subsidiaries in
accordance with their normal investment practices for cash management,
provided that those instruments are rated at least P-2 by Moody's or
A-2 by S&P (or, in their absence, an equivalent rating from another
nationally recognized securities rating agency).
"C/D Assessment Rate": for any day, the annual assessment rate
in effect on such day that is payable by a member of the Bank Insurance
Fund maintained by the Federal Deposit Insurance Corporation (the
"FDIC") classified as well-capitalized and within supervisory subgroup
"B" (or a comparable successor assessment risk classification) within
the meaning of 12 C.F.R. ' 327.4 (or any successor provision) to the
FDIC (or any successor) for the FDIC's (or such successor's) insuring
time deposits at offices of such institution in the United States.
"C/D Reserve Percentage": for any day, that percentage
(expressed as a decimal) which is in effect on such day, as prescribed
by the Board, for determining the maximum reserve requirement for a
Depositary Institution (as defined in Regulation D of the Board as in
effect from time to time) in respect of new non-personal time deposits
in Dollars having a maturity of 30 days or more.
"Change of Control": the occurrence of any of the following:
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(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
Borrower and its Subsidiaries, taken as a whole, to any "person" (as
such term is defined in Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"));
(b) the adoption of a plan relating to the liquidation or
dissolution of the Borrower other than in a transaction permitted under
Section 7.4;
(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 more than (i) 35%, at any time on or
prior to the first anniversary of the Closing Date, or (ii) 50% at any
time after the first anniversary of the Closing Date, in each case of
the total of the Voting Stock of the Borrower (measured by voting power
rather than number of shares);
(d) the first day on which a majority of the members of the
board of directors of the Borrower are not Continuing Directors;
(e) the Borrower 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 Borrower, in
any such event pursuant to a transaction in which any of the
outstanding Voting Stock of the Borrower is converted into or exchanged
for cash, securities or other property, other than any such transaction
where the Voting Stock of the Borrower outstanding immediately prior to
such transaction is converted into or exchanged for Voting 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); or
(f) a Specified Change of Control.
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 5.1 shall have been satisfied, which date shall be not
later than July 31, 2000.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all Property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
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"Collection Account": the account of the Administrative Agent,
account number 322-020565 in the name of the Administrative Agent at
The Chase Manhattan Bank in New York, New York, or such other account
as the Administrative Agent shall specify.
"Commitment Fee Rate": 0.50% per annum; provided, that on and
after the first Adjustment Date occurring after the completion of two
full fiscal quarters of the Borrower after the Initial Funding Date,
the Commitment Fee Rate will be determined pursuant to the Pricing
Grid.
"Commitments": the collective reference to the Revolving
Credit Commitments, the L/C Commitment and the Swing Line Commitments.
"Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with the Borrower within the
meaning of Section 4001 of ERISA or is part of a group that includes
the Borrower and that is treated as a single employer under Section 414
of the Code.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer, substantially in the form of Exhibit A.
"Concentration Accounts": as defined in Section 6.11(b).
"Concentration Account Agreements": as defined in Section
6.11(c).
"Concentration Account Banks": as defined in Section 6.11(c).
"Confidential Information Memorandum": the Confidential
Information Memorandum (and all appendices thereto) to be furnished to
the initial Lenders in connection with the syndication of the Revolving
Credit Facility.
"Consolidated Adjusted EBITDA": for any period, Consolidated
EBITDA for such period, plus, without duplication, the following
adjustments (in the manner specified on Schedule 1.1(e)): (a) charges
incurred as a result of the implementation of the Borrower's 1999
restructuring plan, (b) non-recurring charges incurred as a result of
(i) asset impairments in respect of Vehicles and (ii) employee
retention payments, (c) estimated operating savings to be realized from
the implementation of the Borrower's 1999 restructuring plan assuming
such plan were completed as of January 1, 1999, (d) estimated reduction
of Consolidated EBITDA for the 1999 fiscal year of the Borrower due to
the implementation of the Odyssey computer operating system, (e)
increases in operating reserves and non-recurring accruals during the
1999 fiscal year of the Borrower and (f) any other extraordinary
charges resulting from the implementation of the Borrower's 1999
restructuring plan.
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15
"Consolidated Adjusted Funded Debt": on any date, the sum of
(a) Consolidated Funded Debt (excluding Vehicle Debt), plus (b) the
aggregate outstanding face amount of all Vehicle Letters of Credit on
such date.
"Consolidated Adjusted Funded Debt Ratio": as at the last day
of any period of four consecutive fiscal quarters of the Borrower, the
ratio of (a) Consolidated Adjusted Funded Debt on such day to (b)
Consolidated Adjusted EBITDA of the Borrower and its Subsidiaries for
such period.
"Consolidated EBITDA": of any Person for any period,
Consolidated Net Income of such Person and its Subsidiaries for such
period plus, without duplication and to the extent reflected as a
charge in the statement of such Consolidated Net Income for such
period, the sum of (a) income tax expense, (b) Consolidated Interest
Expense of such Person and its Subsidiaries, amortization or writeoff
of debt discount and debt issuance costs and commissions, discounts and
other fees and charges associated with Indebtedness, (c) depreciation
and amortization expense (excluding any such expense attributable to
Vehicle Debt), (d) amortization of intangibles (including, without
limitation, goodwill) and organization costs, (e) any extraordinary,
unusual or non-recurring expenses or losses (including, whether or not
otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, losses on sales of assets
outside of the ordinary course of business) and (f) any other non-cash
charges, and minus, to the extent included in the statement of such
Consolidated Net Income for such period, the sum of (x) interest income
(except to the extent deducted in determining Consolidated Interest
Expense), (y) any extraordinary, unusual or non-recurring income or
gains (including, whether or not otherwise includable as a separate
item in the statement of such Consolidated Net Income for such period,
gains on the sales of assets outside of the ordinary course of
business) and (z) any other non-cash income, all as determined on a
consolidated basis; provided, that for purposes of calculating
Consolidated EBITDA of the Borrower and its Subsidiaries for any
period, (i) the Consolidated EBITDA of any Person acquired by the
Borrower or its Subsidiaries during such period shall be included on a
pro forma basis for such period (assuming the consummation of such
acquisition and the incurrence or assumption of any Indebtedness in
connection therewith occurred on the first day of such period) if the
consolidated balance sheet of such acquired Person and its consolidated
Subsidiaries as at the end of the period preceding the acquisition of
such Person and the related consolidated statements of income and
stockholders' equity and of cash flows for the period in respect of
which Consolidated EBITDA is to be calculated (A) have been previously
provided to the Administrative Agent and the Lenders and (B) either (1)
have been reported on without a qualification arising out of the scope
of the audit by independent certified public accountants of nationally
recognized standing or (2) have been found reasonably acceptable to the
Administrative Agent and (ii) the Consolidated EBITDA of any Person
Disposed of by the Borrower or its Subsidiaries during such period
shall be excluded for such period (assuming the consummation of such
Disposition and the repayment of any Indebtedness in connection
therewith occurred on the first day of such period). For purposes of
determining the pro forma effect of any acquisitions and Dispositions
-9-
16
referred to in clauses (i) and (ii) of the foregoing proviso,
Consolidated EBITDA may be determined to give pro forma effect to
expense and cost reductions, provided that such calculations are done
on a basis that is permitted by Regulation S-X under the Securities Act
of 1933, as amended.
"Consolidated Fixed Charge Coverage Ratio": for any period,
the ratio of (a) Consolidated Adjusted EBITDA of the Borrower and its
Subsidiaries for such period, minus 50% of the aggregate amount
actually paid by the Borrower and its Subsidiaries in cash during such
period on account of Capital Expenditures to (b) Consolidated Fixed
Charges for such period.
"Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense of the Borrower and
its Subsidiaries for such period, (b) provision for cash income taxes
made by the Borrower or any of its Subsidiaries on a consolidated basis
in respect of such period and (c) scheduled payments made during such
period on account of principal of Indebtedness (other than Vehicle Debt
and the repayment in full of the Excluded Indebtedness) of the Borrower
or any of its Subsidiaries.
"Consolidated Funded Debt": on any date, the amount of Funded
Debt of the Borrower and its Subsidiaries on such date, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Interest Coverage Ratio": for any period, the
ratio of (a) Consolidated Adjusted EBITDA of the Borrower and its
Subsidiaries for such period to (b) Consolidated Interest Expense of
the Borrower and its Subsidiaries for such period.
"Consolidated Interest Expense": of any Person for any period,
total cash interest expense (including that attributable to Capital
Lease Obligations) of such Person and its Subsidiaries for such period
with respect to all outstanding Indebtedness (other than Vehicle Debt)
of such Person and its Subsidiaries (including, without limitation, all
commissions, discounts and other fees and charges owed by such Person
with respect to letters of credit and bankers' acceptance financing and
net costs of such Person under Hedge Agreements in respect of interest
rates to the extent such net costs are allocable to such period in
accordance with GAAP), other than any such cash interest expense in
respect of fees with respect to the Interim Loan Facility and the
Supplemental Credit Facility.
"Consolidated Net Income": of any Person for any period, the
consolidated net income (or loss) of such Person and its Subsidiaries
for such period, determined on a consolidated basis in accordance with
GAAP; provided, that in calculating Consolidated Net Income of the
Borrower and its consolidated Subsidiaries for any period, there shall
be excluded (a) the income (or deficit) of any Person accrued prior to
the date it becomes a Subsidiary of the Borrower or is merged into or
consolidated with the Borrower or any
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of its Subsidiaries, (b) the income (or deficit) of any Person (other
than a Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries has an ownership interest, except to the extent that any
such income is actually received by the Borrower or such Subsidiary in
the form of dividends or similar distributions and (c) the
undistributed earnings of any Subsidiary of the Borrower to the extent
that the declaration or payment of dividends or similar distributions
by such Subsidiary is not at the time permitted by the terms of any
Contractual Obligation (other than under any Loan Document) or
Requirement of Law applicable to such Subsidiary.
"Consolidated Total Debt": at any date, the aggregate
principal amount of all Indebtedness of the Borrower and its
Subsidiaries at such date, determined on a consolidated basis in
accordance with GAAP.
"Continuing Directors": the directors of the Borrower on the
Spin-Off Date, after giving effect to the Spin-Off and the other
transactions contemplated hereby, and each other director of the
Borrower, if, in each case, such other director's nomination for
election to the board of directors of the Borrower is recommended by at
least a majority of the then Continuing Directors.
"Continuing Obligations": means all obligations of the
Borrower and its Subsidiaries, currently existing or entered into in
the future, including reimbursement, indemnification and loan
obligations, to AutoNation and any of its subsidiaries, as a result of
payments made by AutoNation and any of its subsidiaries under (a) 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, (b) the Loan Note Instrument, dated
October 15, 1997, by Republic Industries (UK) PLC, with respect to
Floating Rate Guaranteed Unsecured Loan Notes 2003, (c) 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, (d) the Motor
Vehicle Lease Agreement, dated as of July 1997, among 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 (e) 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.
"Control Investment Affiliate": as to any Person, any other
Person that (a) directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person and (b) is organized
by such Person primarily for the purpose of making equity or debt
investments in one or more companies. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, to
direct or cause
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the direction of the management and policies of such Person, whether by
contract or otherwise.
"Credit Card Acknowledgments": as defined in Schedule 1.1(d).
"Credit Card Agreements": as defined in Schedule 1.1(d).
"Credit Card Issuer": as defined in Schedule 1.1(d).
"Credit Card Processor": as defined in Schedule 1.1(d).
"Default": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Derivatives Counterparty": as defined in Section 7.6.
"Dilution": as defined in Schedule 1.1(d).
"Disposition": with respect to any Property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other
disposition thereof; and the terms "Dispose" and "Disposed of" shall
have correlative meanings.
"Distribution Documentation": collectively, (a) the Form 10
Registration Statement, (b) the Separation and Distribution Agreement,
(c) the Transitional Services Agreement, (d) the Tax Sharing Agreement,
and all schedules, exhibits, annexes and amendments thereto and all
material side letters and agreements affecting the terms thereof or
entered into in connection therewith, in each case, as amended,
supplemented or otherwise modified from time to time.
"Documentation Agent": as defined in the preamble hereto.
"Dollars" and "$": lawful currency of the United States.
"Domestic Subsidiary": any Subsidiary of the Borrower
organized under the laws of the United States, any state thereof or the
District of Columbia.
"Eligible Accounts": as defined in Schedule 1.1(d).
"Eligible Real Property": any parcel of real property owned by
the Borrower or any Subsidiary Guarantor (a) which has been determined
by the Agents, subject to Section 2.3(b), to be eligible for inclusion
in the Borrowing Base and (b) in respect of which the conditions set
forth in Section 2.3(d) have been satisfied.
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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 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.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day, the
aggregate (without duplication) of the maximum rates (expressed as a
decimal fraction) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and
emergency reserves) under any regulations of the Board or other
Governmental Authority having jurisdiction with respect thereto dealing
with reserve requirements prescribed for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of
the Board) maintained by a member bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period, the rate per annum determined on the basis of the rate
for deposits in Dollars for a period equal to such Interest Period
commencing on the first day of such Interest Period appearing on Page
3750 of the Telerate screen (rounded upwards, if necessary, to the next
one-tenth (1/10) of one (1%) percent) as of 11:00 A.M., London time,
two Business Days prior to the beginning of such Interest Period. In
the event that such rate does not appear on Page 3750 of the Telerate
screen (or otherwise on such screen), the "Eurodollar Base Rate" for
purposes of this definition shall be determined by reference to such
other comparable publicly available service for displaying eurodollar
rates as may be selected by the Administrative Agent.
"Eurodollar Loans": Loans for which the applicable rate of
interest is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period, a rate per annum determined for such day in accordance
with the following formula (rounded upward to the nearest 1/100th of
1%):
Eurodollar Base Rate
---------------------------------
1.00 B Eurocurrency Reserve Requirements
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20
"Eurodollar Tranche": the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all of which
begin on the same date and end on the same later date (whether or not
such Loans shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 8,
provided, that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
"Excess Availability": the amount, determined by the
Administrative Agent, calculated at any time, equal to: the lesser of
(a) the Borrowing Base and (b) the Total Revolving Credit Commitments,
minus the amount of all then outstanding and unpaid Obligations.
"Excluded Foreign Subsidiaries": any Foreign Subsidiary in
respect of which (a) no election has been made by the Borrower to treat
such Foreign Subsidiary as a branch for United States tax purposes or
(b) total net assets of such Foreign Subsidiary (as shown on the most
recent balance sheet of such Foreign Subsidiary delivered to the
Agents) aggregates an equivalent of $5,000,000 or less. Any Foreign
Subsidiary which is owned by another Subsidiary that constitutes an
Excluded Foreign Subsidiary pursuant to clause (a) of the foregoing
sentence shall be an Excluded Foreign Subsidiary.
"Excluded Indebtedness": Indebtedness of the Borrower and its
Subsidiaries set forth on Schedule 1.1(f).
"Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds
brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Reference Lender from
three federal funds brokers of recognized standing selected by it.
"Finance Companies": the collective reference to Republic
Industries Funding Corp., National Car Rental Financing Corp., National
Car Rental Financing LP, Car Temps Financing, LLC, Snappy Fleet Finance
Corp., Snappy Funding Corp., Snappy Funding, LP, Alamo Financing, LP,
Alamo Financing, LLC, ARG Funding Corporation, ANC Financial
Corporation, ANC Financial GP Corporation, Car Temps Financing, LP,
Spirit Leasing, Inc. and any of their respective successors and any
finance Subsidiary of the Borrower established in the future.
"First Union": First Union National Bank.
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21
"Foreign Subsidiary": any Subsidiary of the Borrower that is
(a) not a Domestic Subsidiary or (b) a Domestic Subsidiary whose only
asset is the Capital Stock of one or more Foreign Subsidiaries.
"Form 10 Registration Statement": the Borrower's Registration
Statement on Form 10 (Registration No. 1-15421) as filed with the SEC,
as amended through Amendment No. 6 filed with the SEC on May 23, 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 Borrower (e.g., FQ2
2000 means the second fiscal quarter of the Borrower's 2000 fiscal
year, which fiscal quarter ends June 30, 2000).
"Funded Debt": with respect to any Person, all Indebtedness of
such Person of the types described in clauses (a) through (e) of the
definition of Indebtedness in this Section.
"Funding Office": the office specified from time to time by
the Administrative Agent as its funding office by notice to the
Borrower and the Lenders.
"GAAP": generally accepted accounting principles in the United
States of America 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 trustee.
"General Motors Letter of Credit Documentation": collectively,
the General Motors Letter of Credit, the AutoNation Support Agreement,
and all schedules, exhibits, annexes and amendments thereto and all
material side letters and agreements affecting the terms thereof or
entered into in connection therewith, in each case, in form and
substance reasonably satisfactory to the Agents as amended,
supplemented or otherwise modified from time to time in accordance with
Section 7.9.
"GM": as defined in Schedule 1.1(d).
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement to be executed and delivered by the Borrower and
each Subsidiary Guarantor, in form and substance reasonably
satisfactory to the Administrative Agent, as the same may be amended,
supplemented or otherwise modified from time to time.
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"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit), if to induce the creation of such obligation of such other
Person the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case guaranteeing or
in effect guaranteeing any Indebtedness, leases, dividends or other
obligations (the "primary obligations") of any other third Person (the
"primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing
person, whether or not contingent, (i) to purchase any such primary
obligation or any Property constituting direct or indirect security
therefor, (ii) to advance or supply funds (A) for the purchase or
payment of any such primary obligation or (B) to maintain working
capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii) to
purchase Property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person 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 Obligation 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 Obligation, 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 Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as
determined by the Borrower in good faith.
"Hedge Agreements": all interest rate or currency swaps, caps
or collar agreements, foreign exchange agreements, commodity contracts
or similar arrangements entered into by the Borrower or its
Subsidiaries providing for protection against fluctuations in interest
rates, currency exchange rates, commodity prices or the exchange of
nominal interest obligations, either generally or under specific
contingencies.
"Inactive Subsidiary": each Subsidiary of the Borrower 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": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money,
(b) all obligations of such Person for the deferred purchase price of
Property or services (other than trade payables incurred in the
ordinary course of such Person's business), (c) all obligations of such
Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all indebtedness
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created or arising under any conditional sale or other title retention
agreement with respect to Property acquired by such Person (even though
the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such
Property), (e) all Capital Lease Obligations of such Person, (f) all
obligations of such Person, contingent or otherwise, as an account
party or applicant under acceptance, letter of credit or similar
facilities, (g) all obligations of such Person, contingent or
otherwise, to purchase, redeem, retire or otherwise acquire for value
any Capital Stock of such Person, (h) all Guarantee Obligations of such
Person in respect of obligations of the kind referred to in clauses (a)
through (g) above; (i) all obligations of the kind referred to in
clauses (a) through (h) above secured by (or for which the holder of
such obligation has an existing right, contingent or otherwise, to be
secured by) any Lien on Property (including, without limitation,
accounts and contract rights) owned by such Person, whether or not such
Person has assumed or become liable for the payment of such obligation
and (j) for the purposes of Section 8(e) only, all obligations of such
Person in respect of Hedge Agreements.
"Indemnified Liabilities": as defined in Section 10.5.
"Indemnitee": as defined in Section 10.5.
"Initial Funding Date": the date on which the conditions
precedent set forth in Section 5.2 shall have been satisfied and the
initial extensions of credit under this Agreement shall have been made.
"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": International Automotive Group
Insurance Company, Ltd. and its successors and any other captive
insurance Subsidiary of the Borrower 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, without limitation, 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.
"Intercreditor Agreement": the Intercreditor Agreement to be
executed by the Administrative Agent and the administrative agent under
the Supplemental Credit
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Facility, in form and substance reasonably satisfactory to the Agents,
as the same may be amended, supplemented or otherwise modified from
time to time.
"Interest Payment Date": (a) as to any Base Rate Loan, the
last day of each March, June, September and December to occur while
such Loan is outstanding and the final maturity date of such Loan, (b)
as to any Eurodollar Loan having an Interest Period of three months or
shorter, the last day of such Interest Period, (c) as to any Eurodollar
Loan having an Interest Period longer than three months, each day that
is three months, or a whole multiple thereof, after the first day of
such Interest Period and the last day of such Interest Period, (d) as
to any Eurodollar Loan, the date of any repayment or prepayment made in
respect thereof and (e) the date on which the Revolving Credit
Commitments shall terminate.
"Interest Period": as to any Eurodollar Loan, (a) initially,
the period commencing on the borrowing or conversion date, as the case
may be, with respect to such Eurodollar Loan and ending one, two, three
or six months thereafter, as selected by the Borrower in its notice of
borrowing or notice of conversion, as the case may be, given with
respect thereto; and (b) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such Eurodollar
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower by irrevocable notice to the Administrative Agent not
less than three Business Days prior to the last day of the then current
Interest Period with respect thereto; provided, that, all of the
foregoing provisions relating to Interest Periods are subject to the
following:
(i) if any Interest Period would otherwise end on a
day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period
shall end on the immediately preceding Business Day;
(ii) any Interest Period that would otherwise extend
beyond the Revolving Credit Termination Date shall end on the
Revolving Credit Termination Date; and
(iii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest
Period.
"Interim Facility Loan Agreement": the Amended and Restated
Senior Loan Agreement, dated as of June 30, 2000, entered into by the
Borrower in connection with the Interim Loan Facility, as the same may
be amended, supplemented or otherwise modified from time to time in
accordance with Section 7.9.
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"Interim Facility Loan Documentation": the Interim Facility
Loan Agreement, together with all instruments and other agreements
entered into by the Borrower and certain of its Subsidiaries in
connection therewith, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with Section 7.9.
"Interim Loan Facility": the $225,000,000 credit facility to
be provided to the Borrower pursuant to the Interim Facility Loan
Documentation, and any refinancings, refundings, renewals or extensions
thereof (without any increase in the principal amount thereof or any
shortening of the maturity of any principal amount thereof), including,
without limitation, any such refinancing with the issuance of senior
notes (which may be sold in a public offering or private placement) or
other refinancing, in each case on terms no less favorable to the Loan
Parties and the Lenders than the terms under the Interim Facility Loan
Agreement.
"Investments": as defined in Section 7.8.
"Issuing Lender": initially, First Union, and any Lender or
other financial institution from time to time designated by the
Borrower as an Issuing Lender with the consent of such Lender and the
Agents.
"L/C Commitment": $150,000,000.
"L/C Fee Payment Date": the last day of each March, June,
September and December and the last day of the Revolving Credit
Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum in
Dollars (determined, with respect to any obligation denominated in any
Available Foreign Currency, at the U.S. Dollar Equivalent of such
obligation) of (a) the aggregate then undrawn and unexpired amount of
the then outstanding Letters of Credit, and (b) the aggregate amount of
drawings under Letters of Credit that have not then been reimbursed
pursuant to Section 3.5.
"L/C Participants": with respect to any Letter of Credit, the
collective reference to all the Lenders other than the Issuing Lender
that issued such Letter of Credit.
"▇▇▇▇▇▇ Entity": any of ▇▇▇▇▇▇ Commercial Paper Inc. or any of
its affiliates (including Syndicated Loan Funding Trust).
"Lender Addendum": with respect to any initial Lender, a
Lender Addendum, substantially in the form of Exhibit F, to be executed
and delivered by such Lender on the Initial Funding Date as provided in
Section 10.17.
"Lenders": as defined in the preamble hereto.
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"Letters of Credit": as defined in Section 3.1(a).
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any capital lease having substantially the same
economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": this Agreement, the Security Documents, the
Syndication Letter Agreement, the Applications, the Intercreditor
Agreement and the Notes.
"Loan Parties": the Borrower and each Subsidiary of the
Borrower that is a party to a Loan Document.
"Material Adverse Effect": a material adverse effect on (a)
the business, assets, property, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole; (b)
the validity or enforceability of this Agreement or any of the other
Loan Documents or the rights or remedies of the Agents or the Lenders
hereunder or thereunder; (c) the legality, validity, enforceability,
perfection or priority of the Liens of the Administrative Agent on the
Collateral taken as a whole; (d) the Collateral or the value of the
Collateral taken as a whole; or (e) the ability of the Borrower to
repay the Obligations or perform its obligations under this Agreement
or any of the other Loan Documents.
"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.
"Mortgaged Properties": (a) the real properties listed on
Schedule 1.1(a), as to which the Administrative Agent for the benefit
of the Lenders shall be granted a Lien pursuant to one or more
Mortgages and (b) any other parcel of real property owned by the
Borrower or any Subsidiary Guarantor which is acceptable to the Agents
and as to which the Administrative Agent for the benefit of the Lenders
shall be granted a Lien pursuant to a Mortgage.
"Mortgages": each of the mortgages and deeds of trust to be
made by any Loan Party in favor of, or for the benefit of, the
Administrative Agent for the benefit of the
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Lenders, in the form and substance reasonably satisfactory to the
Agents, as the same may be amended, supplemented or otherwise modified
from time to time.
"Multiemployer Plan": a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Non-Excluded Taxes": as defined in Section 2.18(a).
"Non-U.S. Lender": as defined in Section 2.18(d).
"Note": any promissory note evidencing any Loan.
"Obligations": the unpaid principal of and interest on
(including, without limitation, interest, fees and expenses accruing
after the maturity of the Loans and Reimbursement Obligations and
interest, fees and expenses accruing after the filing of any petition
in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest, fees and expenses is allowed in
such proceeding) the Loans, the Reimbursement Obligations and all other
obligations and liabilities of the Borrower to the Administrative Agent
or to any Lender (or, in the case of Specified Hedge Agreements, any
affiliate of any Lender or any other counterparty to such Specified
Hedge Agreement), whether direct or indirect, absolute or contingent,
due or to become due, or now existing or hereafter incurred, which may
arise under, out of, or in connection with, this Agreement, any other
Loan Document, the Letters of Credit, any Specified Hedge Agreement or
any other document made, delivered or given in connection herewith or
therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without
limitation, all fees, charges and disbursements of counsel to any Agent
or to any Lender that are required to be paid by the Borrower pursuant
hereto) or otherwise; provided, that (i) obligations of the Borrower or
any Subsidiary under any Specified Hedge Agreement shall be secured and
guaranteed pursuant to the Security Documents only to the extent that,
and for so long as, the other Obligations are so secured and
guaranteed, (ii) any release of Collateral or Subsidiary Guarantors
effected in the manner permitted by this Agreement shall not require
the consent of holders of obligations under Specified Hedge Agreements
and (iii) the Administrative Agent shall establish and maintain
Reserves in respect of Specified Hedge Agreements in accordance with
the procedures set forth in Section 2.3(e).
"Other Taxes": 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 of, or otherwise with respect to,
this Agreement or any other Loan Document.
"Participant": as defined in Section 10.6(b).
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"Payment Office": the office specified from time to time by
the Administrative Agent as its payment office by notice to the
Borrower and the Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Acquisition": as defined in Section 7.8(i).
"Permitted Joint Venture": as defined in Section 7.8(k).
"Permitted Stock Acquisition": as defined in Section 7.8(j).
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan that
is covered by ERISA and in respect of which the Borrower 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.
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
"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.
"Reference Lender": First Union, together with its successors
and assigns.
"Refunded Swing Line Loans": as defined in Section 2.5(b).
"Refunding Date": as defined in Section 2.5(c).
"Register": as defined in Section 10.6(d).
"Regulation H": Regulation H of the Board as in effect from
time to time.
"Regulation U": Regulation U of the Board as in effect from
time to time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse each Issuing Lender pursuant to Section 3.5 for amounts drawn
under Letters of Credit issued by such Issuing Lender.
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"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, 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, the holders of more than 50%
of the Total Revolving Credit Commitments then in effect or, if the
Revolving Credit Commitments have been terminated, the Total Revolving
Extensions of Credit then outstanding.
"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 law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its Property or to which such Person or any of its Property is
subject.
"Reserves": as defined in Schedule 1.1(d).
"Responsible Officer": the chief executive officer, president,
chief financial officer or treasurer of the Borrower, but in any event,
with respect to financial matters, the chief financial officer or
treasurer of the Borrower.
"Restricted Payments": as defined in Section 7.6.
"Revolving Credit Commitment": as to any Lender, the
obligation of such Lender, if any, to make Revolving Credit Loans and
participate in Swing Line Loans and Letters of Credit, in an aggregate
principal and/or face amount not to exceed the amount set forth under
the heading "Revolving Credit Commitment" opposite such Lender's name
on Schedule 1 to the Lender Addendum delivered by such Lender, or, as
the case may be, in the Assignment and Acceptance pursuant to which
such Lender became a party hereto, as the same may be changed from time
to time pursuant to the terms hereof. The original aggregate amount of
the Total Revolving Credit Commitments is $175,000,000.
"Revolving Credit Commitment Period": the period from and
including the Closing Date to the Revolving Credit Termination Date.
"Revolving Credit Facility": the Revolving Credit Commitments
and the extensions of credit made thereunder.
"Revolving Credit Loans": as defined in Section 2.1(a).
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"Revolving Credit Note": as defined in Section 2.6(e).
"Revolving Credit Percentage": as to any Lender at any time,
the percentage which such Lender's Revolving Credit Commitment then
constitutes of the Total Revolving Credit Commitments (or, at any time
after the Revolving Credit Commitments shall have expired or
terminated, the percentage which the aggregate amount of such Lender's
Revolving Extensions of Credit then outstanding constitutes the amount
of the Total Revolving Extensions of Credit then outstanding).
"Revolving Credit Termination Date": May 31, 2003.
"Revolving Extensions of Credit": as to any Lender at any
time, an amount equal to the sum of (a) the aggregate principal amount
of all Revolving Credit Loans made by such Lender then outstanding, (b)
such Lender's Revolving Credit Percentage of the L/C Obligations then
outstanding and (c) such Lender's Revolving Credit Percentage of the
aggregate principal amount of Swing Line Loans then outstanding.
"Risk Management Subsidiary": each of Post Retirement
Liability Management, Inc., a Florida corporation, and Rental Liability
Management, Inc., a Florida corporation.
"SEC": the Securities and Exchange Commission (or successors
thereto or an analogous Governmental Authority).
"Secured Parties": as defined in the Guarantee and Collateral
Agreement.
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Mortgages, any Concentration
Account Agreements and all other security documents hereafter delivered
to the Administrative Agent granting a Lien on any Property of any
Person to secure the obligations and liabilities of any Loan Party
under any Loan Document.
"Separation and Distribution Agreement": the Separation and
Distribution Agreement to be entered into by the Borrower 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 5.1, as the same may be amended, supplemented or otherwise
modified in accordance with Section 7.16.
"Single Employer Plan": any Plan that 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
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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.
"Specified Change of Control": a "Change of Control," or like
event, as defined in any indenture or other agreement pursuant to which
any securities are issued to refinance the Interim Facility Loan
Agreement.
"Specified Hedge Agreement": any Hedge Agreement conforming to
the following criteria: (a) the parties to such Hedge Agreement are the
Borrower or any of its Subsidiaries, on the one hand, and any Lender or
any affiliate thereof, as counterparty, on the other hand; (b) such
Hedge Agreement is (i) existing on the date hereof and listed in
Schedule 1.1(c) or (ii) entered into by the Borrower or any of its
Subsidiaries after the date hereof and permitted under Section 7.2; and
the Administrative Agent shall have received, in respect of such Hedge
Agreement, (i) written notice thereof from the Borrower and (ii) an
acknowledgment and consent, in form and substance reasonably
satisfactory to the Administrative Agent, pursuant to which (A) the
counterparty to such Hedge Agreement and the Loan Party which is a
party thereto acknowledge that the Administrative Agent has a security
interest in the rights of such Loan Party under such Hedge Agreement,
(B) such Loan Party and counterparty agree that, upon written notice
from the Administrative Agent that an Event of Default has occurred and
is continuing, such counterparty will pay all amounts payable by such
counterparty under such Hedge Agreement directly to the Administrative
Agent and (C) such counterparty shall provide such other undertakings
as the Administrative Agent may reasonably request.
"Spin-Off": as defined in the recitals hereto.
"Spin-Off Date": the date, on or before July 31, 2000, on
which the Spin-Off occurs and the conditions set forth in Section 5.2
are satisfied.
"Subordinated Notes": (a) the unsecured intercompany
promissory notes, in form and substance reasonably satisfactory to the
Agents, initially payable by Alamo Rent-A-Car, LLC to the Risk
Management Subsidiaries in an aggregate principal amount of
approximately $260,000,000, which shall be assumed by ANC Financial, LP
in
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accordance with Section 7.17, the payment of which shall be
subordinated to the Obligations and which, in any event, shall not
permit (i) any payment of principal thereof prior to the date which is
91 days after repayment in full of all amounts outstanding hereunder
and termination of all Commitments and (ii) the payment of interest
thereon after the occurrence and during the continuance of an Event of
Default and (b) the unsecured intercompany revolving credit agreements,
in form and substance reasonably satisfactory to the Agents, between
each Risk Management Subsidiary, as borrower, and initially Alamo
Rent-A-Car, LLC, as lender, which shall be assigned to ANC Financial,
LP in accordance with Section 7.17 and the loans under which shall be
subordinated to the Obligations.
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or
other ownership interests having ordinary voting power (other than
stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation, partnership
or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise qualified,
all references to a "Subsidiary" or to "Subsidiaries" in this Agreement
shall refer to a Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower other
than any Excluded Foreign Subsidiary, any Inactive Subsidiary, any
Finance Company, any Insurance Company and, as of the Initial Funding
Date, any Risk Management Subsidiary.
"Supplemental Credit Facility": the $40,000,000 credit
facility provided to the Borrower pursuant to the Supplemental Credit
Facility Documentation, and any refinancings, renewals, or extensions
thereof (without any increase in the principal amount thereof or any
shortening of the maturity of any principal amount thereof).
"Supplemental Credit Facility Agreement": the Amended and
Restated Credit Agreement, dated as of June 30, 2000, entered into by
the Borrower in connection with the Supplemental Credit Facility, as
the same may be amended, supplemented or otherwise modified from time
to time.
"Supplemental Credit Facility Documentation": the
Supplemental Credit Facility Agreement, together with all instruments
and other agreements entered into by the Borrower and certain of its
Subsidiaries in connection therewith, as the same may be amended,
supplemented or otherwise modified from time to time.
"Supplemental Credit Facility Termination Date": the Revolving
Credit Termination Date under and as defined in the Supplemental Credit
Facility Agreement.
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"Swing Line Commitment": the obligation of the Swing Line
Lender to make Swing Line Loans pursuant to Section 2.4 in an aggregate
principal amount at any one time outstanding not to exceed $20,000,000.
"Swing Line Lender": Congress Financial Corporation (Florida),
in its capacity as the lender of Swing Line Loans.
"Swing Line Loans": as defined in Section 2.4(a).
"Swing Line Note": as defined in Section 2.6(e).
"Swing Line Participation Amount": as defined in Section
2.5(c).
"Syndication Date": the date on which the Syndication Agent
completes the syndication of the Revolving Credit Facility and the
entities selected in such syndication process become parties to this
Agreement.
"Syndication Letter Agreement": the letter agreement, dated as
of May 26, 2000 between the Borrower and the Syndication Agent and the
Arranger relating to the syndication of the Revolving Credit Facility.
"Tax Refund": as defined in Section 2.18(f).
"Tax Sharing Agreement": the Tax Sharing Agreement to be
entered into by the Borrower 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 5.1, as the same may be
amended, supplemented or otherwise modified in accordance with Section
7.16.
"Total Revolving Credit Commitments": at any time, the
aggregate amount of the Revolving Credit Commitments then in effect.
"Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the Lenders
outstanding at such time.
"Total Supplemental Extensions of Credit": at any time, the
aggregate principal amount of all loans outstanding under the
Supplemental Credit Facility at such time.
"Transferee": as defined in Section 10.14.
"Transitional Services Agreement": the Transitional Services
Agreement to be entered into by the Borrower and AutoNation on or
before the Spin-Off Date, substantially in the form of such agreement
delivered to the Agents on the Closing Date
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pursuant to Section 5.1, as the same may be amended, supplemented or
otherwise modified in accordance with Section 7.16.
"Type": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"United States": the United States of America.
"U.S. Dollar Equivalent": on any date with respect to an
amount denominated in any currency other than Dollars, the equivalent
on such date in Dollars of such amount determined by the Administrative
Agent by reference to such publicly-available sources as the
Administrative Agent shall reasonably select.
"Vehicle": any motor vehicle used by the Borrower and its
Subsidiaries in the ordinary course of their motor vehicle rental
businesses.
"Vehicle Debt": Indebtedness of the Subsidiaries of the
Borrower incurred to finance, refinance or lease, directly or
indirectly, Vehicles (but only to the extent actually used to finance,
refinance or lease Vehicles).
"Vehicle Letters of Credit": letters of credit issued for the
account of any Subsidiary of the Borrower to ensure the repayment of
Vehicle Debt.
"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.
"Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying
shares required by law) is owned by such Person directly and/or through
other Wholly Owned Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrower 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.
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(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 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
7.1 and the calculation of the Consolidated Adjusted Funded Debt Ratio for
purposes of determining the Applicable Margin 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 COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, the Lenders severally agree to make revolving credit loans
("Revolving Credit Loans") to the Borrower from time to time during the
Revolving Credit Commitment Period in an aggregate principal amount at any one
time outstanding which, when added to the Total Supplemental Extensions of
Credit, does not exceed for all Lenders in the aggregate the Total Revolving
Credit Commitments; provided, that after giving effect to the making of each
Revolving Credit Loan and the immediate application of the proceeds thereof, (i)
the Total Revolving Extensions of Credit shall not exceed the Borrowing Base at
such time and (ii) the Revolving Extensions of Credit of any Lender shall not
exceed the Revolving Credit Commitment of such Lender. During the Revolving
Credit Commitment Period the Borrower may use the Revolving Credit Commitments
by borrowing, prepaying the Revolving Credit Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof. The
Revolving Credit Loans may from time to time be Eurodollar Loans or Base Rate
Loans, as determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.2 and 2.11; provided, that no Revolving Credit Loan
shall be made as a Eurodollar Loan after the day that is one month prior to the
Revolving Credit Termination Date.
(b) The Borrower shall repay all outstanding Revolving Credit
Loans on the Revolving Credit Termination Date.
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2.2 Procedure for Revolving Credit Borrowing. (a) The Borrower
may borrow under the Revolving Credit Commitments on any Business Day during the
Revolving Credit Commitment Period, provided, that the Borrower shall deliver to
the Administrative Agent a Borrowing Notice (which Borrowing Notice must be
received by the Administrative Agent prior to 1:00 P.M., New York City time, (a)
three Business Days prior to the requested Borrowing Date, in the case of
Eurodollar Loans, or (b) one Business Day prior to the requested Borrowing Date,
in the case of Base Rate Loans). Any Revolving Credit Loans made on the Spin-Off
Date shall initially be Base Rate Loans. Each borrowing of Revolving Credit
Loans under the Revolving Credit Commitments shall be in an amount equal to (x)
in the case of Base Rate Loans, $1,000,000 or a whole multiple thereof (or, if
the then aggregate Available Revolving Credit Commitments are less than
$1,000,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$5,000,000 or a whole multiple of $1,000,000 in excess thereof; provided, that
the Swing Line Lender may request, on behalf of the Borrower, borrowings of Base
Rate Loans under the Revolving Credit Commitments in other amounts pursuant to
Section 2.4. Upon receipt of any such Borrowing Notice from the Borrower, the
Administrative Agent shall promptly notify each Lender thereof. Each Lender will
make its Revolving Credit Percentage of the amount of each borrowing of
Revolving Credit Loans available to the Administrative Agent for the account of
the Borrower at the Funding Office prior to 1:00 P.M., New York City time, on
the Borrowing Date requested by the Borrower in funds immediately available to
the Administrative Agent. Such borrowing will then be made available to the
Borrower by the Administrative Agent in like funds as received by the
Administrative Agent.
(b) With respect to any request for Base Rate Loans, in lieu
of delivering the above-described Borrowing Notice, the Borrower may give the
Administrative Agent telephonic notice of such request by the required time,
with such telephonic notice to be confirmed in writing within 24 hours of the
giving of such notice, provided, however, that the Administrative Agent shall be
entitled to rely on the telephonic notice in making such Revolving Credit Loans.
Any Borrowing Notice (or telephonic notice in lieu thereof) shall be irrevocable
and the Borrower shall be bound to borrow the funds requested therein in
accordance therewith. The Administrative Agent shall not incur any liability to
the Borrower as a result of acting upon any Borrowing Notice, which notice the
Administrative Agent believes in good faith to have been given by an officer
duly authorized by the Borrower to request Revolving Credit Loans on its behalf
or for otherwise acting in good faith, and the crediting of Revolving Credit
Loans to a Borrower's deposit account, or transmittal to such Person as the
Borrower shall direct, shall conclusively establish the obligations of Borrowers
to repay such Revolving Credit Loans as provided herein. Set forth on Schedule
2.2 hereto is the account of the Borrower to which the Administrative Agent is
authorized to transfer the proceeds of the Revolving Credit Loans and the names
of the officers authorized to request Revolving Credit Loans on behalf of the
Borrower. Until the Administrative Agent receives written notice to the
contrary, the Administrative Agent shall be entitled to rely conclusively on
such officer's authority to request Revolving Credit Loans on behalf of the
Borrower, the proceeds of which are to be transferred to any of the accounts
specified by the Borrower pursuant to the immediately preceding sentence. The
Administrative Agent shall have no duty to verify the identity of any individual
representing
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him or herself as one of the officers authorized by the Borrower to make such
requests on its behalf.
2.3 Borrowing Base Calculations; Inclusion of Additional
Assets in Borrowing Base. (a) Based on the most recent Borrowing Base
Certificate delivered by the Borrower to the Administrative Agent and on other
information available to the Administrative Agent, the Administrative Agent
shall in its good faith credit judgment determine which Accounts and parcels of
real property shall be "Eligible Accounts" and "Eligible Real Property,"
respectively, for purposes of this Agreement. The Administrative Agent may, in
its discretion, from time to time, upon not less than five days' prior notice to
the Borrower, reduce the advance rate applicable to any category of Eligible
Accounts to the extent that the Administrative Agent determines in good faith at
any time that either (i) the average of the Dilution with respect to such
category of Eligible Accounts calculated based on the Dilution for such category
of Eligible Accounts in each of the immediately preceding three consecutive
months has increased by three percent (3%) or more from the Dilution for such
category calculated in such manner as of March 31, 2000 or (ii) as to such
category of Eligible Accounts, the Accounts Receivable Turnover for such
category has increased by more than ten percent (10%) from the Accounts
Receivable Turnover for such category calculated as of March 31, 2000.
(b) If at any time the Borrower wishes to include in the
Borrowing Base parcels of real property that are not included in the Borrowing
Base at such time, the Borrower will so advise the Administrative Agent, and the
Agents in their good faith credit judgment, with the consent of all Lenders,
will determine and advise the Borrower whether such assets are eligible for
inclusion in the Borrowing Base provided that if (x) the Borrower determines,
within 10 days after the Initial Funding Date, to include in the Borrowing Base
the Mortgaged Properties located in the State of New York, the inclusion of such
Mortgaged Properties in the Borrowing Base shall not require the consent of all
of the Lenders or (y)(i) the Borrower has sold a parcel of real property that is
included in the calculation of the Borrowing Base and (ii) the proceeds of the
parcel sold pursuant to clause (i) are used to purchase another parcel of like
property which the Borrower requests to be included in the Borrowing Base, the
inclusion of such new parcel in the Borrowing Base shall not require the consent
of all of the Lenders and shall be included in the Borrowing Base in the good
faith credit judgment of the Agents and subject to the satisfaction of the
conditions set forth in Section 2.3(d); and if such assets are so eligible, the
Borrower will take or cause to be taken such actions required by this Agreement
to cause such parcels of real property to conform to the definition of "Eligible
Real Property" in Section 1.1.
(c) If at any time the Borrower wishes to include in the
Borrowing Base assets owned by the Borrower or any Subsidiary Guarantor (other
than Accounts or parcels of real property that are not included in the Borrowing
Base at such time), the Borrower will so advise the Agents, and the Agents in
their good faith credit judgment, with the consent of all Lenders, will
determine and advise the Borrower whether such assets are eligible for inclusion
in the Borrowing Base, and if such assets are so eligible, what advance rate
will apply thereto and what actions are required to cause such assets to be
included in the Borrowing Base (which actions shall in any event include,
without limitation, the creation and perfection of a first priority
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security interest in such assets in favor of the Administrative Agent for the
benefit of the Lenders); and if the Borrower completes all such actions, such
assets will be included in the Borrowing Base subject to the other terms and
conditions of this Agreement. Any assets acquired by the Borrower or any
Subsidiary Guarantor after the date hereof pursuant to any merger, Permitted
Acquisition or otherwise shall only be included in the Borrowing Base upon
compliance by the Borrower with, and subject to the terms of, this Section
2.3(c).
(d) With respect to each parcel of real property owned by the
Borrower or a Subsidiary Guarantor to be included in the Borrowing Base on the
Spin-Off Date, and with respect to each parcel of real property to be included
in the Borrowing Base at any time after the Spin-Off Date, the following
conditions shall be satisfied as conditions precedent to the inclusion of such
parcel in the Borrowing Base:
(i) Mortgage. Such parcel shall be subject to a Mortgage
duly executed and delivered to the Administrative Agent by the Borrower
or Subsidiary Guarantor that is the owner thereof.
(ii) Environmental Reports. The Agents shall have received
a written environmental assessment or review regarding each such
parcel, prepared by an environmental consultant reasonably acceptable
to the Agents, in form, scope and substance reasonably satisfactory to
the Agents, together with a letter from such environmental consultant
permitting the Agents and the Lenders to rely on such environmental
assessment or review as if addressed to and prepared for each of them.
(iii) Appraisals. The Agents shall have received and shall
have been reasonably satisfied with an Appraisal with respect to such
parcel.
(iv) Title Insurance; Flood Insurance; Title Documents;
Property Insurance. (A) The Administrative Agent shall have received in
respect of such Mortgaged Property a mortgagee's title insurance policy
(or policies) or marked up unconditional binder for such insurance.
Each such policy shall (1) be in an amount satisfactory to the
Administrative Agent; (2) be issued at ordinary rates; (3) insure that
the Mortgage insured thereby creates a valid first Lien on such
Mortgaged Property free and clear of all defects and encumbrances,
except for Liens permitted under Section 7.3 and disclosed therein; (4)
name the Administrative Agent for the benefit of the Lenders as the
insured thereunder; (5) be in the form of ALTA Loan Policy - 1970
(Amended 10/17/70 and 10/17/84) (or equivalent policies); (6) contain
such endorsements and affirmative coverage as the Administrative Agent
may reasonably request and (7) be issued by Chicago Title Insurance Co.
or any other title companies satisfactory to the Administrative Agent
(including any such title companies acting as co-insurers or
reinsurers, at the option of the Administrative Agent). The
Administrative Agent shall have received evidence satisfactory to it
that all premiums in respect of each such policy, all charges for
mortgage recording tax, and all related expenses, if any, have been
paid.
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(B) If requested by the Administrative Agent, the
Administrative Agent shall have received, and the title insurance
company issuing the policy referred to in clause (A) above (the "Title
Insurance Company") shall have received, maps or plats of an as-built
survey of the sites of such Mortgaged Property reasonably acceptable to
the Administrative Agent. The Administrative Agent may in its
discretion require that all surveys be certified to the Administrative
Agent and the Title Insurance Company in a manner satisfactory to them,
dated a date satisfactory to the Administrative Agent and the Title
Insurance Company by an independent professional licensed land surveyor
satisfactory to the Administrative Agent and the Title Insurance
Company, and may further request that such maps or plats and the
surveys on which they are based shall be made in accordance with the
Minimum Standard Detail Requirements for Land Title Surveys jointly
established and adopted by the American Land Title Association and the
American Congress on Surveying and Mapping in 1992, and, without
limiting the generality of the foregoing, there shall be surveyed and
shown on such maps, plats or surveys the following: (1) the locations
on such sites of all the buildings, structures and other improvements
and the established building setback lines; (2) the lines of streets
abutting the sites and width thereof; (3) all access and other
easements appurtenant to the sites; (4) all roadways, paths, driveways,
easements, encroachments and overhanging projections and similar
encumbrances affecting the site, whether recorded, apparent from a
physical inspection of the sites or otherwise known to the surveyor;
(5) any encroachments on any adjoining property by the building
structures and improvements on the sites; (6) if the site is described
as being on a filed map, a legend relating the survey to said map; and
(7) the flood zone designations, if any, in which the Mortgaged
Properties are located.
(C) If requested by the Administrative Agent, the
Administrative Agent shall have received, for any Mortgaged Property
the improvements (excluding parking lots) of which are located in a
flood hazard area, (1) a policy of flood insurance that (x) covers any
parcel of improved real property that is encumbered by any Mortgage (y)
is written in an amount not less than the outstanding principal amount
of the indebtedness secured by such Mortgage that is reasonably
allocable to such real property or the maximum limit of coverage made
available with respect to the particular type of property under the
National Flood Insurance Act of 1968, whichever is less, and with
deductibles not exceeding 3% of the value of such real property and (z)
has a term ending not later than the maturity of the indebtedness
secured by such Mortgage and (2) confirmation that the Borrower has
received the notice required pursuant to Section 208.25 of
Regulation H.
(D) The Administrative Agent shall have received a
copy of all recorded documents referred to, or listed as exceptions to
title in, the title policy or policies referred to in clause (B) above
and a copy of all other material documents affecting the Mortgaged
Properties.
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(E) The Administrative Agent shall have received
evidence that an "all risks" insurance policy is in effect with respect
to damage or destruction to any improvements on such Mortgaged
Property. Any such insurance policy shall (1) name the Administrative
Agent as mortgagee, (2) be underwritten by an insurance company
reasonably acceptable to the Administrative Agent, (3) provide for
coverage in an amount equal to full replacement cost, (4) otherwise be
in a form, and cover such risks, and contain such deductibles as are
reasonably acceptable to the Administrative Agent, and (5) provide that
such policy shall not lapse, be canceled or reduced without at least 30
days' prior written notice to the Administrative Agent.
(F) If any Mortgaged Property is damaged or
destroyed, and the cost to repair such damage or destruction exceeds
$250,000, then the Borrower shall elect either to (a) withdraw such
Mortgaged Property from the Borrowing Base, in which event the
aggregate principal amount of the Loans outstanding shall be prepaid,
if necessary, pursuant to Section 2.10(a) and, upon such prepayment,
the Administrative Agent shall release to the Borrower its interest in
any insurance proceeds relating to such damage or destruction, or (b)
promptly repair such damage or destruction, in which event any
applicable insurance proceeds will be paid to the Administrative Agent
and disbursed to the Borrower as necessary to pay the costs of repair
in accordance with procedures reasonably established by the
Administrative Agent. If the Borrower elects to repair, then all such
repairs shall be pursued diligently and shall in any event be completed
within six months from the date of the damage or destruction. If any
Mortgaged Property is damaged or destroyed, and the cost to repair such
damage or destruction is $250,000 or less, then such Mortgaged Property
shall remain in the Borrowing Base, the Borrower shall repair such
damage promptly, but in any event within six months of the date of such
damage, and the insurance proceeds shall be released to the Borrower to
be used to pay for such repairs.
Notwithstanding the foregoing provisions of this paragraph (d) or Schedule
1.1(d), with respect to each parcel of real property that as of the Initial
Funding Date satisfies all of the foregoing requirements of this paragraph (d)
other than the delivery to the Administrative Agent of a survey and title
insurance with respect to such parcel which is not subject to an exception
relating to the lack of such survey, the following shall apply:
(1) if on the Initial Funding Date the Administrative Agent
has received (i) title insurance with respect to such parcel of real
property containing a survey exception and (ii) a site plan or other
evidence of the perimeter description of such parcel, but has not
received an acceptable survey with respect to such parcel of real
property, the amount included in the Borrowing Base for such parcel
shall be 25% of the Appraised Value thereof from the Initial Funding
Date until the date on which the Administrative Agent shall have
received an acceptable survey with respect thereto and acceptable title
insurance with respect thereto omitting any survey exception (and from
and after such date the amount included in the Borrowing Base for such
parcel shall be the amount determined in accordance with Schedule
1.1(d)); provided, that if the Administrative
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Agent has not received, on or before the date which is 60 days after
the Initial Funding Date, an acceptable survey with respect to such
parcel and acceptable title insurance with respect thereto (which shall
in any event omit a survey exception), such parcel shall cease to be
included in the Borrowing Base until such survey and title insurance
are delivered to the Administrative Agent; and
(2) if on the Initial Funding Date the Administrative Agent
has not received a survey or title insurance acceptable to the Agents
with respect to such parcel of real property, such parcel of real
property shall not be included in the Borrowing Base until the date on
which the Administrative Agent shall have received an survey and title
insurance, in each case acceptable to the Agents (which shall in any
event omit all survey exceptions) with respect to such parcel of real
property (and from and after such date the amount included in the
Borrowing Base for such parcel shall be the amount determined in
accordance with Schedule 1.1(d)).
(e) Concurrently with delivery by the Borrower to the
Administrative Agent of any notice pursuant to the definition of "Specified
Hedge Agreement" in Section 1.1 designating any Hedge Agreement as a "Specified
Hedge Agreement", and not less frequently than monthly thereafter, the Borrower
will deliver to the Administrative Agent a report from the relevant counterparty
setting forth the "▇▇▇▇-to-market" value of such Hedge Agreement, determined in
accordance with procedures customary in the relevant market. The Administrative
Agent will calculate from time to time the net amount of the "▇▇▇▇-to-market"
values of all Specified Hedge Agreements on the basis of such counterparty
report, and if such net amount is unfavorable to the Borrower (i.e., the
Borrower would owe a net amount under all Specified Hedge Agreements if all
Specified Hedge Agreements were terminated on such date), the Administrative
Agent will establish a Reserve in an amount equal to such net unfavorable
amount, and will maintain such Reserve until the next determination by the
Administrative Agent pursuant to this paragraph.
2.4 Swing Line Commitment. (a) Subject to the terms and
conditions hereof, the Swing Line Lender agrees that, during the Revolving
Credit Commitment Period, it will make available to the Borrower in the form of
swing line loans ("Swing Line Loans") a portion of the credit otherwise
available to the Borrower under the Revolving Credit Commitments; provided that
(i) the aggregate principal amount of Swing Line Loans outstanding at any time
shall not exceed the Swing Line Commitment then in effect (notwithstanding that
the Swing Line Loans outstanding at any time, when aggregated with the Swing
Line Lender's other outstanding Revolving Credit Loans hereunder, may exceed the
Swing Line Commitment then in effect or such Swing Line Lender's Revolving
Credit Commitment then in effect) and (ii) the Borrower shall not request, and
the Swing Line Lender shall not make, any Swing Line Loan if, after giving
effect to the making of such Swing Line Loan, (A) the aggregate amount of the
Available Revolving Credit Commitments would be less than zero, (B) the Total
Revolving Extensions of Credit would exceed the Borrowing Base or (C) the Total
Revolving Extensions of Credit, when added to the Total Supplemental Extensions
of Credit, would exceed the Total Revolving Credit Commitments. During the
Revolving Credit Commitment Period, the Borrower may use the
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Swing Line Commitment by borrowing, repaying and reborrowing, all in accordance
with the terms and conditions hereof. Swing Line Loans shall be Base Rate Loans
only.
(b) The Borrower shall repay all outstanding Swing Line Loans
on the Revolving Credit Termination Date.
2.5 Procedure for Swing Line Borrowing; Refunding of Swing
Line Loans. (a) The Borrower may borrow under the Swing Line Commitment on any
Business Day during the Revolving Credit Commitment Period, provided, the
Borrower shall give the Swing Line Lender irrevocable telephonic notice
confirmed promptly in writing with a Borrowing Notice (which telephonic notice
must be received by the Swing Line Lender not later than 11:00 A.M., New York
City time, on the proposed Borrowing Date), specifying (i) the amount to be
borrowed and (ii) the requested Borrowing Date. Each borrowing under the Swing
Line Commitment shall be in an amount equal to $500,000 or a whole multiple of
$100,000 in excess thereof. Not later than 3:00 P.M., New York City time, on the
Borrowing Date specified in the borrowing notice in respect of any Swing Line
Loan, the Swing Line Lender shall make available to the Administrative Agent at
the Funding Office an amount in immediately available funds equal to the amount
of such Swing Line Loan. The Administrative Agent shall make the proceeds of
such Swing Line Loan available to the Borrower on such Borrowing Date in like
funds as received by the Administrative Agent.
(b) The Swing Line Lender, at any time and from time to time
in its sole and absolute discretion may, on behalf of the Borrower (which hereby
irrevocably authorizes the Swing Line Lender to act on its behalf), on one
Business Day's notice given by the Swing Line Lender no later than 12:00 Noon,
New York City time, request each Lender to make, and each Lender hereby agrees
to make, a Revolving Credit Loan (which shall initially be a Base Rate Loan), in
an amount equal to such Lender's Revolving Credit Percentage of the aggregate
amount of the Swing Line Loans (the "Refunded Swing Line Loans") outstanding on
the date of such notice, to repay the Swing Line Lender. Each Lender shall make
the amount of such Revolving Credit Loan available to the Administrative Agent
at the Funding Office in immediately available funds, not later than 10:00 A.M.,
New York City time, one Business Day after the date of such notice. The proceeds
of such Revolving Credit Loans shall be made immediately available by the
Administrative Agent to the Swing Line Lender for application by the Swing Line
Lender to the repayment of the Refunded Swing Line Loans.
(c) If prior to the time a Revolving Credit Loan would have
otherwise been made pursuant to Section 2.5(b), one of the events described in
Section 8(f) shall have occurred and be continuing with respect to the Borrower,
or if for any other reason, as determined by the Swing Line Lender in its sole
discretion, Revolving Credit Loans may not be made as contemplated by Section
2.5(b), each Lender shall, on the date such Revolving Credit Loan was to have
been made pursuant to the notice referred to in Section 2.5(b) (the "Refunding
Date"), purchase for cash an undivided participating interest in the then
outstanding Swing Line Loans by paying to the Swing Line Lender an amount (the
"Swing Line Participation Amount") equal to (i) such Lender's Revolving Credit
Percentage times (ii) the sum of the aggregate principal amount of
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Swing Line Loans then outstanding which were to have been repaid with such
Revolving Credit Loans.
(d) At any time after the Swing Line Lender has received from
any Lender such Lender's Swing Line Participation Amount, after the receipt by
the Swing Line Lender of any payment on account of the Swing Line Loans, the
Swing Line Lender will distribute to such Lender its Swing Line Participation
Amount (appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender's participating interest was outstanding
and funded and, in the case of principal and interest payments, to reflect such
Lender's pro rata portion of such payment if such payment is not sufficient to
pay the principal of and interest on all Swing Line Loans then due) pursuant to
Section 2.16(d); provided, however, that in the event that such payment received
by the Swing Line Lender is required to be returned, such Lender will return to
the Swing Line Lender any portion thereof previously distributed to it by the
Swing Line Lender.
(e) Each Lender's obligation to make the Loans referred to in
Section 2.5(b) and to purchase participating interests pursuant to Section
2.5(c) shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any setoff, counterclaim,
recoupment, defense or other right which such Lender or the Borrower may have
against the Swing Line Lender, the Borrower or any other Person for any reason
whatsoever; (ii) the occurrence or continuance of a Default or an Event of
Default or the failure to satisfy any of the other conditions specified in
Section 5; (iii) any adverse change in the condition (financial or otherwise) of
the Borrower; (iv) any breach of this Agreement or any other Loan Document by
the Borrower, any other Loan Party or any other Lender; or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.
2.6 Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of the appropriate Lender, (i) the then unpaid principal amount of each
Revolving Credit Loan of such Lender on the Revolving Credit Termination Date
(or on such earlier date on which the Loans become due and payable pursuant to
Section 8) and (ii) the then unpaid principal amount of each Swing Line Loan of
such Swing Line Lender on the Revolving Credit Termination Date (or on such
earlier date on which the Loans become due and payable pursuant to Section 8).
The Borrower hereby further agrees to pay 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 2.13.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 10.6(d), and a subaccount therein for
each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Note evidencing such Loan, the
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Type of such Loan and each Interest Period applicable thereto, (ii) the amount
of any principal or interest due and payable or to become due and payable from
the Borrower to each Lender hereunder and (iii) both the amount of any sum
received by the Administrative Agent hereunder from the Borrower and each
Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to Section 2.6(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
the Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will promptly execute and
deliver to such Lender a promissory note of the Borrower evidencing any
Revolving Credit Loans or Swing Line Loans, as the case may be, of such Lender,
substantially in the forms of Exhibit D-1 or D-2, respectively (a "Revolving
Credit Note" or "Swing Line Note," respectively), with appropriate insertions as
to date and principal amount; provided, that delivery of Notes shall not be a
condition precedent to the occurrence of the Spin-Off or the making of Loans, or
the issuance of Letters of Credit, on the Spin-Off Date.
2.7 Commitment Fees, etc. (a) The Borrower agrees to pay to
the Administrative Agent for the account of each Lender a commitment fee for the
period from and including the Closing Date to the last day of the Revolving
Credit Commitment Period, computed at the Commitment Fee Rate on the average
daily amount of the Available Revolving Credit Commitment of such Lender during
the period for which payment is made, payable quarterly in arrears on the last
day of each March, June, September and December and on the Revolving Credit
Termination Date, commencing on the first of such dates to occur after the date
hereof.
(b) The Borrower agrees to pay to the Syndication Agent the
fees in the amounts and on the dates previously agreed to in writing by the
Borrower and the Syndication Agent.
(c) The Borrower agrees to pay to the Administrative Agent the
fees in the amounts and on the dates from time to time agreed to in writing by
the Borrower and the Administrative Agent.
2.8 Termination or Reduction of Revolving Credit Commitments.
The Borrower shall have the right, upon not less than three Business Days'
notice to the Administrative Agent, to terminate the Revolving Credit
Commitments or, from time to time, to reduce the aggregate amount of the
Revolving Credit Commitments; provided that no such termination or reduction of
Revolving Credit Commitments shall be permitted if (a) other than in connection
with the repayment in full of the Obligations and the termination of the
Revolving Credit Commitments or with the consent of the Required Lenders, the
Revolving Credit Commitments were reduced to
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an amount below $75,000,000, or (b) after giving effect thereto and to any
prepayments of the Revolving Credit Loans and Swing Line Loans made on the
effective date thereof, the Total Revolving Extensions of Credit would exceed
the Total Revolving Credit Commitments. Any such reduction shall be in an amount
equal to $1,000,000, or a whole multiple thereof, and shall reduce permanently
the Revolving Credit Commitments then in effect. Any reduction of the Revolving
Credit Commitments to an amount less than the amount of the L/C Commitment or
the Swing Line Commitment, as the case may be, shall automatically reduce the
L/C Commitment or the Swing Line Commitment, as the case may be, in the amount
of such deficiency.
2.9 Optional Prepayments. The Borrower may, (a) at any time
and from time to time prior to the Supplemental Credit Facility Termination Date
when the Total Supplemental Extensions of Credit equals zero or (b) at any time
and from time to time after the Supplemental Credit Facility Termination Date,
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 in the case of Eurodollar Loans and at least one Business Day
prior thereto in the case of Base Rate Loans, which notice shall specify the
date and amount of such prepayment and whether such prepayment is of Eurodollar
Loans or Base Rate Loans; provided, that (i) if a Eurodollar Loan is prepaid on
any day other than the last day of the Interest Period applicable thereto, the
Borrower shall also pay any amounts owing pursuant to Section 2.19 and (ii) no
prior notice is required for the prepayment of Swing Line Loans. Upon receipt of
any such notice the Administrative Agent shall promptly notify each relevant
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 (except in
the case of Revolving Credit Loans that are Base Rate Loans and Swing Line
Loans) accrued interest to such date on the amount prepaid. Partial prepayments
of Revolving Credit Loans shall be in an aggregate principal amount of
$1,000,000 or a whole multiple thereof. Partial prepayments of Swing Line Loans
shall be in an aggregate principal amount of $100,000 or a whole multiple
thereof.
2.10 Mandatory Prepayments and Commitment Reductions. (a) If,
at any time during the Revolving Credit Commitment Period for a period in excess
of five consecutive Business Days, the amount of the Total Revolving Extensions
of Credit of all Lenders exceeds the lesser of (i) the Borrowing Base and (ii)
the Total Revolving Credit Commitments then in effect (whether as a result of
the sale of assets included in the Borrowing Base or otherwise), the Borrower
shall, without notice or demand, either (A) prepay (including, without
limitation, in the case of an Asset Sale (as defined in the Supplemental Credit
Facility) in respect of assets included in the Borrowing Base, with the Net Cash
Proceeds (as defined in the Supplemental Credit Facility) of such Asset Sale),
in accordance with this Section, the Revolving Credit Loans and the Swing Line
Loans in an aggregate principal amount equal to such excess, together (except in
the case of Revolving Credit Loans which are Base Rate Loans and Swing Line
Loans) with interest accrued to the date of such payment or prepayment; provided
that if the aggregate principal amount of Revolving Credit Loans and Swing Line
Loans then outstanding is less than the amount of such excess (because L/C
Obligations constitute a portion thereof), the Borrower shall, to the extent of
the balance of such excess, replace outstanding Letters of Credit
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and/or cash collateralize such Letters of Credit in the manner described in
Section 3.9 or (B) provide additional assets to be included in the Borrowing
Base in accordance with Section 2.3 sufficient to eliminate such excess.
(b) Upon the occurrence of a Change of Control, the Borrower
shall, without notice or demand, immediately prepay all Revolving Credit Loans
and all Swing Line Loans then outstanding, and replace outstanding Letters of
Credit and/or cash collateralize such Letters of Credit in the manner described
in Section 3.9, whereupon all Revolving Credit Commitments shall be terminated.
(c) If, at any time during the Revolving Credit Commitment
Period, by reason of a change in currency exchange rates, the aggregate amount
of the Total Revolving Extensions of Credit exceeds the Total Revolving Credit
Commitments, the Borrower shall, upon learning thereof or upon the request of
the Administrative Agent, immediately prepay the Revolving Credit Loans by an
amount at least equal to the amount of such excess. For purposes of this
paragraph, the Administrative Agent, in cooperation with the relevant Issuing
Lenders, will calculate the amount of L/C Obligations outstanding no less
frequently than once per calendar month.
(d) Any reduction of the Revolving Credit Commitments pursuant
to this Section shall be accompanied by prepayment of the Revolving Credit Loans
and/or Swing Line Loans to the extent, if any, that the Total Revolving
Extensions of Credit exceed the amount of the Total Revolving Credit Commitments
as so reduced, provided that if the aggregate principal amount of Revolving
Credit Loans and Swing Line Loans then outstanding is less than the amount of
such excess (because L/C Obligations constitute a portion thereof), the Borrower
shall, to the extent of the balance of such excess, replace outstanding Letters
of Credit and/or cash collateralize such Letters of Credit in the manner
described in Section 3.9; and, provided, further, that any prepayment of the
Revolving Credit Loans or the Swing Line Loan that are Eurodollar Loans pursuant
to this Section shall be made on the last day of the Interest Period with
respect thereto in which the relevant prepayment is required.
2.11 Conversion and Continuation Options. (a) The Borrower may
elect from time to time to convert Eurodollar Loans to Base Rate Loans by giving
the Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may be made
only on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert Base Rate Loans to Eurodollar Loans by
giving the Administrative Agent at least three Business Days' prior irrevocable
notice of such election (which notice shall specify the length of the initial
Interest Period therefor), provided that no Base Rate Loan may be converted into
a Eurodollar Loan (i) when any Event of Default has occurred and is continuing
and the Administrative Agent has, or the Required Lenders have, determined in
its or their sole discretion not to permit such conversions or (ii) after the
date that is one month prior to the Revolving Credit Termination Date. Upon
receipt of any such notice the Administrative Agent shall promptly notify each
Lender thereof.
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(b) The Borrower may elect to continue any Eurodollar Loan as
such upon the expiration of the then current Interest Period with respect
thereto by giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to such
Loans, provided that no Eurodollar Loan may be continued as such (i) when any
Event of Default has occurred and is continuing and the Administrative Agent
has, or the Required Lenders have, determined in its or their sole discretion
not to permit such continuations or (ii) after the date that is one month prior
to the Revolving Credit Termination Date, and provided, further, that if the
Borrower shall fail to give any required notice as described above in this
paragraph or if such continuation is not permitted pursuant to the preceding
proviso, such Loans shall be converted automatically to Base Rate Loans on the
last day of such then expiring Interest Period. Upon receipt of any such notice
the Administrative Agent shall promptly notify each relevant Lender thereof.
2.12 Minimum Amounts and Maximum Number of Eurodollar
Tranches. Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions, continuations and optional prepayments of Eurodollar
Loans and all selections of Interest Periods shall be in such amounts and be
made pursuant to such elections so that, (a) after giving effect thereto, the
aggregate principal amount of the Eurodollar Loans comprising each Eurodollar
Tranche shall be equal to $5,000,000 or a whole multiple of $1,000,000 in excess
thereof and (b) no more than six Eurodollar Tranches shall be outstanding at any
one time.
2.13 Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin in effect for such day.
(b) Each Base Rate Loan shall bear interest for each day on
which it is outstanding at a rate per annum equal to the Base Rate in effect for
such day plus the Applicable Margin in effect for such day.
(c) (i) If all or a portion of the principal amount of any
Loan or Reimbursement Obligation shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), all outstanding Loans and
Reimbursement Obligations (whether or not overdue) (to the extent legally
permitted) shall bear interest at a rate per annum that is equal to (x) in the
case of the Loans, the rate that would otherwise be applicable thereto pursuant
to the foregoing provisions of this Section plus 2% or (y) in the case of
Reimbursement Obligations, the rate applicable to Base Rate Loans plus 2%, and
(ii) if all or a portion of any interest payable on any Loan or Reimbursement
Obligation or any commitment fee or other amount payable hereunder shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest at a rate per annum equal to the rate
then applicable to Base Rate Loans plus 2%, in each case, with respect to
clauses (i) and (ii) above, from the date of such non-payment until such amount
is paid in full (to the extent not prohibited by law, after as well as before
judgment).
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(d) Interest shall be payable in arrears on each Interest
Payment Date, provided, that interest accruing pursuant to paragraph (c) of this
Section shall be payable from time to time on demand.
2.14 Computation of Interest and Fees. (a) Interest, fees and
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to Base Rate
Loans on which interest is calculated on the basis of the Prime Rate, the
interest thereon shall be calculated on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the Borrower and the Lenders of each
determination of a Eurodollar Rate. Any change in the interest rate on a Loan
resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of the effective date and the
amount of each such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the Borrower,
deliver to the Borrower a statement showing the quotations used by the
Administrative Agent in determining any interest rate pursuant to Section
2.13(a).
2.15 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from
the Required Lenders that the Eurodollar Rate determined or to be
determined for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such
Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans requested to be made on the first day
of such Interest Period shall be made as Base Rate Loans, (y) any Loans that
were to have been converted on the first day of such Interest Period to
Eurodollar Loans shall be continued as Base Rate Loans and (z) any outstanding
Eurodollar Loans shall be converted, on the last day of the then current
Interest Period with respect thereto, to Base Rate Loans. Until such notice has
been withdrawn by the Administrative Agent, no
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further Eurodollar Loans shall be made or continued as such, nor shall the
Borrower have the right to convert Loans to Eurodollar Loans.
2.16 Pro Rata Treatment and Payments. (a) Each borrowing by
the Borrower from the Lenders hereunder, each payment by the Borrower on account
of any commitment fee or Letter of Credit fee, and any reduction of the
Revolving Credit Commitments of the Lenders, shall be made pro rata according to
the respective Revolving Credit Percentages of the Lenders.
(b) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Revolving Credit Loans shall be
made pro rata according to the respective outstanding principal amounts of the
Revolving Credit Loans then held by the Lenders. Each payment in respect of
Reimbursement Obligations in respect of any Letter of Credit shall be made to
the Issuing Lender that issued such Letters of Credit.
(c) The application of any mandatory payment of Loans shall be
made, first, to Base Rate Loans and, second, to Eurodollar Loans. The
application of any optional prepayment of Loans pursuant to Section 2.9 shall be
at the direction of the Borrower. Each payment of the Loans (except in the case
of Swing Line Loans and Revolving Credit Loans that are Base Rate Loans) shall
be accompanied by accrued interest to the date of such payment on the amount
paid.
(d) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 2:00 P.M., New York City time, on the due date thereof to the Administrative
Agent, for the account of the relevant Lenders, at the Payment Office, in
Dollars and in immediately available funds. Any payment made by the Borrower
after 2:00 P.M., New York City time, on any Business Day shall be deemed to have
been on the next following Business Day. The Administrative Agent shall
distribute such payments to the Lenders promptly upon receipt in like funds as
received except that in no event shall the Administrative Agent be required to
distribute such payments more frequently than one time in any week. If any
payment hereunder (other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day. If any payment on a Eurodollar Loan becomes
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day. In
the case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable rate
during such extension.
(e) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
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corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the
absence of manifest error. If such Lender's share of such borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
after such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
Base Rate Loans, on demand, from the Borrower.
(f) Unless the Administrative Agent shall have been notified
in writing by the Borrower prior to the date of any payment due to be made by
the Borrower hereunder that the Borrower will not make such payment to the
Administrative Agent, the Administrative Agent may assume that the Borrower is
making such payment, and the Administrative Agent may, but shall not be required
to, in reliance upon such assumption, make available to the Lenders their
respective pro rata shares of a corresponding amount. If such payment is not
made to the Administrative Agent by the Borrower within three Business Days
after such due date, the Administrative Agent shall be entitled to recover, on
demand, from each Lender to which any amount which was made available pursuant
to the preceding sentence, such amount with interest thereon at the rate per
annum equal to the daily average Federal Funds Effective Rate. Nothing herein
shall be deemed to limit the rights of the Administrative Agent or any Lender
against the Borrower.
2.17 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, any Letter of Credit, any
Application or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by Section 2.18 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 that is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other condition;
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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, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower 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 this Section, it shall promptly
notify the Borrower (with a copy to the Administrative Agent) of the event by
reason of which it has become so entitled.
(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 or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, 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 Borrower (with a copy to the Administrative
Agent) of a written request therefor, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such corporation
for such reduction.
(c) A certificate as to any additional amounts payable
pursuant to this Section submitted by any Lender to the Borrower (with a copy to
the Administrative Agent) shall be conclusive in the absence of manifest error.
The obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.18 Taxes. (a) All payments made by the Borrower 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
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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 Borrower 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 Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph
(a).
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable
by the Borrower, as promptly as possible thereafter the Borrower 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
Borrower showing payment thereof. If the Borrower 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 Borrower 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 Borrower 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 E and a Form W-8BEN, or any subsequent
versions thereof or successors thereto duly completed and signed 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 Borrower 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
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Non-U.S. Lender shall promptly notify the Borrower at any time it determines
that it is no longer in a position to provide any previously delivered
certificate to the Borrower (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 Borrower 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 Borrower 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 Borrower 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.
(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 Borrower is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the Borrower
(with a copy to the Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower, 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 such refund against such Lender's Non-Excluded or Other Taxes (a "Tax
Refund"), which in the reasonable judgment of such Lender is allocable to
Non-Excluded Taxes or Other Taxes paid by the Borrower, it shall promptly pay
such Tax Refund, together with any other amounts paid by the Borrower in
connection with such Tax Refund, to the Borrower, net of all out-of-pocket
expenses of such Lender incurred in obtaining such Tax Refund, provided,
however, that the Borrower 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.
2.19 Indemnity. The Borrower agrees to indemnify each Agent
and Lender for, and to hold each Lender harmless from, any loss or expense that
such Lender may sustain or incur as a consequence of (a) default by the Borrower
in making a borrowing of, conversion into or continuation of Eurodollar Loans
after the Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment or conversion of
Eurodollar Loans on a day
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that is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest that would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) that
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank Eurodollar
market. A certificate as to any amounts payable pursuant to this Section
submitted to the Borrower by any Lender shall be conclusive in the absence of
manifest error. This covenant shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.
2.20 Illegality. Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert Base Rate Loans to Eurodollar Loans shall
forthwith be canceled and (b) such Lender's Loans then outstanding as Eurodollar
Loans, if any, shall be converted automatically to Base Rate Loans on the
respective last days of the then current Interest Periods with respect to such
Loans or within such earlier period as required by law. If any such conversion
of a Eurodollar Loan occurs on a day which is not the last day of the then
current Interest Period with respect thereto, the Borrower shall pay to such
Lender such amounts, if any, as may be required pursuant to Section 2.19.
2.21 Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 2.17,
2.18(a) or 2.20 with respect to such Lender, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans affected by such
event with the object of avoiding the consequences of such event; provided, that
such designation is made on terms that, in the sole judgment of such Lender,
cause such Lender and its lending office(s) to suffer no economic, legal or
regulatory disadvantage, and provided, further, that nothing in this Section
shall affect or postpone any of the obligations of the Borrower or the rights of
any Lender pursuant to Section 2.17, 2.18(a) or 2.20.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions
hereof, each Issuing Lender, in reliance on the agreements of the other Lenders
set forth in Section 3.4(a), agrees to issue letters of credit (collectively,
the "Letters of Credit") for the account of the Borrower or any Subsidiary
thereof on any Business Day during the Revolving Credit
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Commitment Period in such form as may be approved from time to time by such
Issuing Lender; provided, that no Issuing Lender shall have any obligation to
issue any Letter of Credit if, after giving effect to such issuance, (i) the L/C
Obligations would exceed the L/C Commitment, (ii) the aggregate amount of the
Available Revolving Credit Commitments would be less than zero, (iii) the amount
of the Total Revolving Extensions of Credit would exceed the Borrowing Base,
(iv) the L/C Obligations in respect of Vehicle Letters of Credit would exceed
$100,000,000 or (v) the Total Revolving Extensions of Credit, when added to the
Total Supplemental Extensions of Credit, would exceed the Total Revolving Credit
Commitments. Each Letter of Credit shall (i) be denominated in Dollars or any
Available Foreign Currency (provided that the U.S. Dollar Equivalent of all L/C
Obligations denominated in Available Foreign Currency shall not exceed, in the
aggregate, $25,000,000) and (ii) expire no later than the earlier of (x) the
first anniversary of its date of issuance and (y) the date which is five
Business Days prior to the Revolving Credit Termination Date; provided that any
Letter of Credit with a one-year term may provide for the renewal thereof for
additional one-year periods (which shall in no event extend beyond the date
referred to in clause (y) above). No Letter of Credit shall be issued on or
after the date that is thirty days prior to the Revolving Credit Termination
Date.
(b) No Issuing Lender shall at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
such Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. (a) The
Borrower may from time to time request that an Issuing Lender issue a Letter of
Credit for the Borrower's own account or for the account of any Subsidiary of
the Borrower (provided that the Borrower will be a co-applicant and a co-obligor
with respect to each Letter of Credit issued for the account of any such
Subsidiary) by delivering to such Issuing Lender at its address for notices
specified herein an Application therefor (with a copy to the Administrative
Agent), completed to the satisfaction of such Issuing Lender, and such other
certificates, documents and other papers and information as such Issuing Lender
may request. Upon receipt of any Application, an Issuing Lender will (x) confirm
with the Administrative Agent that the Excess Availability, prior to giving
effect to any Reserves with respect to such Letter of Credit on the date of the
proposed issuance of Letter of Credit shall be equal to or greater than one
hundred (100%) percent of the face amount thereof and all other commitments and
obligations made or incurred by the Administrative Agent with respect thereto,
and (y) if the Excess Availability is equal to or greater than such amount, as
confirmed to the relevant Issuing Lender by the Administrative Agent, process
such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby by issuing the original of such Letter of Credit to the beneficiary
thereof or as otherwise may be agreed to by such Issuing Lender and the Borrower
(but in no event shall any Issuing Lender be required to issue any Letter of
Credit earlier than three Business Days after its receipt of the Application
therefor and all such other certificates, documents and other papers and
information relating thereto). Promptly after issuance by an Issuing Lender of a
Letter of Credit, such Issuing Lender shall furnish a copy of such Letter of
Credit to the Borrower and Administrative Agent. Each Issuing Lender shall
promptly give notice to the
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Administrative Agent of the issuance of each Letter of Credit issued by such
Issuing Lender (including the amount thereof). Notwithstanding anything to the
contrary contained herein, with respect to any Letter of Credit to be issued by
First Union, the Borrower shall submit any request for a Letter of Credit to the
Administrative Agent, together with an Application therefor, completed in
accordance with customary documentation and procedures established by the
Administrative Agent and First Union. Subject to the terms and conditions
contained herein, upon receipt and approval by the Administrative Agent of an
Application for a Letter of Credit to be issued by First Union, duly executed
and delivered by the Borrower, the Administrative Agent shall execute such
Application as co-applicant with the Borrower and indemnitor of First Union as
the issuer of the Letter of Credit subject to such Application and deliver such
Application to First Union. All obligations of the Borrower hereunder to First
Union as Issuing Lender with respect to any such Letter of Credit shall instead
be owed to the Administrative Agent and with respect to such Letters of Credit,
the Administrative Agent shall be deemed the Issuing Lender for purposes of this
Agreement, except with respect to the fronting fee provided for in Section
3.3(a) hereof and the costs and expenses provided for in Section 3.3(b). The
Administrative Agent may, at its option, charge such fees to the loan account of
the Borrower maintained by the Administrative Agent.
(b) No Issuing Lender will grant any extensions of the
maturity of, time of payment for, or time for presentation of, any drafts,
acceptances or documents in respect of, or agree to any amendments, renewals,
extensions, modifications, changes or cancellations of any of the terms or
conditions of, any of the Letters of Credit or documents, drafts or acceptances
thereunder, without the prior consent of Administrative Agent and subject to
Section 3.1(a).
3.3 Fees and Other Charges. (a) The Borrower will pay a fee on
the aggregate drawable amount of all outstanding Letters of Credit at a per
annum rate equal to the Applicable Margin then in effect with respect to
Eurodollar Loans under the Revolving Credit Facility, shared ratably among the
Lenders in accordance with their respective Revolving Credit Percentages and
payable quarterly in arrears on each L/C Fee Payment Date after the issuance
date. In addition, the Borrower shall pay to the relevant Issuing Lender for its
own account a fronting fee in the amounts and on the dates from time to time
agreed to in writing by the Borrower and such Issuing Lender.
(b) In addition to the foregoing fees, the Borrower shall pay
or reimburse each Issuing Lender for such normal and customary costs and
expenses as are incurred or charged by such Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Letter of Credit.
3.4 L/C Participations. (a) Each Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce each
Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
each Issuing Lender, on the terms and conditions hereinafter stated, for such
L/C Participant's own account and risk, an undivided interest equal to such L/C
Participant's Revolving Credit Percentage in each Issuing Lender's obligations
and rights under
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each Letter of Credit issued by such Issuing Lender hereunder and the amount of
each draft paid by such Issuing Lender thereunder. Each L/C Participant
unconditionally and irrevocably agrees with each Issuing Lender that, if a draft
is paid under any Letter of Credit issued by such Issuing Lender for which such
Issuing Lender is not reimbursed in full by the Borrower in accordance with the
terms of this Agreement, such L/C Participant shall pay to such Issuing Lender
upon demand at such Issuing Lender's direction an amount equal to such L/C
Participant's Revolving Credit Percentage of the amount of such draft, or any
part thereof, that is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant
to an Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any payment made by such Issuing Lender under any Letter of Credit is
paid to such Issuing Lender within three Business Days after the date such
payment is due, such L/C Participant shall pay to such Issuing Lender on demand
an amount equal to the product of (i) such amount, times (ii) the daily average
Federal Funds Effective Rate during the period from and including the date such
payment is required to the date on which such payment is immediately available
to such Issuing Lender, times (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
360. If any such amount required to be paid by any L/C Participant pursuant to
Section 3.4(a) is not made available to such Issuing Lender by such L/C
Participant within three Business Days after the date such payment is due, such
Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum applicable to Base Rate Loans under the Revolving Credit
Facility. A certificate of such Issuing Lender submitted to any L/C Participant
with respect to any such amounts owing under this Section shall be conclusive in
the absence of manifest error.
(c) Whenever, at any time after an Issuing Lender has made
payment under any Letter of Credit and has received from any L/C Participant its
pro rata share of such payment in accordance with Section 3.4(a), such Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise, including proceeds of collateral applied thereto
by such Issuing Lender), or any payment of interest on account thereof, such
Issuing Lender will distribute to such L/C Participant its pro rata share
thereof; provided, however, that in the event that any such payment received by
such Issuing Lender shall be required to be returned by such Issuing Lender,
such L/C Participant shall return to such Issuing Lender the portion thereof
previously distributed by such Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. The Borrower
agrees to reimburse each Issuing Lender, on each date on which such Issuing
Lender notifies the Borrower of the date and amount of a draft presented under
any Letter of Credit and paid by such Issuing Lender, for the amount of (a) such
draft so paid and (b) except to the extent excluded from the Borrower's payment
obligation under Sections 2.17 and 2.18 any taxes, fees, charges or other costs
or expenses incurred by such Issuing Lender in connection with such payment (the
amounts described in the foregoing clauses (a) and (b) in respect of any
drawing, collectively, the "Payment Amount"). Each such payment shall be made to
such Issuing Lender at its direction in lawful money of the United States of
America and in immediately available funds. Interest shall
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be payable on each Payment Amount from the date of the applicable drawing until
payment in full at the rate set forth in (i) until the second Business Day
following the date of the applicable drawing, Section 2.13(b) and (ii)
thereafter, Section 2.13(c). Each drawing under any Letter of Credit shall
(unless an event of the type described in clause (i) or (ii) of Section 8(f)
shall have occurred and be continuing with respect to the Borrower, in which
case the procedures specified in Section 3.4 for funding by L/C Participants
shall apply) constitute a request by the Borrower to the Administrative Agent
for a borrowing pursuant to Section 2.2 of Base Rate Loans (or, at the option of
the Administrative Agent and the Swing Line Lender in their sole discretion, a
borrowing pursuant to Section 2.5 of Swing Line Loans) in the amount of such
drawing. The Borrowing Date with respect to such borrowing shall be the first
date on which a borrowing of Revolving Credit Loans (or, if applicable, Swing
Line Loans) could be made, pursuant to Section 2.2 (or, if applicable, Section
2.5), if the Administrative Agent had received a notice of such borrowing at the
time the Administrative Agent receives notice from the relevant Issuing Lender
of such drawing under such Letter of Credit.
3.6 Obligations Absolute. (a) The Borrower's obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
that the Borrower may have or have had against any Issuing Lender, any
beneficiary of a Letter of Credit or any other Person. The Borrower also agrees
with each Issuing Lender that such Issuing Lender shall not be responsible for,
and the Borrower's Reimbursement Obligations under Section 3.5 shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee. No Issuing
Lender shall be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
such Issuing Lender. The Borrower agrees that any action taken or omitted by an
Issuing Lender under or in connection with any Letter of Credit issued by it or
the related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards or care specified in the
Uniform Commercial Code of the State of New York, shall be binding on the
Borrower and shall not result in any liability of such Issuing Lender to the
Borrower.
(b) The Borrower shall indemnify and hold the Issuing Lenders
and the Lenders harmless from and against any and all losses, claims, damages,
liabilities, costs and expenses which any Issuing Lender or any Lender may
suffer or incur in connection with any Letter of Credit and any documents,
drafts or acceptances relating thereto, including any losses, claims, damages,
liabilities, costs and expenses due to any action taken by any issuer or
correspondent with respect to any Letter of Credit. The Borrower assumes all
risks with respect to the acts or omissions of the drawer under or beneficiary
of any Letter of Credit and for such purposes the drawer or beneficiary shall be
deemed the Borrower's agent. The Borrower agrees that no
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Issuing Lender or Lender shall be liable for any foreign, Federal, State and
local taxes, duties and levies relating to any goods subject to any Letter of
Credit or any documents, drafts or acceptances thereunder. The Borrower hereby
releases and holds each Issuing Lender and Lender harmless from and against any
acts, waivers, errors, delays or omissions, whether caused by the Borrower, by
any Issuing Lender or correspondent or otherwise with respect to or relating to
any Letter of Credit, except for the gross negligence or wilful misconduct of
such Issuing Lender or Lender as determined pursuant to a final, non-appealable
order of a court of competent jurisdiction. The provisions of this Section shall
survive the payment of Obligations and the termination or non-renewal of this
Agreement.
3.7 Letter of Credit Payments. If any draft shall be presented
for payment under any Letter of Credit, the relevant Issuing Lender shall
promptly notify the Borrower of the date and amount thereof. The responsibility
of the relevant Issuing Lender to the Borrower in connection with any draft
presented for payment under any Letter of Credit, in addition to any payment
obligation expressly provided for in such Letter of Credit issued by such
Issuing Lender, shall be limited to determining that the documents (including
each draft) delivered under such Letter of Credit in connection with such
presentment appear on their face to be in conformity with such Letter of Credit.
3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
3.9 Cash Collateral. (a) If the Borrower is required to
provide cash collateral for any L/C Obligations pursuant to this Agreement and
prior to the Revolving Credit Termination Date, the Borrower will pay to the
Administrative Agent for the benefit of the Revolving Credit Lenders cash or
Cash Equivalents (reasonably acceptable to the Administrative Agent) in an
amount equal to the maximum amount then available to be drawn under, plus
related fees and expenses payable to the Issuing Lender in respect of, each
applicable Letter of Credit outstanding. Such funds or Cash Equivalents shall be
held by the Administrative Agent in an interest-bearing cash collateral account
(the "Cash Collateral Account") designated on the books and records of the
Administrative Agent (which may be commingled with other funds) maintained at a
bank or financial institution acceptable to the Administrative Agent. The Cash
Collateral Account shall be in the name of the Administrative Agent and shall be
pledged to, and subject to the sole dominion and control of, the Administrative
Agent, for the benefit of the Administrative Agent and the Lenders, in a manner
satisfactory to the Administrative Agent. The Borrower hereby pledges and grants
to the Administrative Agent, for the benefit of the Lenders, a security interest
in all such funds and Cash Equivalents held in the Cash Collateral Account from
time to time and all proceeds thereof, as security for the payment of all
amounts due in respect of the L/C Obligations and other Obligations, whether or
not then due.
(b) If any L/C Obligations, whether or not then due and
payable, shall for any reason be outstanding on the Revolving Credit Termination
Date, the Borrower shall, as the Administrative Agent shall direct, either (i)
provide cash collateral therefor in the manner
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described in Section 3.9(a), (ii) cause all such Letters of Credit and
guaranties thereof to be canceled and returned, or (iii) deliver a stand-by
letter (or letters) of credit in guarantee of such L/C Obligations, which
stand-by letter (or letters) of credit shall be of like tenor and duration (plus
thirty (30) additional days) as, and in an amount equal to the aggregate maximum
amount then available to be drawn under, plus related fees and expenses payable
to the Issuing Lender in respect of, the Letters of Credit to which such
outstanding L/C Obligations relate and shall be issued by a Person, and shall be
subject to such terms and conditions, as are be satisfactory to the
Administrative Agent in its sole discretion.
(c) From time to time after funds are deposited in the Cash
Collateral Account by the Borrower, whether before or after the Revolving Credit
Termination Date, the Administrative Agent may apply such funds or Cash
Equivalents then held in the Cash Collateral Account to the payment of any
amounts, in such order as the Administrative Agent may elect, as shall be or
shall become due and payable by the Borrower to the Lenders with respect to such
L/C Obligations and, upon the satisfaction in full of all L/C Obligations, to
any other Obligations of the Borrower then due and payable.
(d) Neither the Borrower nor any Person claiming on behalf of
or through the Borrower shall have any right to withdraw any of the funds or
Cash Equivalents held in the Cash Collateral Account, except that upon the
termination of all L/C Obligations and the payment of all amounts payable by the
Borrower to the Lenders in respect thereof, any funds remaining in the Cash
Collateral Account shall be applied to other Obligations when due and owing and
upon payment in full of such Obligations, any remaining amount shall be promptly
paid to the Borrower or as otherwise required by law.
3.10 Letters of Credit Denominated in Available Foreign
Currencies. Notwithstanding any other provision of this Section 3, in the event
that any Letter of Credit is denominated in any Available Foreign Currency, the
amount of the Reimbursement Obligation of the Borrower pursuant to Section 3.5
in respect of such Letter of Credit shall bear interest as provided in Section
3.5 with respect to amounts owing in Dollars; provided, that (i) the interest
rates on such amounts shall be the rates reasonably determined by the relevant
Issuing Lender to be the equivalent rates, in respect of the relevant Available
Foreign Currency, as the applicable rates provided in Section 3.5 with respect
to amounts denominated in Dollars and (ii) if the Borrower fails to pay any such
Reimbursement Obligation required by Section 3.5 on or prior to the second
Business Day following the date of the drawing to which such Reimbursement
Obligation relates, then, on the third Business Day following such date of
drawing, the relevant Issuing Lender, in cooperation with the Administrative
Agent, shall determine the U.S. Dollar Equivalent of the amount of such
Reimbursement Obligation, and the Borrower's obligation is respect of such
Reimbursement Obligation shall be converted to such U.S. Dollar Equivalent, with
interest thereon as provided in Section 3.5 (provided, that if the Application
in respect of such Letter of Credit provides for conversion of such amount into
Dollars on any earlier date or at any other conversion rate, the provisions of
such Application shall control with respect to such conversion).
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SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit, the Borrower hereby represents and warrants to each Agent and each
Lender that:
4.1 Financial Condition. (a) The unaudited pro forma
consolidated balance sheet of the Borrower 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 and the Letters of
Credit to be issued on the Spin-Off Date and the use of proceeds thereof, (iii)
the incurrence of the Indebtedness under the Interim Loan 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 Borrower as of
the date of delivery thereof, and presents fairly on a pro forma basis the
estimated financial position of Borrower and its consolidated Subsidiaries as at
March 31, 2000, assuming that the events specified in the preceding sentence had
actually occurred at such date.
(b) The audited consolidated balance sheets of the Borrower 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
Borrower 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 Borrower 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 Borrower as at such date, and the consolidated results of its
operations and its consolidated cash flows for such period (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 Borrower 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 Borrower of any
material part of its business or Property.
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4.2 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.
4.3 Corporate Existence; Compliance with Law. Each of the
Borrower and its Subsidiaries (other than Inactive Subsidiaries and Foreign
Subsidiaries) (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization (except, with respect to
Subsidiaries of the Borrower only, 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.
4.4 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 Borrower, 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 Borrower,
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 (a) consents, authorizations, filings and
notices described in Schedule 4.4, 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, and (b) the filings referred to in Section 4.19. Each
Loan Document has been 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).
4.5 No Legal Bar. The execution, delivery and performance of
this Agreement and the other Loan Documents, the issuance of Letters of Credit,
the borrowings hereunder and the use of the proceeds thereof will not violate
any Requirement of Law or any Contractual Obligation of the Borrower 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 the Liens
created by the
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Security Documents and immaterial Liens). No Requirement of Law or Contractual
Obligation applicable to the Borrower or any of its Subsidiaries could
reasonably be expected to have a Material Adverse Effect.
4.6 No Material Litigation. Except as disclosed on Schedule
4.6 or 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 Borrower, threatened by or against the Borrower 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.
4.7 No Default. Except as disclosed in the Form 10
Registration Statement, neither the Borrower nor 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.
4.8 Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries has title in fee simple to, or a valid leasehold interest in, all
its real property, and good title to, or a valid leasehold interest in, all its
other Property, and none of such Property is subject to any Lien except as
permitted by Section 7.3. Set forth on Schedule 4.8 is all real property owned,
leased or operated by the Borrower or any of its Subsidiaries and which are
material to the operation of the Borrower and its Subsidiaries.
4.9 Intellectual Property. The Borrower 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 Borrower know of any valid basis for any
such claim. To the knowledge of the Borrower, the use of Intellectual Property
by the Borrower and its Subsidiaries does not infringe on the rights of any
Person in any material respect.
4.10 Taxes. Each of AutoNation (with respect to any years in
which the Borrower would be deemed a part of the same consolidated group with
AutoNation for purposes of U.S. income taxes), the Borrower 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 Borrower
or its Subsidiaries, as the case may be); and no tax Lien has been filed, and,
to the
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knowledge of the Borrower, no claim is being asserted, with respect to any such
tax, fee or other charge.
4.11 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 Borrower 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.
4.12 Labor Matters. There are no strikes or other labor
disputes against the Borrower or any of its Subsidiaries pending or, to the
knowledge of the Borrower, threatened that (individually or in the aggregate)
could reasonably be expected to have a Material Adverse Effect. To the knowledge
of the Borrower, hours worked by and payment made to employees of the Borrower
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 Borrower 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 Borrower or the relevant Subsidiary.
4.13 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 which
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
Borrower 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 Adverse Event, and neither the Borrower nor any
Commonly Controlled Entity would become subject to any liability under ERISA
that could reasonably be expected to result in a Material Adverse Effect if the
Borrower 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
Borrower, no such Multiemployer Plan is in Reorganization or Insolvent which
Reorganization or Insolvency could reasonably be expected to result in a
Material Adverse Effect.
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4.14 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.
4.15 Subsidiaries. The Subsidiaries listed on Schedule 4.15
constitute all the Subsidiaries of the Borrower at the date hereof. Schedule
4.15 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.
4.16 Use of Proceeds. The proceeds of the Revolving Credit
Loans and the Swing Line Loans, and the Letters of Credit, shall be used for
working capital and general corporate purposes and to repay amounts outstanding
in respect of the Supplemental Credit Facility to the extent required
thereunder.
4.17 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 Borrower 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.
(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 Borrower 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 Borrower or
any of its Subsidiaries under any applicable Environmental Law or
otherwise result in costs to the Borrower or any of its Subsidiaries,
or (ii) interfere with the Borrower's or any of its Subsidiaries'
continued operations, or (iii) impair the fair saleable value of any
real property owned or leased by the Borrower or any of its
Subsidiaries.
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(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 Borrower or any
of its Subsidiaries is, or to the knowledge of the Borrower or any of
its Subsidiaries will be, named as a party that is pending or, to the
knowledge of the Borrower or any of its Subsidiaries, threatened.
(d) Neither the Borrower 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 Borrower 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 Borrower 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.
4.18 Accuracy of Information, etc. No statement or information
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum, 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 (or, in the case of the Confidential Information
Memorandum, as of the date of this Agreement), 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
Borrower 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 Confidential
Information Memorandum, 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 6.7.
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4.19 Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Secured Parties, a legal, valid and enforceable security interest
in the Collateral described therein and proceeds thereof. In the case of the
Pledged Stock described in the Guarantee and Collateral Agreement, when any
stock certificates representing such Pledged Stock are delivered to the
Administrative Agent, and in the case of the other Collateral described in the
Guarantee and Collateral Agreement for which security interests may be perfected
by a filing, when financing statements or other relevant filing documents in
appropriate form are filed in the offices specified on Schedule 4.19(a)-1 (which
financing statements or other relevant filing documents shall have been duly
completed and executed and delivered to the Administrative Agent on or before
the Initial Funding Date) the Guarantee and Collateral Agreement shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Loan Parties in such Collateral and the proceeds thereof, as
security for the Obligations (as defined in the Guarantee and Collateral
Agreement), in each case prior and superior in right to any other Person
(except, in the case of Collateral other than Pledged Stock, Liens permitted by
Section 7.3). Other than those that relate to the Vehicle Debt and to the
Supplemental Credit Facility and as described in Section 7.3(m), Schedule
4.19(a)-2 lists each UCC Financing Statement that (i) names any Loan Party as
debtor and (ii) will remain on file after the Closing Date. Schedule 4.19(a)-3
lists each UCC Financing Statement that (i) names any Loan Party as debtor and
(ii) will be terminated in accordance with Section 7.18(b) or with respect to
which the Borrower will comply with Section 7.18(c); and in accordance with
Sections 7.18(b) and (c), the Borrower will have delivered to the Administrative
Agent, or caused to be filed, duly completed UCC termination statements, signed
by the relevant secured party, in respect of each UCC Financing Statement listed
in Schedule 4.19(a)-3.
(b) Each of the Mortgages executed and delivered on the
Initial Funding Date is, and each Mortgage executed and delivered after the
Initial Funding will be, effective to create in favor of the Administrative
Agent, for the benefit of the Lenders, a legal, valid and enforceable Lien on
the Mortgaged Properties described therein and proceeds thereof; and when the
Mortgages are filed in the offices specified on Schedule 4.19(b) (in the case of
the Mortgages to be executed and delivered on or prior to the Spin-Off Date) or
in the recording office designated by the Borrower (in the case of any Mortgage
to be executed and delivered after the Spin-Off Date), each Mortgage shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Loan Parties in the Mortgaged Properties described therein
and the proceeds thereof, as security for the Obligations (as defined in the
relevant Mortgage), in each case prior and superior in right to any other Person
(other than Persons holding Liens or other encumbrances or rights permitted by
the relevant Mortgage).
4.20 Solvency. The Borrower 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.
4.21 Regulation H. No Mortgage encumbers improved real
property which is located in an area that has been identified by the Secretary
of Housing and Urban Development
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as an area having special flood hazards and in which flood insurance has been
made available under the National Flood Insurance Act of 1968 (except any
Mortgaged Properties as to which such flood insurance as required by Regulation
H has been obtained and is in full force and effect as required by this
Agreement).
4.22 Customer and Trade Relations. As of the Closing Date,
there exists no actual or, to the knowledge of the Borrower, threatened
termination or cancellation of, or any material adverse modification or change
in the business relationship of the Borrower with GM.
4.23 Credit Card Agreements. Set forth in Schedule 1.1(b) is
a correct and complete list of all of the Credit Card Agreements and all other
agreements, documents and instruments existing as of the date hereof between or
among a Loan Party, the Credit Card Issuers, the Credit Card Processors and any
of their Affiliates. The Credit Card Agreements constitute all of such
agreements necessary for a Loan Party to operate their respective businesses as
presently conducted with respect to credit cards and debit cards and no Accounts
of the Loan Parties arise from leases by customers with credit cards or debit
cards, other than those which are issued by Credit Card Issuers with whom such
Loan Parties has entered into one of the Credit Card Agreements set forth on
Schedule 1.1(b) or with whom such Loan Parties have entered into a Credit Card
Agreement. Each of the Credit Card Agreements constitutes the legal, valid and
binding obligations of the Loan Parties party thereto, enforceable in accordance
with their respective terms and are in full force and effect, 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). No default or event of default, or act, condition or event which after
notice or passage of time or both, would constitute a default or an event of
default under any of the Credit Card Agreements exists or has occurred which
default or event of default would permit the Credit Card Issuer or Credit Card
Processor party to such Credit Card Agreement to cease or suspend payments to a
Loan Party or would adversely affect the ability of a Loan Party to collect any
such payments thereunder. Each Loan Party has complied with all of the terms and
conditions of the Credit Card Agreements to which it is a party to the extent
necessary for such Loan Party to be entitled to receive all payments thereunder,
except where the failure to so comply would not permit the Credit Card Issuer or
Credit Card Processor party to such Credit Card Agreement to cease or suspend
payments to such Loan Party and would not adversely affect the ability of such
Loan Party to collect any such payments thereunder. The Loan Parties have
delivered, or caused to be delivered to the Administrative Agent, true, correct
and complete copies of all of the Credit Card Agreements.
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SECTION 5. CONDITIONS PRECEDENT.
5.1 Conditions to Closing Date. The Closing Date shall be the
date on which the following conditions precedent shall have been fulfilled or
waived pursuant to this Agreement, as shall be evidenced by a written
acknowledgment of the Agents, which Closing Date occurred on May 26, 2000:
(a) Loan Documents. The Agents shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of the
Borrower, (ii) a Lender Addendum executed and delivered by each Lender
and accepted by the Borrower and (iii) an Assignment and Acceptance,
executed and delivered by ▇▇▇▇▇▇ Commercial Paper Inc., as assignor,
and Congress Financial Corporation (Florida), as assignee, and duly
executed by each other party thereto.
(b) Pro Forma Balance Sheet; Financial Statements. The Agents
shall have received (i) the Pro Forma Balance Sheet and (ii) audited
and unaudited consolidated financial statements of the Borrower
described in Section 4.1(b); and such financial statements shall not,
in the reasonable judgment of the Agents, reflect any material adverse
change in the consolidated financial condition of the Borrower, as
reflected in the financial statements or projections delivered to the
Agents prior to the date hereof. Without limiting the foregoing, the
Agents shall have received audited and unaudited (which have been
reviewed by the independent accountants for the Borrower as provided in
Statement on Auditing Standards No. 71) financial statements of the
Borrower (including pro forma financial statements) meeting the
requirements of Regulation S-X for a Form S-1 registration statement
under the Securities Act of 1933, as amended, and all such financial
statements shall be reasonably satisfactory to the Agents; such
financial statements shall in any event include the unaudited financial
statements of the Borrower for the fiscal quarter ending March 31, 2000
and for the month ending March 31, 2000, and such financial statements
shall show Consolidated EBITDA of the Borrower for the fiscal month
ending March 31, 2000 of not less than $11,700,000 and Consolidated
Adjusted EBITDA for such month of not less than $13,000,000.
(c) Related Agreements and Documents. The Agents shall have
received (in a form reasonably satisfactory to the Agents), true and
correct copies, certified as to authenticity by the Borrower, of (i)
forms of the Distribution Documentation to be executed and delivered on
or before the Spin-Off Date, (ii) the substantially final form of the
Interim Facility Loan Documentation, (iii) the forms of the AutoNation
Support Agreement, (iv) the Supplemental Credit Facility Agreement,
duly executed by an authorized officer of each party thereto and (v)
existing forms of the General Motors Letter of Credit Documentation.
(d) Fees. The Lenders and the Agents shall have received all
fees required to be paid, and all expenses for which invoices have been
presented (including reasonable fees, disbursements and other charges
of counsel to the Agents), on or before the Closing Date.
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(e) Business Plan. The Agents shall have received a business
plan for fiscal years 2000-2004 and a satisfactory written analysis of
the business and prospects of the Borrower and its Subsidiaries for the
period from the Closing Date through the Revolving Credit Termination
Date (including in any event quarterly projections through the last
quarter of fiscal year 2001), all in form and substance satisfactory to
the Lenders.
5.2 Conditions to Initial Extension of Credit. The agreement
of each Lender to make the initial extension of credit requested to be made by
it hereunder (which shall not occur prior to June 30, 2000) is subject to the
satisfaction, prior to or concurrently with the making of such extension of
credit on the Spin-Off Date, of the following conditions precedent:
(a) Closing Date. The Closing Date shall have occurred.
(b) Consummation of Spin-Off. 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 Agents
shall have received such evidence thereof as they shall reasonably
request or (ii) the Spin-Off shall be scheduled to occur on the Initial
Funding Date and the Agents shall have received (A) a certificate, in
form and substance reasonably satisfactory to the Agents, executed by a
responsible officer of AutoNation certifying that (1) all of the
conditions to effectiveness of the Spin-Off pursuant to the
Distribution Documentation have been satisfied (except for the
distribution of shares of common stock of the Borrower to the
shareholders of AutoNation) and (2) AutoNation has given instructions
to the Distribution Agent (under and as defined in the Distribution
Documentation) to distribute the shares of common stock of the Borrower
to the shareholders of AutoNation and (B) a guarantee, in form and
substance reasonably satisfactory to the Agents, executed by AutoNation
to guarantee the Obligations, such guarantee to become effective only
if the Spin-Off does not occur on the Initial Funding Date.
(c) Shareholders' Equity After giving effect to the
consummation of the Spin-Off, the shareholders' equity of the Borrower,
determined in accordance with GAAP, shall be not less than
$851,000,000, and the Agents shall have received evidence thereof in
the form of a certificate to such effect, in form and substance
reasonably satisfactory to the Agents, executed by the Treasurer of the
Borrower and the Chief Financial Officer of AutoNation.
(d) [INTENTIONALLY OMITTED]
(e) Capital Structure. After giving effect to the Spin-Off,
the incurrence of the Indebtedness under each of the Interim Loan
Facility and the Supplemental Credit Facility and the application of
the proceeds thereof and the incurrence of any Indebtedness under this
Agreement on the Spin-Off Date, the capital structure of the Borrower
and its Subsidiaries shall be substantially as reflected in the Pro
Forma Balance
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Sheet (except for changes in the amount of Vehicle Debt and except that
the shareholders' equity of the Borrower need not exceed $851,000,000).
(f) Related Agreements. The Agents shall have received, true
and correct copies, certified as to authenticity by the Borrower, of
(i) the Distribution Documentation and the AutoNation Support
Agreement, and the Distribution Documentation and the AutoNation
Support Agreement shall not be different in any material respect from
the forms thereof delivered to the Agents on the Closing Date pursuant
to Section 5.1(c), (ii) the Interim Facility Loan Documentation, which
shall not be different in any material respect from the form thereof
delivered to the Agents on the Closing Date pursuant to Section 5.1(c),
(iii) the General Motors Letter of Credit Documentation, which shall
not be different in any material respect from the forms thereof
delivered to the Agents on the Closing Date pursuant to Section 5.1(c),
(iv) the Supplemental Credit Facility Documentation, in form and
substance reasonably satisfactory to the Agents and (v) such other
documents or instruments as may be reasonably requested by the Agents.
(g) Liquidity Facility. The Agents shall be satisfied that the
Borrower has obtained a commercial paper liquidity facility in an
aggregate principal amount of at least $1,095,000,000, on terms
equivalent to those which existed as of March 31, 2000, or in such
other amount and subject to such other terms as shall be acceptable to
the Agents.
(h) Fees. The Lenders and the Administrative Agent shall have
received all fees required to be paid, and all expenses for which
invoices have been presented (including reasonable fees, disbursements
and other charges of counsel to the Agents), on or before the Spin-Off
Date. All such amounts, to the extent not otherwise paid, will be paid
with proceeds of Loans made on the Spin-Off Date and will be reflected
in the funding instructions given by the Borrower to the Administrative
Agent on or before the Spin-Off Date.
(i) Sufficiency of Working Capital. The Lenders shall be
satisfied with the sufficiency of amounts available under this
Agreement and the Supplemental Credit Facility Documentation to meet
the ongoing working capital needs of the Borrower from the date of the
Spin-Off through the Revolving Credit Termination Date.
(j) Loan Documents. The Agents shall have received (i) a
Mortgage covering each of the Mortgaged Properties which the Borrower
wishes to include in the Borrowing Base on the Initial Funding Date,
executed and delivered by a duly authorized officer of each party
thereto, (ii) the Intercreditor Agreement, executed and delivered by a
duly authorized officer of each party thereto, (iii) the Concentration
Account Agreements, executed and delivered by a duly authorized officer
of each party thereto, (iv) the Guarantee and Collateral Agreement,
executed and delivered by a duly authorized officer of the Borrower and
each Subsidiary Guarantor and (v) a Lender Addendum executed and
delivered by each Lender and accepted by the Borrower and the
Administrative Agent.
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(k) Approvals. All governmental and third party approvals
necessary in connection with the Spin-Off, the continuing operations of
the Borrower and its Subsidiaries and the transactions contemplated
hereby shall have been obtained and be in full force and effect.
(l) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions:
(i) the legal opinion of Fried, Frank, Harris,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel to the Borrower and its
Subsidiaries, in form and substance reasonably satisfactory to
the Agents;
(ii) the legal opinion of the general counsel of
the Borrower and its Subsidiaries, in form and substance
reasonably satisfactory to the Agents;
(iii) the legal opinion of local counsel in each
of Florida, Ohio and of such other special and local counsel
as may be required by the Administrative Agent in respect of
Mortgaged Properties or perfection matters outside the United
States; and
(iv) the legal opinion of counsel to AutoNation,
in form and substance reasonably satisfactory to the Agents,
as to matters relating to the AutoNation Support Agreement and
the guarantee delivered pursuant to Section 5.2(b)(ii)(B).
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Agents may
reasonably require.
(m) Pledged Stock; Stock Powers; Acknowledgment and Consent;
Pledged Notes. The Administrative Agent shall have received (i) the
certificates representing the shares of Capital Stock pledged pursuant
to the Guarantee and Collateral Agreement, together with an undated
stock power for each such certificate executed in blank by a duly
authorized officer of the pledgor thereof, (ii) an Acknowledgment and
Consent, substantially in the form of Annex II to the Guarantee and
Collateral Agreement, duly executed by any issuer of Capital Stock
pledged pursuant to the Guarantee and Collateral Agreement that is not
itself a party to the Guarantee and Collateral Agreement and (iii) each
promissory note pledged pursuant to the Guarantee and Collateral
Agreement endorsed (without recourse) in blank (or accompanied by an
executed transfer form in blank satisfactory to the Administrative
Agent) by the pledgor thereof.
(n) Filings, Registrations and Recordings. Each document
(including, without limitation, any Uniform Commercial Code financing
statement) required by the Guarantee and Collateral Agreement or under
law or reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the
Administrative Agent, for the benefit of the Lenders, a perfected Lien
on the Collateral
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described therein, prior and superior in right to any other Person
(other than with respect to Liens expressly permitted by Section 7.3),
shall have been filed, registered or recorded or shall have been
delivered to the Administrative Agent and be in proper form for filing,
registration or recordation.
(o) Collateral Update. The Administrative Agent shall have
completed a field review of the existing records and such other
information with respect to the Collateral as the Administrative Agent
may require to determine the amount of Revolving Credit Loans available
to the Borrower (including, without limitation, current roll-forwards
of Accounts through a date not more than three Business Days prior to
the Initial Funding Date (or such earlier date which is acceptable to
the Administrative Agent), together with such supporting documentation
as may be necessary or appropriate, and other documents and information
that will enable the Administrative Agent to accurately identify and
verify the Collateral), the results of which in each case shall be
reasonably satisfactory to the Administrative Agent, not more than
three Business Days prior to the Initial Funding Date.
(p) Third Party Agreements. The Administrative Agent shall
have received, in form and substance satisfactory to the Administrative
Agent, all consents, waivers, acknowledgments and other agreements from
third persons which the Administrative Agent may deem necessary or
desirable in order to permit, protect and perfect its Liens on the
Collateral of or to effectuate the provisions or purposes of this
Agreement, including without limitation, Credit Card Acknowledgments
and collateral access agreements by lessors, mortgagees and
warehousemen.
(q) Solvency Analysis. If determined by the Syndication Agent
to be advisable for use in connection with the syndication of the
Revolving Credit Facility, the Lenders shall have received a solvency
certificate and analysis from the chief financial officer of the
Borrower which shall document the solvency of the Borrower and its
Subsidiaries after giving effect to the Spin-Off and the other
transactions contemplated hereby, all in form and substance
satisfactory to the Agents.
(r) Accounts Field Examination. The Lenders shall have
received copies of a field examination, prepared by or on behalf of the
Administrative Agent, of the Accounts of the Borrower and the
Subsidiary Guarantors, together with a letter addressed to the Lenders
entitling each of the Lenders to rely thereon.
(s) Appraisal. The Appraisal in respect of the Mortgaged
Properties listed in Schedule 1.1(a) shall have been completed and the
Lenders shall have received copies thereof, together with a letter
addressed to the Lenders entitling each of the Lenders to rely thereon.
(t) Lien Searches. The Agents shall have received the results
of a recent lien search in each of the jurisdictions in which Uniform
Commercial Code financing
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statement or other filings or recordations should be made to evidence
or perfect security interests in all assets of the Loan Parties, and
such search shall reveal no liens on any of the assets of the Loan
Party, except for Liens permitted by Section 7.3.
(u) Environmental Matters. The Agents shall have received,
with a copy for each Lender, a written environmental assessment or
review regarding each of the parcels of real property to constitute
Mortgaged Properties on the Spin-Off Date, prepared by Environ
Corporation or other environmental consultants reasonably acceptable to
the Agents, in form, scope, and substance reasonably satisfactory to
the Agents, together with a letter from the relevant consultant
permitting the Agents and the Lenders to rely on such environmental
assessment or review as if addressed to and prepared for each of them;
and the Agents shall be reasonably satisfied with the environmental
affairs of the Borrower and it Subsidiaries generally.
(v) Closing Certificate. The Administrative Agent shall have
received a certificate of each Loan Party, dated the Initial Funding
Date, substantially in the form of Exhibit B, with appropriate
insertions and attachments.
(w) Insurance. The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 5.3 of
the Guarantee and Collateral Agreement.
(x) Subordinated Notes. The Agents shall have received true
and correct copies of the Subordinated Notes executed by the obligor
thereunder, certified as to authenticity by a Responsible Officer.
(y) Borrowing Base Certificate. The Administrative Agent shall
have received a Borrowing Base Certificate, in form and substance
satisfactory to the Administrative Agent, which shall reflect
sufficient availability under the Borrowing Base for the extensions of
credit requested on the Initial Funding Date.
5.3 Conditions to Each Extension of Credit. The agreement of
each Lender to make any extension of credit requested to be made by it hereunder
on any date (including, without limitation, its initial extension of credit) is
subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by any Loan Party in or pursuant to
the Loan Documents shall be true and correct in all material respects
on and as of such date as if made on and as of such date (except when
such representation or warranty relates to a specific date, in which
case, it shall be true and correct in all material respects as of such
date).
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(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.3 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS.
The Borrower hereby agrees that, so long as the Revolving
Credit Commitments remain in effect, any Letter of Credit remains outstanding or
any Loan or other amount is owing to any Lender or any Agent hereunder, the
Borrower shall, and shall cause each of its Subsidiaries to:
6.1 Financial Statements. Furnish to each Agent (with copies
for each Lender):
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the
audited consolidated balance sheet of the Borrower 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 independent certified public accountants of
nationally recognized standing; provided that the delivery of the
Borrower's annual report on Form 10-K shall satisfy the requirements of
this Section 6.1(a).
(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 Borrower, the unaudited consolidated balance sheet
of the Borrower 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
Borrower's quarterly report on Form 10-Q shall satisfy the requirements
of this Section 6.1(b); and
(c) while an Event of Default shall have occurred and be
continuing, as soon as available, but in any event not later than 45
days after the end of each month occurring during each fiscal year of
the Borrower (other than the third, sixth, ninth and twelfth such
month), the unaudited consolidated balance sheets of the Borrower and
its Subsidiaries as at the end of such month and the related unaudited
consolidated statements of income and
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of cash flows for such month and the portion of the fiscal year through
the end of such month, 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) until such time as such Event of Default shall no longer
be continuing;
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).
6.2 Certificates; Other Information. Furnish to each Agent
(with copies for each Lender), or, in the case of clause (f), to the relevant
Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(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 6.1, (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, (x) a Compliance
Certificate containing all information and calculations necessary for
determining compliance by the Borrower 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 Borrower, as the case may be,
(y) to the extent not previously disclosed to the Administrative Agent,
a listing of any county or state within the United States where any
Loan Party keeps inventory or equipment and of any Intellectual
Property acquired by any Loan Party since the date of the most recent
list delivered pursuant to this clause (y) (or, in the case of the
first such list so delivered, since the Closing Date) and (z) any UCC
financing statements or other filings specified in such Compliance
Certificate as being required to be delivered therewith;
(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 Support Agreement, the Interim Facility
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Loan Documentation, the Supplemental Credit Facility Documentation or
the General Motors Letter of Credit Documentation;
(d) within five days after the same are sent, copies of all
financial statements and reports that the Borrower sends to the holders
of any class of its debt securities or public equity securities and,
within five days after the same are filed, copies of all financial
statements and reports that the Borrower may make to, or file with, the
SEC;
(e) as soon as possible and in any event within five days of
obtaining knowledge thereof, any notice that any governmental authority
may deny any application for a material Environmental Permit sought by,
or revoke or refuse to renew any material Environmental Permit held by,
the Borrower; and
(f) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
6.3 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 (including without
limitation, the payment when due of all real estate taxes, assessments and other
charges against any Mortgaged Property), 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 Borrower or its Subsidiaries, as the case may be.
6.4 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 7.4 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
(including without limitation, Requirements of Law applicable to the Mortgaged
Properties), except to the extent that failure to comply therewith could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect.
6.5 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.
6.6 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
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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 Borrower) to visit and
inspect any of its properties and examine and make abstracts from any of its
books and records, and perform collateral audits, 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 Borrower and its
Subsidiaries with officers and employees of the Borrower and its Subsidiaries
and with its independent certified public accountants (subject to the
confidentiality provisions contained in Section 10.14).
6.7 Notices. Promptly give notice to the Agents of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any material
Contractual Obligation of the Borrower or any of its Subsidiaries or
(ii) litigation, investigation or proceeding which may exist at any
time between the Borrower or any of its Subsidiaries and any
Governmental Authority, that in either case, 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 Borrower 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 Borrower 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 Borrower 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 Borrower or the relevant Subsidiary proposes to take
with respect thereto.
6.8 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
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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.
6.9 Additional Collateral, etc. (a) With respect to any
Property acquired after the Closing Date by any Loan Party, including any entity
that becomes a Loan Party hereafter pursuant to Section 6.9(c), (other than (x)
any Property described in paragraph (b) or paragraph (c) of this Section and (y)
any Property subject to a Lien expressly permitted by Section 7.3(g) or (h)) as
to which the Administrative Agent, for the benefit of the Lenders, does not have
a perfected Lien, promptly (i) execute and deliver to the Administrative Agent
such amendments to the Guarantee and Collateral Agreement or such other
documents as the Administrative Agent deems necessary or advisable to grant to
the Administrative Agent, for the benefit of the Lenders, a security interest in
such Property and (ii) take all actions necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first priority
security interest in such Property, including without limitation, the filing of
Uniform Commercial Code financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement or by law or as may be
reasonably requested by the Administrative Agent.
(b) With respect to any fee interest in any real property
having a value (together with improvements thereof) of at least $1,000,000
acquired after the Closing Date by any Loan Party, including any entity that
becomes a Loan Party hereafter pursuant to Section 6.9(c), (other than any such
real property subject to a Lien expressly permitted by Section 7.3(g)), promptly
(i) execute and deliver a first priority Mortgage in favor of the Administrative
Agent, for the benefit of the Lenders, covering such real property, (ii) if
requested by the Administrative Agent, provide the Lenders with (x) title and
extended coverage insurance covering such real property in an amount at least
equal to the purchase price of such real property (or such other amount as shall
be reasonably specified by the Administrative Agent) as well as a current ALTA
survey thereof, together with a surveyor's certificate and (y) any consents or
estoppels reasonably deemed necessary or advisable by the Administrative Agent
in connection with such Mortgage, each of the foregoing in form and substance
reasonably satisfactory to the Administrative Agent and (iii) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(c) With respect to any new Subsidiary (other than an Excluded
Foreign Subsidiary, an Insurance Company, a Finance Company or an Inactive
Subsidiary) created or acquired after the Closing Date (which, for the purposes
of this paragraph, shall include (x) any existing Subsidiary that ceases to be
an Excluded Foreign Subsidiary or an Inactive Subsidiary and (y) any Risk
Management Subsidiary that becomes a Wholly Owned Subsidiary of the
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Borrower), by the Borrower or any of its Subsidiaries, promptly (i) execute and
deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement as the Administrative Agent deems necessary or advisable to
grant to the Administrative Agent, for the benefit of the Lenders, a perfected
first priority security interest in the Capital Stock of such new Subsidiary
that is owned by the Borrower or any of its Subsidiaries, (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock, together
with undated stock powers, in blank, executed and delivered by a duly authorized
officer of the Borrower or such Subsidiary, as the case may be, (iii) cause such
new Subsidiary (A) to become a party to the Guarantee and Collateral Agreement
and (B) to take such actions necessary or advisable to grant to the
Administrative Agent for the benefit of the Lenders a perfected first priority
security interest in the Collateral described in the Guarantee and Collateral
Agreement with respect to such new Subsidiary, including, without limitation,
the filing of Uniform Commercial Code financing statements in such jurisdictions
as may be required by the Guarantee and Collateral Agreement or by law or as may
be reasonably requested by the Administrative Agent, and (iv) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(d) With respect to any new Excluded Foreign Subsidiary
created or acquired after the Closing Date by the Borrower or any of its
Subsidiaries (other than any Excluded Foreign Subsidiaries), promptly (i)
execute and deliver to the Administrative Agent such amendments to the Guarantee
and Collateral Agreement or such other documents as the Administrative Agent
deems necessary or advisable in order to grant to the Administrative Agent, for
the benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary that is owned by the Borrower or any of its
Subsidiaries (other than any Excluded Foreign Subsidiaries), (provided that in
no event shall more than 65% of the total outstanding Capital Stock of any such
new Excluded Foreign Subsidiary be required to be so pledged), (ii) deliver to
the Administrative Agent the certificates representing such Capital Stock,
together with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the Borrower or such Subsidiary, as the case may be, and
take such other action as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect the Lien of the Administrative Agent
thereon, and (iii) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
6.10 Borrowing Base Certificate. In the case of the Borrower,
deliver or cause to be delivered, at the Borrower's expense, the following:
(a) To the Administrative Agent the following documents in a
form satisfactory to the Administrative Agent:
(i) on a weekly basis or more frequently as the
Administrative Agent may request, a Borrowing Base Certificate (which,
upon the request of any Lender, the
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Administrative Agent shall promptly deliver to such Lender),
accompanied by such supporting detail and documentation as is
contemplated by the Borrowing Base Certificate and/or shall be
requested by the Administrative Agent in its reasonable discretion,
provided that at any time that no Default or Event of Default shall
exist or have occurred and be continuing the Borrower shall only be
required to provide the Administrative Agent with such schedules once
each month and in no event later than ten days after the end of each
such month (in a form and detail satisfactory to the Administrative
Agent);
(ii) on a monthly basis and in no event later than
fifteen days after the end of each such month or more frequently as the
Administrative Agent may in good faith request, (A) agings of Accounts
(including the status of payments to owners and lessors of the leased
premises of the Borrower and warehouses and processors used by
Borrowers) and (B) agings of Accounts (together with a reconciliation
to the previous month's aging and to its general ledger);
(iii) upon the Administrative Agent's request in good
faith, (A) copies of customer statements and credit memos, remittance
advices and reports, and copies of deposit slips and bank statements,
and (B) a statement of the outstanding loans and payments made, and
Accounts owing to, Affiliates as of the last day of the immediately
preceding month.
(b) Upon the request of the Administrative Agent or any
Lender, at the Borrower's expense, (i) no more than once in any twelve month
period commencing on the first anniversary of the Closing Date, deliver, or
cause to be delivered, to the Administrative Agent written reports or appraisals
of such Mortgaged Properties as the Administrative Agent may specify as in the
aggregate have Appraised Values of up to twenty-five (25%) percent of the then
existing aggregate Appraised Values of all of the Mortgaged Properties, so long
as no Default or Event of Default shall have occurred and be continuing,
provided, that, if such written appraisals reflect a decline of over twenty
(20%) percent in the aggregate amount of the Appraised Values thereof from the
total Appraised Values for such Mortgaged Properties subject to such appraisal
as set forth in the appraisals received by the Administrative Agent prior to the
date hereof, then the Administrative Agent may request updated appraisals in
respect of all other Mortgaged Properties and (ii) deliver, or cause to be
delivered, to the Administrative Agent written appraisals as to any or all of
the Mortgaged Properties as the Administrative Agent may request on or after a
Default or Event of Default; in each case as to clauses (i) or (ii) above, such
written report or updated appraisal to be in form, scope and methodology, and by
an appraiser acceptable to the Administrative Agent which shall be addressed to
the Administrative Agent and upon which the Administrative Agent is expressly
permitted to rely; and
(c) To the Administrative Agent such other reports, statements
and reconciliations with respect to the Borrowing Base or the Collateral as the
Administrative Agent shall from time to time request in its reasonable
discretion.
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6.11 Cash Management Systems. (a) Identify on Schedule 6.11
all of the banks or other financial institutions with which the Borrower and the
Subsidiary Guarantors have material investment accounts, material securities
accounts, material collection accounts and principal disbursement accounts as of
the date hereof and each of the deposit accounts at such banks to a location of
the Borrower or the applicable Subsidiary Guarantor or the nature of the use of
such investment account, securities account or deposit account by the Borrower
or the applicable Subsidiary Guarantor.
(b) Deposit all proceeds of any Accounts or other Collateral
in every form, including, without limitation, cash, checks, credit card sales
drafts, credit card sales or charge slips or receipts and other forms of daily
receipts, from each location of the Borrower and the Subsidiary Guarantors on
each Business Day into the deposit accounts of the Borrower or the applicable
Subsidiary Guarantor used solely for such purpose and identified to such
location as set forth on Schedule 6.11 or such other deposit accounts as are
established by the Borrower or the applicable Subsidiary Guarantor to be used
for a location after the date hereof in accordance with Section 6.11(d). All
such funds deposited into the separate deposit accounts shall be sent by wire
transfer each Business Day to the Concentration Accounts as provided in Section
6.11(c). The Borrower and the Subsidiary Guarantors shall irrevocably authorize
and direct each of the banks into which proceeds of any Accounts or other
Collateral from each location of the Borrower or the applicable Subsidiary
Guarantor are at any time deposited as provided above to send all funds
deposited in such account by wire transfer each Business Day to concentration
accounts designated by the Borrower and reasonably acceptable to the
Administrative Agent (the "Concentration Accounts"). Such authorization and
direction shall not be rescinded, revoked or modified without the prior written
consent of the Administrative Agent. Notwithstanding the foregoing, the Borrower
and the Subsidiary Guarantors shall be permitted to retain cash at each location
of the Borrower and the Subsidiary Guarantors (or at the respective deposit
accounts used for such locations as set forth on Schedule 6.11 or established
after the date hereof in accordance with Section 6.11(d)) in such amounts as are
necessary for the day-to-day operation of such locations consistent with prior
practices in respect of each such store.
(c) Establish and maintain, at its expense, the Concentration
Accounts. The Borrower shall cause all amounts payable to the Borrower and its
Subsidiaries from Credit Card Issuers and Credit Card Processors to be deposited
in the Concentration Accounts on each Business Day and all amounts on deposit in
its deposit accounts used by each location to be sent as provided in Section
6.11(b) on each Business Day to the Concentration Accounts. On or prior to the
Initial Funding Date, Bank of America, N.A., or any other banks reasonably
acceptable to the Administrative Agent at which a Concentration Account is at
any time established (the "Concentration Account Banks"), shall enter into
blocked account or other agreements, in form and substance satisfactory to the
Administrative Agent (the "Concentration Account Agreements"), providing that
after the Initial Funding Date all items received or deposited in such of the
Concentration Accounts are subject to the Lien of the Administrative Agent for
itself and the ratable benefit of the Secured Parties, the items received for
deposit therein, or the funds from time to time on deposit therein and that upon
the request of the Administrative Agent upon the occurrence and continuance of
an Event of Default (which request shall state that an Event of
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Default under this Agreement has occurred and is continuing), the Concentration
Account Banks will wire, or otherwise transfer, in immediately available funds,
on each Business Day all funds received or deposited into such of the
Concentration Accounts to the Collection Account or such other bank account of
the Administrative Agent as the Administrative Agent may from time to time
designate for such purpose. The Administrative Agent may instruct the
Concentration Account Banks to transfer all funds received or deposited into the
Concentration Accounts to the Collection Account at any time that a Default or
Event of Default shall exist or have occurred and be continuing. The Borrower
agrees that all amounts deposited in the Concentration Accounts or other funds
received and collected by the Administrative Agent or any Lender shall be
subject to the Lien of the Administrative Agent for itself and the ratable
benefit of the Secured Parties.
(d) With respect to the Concentration Accounts or the deposit
accounts of each of the Borrower and the Subsidiary Guarantors set forth on
Schedule 6.11 or established after the date hereof in accordance with this
Section 6.11(d):
(i) (A) add or replace any bank at which such
accounts are located only if the Borrower or the applicable
Subsidiary Guarantor complies with Section 6.11(b) with
respect to the funds on deposit in such additional or
replacement account or (B) replace the Concentration Account
Banks only if (1) the Administrative Agent shall have
consented in writing in advance to any such replacement and
(2) prior to the time of any such addition or replacement, the
Borrower and the additional or replacement bank shall have
executed and delivered to the Administrative Agent a
replacement Concentration Account Agreement with respect to
such replacement Concentration Account Bank; and
(ii) close any accounts of the Borrower or any
Subsidiary Guarantor (other than any Concentration Account)
with prompt notice of such closing to the Administrative
Agent.
6.12 Further Assurances. From time to time execute and
deliver, or cause to be executed and delivered, such additional instruments,
certificates or documents, and take such actions, as the Administrative Agent
may reasonably request for the purposes of implementing or effectuating the
provisions of this Agreement and the other Loan Documents, or of more fully
perfecting or renewing the rights of the Administrative Agent and the Lenders
with respect to the Collateral (or with respect to any additions thereto or
replacements or proceeds thereof or with respect to any other property or assets
hereafter acquired by the Borrower or any Subsidiary which may be deemed to be
part of the Collateral) pursuant hereto or thereto. Upon the exercise by the
Administrative Agent or any Lender of any power, right, privilege or remedy
pursuant to this Agreement or the other Loan Documents which requires any
consent, approval, recording, qualification or authorization of any Governmental
Authority, the Borrower will execute and deliver, or will cause the execution
and delivery of, all applications, certifications, instruments and other
documents and papers that the Administrative Agent or such Lender may be
required
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to obtain from the Borrower or any of its Subsidiaries for such governmental
consent, approval, recording, qualification or authorization.
SECTION 7. NEGATIVE COVENANTS.
The Borrower hereby agrees that, so long as the Revolving
Credit Commitments remain in effect, any Letter of Credit remains outstanding or
any Loan or other amount is owing to any Lender or any Agent hereunder, the
Borrower shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:
7.1 Financial Condition Covenants.
(a) Consolidated Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio for any period of four consecutive fiscal
quarters of the Borrower ending with any fiscal quarter set forth below to be
less than the ratio set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Interest Coverage Ratio
-------------- -----------------------
FQ3 2000 2.50:1.00
FQ4 2000 3.00:1.00
FQ1 2001 3.00:1.00
FQ2 2001 and each fiscal quarter 3.25:1.00
thereafter
(b) Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters of the Borrower ending with any fiscal quarter set forth below
to be less than the ratio set forth below opposite such fiscal quarter:
Consolidated Fixed
Fiscal Quarter Charge Coverage Ratio
-------------- ---------------------
FQ3 2000 1.10:1.00
FQ4 2000 1.10:1.00
FQ1 2001 and each fiscal quarter 1.15:1.00
thereafter
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(c) Consolidated Adjusted Funded Debt Ratio. Permit the
Consolidated Adjusted Funded Debt Ratio as at the last day of any period of four
consecutive fiscal quarters of the Borrower 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 3.75:1.00
FQ4 2000 3.50:1.00
FQ1 2001 3.50:1.00
FQ2 2001 3.25:1.00
FQ3 2001 3.25:1.00
FQ4 2001 3.25:1.00
FQ1 2002 3.25:1.00
FQ2 2002 3.25:1.00
FQ3 2002 3.25:1.00
FQ4 2002 3.25:1.00
FQ1 2003 3.25:1.00
FQ2 2003 and each fiscal quarter 3.00:1.00
thereafter
7.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) Indebtedness (i) of any Loan Party to any other Loan
Party, (ii) of the Borrower to any Insurance Company, (iii) under the
Subordinated Notes and (iv) of any Foreign Subsidiary to any Loan Party
in an aggregate principal amount at any time outstanding not to exceed
the sum of (A) the amount set forth in Schedule 7.2(d), (B) an
aggregate amount up to $60,000,000 used to refinance foreign working
capital facilities existing on the Closing Date and set forth in
Schedule 7.2(d) and (C) an additional aggregate principal of
Indebtedness for all Foreign Subsidiaries of $25,000,000; provided,
that such Indebtedness permitted by clause (iv) shall be pari passu
with all
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other unsecured debt for borrowed money and that such Indebtedness
shall be evidenced by a promissory note that is pledged pursuant to the
Guarantee and Collateral Agreement;
(c) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 7.3(g) in an
aggregate principal amount not to exceed $25,000,000 at any one time
outstanding;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2(d) and any refinancings, refundings, renewals or
extensions thereof (without any increase in the principal amount
thereof or any shortening of the maturity of any principal amount
thereof);
(e) Guarantee Obligations by any Loan Party of Indebtedness of
any other Loan Party permitted under this Section;
(f) Indebtedness of Foreign Subsidiaries in an aggregate
principal amount as to all Foreign Subsidiaries, exclusive of
Indebtedness permitted under Section 7.2(b)(iii), not to exceed
$50,000,000 at any one time outstanding;
(g) Guarantee Obligations by any Loan Party of Indebtedness of
any Foreign Subsidiary permitted under clause (f) above;
(h) Indebtedness of Subsidiaries in respect of the Vehicle
Debt incurred in the ordinary course of business, provided, that the
aggregate outstanding amount of such Indebtedness owed to Persons other
than the Borrower and its Subsidiaries as of the last day of any
calendar month shall not exceed the net book value of any collateral
securing such Indebtedness on such date;
(i) (i) Indebtedness of the Borrower in respect of the
Supplemental Credit Facility in an aggregate principal amount not to
exceed $40,000,000, (ii) Indebtedness of the Borrower in respect of the
Interim Loan Facility in an aggregate principal amount not to exceed
$225,000,000, (iii) the obligation of the Borrower to indemnify
AutoNation for its guarantee or other liability in respect of
Indebtedness of the Borrower otherwise permitted hereby and (iv)
Indebtedness of the Borrower arising under the General Motors Letter of
Credit Documentation and constituting reimbursement obligations in
respect of letters of credit issued pursuant to the General Motors
Letter of Credit Documentation, in an aggregate amount not exceeding
$60,000,000, plus related fees and interest (including any replacement
of the General Motors Letter of Credit and any refinancing of such
reimbursement obligations on terms no less favorable to the Loan
Parties or the Lenders than the terms under the General Motors Letter
of Credit Documentation), which in the case of the foregoing clauses
(iii) and (iv) is subordinate to the Obligations;
(j) Guarantee Obligations of any Subsidiary Guarantor in
respect of the Supplemental Credit Facility and the Interim Loan
Facility;
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(k) Guarantee Obligations and L/C Obligations of the Borrower
or any Subsidiary in respect of obligations of airports and airport and
other Governmental Authorities in respect of the construction of
airport rental or related facilities to be used by the Borrower or any
Subsidiary in the ordinary course of business in an aggregate amount as
to the Borrower and all Subsidiaries not to exceed $30,000,000 at any
one time outstanding;
(l) Indebtedness incurred in connection with the acquisition
of Vehicles directly from the manufacturer thereof, provided, that (i)
such Vehicles could not be acquired with the proceeds of Vehicle Debt
and (ii) such Indebtedness does not exceed the net book value of such
Vehicles;
(m) unsecured purchase money Indebtedness of the Borrower or
any Subsidiary incurred as part of the purchase of a franchisee in an
amount as to the Borrower and all Subsidiaries not to exceed $5,000,000
at any one time outstanding;
(n) Indebtedness of the Borrower or any Subsidiary in respect
of Specified Hedge Agreements;
(o) Indebtedness of any Person that becomes a Subsidiary after
the date hereof in an aggregate amount not to exceed $10,000,000 at any
one time outstanding as to all such Subsidiaries and any refinancings,
refundings, renewals or extensions thereof (without any increase in the
principal amount thereof or any shortening of the maturity of any
principal amount thereof); provided, that such Indebtedness exists at
the time such Person becomes a Subsidiary and is not created in
contemplation of, or in connection with, such Person becoming a
Subsidiary;
(p) Indebtedness incurred in respect of workers' compensation
claims, self-insurance obligations, performance, surety and similar
bonds and completion guarantees provided by the Borrower or any other
Loan Party in the ordinary course of business;
(q) Indebtedness arising from agreements of the Borrower or
any other Loan Party 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 any Subsidiary that is a Loan Party or incurred in
connection with a sale of Capital Stock of the Borrower;
(r) letters of credit issued for the account of the Insurance
Companies in an amount not to exceed $40,000,000 in the aggregate
outstanding at any one time;
(s) additional notes issued pursuant to and in accordance with
the Loan Note Instrument, dated October 15, 1997, by Republic
Industries (UK) PLC and Republic
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Industries, Inc. (n/k/a AutoNation, Inc.), provided that such notes
shall not exceed ,6,765,380 in the aggregate;
(t) Guarantee Obligations of the Borrower or any Subsidiary of
the Borrower of Indebtedness of any Permitted Joint Venture in an
aggregate principal amount for the Borrower and all Subsidiaries not to
exceed $10,000,000 at any one time outstanding;
(u) Indebtedness incurred in connection with the Permitted
Acquisitions in the amount (excluding the amounts of any assumed
Indebtedness permitted by clause (o) above and Section 7.8(i)(iii)) not
to exceed $10,000,000; and
(v) additional unsecured Indebtedness of the Borrower or any
of its Subsidiaries in an aggregate principal amount for the Borrower
and all Subsidiaries not to exceed $10,000,000 at any one time
outstanding.
7.3 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its Property, whether now owned or hereafter
acquired, except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of the
Borrower or its Subsidiaries, as the case may be, in conformity with
GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 30 days or
that are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and other
minor imperfections of title that, in the aggregate, are not
substantial in amount and which do not in any case materially detract
from the value of the Property subject thereto or materially interfere
with the ordinary conduct of the business of the Borrower and its
Subsidiaries, taken as a whole;
(f) Liens in existence on the date hereof listed on Schedule
7.3(f), securing Indebtedness permitted by Section 7.2(d), provided
that no such Lien is spread to cover any additional Property after the
Closing Date and that the amount of Indebtedness secured thereby is not
increased;
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(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred or assumed pursuant to Section 7.2(c) to finance
the acquisition, construction or improvement of fixed or capital
assets, provided that (i) such Liens shall be created prior to or
substantially simultaneously with the acquisition, construction or
improvement of such fixed or capital assets, (ii) such Liens do not at
any time encumber any Property other than the Property financed by such
Indebtedness, (iii) the amount of Indebtedness secured thereby is
incurred prior to or within 150 days after the acquisition of, or
completion of the construction or improvement on, such fixed or capital
asset, and (iv) the principal amount of Indebtedness secured thereby is
not increased;
(h) (i) Liens securing (A) Vehicle Debt permitted by Section
7.2(h) and (B) Indebtedness permitted by Section 7.2(l), provided, in
each case, that such Liens shall not spread to any Property other than
the Vehicles purchased with such Indebtedness and (ii) Liens on cash or
cash equivalents pledged as collateral in respect of Vehicle Debt
(including the General Motors Letter of Credit Documentation or
Indebtedness permitted by Section 7.2(l)) as permitted by the terms of
the documentation governing the Vehicle Debt (including the General
Motors Letter of Credit Documentation or Indebtedness permitted by
Section 7.2(l));
(i) Liens created pursuant to the Security Documents and Liens
created pursuant to the Supplemental Credit Facility Documentation
which are junior to the Liens pursuant to the Security Documents;
(j) any interest or title of a lessor or sublessor under any
lease entered into by the Borrower or any Subsidiary in the ordinary
course of its business and covering only the assets so leased or
subleased;
(k) Liens on goods in favor of customs and revenue authorities
to secure payment of customs duties in connection with the importation
thereof in the ordinary course of business;
(l) 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;
(m) 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;
(n) Liens securing Indebtedness of a Person that becomes a
Subsidiary after the date hereof permitted by Section 7.2(o); provided
that such Liens are limited to the Property of such Person and were not
created in contemplation of, or in connection with, such Person
becoming a Subsidiary; and
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(o) Liens on assets which are not of the type included in the
Borrowing Base and not otherwise permitted by this Section 7.3 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 exceeds (as to the Borrower and
all Subsidiaries) $5,000,000 at any one time.
7.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially all
of its Property or business, except that:
(a) any Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation) or with or into any
Subsidiary Guarantor (provided that (i) the Subsidiary Guarantor shall
be the continuing or surviving corporation or (ii) simultaneously with
such transaction, the continuing or surviving corporation shall become
a Subsidiary Guarantor and the Borrower shall comply with Section 6.10
in connection therewith);
(b) any Subsidiary of the Borrower may Dispose of any or all
of its assets (upon voluntary liquidation or otherwise) to the Borrower
or any Subsidiary Guarantor;
(c) the Borrower or any of its Subsidiaries may change the
jurisdiction of its organization so long as the new jurisdiction of the
Borrower or any Domestic Subsidiary is in the United States and any
actions required to continue the perfection and priority of the
Administrative Agent's security interest in the Collateral shall have
been taken;
(d) any Foreign Subsidiary of the Borrower may be merged,
consolidated with or into, or Dispose any or all of its assets (upon
voluntary liquidation or otherwise) to, another Foreign Subsidiary of
the Borrower;
(e) any Finance Company may be merged, consolidated with or
into, or Dispose any or all of its assets (upon voluntary liquidation
or otherwise) to, another Finance Company;
(f) any Insurance Company may be merged, consolidated with or
into, or Dispose any or all of its assets (upon voluntary liquidation
or otherwise) to, another Insurance Company; and
(g) the Borrower may liquidate any of its Inactive
Subsidiaries.
7.5 Limitation on Disposition of Property. Dispose of any of
its Property (including, without limitation, receivables and leasehold
interests), whether now owned or
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hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares
of such Subsidiary's Capital Stock to any Person, except:
(a) the Disposition of obsolete or worn out property in the
ordinary course of business, including the Disposition, in the ordinary
course of business and as a part of customary practices of replacing
Vehicles with newer Vehicles from time to time;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 7.4;
(d) the sale or issuance of any Subsidiary's Capital Stock to
the Borrower or any Subsidiary Guarantor;
(e) Dispositions of any assets or property of (i) any
Subsidiary to the Borrower or any Subsidiary Guarantor, (ii) any
Foreign Subsidiary of the Borrower to another Foreign Subsidiary of the
Borrower, (iii) any Finance Company to another Finance Company and (iv)
any Insurance Company to another Insurance Company;
(f) Dispositions of Cash Equivalents;
(g) any Restricted Payment that is permitted by Section 7.6
and any Investment that is permitted by Section 7.8;
(h) the sale or issuance of directors' qualifying shares or
shares or Investments required by any Requirement of Law to be held by
a Person other than the Borrower or a Subsidiary Guarantor;
(i) the grant of a Lien that is permitted by Section 7.3;
(j) non-recourse sales of receivables generated in the United
Kingdom in connection with working capital facilities permitted under
Section 7.2;
(k) Dispositions of assets listed on Schedule 7.5(k);
(l) Dispositions of assets that are not subject of a Lien in
favor of the Administrative Agent (other than real property located in
the United States and Intellectual Property);
(m) Dispositions of assets of the type that are not included
in the Borrowing Base (other than Dispositions permitted under clauses
(k) and (l) above and Intellectual Property) having a fair market value
not to exceed $7,500,000 in the aggregate for any fiscal year of the
Borrower; and
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(n) Dispositions of other assets of the type that are included
in the Borrowing Base, provided, that, if as of the date of such
Disposition and after giving effect thereto, a Default or Event of
Default shall exist, the Borrower shall have obtained the consent of
the Administrative Agent to such Disposition.
7.6 Limitation on Restricted Payments. Declare or pay any
dividend on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Capital Stock of the Borrower or any
Subsidiary, whether now or hereafter outstanding, or make any other distribution
in respect thereof, either directly or indirectly, whether in cash or property
or in obligations of the Borrower or any Subsidiary, or enter into any
derivatives or other transaction with any financial institution, commodities or
stock exchange or clearinghouse (a "Derivatives Counterparty") obligating the
Borrower or any Subsidiary to make payments to such Derivatives Counterparty as
a result of any change in market value of any such Capital Stock (collectively,
"Restricted Payments"), except that:
(a) any Subsidiary may make Restricted Payments to the
Borrower or any Subsidiary Guarantor;
(b) the Borrower may make Restricted Payments in the form of
common stock of the Borrower;
(c) the Borrower may purchase the Borrower's common stock or
common stock options from present or former officers or employers of
the Borrower or any Subsidiary upon the death, disability or
termination of employment of such officer or employer, provided, that
the aggregate amount of payments under this paragraph subsequent to the
date hereof (net of any proceeds received by the Borrower subsequent to
the date hereof in connection with resales of any common stock or
common stock options so purchased) shall not exceed $5,000,000;
(d) the Borrower may pay any dividend within 60 days after the
date of declaration thereof, if at said date of declaration such
payment would have complied with the provisions of this Agreement;
(e) the Borrower may make 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;
(f) the Borrower may make other Restricted Payments not
otherwise permitted by this Section 7.6 in an aggregate amount from the
Closing Date not to exceed $2,500,000; and
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(g) either Risk Management Subsidiary may redeem 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.
7.7 Limitation on Capital Expenditures. Make or commit to make
any Capital Expenditure, except Capital Expenditures of the Borrower and its
Subsidiaries in the ordinary course of business in any fiscal year set forth
below not to exceed the amount set forth below opposite such fiscal year:
Fiscal Year Capital Expenditures
----------- --------------------
2000 $100,000,000
2001 $105,000,000
2002 $115,000,000
2003 $115,000,000
provided, that (i) up to $35,000,000 of any such amount referred to above, if
not so expended in the fiscal year for which it is permitted, may be carried
over for expenditure in the next succeeding fiscal year and (ii) Capital
Expenditures made during any fiscal year shall be deemed made, first, in respect
of amounts permitted for such fiscal year as provided above and second, in
respect of amounts carried over from the prior fiscal year pursuant to clause
(i) above.
7.8 Limitation on Investments. Make any advance, loan,
extension of credit (by way of guaranty or otherwise) or capital contribution
to, or purchase any Capital Stock, bonds, notes, debentures or other debt
securities of, or any assets constituting an ongoing business from, or make any
other investment in, any other Person (all of the foregoing, "Investments"),
except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in cash or Cash Equivalents;
(c) Investments arising in connection with the incurrence of
Indebtedness permitted by Sections 7.2(b), (e), (g), (j), (k) and (l);
(d) loans and advances to employees of the Borrower or any
Subsidiaries of the Borrower in the ordinary course of business
(including, without limitation, for travel, payroll, entertainment and
relocation expenses) in an aggregate amount for the Borrower and
Subsidiaries of the Borrower not to exceed $2,000,000 at any one time
outstanding;
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(e) Investments (other than those relating to the incurrence
of Indebtedness permitted by Section 7.8(c)) by the Borrower or any of
its Subsidiaries in the Borrower or any Person that, prior to such
Investment, is a Subsidiary Guarantor;
(f) stock, obligations or securities received in settlement of
debts created in the ordinary course of business and owing to the
Borrower or any other Loan Party 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 Borrower or any other Loan
Party as a result of the transfer of title with respect to any secured
Investment in default as a result of a foreclosure by the Borrower or
any other Loan Party with respect to such secured Investment;
(g) Investment in prepaid expenses, negotiable instruments
held for collection and lease, utility and worker's compensation,
performance and other similar deposits;
(h) Investments existing on the Closing Date and described in
Schedule 7.8, setting forth the respective amounts of such Investments
as of a recent date;
(i) Investments by the Borrower for acquisitions ("Permitted
Acquisitions") in connection with its line of business in an amount not
to exceed (excluding the value of any Capital Stock of the Borrower
issued in connection with such Permitted Acquisition) $50,000,000 in
the aggregate; provided that after giving effect to any such Permitted
Acquisition (i) no Default or Event of Default shall occur and be
continuing, (ii) the Borrower would be in pro forma compliance with the
financial covenants set forth in Section 7.1 for the four quarters
preceding the effective date of the acquisition and (iii) the amount of
existing Indebtedness assumed in such acquisition (other than
Indebtedness that finances the acquiree's fleet of vehicles) when added
to the aggregate Indebtedness assumed for all such Permitted
Acquisitions and any Permitted Stock Acquisitions permitted by clause
(j) below would not exceed $10,000,000;
(j) Investments by the Borrower not otherwise permitted by
clause (i) above, for the purpose of acquiring ("Permitted Stock
Acquisitions") additional franchises of the Borrower, paid for solely
in common stock of the Borrower; provided, that after giving effect to
any such acquisition (i) no Default or Event of Default shall occur and
be continuing, (ii) the Borrower would be in pro forma compliance with
the financial covenants set forth in Section 7.1 for the four quarters
preceding the effective date of such Permitted Stock Acquisition and
(iii) the amount of Indebtedness assumed in such Permitted Stock
Acquisition (other than Indebtedness that finances the acquiree's fleet
of vehicles) when added to the aggregate Indebtedness assumed for all
such Permitted Stock Acquisitions (including any such acquisition
permitted pursuant to clause (i) above) would not exceed $10,000,000;
(k) Investments in joint ventures, partnerships or other
similar arrangements (other than Subsidiaries of the Borrower), whether
in corporate, partnership, limited liability company or other legal
form, when added to Guarantee Obligations permitted
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under Section 7.2(u), not to exceed $10,000,000 in the aggregate
("Permitted Joint Ventures");
(l) Investments in the Finance Companies and Insurance
Companies to the extent required to meet their capital requirements
pursuant to Requirements of Law (in the case of the Insurance
Companies) or Contractual Obligations relating to Vehicle Debt (in the
case of the Finance Companies);
(m) Loans by the Insurance Companies to the Borrower;
(n) the purchase by the Borrower or one of its Subsidiaries of
warrants to purchase preferred stock of E-Travel, Inc., and the
exercise of such warrants, for an aggregate amount not to exceed
$1,750,000; and
(o) in addition to Investments otherwise expressly permitted
by this Section, Investments by the Borrower or any of its Subsidiaries
in an aggregate amount (valued at cost) not to exceed $10,000,000
during the term of this Agreement.
7.9 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. (a) Make or offer to make any optional or voluntary payment,
prepayment, repurchase or redemption of, or otherwise voluntarily or optionally
defease, any Subordinated Note, the Interim Loan Facility or the AutoNation
Subordinated Debt (other than (i) any refinancing of the Interim Loan Facility
with the issuance of senior notes (which may be sold in a public offering or
private placement) or other refinancing, in each case on terms no less favorable
to the Loan Parties and the Lenders than the terms under the Interim Loan
Facility and (ii) any refinancing of Indebtedness of the Borrower pursuant to
the General Motors Letter of Credit Documentation on terms no less favorable to
the Loan Parties and the Lenders than the terms contained thereunder), or
segregate funds for any such payment, prepayment, repurchase, redemption or
defeasance, or enter into any derivative or other transaction with any
Derivatives Counterparty obligating the Borrower or any Subsidiary to make
payments to such Derivatives Counterparty as a result of any change in market
value of the Interim Loan Facility or (b) amend, modify or otherwise change, or
consent or agree to any amendment, modification, waiver or other change to, any
of the terms of any Subordinated Note, the Interim Facility Loan Documentation
or the AutoNation Subordinated Debt (other than any such amendment,
modification, waiver or other change which (i) would extend the maturity or
reduce the amount of any payment of principal thereof, reduce the rate or extend
the date for payment of interest thereon or relax any covenant or other
restriction applicable to the Borrower or any of its Subsidiaries and (ii) does
not involve the payment of a consent fee).
7.10 Limitation on Transactions with Affiliates. Enter into
any transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than the
Borrower or any Subsidiary Guarantor) unless such transaction is (a) otherwise
permitted under this Agreement, (b) in the ordinary course of business of the
Borrower or such Subsidiary, as the case may be, and (c) upon fair and
reasonable terms no less favorable to the Borrower or such
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Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person that is not an Affiliate. Notwithstanding the
foregoing, the Borrower may (i) enter into, and perform the transactions
consummated pursuant to, or contemplated by, the Tax Sharing Agreement, the
Separation and Distribution Agreement, the Transitional Services Agreement, the
AutoNation Support Agreement, the General Motors Letter of Credit Documentation,
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 Borrower and its
Subsidiaries, on the other hand, as such agreements are in effect on the Initial
Funding Date, as such agreements may be amended, supplemented or otherwise
modified from time to time in any manner no less favorable to the Loan Parties
and the Lenders, (ii) make Investments or Restricted Payments permitted under
Sections 7.8 and 7.6, respectively, (iii) pay fees and compensation to members
of the Board of Directors of the Borrower and its Subsidiaries, (iv) make loans
or advances to employees for moving, entertainment and travel expenses, drawing
accounts and similar expenditures in the ordinary course of business permitted
under Section 7.8(d), (v) pay fees and compensation (including the issuance of
stock options permitted under Section 7.6) to, and provide indemnity on behalf
of, officers, directors, consultants or employees of the Borrower or any of its
Subsidiaries, pursuant to agreements, statute, charter or by-law provision or
otherwise, (vi) enter into customary business arrangements consistent with past
practice between the Borrower and its Subsidiaries, on the one hand, and
Certified Vacations, Inc. and its affiliates, on the other hand, (vii) purchase
revenue earning vehicles from AutoNation, provided that (x) the purchase price
for such vehicles is no greater than the purchase price paid by AutoNation to an
unrelated Person for such vehicles and (y) any processing or other fees paid to
AutoNation in connection with such purchase are customary and consistent with
industry practice, (viii) enter into any employment, consulting, agency or other
compensation agreement entered into or benefit plan adopted by the Borrower or
any of its Subsidiaries in the ordinary course of business, (ix) sell or
otherwise issue Capital Stock of the Borrower, including the issuance of stock
options, (x) enter into 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 Lenders, (xi)
enter into any transaction with an affiliate that involves consideration of
$250,000 or less, provided that such transactions as to all affiliates do not
exceed $2,500,000 in the aggregate in any 12-month period and (xii) enter into a
registration rights agreement with ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and related entities in
respect of the shares of common stock of the Borrower distributed to him
pursuant to the Spin-Off, which registration rights agreement shall be on terms
no less favorable to the Borrower than the existing registration rights
agreement between AutoNation and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇.
7.11 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Borrower or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
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security of such property or rental obligations of the Borrower or such
Subsidiary except that (a) the Borrower or its Subsidiary may enter into a sale
and leaseback transaction if (i) it could have incurred Indebtedness in an
amount equal to the Attributable Debt relating to such sale and leaseback
transaction pursuant to Section 7.2(c), (ii) 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 $5,000,000)
of the Property that is the subject of such sale and leaseback transaction and
(iii) the transfer of assets in such sale and leaseback transaction is permitted
by Section 7.5 to prepay any outstanding Loans; and (b) the restrictions of this
Section 7.11 shall not apply to sale and leaseback transactions with respect to
revenue earnings Vehicles.
7.12 Limitation on Changes in Fiscal Periods. Permit the
fiscal year of the Borrower to end on a day other than December 31 or change the
Borrower's method of determining fiscal quarters.
7.13 Limitation on Negative Pledge Clauses. Enter into or
suffer to exist or become effective any agreement that prohibits or limits the
ability of the Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its Property or revenues, whether now owned
or hereafter acquired, to secure the Obligations or, in the case of any
Subsidiary Guarantor, its obligations under the Guarantee and Collateral
Agreement, other than (a) this Agreement and the other Loan Documents, (b) the
Supplemental Credit Facility Documentation, (c) the Interim Facility Loan
Documentation, (d) the General Motors Letter of Credit Documentation, (e) any
instruments pursuant to which Vehicle Debt is outstanding or secured (in which
case any restriction shall only be effective against the Vehicles financed
thereby) and (f) any agreements governing any purchase money Liens or Capital
Lease Obligations otherwise permitted hereby (in which case, any prohibition or
limitation shall only be effective against the Vehicles financed thereby).
7.14 Limitation on Restrictions on Subsidiary Distributions.
Enter into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary, (b) make Investments in the
Borrower or any other Subsidiary or (c) transfer any of its assets to the
Borrower or any other Subsidiary, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan
Documents, (ii) any restrictions with respect to a Subsidiary imposed pursuant
to an agreement that has been entered into in connection with the Disposition of
all or substantially all of the Capital Stock or assets of such Subsidiary,
(iii) any instruments pursuant to which Vehicle Debt is outstanding or secured,
(iv) any restriction existing under documentation governing Indebtedness
permitted to be incurred under Section 7.2(e), (g), (i), (j) (k) and (t), (v)
any restrictions arising by reason of customary non-assignment provisions in
leases entered into in the ordinary course of business; (vi) customary
provisions restricting dispositions of real property interest set forth in any
reciprocal easement agreements of the Loan Parties; and (vii) any restrictions
arising or existing
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by reason of Requirements of Law, including, without limitation, restrictions on
the payment of dividends on the Insurance Companies imposed by a Governmental
Authority.
7.15 Limitation on Lines of Business. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
the Borrower and its Subsidiaries are engaged on the date of this Agreement or
that are reasonably related thereto.
7.16 Limitation on Amendments to Certain Instruments. (a)
Amend, supplement or otherwise modify the Tax Sharing Agreement, the Separation
and Distribution Agreement, the Transitional Services Agreement or any
documentation governing the Continuing Obligations in any manner that would
increase the amounts payable by the Borrower thereunder or (b) otherwise amend,
supplement or otherwise modify the terms and conditions of the Tax Sharing
Agreement, the Separation and Distribution Agreement, the Transitional Services
Agreement or any documentation governing the Continuing Obligations, except to
the extent that any such amendment, supplement or modification could not
reasonably be expected to have a Material Adverse Effect.
7.17 Subordinated Notes. On or before July 7, 2000, in the
case of ANC Financial, LP, fail to assume all of the obligations and the
liabilities of Alamo Rent-A-Car, LLC, under the Subordinated Notes, pursuant to
documentation reasonably satisfactory to the Agents.
7.18 Further Assurances. (a) Within 30 days after the Initial
Funding Date, fail to deliver to the Agents the agreements or other documents
set forth in Section A of Schedule 7.18.
(b) Within 60 days after the Initial Funding Date, fail to
deliver to the Administrative Agent, or cause to be filed, duly completed UCC
termination statements, signed by the relevant secured party, in respect of each
UCC Financing Statement listed in Section A of Schedule 4.19(a)-3.
(c) Fail to use their respective best efforts to deliver (i)
the agreements or other documents set forth in Section B of Schedule 7.18 or
(ii) or cause to be filed, duly completed UCC termination statements, signed by
the relevant secured party, in respect of each UCC Financing Statement listed in
Section B of Schedule 4.19(a)-3.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan
or Reimbursement Obligation when due in accordance with the terms
hereof; or the Borrower shall fail to pay any interest on any Loan or
Reimbursement Obligation, or any other amount payable
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hereunder or under any other Loan Document, within five days after any
such interest or other amount becomes due in accordance with the terms
hereof or thereof; or
(b) Any representation or warranty made or deemed made by any
Loan Party herein or in any other Loan Document or that 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 inaccurate in any material
respect on or as of the date made or deemed made or furnished; or
(c) (i) Any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section
6.4(a) (with respect to the Borrower only), Section 6.7(a) or Section
7, or in Section 5 of the Guarantee and Collateral Agreement or (ii) an
"Event of Default" under and as defined in any Mortgage shall have
occurred and be continuing; or
(d) Any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any
other Loan Document (other than as provided in paragraphs (a) through
(c) of this Section), and such default shall continue unremedied for a
period of 30 days; or
(e) The Borrower or any of its Subsidiaries shall (i) default
in making any payment of any principal of any Indebtedness (including,
without limitation, any Guarantee Obligation, but excluding the Loans
and Reimbursement Obligations) on the scheduled or original due date
with respect thereto; or (ii) default in making any payment of any
interest on any such Indebtedness beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness
was created; or (iii) default in the observance or performance of any
other agreement or condition relating to any such Indebtedness or
contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or
to permit the holder or beneficiary of such Indebtedness (or a trustee
or agent on behalf of such holder or beneficiary) to cause, with the
giving of notice if required, such Indebtedness to become due prior to
its stated maturity or to become subject to any mandatory offer to
purchase by the obligor thereunder or (in the case of any such
Indebtedness constituting a Guarantee Obligation) to become payable;
provided, that a default, event or condition described in clause (i),
(ii) or (iii) of this paragraph (e) shall not at any time constitute an
Event of Default unless, at such time, one or more defaults, events or
conditions of the type described in clauses (i), (ii) and (iii) of this
paragraph (e) shall have occurred and be continuing with respect to
Indebtedness the outstanding principal amount of which exceeds in the
aggregate $5,000,000; or
(f) (i) The Borrower or any of its Subsidiaries 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
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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 Borrower or any of its
Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Borrower or any
of its Subsidiaries any case, proceeding or other action of a nature
referred to in clause (i) above that (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 Borrower or any of its
Subsidiaries 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 that results in the entry of
an order for any such relief that shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) the Borrower or any of its Subsidiaries 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 Borrower or any of its
Subsidiaries shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts as they become due; or
(g) (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 Borrower 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 Required
Lenders, 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 Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders shall be likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; 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
(h) One or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries involving for the Borrower and
its Subsidiaries taken as a whole a liability (not paid or fully
covered by insurance as to which the relevant insurance company has
acknowledged coverage) of $5,000,000 or more, and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded
pending appeal within 30 days from the entry thereof; or
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(i) Any of the Security Documents shall cease, for any reason
(other than by reason of the express release thereof pursuant to
Section 10.15), to be in full force and effect, or any Loan Party or
any Affiliate of any Loan Party shall so assert, or any Lien created by
any of the Security Documents shall cease to be enforceable and of the
same effect and priority purported to be created thereby; or
(j) (i) The guarantee contained in Section 2 of the Guarantee
and Collateral Agreement shall cease, for any reason (other than by
reason of the express release thereof pursuant to Section 10.15), to be
in full force and effect or any Loan Party or any Affiliate of any Loan
Party shall so assert; 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 clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) 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 Borrower declare the Commitments to be terminated
forthwith, whereupon the Commitments shall immediately terminate; and (ii) 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 Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents
(including, without limitation, all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required thereunder) to be due and payable forthwith, whereupon
the same shall immediately become due and payable. In the case of all Letters of
Credit with respect to which presentment for honor shall not have occurred at
the time of an acceleration pursuant to this paragraph, the Borrower shall upon
notice from the Administrative Agent, deposit in the Cash Collateral Account an
amount equal to the aggregate then undrawn and unexpired amount of such Letters
of Credit. Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
Obligations of the Borrower hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrower hereunder and under the other Loan Documents shall have been paid
in full, the balance, if any, in such cash collateral account shall be returned
to the Borrower (or such other Person as may be lawfully entitled thereto).
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SECTION 9. THE AGENTS
9.1 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.
9.2 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.
9.3 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.
9.4 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
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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 10.6 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.
9.5 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
Borrower 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.
9.6 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
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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.
9.7 Indemnification. The Lenders agree to indemnify each Agent
in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Aggregate Exposure 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 Aggregate Exposure
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.
9.8 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 and with respect to any Letter
of Credit issued or participated in 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.
9.9 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 10 days' notice to the Lenders and the
Borrower. 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 shall have occurred and be
continuing) be subject to approval by the Borrower (which approval shall not be
unreasonably withheld or delayed), whereupon such successor agent shall succeed
to the rights,
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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
9 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.
9.10 Authorization to Release Liens and Guarantees. The
Administrative Agent is hereby irrevocably authorized by each of the Lenders to
effect any release of Liens or guarantee obligations contemplated by Section
10.15.
9.11 The Arranger and the Documentation Agent. The Arranger
and the Documentation Agent shall have no duties or responsibilities, and shall
incur no liability, under this Agreement and the other Loan Documents.
9.12 Additional Loans. The Administrative Agent shall not make
any Loans or approve any Letter of Credit on behalf of the Lenders intentionally
and with actual knowledge that such Loans or Letter of Credit would cause the
aggregate amount of the total outstanding Loans and Letter of Credit to exceed
the Borrowing Base, without the prior consent of all Lenders, except that the
Administrative Agent may make such additional Loans or provide such additional
Letters of Credit on behalf of Lenders intentionally and with actual knowledge
that such Loans or Letters of Credit will cause the total outstanding Loans and
Letters of Credit to exceed the Borrowing Base, as the Administrative Agent may
deem necessary or advisable in its discretion, provided that the total principal
amount of the additional Loans or additional Letters of Credit which the
Administrative Agent may make or provide after obtaining such actual knowledge
that the aggregate principal amount of the Loans equal or exceed the Borrowing
Base shall not cause the total of all outstanding Loans and Letters of Credit to
exceed the Borrowing Base as calculated by the Administrative Agent at the time
of such additional Loan or Letter of Credit by more than ten (10%) percent of
such amount and shall not cause the total principal amount of the Loans and
Letters of Credit to exceed the Total Revolving Credit Commitments. Each Lender
shall be obligated to pay the Administrative Agent the amount of its pro rata
share based on its Revolving Credit Percentage of any such additional Loans or
Letters of Credit provided that the Administrative Agent is acting in accordance
with the terms of this
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Section 9.12. Additional Loans made and Letters of Credit issued pursuant to
this Section 9.12 shall be secured by all Collateral and shall not be considered
for purposes of Section 2.10, provided, that, with respect to any such
additional Loan or Letter of Credit which remains outstanding 30 days after such
additional Loan is made or Letter of Credit is issued, the Borrower shall comply
with Section 2.10.
9.13 Field Audit and Examination Reports; Disclaimer by
Lenders. By its execution of this Agreement, each Lender:
(a) is deemed to have requested that the Administrative Agent
furnish each Lender, promptly after it becomes available, a copy of each field
audit or examination report (each a "Report" and collectively, "Reports")
prepared by the Administrative Agent;
(b) expressly agrees and acknowledges that the Administrative
Agent does not make any representation or warranty as to the accuracy of any
Report, or shall not be liable for any information contained in any Report;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Administrative Agent or other
party performing any audit or examination will inspect only specific information
regarding the Borrower and its Subsidiaries and will rely significantly upon the
books and records of the Borrower and its Subsidiaries, as well as on
representations of personnel of the Borrower and its Subsidiaries; and
(d) agrees to keep all Reports confidential and strictly for
its internal use in accordance with the terms hereof, and not to distribute or
use any Report in any other manner.
9.14 Collateral Matters. (a) The Administrative Agent may from
time to time, at any time on or after an Event of Default and for so long as the
same is continuing, make such disbursements and advances ("Agent Advances")
which the Administrative Agent, in its sole discretion, deems necessary or
desirable either (i) to preserve or protect the Collateral or any portion
thereof, (ii) to enhance the likelihood or maximize the amount of repayment by
the Borrower of the Loans and other Obligations, provided that the amount of any
such Agent Advance permitted under this clause (ii) shall not exceed the amount
equal to 10% of the Borrowing Base as calculated by the Administrative Agent at
the time of such Agent Advance or (iii) to pay any other amount chargeable to
the Borrower pursuant to the terms of this Agreement, including, without
limitation, costs, fees and expenses as described in Section 10.5 and payments
to any Issuing Lender. Agent Advances shall be repayable on demand and be
secured by the Collateral. Agent Advances shall not constitute Loans but shall
otherwise constitute Obligations hereunder. The Administrative Agent shall
notify each Lender in writing of each such Agent Advance, which notice shall
include a description of the purpose of such Agent Advance. Without limitation
of its obligations pursuant to Section 2.4, each Lender agrees that it shall
make available to the Administrative Agent, upon the Administrative Agent's
demand, in immediately available funds, the amount equal to such Lender's pro
rata share based on its Revolving Credit Percentage of each such Agent Advance.
If such funds are not made available to the Administrative Agent by such Lender,
the Administrative Agent shall be entitled to
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recover such funds, on demand from such Lender together with interest thereon,
for each day from the date such payment was due until the date such amount is
paid to the Administrative Agent, at the interest rate applicable to Base Rate
Loans.
(b) The Administrative Agent shall have no obligation
whatsoever to any Lender or any other Person to investigate, confirm or assure
that the Collateral exists or is owned by any Borrower or is cared for,
protected or insured or has been encumbered, or that any particular items of
Collateral meet the eligibility criteria applicable in respect of the Loans or
Letters of Credit hereunder, or whether any particular Reserves are appropriate,
or that the Liens granted to the Administrative Agent herein or pursuant hereto
or otherwise have been properly or sufficiently or lawfully created, perfected,
protected or enforced or are entitled to any particular priority, or to exercise
at all or in any particular manner or under any duty of care, disclosure or
fidelity, or to continue exercising, any of the rights, authorities and powers
granted or available to the Administrative Agent in this Agreement or in any of
the other Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, the Administrative
Agent may act in any manner it may deem appropriate, in its discretion, given
the Administrative Agent's own interest in the Collateral as a Lender and that
the Administrative Agent shall have no duty or liability whatsoever to any other
Lender.
9.15 Agency for Perfection. The Administrative Agent and each
Lender hereby appoints each other Lender as agent for the purpose of perfecting
the Secured Parties' Liens upon the Collateral of the Administrative Agent for
itself and the ratable benefit of Lenders in assets which, in accordance with
Article 9 of the UCC can be perfected only by possession. Should any Lender
obtain possession of any such Collateral, such Lender shall notify the
Administrative Agent thereof, and, promptly upon the Administrative Agent's
request therefor shall deliver such Collateral to the Administrative Agent or in
accordance with the Administrative Agent's instructions.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement or any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.1. The Required Lenders and each Loan Party to the relevant Loan
Document may, or (with the written consent of the Required Lenders) the Agents
and each Loan Party to the relevant Loan Document may, from time to time, (a)
enter into written amendments, supplements or modifications hereto and to the
other Loan Documents (including amendments and restatements hereof or thereof)
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 Loan
Parties hereunder or thereunder or (b) waive, on such terms and conditions as
may be specified in the instrument of waiver, 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:
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(i) forgive the principal amount or extend the final
scheduled date of maturity of any Loan or Reimbursement Obligation,
reduce the stated rate of any interest or fee payable hereunder or
extend the scheduled date of any payment owing by the Borrower
hereunder, or increase the amount or extend the expiration date of any
Commitment of any Lender, in each case without the consent of each
Lender directly affected thereby;
(ii) amend, modify or waive any provision of this Section
or amend any percentage specified in the definition of Required
Lenders, consent to the assignment or transfer by the Borrower of any
of its rights and obligations under this Agreement and the other Loan
Documents, release all or substantially all of the Collateral (except
as otherwise expressly required hereunder or under the other Loan
Documents) or release all or substantially all of the Subsidiary
Guarantors from their guarantee obligations under the Guarantee and
Collateral Agreement, in each case without the consent of all Lenders;
(iii) amend, modify or waive any provision of Section 9 or
of the Guarantee and Collateral Agreement without the consent of any
Agent directly affected thereby;
(iv) reduce (except for any reduction pursuant to Section
2.3(a)) or increase any percentage representing an advance rate in
respect of the definition of Borrowing Base without the consent of the
Administrative Agent and Lenders whose Revolving Credit Percentages
are, in the aggregate, more than 66b%;
(v) amend, modify or waive any provision of Sections 2.4
or 2.5, without the consent of the Swing Line Lender;
(vi) amend, modify or waive any provision of Section 2.2,
2.3, 2.10, 2.12, 2.14, 6.10, 6.11, Section 5 or 8 or Schedule 1.1(d),
without the consent of the Administrative Agent;
(vii) amend, modify or waive any provision of Section 2.16
without the consent of each Lender directly affected thereby;
(viii) amend, modify or waive any provision of Section 3
without the consent of the Administrative Agent and each Issuing Lender
directly affected thereby.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Agents and all future holders of the Loans. In the case of any
waiver, the Loan Parties, the Lenders and the Agents shall be restored to their
former position 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; but no such waiver shall extend to any subsequent or other Default
or Event of
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Default, or impair any right consequent thereon. Any such waiver, amendment,
supplement or modification shall be effected by a written instrument signed by
the parties required to sign pursuant to the foregoing provisions of this
Section; provided, that delivery of an executed signature page of any such
instrument by facsimile transmission shall be effective as delivery of a
manually executed counterpart thereof.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed (a) in the case of the Borrower and the Agents, as follows
and (b) in the case of the Lenders, as set forth in an administrative
questionnaire delivered to the Administrative Agent or on Schedule I to the
Lender Addendum to which such Lender is a party or, in the case of a Lender
which becomes a party to this Agreement pursuant to an Assignment and
Acceptance, in such Assignment and Acceptance or (c) in the case of any party,
to such other address as such party may hereafter notify to the other parties
hereto:
The Borrower: NC Rental Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Syndication Agent: ▇▇▇▇▇▇ Commercial Paper Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent: Congress Financial Corporation (Florida)
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Issuing Lender: As notified by such Issuing Lender to the
Agents and the Borrower
provided that any notice, request or demand to or upon the any Agent, the
Issuing Lender or any Lender shall not be effective until received.
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10.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of any Agent or any Lender, any right,
remedy, power or privilege hereunder or under 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.
10.4 Survival of Representations and Warranties. All
representations and warranties made herein, 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 and other extensions of credit hereunder.
10.5 Payment of Expenses. The Borrower agrees (a) to pay or
reimburse the Agents for all their reasonable out-of-pocket costs and expenses
incurred in connection with the syndication of the Revolving Credit Facility
(other than fees payable to syndicate members) and the development, preparation
and execution of, and any amendment, supplement or modification to, this
Agreement and the other 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 and other charges of counsel to the
Administrative Agent and fees relating to the use of Intralinks in respect of
this Agreement and the other Loan Documents, (b) to pay or reimburse each Lender
and the Agents for all their costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, the other Loan
Documents and any other documents prepared in connection herewith or therewith,
including, without limitation, the fees and disbursements of counsel to each
Lender and of counsel to the Agents, (c) to pay, indemnify, or reimburse each
Lender and the Agents for, and hold each Lender and the 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 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, this Agreement, the other Loan
Documents and any such other documents, and (d) to pay, indemnify or reimburse
each Lender, each Agent, their respective affiliates, and their respective
officers, directors, trustees, employees, advisors, agents and controlling
persons (each, an "Indemnitee") for, and hold each Indemnitee 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 this Agreement, the other Loan Documents and
any such other documents, including, without limitation, any of the foregoing
relating to the use of proceeds of the Loans or the violation of, noncompliance
with or liability under, any Environmental Law applicable to the operations of
the Borrower or any of its Subsidiaries or any
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of their respective Properties and the reasonable fees and disbursements and
other charges of legal counsel in connection with claims, actions or proceedings
by any Indemnitee against the Borrower hereunder (all the foregoing in this
clause (d), collectively, the "Indemnified Liabilities"), provided, that the
Borrower shall have no obligation hereunder to any Indemnitee with respect to
Indemnified Liabilities to the extent such Indemnified Liabilities are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such Indemnitee.
Subject to the foregoing proviso, and to the extent permitted by applicable law,
the Borrower 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, (x) under or related to Environmental Laws or (y)
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 Revolving Facilities,
that any of them might have by statute or otherwise against any Indemnitee. All
amounts due under this Section shall be payable not later than 30 days after
written demand therefor. The Administrative Agent may, at its option, charge the
loan account of Borrower for any amounts due under clauses (a), (b) and (c) of
the first sentence of this Section 10.5 and such charges shall be deemed Swing
Line Loans to the extent available to the Borrower and otherwise Revolving
Credit Loan constituting Base Rate Loans. Statements payable by the Borrower
pursuant to this Section shall be submitted to ▇▇▇ ▇▇▇▇▇▇ (Telephone No. (954)
▇▇▇-▇▇▇▇) (Fax No. (▇▇▇) ▇▇▇-▇▇▇▇), at the address of the Borrower set forth in
Section 10.2, or to such other Person or address as may be hereafter designated
by the Borrower in a notice to the Administrative Agent. The agreements in this
Section shall survive repayment of the Loans and all other amounts payable
hereunder.
10.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Agents, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Agents and each Lender.
(b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "Participant") participating interests
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes under this Agreement and the other Loan Documents, and the
Borrower and the Agents shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement and
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the other Loan Documents. In no event shall any Participant under any such
participation have any right to approve any amendment or waiver of any provision
of any Loan Document, or any consent to any departure by any Loan Party
therefrom, except to the extent that such amendment, waiver or consent would
require the consent of all Lenders pursuant to Section 10.1. The Borrower agrees
that if amounts outstanding under this Agreement and the Loans are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, provided that, in purchasing
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 10.7(a) as
fully as if such Participant were a Lender hereunder. The Borrower also agrees
that each Participant shall be entitled to the benefits of Sections 2.17, 2.18
and 2.19 with respect to its participation in the Commitments and the Loans
outstanding from time to time as if such Participant were a Lender; provided
that, in the case of Section 2.18, such Participant shall have complied with the
requirements of said Section, and provided, further, that no 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 Participant
had no such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with
applicable law and upon written notice to the Agents, at any time and from time
to time assign to any Lender or any affiliate or Control Investment Affiliate
thereof or, with the consent of the Borrower, the Agents the Issuing Lender and
the Swing Line Lender (which, in each case, shall not be unreasonably withheld
or delayed) (provided that no such consent need be obtained by any ▇▇▇▇▇▇ Entity
for a period of 180 days following the Closing Date), to an additional bank,
financial institution or other entity (an "Assignee") all or any part of its
rights and obligations under this Agreement pursuant to an Assignment and
Acceptance, substantially in the form of Exhibit C, executed by such Assignee
and such Assignor (and, where the consent of the Borrower, the Agents or the
Issuing Lender or the Swing Line Lender is required pursuant to the foregoing
provisions, by the Borrower and such other Persons) and delivered to the Agents
for acceptance and recording by the Administrative Agent in the Register;
provided that no such assignment to an Assignee (other than any Lender or any
affiliate thereof) shall be in an aggregate principal amount of less than
$5,000,000 (other than in the case of an assignment of all of a Lender's
interests under this Agreement), unless otherwise agreed by the Borrower and the
Agents. 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 Commitments and/or Loans as set forth therein, and (y) the
Assignor 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 of an Assignor's rights and
obligations under this Agreement, such Assignor shall cease to be a party
hereto, except as to Section 2.17, 2.18 and 10.5 in respect of the period prior
to such effective
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date). Notwithstanding any provision of this Section, the consent of the
Borrower shall not be required for any assignment that occurs at any time when
any Event of Default shall have occurred and be continuing.
(d) The Administrative Agent shall, on behalf of the Borrower,
maintain at its address referred to in Section 10.2 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 Commitment of, and
principal amount 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 Borrower, each Agent and the Lenders shall treat each Person whose name
is recorded in the Register as the owner of the Loans and any Notes evidencing
such Loans recorded therein for all purposes of this Agreement. Any assignment
of any Loan, whether or not evidenced by a Note, shall be effective only upon
appropriate entries with respect thereto being made in the Register (and each
Note shall expressly so provide). Any assignment or transfer of all or part of a
Loan evidenced by a Note shall be registered on the Register only upon surrender
for registration of assignment or transfer of the Note evidencing such Loan,
accompanied by a duly executed Assignment and Acceptance; thereupon one or more
new Notes in the same aggregate principal amount shall be issued to the
designated Assignee, and the old Notes shall be returned by the Administrative
Agent to the Borrower marked "canceled." The Register shall be available for
inspection by the Borrower or any Lender (with respect to any entry relating to
such Lender's Loans) at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an Assignor and an Assignee (and, in any case where the consent of any other
Person is required by Section 10.6(c), by each such other Person) together with
payment to the Administrative Agent of a registration and processing fee of
$3,500 (except that no such registration and processing fee shall be payable (y)
in connection with an assignment by or to a ▇▇▇▇▇▇ Entity or (z) in the case of
an Assignee which is already a Lender or is an affiliate of a Lender or a Person
under common management with a Lender), 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 Borrower. On
or prior to such effective date, the Borrower, at its own expense, upon request,
shall execute and deliver to the Administrative Agent (in exchange for the
Revolving Credit Note of the assigning Lender) a new Revolving Credit Note to
the order of such Assignee in an amount equal to the Revolving Credit Commitment
assumed or acquired by it pursuant to such Assignment and Acceptance and, if the
Assignor has retained a Revolving Credit Commitment upon request, a new
Revolving Credit Note to the order of the Assignor in an amount equal to the
Revolving Credit Commitment retained by it hereunder. Such new Note or Notes
shall be dated the Closing Date and shall otherwise be in the form of the Note
or Notes replaced thereby.
(f) 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 in
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Loans and Notes, 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.
10.7 Adjustments; Set-off. (a) If any Lender (a "Benefitted
Lender") shall at any time receive any payment of all or part of the Obligations
owing to it, 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 8(f), 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 Obligations, such Benefitted Lender shall purchase for
cash from the other Lenders a participating interest in such portion of each
such other Lender's Obligations, or shall provide such other Lenders with the
benefits of any such collateral, as shall be necessary to cause such Benefitted
Lender to share the excess payment or benefits of such collateral 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
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise), 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 Borrower. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such setoff and application.
10.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Delivery of an executed signature page of this
Agreement or of a Lender Addendum by facsimile transmission shall be effective
as delivery of a manually executed counterpart hereof. A set of the copies of
this Agreement signed by all the parties shall be lodged with the Borrower and
the Administrative Agent.
10.9 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
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10.10 Integration. This Agreement and the other Loan Documents
represent the entire agreement of the Borrower, the Agents, the Arranger and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Arranger, any Agent
or any Lender relative to subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. The Borrower 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 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 Borrower at its address set forth in Section 10.2 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.
10.13 Acknowledgments. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
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(b) neither the Arranger, any Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between the Arranger, the Agents and the Lenders,
on one hand, and the Borrower, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(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 Arranger, the Agents and the Lenders or
among, the Borrower and the Lenders.
10.14 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.
10.15 Release of Collateral and Guarantee Obligations.
(a) Notwithstanding anything to the contrary contained herein
or in any other Loan Document, upon request of the Borrower 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 or any other counterparty that is a party to any
Specified Hedge Agreement) take such actions as shall be required to release its
security interest in any Collateral being Disposed of in such Disposition, and
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.
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(b) Notwithstanding anything to the contrary contained herein
or any other Loan Document, when all Obligations (other than obligations in
respect of any Specified Hedge Agreement) have been paid in full, all
Commitments have terminated or expired and no Letter of Credit shall be
outstanding, upon request of the Borrower, the Administrative Agent shall
(without notice to, or vote or consent of, any Lender, any affiliate of any
Lender or any other counterparty that is a party to any Specified Hedge
Agreement) take such actions as shall be required to release its security
interest in all Collateral, and to release all guarantee obligations under any
Loan Document, whether or not on the date of such release there may be
outstanding Obligations in respect of Specified Hedge Agreements. 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 Borrower 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 Borrower or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payment had not been made.
10.16 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 Borrower 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
Borrower'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 Borrower, 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.
10.17 Delivery of Lender Addenda. Each initial Lender shall
become a party to this Agreement by delivering to the Administrative Agent a
Lender Addendum duly executed by such Lender, the Borrower and the
Administrative Agent.
10.18 WAIVERS OF JURY TRIAL. THE BORROWER, 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: Authorized Signatory
▇▇▇▇▇▇ COMMERCIAL PAPER INC., as
Syndication Agent
By: /s/ G. ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
Name: G. ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Signatory
CONGRESS FINANCIAL CORPORATION (FLORIDA),
as Administrative Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
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ANNEX A
PRICING GRID
------------------------------------------------- ----------------------- ---------------------- -------------------
Applicable Margin
Consolidated Adjusted Applicable Margin for Base Commitment Fee
Funded Debt Ratio for Eurodollar Loans Rate Loans Rate
------------------------------------------------- ----------------------- ---------------------- -------------------
greater than or equal to 3.00 : 1.00 2.75% 1.50% 0.50%
------------------------------------------------- ----------------------- ---------------------- -------------------
greater than or equal to 2.75 : 1.00 2.50% 1.25% 0.50%
------------------------------------------------- ----------------------- ---------------------- -------------------
greater than or equal to 2.25 : 1.00 2.25% 1.00% 0.50%
------------------------------------------------- ----------------------- ---------------------- -------------------
greater than or equal to 2.00 : 1.00 2.00% 0.75% 0.375%
------------------------------------------------- ----------------------- ---------------------- -------------------
less than 2.00 : 1.00 1.75% 0.50% 0.375%
------------------------------------------------- ----------------------- ---------------------- -------------------
Changes in the Applicable Margin or in the Commitment Fee Rate resulting from
changes in the Consolidated Adjusted Funded Debt Ratio shall become effective on
the date (the "ADJUSTMENT DATE") on which financial statements are delivered to
the Lenders pursuant to Section 6.1 (but in any event not later than the 45th
day after the end of each of the first three quarterly periods of each fiscal
year or the 90th day after the end of each fiscal year, as the case may be) and
shall remain in effect until the next change to be effected pursuant to this
paragraph. If any financial statements referred to above are not delivered
within the time periods specified above, then, until such financial statements
are delivered, the Consolidated Adjusted Funded Debt Ratio as at the end of the
fiscal period that would have been covered thereby shall for the purposes of
this definition be deemed to be greater than 3.00 to 1.00, respectively. If on
any Adjustment Date the Consolidated Adjusted Funded Debt Ratio would result in
different Applicable Margins or Commitment Fee Rates, the higher Applicable
Margin or Commitment Fee Rate shall govern. Each determination of the
Consolidated Adjusted Funded Debt Ratio pursuant to this Pricing Grid shall be
made for the periods and in the manner contemplated by Section 7.1(c).
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SCHEDULE 1.1(d)
TO
CREDIT AGREEMENT
BORROWING BASE
"Accounts" shall mean, as to Borrower and each Subsidiary Guarantor,
all present and future rights of Borrower and such Subsidiary Guarantor to
payment of money arising out of Borrower's or such Subsidiary's rendition of
services, or sale, lease or other disposition of Borrower's or such Subsidiary's
goods or other property and including, without limitation, all rentals, lease
payments and other monies earned and to be earned, due and to become due as a
result of the use of a motor vehicle by any person under a Rental Contract or
monies earned and to be earned as the result of the sale of any motor vehicle or
amounts payable to Borrower or such Subsidiary Guarantor as rebates or
incentives for the purchase by Borrower or such Subsidiary Guarantor of motor
vehicles. Without limiting the generality of the foregoing, the term "Accounts"
shall include, without limitation, Unbilled Accounts, Corporate Accounts, Credit
Card Receivables, CarTemps Accounts, Manufacturer Incentive Accounts,
Pre-Delivery Inspection Accounts.
"Accounts Receivable Turnover" shall mean, at any time, for any Person,
the average of the outstanding accounts receivable of such Person at the
beginning of each of the three (3) immediately preceding months divided by the
aggregate amount of the gross cash receipts of such Person for such three (3)
months multiplied by thirty (30).
"Alamo" shall mean Alamo Rent-A-Car, LLC, a Delaware limited liability
company.
"Borrowing Base" shall mean, at any time, the amount equal to:
(a) the sum of:
(i) seventy-five (75%) percent of the Net Amount of
Eligible Unbilled Accounts of National, PLUS
(ii) seventy-five (75%) percent of the Net Amount of
Eligible Corporate Accounts of National (other than TA/TO Accounts of National),
PLUS
(iii) eighty (80%) percent of the Net Amount of
Eligible Corporate Accounts consisting of the Corporate Accounts of Alamo, the
TA/TO Accounts of Alamo and the TA/TO Accounts of National, PLUS
(iv) eighty-five (85%) percent of the Net Amount of
Eligible Credit Card Receivables of National and CarTemps, PLUS
121
(v) eighty (80%) percent of the Net Amount of
Eligible CarTemps Accounts, PLUS
(vi) eighty-five (85%) percent of the amount of
Eligible Manufacturer Incentive Accounts, PLUS
(vii) eighty-five (85%) percent of the amount of
Eligible Pre-Delivery Inspection Accounts, PLUS
(viii) eighty-five (85%) percent of the Net Amount of
Eligible Vehicle Sales Accounts, PLUS
(ix) forty (40%) percent of the Appraised Value of
the Eligible Real Property on such date, MINUS
(b) any Reserves established by the Administrative Agent at
such time.
The Borrowing Base shall be determined by the Administrative Agent in its
reasonable judgment by reference to the most recent Borrowing Base Certificate,
PROVIDED, THAT, the Administrative Agent shall be entitled to rely upon the
information set forth in Borrowing Base Certificates and shall be under no
obligation to inquire as to the accuracy thereof. As of the date of each Loan or
the issuance of each Letter of Credit, Borrower shall be deemed to represent and
warrant to Administrative Agent and Lenders that after giving effect to such
Loan or Letter of Credit, the aggregate outstanding amount of the Loans and the
Letters of Credit do not exceed the Borrowing Base calculated for this purpose
as of the last day of the week immediately preceding the date of such Loan or
issuance of such Letter of Credit. General criteria for different categories of
Eligible Accounts may be revised from time to time by Administrative Agent in
good faith based on an event, condition or other circumstance arising after the
date hereof, or existing on the date hereof to the extent Administrative Agent
has no written notice thereof from a Subsidiary Guarantor, which adversely
affects such category of Eligible Accounts in the good faith determination of
Administrative Agent and to the extent no Reserve has been established in
connection therewith. Any Accounts which are not Eligible Accounts shall
nevertheless be part of the Collateral.
"CarTemps" shall mean Spirit Rent-A-Car, Inc., a Delaware corporation,
doing business as CarTemps USA.
"CarTemps Accounts" shall mean Accounts owing to CarTemps by a car
dealership or insurance company.
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"Corporate Accounts" shall mean Accounts owing to Alamo or National by
a corporation (other than a corporation which is a travel agent or tour
operator) that has established an account with Alamo or National for centralized
billing in accordance with the current practices of Alamo and National,
respectively, as of the date hereof.
"Credit Card Acknowledgments" shall mean, individually and
collectively, the agreements by Credit Card Issuers or Credit Card Processors
who are parties to Credit Card Agreements in favor of Administrative Agent
acknowledging Administrative Agent's first priority security interest in the
monies due and to become due to Borrowers (including, without limitation,
credits and reserves) under the Credit Card Agreements, and agreeing to transfer
all such amounts to the Blocked Accounts, as the same now exist or may hereafter
be amended, modified, supplemented, extended, renewed, restated or replaced.
"Credit Card Agreements" shall mean all agreements now or hereafter
entered into by a Subsidiary Guarantor with any Credit Card Issuer or any Credit
Card Processor, as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
"Credit Card Issuer" shall mean any person (other than a Subsidiary
Guarantor) who issues or whose members issue credit cards, including, without
limitation, MasterCard or VISA bank credit or debit cards or other bank credit
or debit cards issued through MasterCard International, Inc., Visa, U.S.A., Inc.
or Visa International and American Express, Discover, Diners Club, ▇▇▇▇▇ ▇▇▇▇▇▇▇
and other non-bank credit or debit cards, including, without limitation, credit
or debit cards issued by or through American Express Travel Related Services
Company, Inc. and Novus Services, Inc.
"Credit Card Processor" shall mean any servicing or processing agent or
any factor or financial intermediary who facilitates, services, processes or
manages the credit authorization, billing transfer and/or payment procedures
with respect to any of a Borrower's sales transactions involving credit card or
debit card purchases by customers using credit cards or debit cards issued by
any Credit Card Issuer (including, but not limited to First Data Corporation).
"Credit Card Receivables" shall mean, collectively, (a) all present and
future rights of any Subsidiary Guarantor to payment from any Credit Card
Issuer, Credit Card Processor or other third party arising from the sale or
lease of goods or rendition of services to customers who have purchased or
leased such goods or services using a credit or debit card and (b) all present
and future rights of a Subsidiary Guarantor to payment from any Credit Card
Issuer, Credit Card Processor or other third party in connection with the sale
or transfer of Accounts arising pursuant to the sale or lease of goods or
rendition of services to customers who have purchased or leased such goods or
services using a credit card or a debit card, including, but not limited to, all
amounts at any time due or to become due from any Credit Card Issuer or Credit
Card Processor under the Credit Card Agreements or otherwise.
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"Dilution" shall mean, as to any Person, for any period, the fraction,
expressed as a percentage, the numerator of which is the aggregate amount of
non-cash reductions in the Accounts of such Person for such period and the
denominator of which is the aggregate dollar amount of the sales of such Person
for such period.
"Eligible Accounts" shall mean, collectively, Eligible CarTemps
Accounts, Eligible Corporate Accounts, Eligible Credit Card Receivables,
Eligible Manufacturer Incentive Accounts, Eligible Pre-Delivery Inspection
Accounts and Eligible Vehicle Sale Accounts.
"Eligible CarTemps Accounts" shall mean Accounts created by CarTemps
which are and continue to be acceptable to Administrative Agent based on the
criteria set forth below. Subject to the terms and conditions contained herein,
a CarTemps Account shall be an Eligible CarTemps Account if:
(a) such Accounts arose from the actual and BONA FIDE lease of
a motor vehicle by such Subsidiary Guarantor in the ordinary course of its
business which transaction is completed in accordance with the terms and
provisions contained in the Rental Contract applicable thereto;
(b) the motor vehicle that was subject to the Rental Contract
giving rise to such Account has been returned to such Subsidiary Guarantor;
(c) such Account is not an Unbilled Account and an invoice has
been rendered to the account debtor with respect to such Account;
(d) such Account is not a Credit Card Receivable;
(e) such Account is not unpaid more than the sixty (60) days
after the date of the original invoice for it;
(f) neither the account debtor nor any officer or employee of
the account debtor with respect to such Account is an officer, employee, agent
or other Affiliate of Borrower or any Subsidiary Guarantor;
(g) such Account is not owed by an account debtor who has
Accounts unpaid more than sixty (60) days after the original invoice date for
them which constitute more than fifty (50%) percent of the total Accounts of
such account debtor;
(h) the account debtor with respect to such Account is located
in the United States of America or Canada or, at Administrative Agent's option,
if the account debtor with respect to such Corporate Account is located other
than in the United States of America or Canada, then if such Account is
otherwise acceptable in all respects to Administrative Agent (subject to such
lending formula with respect thereto as Administrative Agent may determine);
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(i) such Account does not arise from terms under which payment
by the account debtor may be conditional or contingent;
(j) the account debtor with respect to such Account has not
asserted a counterclaim, defense or dispute and does not have, and does not
engage in transactions which may give rise to any right of setoff or recoupment
against such Accounts (but the portion of the Accounts of such account debtor in
excess of the amount at any time and from time to time owed by Subsidiary
Guarantor to such account debtor or claimed owed by such account debtor may be
deemed Eligible CarTemps Accounts);
(k) there are no facts, events or occurrences which would
impair the validity, enforceability or collectability of such Account or reduce
the amount payable or delay payment thereunder;
(l) such Account is subject to the first priority, valid and
perfected security interest of Administrative Agent;
(m) the account debtors with respect to such Accounts are not
any foreign government, the United States of America, any State, political
subdivision, department, agency or instrumentality thereof, unless, if the
account debtor is the United States of America, any State, political
subdivision, department, agency or instrumentality thereof, upon Lender's
request, the Federal Assignment of Claims Act of 1940, as amended or any similar
State or local law, if applicable, has been complied with in a manner
satisfactory to Administrative Agent;
(n) there are no proceedings or actions reasonably known to
any Subsidiary Guarantor which are threatened or pending against the account
debtor with respect to such Account which might result in any material adverse
change in any such account debtor's financial condition;
(o) such Account is not evidenced by or arising under any
instrument or chattel paper;
(p) such Account of a single account debtor or its Affiliates
does not constitute more than twenty (20%) percent of all otherwise Eligible
Accounts (but the portion of the Accounts not in excess of such percentage may
be deemed Eligible CarTemps Accounts);
(r) such Account is owed by an account debtor whose total
indebtedness to such Subsidiary Guarantor does not exceed the credit limit with
respect to such account debtor as determined by such Subsidiary Guarantor from
time to time which limits shall be established by such Subsidiary Guarantor in a
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manner consistent with its current practices as of the date hereof (but the
portion of the Accounts not in excess of such credit limit may be deemed
Eligible CarTemps Accounts);
(s) such Account is owed by an account debtor deemed
creditworthy at all times by such Subsidiary Guarantor determined by such
Guarantor consistent with its current practices as of the date hereof;
(t) such Account is owed by a car dealership or insurance
company and not the person that is using the motor vehicle, the use of which
gives rise to the Account;
(u) such Account is not owed by the manufacturer of any motor
vehicle of such Subsidiary Guarantor;
(v) such Account does not arise from a claim by CarTemps
against an insurance policy (but may arise from the obligations of an insurance
company to provide replacement vehicles);
(w) the representations or warranties pertaining to Accounts
set forth in this Agreement or the Guarantee and Collateral Agreement shall be
true as to such Account;
(x) such Account represents a bona fide, valid and legally
enforceable obligation of the account debtor with respect thereto;
(y) such Account is payable in Dollars.
"Eligible Corporate Accounts" shall mean Corporate Accounts and TA/TO
Accounts created by Alamo and National which are and continue to be acceptable
to Administrative Agent based on the criteria set forth below. Subject to the
terms and conditions contained herein, a Corporate Account and TA/TO Account
shall be an Eligible Corporate Account if:
(a) such Accounts arose from the actual and BONA FIDE lease of
a motor vehicle by such Subsidiary Guarantor in the ordinary course of its
business which transaction is completed in accordance with the terms and
provisions contained in the Rental Contract applicable thereto;
(b) the motor vehicle that was subject to the Rental Contract
giving rise to such Account has been returned to such Subsidiary Guarantor;
(c) such Account is not an Unbilled Account and an invoice has
been rendered to the account debtor with respect to such Account;
(d) such Account is not a Credit Card Receivable;
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(e) such Account is not unpaid more than the sixty (60) days
after the date of the original invoice for it;
(f) neither the account debtor nor any officer or employee of
the account debtor with respect to such Account is an officer, employee, agent
or other Affiliate of Borrower or any Subsidiary Guarantor;
(g) such Account is not owed by an account debtor who has
Accounts unpaid more than sixty (60) days after the original invoice date for
them which constitute more than fifty (50%) percent of the total Accounts of
such account debtor;
(h) the account debtor with respect to such Account is located
in the United States of America or Canada or, at Administrative Agent's option,
if the account debtor with respect to such Corporate Account is located other
than in the United States or Canada, then if such Account is otherwise
acceptable in all respects to Administrative Agent (subject to such lending
formula with respect thereto as Administrative Agent may determine), which as of
the date hereof include Holiday Autos International Tours, Holidays Auto
Germany, Derdata Information Management and Meiers Weiltreisen Touristik;
(i) such Account does not arise from terms under which payment
by the account debtor may be conditional or contingent;
(j) the account debtor with respect to such Account has not
asserted a counterclaim, defense or dispute and does not have, and does not
engage in transactions which may give rise to any right of setoff or recoupment
against such Accounts (but the portion of the Accounts of such account debtor in
excess of the amount at any time and from time to time owed by Subsidiary
Guarantor to such account debtor or claimed owed by such account debtor may be
deemed Eligible Corporate Accounts);
(k) there are no facts, events or occurrences which would
impair the validity, enforceability or collectability of such Account or reduce
the amount payable or delay payment thereunder;
(l) such Account is subject to the first priority, valid and
perfected security interest of Administrative Agent;
(m) the account debtors with respect to such Accounts are not
any foreign government, the United States of America, any State, political
subdivision, department, agency or instrumentality thereof, unless, if the
account debtor is the United States of America, any State, political
subdivision, department, agency or instrumentality thereof, upon Administrative
Agent's request, the Federal Assignment of Claims Act of 1940, as amended or any
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similar State or local law, if applicable, has been complied with in a manner
satisfactory to Administrative Agent;
(n) there are no proceedings or actions reasonably known to
any Subsidiary Guarantor which are threatened or pending against the account
debtors with respect to such Account which might result in any material adverse
change in any such account debtor's financial condition;
(o) such Account is not evidenced by or arising under any
instrument or chattel paper;
(p) such Account of a single account debtor or its Affiliates
do not constitute more than twenty (20%) percent of all otherwise Eligible
Accounts (but the portion of the Accounts not in excess of such percentage may
be deemed Eligible Corporate Accounts);
(r) such Account is owed by an account debtor whose total
indebtedness to such Subsidiary Guarantor does not exceed the credit limit with
respect to such account debtor as determined by such Subsidiary Guarantor in a
manner consistent with its current practice as of the date hereof (but the
portion of the Accounts not in excess of such credit limit may be deemed
Eligible Corporate Accounts);
(s) such Account is owed by an account debtor deemed
creditworthy at all times by such Subsidiary Guarantor determined in a manner
consistent with its current practices as of the date hereof;
(t) the representations or warranties pertaining to Accounts
set forth in this Agreement or the Guarantee and Collateral Agreement shall be
true as to such Account;
(u) such Account represents a bona fide, valid and legally
enforceable obligation of the account debtor with respect thereto;
(v) such Account is payable in Dollars.
"Eligible Credit Card Receivables" shall mean Credit Card Receivables
of National and CarTemps which are and continue to be acceptable to
Administrative Agent based on the criteria set forth below. Subject to the terms
and conditions contained herein, Credit Card Receivables shall be Eligible
Credit Card Receivables if:
(a) such Credit Card Receivables arise from the actual and
BONA FIDE lease of a motor vehicle by such Subsidiary Guarantor in the ordinary
course of the business of such Subsidiary Guarantor which transactions are
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completed in accordance with the terms and provisions contained in any documents
binding on such Subsidiary Guarantor or the other party or parties related
thereto;
(b) such Credit Card Receivables are not past due pursuant to
the terms set forth in the Credit Card Agreements with the Credit Card Issuer or
Credit Card Processor of the credit card or debit card used in the purchase
giving rise to such Credit Card Receivables;
(d) the Credit Card Issuer or Credit Card Processor with
respect to such Credit Card Receivables is located in the United States or
Canada;
(e) the Credit Card Issuer or Credit Card Processor with
respect to such Credit Card Receivables has not asserted a counterclaim, defense
or dispute and does not have, and does not engage in transactions which may give
rise to, any right of setoff against such Credit Card Receivables (other than
transactions in the ordinary course of the business of such Subsidiary
Guarantor) and such Credit Card Issuer or Credit Card Processor has not setoff
against amounts otherwise payable by such Credit Card Issuer or Credit Card
Processor to such Subsidiary Guarantor for the purpose of establishing a reserve
or collateral for obligations of such Subsidiary Guarantor to such Credit Card
Issuer or Credit Card Processor;
(f) there are no facts, events or occurrences which would
impair the validity, enforceability or collectability of such Credit Card
Receivables or reduce the amount payable or delay payment thereunder;
(h) such Credit Card Receivables are subject to the first
priority, valid and perfected security interest of Administrative Agent;
(i) Administrative Agent shall have received, in form and
substance satisfactory to Administrative Agent, a Credit Card Acknowledgment
duly authorized, executed and delivered by the Credit Card Issuer or Credit Card
Processor for the credit card or debit card used in the sale which gave rise to
such Credit Card Receivable, such Credit Card Acknowledgment shall be in full
force and effect and the Credit Card Issuer or Credit Card Processor party
thereto shall have complied with the terms thereof;
(j) there are no proceedings or actions reasonably known to
any Subsidiary Guarantor which are threatened or pending against the Credit Card
Issuers or Credit Card Processors with respect to such Credit Card Receivables
which might result in any material adverse change in the financial condition of
any such Credit Card Issuer or Credit Card Processor;
(l) no default or event of default has occurred under the
Credit Card Agreement of such Subsidiary Guarantor with the Credit Card Issuer
or Credit Card Processor who has issued the credit card or debit card or handles
payments under the credit card or debit card used in the sale which gave rise to
such Credit Card Receivables which default gives such Credit Card Issuer or
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Credit Card Processor the right to cease or suspend payments to such Subsidiary
Guarantor and no event shall have occurred which gives such Credit Card Issuer
or Credit Card Processor the right to setoff against amounts otherwise payable
to such Subsidiary Guarantor (other than for then current fees and chargebacks
consistent with the current practices of such Credit Card Issuer or Credit Card
Processor) or the right to establish reserves or establish or demand collateral
and such Credit Card Agreements are otherwise in full force and effect; and
(m) the Credit Card Issuer or Credit Card Processor has not
sent any notice of default and/or notice of its intention to cease or suspend
payments to such Subsidiary Guarantor in respect of such Credit Card Receivables
or to establish reserves or cash collateral for obligations of such Subsidiary
Guarantor to such Credit Card Issuer or Credit Card Processor;
(t) the representations or warranties pertaining to Accounts
set forth in this Agreement or the Guarantee and Collateral Agreement shall be
true as to such Account;
(u) such Credit Card Receivables represent a bona fide, valid
and legally enforceable obligation of the Credit Card Issuer or Credit Card
Processor with respect thereto;
(v) such Credit Card Receivables are payable in Dollars.
"Eligible Manufacturer Incentive Accounts" shall mean the Manufacturer
Incentive Accounts which are and continue to be acceptable to Administrative
Agent based on the criteria set forth below. Subject to the terms and conditions
contained herein, Manufacturer Incentive Accounts shall be Eligible Manufacturer
Incentive Accounts if:
(a) such Accounts arose from the actual and bona fide purchase
and receipt by Alamo or National of a motor vehicle manufactured by GM from an
authorized dealer of General Motors Corporation in the ordinary course of the
business of Alamo or National, as the case may be, and in each case in
accordance with the terms of the GM Incentive Agreement and the programs
referred to therein;
(b) Borrower and each Subsidiary Guarantor shall have complied
in all respects with the terms of the GM Incentive Agreement with respect to
such Accounts, including the delivery to GM of all information with respect to
the vehicle purchased by Alamo or National giving rise to such Accounts at the
times and in the form and manner required by GM;
(c) such Accounts are not unpaid after the last day of the
month following vehicle delivery and the receipt by GM of an electronic media
transmission from Borrower listing the vehicle purchased which is the basis for
such Accounts;
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(d) the GM Incentive Agreement is in full force and effect and
no party thereto has sent any notice of any breach thereof (whether of
anticipatory breach or actual breach) by the other or of any intention to
terminate or suspend such agreement or in the case of GM, to suspend or cease
making any payments to Borrower in accordance with the GM Incentive Agreement
and no default or event of default thereunder by any party thereto exists or has
occurred;
(e) GM has not asserted or threatened a counterclaim, defense
or dispute with respect to any of such Accounts or the GM Incentive Agreement or
failed to make any payment under the GM Incentive Agreement or asserted or
threatened any offset against any of such Accounts for any reason; and
(f) GM shall not have made any demand for repayment of any
amounts previously paid by GM in respect of such Accounts, and the conditions
giving rise to the right of GM to make such demand under the terms of the GM
Incentive Agreement shall not exist or have occurred;
(f) the GM Incentive Agreement shall not have been amended,
modified or supplemented in any material respect or in any way which affects the
terms of payments by GM to Borrower thereunder, or any rights of Borrower
thereunder waived, released or modified, without the prior written consent of
Administrative Agent, except for adjustments of the volume and mix requirements
thereof as permitted under the GM Incentive Agreement consistent with current
practices of Borrower and GM and as to which GM and Borrower agree; PROVIDED,
THAT, upon Administrative Agent's request, the Borrower shall provide
Administrative Agent with such information concerning changes in the terms of
the volume and mix requirements;
(g) such Accounts shall represent bona fide, valid and legally
enforceable obligations of GM arising in the ordinary course of the business of
GM;
(h) Administrative Agent shall have received the list of
vehicles purchased by Alamo and National giving rise to such Accounts submitted
by Borrower to GM under the terms of the GM Incentive Agreement;
(i) Borrower shall have received from GM (and provided to
Administrative Agent) the confirmation issued by GM with respect to such
Accounts disclosing the quantity and models that will receive the benefit of the
incentive payments constituting the Accounts in the following month;
(j) such Accounts shall not constitute Pre-delivery Inspection
Accounts or amounts payable by GM in respect of depreciation with respect to any
motor vehicles manufactured by GM purchased by Alamo or National or any amounts
payable for wrecked motor vehicles or which are not to be repurchased by GM as
the manufacturer thereof or cannot otherwise be returned by Borrower, Alamo or
National;
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(k) there are no facts, events or occurrences which would
impair the validity, enforceability or collectability of such Accounts or reduce
the amount payable or delay payment thereunder;
(l) such Accounts are subject to the first priority, valid and
perfected security interest of Administrative Agent;
(m) there are no proceedings or actions reasonably known to
any Subsidiary Guarantor which are threatened or pending which might adversely
affect the ability or willingness of GM to make any payment in respect of such
Accounts;
(n) such Accounts are not evidenced by or arising under any
instrument or chattel paper;
(o) the representations or warranties pertaining to Accounts
set forth in this Agreement or the Guarantee and Collateral Agreement shall be
true as to such Account;
(p) such Accounts are payable in Dollars.
"Eligible Pre-Delivery Inspection Accounts" shall mean Pre-Delivery
Inspection Accounts created by National which are and continue to be acceptable
to Administrative Agent based on the criteria set forth below. Subject to the
terms and conditions contained herein, Pre-Delivery Inspection Accounts shall be
Eligible Pre-Delivery Inspection Accounts if:
(a) such Accounts arose from the actual and bona fide
rendition of inspection work (including removing plastic and cleaning) by
National with respect to vehicles purchased by National, Alamo or CarTemps from
GM or an authorized dealer of GM in the ordinary course of the business of
National and GM in accordance with the terms of the Pre-Delivery Inspection
Agreement;
(b) Borrower and each Subsidiary Guarantor shall have complied
in all respects with the terms of the Pre-Delivery Inspection Agreement with
respect to such Accounts, including the delivery to GM of all information with
respect to the vehicle for which the inspection work was done giving rise to
such Accounts at the times and in the form and manner required by GM;
(c) such Accounts are not unpaid after the last day of the
month following the date of the original invoice for them;
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(d) the Pre-Delivery Inspection Agreement is in full force and
effect and no party thereto has sent any notice of any breach thereof (whether
of anticipatory breach or actual breach) by the other or of any intention to
terminate or suspend such agreement or in the case of GM, to suspend or cease
making any payments to National in accordance with the Pre-Delivery Inspection
Agreement and no default or event of default thereunder by any party thereto
exists or has occurred;
(e) GM has not asserted or threatened a counterclaim, defense
or dispute with respect to any of such Accounts or the Pre-Delivery Inspection
Agreement or failed to make any payment under the Pre-Delivery Inspection
Agreement or asserted or threatened any offset against any of such Accounts for
any reason;
(f) the Pre-Delivery Inspection Agreement shall not have been
amended, modified or supplemented in any material respect or in any respect that
affects the terms of payment thereunder, or any rights of Borrower thereunder
waived, released or modified, without the prior written consent of
Administrative Agent,
(g) such Accounts shall represent bona fide, valid and legally
enforceable obligations of GM arising in the ordinary course of the business of
GM;
(h) such Accounts shall not constitute Manufacturer Incentive
Accounts or amounts payable by GM in respect of depreciation with respect to any
motor vehicles manufactured by GM purchased by Alamo or National or any amounts
payable for wrecked motor vehicles or which are not to be repurchased by GM as
the manufacturer thereof or cannot otherwise be returned by Borrower, Alamo or
National;
(i) there are no facts, events or occurrences which would
impair the validity, enforceability or collectability of such Accounts or reduce
the amount payable or delay payment thereunder;
(j) such Accounts are subject to the first priority, valid and
perfected security interest of Administrative Agent;
(k) there are no proceedings or actions reasonably known to
Borrower which are threatened or pending which might adversely affect the
ability or willingness of GM to make any payment in respect of such Accounts;
(l) such Accounts are not evidenced by or arising under any
instrument or chattel paper;
(m) the representations or warranties pertaining to Accounts
set forth in this Agreement or the Guarantee and Collateral Agreement shall be
true as to such Account;
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(n) such Accounts are payable in Dollars.
"Eligible Unbilled Accounts" shall mean Unbilled Accounts created by
National which are and continue to be acceptable to Administrative Agent based
on the criteria set forth below. Subject to the terms and conditions contained
herein, Unbilled Accounts shall be Eligible Unbilled Accounts if such Accounts
arise from the actual and BONA FIDE lease of a motor vehicle by National to a
business in the ordinary course of its business which transactions are completed
in accordance with the terms and provisions contained in Rental Contract
applicable thereto and otherwise satisfy the criteria for Eligible Corporate
Accounts, except that (a) the obligation of the account debtor to make payment
in respect thereof is subject only to the rendition of an invoice therefor, (b)
such Accounts are not unbilled more than thirty (30) days after the completion
of the term of the applicable Rental Contract and (c) Administrative Agent shall
be able to obtain, and National can promptly upon Administrative Agent's request
deliver, documents prepared or generated in the ordinary course of the business
of National, satisfactory to Administrative Agent, to evidence the nature and
dates of the rental provided by National to the account debtor and the amount
owned by the account debtor.
"Eligible Vehicle Sales Accounts" shall mean Vehicle Sales Accounts
created by Alamo or National which are and continue to be acceptable to
Administrative Agent based on the criteria set forth below. Subject to the terms
and conditions contained herein, a Vehicle Sales Account shall be an Eligible
Vehicle Sales Account if:
(a) such Account arose from the actual and BONA FIDE sale by
Alamo or National, as the case may be, of a motor vehicle in the ordinary course
of its business which transaction is completed in accordance with the terms and
provisions of the documents applicable thereto;
(b) Alamo or National, as the case may be, shall have
purchased the motor vehicle the sale of which gave rise to such Account and
shall have the sole legal and valid title to such motor vehicle immediately
prior to its sale;
(c) such Account is not an Unbilled Account and an invoice has
been rendered to the account debtor with respect to such Account;
(d) such Account is not a Credit Card Receivable;
(e) such Account is not unpaid more than the fifteen (15) days
after the date of the sale of the motor vehicle giving rise to such Account;
(f) neither the account debtor nor any officer or employee of
the account debtor with respect to such Account is an officer, employee, agent
or other Affiliate of Borrower or any Subsidiary Guarantor;
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(g) such Account is not owed by an account debtor who has
Accounts unpaid more than fifteen (15) days after the original invoice date for
them which constitute more than fifty (50%) percent of the total Accounts of
such account debtor;
(h) the account debtor with respect to such Account is located
in the United States of America or Canada or, at Administrative Agent's option,
if the account debtor with respect to such Vehicle Sales Account is located
other than in the United States of America or Canada, then if such Account is
otherwise acceptable in all respects to Administrative Agent (subject to such
lending formula with respect thereto as Administrative Agent may determine);
(i) such Account does not arise from terms under which payment
by the account debtor may be conditional or contingent;
(j) the account debtor with respect to such Account has not
asserted a counterclaim, defense or dispute and does not have, and does not
engage in transactions which may give rise to any right of setoff or recoupment
against such Accounts (but the portion of the Accounts of such account debtor in
excess of the amount at any time and from time to time owed by Subsidiary
Guarantor to such account debtor or claimed owed by such account debtor may be
deemed Eligible Vehicle Sales Accounts);
(k) there are no facts, events or occurrences which would
impair the validity, enforceability or collectability of such Account or reduce
the amount payable or delay payment thereunder;
(l) such Account is subject to the first priority, valid and
perfected security interest of Administrative Agent;
(m) the account debtors with respect to such Accounts are not
any foreign government, the United States of America, any State, political
subdivision, department, agency or instrumentality thereof, unless, if the
account debtor is the United States of America, any State, political
subdivision, department, agency or instrumentality thereof, upon Administrative
Agent's request, the Federal Assignment of Claims Act of 1940, as amended or any
similar State or local law, if applicable, has been complied with in a manner
satisfactory to Administrative Agent;
(n) there are no proceedings or actions reasonably known to
Borrower which are threatened or pending against the account debtors with
respect to such Account which might result in any material adverse change in any
such account debtor's financial condition;
(o) such Account is not evidenced by or arising under any
instrument or chattel paper;
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(p) such Account of a single account debtor or its Affiliates
do not constitute more than twenty (20%) percent of all otherwise Eligible
Accounts (but the portion of the Accounts not in excess of such percentage may
be deemed Eligible Vehicle Sales Accounts);
(r) such Account is owed by an account debtor whose total
indebtedness to such Subsidiary Guarantor does not exceed the credit limit with
respect to such account debtor as determined by such Subsidiary Guarantor in a
manner consistent with its current practice as of the date hereof (but the
portion of the Accounts not in excess of such credit limit may be deemed
Eligible Vehicle Sales Accounts);
(s) such Account is owed by an account debtor deemed
creditworthy at all times by such Subsidiary Guarantor consistent with its
current practice as of the date hereof;
(t) the representations or warranties pertaining to Accounts
set forth in this Agreement or the Guarantee and Collateral Agreement shall be
true as to such Account;
(u) such Account represents a bona fide, valid and legally
enforceable obligation of the account debtor with respect thereto;
(v) such Account is payable in Dollars.
"GM" shall mean General Motors Corporation and its successors and
assigns.
"GM Incentive Agreement" shall mean the letter agreement dated December
13, 1999 between Borrower (as assignee of AutoNation, Inc.) and GM, and
including all exhibits and attachments thereto, as amended and supplemented from
time to time (other than with respect to terms relating to payments by GM
thereunder).
"Manufacturer Incentive Accounts" shall mean Accounts of Borrower owing
by GM to Borrower pursuant to the GM Incentive Agreement as in effect on the
date hereof constituting the incentive rebate per vehicle payable by GM to
Borrower for each of certain types of vehicles purchased by Alamo and National
from GM in accordance with the terms of GM Incentive Agreement.
"National" shall mean National Car Rental System, Inc., a Delaware
corporation.
"Net Amount of Eligible CarTemps Accounts" shall mean the gross amount
of Eligible CarTemps Accounts, less (a) sales, excise or similar taxes included
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in the amount thereof and (b) credits, claims, discounts and allowances issued
or available with respect thereto.
"Net Amount of Eligible Corporate Accounts" shall mean the gross amount
of Eligible Corporate Accounts, less (a) sales, excise or similar taxes included
in the amount thereof and (b) credits (including marketing and trade-out
credits), commissions (including hotel commissions, airlines programs and volume
rebates and commissions payable to travel agencies and tour operators and
similar obligations which result in the reduction of amounts payable to Alamo or
National), claims, discounts and allowances issued or available with respect
thereto and (c) amounts reflected in the clearing accounts and as unapplied
payments (currently set forth in general ledger account no.101260 and general
ledger account no.101265).
"Net Amount of Eligible Credit Card Receivables" shall mean, at any
time, (a) as to such Accounts arising from the use by the customer of a Visa
card or Mastercard, two (2) days of average payments received by National based
on the daily average of the payments received by National for the immediately
preceding two (2) calendar month period, less the amount of any commissions or
other fees then owing to the Credit Card Processor handling the payment of such
amounts to National and (b) as to such Accounts arising from the use by the
customer of an American Express card, four (4) days of average payments received
by National based on the daily average of the payments received by National for
the immediately preceding two (2) calendar month period.
"Net Amount of Eligible Unbilled Accounts" shall mean the gross amount
of Eligible Unbilled Accounts, less (a) sales, excise or similar taxes included
in the amount thereof and (b) credits, claims, discounts and allowances issued
or available with respect thereto.
"Net Amount of Eligible Vehicles Sales Accounts" shall mean the gross
amount of Eligible Vehicle Sales Accounts, less (a) sales, excise or similar
taxes included in the amount thereof and (b) credits, claims, discounts,
allowances and commissions (including the commission payable to the auction
house which is obligated thereon) with respect thereto.
"Pre-Delivery Inspection Accounts" shall mean Accounts of National
owing by GM to National pursuant to the Pre-Delivery Inspection Agreement as in
effect on the date hereof.
"Pre-Delivery Inspection Agreement" shall mean the Authorized Fleet
Warranty Service Station Agreement, dated June 26, 2000, between National and
GM, as amended and supplemented from time to time (other than with respect to
terms relating to payments by GM thereunder).
"Rental Contracts" shall mean, collectively, the written agreements
between a Subsidiary Guarantor and a user of the motor vehicle of such
Subsidiary Guarantor in the ordinary course of business of such Subsidiary
Guarantor for the lease or rental of such motor vehicle.
"Reserves" shall mean as of any date of determination, such amounts as
Administrative Agent may from time to time establish and revise in good faith
reducing the amount of Loans and Letter of Credit which would otherwise be
available to Borrower under the lending formula(s) provided for herein: (a) to
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reflect events, conditions, contingencies or risks which, as determined by
Administrative Agent in good faith, adversely affect, or which Administrative
Agent in good faith determines is reasonably likely to adversely affect, either
(i) the Collateral or (ii) the security interests and other rights of
Administrative Agent in the Collateral (including the enforceability, perfection
and priority thereof) or (b) to reflect Administrative Agent's good faith belief
that any collateral report or financial information furnished by or on behalf of
Borrower or any Subsidiary Guarantor to Administrative Agent is or may have been
incomplete, inaccurate or misleading in any material respect or (c) to reflect
outstanding Letters of Credit or (d) in respect of any state of facts which
Administrative Agent determines in good faith constitutes an Event of Default or
may, with notice or passage of time or both, constitute an Event of Default.
Without limiting the generality of the foregoing, Reserves may be established in
respect of Specified Hedge Agreements and estimated projected environmental
remediation expenses. To the extent Administrative Agent may revise the lending
formulas used to determine the Borrowing Base or establish new criteria or
revise existing criteria for Eligible Accounts so as to address any
circumstances, condition, event or contingency in an manner satisfactory to
Administrative Agent, Administrative Agent shall not establish a Reserve for the
same purpose. The amount of any Reserve established by Administrative Agent
shall have a reasonable relationship to the event, condition or other matter
which is the basis for such reserve as determined by Administrative Agent in
good faith.
"TA/TO Accounts" shall mean Accounts owing by travel agents and tour
operators, that set up reservations for customers as part of a travel package
and provide such customers with vouchers that must be presented at the time of
the customer taking possession of the motor vehicle subject to the Rental
Contract which gives rise to such Accounts.
"Unbilled Accounts" shall mean Corporate Accounts or TA/TO Accounts of
National with respect to which the terms of the Rental Contract giving rise to
such Account has been completed and closed, the vehicle which is subject to such
Rental Contract has been returned and with respect to which National has
otherwise fully and completely performed its obligations to the account debtor
sufficient to entitle it to payment and create a valid and legally enforceable
indebtedness, but for which an invoice or other billing document or instrument
evidencing such Account has not been generated and rendered to the account
debtor.
"Vehicle Sales Accounts" shall mean Accounts of National, Alamo and
[CarTemps] arising from the sale by such person of motor vehicles which it has
purchased to third party auction houses for the purpose of the sale thereof by
such auction house.
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