Exhibit 10-I
CONFORMED COPY
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COMMITMENT
TRANSFER AGREEMENT
Dated as of April 26, 1996
CHRYSLER FINANCIAL CORPORATION,
as Borrower
CHEMICAL BANK, as Administrative Agent
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS.................................................. 1
1.1 Defined Terms................................................... 1
1.2 Other Definitional Provisions................................... 10
SECTION 2. AMOUNT AND TERMS OF THE COMMITMENTS........................... 10
2.1 The Commitments.................................................. 10
2.2 Procedure for Borrowing.......................................... 11
2.3 Repayment of Outstanding Loans................................... 12
2.4 Evidence of Debt................................................. 12
2.5 Prepayments...................................................... 12
2.6 Minimum Amount of Eurodollar Tranches............................ 12
2.7 Interest Rate and Payment Dates.................................. 12
2.8 Mandatory Repayments............................................. 13
2.9 Conversion and Continuation Options.............................. 13
2.10 Computation of Interest......................................... 14
2.11 Inability to Determine Eurodollar Rate.......................... 14
2.12 Pro Rata Treatment and Payments................................. 15
2.13 Increased Costs................................................. 15
2.14 Transfer of Eurodollar Loans.................................... 17
2.15 Indemnity....................................................... 17
2.16 Taxes........................................................... 17
2.17 Transferred Commitment.......................................... 19
2.18 Use of Proceeds................................................. 19
SECTION 3. REPRESENTATIONS AND WARRANTIES................................ 19
3.1 Financial Condition.............................................. 19
3.2 No Change........................................................ 19
3.3 Corporate Existence.............................................. 19
3.4 Corporate Authorization; No Violation............................ 20
3.5 Government Authorization......................................... 20
3.6 Federal Regulations.............................................. 20
3.7 Enforceable Obligations.......................................... 20
3.8 No Material Litigation........................................... 20
3.9 Taxes............................................................ 20
3.10 ERISA........................................................... 20
3.11 Investment Company Act; Other Regulations....................... 21
3.12 Existing Financial Covenants.................................... 21
SECTION 4. CONDITIONS PRECEDENT ......................................... 21
4.1 Conditions to Effectiveness..................................... 21
4.2 Conditions to All Loans......................................... 22
(a) Representations and Warranties.......................... 22
(b) No Default or Event of Default.......................... 22
SECTION 5. AFFIRMATIVE COVENANTS......................................... 22
5.1 Financial Statements, etc....................................... 22
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Page
5.2 Maintenance of Existence........................................ 23
5.3 Notices......................................................... 23
SECTION 6. NEGATIVE COVENANTS............................................ 24
6.1 Debt to Equity Ratio............................................ 24
6.2 Limitation on Fundamental Change................................ 24
6.3 Limitation on Liens............................................. 24
6.4 Additional Covenants............................................ 26
SECTION 7. EVENTS OF DEFAULT............................................. 27
SECTION 8. THE ADMINISTRATIVE AGENT...................................... 29
8.1 Appointment..................................................... 29
8.2 Delegation of Duties............................................ 29
8.3 Exculpatory Provisions.......................................... 29
8.4 Reliance by Administrative Agent and CASC....................... 29
8.5 Notice of Default............................................... 30
8.6 Non-Reliance on Administrative Agent, Other Banks and CASC.......30
8.7 Indemnification................................................. 31
8.8 Administrative Agent in its Individual Capacity................. 31
8.9 Successor Administrative Agent.................................. 31
SECTION 9. MISCELLANEOUS................................................. 31
9.1 Amendments and Waivers.......................................... 31
9.2 Notices......................................................... 32
9.3 Clearing Accounts............................................... 33
9.4 No Waiver; Cumulative Remedies.................................. 33
9.5 Survival of Representations and Warranties...................... 34
9.6 Payment of Expenses............................................. 34
9.7 Successors and Assigns; Participations and Assignments.......... 34
9.8 Right of Set-off................................................ 36
9.9 Adjustments..................................................... 36
9.10 New Banks...................................................... 36
9.11 Increase in Commitments........................................ 37
9.12 Tax Forms...................................................... 37
9.13 Counterparts................................................... 38
9.14 Governing Law.................................................. 38
9.15 Submission to Jurisdiction; Waivers............................ 38
9.16 Integration.................................................... 38
9.17 WAIVERS OF JURY TRIAL......................................... 39
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SCHEDULES
Schedule I - Banks
Schedule II - Existing Financial Covenants
EXHIBITS
Exhibit A-1 - Form of Opinion of Simpson Thacher & Bartlett
Exhibit A-2 - Form of Opinion of General Counsel
Exhibit B - Form of New Bank Supplement
Exhibit C - Form of Addendum
Exhibit D - Form of Closing Certificate
Exhibit E - Form of Note
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COMMITMENT TRANSFER AGREEMENT dated as of April 26, 1996
among CHRYSLER FINANCIAL CORPORATION, a Michigan corporation (the "Company"),
the several financial institutions parties to this Agreement (collectively,
the "Banks"; individually, a "Bank") and CHEMICAL BANK, a New York banking
corporation ("Chemical"), as administrative agent for the Banks.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms
defined in the caption to this Agreement shall have the meanings set forth
therein and the following terms have the following meanings (such meanings to
be equally applicable to both the singular and plural forms of the terms
defined):
"Accumulated Funding Deficiency" shall mean any "accumulated
funding deficiency" as defined in Section 302 of ERISA.
"ACH" shall mean an Automated Clearing House.
"Addendum" shall mean an instrument, substantially in the
form of Exhibit C, by which a Bank becomes a party to this Agreement.
"Affected Bank" shall have the meaning set forth in
subsection 2.13.
"Administrative Agent" shall mean Chemical Bank and its
affiliates, in their respective capacities as administrative agent
for the Banks under this Agreement and arranger of the Commitments,
together with any of their respective successors.
"Agreement" shall mean this Commitment Transfer Agreement,
as the same may be amended, modified or supplemented from time to
time.
"Applicable Margin" shall mean, with respect to each
Eurodollar Loan at any date, the applicable percentage per annum set
forth below based upon the Status and Utilization on such date
(provided that if the Commitments have been terminated prior to such
date, the Utilization for such date shall be deemed to be greater
than 50%):
Level I Level II Level III Level IV Level V
Utilization Status Status Status Status Status
- ----------- ------- -------- --------- -------- -------
Less than or equal to
50%: 0.1300% 0.1600% 0.2250% 0.2500% 0.5000%
Greater than 50%: 0.2550% 0.2850% 0.3500% 0.3750% 0.6250%
"Assessment Rate" shall mean for any date the annual rate
(rounded upwards, if necessary, to the next 1/100 of 1%) most
recently estimated by the Administrative Agent as the then current
net annual assessment rate that will be employed in determining
amounts payable by Chemical to the Federal Deposit Insurance
Corporation (or any successor) for
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insurance by such Corporation (or any successor) of time deposits
made in Dollars at Chemical's domestic offices.
"Available Transferred Commitment" shall mean, as to any
Bank, at a particular time, an amount equal to the excess, if any, of
(a) the amount of such Bank's Commitment at such time over (b) the
aggregate unpaid principal amount at such time of all Loans made by
such Bank pursuant to subsection 2.1; collectively, as to all the
Banks, the "Available Transferred Commitments".
"Base Rate" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/100 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 Effective Federal
Funds Rate in effect on such day plus 1/2 of 1%. For purposes hereof,
"Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by Chemical as its prime rate in effect
at its principal office in New York City; each change in the Prime
Rate shall be effective on the date such change is publicly
announced; "Base CD Rate" shall mean the sum of (a) the product of
(i) the Three-Month Secondary CD Rate and (ii) Statutory Reserves and
(b) the 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 Federal Reserve Board through the public information
telephone line of the Federal Reserve Bank of New York (which rate
will, under the current practices of the Federal Reserve 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
for 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 Administrative Agent from three New York City negotiable
certificate of deposit dealers of recognized standing selected by it.
If for any reason the Administrative Agent shall have determined
(which determination shall be conclusive absent clearly demonstrable
error) that it is unable to ascertain the Base CD Rate or the
Effective Federal Funds Rate or both for any reason, including the
inability or failure of the Administrative Agent to obtain sufficient
quotations in accordance with the terms thereof, the Base Rate shall
be determined without regard to clause (b) or (c), or both, of the
first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any
change in the Base Rate due to a change in the Prime Rate, the
Three-Month Secondary CD Rate or the Effective Federal Funds Rate
shall be effective on the effective date of such change in the Prime
Rate, the Three-Month Secondary CD Rate or the Effective Federal
Funds Rate, respectively.
"Base Rate Loans" shall mean Loans hereunder at such time as
they bear interest at a rate based upon the Base Rate.
"Borrowing Date" shall mean any Business Day specified in a
notice pursuant to subsection 2.2 as a date on which the Company
requests the Banks to make Loans hereunder.
"Business Day" shall mean 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, except that, when used in
connection with a Eurodollar Loan with respect to which the
Eurodollar Rate is determined based upon the Telerate screen in
accordance with the definition of Eurodollar Rate, "Business Day"
shall mean any Business Day on which dealings in foreign currencies
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and exchange between banks may be carried on in London, England and
New York, New York.
"Capital Stock" shall mean 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 or
options to purchase any of the foregoing.
"CASC" shall mean Chemical Bank Agency Services (and any
successor).
"CFC Affiliate" shall mean any Person that, directly or
indirectly, controls or is controlled by or is under common control
with the Company (including, without limitation, Chrysler and its
subsidiaries, but excluding any Subsidiary). For the purposes of this
definition, "control" (including, with correlative meanings, the
terms "controlled by" and "under common control with"), as used with
respect to any Person, shall mean the power, directly or indirectly,
either to (a) vote 20% or more of the securities (or other equity
interests) of such Person having ordinary voting power or (b) direct
or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities (or other equity
interests) or by contract or otherwise.
"Change of Control" shall mean any of the following events
or circumstances: (a) any Person or "group" (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended) shall either (i) acquire beneficial ownership of more than
50% of any outstanding class of common stock of Chrysler having
ordinary voting power in the election of directors of Chrysler or
(ii) obtain the power (whether or not exercised) to elect a majority
of Chrysler's directors or (b) the Board of Directors of Chrysler
shall not consist of a majority of Continuing Directors. As used in
this definition, "Continuing Directors" shall mean the directors of
Chrysler on the Effective Date and each other director of Chrysler,
if such other director's nomination for election to the Board of
Directors of Chrysler is recommended by a majority of the then
Continuing Directors.
"Chrysler" shall mean Chrysler Corporation, a Delaware
corporation.
"Chrysler Agreement" shall mean the Revolving Credit
Agreement dated as of April 26, 1996 among Chrysler Corporation,
Chrysler Canada Ltd., the banks parties thereto, Royal Bank of
Canada, as Canadian administrative agent, and Chemical Bank, as
administrative agent, as the same may be amended, modified or
supplemented from time to time.
"Clearing Account" shall mean, as to any Bank, the bank
account designated in its Addendum, or such other bank account as
such Bank shall designate in writing to the Administrative Agent from
time to time, provided that such other bank account shall be
maintained at the office of an ACH member.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Commitment" shall mean, as to any Bank, its obligation to
make Loans to the Company pursuant to subsection 2.1 in the amount
referred to therein, as such amount may be determined from time to
time pursuant to subsection 2.17; collectively, as to all the Banks,
the "Commitments".
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"Commitment Percentage" shall mean, as to any Bank at any
time, the percentage of the aggregate Commitments then constituted by
such Bank's Commitment.
"Commitment Period" shall mean the period from and including
the Effective Date (or, in the case of an assignee that is not
already a Bank and any New Bank, from the date that such Person
becomes party to this Agreement as provided in subsection 9.7 or
9.10, as applicable) to but not including the Termination Date or
such earlier date as the Commitments shall terminate as provided
herein.
"Commonly Controlled Entity" shall mean an entity, whether
or not incorporated, which is under common control with the Company
within the meaning of Section 4001 of ERISA or is part of a group
which includes the Company and is treated as a single employer under
Section 414 of the Code.
"Contractual Obligation" shall mean, as to any Person, any
enforceable provision of any security issued by such Person or of any
agreement, instrument or undertaking to which such Person is a party
or by which it or any of its property is bound.
"D&P" shall mean Duff & Phelps Credit Rating Company and its
successors.
"Debt" shall mean, at any date, the amount which would
appear in accordance with GAAP on a consolidated balance sheet of the
Company and its Subsidiaries on such date opposite the heading "debt"
(or any similar item).
"Default" shall mean any of the events specified in Section
7, whether or not any requirement for the giving of notice, lapse of
time, or both, or the happening of any other condition, has been
satisfied.
"Dollars" or "$" shall mean lawful currency of the United
States of America.
"Domestic Subsidiary" shall mean any Subsidiary other than a
Foreign Subsidiary.
"Effective Date" shall mean, subject to satisfaction of the
conditions specified in subsection 4.1, April 26, 1996.
"Effective Federal Funds Rate" shall mean, for any day, the
weighted average of the rates on overnight Federal funds transactions
between 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 that is a Business Day, the average quotations
for the day of such transactions received by the Administrative Agent
from three Federal funds brokers of recognized standing selected by
it.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"Equity" shall mean, at any date, the amount which would
appear in accordance with GAAP on a consolidated balance sheet of the
Company and its Subsidiaries on such date opposite the heading "total
shareholders' investment" (or any similar item).
"Eurodollar Loan" shall mean any Loan bearing interest at a
rate determined by reference to the Eurodollar Rate.
5
"Eurodollar Rate" shall mean, in the case of any Eurodollar
Loan, with respect to each day during each Interest Period (other
than any seven-day Interest Period) pertaining to such Eurodollar
Loan, the rate of interest 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 as of 11:00 A.M., London time, two
Business Days prior to the beginning of such Interest Period,
provided, that in the event that such rate does not appear on Page
3750 of the Telerate Service (or otherwise on such service), the
"Eurodollar Rate" shall be determined by reference to such other
publicly available service for displaying eurodollar rates as may be
agreed upon by the Administrative Agent and the Company. In the
absence of such agreement, and in the case of any seven-day Interest
Period pertaining to such Eurodollar Loan, the "Eurodollar Rate"
shall instead be the rate per annum equal to the average (rounded
upward, if necessary, to the nearest 1/100th of 1%) of the respective
rates notified to the Administrative Agent by each of the Reference
Banks as the rate at which such Reference Bank is offered Dollar
deposits at or about 10:00 A.M., New York City time, two Business
Days prior to the beginning of the relevant Interest Period, in the
interbank eurodollar market where the eurodollar and foreign currency
and exchange operations in respect of its Eurodollar Loans are then
being conducted for delivery on the first day of such Interest Period
for the number of days comprised therein and in an amount comparable
to the amount of its Eurodollar Loan to be outstanding during such
Interest Period.
"Eurodollar Tranche" shall mean and be a collective
reference to Eurodollar Loans having the same Interest Period,
whether or not originally made on the same day.
"Event of Default" shall mean any of the events specified in
Section 7, provided that any requirement for the giving of notice,
the lapse of time, or both, or the happening of any other condition,
has been satisfied.
"Excess Utilization Period" shall mean any Utilization
Period with respect to which the Utilization exceeds 50%.
"Existing Commitment Transfer Agreement" shall mean the
Fifth Amended and Restated Commitment Transfer Agreement dated as of
May 1, 1995 among the Company, the banks parties thereto and
Chemical, as Agent.
"Federal Reserve Board" shall mean the Board of Governors of
the Federal Reserve System of the United States.
"Final Date" shall mean the later of (a) the last day of the
Commitment Period and (b) the date on which all of the Loans shall
have been paid in full.
"Finance Business" shall mean (a) the small loan, personal
finance, consumer finance or installment credit business (including
the business of making collateral loans secured by credit obligations
or personal property), (b) the sales finance business and the
business of purchasing and selling notes and accounts receivable
(whether or not repayable in installments) and interests therein, (c)
the commercial financing and factoring business as generally
conducted, including the leasing of tangible personal property, and
(d) any business (including, without limitation, securitization and
other receivables-based transactions) related to or conducted in
connection with any business of the character referred to in the
foregoing clauses (a), (b) and (c) other than insurance underwriting.
6
"Finance-Related Insurance Business" shall mean the business
of (a) insuring articles and merchandise the sale or leasing of which
is financed in the ordinary course of the Finance Business, (b)
insuring the lives of individuals who are liable for the payment of
the amounts owing on such sales or leases and writing accident and
health insurance on such individuals, (c) automobile dealership
property, liability, workers compensation and related insurance, (d)
motor vehicle physical damage and liability insurance, and such other
insurance business that is not described in clause (a), (b), (c) or
(d) above to the extent that such insurance business does not produce
at any time aggregate premiums written (net of reinsurance ceded) by
all Subsidiaries in an amount greater than 50% of the aggregate
amount of all premiums written (net of reinsurance ceded) at such
time in all of the insurance business of such Subsidiaries.
"Finance Subsidiary" shall mean any Domestic Subsidiary that
is engaged primarily in the Finance Business.
"Fitch" shall mean Fitch Investors Service, Inc. and its
successors.
"Foreign Subsidiary" shall mean any Subsidiary that (a) is
organized under the laws of any jurisdiction outside the United
States of America, Puerto Rico and Canada, or (b) conducts the major
portion of its business outside the United States of America, Puerto
Rico and Canada.
"GAAP" shall mean generally accepted accounting principles
in the United States of America in effect from time to time, except
that for the purposes of determining compliance with the covenants
set forth in Section 6, "GAAP" shall mean generally accepted
accounting principles in the United States of America in effect on
December 31, 1995 applied consistently with those used in compiling
the financial statements included in the 1995 Annual Report.
"Governmental Authority" shall mean 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.
"Indebtedness" shall mean, as applied to any Person, at any
date, (a) indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services which would appear on
a consolidated balance sheet of such Person (or, in the case of the
Company and its Subsidiaries, the Company) prepared in accordance
with GAAP, (b) obligations of such Person under leases which appear
as capital leases on a consolidated balance sheet of such Person
prepared in accordance with GAAP and (c) any withdrawal obligation of
such Person or any Commonly Controlled Entity thereof to a
Multiemployer Plan.
"Interest Period" shall mean with respect to any Eurodollar
Tranche:
(i) initially, the period commencing on the
borrowing or conversion date, as the case may be, with
respect to such Eurodollar Tranche and ending seven days or
one, two, three or six months thereafter, as selected by the
Company in its notice of borrowing or notice of conversion,
as the case may be, given with respect thereto; and
(ii) thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to
such Eurodollar Tranche and ending seven days or one, two,
three or six months thereafter, as selected by the Company
by irrevocable notice to the Administrative Agent not less
than three Business Days prior to the last
7
day of the then current Interest Period with respect thereto
(or, if no such period is specified, ending one month
thereafter);
provided that, the foregoing provisions are subject to the following:
(A) if any Interest Period would otherwise
end on a day which 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;
(B) no Interest Period may be selected by
the Company if such Interest Period would end after
the Termination Date; and
(C) any Interest Period of at least one
month's duration 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 relevant
calendar month.
"Level" shall mean any of Level I, Level II, Level III,
Level IV or Level V.
"Level I" shall mean any of the following long-term senior
unsecured debt ratings: A+ or better by S&P, A1 or better by Moody's,
A+ or better by D&P or A+ or better by Fitch.
"Level II" shall mean any of the following long-term senior
unsecured debt ratings: A or A- by S&P, A2 or A3 by Moody's, A or A-
by D&P or A or A- by Fitch.
"Level III" shall mean any of the following long-term senior
unsecured debt ratings: BBB+ or BBB by S&P, Baa1 or Baa2 by Moody's,
BBB+ or BBB by D&P or BBB+ or BBB by Fitch.
"Level IV" shall mean any of the following long-term senior
unsecured debt ratings: BBB- by S&P, Baa3 by Moody's, BBB- by D&P or
BBB- by Fitch.
"Level V" shall mean any of the following long-term senior
unsecured debt ratings: BB+ or lower (or unrated) by S&P, Ba1 or
lower (or unrated) by Moody's, BB+ or lower (or unrated) by D&P or
BB+ or lower (or unrated) by Fitch.
"Lien" shall mean, with respect to any property of any
Person, any mortgage, pledge, hypothecation, encumbrance, lien
(statutory or other), charge or other security interest of any kind
in or with respect to such property (including, without limitation,
any conditional sale or other title retention agreement, and any
financing lease under which such Person is lessee having
substantially the same economic effect as any of the foregoing).
"Loan" shall have the meaning set forth in subsection 2.1(a).
"Long Term Revolving Credit Agreement" shall mean (i) the
Long Term Revolving Credit Agreement, dated as of April 26, 1996,
among the Company, Chrysler Credit Canada Ltd., the financial
institutions from time to time parties thereto, the Managing Agents
parties thereto, Royal Bank of Canada, as Canadian administrative
agent, and Chemical Bank, as
8
administrative agent, as amended, supplemented, or otherwise modified
from time to time, or (ii) if such Revolving Credit Agreement is
refinanced, refunded or otherwise replaced by another bank revolving
credit agreement, such agreement, as amended, supplemented or
otherwise modified from time to time.
"Material Indebtedness" shall mean any item or related items
of Indebtedness (or, in the case of any revolving credit facility,
any commitments) having an aggregate principal amount of at least
$100,000,000 (or the equivalent thereof in any other currency).
"Moody's" shall mean Moody's Investors Service, Inc. and its
successors.
"Multiemployer Plan" shall mean a Plan which is a
multiemployer plan as defined in Section 4001(a)(3) of ERISA.
"New Bank" shall have the meaning set forth in subsection
9.10.
"1995 Annual Report" shall mean the Company's annual report
to stockholders for the fiscal year ended December 31, 1995.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA or any
successor corporation.
"Person" shall mean and include an individual, a
partnership, a corporation (including a business trust), a joint
stock company, a trust, an unincorporated association, a joint
venture or other entity or a government or any agency or political
subdivision thereof.
"Plan" shall mean any pension plan which is covered by Title
IV of ERISA and in respect of which the Company or a Commonly
Controlled Entity is an "employer" as defined in Section 3(5) of
ERISA.
"Prohibited Transaction" shall mean any "prohibited
transaction" as defined in Section 406 of ERISA or Section 4975 of
the Code.
"Rating Agencies" shall mean the collective reference to
D&P, Fitch, Moody's and S&P.
"Real Estate Business" shall mean the acquisition,
development, leasing, financing, management, maintenance and
disposition of real property, including, without limitation,
automotive dealership facilities and dealership site control
arrangements.
"Reference Banks" shall mean Chemical, Royal Bank of Canada
and Swiss Bank Corporation; provided, that, for the purposes of
determining the Eurodollar Rate with respect to any seven-day
Interest Period, Chemical shall be the sole Reference Bank.
"Reportable Event" shall mean any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder.
"Required Banks" shall mean, at any date, Banks having at
least 51% of the aggregate amount of the Commitments at such date or,
if the Commitments have been terminated, Banks holding at least 51%
of the outstanding principal amount of the Loans hereunder.
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"Requirement of Law" shall mean, 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.
"Responsible Officer" shall mean, at any particular time,
the Chairman of the Board of Directors, the President, the chief
financial officer, the Vice President - Corporate Finance and
Development, the Treasurer or the Controller of the Company.
"S&P" shall mean Standard & Poor's Ratings Services, and its
successors.
"Short Term Revolving Credit Agreement" shall mean (i) the
Short Term Revolving Credit Agreement, dated as of April 26, 1996,
among the Company, Chrysler Credit Canada Ltd., the financial
institutions from time to time parties thereto, the Managing Agents
parties thereto, Royal Bank of Canada, as Canadian administrative
agent, and Chemical Bank, as administrative agent, as amended,
supplemented, or otherwise modified from time to time, or (ii) if
such Revolving Credit Agreement is refinanced, refunded or otherwise
replaced by another bank revolving credit agreement, such agreement,
as amended, supplemented or otherwise modified from time to time.
"Significant Subsidiary" shall mean at the time of any
determination thereof (a) any Finance Subsidiary and (b) any other
Subsidiary the assets of which constitute at least 5% of the
consolidated assets of the Company and its Subsidiaries as stated on
the consolidated financial statements of the Company and its
Subsidiaries for the most recently ended fiscal quarter of the
Company, provided, that the term "Significant Subsidiary" shall not
include any Special Purpose Subsidiary.
"Single Employer Plan" shall mean any Plan which is not a
Multiemployer Plan.
"Special Purpose Subsidiary" shall mean any Subsidiary
created for the sole purpose of purchasing assets from the Company or
any Finance Subsidiary with the intention and for the purpose of
using such assets in a securitization transaction.
"Status" shall mean, as to the Company, the existence of
Level I Status, Level II Status, Level III Status, Level IV Status or
Level V Status, as the case may be. For the purposes of this
definition, "Status" will be set at the lowest Level assigned to the
Company by any Rating Agency, unless only one Rating Agency has
assigned such Level to the Company, in which case the Company's
Status will be set at the second lowest Level assigned to the Company
by any Rating Agency.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the
denominator of which is the number one minus the aggregate of the
maximum applicable reserve percentages (including any marginal,
special, emergency or supplemental reserves) expressed as a decimal
established by the Federal Reserve Board and any other banking
authority to which Chemical is subject with respect to the Base CD
Rate (as such term is used in the definition of "Base Rate"), for new
negotiable nonpersonal time deposits in Dollars of over $100,000 with
maturities approximately equal to three months. Statutory Reserves
shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage.
10
"Subsidiary" shall mean any corporation of which the Company
or one or more Subsidiaries or the Company and one or more
Subsidiaries shall at the time own shares of any class or classes
(however designated) having voting power for the election of at least
a majority of the members of the board of directors (or other
governing body) of such corporation.
"Termination Date" shall mean as to any Bank the
"Termination Date" as defined in the Chrysler Agreement.
"Transferred Commitment" shall have the meaning set forth in
subsection 2.17.
"Type" shall mean, as to any Loan hereunder, its nature as a
Base Rate Loan or a Eurodollar Loan.
"Utilization" shall mean, for any Utilization Period, the
percentage equivalent of a fraction (a) the numerator of which is the
average daily principal amount of Loans outstanding during such
Utilization Period and (b) the denominator of which is the average
daily amount of the aggregate Commitments of all Banks during such
Utilization Period.
"Utilization Period" shall mean (a) each fiscal quarter of
the Company and (b) any portion of a fiscal quarter of the Company
ending on the Final Date.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified, all terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto.
(b) As used herein, and in any certificate or other document
made or delivered pursuant hereto, accounting terms relating to the Company
and its Subsidiaries not defined in subsection 1.1, and accounting terms partly
defined in subsection 1.1 to the extent not defined, shall have the respective
meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement, and section,
subsection, schedule and exhibit references are to this Agreement unless
otherwise specified.
SECTION 2. AMOUNT AND TERMS OF THE COMMITMENTS
2.1 The Commitments. (a) Subject to the terms and conditions
hereof, each Bank severally agrees to make loans ("Loans") to the Company from
time to time during the Commitment Period in an aggregate principal amount at
any one time outstanding not to exceed such Bank's Transferred Commitment at
such time set opposite such Bank's name in the most recent effective notice
delivered by Chrysler pursuant to subsection 2.5 of the Chrysler Agreement.
During the Commitment Period, the Company may use such Commitment by
borrowing, prepaying or repaying the Loans of such Bank, in whole or in part,
and reborrowing, all in accordance with the terms and conditions hereof.
(b) Loans hereunder may be Base Rate Loans or Eurodollar
Loans, or part Base Rate Loans and part Eurodollar Loans, as determined by the
Company and notified to the Administrative
11
Agent in accordance with subsection 2.2, provided that no Eurodollar Loans
shall be made after the date which is seven days prior to the Termination
Date.
2.2 Procedure for Borrowing. (a) The Company may borrow
under the Commitments during the Commitment Period on any Business Day,
provided that the Company shall give the Administrative Agent irrevocable
notice (which notice must be received by the Administrative Agent prior to
10:00 A.M., New York City time, (i) three Business Days prior to the requested
Borrowing Date, if all or any part of the requested Loans are to be initially
Eurodollar Loans, and (ii) one Business Day prior to the requested Borrowing
Date, otherwise) specifying (A) the amount to be borrowed, (B) the requested
Borrowing Date, (C) whether the borrowing is to be a Eurodollar Loan or a Base
Rate Loan or a combination thereof, and (D) if such borrowing is to be
entirely or partly a Eurodollar Loan, the length of the Interest Period for
such Eurodollar Loan. Upon receipt of such notice, the Administrative Agent
shall promptly notify each Bank thereof. Not later than 2:00 P.M., New York
City time, on the Borrowing Date specified in such notice, each Bank shall
(subject to subsection 9.3(b)) deposit in its Clearing Account an amount in
immediately available funds equal to the amount of the Loan to be made by such
Bank. The Administrative Agent shall, pursuant to subsection 9.3(a), cause
such amount to be withdrawn from each such Clearing Account and shall make the
aggregate amount so withdrawn available to the Company by depositing the
proceeds thereof in the account of the Company with the Administrative Agent
on the date such Loans are made for transmittal by the Administrative Agent
upon the Company's request. Each borrowing pursuant to the Commitments shall
be in an aggregate principal amount of the lesser of (i) $25,000,000 or an
integral multiple of $1,000,000 in excess thereof or (ii) the then Available
Transferred Commitments, provided that, with respect to any borrowing of
Eurodollar Loans, after giving effect thereto, subsection 2.6 shall not have
been contravened.
(b) Unless the Administrative Agent shall have received
notice from a Bank prior to a Borrowing Date that such Bank will not make
available to the Administrative Agent such Bank's ratable portion of the
relevant borrowing through such Bank's Clearing Account, the Administrative
Agent may assume that such Bank has made such portion available to the
Administrative Agent through such Bank's Clearing Account on the date of such
borrowing in accordance with subsection 2.2(a) and the Administrative Agent
may, in reliance upon such assumption, make available to the Company on such
date a corresponding amount. If the Administrative Agent does, in such
circumstances, make available to the Company such amount, such Bank shall make
such ratable portion available to the Administrative Agent forthwith on
demand, together with interest thereon for each day from and including such
Borrowing Date that such ratable portion was not made available, to but
excluding the date such Bank makes its share of such borrowing available to
the Administrative Agent, at the Effective Federal Funds Rate. If such amount
is so made available, such payment to the Administrative Agent shall
constitute such Bank's Loan on such Borrowing Date for all purposes of this
Agreement. If such amount is not so made available to the Administrative
Agent, then the Administrative Agent shall notify the Company of such failure
and on the fourth Business Day following such Borrowing Date, the Company
shall pay to the Administrative Agent such ratable portion, together with
interest thereon for each day that the Company had the use of such ratable
portion at the Effective Federal Funds Rate. Nothing contained in this
subsection 2.2(b) shall relieve any Bank which has failed to make available
its ratable portion of any borrowing hereunder from its obligation to do so in
accordance with the terms hereof.
(c) The failure of any Bank to make the Loan to be made by
it on any Borrowing Date shall not relieve any other Bank of its obligation,
if any, hereunder to make its Loan on such Borrowing Date, but no Bank shall
be responsible for the failure of any other Bank to make the Loan to be made
by such other Bank on such Borrowing Date.
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2.3 Repayment of Outstanding Loans. The Company shall repay
all outstanding Loans (together with all accrued unpaid interest thereon) on
the Termination Date.
2.4 Evidence of Debt. (a) Each Bank shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Company to the appropriate lending office of such Bank
resulting from each Loan made by such lending office of such Bank from time to
time, including the amounts of principal and interest payable and paid to such
lending office of such Bank from time to time under this Agreement.
(b) The Administrative Agent shall maintain the Register
pursuant to subsection 9.7(f), and a subaccount for each Bank, in which
Register and subaccounts (taken together) shall be recorded (i) the amount of
each Loan made hereunder, the Type of each Loan made and the Interest Period
(if any) applicable thereto, (ii) the amount of any principal or interest due
and payable or to become due and payable from the Company to each Bank
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder from the Company and each Bank's share thereof.
(c) The entries made in the Register and accounts maintained
pursuant to paragraphs (a) and (b) of this subsection 2.4 shall, to the extent
permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of the Company therein recorded; provided, however,
that the failure of any Bank or the Administrative Agent to maintain such
account, such Register or such subaccount, as applicable, or any error
therein, shall not in any manner affect the obligation of the Company to repay
(with applicable interest) the Loans made to the Company by such Bank in
accordance with the terms of this Agreement.
2.5 Prepayments. The Company may, at any time and from time
to time, prepay the Loans hereunder, in whole or in part, without premium or
penalty, upon prior notice to the Administrative Agent (which notice must be
received by the Administrative Agent prior to 10:00 A.M., New York City time,
(i) three Business Days prior to the repayment date in the case of Eurodollar
Loans and (ii) one Business Day prior to the repayment date otherwise)
specifying the date and amount of prepayment, and whether the prepayment is of
Eurodollar Loans, Base Rate Loans or a combination thereof, and, if a
combination thereof, the amount allocable to each, provided that, each
prepayment of Eurodollar Loans on a day other than the last day of the related
Interest Period shall require the payment of any amounts payable by the
Company pursuant to subsection 2.15. Upon receipt of any such notice, the
Administrative Agent shall promptly notify each Bank thereof. Any such notice
shall be irrevocable and the payment amount specified in such notice shall be
due and payable on the date specified, together with accrued interest to such
date on the amount prepaid. Partial prepayments shall be in an aggregate
principal amount of $25,000,000 or a multiple of $1,000,000 in excess thereof,
and after giving effect thereto subsection 2.6 shall not have been
contravened.
2.6 Minimum Amount of Eurodollar Tranches. All borrowings,
payments, prepayments, continuations and conversions hereunder shall be in
such amounts and be made pursuant to such elections so that, after giving
effect thereto, the aggregate principal amount of the Eurodollar Loans
comprising any Eurodollar Tranche shall not be less than $50,000,000.
2.7 Interest Rate and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period therefor on
the unpaid principal amount thereof at a rate per annum equal to the
Eurodollar Rate determined for such Interest Period in accordance with the
terms hereof plus the Applicable Margin.
13
(b) The Base Rate Loans shall bear interest for each day on
the unpaid principal amount thereof, at a rate per annum equal to the Base
Rate determined for such day.
(c) If all or a portion of (i) the principal amount of any
Loan, (ii) any interest payable thereon or (iii) any 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 which is (x) in the case of overdue principal, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
subsection 2.7 plus 1% or (y) in the case of any overdue interest or other
amount, the rate described in subsection 2.7(b) plus 1%, in each case from the
date of such non-payment to (but excluding) the date on which such amount is
paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears (i) with respect to
Eurodollar Loans having an Interest Period of three months or less, on the
last day of such Interest Period, (ii) with respect to Eurodollar Loans having
an Interest Period longer than three months, on each day which is three
months, or a whole multiple thereof, after the first day of such Interest
Period and the last day of such Interest Period, (iii) with respect to Base
Rate Loans, on the last day of each March, June, September and December, and
(iv) with respect to all Loans, upon each repayment, prepayment or conversion
thereof; provided that interest accruing pursuant to paragraph (c) of this
subsection shall be payable on demand. The amount of interest on any
Eurodollar Loans to be paid on any date as specified above shall in each case
be determined under the assumption that the Utilization for the Utilization
Period(s) during which such interest accrued was less than 50%. On the first
Business Day following the last day of each Excess Utilization Period, the
Company shall pay to the Administrative Agent, for the benefit of the Banks,
an additional amount of interest equal to the excess (if any) of (i) the
amount of interest which accrued during such Utilization Period after giving
effect to the actual Utilization for such Utilization Period (whether or not
such accrued interest was actually payable during such Utilization Period)
over (ii) the amount of interest which would have accrued during such
Utilization Period if the Utilization during such Utilization Period had been
less than 50%.
2.8 Mandatory Repayments. The Company, without notice or
demand, shall immediately repay the Loans hereunder to the extent that the
aggregate amount thereof exceeds the Commitments from time to time in effect.
2.9 Conversion and Continuation Options. (a) The Company 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 only be made on the last day of an Interest Period with respect thereto.
The Company 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. Any such notice of conversion
to Eurodollar Loans shall specify the length of the initial Interest Period or
Interest Periods therefor. Upon receipt of any such notice the Administrative
Agent shall promptly notify each Bank thereof. All or any part of outstanding
Eurodollar Loans and Base Rate Loans may be converted as provided herein,
provided that (i) no Base Rate Loan may be converted into a Eurodollar Loan
when any Event of Default has occurred and is continuing and the
Administrative Agent has or the Required Banks have determined in its or their
sole discretion that such conversion is not appropriate, (ii) any such
conversion may only be made if, after giving effect thereto, subsection 2.6
shall not have been contravened and (iii) no Base Rate Loan may be converted
into a Eurodollar Loan after the date that is seven days prior to the
Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Company giving irrevocable notice to the
14
Administrative Agent, in accordance with the applicable provisions of the term
"Interest Period" set forth in subsection 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 Banks have
determined in its or their sole discretion that such continuation is not
appropriate, (ii) if, after giving effect thereto, subsection 2.6 would be
contravened or (iii) after the date that is seven days prior to the
Termination Date and provided, further, that if the Company 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 automatically converted to Base Rate Loans on the last day of such
then expiring Interest Period. Upon receipt of any notice given by the Company
pursuant to this subsection 2.9(b), the Administrative Agent shall promptly
notify each Bank thereof.
2.10 Computation of Interest. (a) Interest (other than
interest calculated on the basis of the Prime Rate) shall be calculated on the
basis of a 360-day year, for the actual days elapsed. Interest calculated on
the basis of the Prime Rate 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 Company and the
Banks of each determination of the Eurodollar Rate with respect to Eurodollar
Loans. Any change in the interest rate in respect of a Loan resulting from a
change in the Base Rate or the Applicable Margin shall become effective as of
the opening of business on the day on which a change in the Base Rate shall
become effective or such Applicable Margin changes as provided herein, as the
case may be. The Administrative Agent shall notify the Company and the Banks
of the effective date and the amount of each such change in the Base Rate.
(b) Each determination, pursuant to and in accordance with
any provision of this Agreement, of an interest rate applicable to a
Eurodollar Loan for any Interest Period by the Administrative Agent, and each
determination by a Reference Bank of a rate with respect to a Eurodollar Loan
for any Interest Period to be notified to the Administrative Agent pursuant to
the definition of "Eurodollar Rate" shall be conclusive and binding on the
Company and the Banks in the absence of manifest error. The Administrative
Agent shall, at the request of the Company, deliver to the Company a statement
showing any quotations given by the Reference Banks and the computations used
by the Administrative Agent in determining any interest rate pursuant to
subsection 2.7(a).
(c) If any Reference Bank's Commitment shall terminate
(otherwise than on termination of all the Commitments), or, as the case may
be, Loans made by it hereunder are assigned, or prepaid or repaid (otherwise
than on the ratable prepayment or repayment of the Loans among the Banks) for
any reason whatsoever, such Reference Bank shall thereupon cease to be a
Reference Bank and, if as a result of the foregoing, there shall be only one
Reference Bank remaining, then the Administrative Agent (after consultation
with the Company and the Banks) shall, as soon as practicable thereafter, by
notice to the Company and the Banks, designate another Bank that is willing to
act as a Reference Bank so that there shall at all times be at least two
Reference Banks. In acting to so designate another Bank to serve as a
Reference Bank, the Administrative Agent will use its best efforts to ensure
that one Reference Bank will, at all times, be a Bank that has its
headquarters office located outside the United States.
(d) If any of the Reference Banks shall be unable or shall
otherwise fail to provide notice of a rate to the Administrative Agent upon
its request with respect to a Eurodollar Loan, the Eurodollar Rate shall be
determined on the basis of rates provided in notices of the remaining
Reference Banks.
2.11 Inability to Determine Eurodollar Rate. In the event
that (a) the Administrative Agent determines (which determination shall be
conclusive and binding upon the Company) that by
15
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate in respect of any
Eurodollar Loans, or (b) the Required Banks determine (which determination
shall be conclusive and binding upon the Company) and shall notify the
Administrative Agent that the rates of interest referred to in the definition
of "Eurodollar Rate" as the basis upon which the rate of interest for
Eurodollar Loans is to be determined do not adequately cover the cost to the
Banks of making or maintaining Eurodollar Loans, in each case with respect to
any proposed Loan that the Company has requested to be made as a Eurodollar
Loan, the Administrative Agent shall forthwith give facsimile transmission or
other written notice of such determination to the Company and the Banks at
least one Business Day prior to the requested Borrowing Date for such
Eurodollar Loan. If such notice is given, any requested borrowing of a
Eurodollar Loan shall be made as a Base Rate Loan. Until such notice has been
withdrawn by the Administrative Agent, no further Eurodollar Loans shall be
made.
2.12 Pro Rata Treatment and Payments. (a) Each borrowing by
the Company from the Banks and any reduction of the amount of the Commitments
of the Banks hereunder (except for the reduction or termination of a
particular Bank's Commitment pursuant to subsection 2.16) shall be made pro
rata according to the amounts of the then existing Commitments. Each payment
(including each prepayment) by the Company on account of principal and
interest (except for payments to a particular Bank pursuant to subsection
2.13, 2.15, or 2.16), shall be made on a pro rata basis according to the
amounts of the then outstanding Loans of the Banks hereunder. All payments
(including prepayments) by the Company shall be made without setoff or
counterclaim to the Administrative Agent for the account of the Banks at the
office of the Administrative Agent referred to in subsection 9.2 in Dollars
and in immediately available funds. The Administrative Agent shall promptly
distribute such payments to each Bank entitled to receive a portion thereof in
like funds as received. If any payment hereunder (other than a payment in
respect of 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. 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.
(b) Unless the Administrative Agent shall have received
notice from the Company prior to the date on which any payment is due to the
Banks hereunder that the Company will not make such payment in full, the
Administrative Agent may assume that the Company has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Bank on such
due date an amount equal to the amount then due to such Bank. If and to the
extent the Company shall not have so made such payment in full to the
Administrative Agent, each Bank shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Bank together with
interest thereon, for each day from and including the date such amount is
distributed to such Bank to but excluding the date such Bank repays such
amount to the Administrative Agent at the Effective Federal Funds Rate for
each such day. Nothing contained in this subsection 2.12(b) shall relieve the
Company from its obligations to make payments on all amounts due hereunder in
accordance with the terms hereof.
2.13 Increased Costs. (a) In the event that any law,
regulation, treaty or directive or any change therein or in the interpretation
or application thereof or compliance by any Bank with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority enacted or made subsequent to the date hereof:
16
(i) does or shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, or deposits or other liabilities in or for
the account of, advances or loans by, or other credit extended by, or
any other acquisition of funds by, any office of such Bank; or
(ii) does or shall impose on such Bank any other condition;
and the result of any of the foregoing is to increase the cost to such Bank of
making, or maintaining advances or extensions of credit or to reduce any
amounts receivable hereunder (such increase in cost or reduction in amounts
receivable, "Increased Costs") then, in any such case, the Company shall
promptly pay to the Administrative Agent for the account of such Bank, upon
the written demand of such Bank to the Company (with a copy to the
Administrative Agent), so long as such Increased Costs are not otherwise
included in the amounts required to be paid to such Bank pursuant to
subsection 2.13(b), 2.15, or 2.16, any additional amounts necessary to
compensate such Bank for such Increased Costs which such Bank deems to be
material as determined by such Bank with respect to its Eurodollar Loans. If a
Bank becomes entitled to claim any additional amounts pursuant to this
subsection 2.13(a), it shall promptly notify the Company, through the
Administrative Agent, of the event by reason of which it has become so
entitled. A certificate as to any additional amounts payable pursuant to the
foregoing sentence submitted by a Bank, through the Administrative Agent, to
the Company shall be conclusive in the absence of manifest error.
(b) Upon notice from any Affected Bank (as hereinafter
defined), the Company shall pay to the Administrative Agent for the account of
such Affected Bank an additional amount for each Eurodollar Loan of such
Affected Bank, payable on the last day of the Interest Period with respect
thereto, equal to
P X [[R / (1.00 - r)] - R] X [T / 360]
Where P = the principal amount of such Eurodollar Loan of such Bank;
R = the Eurodollar Rate (expressed as a decimal) for such Interest
Period;
T = the number of days in such Interest Period during which such
Bank was an "Affected Bank"; and
r = the aggregate of rates (expressed as a decimal) of reserve
requirements ("Reserve Requirements") current on the date two
Business Days prior to the beginning of such Interest Period
(including, without limitation, basic, supplemental, marginal
and emergency reserves) under any regulations of the Federal
Reserve Board or other Governmental Authority having
jurisdiction with respect thereto, as now and from time to time
hereafter in effect, dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
"Eurocurrency liabilities" in Regulation D of the Federal
Reserve Board) maintained by a member bank of the Federal
Reserve System.
The term "Affected Bank" shall mean any Bank party to this
Agreement that (i) is (x) organized under the laws of the United States or any
State thereof or (y) a bank organized under laws other than those of the United
States of America or a State thereof that is funding its Eurodollar Loans
through a branch or agency located in the United States of America and (ii)
is subject to actual Reserve Requirements in respect of its Eurodollar Loans.
Each Bank agrees to notify the
17
Administrative Agent promptly upon becoming an Affected Bank, and of any
subsequent change of status, disclosing the effective date of such change.
2.14 Transfer of Eurodollar Loans. Upon the occurrence of
any of the events specified in subsection 2.13(a), each Bank whose Eurodollar
Loans are affected by any such event agrees that it will transfer its
Eurodollar Loans affected by any such event to another branch office (or, if
such Bank so elects, to an affiliate) of such Bank, provided that such
transfer shall be made only if such Bank shall have determined in good faith
(which determination shall, absent manifest error, be final, conclusive and
binding upon all parties) that, (a) on the basis of existing circumstances,
such transfer will avoid such events and will not result in any additional
costs, liabilities or expenses to such Bank or to the Company and (b) such
transfer is otherwise consistent with the interests of such Bank.
2.15 Indemnity. The Company agrees to indemnify each Bank
and to hold such Bank harmless from all losses or expenses (including, but not
limited to, any such loss or expense arising from interest or fees payable by
such Bank to lenders of funds obtained by it in order to maintain its
Eurodollar Loans hereunder, but excluding loss of the Applicable Margin) which
such Bank may sustain or incur as a consequence of (a) failure by the Company
in making any payment when due (whether by acceleration or otherwise) of the
principal amount of or interest on the Eurodollar Loans of such Bank, (b)
failure by the Company in making a borrowing of Eurodollar Loans, or a
conversion into or continuation of Eurodollar Loans, after the Company has
given a notice requesting or accepting the same in accordance with the
provisions of this Agreement, (c) failure by the Company in making any
prepayment after the Company has given a notice in accordance with subsection
2.5 or (d) a prepayment of a Eurodollar Loan on a day that is not the last day
of the Interest Period with respect thereto. Such indemnification may include
an amount equal to the excess, if any, of (i) the amount of interest which
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 the relevant Interest Period
(or proposed Interest Period), in each case at the applicable rate of interest
for such Loans provided for herein (excluding, however, the Applicable Margin)
over (ii) the amount of interest (as reasonably determined by such Bank) which
would have accrued to such Bank on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
market. The agreements in this subsection 2.15 shall survive the payment of
the Loans and all other amounts payable hereunder.
2.16 Taxes. (a) In the event that the adoption of any law,
regulation, treaty or directive or any change therein or in the interpretation
or application thereof, in each case after the date hereof, shall require any
Taxes (as hereinafter defined) to be withheld or deducted from any amount
payable to any Bank under this Agreement, upon notice by such Bank to the
Company (with a copy to the Administrative Agent) to the effect that (i) as a
result of the adoption of such law, rule, regulation, treaty or directive or a
change therein or in the interpretation thereof, Taxes are being withheld or
deducted from amounts payable to such Bank under this Agreement and (ii) such
Bank has taken all action required to be taken by it to avoid the imposition
of such Taxes pursuant to paragraph (c) of this subsection 2.16 prior to
demanding indemnification under this paragraph (a), the Company will pay to
the Administrative Agent for the account of such Bank additional amounts so
that such additional amounts, together with amounts otherwise payable under
this Agreement, will yield to such Bank, after deduction from such increased
amount of all Taxes required to be withheld or deducted therefrom, the amount
stated to be payable under this Agreement. The term "Taxes" shall mean all net
income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, imposed, levied, collected, withheld or assessed
by any country (or by any political subdivision or taxing authority thereof or
therein), excluding, with respect to any Bank, net income and franchise taxes
imposed with respect to net income by any country (or any political
subdivision or
18
taxing authority thereof or therein) where such Bank is organized or, in
respect of such Bank's Eurodollar Loans, by the country (or any political
subdivision or tax authority thereof or therein) where such Bank's Eurodollar
Loans are booked and, in respect of such Bank's Base Rate Loans, by the
country (or any political subdivision or tax authority thereof or therein)
where such Bank's Base Rate Loans are booked. If the Company fails to pay any
Taxes when due following notification by any Bank as provided above, the
Company shall indemnify such Bank for any incremental taxes, interest or
penalties that may become payable by any Bank as a result of any such failure
by the Company to make such payment. The Company may, upon payment by the
Company to any Bank claiming indemnification under this paragraph (a) of any
amount payable by the Company to such Bank, elect by not less than four
Business Days' prior written notice to such Bank to terminate the Commitment
of such Bank and prepay the Loans of such Bank outstanding hereunder on the
next day upon which a prepayment may be made pursuant to subsection 2.5.
(b) Each Bank that is not incorporated under the laws of the
United States of America or a state thereof agrees that it will deliver to the
Company and the Administrative Agent (i) two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224 or any successor applicable
form, as the case may be, and (ii) an Internal Revenue Service Form W-8 or W-9
or any successor form. Each such Bank also agrees to deliver to the Company
and the Administrative Agent two further copies of the said Form 1001 or 4224
and Form W-8 or W-9, or successor applicable forms or other manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the Company, and
such extensions or renewals thereof as may reasonably be requested by the
Company or the Administrative Agent, unless in any such case an event
(including, without limitation, any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Bank from duly completing and delivering any such form with respect to it and
such Bank so advises the Company and the Administrative Agent. Such Bank shall
certify (i) in the case of Form 1001 or 4224, that it is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes and (ii) in the case of a Form W-8 or W-9, that it
is entitled to an exemption from United States backup withholding tax.
(c) No Bank may request indemnification for any Taxes from
the Company under paragraph (a) of this subsection 2.16 to the extent that
such Taxes would have been avoided or reduced by such Bank's transfer of its
Loans affected by such event to another office of such Bank (or to an
affiliate of such Bank), by such Bank's properly claiming the benefit of any
exemption from or reduction of such Taxes (whether provided by statute, treaty
or otherwise) including, without limitation, by delivering the forms required
by paragraph (b) of this subsection 2.16, or by such Bank's taking any other
action which in its judgment is reasonable to avoid or reduce such Taxes,
provided that such Bank shall not be required to (i) take any action which in
the reasonable judgment of such Bank could directly or indirectly result in
any increased cost or expense or in any loss of opportunity to such Bank
unless the Company shall have provided to such Bank indemnity or reimbursement
therefor in form and substance reasonably satisfactory to such Bank or (ii)
claim or apply any tax credit against such Taxes.
(d) Within 30 days after the payment by the Company of any
Taxes withheld or deducted from any amount payable to any Bank under this
Agreement, and irrespective of whether such Bank is entitled to demand
indemnification in respect thereof under paragraph (a) above, the Company will
furnish to such Bank (with a copy to the Administrative Agent), the original
or a certified copy of a receipt evidencing payment thereof.
19
2.17 Transferred Commitment. (a) The Company and each Bank
agree that Chrysler may by giving four days' notice to the Administrative
Agent, each Bank and the Company (which notice shall, upon receipt by the
Administrative Agent supersede and cancel all prior notices hereunder),
consent to the transfer to and borrowing by the Company hereunder of such
portion of the Available Chrysler/CFC Commitments (as such term is defined in
the Chrysler Agreement) as may be specified in such notice (as to each Bank,
its "Transferred Commitment"; collectively for all the Banks, the "Transferred
Commitments"). As of the Effective Date, the Transferred Commitments shall be
zero, unless Chrysler shall have delivered a notice pursuant to the foregoing
sentence at least four days prior to the Effective Date. Each notice given
pursuant to this subsection shall indicate the total Transferred Commitments
and as to each Bank, its pro rata Transferred Commitment.
(b) The Company also agrees that Chrysler may, by giving
thirty days' written notice to the Administrative Agent, each Bank and the
Company, withdraw any consent to the transfer to and borrowing by the Company
given in accordance with subsection 2.17(a) in respect of any portion of the
Transferred Commitments not utilized by the Company as of the date of such
notice.
2.18 Use of Proceeds. The proceeds of the Loans hereunder
shall be used by the Company for general corporate purposes.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Agreement
and to make the Loans herein provided for, the Company hereby represents and
warrants to each Bank that:
3.1 Financial Condition. The consolidated balance sheet of
the Company and its Subsidiaries as at December 31, 1995 and the related
consolidated statements of net earnings and cash flows for the fiscal year
ended on such date, certified by Deloitte & Touche LLP, copies of which have
been delivered to each Bank, present fairly the consolidated financial
position of the Company and its Subsidiaries as at such date, and the
consolidated results of their operations and cash flows for the fiscal year
then ended. The unaudited consolidated balance sheet of the Company and its
Subsidiaries as at March 31, 1996 and the related consolidated statements of
net earnings and cash flows for the three-month period ended on such date,
certified by a Responsible Officer, copies of which have been delivered to
each Bank, present fairly the consolidated financial condition of the Company
and its Subsidiaries as at such date, and the consolidated results of their
operations for the three-month period then ended (subject to normal year-end
audit adjustments). Such financial statements, including the related schedules
and notes thereto, have been prepared in accordance with GAAP. As at March 31,
1996, neither the Company nor any of its Subsidiaries had any asset,
liability, contingent obligation, liability for taxes, long-term lease or
unusual forward or long-term commitment material to the financial condition of
the Company and its Subsidiaries taken as a whole, which was not reflected in
the foregoing statements or in the notes thereto.
3.2 No Change. Between December 31, 1995 and the Effective
Date, there has been no material adverse change in the business, operations or
financial condition of the Company and its Subsidiaries taken as a whole.
3.3 Corporate Existence. The Company (a) is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Michigan, and (b) is duly qualified as a foreign corporation to do
business and is in good standing in each of the jurisdictions in which the
character of the properties owned or held under lease by it or the nature of
business transacted by it makes such qualification necessary, except in the
case of this clause (b) to the extent that the failure to
20
be so qualified or in good standing would not have a material adverse effect
on the business, operations or financial condition of the Company and its
Subsidiaries taken as a whole.
3.4 Corporate Authorization; No Violation. The execution,
delivery and performance by the Company of this Agreement are within the
corporate powers of the Company, have been duly authorized by all necessary
corporate action, and do not contravene any Requirement of Law or Contractual
Obligation of the Company, except to the extent that such contravention would
not have a material adverse effect on the business, operations or financial
condition of the Company and its Subsidiaries taken as a whole or on the
ability of the Company to fulfill its obligations under this Agreement or on
the rights and remedies of the Administrative Agent and the Banks hereunder.
3.5 Government Authorization. No authorization or approval
or other action by, and no notice to or filing with, any Governmental
Authority is required to be obtained or made by the Company for the due
execution, delivery and performance by the Company of this Agreement.
3.6 Federal Regulations. Neither the Company nor any of its
Subsidiaries is principally engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U, T, G or X issued by the Federal Reserve Board), and no proceeds
of any borrowing hereunder will be used to purchase or carry any margin stock
or to extend credit to others for the purpose of purchasing or carrying any
margin stock.
3.7 Enforceable Obligations. This Agreement has been duly
executed and delivered on behalf of the Company, and this Agreement
constitutes a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
principles of equity, whether considered in a proceeding in equity or at law.
3.8 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending
or, to the knowledge of the Company, threatened by or against the Company or
any of its Subsidiaries or against any of its or their respective properties
or revenues, in which there is a reasonable likelihood of an adverse
determination (a) with respect to this Agreement or any of the transactions
contemplated hereby, if such adverse determination would have a material
adverse effect on the ability of the Company to fulfill its obligations under
this Agreement or on the rights and remedies of the Administrative Agent and
the Banks hereunder or (b) which would, if adversely determined, have a
material adverse effect on the business, operations, property or financial
condition of the Company and its Subsidiaries taken as a whole.
3.9 Taxes. Each of the Company and its Subsidiaries has
filed or caused to be filed all material tax returns which to the knowledge of
the Company are required to be filed, and has paid all material 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 and other charges imposed on it
or any of its property by any Governmental Authority (other than those 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, if any, have been provided on the books of the Company or its
Subsidiaries, as the case may be).
3.10 ERISA. No Prohibited Transaction or Accumulated Funding
Deficiency (other than those that have been waived by the Internal Revenue
Service) has occurred since July 1, 1974 with respect to any Plan and no
Reportable Event has occurred since July 1, 1974 with respect to any Plan
which could in either case subject the Company or any of its Subsidiaries to
any tax, penalty or
21
other liabilities in the aggregate material in relation to the business,
operations, property or financial or other condition of the Company and its
Subsidiaries taken as a whole. The projected benefit obligations with respect
to all benefits, both vested and nonvested, under all Single Employer Plans
(based on the most recently available actuarial information and computed in
accordance with Statement of Accounting Standards No. 87) maintained by the
Company or a Commonly Controlled Entity did not exceed, at December 31, 1995,
the fair value of the assets of such Plans.
3.11 Investment Company Act; Other Regulations. The Company
is not an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended. The Company is not subject to regulation under any Federal or state
statute or regulation which limits its ability to incur Indebtedness.
3.12 Existing Financial Covenants. Schedule II hereto sets
forth a list of all Material Indebtedness of the Company or any Significant
Subsidiary the documentation with respect to which includes a financial
covenant which is more onerous than, or materially different from, the
financial covenant contained in subsection 6.1, together with a complete and
correct transcription of the text of each such financial covenant.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Effectiveness. The effectiveness of this
Agreement is subject to the satisfaction of the following conditions
precedent:
(a) Execution of Agreement and Addenda. (i) This Agreement
shall have been executed and delivered by a duly authorized officer
of each of the Company and the Administrative Agent and (ii) the
Administrative Agent shall have received an executed Addendum (or a
copy thereof by facsimile transmission) from each Person listed on
Schedule I.
(b) Closing Certificate. The Administrative Agent shall have
received a certificate of the Company, dated the Effective Date,
substantially in the form of Exhibit D, with appropriate insertions,
satisfactory in form and substance to the Administrative Agent,
executed by the President or any Vice President and the Secretary or
any Assistant Secretary of the Company, and attaching the documents
referred to in subsection 4.1(c) and (d).
(c) Corporate Proceedings of the Company. The Administrative
Agent shall have received a copy of the resolutions, in form and
substance satisfactory to the Administrative Agent, of the Board of
Directors of the Company (or a duly authorized committee thereof)
authorizing (i) the execution, delivery and performance of this
Agreement and (ii) the borrowings contemplated hereunder.
(d) Corporate Documents. The Administrative Agent shall have
received true and complete copies of the certificate of incorporation
and by-laws of the Company.
(e) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions, with a copy for each
Bank:
(i) the executed legal opinion of Simpson Thacher &
Bartlett, counsel to the Administrative Agent, substantially
in the form of Exhibit A-1; and
22
(ii) the executed legal opinion of Allan L.
Ronquillo, Esq., General Counsel of the Company,
substantially in the form of Exhibit A-2.
(f) Existing Commitment Transfer Agreement. The
Administrative Agent shall have received satisfactory evidence that
the Existing Commitment Transfer Agreement shall have been terminated
pursuant to an irrevocable notice of termination and that any amounts
owing thereunder by the Company shall have been (or shall upon the
occurrence of the Effective Date be) paid in full. Without affecting
any terms of the Existing Commitment Transfer Agreement which
expressly survive the termination of the Existing Commitment Transfer
Agreement, each Bank party to the Existing Commitment Transfer
Agreement hereby waives any requirement of advance notice of such
termination contained in the Existing Commitment Transfer Agreement
and hereby agrees that the Existing Commitment Transfer Agreement and
any commitments thereunder (subject to receipt of any other required
consents of any other Person) shall terminate simultaneously with the
satisfaction of the conditions to effectiveness set forth in this
subsection 4.1.
The Administrative Agent shall notify the Banks of the Effective Date promptly
after the occurrence thereof.
4.2 Conditions to All Loans. The obligation of each Bank to
make any Loan on or after the Effective Date to be made by it hereunder is
subject to the satisfaction of the conditions precedent described in clauses
(a) and (b) below:
(a) Representations and Warranties. The representations and
warranties made by the Company herein shall be correct in all
material respects on and as of the Borrowing Date for such Loan as if
made on and as of such date, except for any such representations or
warranties which relate solely to an earlier date.
(b) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing on such Borrowing Date
or after giving effect to the Loans to be made on such Borrowing
Date.
Each borrowing by the Company hereunder shall constitute a
representation and warranty by the Company as of the date of each such
borrowing that the conditions in this subsection 4.2 have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Company hereby covenants and agrees that so long as the
Commitments remain in effect, any Loan made hereunder remains outstanding and
unpaid or any other amount is owing to any Bank or the Administrative Agent
hereunder:
5.1 Financial Statements, etc. (a) The Company will furnish
to each Bank:
(i) as soon as available and in any event within 60 days
after the end of the first, second and third quarterly accounting
periods in each fiscal year of the Company, copies of financial
statements of the Company and its Subsidiaries consisting of, at a
minimum, balance sheets of the Company and its Subsidiaries on a
consolidated basis as of the end of such quarterly accounting period,
and related statements of net earnings and cash flows for the portion
of such fiscal year ended with the last day of such quarterly
accounting period, all in
23
reasonable detail and prepared and certified (subject to year-end
audit adjustments) by a Responsible Officer (which certification may
be included in the certificate referred to in subsection 5.1(a)(iii))
and stating in comparative form the respective figures for the
corresponding date and period in the previous fiscal year;
(ii) as soon as available and in any event within 90 days
after the end of each fiscal year of the Company, copies of financial
statements of the Company and its Subsidiaries consisting of, at a
minimum, balance sheets of the Company and its Subsidiaries on a
consolidated basis as of the end of such fiscal year, and related
statements of net earnings and cash flows for such fiscal year, all
in reasonable detail and certified by independent public accountants
of nationally recognized standing selected by the Company and stating
in comparative form the respective figures as of the end of and for
the previous fiscal year;
(iii) concurrently with the financial statements for each
quarterly accounting period and for each fiscal year of the Company
furnished pursuant to paragraphs (a)(i) and (a)(ii) of this
subsection 5.1, a certificate of a Responsible Officer stating that,
based on an examination which in the opinion of the signer is
sufficient to enable him to make an informed statement, the Company
and its Subsidiaries have performed and observed all of, and neither
the Company nor any of its Subsidiaries is in default in the
performance or observance of any of, the terms, covenants, agreements
and conditions of this Agreement or, if the Company or any of its
Subsidiaries shall be in default, specifying all such defaults and
the nature thereof, of which the signer of such certificate may have
knowledge; and
(iv) such other information relating to the affairs of
the Company and its Subsidiaries as any Bank through the
Administrative Agent may from time to time reasonably request.
(b) (i) Upon written request by any Bank through the
Administrative Agent, the Company will furnish to such Bank copies of all such
reports of the type a publicly held corporation would generally make available
to its stockholders as the Company shall make available to its parent company
and (ii) upon written request of the Administrative Agent, the Company will
furnish to the Administrative Agent all regular and periodic reports which the
Company or any Subsidiary may be required to file with the Securities and
Exchange Commission or any similar or corresponding government department,
commission, board, bureau or agency, domestic or foreign, or with any
securities exchange.
5.2 Maintenance of Existence. The Company will, and will
cause each Subsidiary to, preserve, renew and keep in full force and effect
its corporate existence and take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of its
business, except for rights, privileges and franchises the loss of which would
not in the aggregate in the reasonable business judgment of the Company have a
material adverse effect on the business, operations, property or financial or
other condition of the Company and its Subsidiaries taken as a whole, and
except as otherwise permitted by subsection 6.2.
5.3 Notices. The Company will promptly give notice to the
Administrative Agent (which shall notify the Banks) of (a) the occurrence of
any Default or Event of Default (accompanied by a certificate of a Responsible
Officer specifying the nature of such event, the period of existence thereof,
and the action that the Company proposes to take with respect thereto) and (b)
the execution and delivery of any documentation with respect to any Material
Indebtedness of the Company or any Significant Subsidiary if such
documentation includes a financial covenant which is more onerous than, or
materially different from, the financial covenant contained in subsection 6.1,
accompanied by
24
a complete and correct transcription of the text of such financial covenant.
The delivery of any such notice shall be deemed to automatically amend
Schedule II to reflect the existence of such financial covenant and the text
thereof.
SECTION 6. NEGATIVE COVENANTS
The Company hereby covenants and agrees that so long as the
Commitments remain in effect, any Loan made hereunder remains outstanding and
unpaid or any other amount is owing to any Bank or the Administrative Agent
hereunder:
6.1 Debt to Equity Ratio. The Company will not permit the
ratio of Debt on the last day of any fiscal quarter of the Company to Equity
on such day to be greater than 11.0 to 1.0.
6.2 Limitation on Fundamental Change. The Company will not
(a) merge or consolidate with any other Person (unless (i) the Company shall
be the continuing corporation and (ii) immediately before and immediately
after giving effect to such merger or consolidation, no Default or Event of
Default shall have occurred and be continuing) or (b) sell or convey all or
substantially all of its assets to any Person.
6.3 Limitation on Liens. (a) The Company will not, and will
not permit any Finance Subsidiary to, create, assume or incur, or suffer to be
created, assumed or incurred or to exist, any Lien in respect of any property
of any character of the Company or such Finance Subsidiary, whether heretofore
or hereafter acquired; excluding, however, from the operation of this
covenant:
(i) any deposit of assets of the Company or any of
its Finance Subsidiaries with any surety company or clerk of any
court, or in escrow, as collateral in connection with, or in lieu of,
any bond on appeal by the Company or any of its Finance Subsidiaries,
from any judgment or decree, or in connection with other proceedings
or actions at law or in equity by or against the Company or any of
its Finance Subsidiaries;
(ii) Liens created by any Finance Subsidiary in favor
of the Company or a wholly-owned Subsidiary securing indebtedness of
such Finance Subsidiary to the Company or a wholly-owned Subsidiary
(which Liens cannot be transferred except to the Company or to
another wholly-owned Subsidiary);
(iii) any deposits to secure public or statutory
obligations of the Company or any of its Finance Subsidiaries, other
than any such deposit made as a result of or in connection with the
occurrence of any of the events described in clause (i), (ii), (iii)
or (iv) of Section 7(g);
(iv) any purchase money Liens in respect of fixed
assets or other physical or real properties heretofore or hereafter
acquired by the Company or any of its Finance Subsidiaries, or any
Liens existing in respect of such property at the time of acquisition
thereof; provided, however, that no such Lien shall extend to or
cover any other property of the Company or such Finance Subsidiary,
as the case may be;
(v) any Liens which are (A) in respect of fixed
assets or other physical properties of a corporation which is not a
Finance Subsidiary as of the date hereof, and (B) in existence at the
time such corporation becomes a Finance Subsidiary;
25
(vi) the extension, renewal or replacement of any Lien
permitted by paragraphs (i) through (v) above in respect of the same
property theretofore subject thereto or the extension, renewal or
replacement (without increase of principal amount) of the
indebtedness secured thereby;
(vii) Liens for taxes not yet due or which are being
contested in good faith and by appropriate proceedings if adequate
reserves with respect thereto are maintained on the books of the
Company or such Finance Subsidiary, as the case may be, in accordance
with GAAP;
(viii) carriers', warehousemen's, mechanics',
landlords', materialmen's, repairmen's or other like Liens arising in
the ordinary course of business (A) which are not overdue for a
period of more than 60 days or (B) which are being contested in good
faith and by appropriate proceedings if adequate reserves with
respect thereto are maintained on the books of the Company or such
Finance Subsidiary, as the case may be, in accordance with GAAP;
(ix) easements, rights-of-way, zoning and similar
restrictions and other similar encumbrances or title defects incurred
in the ordinary course of business which, 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 interfere
with the ordinary conduct of the business of the Company or its
Finance Subsidiaries;
(x) any attachment or judgment lien, unless the
judgment it secures shall not, within 30 days after the entry
thereof, have been discharged or execution thereof stayed pending
appeal, or shall not have been discharged within 30 days after the
expiration of any such stay;
(xi) Liens granted on assets in connection with
leveraged leases and project financings entered into in the ordinary
course of the Finance Business;
(xii) Liens granted in connection with the cash
collateralization of bankers' acceptances pursuant to the Long Term
Revolving Credit Agreement or the Short Term Revolving Credit
Agreement;
(xiii) Liens on receivables payable in foreign
currencies (other than Canadian dollars) to secure borrowings in
foreign countries (other than Canada); and
(xiv) Liens to secure Indebtedness and other
obligations of the Company or any of its Finance Subsidiaries not
otherwise permitted by this subsection 6.3, but only to the extent
that the aggregate amount of Indebtedness and other obligations
secured thereby does not at any time exceed $100,000,000 (or the
equivalent thereof in any other currency).
(b) The Company will not permit any Domestic Subsidiary that
is not a Finance Subsidiary to create, assume or incur, or suffer to be
created, assumed or incurred or to exist, any Lien in respect of any property
of any character of such Domestic Subsidiary, whether heretofore or hereafter
acquired, excluding, however, from the operation of this covenant:
(i) Liens on property of such Domestic Subsidiary
that would be permitted under subsection 6.3(a) if such Domestic
Subsidiary were a Finance Subsidiary;
26
(ii) Liens on property of such Domestic Subsidiary
that are incurred in the ordinary course of the Finance Business or
the Real Estate Business of such Domestic Subsidiary; and
(iii) Liens on any property of such Domestic Subsidiary
if such Domestic Subsidiary is a "single purpose" entity formed for
the purpose of holding title to such property and engages in no
activities other than those related to holding title to such
property.
6.4 Additional Covenants. At any time after the occurrence
of a Change of Control:
(a) Limitation on Dividends, Investments, etc. The
Company shall not (i) declare or pay any dividend (other than
dividends payable solely in common stock of the Company) 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 shares of any class of Capital Stock of
the Company, 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 Company or any
Subsidiary or (ii) make, or permit any Subsidiary to make, any
investment, loan, advance, capital contribution or extension of
credit (including by way of guaranty in favor of third party
creditors), whether in cash or property or otherwise, in or to or for
the benefit of any CFC Affiliate, except that (x) so long as no Event
of Default has occurred and is continuing (or would occur after
giving effect thereto), the Company may declare and pay any scheduled
dividend on, and make redemptions of, preferred stock issued by the
Company to any Person (other than a CFC Affiliate) to the extent
permitted by the terms thereof and (y) the Company and its
Subsidiaries may make investments, loans, advances and extensions of
credit in or to or for the benefit of any CFC Affiliate in the
ordinary course of its Finance Business consistent with historical
practices (in each case determined as of the date of such Change of
Control) and in accordance with subsection 6.4(c).
(b) Minimum Equity. The Company shall not permit
Equity (determined without giving effect to any redemption of
preferred stock of the Company made pursuant to subsection 6.5(a)
after the date of such Change of Control) to be less than an amount
equal to Equity as of the day immediately preceding the occurrence of
such Change of Control minus $250,000,000.
(c) Limitation on Amendments to Intercompany
Agreements; CFC Affiliate Transactions. The Company shall not, and
shall not permit any Subsidiary to, (i) amend or modify, or agree to
amend or modify, any of the provisions of any Intercompany Agreement
in a manner materially adverse to the interests of either (x) the
Company and its Subsidiaries taken as a whole or (y) the Banks, or
(ii) enter into, or agree to enter into, any Intercompany Agreement
which is materially adverse to the interests of either (x) the
Company and its Subsidiaries taken as a whole or (y) the Banks. In
addition, the Company shall not, and shall not permit any Subsidiary
to, engage in any transaction with any CFC Affiliate (other than the
Company and its Subsidiaries) on terms substantially less favorable
to the Company or such Subsidiary than would be obtainable at the
time in comparable transactions of the Company or such Subsidiary
with Persons not CFC Affiliates. As used in this subsection 6.4(c),
"Intercompany Agreement" means any agreement between the Company or
any Subsidiary and any CFC Affiliate, any instrument issued by the
Company or any Subsidiary to any CFC Affiliate and any instrument
issued by any CFC Affiliate to the Company or any Subsidiary.
27
(d) Limitation on Lines of Business. The Company
shall not, and shall not permit any Subsidiary to, engage in any
business other than the Finance Business, the Finance- Related
Insurance Business and the other businesses in which the Company and
its Subsidiaries are engaged as of the date of such Change of
Control, and other than businesses in which the Company or any of its
Subsidiaries may be involved in connection with or related to any
workout, liquidation, foreclosure or other realization on or
disposition of assets in which it has a security interest, or any
other exercise of rights or remedies pursuant to a workout in
connection with any financing (whether equity or debt) provided by
the Company or any of its Subsidiaries to any Person.
SECTION 7. EVENTS OF DEFAULT
Upon the occurrence of any of the following events:
(a) the Company shall fail to pay any principal of any Loan
made hereunder when due in accordance with the terms hereof; or to
pay any interest on any Loan made hereunder or any other amount
payable hereunder within five Business Days after any such interest
or other amount becomes due in accordance with the terms hereof; or
(b) any representation or warranty made by the Company
herein, or deemed made by the Company pursuant to Section 3 or 4, or
contained in any certificate, document or financial or other
statement furnished at any time under or in connection with this
Agreement shall prove to have been incorrect in any material respect
on or as of the date made or deemed made; or
(c) the Company shall default in the observance or
performance of any agreement contained in subsection 6.1, 6.2 or 6.4;
or
(d) the Company shall default in the observance or
performance of any other agreement, covenant or term contained in
this Agreement (including any failure to make any payment required
hereunder other than as described in paragraph (a) above), and such
default shall continue unremedied for a period of 30 days after
receipt by the Company of notice of such default from the
Administrative Agent; or
(e) the Company or any Significant Subsidiary shall default
in any payment of $25,000,000 (or the equivalent thereof in any other
currency) or more of principal of or interest on any Indebtedness or
in the payment of $25,000,000 (or the equivalent thereof in any other
currency) or more on account of any guarantee in respect of
Indebtedness, beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness or guarantee
was created; or
(f) (i) the Company or any of its Significant 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
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
or other similar official for it or for all or any substantial part
of its assets, or the Company or any of its Significant Subsidiaries
shall make a general assignment for the benefit of its creditors; or
(ii) there shall be commenced against the Company or any of
28
its Significant Subsidiaries any case, proceeding or other action of
a nature referred to in clause (i) above which (A) results in the
entry of an order for relief or any such adjudication or appointment
or (B) remains undismissed, undischarged or unbonded for a period of
60 days; or (iii) there shall be commenced against the Company or any
of its Significant 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
which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iv) the Company or
any of its Significant 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 Company or any of its Significant
Subsidiaries shall admit in writing its inability to pay its debts
generally as they become due; or
(g) (i) any Person shall engage in any Prohibited
Transaction involving any Plan, (ii) any Accumulated Funding
Deficiency, whether or not waived, shall exist with respect to any
Plan, (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 institution of proceedings
is, in the reasonable opinion of the Required Banks, likely to result
in the termination of such Plan for purposes of Title IV of ERISA,
and, in the case of a Reportable Event, the continuance of such
Reportable Event unremedied for ten days after notice of such
Reportable Event pursuant to Section 4043(a), (c) or (d) of ERISA is
given or the continuance of such proceedings for ten days after
commencement thereof, as the case may be, (iv) any Single Employer
Plan shall terminate for purposes of Title IV of ERISA, or (v) any
other event or condition shall occur or exist with respect to a
Single Employer Plan; and in each case in clauses (i) through (v)
above, the Administrative Agent shall have notified the Company that,
in the opinion of the Required Banks, such event or condition,
together with all other such events or conditions, if any, could
reasonably be expected to subject the Company or any of its
Subsidiaries to any tax, penalty or other liabilities in the
aggregate material in relation to the business, operations, property
or financial or other condition of the Company and its Subsidiaries
taken as a whole; or
(h) one or more final judgments or decrees shall be entered
against the Company or any of its Significant Subsidiaries involving
in the aggregate a liability (not paid or fully covered by insurance)
of $100,000,000 (or the equivalent thereof in any other currency) or
more, shall have been unpaid for a period of 60 days and shall not
have been stayed; or
(i) Chrysler shall at any time fail to own at least 51% of
the issued and outstanding shares of the common stock of the Company;
or
(j) the Company or any of its Significant Subsidiaries shall
default in the observance or performance of any financial covenant
contained in any instrument or agreement evidencing, securing or
relating to any of its Material Indebtedness, the effect of which
default is to cause, or to permit the holder or holders of such
Material Indebtedness (or a trustee or agent on behalf of such holder
or holders) to cause, such Material Indebtedness to become due prior
to its stated maturity;
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
Company, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement shall immediately become due and payable, and (b) if such
event is any other Event of Default, either or both of the following actions
may be taken: (i) with the consent of the Required
29
Banks, the Administrative Agent may, or upon the request of the Required
Banks, the Administrative Agent shall, by notice to the Company, declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and (ii) with the consent of the Required Banks, the
Administrative Agent may, or upon the request of the Required Banks, the
Administrative Agent shall, by notice of default to the Company, declare the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement to be due and payable forthwith, whereupon the same shall
immediately become due and payable. Except as expressly provided above in this
Section 7, presentment, demand, protest and all other notices of any kind are
hereby expressly waived.
SECTION 8. THE ADMINISTRATIVE AGENT
8.1 Appointment. Each Bank hereby irrevocably designates and
appoints Chemical as the Administrative Agent of such Bank under this
Agreement, and each Bank hereby irrevocably authorizes Chemical as
Administrative Agent for such Bank, to take such action on its behalf under
the provisions of this Agreement and to exercise such powers and perform such
duties as are expressly delegated to the Administrative Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.
8.2 Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Without limiting the foregoing, the
Administrative Agent may appoint CASC as its agent to perform the functions of
the Administrative Agent hereunder relating to the advancing of funds to the
Company and distribution of funds to the Banks and to perform such other
related functions of the Administrative Agent hereunder as are reasonably
incidental to such functions.
8.3 Exculpatory Provisions. Neither the Administrative
Agent, nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates (including, without limitation, CASC) shall be
(a) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement (except for its or such
Person's own gross negligence or willful misconduct), or (b) responsible in
any manner to any of the Banks for any recitals, statements, representations
or warranties made by the Company or any officer thereof contained in this
Agreement or in any certificate, report, statement or other document referred
to or provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or for any failure of the Company to perform
its obligations hereunder. The Administrative Agent shall not be under any
obligation to any Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement, or to inspect the properties, books or records of the Company.
8.4 Reliance by Administrative Agent and CASC. The
Administrative Agent and CASC shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, facsimile transmission,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal
counsel (including, without limitation, counsel to the Company), independent
30
accountants and other experts selected by the Administrative Agent. The
Administrative Agent and CASC may deem and treat the Bank specified in the
Register with respect to any amount owing hereunder as the owner thereof for
all purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with the Administrative Agent in accordance with
subsection 9.7. The Administrative Agent shall be fully justified in failing
or refusing to take any action under this Agreement unless it shall first
receive such advice or concurrence of the Required Banks (or, if so specified
in this Agreement, all of the Banks) as it deems appropriate or it shall first
be indemnified to its satisfaction by the Banks against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Administrative Agent shall, in all cases, be fully
protected in acting, or in refraining from acting, under this Agreement in
accordance with a request of the Required Banks (or, if so specified in this
Agreement, all of the Banks), and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Banks and all future
holders of the obligations owing by the Company hereunder.
8.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event
of Default unless the Administrative Agent has received notice from a Bank or
the Company referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event
that the Administrative Agent receives such a notice, the Administrative Agent
shall give notice thereof to the Banks, and, if such notice is received from a
Bank, the Administrative Agent shall give notice thereof to the Company and
each other Bank. Subject to the proviso contained in the first sentence of
subsection 9.1, the Administrative Agent shall take such action with respect
to such Default or Event of Default as shall be reasonably directed by the
Required Banks (or, if so specified in this Agreement, all of the Banks),
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 Banks.
8.6 Non-Reliance on Administrative Agent, Other Banks and
CASC. Each Bank expressly acknowledges that neither the Administrative Agent,
nor any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates (including, without limitation, CASC) has made any representations
or warranties to it and that no act by the Administrative Agent hereafter
taken, including any review of the affairs of the Company, shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Bank. Each Bank represents to the Administrative Agent and CASC that it has,
independently and without reliance upon the Administrative Agent, any other
Bank or CASC, 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 Company and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Bank also represents that it will, independently and
without reliance upon the Administrative Agent, any other Bank or CASC, 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 to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of
the Company. Except for notices, reports and other documents expressly
required to be furnished to the Banks by the Administrative Agent hereunder,
the Administrative Agent shall not have any duty or responsibility to provide
any Bank with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of the
Company which may come into the possession of the Administrative Agent or any
of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
31
8.7 Indemnification. The Banks agree to indemnify the
Administrative Agent and CASC (to the extent not reimbursed by the Company and
without limiting the obligation of the Company to do so), ratably according to
the respective amounts of their respective Commitment Percentages in effect on
the date on which indemnification is sought under this subsection 8.7 (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated, ratably in accordance with such Commitment Percentages immediately
prior to such date) from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Loans made hereunder) be
imposed on, incurred by or asserted against the Administrative Agent or CASC
in any way relating to or arising out of this Agreement or any other documents
contemplated by or referred to herein or the transactions contemplated hereby
or any action taken or omitted by the Administrative Agent or CASC under or in
connection with any of the foregoing, provided that no Bank shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Administrative Agent's or CASC's gross
negligence or willful misconduct. The agreements in this subsection 8.7 shall
survive the payment of the Loans made hereunder and all other amounts payable
hereunder.
8.8 Administrative Agent in its Individual Capacity. The
Administrative Agent and its affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Company as though
the Administrative Agent were not the Administrative Agent hereunder. With
respect to its Loans made or renewed by it, the Administrative Agent shall
have the same rights and powers under this Agreement as any Bank and may
exercise the same as though it were not the Administrative Agent and the terms
"Bank" and "Banks" shall include the Administrative Agent in its individual
capacity.
8.9 Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent, upon 30 days' notice to the Banks and the
Company, and may be removed at any time with or without cause by the Required
Banks. If the Administrative Agent shall resign or be removed as
Administrative Agent under this Agreement, then either (a) the Required Banks
shall appoint from among the Banks a successor agent for the Banks, which
successor agent shall be approved by the Company, or (b) if a successor agent
shall not have been so appointed and approved within the thirty-day period
following the Administrative Agent's notice to the Banks or its removal as
Administrative Agent, the Administrative Agent shall then, with the consent of
the Company, appoint a successor agent who shall serve as Administrative Agent
until such time, if any, as the Required Banks appoint, and the Company
approves, a successor agent as provided in (a) above. Upon its appointment
pursuant to either clause (a) or (b) above, such successor agent shall succeed
to the rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon its
appointment, 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 obligations owing by the Company
hereunder. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Section 8 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. With the written consent of the
Required Banks, the Administrative Agent and the Company may, from time to
time, enter into written amendments, supplements or modifications hereto for
the purpose of adding any provisions to this Agreement or
32
changing in any manner the rights of the Banks or of the Company hereunder,
and with the consent of the Required Banks, the Administrative Agent on behalf
of the Banks may execute and deliver to the Company a written instrument
waiving, on such terms and conditions as the Administrative Agent may specify
(with such consent) in such instrument, any of the requirements of this
Agreement or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification
shall (a) extend the maturity of any Loan, or reduce the rate or extend the
time of payment of interest thereon, or reduce the principal amount thereof,
or change the amount or terms of any Bank's Commitment, or amend, modify or
waive any provision of this subsection 9.1 or reduce the percentage specified
in the definition of Required Banks, or consent to the assignment or transfer
by the Company of any of its rights and obligations under this Agreement or
amend, modify or waive the provisions of subsection 9.8, in each case without
the prior written consent of each Bank directly affected thereby, or (b)
amend, modify or waive any provision of Section 8 without the prior written
consent of the Administrative Agent. Each Bank hereby consents to the
inclusion in this Agreement of each and every amendment, revision, addition,
change, waiver or other modification to Section 7, Section 8 and/or the
definitions of "Applicable Margin", "Base Rate", "Eurodollar Rate" and
"Status" (including each defined term referred to in the definition of
"Status") of the Long Term Revolving Credit Agreement made after the Effective
Date (except to the extent relating to any provision contained in such
Sections on the Effective Date as to which there is no comparable provision
herein on the Effective Date) and each and every such amendment, revision,
addition, change, waiver or other modification thereof is hereby incorporated,
as in effect from time to time, into this Agreement with the same effect as if
fully set forth in Section 5, Section 6 and/or the definitions of "Applicable
Margin", "Base Rate", "Eurodollar Rate" and "Status" (including each defined
term referred to in the definition of "Status") of this Agreement, as
appropriate, provided that for purposes of this Agreement if the Long Term
Revolving Credit Agreement is terminated such Sections 5 and 6 and such
definitions of "Applicable Margin", "Base Rate", "Eurodollar Rate" and
"Status" shall remain in effect for purposes of this Agreement in the form in
which they shall be in effect on the date of such termination; provided,
further, that for purposes of this Agreement if the Long Term Revolving Credit
Agreement is amended so as to remove the covenant set forth in Section 8.3 of
the Long Term Revolving Credit Agreement, subsection 6.3 hereof shall not be
so amended, and if any provision of Section 8.3 of the Long Term Revolving
Credit Agreement is amended or waived so as to grant to the financial
institutions under the Long Term Revolving Credit Agreement a Lien on any
assets of the Company or its Subsidiaries, the obligations of the Company
hereunder shall be secured, and the Company shall take such action and execute
such security documents as the Administrative Agent may reasonably request to
further effect the security of such obligations, equally and ratably with its
obligations to the financial institutions under the Long Term Revolving Credit
Agreement. The Company will advise the Administrative Agent promptly of any
amendment to or termination of the Long Term Revolving Credit Agreement. Any
such waiver and any such amendment, supplement or modification shall apply
equally to each of the Banks and shall be binding upon the Company, the Banks,
the Administrative Agent and all future holders of the obligations owing by
the Company hereunder. In the case of any waiver, the Company, the Banks and
the Administrative Agent shall be restored to their former position and rights
hereunder 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 Default, or impair any right consequent thereon. No
provision of this subsection 9.1 shall limit the rights of any party hereto
pursuant to subsections 2.13, 2.14, 2.15, 2.16, 9.8 and 9.9.
9.2 Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing or by
telecopy and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand or when deposited in the
mail, first class or air postage prepaid, or, in the case of telecopied
notice, when telecopied, receipt acknowledged, addressed as follows in the
case of the Company and the Administrative Agent,
33
and as set forth in its Addendum in the case of the other parties hereto, or
to such other address as may be hereafter notified by the respective parties
hereto and any future holders of the obligations owing by the Company
hereunder:
The Company: Chrysler Financial Corporation
27777 Franklin Road
Southfield, Michigan 48034-8286
Attention: Vice President and Treasurer
Telecopy: 810-948-3801
The Administrative Agent: Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: Rosemary Bradley
Telecopy: 212-972-9854
With Copies
to: Chemical Bank Agency
Services
Grand Central Tower
140 East 45th Street
New York, New York 10017
Attention: Sandra Miklave
Telecopy: 212-622-0002
provided that any notice, request or demand to or upon the Administrative
Agent pursuant to subsection 2.2, 2.4, 2.17, or 8.5 shall not be effective
until received.
9.3 Clearing Accounts. (a) Each Bank irrevocably authorizes
the Administrative Agent and CASC to cause such Bank's Clearing Account to be
debited as contemplated in subsection 2.2 and to cause to be created an
overdraft in such account if the balance in such Bank's Clearing Account on a
particular Borrowing Date is less than the amount of the Loan to be made by
such Bank on such day. In addition each Bank irrevocably authorizes the
Administrative Agent and CASC to cause such Bank's Clearing Account to be
credited with its ratable share of payments received by the Administrative
Agent from the Company. The Clearing Account of each Bank shall be maintained
at its own expense and free of charge to the Administrative Agent, CASC and
the Company.
(b) The Administrative Agent may at any time in its sole
discretion, upon notice to the Company and the Banks, discontinue the use of
ACH procedures in connection with Loans made pursuant hereto, and the Banks
shall thereafter fund each Loan required to be made by them hereunder by
making available the amount thereof to the Administrative Agent for the
account of the Company at the office of the Administrative Agent set forth in
subsection 9.2 in funds immediately available to the Administrative Agent.
9.4 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Bank, any right, remedy, power or privilege hereunder, 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
of 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.
34
9.5 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement.
9.6 Payment of Expenses. The Company agrees:
(a) to pay or reimburse the Administrative Agent for all
reasonable out-of-pocket costs and expenses incurred in connection
with the preparation and execution of, and any amendment, supplement
or modification to or waiver under, this Agreement and any other
documents prepared in connection herewith, and the consummation of
the transactions contemplated hereby and the administration of this
Agreement, including, without limitation, the reasonable fees and
disbursements of Simpson Thacher & Bartlett, special counsel to the
Administrative Agent and the Banks;
(b) to pay or reimburse each Bank and the Administrative
Agent for all costs and expenses (other than legal fees and
disbursements) incurred in connection with the enforcement or
preservation of any rights under this Agreement and any such other
documents and the reasonable fees and disbursements of one firm of
special counsel to the Administrative Agent and the Banks; and
(c) to (i) indemnify each Bank from and against liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements (other than legal fees and
disbursements) of any kind whatsoever (and, with respect to any
proceeding or related proceedings, the reasonable fees and
disbursements of one firm of special counsel to the relevant Banks in
connection with such proceeding(s)) which may at any time (including,
without limitation, at any time following the payment of the Loans
made hereunder) be imposed on, incurred by or asserted against such
Bank in any way relating to or arising out of this Agreement or any
other documents contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted by
such Bank under or in connection with any of the foregoing, provided
that the Company shall not be liable for the payment of any portion
of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting
from (x) the ordinary course administration of this Agreement or such
other documents by any Bank or (y) any Bank's gross negligence or
willful misconduct or bad faith and (ii) pay or reimburse (x) each
Bank for any payments made by such Bank to the Administrative Agent
or CASC pursuant to the provisions of subsection 8.7 and (y) the
Administrative Agent and CASC for any and all liabilities, expenses
or disbursements incurred by any of them which pursuant to the
provisions of subsection 8.7 are the subject of indemnification
payments from the Banks to the extent that the Administrative Agent
or CASC, for whatever reason, did not receive such indemnification
payments from any Bank or Banks.
The agreements in this subsection 9.6 shall survive the
repayment of the Loans made hereunder and all other amounts payable hereunder.
9.7 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Company, the Banks and the Administrative Agent, and their respective
successors and assigns, except that the Company may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of each Bank.
(b) Any Bank may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell to
one or more banks or other entities ("Participants")
35
participating interests in any Loan owing to such Bank, any Commitment of such
Bank or any other interest of such Bank hereunder. In the event of any such
sale by a Bank of a participating interest to a Participant, such Bank's
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, such Bank shall remain solely responsible for the
performance thereof, such Bank shall remain the holder of any Loan made by it
for all purposes under this Agreement, and the Company and the Administrative
Agent shall continue to deal solely and directly with such Bank in connection
with such Bank's rights and obligations under this Agreement, provided, that
the terms of any participation agreement or certificate relating to any such
participation shall prohibit any subparticipations by such participant and
provided, further any such participation agreement or certificate shall permit
the Bank granting such participations the right to consent to waivers,
amendments or supplements to this Agreement without the consent of such
participant except in the case of (a) waivers of any Default or Event of
Default described in Section 7(a), and (b) any amendment or modification
extending the maturity of any Loan, or reducing the rate or extending the time
of payment of interest thereon, or reducing the principal amount thereof. The
Company agrees that if amounts outstanding under this Agreement 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 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 Bank under this
Agreement, provided that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Banks the
proceeds thereof as provided in subsection 9.9 as fully as if it were a Bank
hereunder. All amounts payable by the Company under Section 2 shall be
determined as if such Bank had not sold such participations.
(c) Any Bank may assign to any Bank or additional bank or
financial institution or any Federal Reserve Bank all or any part of its
rights and obligations under this Agreement on the terms and conditions set
forth in subsection 13.6(c), (d), (e) and (g) of the Chrysler Agreement, the
provisions of which (including the definitions of defined terms used therein)
are incorporated herein by reference as if set forth fully herein; provided,
however, that in no event shall any such assignment by any Bank to any
assignee (other than any pledge or assignment of Loans to a Federal Reserve
Bank) be permitted hereunder unless contemporaneously therewith such Bank
shall assign to such assignee a percentage interest in such Bank's rights and
obligations under the Chrysler Agreement that is equal to the percentage
interest then being assigned hereunder.
(d) The Company authorizes each Bank to disclose to any
Participant or Assignee (as defined in the Chrysler Agreement) (each, a
"Transferee") and any prospective Transferee any and all financial information
in such Bank's possession concerning the Company and its affiliates which has
been delivered to such Bank by or on behalf of the Company pursuant to this
Agreement or which has been delivered to such Bank by or on behalf of the
Company in connection with such Bank's credit evaluation of the Company and
its affiliates prior to becoming a party to this Agreement.
(e) In order to facilitate any pledge or assignment to any
Federal Reserve Bank of any Loans made by any Bank hereunder, the Company
hereby agrees that, upon request of any Bank at any time and from time to time
after the Company has made its initial borrowing hereunder, the Company shall
provide to such Bank, at the Company's own expense, a note, substantially in
the form of Exhibit E, evidencing the Loans owing to such Bank.
(f) The Administrative Agent shall maintain at its address
referred to in subsection 9.2 a register (the "Register") for the recordation
of the names and addresses of the Banks, the Commitments of the Banks, and the
principal amount of each Type of Loan owing to each Bank from time to time.
The entries in the Register shall be conclusive, in the absence of clearly
demonstrable error, and the Company, the Administrative Agent and the Banks
may treat each Person whose name
36
is recorded in the Register as the owner of the Loans recorded therein for all
purposes of this Agreement. The Register shall be available for inspection by
the Company or any Bank at any reasonable time and from time to time upon
reasonable prior notice. The Administrative Agent shall give prompt written
notice to the Company of the making of any entry in the Register or any change
in any such entry.
9.8 Right of Set-off. Upon (a) the occurrence and during the
continuance of an Event of Default and (b) with the consent of the Required
Banks, each Bank is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held
and other indebtedness at any time owing by such Bank (including, without
limitation, its branches) to or for the credit or the account of the Company
against any and all of the obligations of the Company now or hereafter
existing under this Agreement, irrespective of whether or not such Bank shall
have made any demand under this Agreement and although such obligations may be
unmatured. Each Bank agrees promptly to notify the Company after any such
set-off and application made by such Bank, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Bank under this subsection are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which such
Bank may have.
9.9 Adjustments. If any Bank (a "benefitted Bank") shall at
any time, except in connection with any termination or assignment of or by
such Bank pursuant to this Agreement, receive any payment of all or part of
its Loans made hereunder, or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in clause (f) of Section 7, or
otherwise) in a greater proportion than any such payment to, or any collateral
received by, any other Bank, if any, in respect of such other Bank's Loans, or
interest thereon, such benefitted Bank shall purchase for cash from the other
Banks such portion of each such other Bank's Loans, or shall provide such
other Banks with the benefits of any such collateral, or the proceeds thereof,
as shall be necessary to cause such benefitted Bank to share the excess
payment or benefits of such collateral or proceeds ratably with each of the
Banks; provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such benefitted Bank, such purchase
shall be rescinded, and the purchase price and benefits returned, to the
extent of such recovery, but without interest. The Company agrees that each
Bank so purchasing a portion of another Bank's Loans may exercise all rights
of payment (including, without limitation, rights of set-off) with respect to
such portion as fully as if such Bank were the direct holder of such portion.
9.10 New Banks. During the term of this Agreement with the
consent of the Company and upon notification to the Administrative Agent, one
or more additional financial institutions may become a party to this Agreement
by executing a supplement hereto with the Company and the Administrative
Agent, substantially in the form of Exhibit B, whereupon such financial
institution (herein called a "New Bank") shall become a Bank for all purposes
and to the same extent as if originally a party hereto and shall be bound by
and entitled to the benefits of this Agreement, provided that any such New
Bank has also become a New Bank under the Chrysler Agreement pursuant to
subsection 13.9 thereof. Effective as of the date on which any such New Bank
becomes a Bank pursuant to the provisions of this subsection, the
Administrative Agent, each Bank and the Company shall receive a notice from
Chrysler of each Bank's Commitment and the aggregate Commitments pursuant to
subsection 2.5 of the Chrysler Agreement. If on the date upon which such New
Bank becomes a Bank pursuant to the provisions of this subsection 9.10, there
is an unpaid principal amount of the Loans outstanding hereunder, the Company
shall borrow from such New Bank through the Administrative Agent, in an amount
determined by multiplying the amount of such New Bank's Commitment by a
fraction, the numerator of which shall be the then unpaid principal amount
37
of the Loans outstanding hereunder and the denominator of which shall be the
aggregate Commitments of the Banks other than the New Bank. Notwithstanding
anything herein to the contrary, if there are Eurodollar Loans outstanding, a
financial institution that becomes a New Bank will make Eurodollar Loans to
the Company (pro rata according to its Commitment Percentage) having Interest
Periods corresponding to the then unexpired portions of the respective
Interest Periods of such Eurodollar Loans and bearing interest at a rate equal
to the respective interest rates then applicable to such Eurodollar Loans. The
Administrative Agent shall advise the Banks of each addition of a New Bank
hereunder, of the amount of its Commitment and of the amount of any borrowing
from it hereunder made simultaneously upon its addition.
9.11 Increase in Commitments. During the term of this
Agreement, upon any Bank increasing its Commitment under the Chrysler
Agreement and Chrysler giving the notice required by subsection 2.5(c) of the
Chrysler Agreement, such Bank shall be deemed to have increased its Commitment
hereunder as set forth in such notice, whereupon such Bank shall be bound by
and entitled to the benefits of this Agreement with respect to the full amount
of its Commitment as so increased. Effective as of the date on which any such
Bank increases its Commitment pursuant to the provisions of this subsection
9.11, the Administrative Agent, each Bank and the Company shall receive a
notice from Chrysler of each Bank's Commitment and the aggregate Commitments
pursuant to subsection 2.5 of the Chrysler Agreement. If on the date upon
which such Bank increases its Commitment pursuant to this subsection 9.11
there is an unpaid principal amount of the Loans hereunder, the Company shall
borrow from such Bank through the Administrative Agent, in an amount
determined by multiplying the amount of the increase in such Bank's Commitment
by a fraction, the numerator of which shall be the then unpaid principal
amount of the Loans outstanding hereunder and the denominator of which shall
be the aggregate Commitments of the Banks other than the amount of the
additional Commitment of such Bank. Notwithstanding anything herein to the
contrary, if there are Eurodollar Loans outstanding, a Bank that increases its
Commitment pursuant to this subsection 9.11 will make Eurodollar Loans to the
Company (pro rata according to the amount of the increase in such Bank's
Commitment) having Interest Periods corresponding to the then unexpired
portions of the respective Interest Periods of such Eurodollar Loans and
bearing interest at a rate equal to the respective interest rates then
applicable to such Eurodollar Loans. The Administrative Agent shall advise the
Banks of such increase in the Commitment of a Bank and of the amount of any
borrowing from it hereunder made simultaneously upon such increase.
9.12 Tax Forms. If any Bank which becomes a party to this
Agreement on any day after the date hereof pursuant to subsection 9.7 or 9.10
is organized under the laws of any jurisdiction other than the United States
or any state thereof, such Bank shall on such day (i) represent to the
transferor Bank (if applicable), the Administrative Agent and the Company that
under applicable law and treaties no taxes will be required to be withheld by
the Administrative Agent, the Company or the transferor Bank (if applicable)
with respect to any payments to be made to such Bank in respect of the Loans
hereunder, (ii) furnish to the transferor Bank (if applicable), the
Administrative Agent and the Company either U.S. Internal Revenue Service Form
4224 or U.S. Internal Revenue Service Form 1001 (wherein such Bank claims
entitlement to complete exemption from U.S. federal withholding tax on all
interest payments hereunder) and (iii) agree (for the benefit of the
transferor Bank (if applicable), the Administrative Agent and the Company) to
provide the transferor Bank (if applicable), the Administrative Agent and the
Company a new Form 4224 or Form 1001 upon the expiration or obsolescence of
any previously delivered form and comparable statements in accordance with
applicable U.S. laws and regulations and amendments duly executed and
completed by such Bank, and to comply from time to time with all applicable
U.S. laws and regulations with regard to such withholding tax exemption.
38
9.13 Counterparts. This Agreement may be executed by one or
more of the parties hereto on any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the
same instrument. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Company and the Administrative Agent.
9.14 Governing Law. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
9.15 Submission to Jurisdiction; Waivers. The Company hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action
or proceeding commenced by any party hereto relating to this
Agreement, 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 Company at its address set forth in subsection 9.2 or
at such other address of which the Administrative Agent shall have
been notified with copies addressed as set forth in subsection 9.2;
and
(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 sue in any other jurisdiction.
9.16 Integration. This Agreement represents the agreement of
each party with respect to the subject matter hereof, and there are no
promises or representations by the Administrative Agent or any Bank relative
to the subject matter hereof not reflected herein.
39
9.17 WAIVERS OF JURY TRIAL. THE COMPANY, THE
ADMINISTRATIVE AGENT AND THE BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
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.
CHRYSLER FINANCIAL CORPORATION
By:\s\ D.M. Cantwell
------------------------------------
Title: Vice President and Treasurer
CHEMICAL BANK, as Administrative Agent
By:\s\ Rosemary Bradley
------------------------------------
Title: Vice President
SCHEDULE I TO
COMMITMENT TRANSFER AGREEMENT
Chemical Bank
The Chase Manhattan Bank, N.A.
Royal Bank of Canada
ABN AMRO Bank N.V.
Bank of America NT & SA
The Bank of New York
The Bank of Nova Scotia
Banque Nationale de Paris, Chicago Branch
Canadian Imperial Bank of Commerce
Comerica Bank
Commerzbank Aktiengesellschaft Grand Cayman Branch
Credit Lyonnais Chicago Branch
NBD Bank
The Long-Term Credit Bank of Japan, Ltd. New York Branch
Morgan Guaranty Trust Company of New York
NationsBank, N.A.
Societe Generale
The Toronto-Dominion Bank
Arab Banking Corporation
Banca Nazionale Del Lavoro S.p.A. New York Branch
Bankers Trust Company
Bank of Montreal
Barclays Bank PLC
CARIPLO - Cassa di Risparmio delle Provincie Lombarde S.p.A.
Credit Suisse
The Dai-Ichi Kangyo Bank, Ltd.
The Fuji Bank, Limited
Istituto Bancario San Paolo di Torino SpA
Mellon Bank N.A.
National Bank of Canada
National Westminster Bank Plc
The Sanwa Bank, Ltd., The Chicago Branch
Swiss Bank Corporation, New York Branch
Union Bank of Switzerland (Chicago Branch)
The Yasuda Trust & Banking Co., Ltd.
SCHEDULE II TO
COMMITMENT TRANSFER AGREEMENT
None
EXHIBIT A-1 TO
COMMITMENT TRANSFER AGREEMENT
[FORM OF OPINION OF SIMPSON THACHER & BARTLETT]
April 26, 1996
To: Chemical Bank, as administrative agent under the
Agreement referred to below
270 Park Avenue
New York, New York 10017
The Banks listed on Schedule I hereto
Re: The Commitment Transfer Agreement, dated as of April 26,
1996 (the "Agreement"), among Chrysler Financial
Corporation (the "Company"), the Banks parties thereto
and Chemical Bank, as administrative agent (the
"Administrative Agent").
Ladies and Gentlemen:
We have acted as counsel to the Administrative Agent in
connection with the preparation, execution and delivery of the Agreement.
This opinion is delivered to you pursuant to subsection
4.1(e)(i) of the Agreement. Unless otherwise defined herein, terms defined in
the Agreement and used herein shall have the respective meanings set forth in
the Agreement.
In arriving at the opinion expressed below, we have examined
(a) a counterpart of the Agreement, signed by the Company and the
Administrative Agent and (b) such documents as we have deemed necessary or
appropriate for the purposes of this opinion.
In such examination, we have assumed the genuineness of all
signatures, the authenticity, regularity and completeness of all documents
submitted to us as originals, the completeness of all documents submitted to
us as certified, conformed or photostatic copies and the conformity of such
documents to the original documents.
We have also assumed that the Agreement has been duly
authorized, executed and delivered by the Company, that the Company is duly
incorporated and validly existing under the laws of its jurisdiction of
incorporation and has the corporate power and authority to execute, deliver
and perform its obligations under the Agreement, that the Company is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, that the execution, delivery and performance by the Company of the
Agreement have been duly authorized by all necessary corporate action on the
part of the Company, do
2
not contravene its certificate of incorporation or by-laws or similar
organizational documents or violate, or require any consent not obtained
under, any applicable law or regulation or any order, writ, injunction or
decree of any court or other Governmental Authority binding upon the Company
and do not violate, or require any consent not obtained under, any contractual
obligation applicable to or binding upon the Company, and that the Agreement
constitutes a valid and legally binding obligation of the Banks.
Based upon the foregoing, and subject to the qualifications and
comments set forth below, we are of the opinion that, insofar as the law of
the State of New York is concerned, the Agreement constitutes a valid and
legally binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing, except that we express no
opinion as to (a) subsection 9.15(b) of the Agreement insofar as it relates to
an action brought in the United States District Court for the Southern
District of New York and note that such matters may be raised by such court;
(b) any indemnification obligations of the Company under the Agreement to the
extent such obligations might be deemed to be inconsistent with public policy;
(c) any provision of the Agreement that purports to establish an evidentiary
standard for determinations by the Banks or the Administrative Agent; or (d)
any setoff right contained in subsection 9.8 or 9.9 of the Agreement
authorizing any Bank to set off and apply deposits at any time held, and any
other indebtedness at any time owing, by such Bank to or for the account of
any party against any participation transferred to or by such Bank.
We are members of the Bar of the State of New York and we do
not express any opinion herein concerning any law other than the law of the
State of New York.
This opinion has been rendered solely for your benefit in
connection with the Agreement and the transactions contemplated thereby and
may not be relied upon by you for any other purpose, or relied upon by any
other person, firm or corporation without our prior written consent or
furnished to any other person, firm or corporation other than any assignee or
participant under the Agreement or any bank examiner or other regulatory
authority without our prior written consent.
Very truly yours,
SIMPSON THACHER & BARTLETT
SCHEDULE I
THE BANKS
EXHIBIT A-2 TO
COMMITMENT TRANSFER AGREEMENT
[FORM OF OPINION OF GENERAL COUNSEL
of
THE COMPANY]
April 26, 1996
To: Chemical Bank, as administrative agent
270 Park Avenue
New York, New York 10017
The Banks parties to the Agreement referred to below
Dear Sirs:
I am General Counsel of Chrysler Financial Corporation, a
Michigan corporation (the "Company"), and have acted as counsel to the Company
in connection with the execution and delivery of the Commitment Transfer
Agreement, dated as of April 26, 1996 (the "Agreement"), among Chrysler
Financial Corporation (the "Company"), the Banks parties thereto, and Chemical
Bank, as administrative agent. This opinion is delivered to you pursuant to
subsection 4.1(e)(ii) of the Agreement. Terms used herein which are defined in
the Agreement shall have the respective meanings set forth in the Agreement,
unless otherwise defined herein.
In connection with this opinion, I, or members of my staff,
have examined executed copies (or telecopies of signature pages) of the
Agreement and such corporate documents and records of the Company, and
certificates of public officials and officers of the Company, and such other
documents, as I, or members of my staff, have deemed necessary or appropriate
for the purposes of this opinion. For the purposes of this opinion, I have
assumed (i) the genuineness of all signatures of, and the authority of,
Persons signing the Agreement on behalf of parties thereto other than the
Company, (ii) the authenticity of all documents submitted to me as originals,
(iii) the conformity to authentic original documents of all documents
submitted to me as certified, conformed or photostatic copies and (iv) the due
authorization, execution and delivery of the Agreement by the parties thereto
other than Company.
My opinions expressed herein are limited to the laws of the
State of Michigan, the State of New York, the General Corporation Law of the
State of Delaware, and the Federal laws of the United States of America (the
"Specified Laws"), and I do not express any opinion herein concerning any
other law (including, without limitation, any law of any political subdivision
of the foregoing States). For the purposes of this opinion I have
2
assumed that the laws of the State of New York are identical to the laws of
the State of Michigan.
Based upon the foregoing and subject to the qualifications set
forth herein, I am of the opinion that:
1. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Michigan
and is duly qualified as a foreign corporation to do business and is
in good standing in each of the jurisdictions in which the character
of the properties owned or held under lease by it or the nature of
business transacted by it makes such qualification necessary, except
to the extent that the failure to be so qualified or in good standing
would not have a material adverse effect on the business, operations
or financial condition of the Company and its subsidiaries taken as a
whole.
2. The Agreement has been duly executed and delivered on behalf
of the Company. The execution, delivery and performance by the Company
of the Agreement (a) are within the corporate powers of the Company,
(b) have been duly authorized by all necessary corporate action, and
(c) do not contravene (i) the charter or by-laws of the Company, (ii)
any law, rule, or regulation under the Specified Laws presently in
effect which affects or binds the Company or any of its respective
properties (including, without limitation, Regulations G, T, U and X
of the Board of Governors of the Federal Reserve System) or, to the
best of my knowledge, any order, writ, judgment, injunction, decree,
determination or award presently in effect which affects or binds the
Company or any of its respective properties or (iii) to the best of my
knowledge, any Contractual Obligation to which the Company is a party;
except to the extent that such contravention, in case of either clause
(ii) or (iii), would not have a material adverse effect on the
business, operations or financial condition of the Company and its
subsidiaries taken as a whole or on the ability of the Company to
fulfill its obligations under the Agreement or on the rights and
remedies of the Administrative Agent or the Banks thereunder.
3. No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority under the
Specified Laws is required to be obtained or made by the Company for
the due execution, delivery and performance by the Company of the
Agreement.
4. To the best of my knowledge after due inquiry, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or threatened by or against the
Company or any of its Subsidiaries or against any of their respective
properties or revenues (a) with respect to the Agreement, or (b) which
would, if adversely determined, have a material adverse effect on the
business, operations, property or financial condition of the Company
and its Subsidiaries taken as a whole.
3
5. The Agreement constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except as affected by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith
and fair dealing.
6. The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
7. Neither the Administrative Agent nor the Banks will become
subject to any income, franchise or other tax imposed by a
Governmental Authority of the State of Michigan solely by reason of
the transactions contemplated by the Agreement.
I express no opinion as to (a) the effect of any laws other
than the Specified Laws which limit the rates of interest legally chargeable
or collectible; (b) any obligation of any party to the Agreement to indemnify
other Persons to the extent such obligation might be deemed to be inconsistent
with public policy; (c) any setoff right contained in subsection 9.9 of the
Agreement authorizing any Bank to set off and apply deposits at any time held,
and any other indebtedness at any time owing, by such Bank to or for the
account of any party against any participation transferred to or by such Bank;
(d) any agreement to pay interest on interest; (e) subsection 9.15(b) of the
Agreement insofar as it relates to an action brought in the United States
District Court for the Southern District of New York and note that such
matters may be raised by such court; or (f) any provision of the Agreement
that purports to establish an evidentiary standard for determinations by the
Banks.
This opinion is given as of the date hereof and I undertake no
obligation to notify you of any changes in law or fact occurring after the
date hereof. This opinion is furnished to you solely in connection with the
execution and delivery of the Agreement and may not be furnished to any other
person, firm or corporation other than any assignee or participant under the
Agreement or any bank examiner or other regulatory authority without my prior
written consent and may not be relied upon by any one other than you, the
other counsel providing legal opinions to you pursuant to subsection 4.1(e) of
the Agreement, and by you and such other counsel only in connection with the
execution and delivery of the Agreement.
Very truly yours,
EXHIBIT B TO
COMMITMENT TRANSFER AGREEMENT
[FORM OF NEW BANK SUPPLEMENT]
SUPPLEMENT, dated ________, to the Commitment Transfer
Agreement, dated as of April 26, 1996 (as amended, supplemented or otherwise
modified from time to time, the "Agreement"), among CHRYSLER FINANCIAL
CORPORATION (the "Company"), the Banks parties thereto and CHEMICAL BANK, as
administrative agent.
W I T N E S S E T H :
WHEREAS, the Agreement provides in subsection 9.10 that any
commercial bank, although not originally a party thereto, may become a party
to the Agreement with the consent of the Company by executing and delivering
to the Company and the Administrative Agent a supplement to the Agreement in
substantially the form of this Supplement; and
WHEREAS, the undersigned was not an original party to the
Agreement but now desires to become a party thereto;
NOW, THEREFORE, the undersigned hereby agrees as follows:
1. The undersigned agrees to be bound by the provisions of the
Agreement, and agrees that it shall, on the date this Supplement is
accepted by the Company and the Administrative Agent, become a Bank
for all purposes of the Agreement to the same extent as if originally
a party thereto.
2. The amount of the Commitment of the undersigned shall be
$___________.
3. The undersigned's address for notices for the purposes of
the Agreement is as follows:
4. The undersigned's Chrysler Financial Corporation Clearing
Account No. is _________, and the name of the Automated Clearing
House member at which such Clearing Account is located is
_____________.
5. Terms defined in the Agreement shall have their defined
meanings when used herein.
2
IN WITNESS WHEREOF, the undersigned has caused this Supplement
to be executed and delivered by a duly authorized officer on the date first
above written.
[INSERT NAME OF BANK]
By____________________________
Title:
Accepted this ____ day of
_____________, 199_
CHRYSLER FINANCIAL CORPORATION
By___________________________
Title:
Accepted this ___ day of
_____________, 199_
CHEMICAL BANK, as Administrative Agent
By___________________________
Title:
EXHIBIT C TO
COMMITMENT TRANSFER AGREEMENT
[FORM OF ADDENDUM]
ADDENDUM TO COMMITMENT TRANSFER AGREEMENT
The undersigned Bank (i) agrees to all of the provisions of the
Commitment Transfer Agreement dated as of April 26, 1996 (as amended,
supplemented or otherwise modified from time to time, the "Commitment Transfer
Agreement") among Chrysler Financial Corporation (the "Company"), the Banks
parties thereto, and Chemical Bank, as administrative agent, and (ii) becomes
a party thereto, as a Bank, with an obligation to make Loans to the Company in
an aggregate principal amount not to exceed such Bank's Transferred Commitment
at such time set forth opposite such Bank's name in the most recent notice
with respect thereto delivered by Chrysler Corporation pursuant to the
Chrysler Agreement, as such amount may be reduced or increased from time to
time as provided in the Commitment Transfer Agreement. Unless otherwise
defined herein, capitalized terms defined in the Commitment Transfer Agreement
shall have their respective defined meanings herein.
Set forth below is our address for notices for the purposes of
subsection 9.2 of the Commitment Transfer Agreement:
Address for Notices: __________________________________________
__________________________________________
Attention:
Telecopy:
Clearing Account No.________________________________________________
Name of Automated Clearing House Member
at which Clearing Account is Located:_______________________________
Name of Bank ____________________________________
As of April 26, 1996 By____________________________________________
Title:
EXHIBIT D TO
COMMITMENT TRANSFER AGREEMENT
[FORM OF CLOSING CERTIFICATE]
CLOSING CERTIFICATE
Pursuant to subsections 4.1(b), (c) and (d) of the Commitment
Transfer Agreement dated as of April 26, 1996 (the "Agreement"; unless
otherwise defined herein, terms defined in the Agreement and used herein shall
have the meanings given to them in the Agreement) among CHRYSLER FINANCIAL
CORPORATION (the "Company"), the Banks parties thereto, and CHEMICAL BANK, as
administrative agent, the undersigned ________ of the Company hereby certifies
as follows:
1. The representations and warranties of the Company contained
in the Agreement or in any certificate, document or financial or other
statement furnished by or on behalf of the Company pursuant to or in
connection with the Agreement are true and correct in all material
respects on and as of the date hereof with the same effect as if made
on the date hereof except for representations and warranties stated to
relate to a specific earlier date, in which case such representations
and warranties were true and correct in all material respects as of
such earlier date;
2. No Default or Event of Default has occurred and is
continuing as of the date hereof or after giving effect to any Loans
to be made on the date hereof; and
3. ____________________ is and at all times since
_____________________ 19__, has been the duly elected and qualified
[Assistant] Secretary of the Company and the signature set forth on
the signature line for such officer below is such officer's true and
genuine signature;
and the undersigned [Assistant] Secretary of the Company hereby certifies as
follows:
4. There are no liquidation or dissolution proceedings pending
or to my knowledge threatened against the Company, nor to my knowledge
has any other event occurred affecting or threatening the corporate
existence of the Company;
5. The Company is a corporation duly organized, validly
existing and in good standing under the laws of Michigan;
6. Attached hereto as Exhibit A is a complete and correct copy
of resolutions duly adopted by the Board of Directors (or a duly
authorized committee thereof) of the Company on _________, 19__; such
resolutions have not in any way been amended, modified, revoked or
rescinded and have been in full force and effect since their adoption
to and including the date hereof and are now in full force and effect;
such resolutions are the only corporate proceedings of the Company now
in force relating to or affecting the matters referred to therein;
7. Attached hereto as Exhibit B is a complete and correct copy
of the by-laws of the Company as in effect at all times since
_________________, 19__ to and including the
2
date hereof; and attached hereto as Exhibit C is a true and complete
copy of the certificate of incorporation of the Company as in effect
at all times since ___________________, 19__ to and including the date
hereof; and
8. The following persons are now duly elected and qualified
officers of the Company holding the offices indicated next to their
respective names below, and such officers have held such offices with
the Company at all times since ________________, 19__ to and including
the date hereof, and the signatures appearing opposite their
respective names below are the true and genuine signatures of such
officers, and each of such officers is duly authorized to execute and
deliver on behalf of the Company the Agreement and any certificate or
other document to be delivered by the Company pursuant to the
Agreement:
Name Office Signature
______________________ [________] _____________________
______________________ [Assistant] Secretary _____________________
IN WITNESS WHEREOF, the undersigned have hereto set our names.
_____________________________
Title: [___________] Title: [Assistant] Secretary
Date: April 26, 1996
EXHIBIT E TO
COMMITMENT TRANSFER AGREEMENT
[FORM OF NOTE]
NOTE
$ _______________ New York, New York
_________ __, 19__
FOR VALUE RECEIVED, the undersigned, CHRYSLER FINANCIAL
CORPORATION, a Michigan corporation (the "Company"), hereby promises to pay
to the order of (the "Bank") on the Termination Date at the office of
Chemical Bank located at 270 Park Avenue, New York, New York 10017, in lawful
money of the United States of America and in immediately available funds, the
principal amount of (a) ____________ Dollars ($________) or, if less, (b) the
aggregate unpaid principal amount of all Loans made by the Bank to the
Company pursuant to subsection 2.1 of the Agreement as hereinafter defined.
The Company further agrees to pay interest in like money at such office on
the unpaid principal amount hereof from time to time outstanding at the rates
and on the dates determined in accordance with subsection 2.7 of such
Agreement.
The holder of this note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof, the date, Type and amount of each
Loan made pursuant to the Agreement and the date and amount of each payment or
prepayment of principal thereof, each continuation thereof, each conversion of
all or a portion thereof to another Type and, in the case of Eurodollar Loans,
the length of each Interest Period with respect thereto. Each such endorsement
shall constitute prima facie evidence of the accuracy of the information
endorsed. The failure to make any such endorsement or any error in such
endorsement shall not affect the obligations of the Company in respect of any
Loan.
This note (a) has been issued pursuant to subsection 9.7(e) of the
Commitment Transfer Agreement, dated as of April 26, 1996 (as amended,
supplemented or otherwise modified from time to time, the "Agreement"), among
the Company, the Bank, the other banks parties thereto and Chemical Bank, as
administrative agent, (b) is subject to the provisions of the Agreement and
(c) is subject to prepayment in whole or in part as provided in the Agreement.
Upon the occurrence of any one or more of the Events of Default
specified in the Agreement, all amounts then remaining unpaid on this note
shall become, or may be declared to be, immediately due and payable, all as
provided in the Agreement.
All parties now and hereafter liable with respect to this note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Agreement and
used herein shall have the meanings given to them in the Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
CHRYSLER FINANCIAL CORPORATION
By:___________________________
Title:
Schedule A to Note
BASE RATE LOANS AND REPAYMENT OF BASE RATE LOANS
(4) (5)
(2) Amount of Base Amount of (6) (7)
Balance Forward Rate Loans Eurodollar Loans Amount of Base Unpaid Principal
from Column (7) of (3) Converted into Converted into Rate Loans Balance Base (8)
(1) Preceding Amount of Base Eurodollar Loans Base Rate Loans Repaid Rate Notation
Date Line Rate Loan (add) (subtract) (add) (subtract) Loans Made By
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Schedule B to Note
EURODOLLAR LOANS AND REPAYMENT OF EURODOLLAR LOANS
(5)
Amount of (6)
Eurodollar Amount of
(2) Loans Base Rate (7) (8)
Balance (3) Converted Loans Amount of Unpaid Principal
Forward from Amount of (4) into Base Converted into Eurodollar Balance (9)
(1) Column (8) of Eurodollar Interest Rate Loans Eurodollar Loans Repaid Eurodollar Notation
Date Preceding Line Loan (add) Period (subtract) Loans (add) (subtract) Loans Made By
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