Exhibit 4.58
FIRST AMENDMENT
FIRST AMENDMENT, dated as of November 9, 2001 (this "AMENDMENT"), to
the Agreement, dated as of August 30, 2001 (the "AGREEMENT"), between Liberty
Mutual Insurance Company, solely in its capacity as surety ("LIBERTY") and ANC
Rental Corporation ("ANC" or the "COMPANY").
WHEREAS, the Company has requested that Liberty amend certain
provisions of the Agreement;
WHEREAS, Liberty has agreed to amend the Agreement, but only to the
extent and on the terms and conditions set forth below; and
WHEREAS, in connection with and as a condition to Liberty's agreement
to the provisions of this Amendment, it will be necessary (i) for Liberty to
enter into an amendment (the "INDEMNIFICATION AMENDMENT") to that certain
Indemnification Agreement, dated as of August 30, 2001, between Liberty and
AutoNation, Inc., and (ii) for certain other agreements and bonds to be executed
and delivered, as provided in this Amendment.
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby duly acknowledged, Liberty and ANC hereby agree
as follows:
1. DEFINITIONS. All capitalized terms used but not defined herein shall
have the meanings specified in the Agreement.
2. AMENDMENT TO SECTION 1.1 OF THE AGREEMENT. Section 1.1 of the
Agreement is hereby amended by deleting in its entirety the definition of
"AutoNation Indemnification Agreement" and replacing it with the following:
"AUTONATION INDEMNIFICATION AGREEMENT" means the Indemnification
Agreement, dated as of August 30, 2001, as amended, executed and
delivered by AutoNation in favor of Liberty Mutual Insurance
Company relating to the New AIG Retro Bonding."
3. AMENDMENT OF SECTION 4.4 OF THE AGREEMENT. Section 4.4 of the
Agreement is hereby deleted in its entirety and replaced with the following:
4.4 (a) ANC has requested that Liberty issue Surety Bond
Coverage in the form of new, previously unissued Premium and
Deductible Surety Bond Coverage in the approximate aggregate
penal sum of $29.5 million in favor of member companies of AIG
(such requested Premium and
Deductible Surety Bond Coverage hereafter referred to as the
"NEW AIG RETRO BONDING"). Notwithstanding 4.1(d), Liberty
agrees that it will issue the New AIG Retro Bonding as
promptly as reasonably practicable after all the following
terms and conditions are met:
(i) such New AIG Retro Bonding shall be fully collateralized
by the AutoNation Indemnification Agreement, it being
understood that the indemnity provided pursuant to the
AutoNation Indemnification Agreement (x) shall be secondary,
for a limited period of time, to the Collateral granted under
the Collateral Agreement, and shall not exceed the amount of
$29.5 million; (ii) AIG shall, simultaneously with the
issuance by Liberty and delivery to AIG of the New AIG Retro
Bonding, formally release and deliver to Liberty Indemnity
Agreement Bond Nos. 15004548 and 15008426 (previously issued
by Liberty on behalf of ANC's former corporate parent,
Republic Industries, Inc., prior to AIG's release of the
obligations of Republic Industries, Inc. to AIG which were the
subject of such bonds), which bonds shall be marked
"cancelled" under the signature of an authorized officer of
AIG; (iii) AIG shall have agreed to a bond form for the New
AIG Retro Bonding, acceptable to Liberty in its sole
discretion, providing INTER ALIA, that AIG will look to,
collect against and exhaust the $9 million letter of credit
heretofore provided to AIG on behalf of ANC ("AIG L/C") before
making any demand whatsoever under the New AIG Retro Bonding;
(iv) AIG and Liberty shall have executed a side-agreement
("AIG SIDE AGREEMENT") providing, INTER ALIA, that (A) AIG
will not, and will not attempt to, reduce, release, impair or
otherwise modify the AIG L/C without the written consent of
Liberty (which consent may be withheld in Liberty's sole
discretion), and (B) AIG will not, and will not attempt to,
reduce, release, impair, substitute or otherwise modify the
AIG L/C unless and until any remaining actual and/or
contingent liability of Liberty in respect of the New AIG
Retro Bonding has been permanently reduced to zero ($0), as
determined by Liberty in its sole discretion; and (v) the
conditions of subsections (i) through (v) of this section are
complied with no later than November 9, 2001.
(b) In addition to the preconditions to the issuance of the
New AIG Retro Bonding set forth in section 4.4(a), ANC
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agrees that so long as such New AIG Retro Bonding remains in
effect, regardless of the penal sum of such bonding in effect
at any time, and/or until all risk undertaken by Liberty
(whether residual or future) under or in connection with such
New AIG Retro Bonding has been, in Liberty's sole and absolute
discretion, conclusively terminated, ANC shall at all times
(i) no later than 91 days prior to each and every date upon
which the Maximum Amount payable under the AutoNation
Indemnification Agreement is scheduled to decrease in
accordance with its terms, deliver to Liberty cash or letter
of credit collateral (at Liberty's option) in an amount equal
to or exceeding the amount of such scheduled decrease; (ii) no
later than 91 days prior to either (A) any renewal date of any
part of the New AIG Retro Bonding or (B) the effective date of
any increase in bond collateral requested (B) the effective
date of any increase in bond collateral requested by AIG,
deliver to Liberty additional cash or letter of credit
collateral (at the option of Liberty) in an amount equal to
the difference between (x) the amount of the aggregate penal
sum of the New AIG Retro Bonding that is requested as of the
renewal date or the effective date of the bond increase demand
from AIG, and (y) the sum of (a) the Maximum Amount payable
under the AutoNation Indemnification Agreement as of such
renewal date or such effective date, and (b) all cash or
letter of credit collateral held by Liberty specifically to
secure the New AIG Retro Bonding as of that date which is 92
days prior to such renewal date or such effective date; (iii)
within six (6) business days of written demand by Liberty, ANC
shall deliver such additional cash (or, at Liberty's option,
letter or credit) collateral to secure the New AIG Retro
Bonding as Liberty, in its sole discretion, shall determine is
required to assure that the amount of such cash or letter of
credit collateral held by Liberty, taken together with the
then applicable Maximum Amount payable under the AutoNation
Indemnification Agreement (and without regard to the value at
any time of any of the Collateral pledged to the Collateral
Trustee) is sufficient to fully collateralize Liberty's
obligations and risk under the New AIG Retro Bonding, provided
that, at such times as Liberty, in its sole discretion, deems
appropriate and within a reasonable time following written
demand from ANC, and so long as no event has occurred which
but for notice or the passage of time would constitute an
Event of Default
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hereunder (a "DEFAULT") that remains uncured or that has not
been waived in writing, Liberty shall return to ANC or shall
surrender that part of such cash or letter or credit
collateral as Liberty, in its sole discretion, shall agree
constitutes an excess of collateral above and beyond the
amounts required hereunder; and (iv) if ANC delivers
additional cash (or, at Liberty's option, letter of credit)
collateral above and beyond the amounts required hereunder
designated as collateral to secure the New AIG Retro Bonding,
then (1) so long as no Default under this Agreement has
occurred, and (2) effective as of the date when Liberty's
possession of or interest in such additional cash or letter of
credit collateral has been perfected for more than 91 days
without commencement of any Insolvency Proceeding, then
Liberty shall treat such additional cash and/or letter of
credit collateral as L/C Collateral under the terms of the
AutoNation Indemnification Agreement.
(c) ANC agrees, on behalf of itself and the other members of
the ANC Group (including their respective successors, assigns,
representatives and trustees), that any payments made by
AutoNation to Liberty under the terms of the AutoNation
Indemnification Agreement shall not be deemed to reduce the
amount due from ANC or any other member of the ANC Group to
Liberty or to any of Liberty's affiliates under the Indemnity
Agreements or under any other Surety Bond Documents; or to
reduce any sums secured by the Collateral.
(d) The Company agrees that it will at all times maintain,
continue and keep effective the AIG L/C, and that neither the
Company nor any other member of the ANC Group, without the
prior written consent of Liberty (which may be withheld in
Liberty's sole discretion), will directly or indirectly take
any actions, or cooperate with or suffer to exist any actions,
to reduce, modify, impair, substitute or release the AIG L/C.
Without limiting the foregoing, ANC acknowledges that it has
reviewed, and will not take any actions to interfere with, the
operation of the AIG Side Letter."
4. REPRESENTATIONS AND WARRANTIES. ANC hereby reiterates and makes, as
of the date of this Amendment, the representations and warranties contained in
Sections 8.1 through 8.10 of the Agreement, except that the representation in
Section 8.5 of the Agreement is amended by adding after the word "10-Q" the
words "or in a press release
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issued by ANC prior to the date hereof." All references in such sections to the
"Agreement" will be deemed to be references to the Agreement as amended and
modified by this Amendment.
5. LIMITED AMENDMENT. Except as expressly amended herein, the Agreement
shall continue to be, and shall remain, in full force and effect. This
Amendment, which is integrated with and becomes a part of the Agreement, shall
not be deemed to be a waiver of, or consent to, or a modification or amendment
of, any other term or condition of the Agreement or to prejudice any other right
or rights which Liberty may now have or may have in the future under or in
connection with the Agreement or any of the instruments or agreements referred
to therein, as the same may be amended from time to time.
6. CONDITIONS TO EFFECTIVENESS. This Amendment will not be deemed to be
effective until each of the following, in form and substance acceptable to
Liberty in its sole discretion, has been received:
(a) a fully executed Indemnification Amendment;
(b) a fully executed AIG Side Letter; and
(c) a copy of the AIG L/C.
7. COUNTERPARTS. This Amendment may be executed by one or more of the
parties hereto in any number of separate counterparts (which may include
counterparts delivered by facsimile transmission) and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.
8. CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER. THIS AMENDMENT AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK AS
APPLIED TO AGREEMENTS EXECUTED AND TO BE PERFORMED EXCLUSIVELY WITHIN SUCH
STATE, WITHOUT REGARD TO CHOICE OF LAW PRINCIPLES. THE UNDERSIGNED AGREE THAT
ANY DISPUTE BETWEEN THE UNDERSIGNED WILL AT LIBERTY'S OPTION BE RESOLVED
EXCLUSIVELY IN A COURT OF COMPETENT JURISDICTION LOCATED IN THE STATE OF NEW
YORK AND COUNTY OF NEW YORK. ANC FURTHER CONSENTS TO THE PERSONAL JURISDICTION
AND VENUE OF ANY COURT IN WHICH ANY ACTION MAY BE BROUGHT AGAINST IT BY LIBERTY
AND TO SERVICE OF PROCESS IN ANY SUCH ACTION BY CERTIFIED MAIL, RETURN RECEIPT
REQUESTED OR BY ANY MEANS GIVING ACTUAL NOTICE OF SUCH PROCESS TO ANC. ANC
HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY SUCH ACTION.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their respective duly authorized officers as of the
date first above written.
ANC RENTAL CORPORATION
By /s/ Mary E. Wood
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Name: Mary E. Wood
Title: SVP Shared Services
LIBERTY MUTUAL INSURANCE COMPANY,
solely in its capacity as surety
By
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Name:
Title:
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