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Published CUSIP Number: 14312CAA5
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CREDIT AGREEMENT
Dated as of August 24, 2005
among
CARMAX AUTO SUPERSTORES, INC.,
as the Revolving Borrower,
CERTAIN SUBSIDIARIES,
as Designated Borrowers,
CARMAX, INC.,
and
BANK OF AMERICA, N.A.,
as Administrative Agent, Swing Line Lender,
New Vehicle Swing Line Lender and L/C Issuer
and
JPMORGAN CHASE BANK, N.A.
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Co-Syndication Agents,
and
SUNTRUST BANK
and
TOYOTA MOTOR CREDIT CORPORATION,
as Co-Documentation Agents
and
The Other Lenders Party Hereto
BANC OF AMERICA SECURITIES LLC,
as
Sole Lead Arranger and Sole Book Manager
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C722003.23
TABLE OF CONTENTS
Section Page
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ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms...........................................................................................1
1.02 Other Interpretive Provisions..........................................................................26
1.03 Accounting Terms.......................................................................................27
1.04 Rounding...............................................................................................28
1.05 Times of Day...........................................................................................28
1.06 Letter of Credit Amounts...............................................................................28
ARTICLE II.
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 Committed Loans........................................................................................28
2.02 Borrowings, and Conversions and Continuations of Committed Loans.......................................28
2.03 Letters of Credit......................................................................................29
2.04 Swing Line Loans.......................................................................................38
2.05 New Vehicle Swing Line Loans...........................................................................42
2.06 Prepayments............................................................................................46
2.07 Termination or Reduction of Commitments................................................................47
2.08 Repayment of Loans.....................................................................................47
2.09 Interest...............................................................................................48
2.10 Fees...................................................................................................48
2.11 Computation of Interest and Fees.......................................................................49
2.12 Evidence of Debt.......................................................................................49
2.13 Payments Generally; Administrative Agent's Clawback....................................................50
2.14 Sharing of Payments by Lenders.........................................................................52
2.15 Designated Borrowers...................................................................................52
ARTICLE IIA.
SECURITY
2A.01. Security.................................................................................................54
2A.02. Further Assurances.......................................................................................55
2A.03. Information Regarding Collateral.........................................................................55
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes..................................................................................................56
3.02 Illegality.............................................................................................58
3.03 Inability to Determine Rates...........................................................................58
3.04 Increased Costs........................................................................................58
3.05 Mitigation Obligations; Replacement of Lenders.........................................................60
3.06 Survival...............................................................................................61
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ARTICLE IV.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 Conditions of Initial Credit Extension.................................................................61
4.02 Conditions to all Credit Extensions (other than pursuant to a Payment Commitment)......................63
4.03 Conditions to all New Vehicle Swing Line Borrowings pursuant to a Payment Commitment...................64
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
5.01 Existence, Qualification and Power; Compliance with Laws...............................................65
5.02 Authorization; No Contravention........................................................................65
5.03 Governmental Authorization; Other Consents.............................................................65
5.04 Binding Effect.........................................................................................65
5.05 Financial Statements; No Material Adverse Effect.......................................................65
5.06 Litigation.............................................................................................66
5.07 No Default.............................................................................................66
5.08 Ownership of Property; Liens...........................................................................66
5.09 Insurance..............................................................................................67
5.10 Environmental Compliance...............................................................................67
5.11 Taxes..................................................................................................67
5.12 ERISA Compliance.......................................................................................67
5.13 Subsidiaries; Equity Interests.........................................................................68
5.14 Margin Regulations; Investment Company Act; Public Utility Holding Company Act.........................68
5.15 Disclosure.............................................................................................68
5.16 Compliance with Laws...................................................................................68
5.17 Intellectual Property; Licenses, Etc...................................................................69
5.18 Books and Records......................................................................................69
5.19 Franchise Agreements...................................................................................69
5.20 Collateral.............................................................................................69
ARTICLE VI.
AFFIRMATIVE COVENANTS
6.01 Financial Statements...................................................................................70
6.02 Certificates; Other Information........................................................................71
6.03 Notices................................................................................................73
6.04 Payment of Obligations.................................................................................74
6.05 Preservation of Existence, Etc.........................................................................74
6.06 Maintenance of Properties..............................................................................74
6.07 Maintenance of Insurance...............................................................................74
6.08 Compliance with Laws and Contractual Obligations.......................................................75
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6.09 Books and Records......................................................................................75
6.10 Inspection Rights......................................................................................75
6.11 Use of Proceeds........................................................................................75
6.12 New Subsidiaries.......................................................................................75
6.13 Internal Control Events................................................................................76
6.14 Location of Vehicles...................................................................................76
ARTICLE VII.
NEGATIVE COVENANTS
7.01 Liens..................................................................................................77
7.02 Investments............................................................................................78
7.03 Fundamental Changes....................................................................................79
7.04 Dispositions...........................................................................................80
7.05 Change in Nature of Business...........................................................................81
7.06 Transactions with Affiliates...........................................................................81
7.07 Burdensome Agreements..................................................................................81
7.08 Use of Proceeds........................................................................................82
7.09 Financial Covenants....................................................................................82
7.10 Acquisitions...........................................................................................82
7.11 Borrowing Base.........................................................................................83
7.12 Capital Expenditures...................................................................................83
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default......................................................................................83
8.02 Remedies Upon Event of Default.........................................................................86
8.03 Application of Funds...................................................................................87
ARTICLE IX.
ADMINISTRATIVE AGENT
9.01 Appointment and Authority..............................................................................88
9.02 Rights as a Lender.....................................................................................88
9.03 Exculpatory Provisions.................................................................................88
9.04 Reliance by Administrative Agent.......................................................................89
9.05 Delegation of Duties...................................................................................90
9.06 Resignation of Administrative Agent....................................................................90
9.07 Non-Reliance on Administrative Agent and Other Lenders.................................................91
9.08 No Other Duties, Etc...................................................................................91
9.09 Administrative Agent May File Proofs of Claim..........................................................91
9.10 Collateral and Guaranty Matters........................................................................92
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ARTICLE X.
MISCELLANEOUS
10.01 Amendments, Etc........................................................................................93
10.02 Notices; Effectiveness; Electronic Communication.......................................................94
10.03 No Waiver; Cumulative Remedies.........................................................................96
10.04 Expenses; Indemnity; Damage Waiver.....................................................................96
10.05 Payments Set Aside.....................................................................................98
10.06 Successors and Assigns.................................................................................98
10.07 Treatment of Certain Information; Confidentiality.....................................................102
10.08 Right of Setoff.......................................................................................103
10.09 Interest Rate Limitation..............................................................................103
10.10 Counterparts; Integration; Effectiveness..............................................................104
10.11 Survival of Representations and Warranties............................................................104
10.12 Severability..........................................................................................104
10.13 Replacement of Lenders................................................................................104
10.14 Governing Law; Jurisdiction; Etc......................................................................105
10.15 Waiver of Jury Trial..................................................................................106
10.16 USA PATRIOT Act Notice................................................................................106
SIGNATURES.....................................................................................................S-1
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SCHEDULES
1.01 Term Securitization Programs*
2.01 Commitments and Applicable Percentages*
2A.03(a) Collateral Information*
4.01 Good Standing Jurisdictions*
5.06 Litigation*
5.13 Subsidiaries and Other Equity Investments*
6.14 Location of Vehicles*
7.01 Existing Liens*
7.02 Existing Investments*
10.02 Administrative Agent's Office; Certain Addresses for Notices*
10.06 Processing and Recordation Fees*
EXHIBITS
Form of
A Committed Loan Notice
B Swing Line Loan Notice
C New Vehicle Swing Line Loan Notice
D Note
E Compliance Certificate
F Borrowing Base Certificate*
G Borrowing Base Schedule*
H Assignment and Assumption*
I Company Guaranty Agreement*
J Subsidiary Guaranty Agreement*
K Joinder Agreement*
L Designated Borrower Notice*
M Opinion Matters*
N Security Agreement*
O Autoborrow Agreement*
*These schedules and exhibits have been omitted from the Credit Agreement as
filed. CarMax agrees to furnish supplementally to the Commission upon request
a copy of such schedules and exhibits.
C722003.23
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CREDIT AGREEMENT
This CREDIT AGREEMENT ("Agreement") is entered into as of August 24,
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2005, among CARMAX AUTO SUPERSTORES, INC., a Virginia corporation (the
"Revolving Borrower"), certain Subsidiaries of the Company party hereto pursuant
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to Section 2.15 (each a "Designated Borrower" and, together with the Revolving
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Borrower, the "Borrowers" and, each a "Borrower"), CARMAX, INC., a Virginia
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corporation (the "Company"), each lender from time to time party hereto
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(collectively, the "Lenders" and individually, a "Lender"), and BANK OF AMERICA,
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N.A., as Administrative Agent, Swing Line Lender, New Vehicle Swing Line Lender
and L/C Issuer.
The Company has requested that the Lenders provide a revolving credit
facility, and the Lenders are willing to do so on the terms and conditions set
forth herein.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms. As used in this Agreement, the following terms
shall have the meanings set forth below:
"ABCP Facility" means (a) the private securitization facility governed
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by the Transfer and Administration Agreement dated as of December 1, 2004 among
CarMax Funding II, as transferor, CarMax Business Services, LLC, a Delaware
limited liability company, individually and as servicer, Bank of America, as a
bank investor, as a class agent and as agent, and the other investors and class
agents party thereto, as amended, supplemented or otherwise modified from time
to time, and (b) any other asset-backed commercial paper facility under which
retail installment contracts originated by the Company or any other Loan Party
are sold, transferred or assigned from time to time to one or more special
purpose entities in a transaction that constitutes a "true sale" for bankruptcy
purposes (as evidenced by an opinion prepared and delivered in a manner
consistent with market standards by reputable independent counsel experienced in
securitization transactions) for a price equal to not less than the fair market
value of such retail installment contracts and on such other terms and
conditions as shall be reasonable and customary for such transactions; provided,
however, that (x) such arrangement does not include (i) provisions under which
the Company or any Subsidiary (other than an Excluded Special Purpose Finance
Subsidiary) directly assumes the credit risk associated with such retail
installment contracts, (ii) direct or indirect recourse provisions under which,
based on the historical performance of such retail installment contracts, the
Company or any Subsidiary (other than an Excluded Special Purpose Finance
Subsidiary) could reasonably be expected to suffer economic loss, or (iii) any
recourse provisions which are not customary for transactions of such type and
(y) such arrangement does not result in the creation of any Lien on the assets
of the Company or any Subsidiary (other than Excluded Special Purpose Finance
Subsidiaries), other than Liens on such retail installment contracts and the
Related Property.
"Acquisition" means the acquisition of (i) a controlling equity
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interest or other controlling ownership interest in another Person (including
C722003.23
the purchase of an option, warrant or convertible or similar type security to
acquire such a controlling interest at the time it becomes exercisable by the
holder thereof), whether by purchase of such equity or other ownership interest
or upon the exercise of an option or warrant for, or conversion of securities
into, such equity or other ownership interest, (ii) assets of another Person
which constitute all or substantially all of the assets of such Person or of a
line or lines of business conducted by such Person, or (iii) assets constituting
a vehicle dealership.
"Administrative Agent" means Bank of America in its capacity as
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administrative agent under any of the Loan Documents, or any successor
administrative agent.
"Administrative Agent's Office" means the Administrative Agent's
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address and, as appropriate, account as set forth on Schedule 10.02, or such
other address or account as the Administrative Agent may from time to time
notify to the Company and the Lenders.
"Administrative Questionnaire" means an Administrative Questionnaire in
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a form supplied by the Administrative Agent.
"Affiliate" means, with respect to any Person, another Person that
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directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Aggregate Commitments" means the Commitments of all the Lenders.
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"Agreement" means this Credit Agreement.
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"Applicable Percentage" means, with respect to any Lender at any time,
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the percentage (carried out to the ninth decimal place) of the Aggregate
Commitments represented by such Lender's Commitment at such time. If the
commitment of each Lender to make Loans and the obligation of the L/C Issuer to
make L/C Credit Extensions have been terminated pursuant to Section 8.02 or if
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the Aggregate Commitments have expired, then the Applicable Percentage of each
Lender shall be determined based on the Applicable Percentage of such Lender
most recently in effect, giving effect to any subsequent assignments. The
initial Applicable Percentage of each Lender is set forth opposite the name of
such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to
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which such Lender becomes a party hereto, as applicable.
"Applicable Rate" means a per annum rate equal to:
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(a) with respect to Base Rate Loans, 0.00%;
(b) with respect to Eurodollar Rate Loans, 1.15%;
(c) with respect to Letter of Credit Fees, 1.15%; and
(d) with respect to the Commitment Fee, 0.20%.
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"Approved Fund" means any Fund that is administered or managed by (a)a
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Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Arranger" means Banc of America Securities LLC, in its capacity as
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sole lead arranger and sole book manager.
"Assignee Group" means two or more Eligible Assignees that are
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Affiliates of one another or two or more Approved Funds managed by the same
investment advisor.
"Assignment and Assumption" means an assignment and assumption entered
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into by a Lender and an Eligible Assignee (with the consent of any party whose
consent is required by Section 10.06(b), and accepted by the Administrative
Agent, in substantially the form of Exhibit H or any other form approved by the
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Administrative Agent.
"Attributable Indebtedness" means, on any date, (a) in respect of any
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capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.
"Audited Financial Statements" means the audited consolidated balance
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sheet of the Company and its Subsidiaries as at February 28, 2005, and the
related consolidated statements of earnings, shareholders' equity and cash flows
of the Company and its Subsidiaries for the fiscal year ended on that date,
including the notes thereto.
"Autoborrow Agreement" means an agreement by and between the Revolving
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Borrower and the Swing Line Lender in substantially the form of Exhibit O
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hereto, providing for the automatic advance of Swing Line Loans by the Swing
Line Lender under the conditions set forth therein.
"Availability Period" means the period from and including the Closing
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Date to the earliest of (a) the Maturity Date, (b) the date of termination of
the Aggregate Commitments pursuant to Section 2.07, and (c) the date of
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termination of the commitment of each Lender to make Loans and of the obligation
of the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.
"Bank of America" means Bank of America, N.A. and its successors.
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"Base Rate" means for any day a fluctuating rate per annum equal to the
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higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." The "prime rate" is a rate set by Bank of America
based upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.
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"Base Rate Committed Loan" means a Committed Loan that is a Base Rate
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Loan.
"Base Rate Loan" means a Loan that bears interest at a rate based on
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the Base Rate.
"Bilateral New Vehicle Swing Line Loan" means the portion of any New
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Vehicle Swing Line Loan made pursuant to Section 2.05(a) which (i) causes the
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Outstanding Amount of New Vehicle Swing Line Loans or other Obligations to
exceed the New Vehicle Swing Line Sublimit or any limit set forth in Section
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2.05(a), or (ii) is made when the conditions in Section 4.02 are not otherwise
- ------ ------------
met.
"Bilateral Swing Line Loan" means the portion of any Swing Line Loan
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made pursuant to Section 2.04(a) which causes the Outstanding Amount of Swing
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Line Loans or other Obligations to exceed the Swing Line Sublimit or any limit
set forth in Section 2.04(a).
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"Borrower" and "Borrowers" each has the meaning specified in the
------------------------
introductory paragraph hereto.
"Borrower Materials" has the meaning specified in Section 6.02.
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"Borrowing" means a Committed Borrowing, a Swing Line Borrowing or a
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New Vehicle Swing Line Borrowing, as the context may require.
"Borrowing Base" means, as of any date of calculation, 80% of the Net
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Book Value of the Eligible Vehicle Inventory as of such date.
"Borrowing Base Certificate" means a certificate by a Responsible
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Officer of the Company, substantially in the form of Exhibit F (or another form
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acceptable to the Administrative Agent) setting forth the calculation of the
Borrowing Base, including a calculation of each component thereof, all in such
detail as shall be reasonably satisfactory to the Administrative Agent. All
calculations of the Borrowing Base in connection with the preparation of any
Borrowing Base Certificate shall originally be made by the Company and certified
to the Administrative Agent; provided, that the Administrative Agent shall have
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the right to review and adjust, in the exercise of its reasonable credit
judgment, any such calculation to the extent that such calculation is not in
accordance with this Agreement.
"Borrowing Base Schedule" means a schedule, substantially in the form
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of Exhibit G (or another form acceptable to the Administrative Agent) setting
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forth the calculation of the Borrowing Base, including a calculation of each
component thereof, all in such detail as shall be reasonably satisfactory to the
Administrative Agent.
"Business Day" means any day other than a Saturday, Sunday or other day
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on which commercial banks are authorized to close under the Laws of, or are in
fact closed in, New York State or the state where the Administrative Agent's
Office is located and if such day relates to any Eurodollar Rate Loan, means any
such day on which dealings in Dollar deposits are conducted by and between banks
in the London interbank eurodollar market.
"CarMax Funding II" means CarMax Funding II, LLC, a Delaware limited
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liability company.
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4
"Cash Collateralize" has the meaning specified in Section 2.03(g).
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"Change in Law" means the occurrence, after the date of this Agreement,
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of any of the following: (a) the adoption or taking effect of any law, rule,
regulation or treaty, (b) any change in any law, rule, regulation or treaty or
in the administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.
"Change of Control" means an event or series of events by which:
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(a) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but
excluding any employee benefit plan of such person or its subsidiaries,
and any person or entity acting in its capacity as trustee, agent or
other fiduciary or administrator of any such plan), other than Existing
Management, becomes the "beneficial owner" (as defined in Rules 13d-3
and 13d-5 under the Securities Exchange Act of 1934, except that a
person or group shall be deemed to have "beneficial ownership" of all
securities that such person or group has the right to acquire (such
right, an "option right"), whether such right is exercisable
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immediately or only after the passage of time), directly or indirectly,
of 25% or more of the equity securities of the Company entitled to vote
for members of the board of directors or equivalent governing body of
the Company on a fully-diluted basis (and taking into account all such
securities that such person or group has the right to acquire pursuant
to any option right); or
(b) during any period of 12 consecutive months, a majority of
the members of the board of directors or other equivalent governing
body of the Company cease to be composed of individuals (i) who were
members of that board or equivalent governing body on the first day of
such period, (ii) whose election or nomination to that board or
equivalent governing body was approved by individuals referred to in
clause (i) above constituting at the time of such election or
nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other
equivalent governing body was approved by individuals referred to in
clauses (i) and (ii) above constituting at the time of such election or
nomination at least a majority of that board or equivalent governing
body (excluding, in the case of both clause (ii) and clause (iii), any
individual whose initial nomination for, or assumption of office as, a
member of that board or equivalent governing body occurs as a result of
an actual or threatened solicitation of proxies or consents for the
election or removal of one or more directors by any person or group
other than a solicitation for the election of one or more directors by
or on behalf of the board of directors); or
(c) the Revolving Borrower ceases to be a direct or indirect,
wholly-owned Subsidiary of the Company; or
(d) the Revolving Borrower becomes a direct or indirect
Subsidiary of any Subsidiary that is not a Loan Party.
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5
"Closing Date" means the first date on which all the conditions
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precedent in Section 4.01 are satisfied or waived in accordance with Section
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10.01.
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"Code" means the Internal Revenue Code of 1986.
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"Collateral" means, collectively, all Collateral (as defined in the
----------
Security Agreement) now owned or hereafter acquired by any Grantor and any other
assets, property and interests in property of any Person in which the
Administrative Agent, on behalf of the Secured Parties, is granted a Lien under
any Security Instrument as security for all or any portion of the Obligations.
"Collection Account" means account #2050000-450967 maintained in the
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name of CarMax Business Services, LLC, d/b/a CarMax Auto Finance, at Wachovia
Bank, National Association.
"Commitment" means, as to each Lender, its obligation to (a) make
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Committed Loans to the Revolving Borrower pursuant to Section 2.01, (b) purchase
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participations in L/C Obligations, (c) purchase participations in Swing Line
Loans, and (d) purchase participations in New Vehicle Swing Line Loans, in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth opposite such Lender's name on Schedule 2.01 or in the Assignment and
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Assumption pursuant to which such Lender becomes a party hereto, as applicable,
as such amount may be adjusted from time to time in accordance with this
Agreement.
"Commitment Fee" has the meaning specified in Section 2.10(a).
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"Committed Borrowing" means a borrowing consisting of simultaneous
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Committed Loans of the same Type made by each of the Lenders pursuant to Section
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2.01.
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"Committed Loan" has the meaning specified in Section 2.01, provided
-------------- ------------ --------
that, for purposes of clarity, Committed Loans shall not include Swing Line
Loans or New Vehicle Swing Line Loans, but shall include any Loan made pursuant
to Section 2.04(c)(i) or 2.05(e)(i).
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"Committed Loan Notice" means a notice of (a) a Committed Borrowing, or
---------------------
(b) a conversion of Committed Loans from one Type to the other pursuant to
Section 2.02(a), which, if in writing, shall be substantially in the form of
- ---------------
Exhibit A.
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"Company" has the meaning specified in the introductory paragraph
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hereto.
"Company Guaranty Agreement" means the Company Guaranty Agreement made
--------------------------
by the Company in favor of the Administrative Agent and the Lenders,
substantially in the form of Exhibit I.
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"Compliance Certificate" means a certificate substantially in the form
----------------------
of Exhibit E.
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"Consolidated Current Assets" means, as of any date of determination,
---------------------------
the current assets of the Company and its Subsidiaries on a consolidated basis
as of such date.
C722003.23
6
"Consolidated Current Liabilities" means, as of any date of
--------------------------------
determination, the current liabilities of the Company and its Subsidiaries, and
(without duplication) the Total Outstandings, on a consolidated basis as of such
date.
"Consolidated Current Ratio" means, as of any date of determination,
--------------------------
the ratio of (a) Consolidated Current Assets as of such date to (b) Consolidated
Current Liabilities as of such date.
"Consolidated EBITDA" means, for any period, for the Company and its
-------------------
Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income
for such period plus (a) the following to the extent deducted in calculating
such Consolidated Net Income: (i) Consolidated Interest Charges for such period,
(ii) the provision for Federal, state, local and foreign income taxes payable by
the Company and its Subsidiaries for such period, (iii) depreciation and
amortization expense and (iv) other non-recurring expenses of the Company and
its Subsidiaries reducing such Consolidated Net Income which do not represent a
cash item in such period or any future period and minus (b) the following to the
-----
extent included in calculating such Consolidated Net Income: (i) Federal, state,
local and foreign income tax credits of the Company and its Subsidiaries for
such period and (ii) all non-cash items increasing such Consolidated Net Income.
"Consolidated EBITDAR" means, for any period, for the Company and its
--------------------
Subsidiaries on a consolidated basis, an amount equal to Consolidated EBITDA for
such period, plus Consolidated Rental Obligations for such period.
----
"Consolidated Fixed Charge Coverage Ratio" means, as of any date of
----------------------------------------
determination, the ratio of (a) Consolidated EBITDAR for the four fiscal quarter
period ending on such date to (b) Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges" means, for any period (the "Calculation
--------------------------
Period"), the sum of (a) Consolidated Interest Charges for such period plus (b)
----
Consolidated Rental Obligations for such period, plus (c) Federal, state, local
----
and foreign income taxes paid in cash by the Company and its Subsidiaries on a
consolidated basis for such period, plus (d) Restricted Payments of the Company
----
and its Subsidiaries on a consolidated basis for such period, plus (e)
----
Consolidated Scheduled Principal Payments (excluding any scheduled payments of
principal that were (i) paid during the Calculation Period with the proceeds of
replacement Indebtedness or (ii) deferred to a later period by an appropriate
written amendment, but including payments of principal that were deferred to
such Calculation Period from a prior period) of the Company and its Subsidiaries
on a consolidated basis for such period. For purposes of clarity (and without
limiting the generality of clause (b) of the definition of "Subsidiary"), the
parties acknowledge that any reference to Subsidiary in this definition of
Consolidated Fixed Charges shall exclude those Subsidiaries which would not
otherwise qualify as a Subsidiary under clause (b) of the definition of
"Subsidiary."
"Consolidated Interest Charges" means, for any period, for the Company
-----------------------------
and its Subsidiaries on a consolidated basis, the sum of (a) all gross interest
expense (without reducing such amount by, or otherwise netting out, any interest
income, floorplan assistance, interest credits or other similar income), premium
payments, debt discount, fees, charges and related expenses of the Company and
C722003.23
7
its Subsidiaries in connection with borrowed money or in connection with the
deferred purchase price of assets, in each case to the extent treated as
interest in accordance with GAAP, and (b) the portion of rent expense of the
Company and its Subsidiaries with respect to such period under (i) capital
leases that is treated as interest in accordance with GAAP and (ii) Synthetic
Lease Obligations that would be treated as interest under GAAP were such leases
treated as capital leases.
"Consolidated Net Income" means, for any period, for the Company and
-----------------------
its Subsidiaries on a consolidated basis, the net income of the Company and its
Subsidiaries (excluding extraordinary gains and extraordinary losses) for such
period.
"Consolidated Rental Obligations" means, for any period, the aggregate
-------------------------------
amount of all rental obligations accrued during such period for which the
Company and its Subsidiaries are directly or indirectly liable (as lessee or as
guarantor or other surety but without duplication) under all leases in effect at
any time during such period, all as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Scheduled Principal Payments" means, for any period, for
-----------------------------------------
the Company and its Subsidiaries on a consolidated basis, all payments of
principal of the Company and its Subsidiaries in connection with borrowed money
or in connection with the deferred purchase price of assets which payments are
scheduled to be made during such period, in each case to the extent treated as
principal in accordance with GAAP.
"Consolidated Tangible Net Worth" means, as of any date of
-------------------------------
determination, for the Company and its Subsidiaries on a consolidated basis,
Shareholders' Equity as of such date minus the Intangible Assets of the Company
and its Subsidiaries as of such date.
"Consolidated Total Liabilities" means, as of any date of
------------------------------
determination, for the Company and its Subsidiaries on a consolidated basis, the
sum of current liabilities plus long-term liabilities, including contingent
liabilities that constitute Indebtedness, liabilities under Synthetic Leases and
other Off-Balance Sheet Liabilities, in each case as of such date.
"Consolidated Total Liabilities to Tangible Net Worth Ratio" means, as
----------------------------------------------------------
of any date of determination, the ratio of Consolidated Total Liabilities as of
such date to Consolidated Tangible Net Worth as of such date.
"Contractual Obligation" means, as to any Person, any provision of any
----------------------
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" means the possession, directly or indirectly, of the power to
-------
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
----------- ----------
"Cost of Acquisition" means, with respect to any Acquisition, as at the
-------------------
date of entering into any agreement therefor, the sum of the following (without
duplication): (i) the value of the Equity Interests of the Company or any
C722003.23
8
Subsidiary to be transferred in connection with such Acquisition, (ii) the
amount of any cash and fair market value of other property (excluding property
described in clause (i) and the unpaid principal amount of any debt instrument)
given as consideration in connection with such Acquisition, (iii) the amount
(determined by using the face amount or the amount payable at maturity,
whichever is greater) of any Indebtedness incurred, assumed or acquired by the
Company or any Subsidiary in connection with such Acquisition, (iv) all
additional purchase price amounts in the form of earnouts and other contingent
obligations that should be recorded on the financial statements of the Company
and its Subsidiaries in accordance with GAAP in connection with such
Acquisition, (v) all amounts paid in respect of covenants not to compete,
consulting agreements that should be recorded on the financial statements of the
Company and its Subsidiaries in accordance with GAAP, and other affiliated
contracts in connection with such Acquisition, (vi) the aggregate fair market
value of all other consideration given by the Company or any Subsidiary in
connection with such Acquisition, and (vii) out of pocket transaction costs for
the services and expenses of attorneys, accountants and other consultants
incurred in effecting such Acquisition, and other similar transaction costs so
incurred, provided that the Cost of Acquisition shall not include the purchase
--------
price of floored vehicles acquired in connection with such Acquisition. For
purposes of determining the Cost of Acquisition for any transaction, (A) the
Equity Interests of the Company shall be valued (I) in the case of any Equity
Interests then designated as a national market system security by the National
Association of Securities Dealers, Inc. ("NASDAQ") or listed on a national
securities exchange, the average of the last reported bid and ask quotations or
the last prices reported thereon, and (II) with respect to any other Equity
Interests, as determined by the Board of Directors of the Company and, if
reasonably requested by the Administrative Agent, determined to be a reasonable
valuation by the Public Accountant, (B) the Equity Interests of any Subsidiary
shall be valued as determined by the Board of Directors of such Subsidiary and,
if reasonably requested by the Administrative Agent, determined to be a
reasonable valuation by the Public Accountant, and (C) with respect to any
Acquisition accomplished pursuant to the exercise of options or warrants or the
conversion of securities, the Cost of Acquisition shall include both the cost of
acquiring such option, warrant or convertible security as well as the cost of
exercise or conversion.
"Credit Extension" means each of the following: (a) a Borrowing and
----------------
(b)an L/C Credit Extension.
"Debtor Relief Laws" means the Bankruptcy Code of the United States,
------------------
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any event or condition that constitutes an Event of
-------
Default or that, with the giving of any notice, the passage of time, or both,
would be an Event of Default.
"Default Rate" means (a) when used with respect to Obligations other
------------
than Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus
----
(ii) the Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2%
----
per annum; provided, however, that with respect to a Eurodollar Rate Loan, the
-------- -------
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2% per annum, and (b)
C722003.23
9
when used with respect to Letter of Credit Fees, a fee rate equal to the
Applicable Rate plus 2% per annum.
"Defaulting Lender" means any Lender that (a) has failed to fund any
-----------------
portion of the Committed Loans, participations in L/C Obligations,
participations in Swing Line Loans or participations in New Vehicle Swing Line
Loans required to be funded by it hereunder within one Business Day of the date
required to be funded by it hereunder, (b) has otherwise failed to pay over to
the Administrative Agent or any other Lender any other amount required to be
paid by it hereunder within one Business Day of the date when due, unless the
subject of a good faith dispute, or (c) has been deemed insolvent or become the
subject of a bankruptcy or insolvency proceeding.
"Designated Borrower" has the meaning specified in the introductory
-------------------
paragraph hereto.
"Designated Borrower Notice" has the meaning specified in Section
-------------------------- -------
2.15(b).
- -------
"Disposition" or "Dispose" means the sale, transfer, license, lease or
----------- -------
other disposition (including any sale and leaseback transaction) of any property
by any Person, including any sale, assignment, transfer or other disposal, with
or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith.
"Dollar" and "$" mean lawful money of the United States.
------ -
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender;
-----------------
(c) an Approved Fund; and (d) any other Person (other than a natural person)
approved by (i) the Administrative Agent, the L/C Issuer, the Swing Line Lender
and the New Vehicle Swing Line Lender, and (ii) unless an Event of Default has
occurred and is continuing, the Company (each such approval not to be
unreasonably withheld or delayed); provided that notwithstanding the foregoing,
--------
"Eligible Assignee" shall not include the Company or any of the Company's
Affiliates or Subsidiaries.
"Eligible Vehicle Inventory" means Vehicles of any Grantor that (a) in
--------------------------
the case of all such Vehicles, are subject to a perfected, first priority Lien
in favor of the Administrative Agent for the benefit of the Secured Parties
pursuant to the Security Instruments, free from any other Lien other than those
acceptable to the Administrative Agent in its discretion, (b) in the case of
Used Vehicles, are properly titled in such Grantor's name or the certificates of
title for such Vehicles are endorsed in blank by the prior owners and such
Grantor physically holds such certificates of title (or such Grantor has, in
accordance with its standard policies and procedures, initiated the process by
which the requirements of this clause (b) will be satisfied) and (c) in the case
of all such Vehicles, are located at such Grantor's facilities (except as set
forth in Section 6.14).
------------
"Environmental Laws" means any and all Federal, state, local, and
------------------
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
C722003.23
10
"Environmental Liability" means any liability, contingent or otherwise
-----------------------
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Company, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"Equity Interests" means, with respect to any Person, all of the shares
----------------
of capital stock of (or other ownership or profit interests in) such Person, all
of the warrants, options or other rights for the purchase or acquisition from
such Person of shares of capital stock of (or other ownership or profit
interests in) such Person, all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase or
acquisition from such Person of such shares (or such other interests), and all
of the other ownership or profit interests in such Person (including
partnership, member or trust interests therein), whether voting or nonvoting,
and whether or not such shares, warrants, options, rights or other interests are
outstanding on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974.
-----
"ERISA Affiliate" means any trade or business (whether or not
---------------
incorporated) under common control with the Company within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
-----------
Plan; (b) a withdrawal by the Company or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Company or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability upon the Company or any ERISA Affiliate under Title
IV of ERISA, other than for PBGC premiums due but not delinquent under Section
4007 of ERISA, that has not been satisfied in full.
"Eurodollar Rate" means, for any Interest Period with respect to a
---------------
Eurodollar Rate Loan, the rate per annum equal to the British Bankers
Association LIBOR Rate ("BBA LIBOR"), as published by Reuters (or by such other
---------
commercially available source providing quotations of BBA LIBOR as may be
designated by the Administrative Agent from time to time) at approximately 11:00
a.m., London time, two Business Days prior to the commencement of such Interest
Period, for Dollar deposits (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period. If such rate is not
C722003.23
11
available at such time for any reason, then the "Eurodollar Rate" for such
Interest Period shall be the rate per annum determined by the Administrative
Agent to be the rate at which deposits in Dollars for delivery on the first day
of such Interest Period in same day funds in the approximate amount of the
Eurodollar Rate Loan being made, continued or converted and with a term
equivalent to such Interest Period would be offered by Bank of America's London
Branch to major banks in the London interbank eurodollar market at their request
at approximately 11:00 a.m. (London time) two Business Days prior to the
commencement of such Interest Period.
"Eurodollar Rate Committed Loan" means a Committed Loan that is a
------------------------------
Eurodollar Rate Loan.
"Eurodollar Rate Loan" means a Loan that bears interest at a rate based
--------------------
on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 8.01.
---------------- ------------
"Excluded Special Purpose Finance Subsidiaries" means, collectively,
---------------------------------------------
(a) CarMax Funding II, and (b) CarMax Auto Funding LLC, a Delaware limited
liability company.
"Excluded Subsidiaries" means, collectively, (a) Glen Allen Insurance,
----------------------
Ltd., a Bermuda company, and (b) each Excluded Special Purpose Finance
Subsidiary.
"Excluded Taxes" means, with respect to the Administrative Agent, any
--------------
Lender, the L/C Issuer or any other recipient of any payment to be made by or on
account of any obligation of the Company or any Borrower hereunder, (a) taxes
imposed on or measured by its overall net income (however denominated),
including branch profits taxes, and franchise taxes imposed on it (in lieu of
net income taxes), by the jurisdiction (or any political subdivision thereof)
under the laws of which such recipient is organized or in which its principal
office is located or, in the case of any Lender, in which its applicable Lending
Office is located, (b) any branch profits taxes imposed by the United States or
any similar tax imposed by any other jurisdiction in which the Company or such
Borrower, as the case may be, is located and (c) in the case of a Foreign Lender
(other than an assignee pursuant to a request by the Company under Section
-------
10.13), any withholding tax that is imposed on amounts payable to such Foreign
- -----
Lender at the time such Foreign Lender becomes a party hereto (or designates a
new Lending Office) or is attributable to such Foreign Lender's failure or
inability (other than as a result of a Change in Law) to comply with Section
-------
3.01(e), except to the extent that such Foreign Lender (or its assignor, if any)
- -------
was entitled, at the time of designation of a new Lending Office (or
assignment), to receive additional amounts from the Company or the applicable
Borrower, as the case may be, with respect to such withholding tax pursuant to
Section 3.01(a).
- ---------------
"Existing Credit Agreement" means that certain Amended and Restated
-------------------------
Credit Agreement dated as of February 10, 2003, as amended prior to the date
hereof, among CarMax Auto Superstores, Inc., as borrower, the Company, as
guarantor, DaimlerChrysler Services North America LLC, as agent, and the lenders
party thereto.
C722003.23
12
"Existing Management" means any of Austin Ligon, Keith Browning, Tom
-------------------
Folliard, Joe Kunkel or Mike Dolan.
"Federal Funds Rate" means, for any day, the rate per annum equal to
------------------
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
--------
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.
"Fee Letter" means the letter agreement, dated May 19, 2005, among the
----------
Company, the Administrative Agent and the Arranger.
"Foreign Lender" means, with respect to the Company or any Borrower,
--------------
any Lender that is organized under the laws of a jurisdiction other than that in
which the Company or such Borrower is resident for tax purposes. For purposes of
this definition, the United States, each State thereof and the District of
Columbia shall be deemed to constitute a single jurisdiction.
"Franchise Agreement" means a franchise agreement or a framework
-------------------
agreement, in each case between a Loan Party and a manufacturer or distributor
of New Vehicles.
"FRB" means the Board of Governors of the Federal Reserve System of the
---
United States.
"Fund" means any Person (other than a natural person) that is (or will
----
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"GAAP" means generally accepted accounting principles in the United
----
States set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"Governmental Authority" means the government of the United States or
----------------------
any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).
"Grantor" has the meaning specified in Section 2A.03.
------- -------------
C722003.23
13
"Guarantee" means, as to any Person, (a) any obligation, contingent or
---------
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien); provided, however,
-------- -------
that "Guarantee" shall not include endorsements of drafts or other negotiable
instruments for collection or deposit in the ordinary course of business. The
amount of any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the related primary obligation, or portion thereof, in
respect of which such Guarantee is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith; provided, however, that the amount of any
-------- -------
Guarantee described in clause (b) above which is expressly non-recourse to the
other assets of such Person shall be deemed to be the lesser of the amount
determined as described above and the fair market value of the assets subject to
such Lien as determined by the guaranteeing Person in good faith. The term
"Guarantee" as a verb has a corresponding meaning.
"Guaranties" means the Company Guaranty Agreement and the Subsidiary
----------
Guaranty Agreement.
"Hazardous Materials" means all explosive or radioactive substances or
-------------------
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Indebtedness" means, as to any Person at a particular time, without
------------
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
(b) all direct or contingent obligations of such Person
arising under letters of credit (including standby and commercial),
bankers' acceptances, bank guaranties, surety bonds and similar
instruments;
C722003.23
14
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred
purchase price of property or services (other than trade accounts
payable arising in the ordinary course of business);
(e) indebtedness (excluding prepaid interest thereon) secured
by a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse;
(f) capital leases and Synthetic Lease Obligations;
(g) all obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any Equity
Interest in such Person or any other Person, valued, in the case of a
redeemable preferred interest, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends;
----
and
(h) all Guarantees of such Person in respect of any of the
foregoing.
For all purposes hereof, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person (in which case such Indebtedness shall not be
included) or the liability of such Person in respect of such Indebtedness is
expressly limited (in which case such Indebtedness shall only be included to the
extent of such liability). The amount of any Indebtedness secured by a Lien on
property owned or being purchased by any Person shall be deemed to be the lesser
of the outstanding amount of such Indebtedness and the fair market value of such
property as determined by such Person in good faith if recourse with respect to
such Indebtedness is expressly limited to such property. The amount of any net
obligation under any Swap Contract on any date shall be deemed to be the Swap
Termination Value thereof as of such date. The amount of any capital lease or
Synthetic Lease Obligation as of any date shall be deemed to be the amount of
Attributable Indebtedness in respect thereof as of such date.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
-----------------
"Indemnitees" has the meaning specified in Section 10.04(b).
----------- ----------------
"Information" has the meaning specified in Section 10.07.
----------- -------------
"Intangible Assets" means assets that are considered to be intangible
-----------------
assets under GAAP, including customer lists, goodwill, computer software,
copyrights, trade names, trademarks, patents, franchises, licenses, unamortized
deferred charges, unamortized debt discount and capitalized research and
development costs.
"Interest Payment Date" means the first Business Day of each calendar
---------------------
month.
C722003.23
15
"Interest Period" means a period of approximately one month commencing
---------------
on the first Business Day of each month and ending on the first Business Day of
the following month.
"Internal Control Event" means, with respect to the Company and its
----------------------
Subsidiaries on a consolidated basis, a determination by management or the Audit
Committee of the Board of Directors of the Company or by the Public Accountant
that (i) a material weakness, as defined in PCAOB No. 2 or any successor source
for such definition under the Securities Laws, exists in the Company's or any
Subsidiary's internal controls over financial reporting, or (ii) the principal
executive officer or principal financial officer or any other member of the
senior management of the Company who has a significant role in the Company's
internal control over financial reporting, has committed an act of fraud.
"Investment" means, as to any Person, any direct or indirect
----------
acquisition or investment by such Person, whether by means of (a) the purchase
or other acquisition of capital stock or other securities of another Person, (b)
a loan, advance or capital contribution to, Guarantee or assumption of debt of,
or purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person and any arrangement pursuant to which the investor
Guarantees Indebtedness of such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit. For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.
"IP Rights" has the meaning specified in Section 5.17.
--------- ------------
"IRS" means the United States Internal Revenue Service.
---
"ISP" means, with respect to any Letter of Credit, the "International
---
Standby Practices 1998" published by the Institute of International Banking Law
& Practice (or such later version thereof as may be in effect at the time of
issuance of such Letter of Credit).
"Issuer Documents" means with respect to any Letter of Credit, the
----------------
related Letter of Credit Application, and any other document, agreement or
instrument entered into by the L/C Issuer and the Revolving Borrower (or any
Subsidiary) or in favor of the L/C Issuer and relating to such Letter of Credit.
"Joinder Agreement" means each Joinder Agreement, substantially in the
-----------------
form of Exhibit K, executed and delivered by a Subsidiary or any other Person to
---------
the Administrative Agent, for the benefit of the Secured Parties, pursuant to
Section 6.12.
- ------------
"Landlord Waiver" means, as to any leasehold interest, a landlord
---------------
waiver and consent agreement executed by the landlord of such leasehold
interest, in each case in form and substance satisfactory to the Administrative
Agent.
"Laws" means, collectively, all international, foreign, Federal, state
----
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
C722003.23
16
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"L/C Advance" means, with respect to each Lender, such Lender's funding
-----------
of its participation in any L/C Borrowing in accordance with its Applicable
Percentage.
"L/C Borrowing" means an extension of credit resulting from a drawing
-------------
under any Letter of Credit which has not been reimbursed on the date when made
or refinanced as a Committed Borrowing.
"L/C Credit Extension" means, with respect to any Letter of Credit, the
--------------------
issuance thereof or extension of the expiry date thereof, or the increase of the
amount thereof.
"L/C Issuer" means Bank of America in its capacity as issuer of Letters
----------
of Credit hereunder, or any successor issuer of Letters of Credit hereunder.
"L/C Obligations" means, as of any date of determination, the aggregate
amount available to be drawn under all outstanding Letters of Credit as of such
date plus the aggregate of all Unreimbursed Amounts, including all L/C
Borrowings, as of such date. For purposes of computing the amount available to
be drawn under any Letter of Credit, the amount of such Letter of Credit shall
be determined in accordance with Section 1.06. For all purposes of this
------------
Agreement, if on any date of determination a Letter of Credit has expired by its
terms but any amount may still be drawn thereunder by reason of the operation of
Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be "outstanding"
in the amount so remaining available to be drawn.
"Lender" has the meaning specified in the introductory paragraph hereto
------
and, as the context requires, includes the Swing Line Lender and the New Vehicle
Swing Line Lender.
"Lending Office" means, as to any Lender, the office or offices of such
--------------
Lender described as such in such Lender's Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Company and
the Administrative Agent.
"Letter of Credit" means any standby letter of credit issued hereunder.
----------------
"Letter of Credit Application" means an application and agreement for
----------------------------
the issuance or amendment of a Letter of Credit in the form from time to time in
use by the L/C Issuer.
"Letter of Credit Expiration Date" means the day that is seven days
--------------------------------
prior to the Maturity Date then in effect (or, if such day is not a Business
Day, the next preceding Business Day).
"Letter of Credit Fee" has the meaning specified in Section 2.03(i).
-------------------- ---------------
"Letter of Credit Sublimit" means an amount equal to $30,000,000. The
-------------------------
Letter of Credit Sublimit is part of, and not in addition to, the Aggregate
Commitments.
C722003.23
17
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
----
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).
"Loan" means an extension of credit by a Lender to a Borrower under
----
Article II in the form of a Committed Loan, a Swing Line Loan or a New Vehicle
- ----------
Swing Line Loan.
"Loan Documents" means, collectively, this Agreement, each Joinder
--------------
Agreement, each Note, each Issuer Document, each Payment Commitment, the
Security Agreement, each other Security Instrument, each Guaranty, the Fee
Letter and any Autoborrow Agreement.
"Loan Parties" means, collectively, the Company, the Revolving
------------
Borrower, each Subsidiary Guarantor and each Designated Borrower.
"Material Adverse Effect" means (a) a material adverse change in, or a
-----------------------
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent), condition (financial or otherwise) or prospects of the
Company and its Subsidiaries taken as a whole; (b) a material impairment of the
ability of any Loan Party to perform its obligations under any Loan Document to
which it is a party; or (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against any Loan Party of any Loan
Document to which it is a party.
"Maturity Date" means August 24, 2009.
-------------
"Multiemployer Plan" means any employee benefit plan of the type
------------------
described in Section 4001(a)(3) of ERISA, to which the Company or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
five plan years, has made or been obligated to make contributions.
"Net Book Value" means, for any Vehicle, the net book value of such
--------------
Vehicle as reflected on the books of the Company in accordance with GAAP, after
netting out (without limitation) the cost of payoff of any Lien on such Vehicle
excluding the Lien of the Administrative Agent under the Loan Documents.
"New Vehicle" means a Vehicle which has never been owned except by a
-----------
manufacturer, distributor or dealer and has never been registered.
"New Vehicle Swing Line" means the revolving credit facility made
----------------------
available by the New Vehicle Swing Line Lender pursuant to Section 2.05.
------------
"New Vehicle Swing Line Borrowing" means a borrowing of a New Vehicle
--------------------------------
Swing Line Loan pursuant to Section 2.05.
------------
"New Vehicle Swing Line Lender" means Bank of America in its capacity
-----------------------------
as provider of New Vehicle Swing Line Loans, or any successor new vehicle swing
line lender hereunder.
C722003.23
18
"New Vehicle Swing Line Loan" has the meaning specified in Section
--------------------------- -------
2.05(a).
- -------
"New Vehicle Swing Line Loan Notice" means a notice of a New Vehicle
----------------------------------
Swing Line Borrowing pursuant to Section 2.05(b), which, if in writing, shall be
---------------
substantially in the form of Exhibit C.
---------
"New Vehicle Swing Line Sublimit" means an amount equal to the lesser
-------------------------------
of (a) $25,000,000 and (b) the Aggregate Commitments. The New Vehicle Swing Line
Sublimit is part of, and not in addition to, the Aggregate Commitments.
"Note" means a promissory note made by a Borrower in favor of a Lender
----
evidencing Loans made by such Lender to such Borrower, substantially in the form
of Exhibit D.
---------
"Obligations" means all advances to, and debts, liabilities,
-----------
obligations, covenants and duties of, any Loan Party arising under any Loan
Document or otherwise with respect to any Loan or Letter of Credit, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against any
Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief
Laws naming such Person as the debtor in such proceeding, regardless of whether
such interest and fees are allowed claims in such proceeding.
"Off-Balance Sheet Liabilities" means, as of any date of determination,
-----------------------------
without duplication and to the extent not included as a liability on the
consolidated balance sheet of the Company and its Subsidiaries in accordance
with GAAP: (a) with respect to any asset securitization transaction, any
payment, recourse, repurchase, hold harmless, indemnity or similar obligation of
the Company or any of its Subsidiaries (other than any Excluded Special Purpose
Finance Subsidiary), other than limited recourse provisions that are customary
for transactions of such type and that (x) could not reasonably be expected to
result in the Company or any of its Subsidiaries suffering economic loss and (y)
do not impair the characterization of such transaction as a true sale under
applicable Debtor Relief Laws; (b) any monetary obligation of the Company or any
Subsidiary under any financing lease or so-called "synthetic," tax retention or
off-balance sheet lease transaction which, upon the application of any Debtor
Relief Law to the Company or any of its Subsidiaries, would be characterized as
indebtedness; or (c) any other monetary obligation arising with respect to any
other transaction which (i) is characterized as indebtedness for tax purposes
but not for accounting purposes in accordance with GAAP or (ii) is the
functional equivalent of or takes the place of borrowing but which does not
constitute a liability on the consolidated balance sheet of the Company and its
Subsidiaries (for purposes of this clause (c), any transaction structured to
provide tax deductibility as interest expense of any dividend, coupon or other
periodic payment will be deemed to be the functional equivalent of a borrowing).
"Organization Documents" means, (a) with respect to any corporation,
----------------------
the certificate or articles of incorporation and bylaws of such corporation (or
equivalent or comparable constitutive documents with respect to any non-U.S.
jurisdiction); (b) with respect to any limited liability company, the
certificate or articles of formation or organization and operating agreement of
such company; and (c) with respect to any partnership, joint venture, trust or
other form of business entity, the partnership, joint venture or other
C722003.23
19
applicable agreement of formation or organization and any agreement, instrument,
filing or notice with respect thereto filed in connection with the formation or
organization of such partnership, joint venture, trust or other entity with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"Other Special Purpose Finance Entities" means those special purpose
--------------------------------------
entities (other than Subsidiaries) formed pursuant to Permitted Sale Facilities
to receive and hold Permitted Retail Installment Contracts.
"Other Taxes" means all present or future stamp or documentary taxes or
-----------
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.
"Outstanding Amount" means (i) with respect to Committed Loans, Swing
------------------
Line Loans and New Vehicle Swing Line Loans, on any date, the aggregate
outstanding principal amount thereof after giving effect to any borrowings and
prepayments or repayments of Committed Loans, Swing Line Loans and New Vehicle
Swing Line Loans, as the case may be, occurring on such date; (ii) with respect
to any L/C Obligations on any date, the amount of such L/C Obligations on such
date after giving effect to any L/C Credit Extension occurring on such date and
any other changes in the aggregate amount of the L/C Obligations as of such
date, including as a result of any reimbursements by the Revolving Borrower of
Unreimbursed Amounts.
"Participant" has the meaning specified in Section 10.06(d).
----------- ----------------
"Payment Commitment" means a written agreement entered into between the
------------------
New Vehicle Swing Line Lender and a vehicle manufacturer or distributor (and if
required pursuant to the terms of the Payment Commitment, the applicable
Borrower), providing for advances of the proceeds of New Vehicle Swing Line
Loans directly by the New Vehicle Swing Line Lender to such manufacturer or
distributor in payment for the purchase of a New Vehicle by the applicable
Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation.
----
"PCAOB No. 2" means the Public Company Accounting Oversight Board's
-----------
Auditing Standard No. 2, as amended, modified or supplemented and any successor
thereto from time to time.
"Pension Plan" means any "employee pension benefit plan" (as such term
------------
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Company or
any ERISA Affiliate or to which the Company or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.
C722003.23
20
"Permitted Retail Installment Contract" means a vehicle retail
-------------------------------------
installment contract sold, transferred or assigned by the Company or a
Subsidiary to the applicable purchaser, transferee or assignee pursuant to a
Permitted Sale Facility.
"Permitted Sale Facilities" means, collectively, (i) each ABCP
-------------------------
Facility, (ii) each Term Securitization Program, (iii) each arrangement under
which Third-Party Contracts are sold for fair market value to financial
institutions or other lenders and (iv) each other arrangement which provides for
the sale, transfer or assignment of retail installment contracts originated by
the Company or any other Loan Party to a third party purchaser, transferee or
assignee and in a transaction that constitutes a "true sale" for bankruptcy
purposes (as evidenced by an opinion prepared and delivered in a manner
consistent with market standards by reputable independent counsel experienced in
securitization transactions) for a price equal to not less than the fair market
value of such retail installment contracts and on such other terms and
conditions as shall be reasonable and customary for such transactions; provided,
--------
however, that, in the case of any arrangement described in clause (iii) or (iv)
- -------
above, (x) such arrangement does not create Indebtedness of the Company or any
Subsidiary (other than an Excluded Special Purpose Finance Subsidiary), (y) such
arrangement does not include (1) provisions under which the Company or any
Subsidiary (other than an Excluded Special Purpose Finance Subsidiary) directly
assumes the credit risk associated with such retail installment contracts, (2)
direct or indirect recourse provisions under which, based on the historical
performance of such retail installment contracts, the Company or any Subsidiary
(other than an Excluded Special Purpose Finance Subsidiary) could reasonably be
expected to suffer economic loss, or (3) any recourse provisions which are not
customary for transactions of such type and (z) such arrangement does not result
in the creation of any Lien on the assets of the Company or any Subsidiary
(other than Excluded Special Purpose Finance Subsidiaries), other than Liens on
such retail installment contracts and the Related Property.
"Person" means any natural person, corporation, limited liability
------
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any "employee benefit plan" (as such term is defined in
----
Section 3(3) of ERISA) established by the Company or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.
"Platform" has the meaning specified in Section 6.02.
-------- ------------
"Public Accountant" means a Registered Public Accounting Firm of
-----------------
nationally recognized standing engaged by the Company.
"Register" has the meaning specified in Section 10.06(c).
-------- ----------------
"Registered Public Accounting Firm" has the meaning specified in the
---------------------------------
Securities Laws and shall be independent of the Company as prescribed by the
Securities Laws.
"Related Parties" means, with respect to any Person, such Person's
---------------
Affiliates and the partners, directors, officers, employees, agents and advisors
of such Person and of such Person's Affiliates.
C722003.23
21
"Related Property" means, with respect to any retail installment
----------------
contract, (i) the Lien created by such contract in the vehicle purchased under
such contract, (ii) all other Liens, if any, (other than Liens on assets of the
Company or any Subsidiary) to secure payment of such contract, (iii) all
guaranties, insurance contracts and other agreements or arrangements of whatever
character from time to time supporting or securing payment of such contract,
(iv) all documents evidencing such contract or the Liens, guaranties, agreements
or arrangements described in clauses (i) through (iii) above, (v) all present
and future claims, demands, causes of action and choses in action in respect of
the foregoing and (vi) all proceeds of the foregoing.
"Reportable Event" means any of the events set forth in Section 4043(c)
----------------
of ERISA, other than events for which the 30 day notice period has been waived.
"Request for Credit Extension" means (a) with respect to a Borrowing,
----------------------------
conversion or continuation of Committed Loans, a Committed Loan Notice, (b) with
respect to an L/C Credit Extension, a Letter of Credit Application, (c) with
respect to a Swing Line Loan, a Swing Line Loan Notice, and (d) with respect to
a New Vehicle Swing Line Loan, a New Vehicle Swing Line Loan Notice or a request
from a manufacturer or distributor for New Vehicle Swing Line Loans pursuant to
a Payment Commitment.
"Required Lenders" means, as of any date of determination, Lenders
----------------
having more than 50% of the Aggregate Commitments or, if the commitment of each
Lender to make Loans and the obligation of the L/C Issuer to make L/C Credit
Extensions have been terminated pursuant to Section 8.02, Lenders holding in the
------------
aggregate more than 50% of the Total Outstandings (with the aggregate amount of
each Lender's risk participation and funded participation in L/C Obligations,
Swing Line Loans and New Vehicle Swing Line Loans being deemed "held" by such
Lender for purposes of this definition); provided that (i) the Commitment of,
--------
and the portion of the Total Outstandings held or deemed held by, any Defaulting
Lender shall be excluded for purposes of making a determination of Required
Lenders, (ii) in the event that at the time of such determination any Bilateral
Swing Line Loans are outstanding and any Default shall have occurred and be
continuing, each of (x) the Aggregate Commitments or Total Outstandings, as the
case may be, and (y) the Commitment of or Total Outstandings held by the Swing
Line Lender (as the case may be), shall be deemed for purposes of this
determination to be increased in the amount of such outstanding Bilateral Swing
Line Loans, and (iii) in the event that at the time of such determination any
Bilateral New Vehicle Swing Line Loans are outstanding and any Default shall
have occurred and be continuing, each of (x) the Aggregate Commitments or Total
Outstandings, as the case may be, and (y) the Commitment of or Total
Outstandings held by the New Vehicle Swing Line Lender (as the case may be),
shall be deemed for purposes of this determination to be increased in the amount
of such outstanding Bilateral New Vehicle Swing Line Loans.
"Responsible Officer" means the chief executive officer, president,
-------------------
chief financial officer, executive vice president, treasurer, assistant
treasurer or any assistant secretary (who is also a treasury manager) of a Loan
Party. Any document delivered hereunder that is signed by a Responsible Officer
of a Loan Party shall be conclusively presumed to have been authorized by all
necessary corporate, partnership and/or other action on the part of such Loan
Party and such Responsible Officer shall be conclusively presumed to have acted
on behalf of such Loan Party.
C722003.23
22
"Restricted Payment" means any dividend or other distribution (whether
------------------
in cash, securities or other property) with respect to any capital stock or
other Equity Interest of the Company or any Subsidiary, or any payment (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such capital stock or other Equity Interest,
or on account of any return of capital to the Company's stockholders, partners
or members (or the equivalent Person thereof).
"Revolving Borrower" has the meaning specified in the introductory
------------------
paragraph hereto.
"Sarbanes-Oxley" means the Sarbanes-Oxley Act of 2002.
--------------
"SEC" means the Securities and Exchange Commission, or any Governmental
---
Authority succeeding to any of its principal functions.
"Secured Parties" means, collectively, the Administrative Agent and the
---------------
Lenders.
"Securities Laws" means the Securities Act of 1933, the Securities
---------------
Exchange Act of 1934, Sarbanes-Oxley and the applicable accounting and auditing
principles, rules, standards and practices promulgated, approved or incorporated
by the SEC or the Public Company Accounting Oversight Board, as each of the
foregoing may be amended and in effect on any applicable date hereunder.
"Security Agreement" means the Security Agreement substantially in the
------------------
form of Exhibit N dated as of the date hereof by the Company and other Loan
---------
Parties to the Administrative Agent for the benefit of the Secured Parties, as
supplemented from time to time by the execution and delivery of Joinder
Agreements pursuant to Section 6.12, and as from time to time otherwise
------------
supplemented, amended, modified, amended and restated or replaced.
"Security Instruments" means, collectively or individually as the
--------------------
context may indicate, the Security Agreement (including the Joinder Agreements)
and all other agreements including control agreements, instruments and other
documents, whether now existing or hereafter in effect, pursuant to which the
Company, the other Loan Parties or any other Person shall grant or convey to the
Administrative Agent, for the benefit of the Secured Parties, a Lien in, or any
other Person shall acknowledge any such Lien in, property as security for all or
any portion of the Obligations, or any other obligation under any Loan Document,
as any of them may be amended, amended and restated, modified or otherwise
supplemented from time to time.
"Shareholders' Equity" means, as of any date of determination,
--------------------
consolidated shareholders' equity of the Company and its Subsidiaries as of such
date determined in accordance with GAAP.
"Specified Subsidiaries" means, collectively, (a) CarMax Texas General
----------------------
Partner, LLC, a Texas limited liability company, (b) CarMax Auto Superstores
Texas, LP, a Texas limited partnership, (c) CarMax Auto Superstores Services,
Inc., a Virginia corporation and (d) CarMax Properties, LLC, a Virginia limited
liability company.
C722003.23
23
"Subsidiary" of a Person means a corporation, partnership, joint
----------
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, (a) all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
the Company and (b) all references herein to "Subsidiaries" in connection with
financial statements or financial ratios (or the components thereof) shall refer
to the Subsidiaries of the Company the accounts of which (i) are consolidated
with those of the Company in its consolidated financial statements or (ii) would
be consolidated with those of the Company in its consolidated financial
statements if such statements were prepared in accordance with GAAP.
"Subsidiary Guarantors" means, collectively, all Subsidiaries executing
---------------------
a Subsidiary Guaranty Agreement on the Closing Date and all other Subsidiaries
that enter into a Joinder Agreement.
"Subsidiary Guaranty Agreement" means the Subsidiary Guaranty Agreement
-----------------------------
made by the Subsidiary Guarantors in favor of the Administrative Agent and the
Lenders, substantially in the form of Exhibit J.
---------
"Swap Contracts" means (a) any and all rate swap transactions, basis
--------------
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"), including
----------------
any such obligations or liabilities under any Master Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
----------------------
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
C722003.23
24
"Swing Line" means the revolving credit facility made available by the
----------
Swing Line Lender pursuant to Section 2.04.
------------
"Swing Line Borrowing" means a borrowing of a Swing Line Loan pursuant
--------------------
to Section 2.04, including any borrowing of such a Loan pursuant to the
------------
Autoborrow Agreement.
"Swing Line Lender" means Bank of America in its capacity as provider
-----------------
of Swing Line Loans, or any successor swing line lender hereunder.
"Swing Line Loan" has the meaning specified in Section 2.04(a).
--------------- ---------------
"Swing Line Loan Notice" means a notice of a Swing Line Borrowing
----------------------
pursuant to Section 2.04(b), which, if in writing, shall be substantially in the
--------------
form of Exhibit B.
---------
"Swing Line Sublimit" means an amount equal to the lesser of (a)
-------------------
$25,000,000 and (b) the Aggregate Commitments. The Swing Line Sublimit is part
of, and not in addition to, the Aggregate Commitments.
"Synthetic Lease Obligation" means the monetary obligation of a Person
--------------------------
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
"Taxes" means all present or future taxes, levies, imposts, duties,
-----
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.
"Term Securitization Programs" means (a) the public securitization
----------------------------
programs identified on Schedule 1.01 and (b) any other non-revolving
-------------
securitization program under which a discrete pool of retail installment
contracts originated by the Company or any other Loan Party is sold, transferred
or assigned to one or more special purpose entities in a transaction that
constitutes a "true sale" for bankruptcy purposes (as evidenced by an opinion
prepared and delivered in a manner consistent with market standards by reputable
independent counsel experienced in securitization transactions) for a price
equal to not less than the fair market value of such retail installment
contracts and on such other terms and conditions as shall be reasonable and
customary for such transactions; provided, however, that (x) such arrangement
-------- -------
does not include (i) provisions under which the Company or any Subsidiary (other
than an Excluded Special Purpose Finance Subsidiary) directly assumes the credit
risk associated with such retail installment contracts, (ii) direct or indirect
recourse provisions under which, based on the historical performance of such
retail installment contracts, the Company or any Subsidiary (other than an
Excluded Special Purpose Finance Subsidiary) could reasonably be expected to
suffer economic loss, or (iii) any recourse provisions which are not customary
for transactions of such type and (y) such arrangement does not result in the
creation of any Lien on the assets of the Company or any Subsidiary (other than
Excluded Special Purpose Finance Subsidiaries), other than Liens on such retail
installment contracts and the Related Property.
C722003.23
25
"Third-Party Contract" means a retail installment contract originated
--------------------
by the Company or any other Loan Party, using a form provided by a financial
institution or other lender that is not an Affiliate of the Company, which
contract is assigned to such financial institution or other lender promptly
after origination.
"Threshold Amount" means $15,000,000.
----------------
"Total Outstandings" means the aggregate Outstanding Amount of all
------------------
Loans and all L/C Obligations.
"Type" means, with respect to a Committed Loan, Swing Line Loan or New
----
Vehicle Swing Line Loan, its character as a Base Rate Loan or a Eurodollar Rate
Loan.
"Unfunded Pension Liability" means, with respect to any Pension Plan,
--------------------------
the excess of such Pension Plan's benefit liabilities under Section 4001(a)(16)
of ERISA, over the current value of such Pension Plan's assets, determined in
accordance with the assumptions used for funding such Pension Plan pursuant to
Section 412 of the Code for the applicable plan year.
"United States" and "U.S." mean the United States of America.
------------- ----
"Unreimbursed Amount" has the meaning specified in Section 2.03(c)(i).
------------------- ------------------
"Used Vehicle" means a Vehicle other than a New Vehicle.
------------
"Vehicle" means an automobile or truck with a gross vehicle weight of
-------
less than 16,000 pounds which satisfies the following requirements: (a) the
vehicle is owned by a Grantor free of any title defects or any liens or
interests of others except the security interest in favor of the Administrative
Agent for the benefit of the Secured Parties and other Liens to which the
Administrative Agent consents in writing in its sole discretion; (b) except as
set forth in Section 6.14, the vehicle is located at one of the locations
------------
identified in Schedule 6.14; and (c) the vehicle is held for sale in the
-------------
ordinary course of a Grantor's business and is of good and merchantable quality.
"Vehicle Title Documentation" has the meaning specified in Section
--------------------------- -------
6.05.
- ----
"Within Line Limitation" means, with respect to any Borrower, any
----------------------
dealer location and any specific vehicle manufacturer or distributor,
limitations on the amount of New Vehicle Swing Line Loans that may be advanced
to such manufacturer or distributor with respect to New Vehicles purchased or to
be purchased by such Borrower for such dealer location, which limitations are
agreed to from time to time by the Administrative Agent and such distributor or
manufacturer.
1.02 Other Interpretive Provisions. With reference to this Agreement
and each other Loan Document, unless otherwise specified herein
or in such other Loan Document:
(a) The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include,"
-------
"includes" and "including" shall be deemed to be followed by the
-------- ---------
C722003.23
26
phrase "without limitation." The word "will" shall be construed
----
to have the same meaning and effect as the word "shall." Unless
-----
the context requires otherwise, (i) any definition of or
reference to any agreement, instrument or other document
(including any Organization Document) shall be construed as
referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject
to any restrictions on such amendments, supplements or
modifications set forth herein or in any other Loan Document),
(ii) any reference herein to any Person shall be construed to
include such Person's successors and assigns, (iii) the words
"herein," "hereof" and "hereunder," and words of similar import
------ ------ ---------
when used in any Loan Document, shall be construed to refer to
such Loan Document in its entirety and not to any particular
provision thereof, (iv) all references in a Loan Document to
Articles, Sections, Exhibits and Schedules shall be construed to
refer to Articles and Sections of, and Exhibits and Schedules to,
the Loan Document in which such references appear, (v) any
reference to any law shall include all statutory and regulatory
provisions consolidating, amending, replacing or interpreting
such law and any reference to any law or regulation shall, unless
otherwise specified, refer to such law or regulation as amended,
modified or supplemented from time to time, and (vi) the words
"asset" and "property" shall be construed to have the same
----- --------
meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities,
accounts and contract rights.
(b) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including;"
------------------
the words "to" and "until" each mean "to but excluding;" and the
-- ----- ------------------
word "through" means "to and including."
------- ----------------
(c) Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect
the interpretation of this Agreement or any other Loan Document.
1.03 Accounting Terms. (a) Generally. All accounting terms not
---------
specifically or completely defined herein shall be construed in
conformity with, and all financial data (including financial
ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with,
GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing
the Audited Financial Statements, except as otherwise
------
specifically prescribed herein.
(b) Changes in GAAP or Accounting Practices. If at any time any
------------------------------------------
change in GAAP or any change in any accounting practice or
financial reporting practice of any Loan Party made in accordance
with GAAP would affect the computation of any financial ratio or
requirement set forth in any Loan Document, and either the
Company or the Required Lenders shall so request, the
Administrative Agent, the Lenders and the Company shall negotiate
in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP or such
change in accounting practice or financial reporting practice
(subject to the approval of the Required Lenders); provided that,
--------
until so amended, (i) such ratio or requirement shall continue to
be computed in accordance with GAAP or such accounting practice
or financial reporting practice prior to such change therein and
(ii) the Company shall provide to the Administrative Agent and
the Lenders financial statements and other documents required
under this Agreement or as reasonably requested hereunder setting
forth a reconciliation between calculations of such ratio or
C722003.23
27
requirement made before and after giving effect to such change in
GAAP or such change in accounting practice or financial reporting
practice.
1.04 Rounding. Any financial ratios required to be maintained by the
Company pursuant to this Agreement shall be calculated by
dividing the appropriate component by the other component,
carrying the result to one place more than the number of places
by which such ratio is expressed herein and rounding the result
up or down to the nearest number (with a rounding-up if there is
no nearest number).
1.05 Times of Day. Unless otherwise specified, all references herein
to times of day shall be references to Eastern time (daylight or
standard, as applicable).
1.06 Letter of Credit Amounts. Unless otherwise specified herein, the
amount of a Letter of Credit at any time shall be deemed to be
the stated amount of such Letter of Credit in effect at such
time; provided, however, that with respect to any Letter of
-------- -------
Credit that, by its terms or the terms of any Issuer Document
related thereto, provides for one or more automatic increases in
the stated amount thereof, the amount of such Letter of Credit
shall be deemed to be the maximum stated amount of such Letter of
Credit after giving effect to all such increases, whether or not
such maximum stated amount is in effect at such time.
ARTICLE II.
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 Committed Loans. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make loans (each such
loan, a "Committed Loan") to the Revolving Borrower, from time to
--------------
time, on any Business Day during the Availability Period, in an
aggregate amount not to exceed at any time outstanding the amount
of such Lender's Commitment; provided, however, that after giving
-------- -------
effect to any Committed Borrowing, (i) the Total Outstandings
shall not exceed the lesser of the Aggregate Commitments and the
Borrowing Base, and (ii) the Outstanding Amount of the Committed
Loans of any Lender, plus such Lender's Applicable Percentage of
the Outstanding Amount of all L/C Obligations, plus such Lender's
Applicable Percentage of the Outstanding Amount of all Swing Line
Loans, plus such Lender's Applicable Percentage of the
Outstanding Amount of all New Vehicle Swing Line Loans shall not,
in the aggregate, exceed such Lender's Commitment. Within the
limits of each Lender's Commitment, and subject to the other
terms and conditions hereof, the Revolving Borrower may borrow
under this Section 2.01, prepay under Section 2.06, and reborrow
------------ ------------
under this Section 2.01. Committed Loans may be Base Rate Loans
------------
or Eurodollar Rate Loans, as further provided herein.
2.02 Borrowings, and Conversions and Continuations of Committed Loans.
(a) Each Committed Borrowing and each conversion of Committed Loans
from one Type to the other shall be made upon the Revolving
Borrower's irrevocable notice to the Administrative Agent, which
may be given by telephone. Each such notice must be received by
the Administrative Agent not later than 11:00 a.m. (i) one
Business Day prior to the requested date of any Borrowing of
Eurodollar Rate Loans, or of any conversion of Eurodollar Rate
Loans to Base Rate Committed Loans or of any conversion of Base
Rate Committed Loans to Eurodollar Rate Loans, or (ii) one
C722003.23
28
Business Day prior to the requested date of any Borrowing of Base
Rate Committed Loans. Except as provided in Sections 2.03(c),
-----------------
2.04(c), and 2.05(e), each Borrowing of or conversion of Loans
------ -------
shall be in a principal amount of $1,000,000 or a whole multiple
of $100,000 in excess thereof. Each Committed Loan Notice
(whether telephonic or written) shall specify (i) whether the
Revolving Borrower is requesting a Committed Borrowing, or a
conversion of Committed Loans from one Type to the other, (ii)
the requested date of the Borrowing or conversion, as the case
may be (which shall be a Business Day), (iii) the principal
amount of Committed Loans to be borrowed or converted, and (iv)
the Type of Committed Loans to be borrowed or to which existing
Committed Loans are to be converted. If the Revolving Borrower
fails to provide a timely Committed Loan Notice requesting a
conversion of Eurodollar Rate Loans to Base Rate Loans, such
Loans shall continue as Eurodollar Rate Loans. If the Revolving
Borrower fails to specify a Type of Committed Loan in a Committed
Loan Notice, then the applicable Committed Loans shall be made as
Eurodollar Rate Loans.
(b) Following receipt of a Committed Loan Notice, the Administrative
Agent shall promptly notify each Lender of the amount of its
Applicable Percentage of the applicable Committed Loans. Each
Lender shall make the amount of its Committed Loan available to
the Administrative Agent in immediately available funds at the
Administrative Agent's Office not later than 1:00 p.m., on the
Business Day specified in the applicable Committed Loan Notice.
Upon satisfaction of the applicable conditions set forth in
Section 4.02 (and, if such Borrowing is the initial Credit
-------------
Extension, Section 4.01), the Administrative Agent shall make all
------------
funds so received available to the Revolving Borrower in like
funds as received by the Administrative Agent either by (i)
crediting the account of the Revolving Borrower on the books of
Bank of America with the amount of such funds or (ii) wire
transfer of such funds, in each case in accordance with
instructions provided to (and reasonably acceptable to) the
Administrative Agent by the Revolving Borrower; provided,
--------
however, that if, on the date the Committed Loan Notice with
-------
respect to such Borrowing is given by the Revolving Borrower,
there are L/C Borrowings outstanding, then the proceeds of such
Borrowing, first, shall be applied to the payment in full of any
-----
such L/C Borrowings, and, second, shall be made available to the
------
Revolving Borrower as provided above.
(c) The Administrative Agent shall promptly notify the Revolving
Borrower and the Lenders of the interest rate applicable to any
Eurodollar Rate Loans upon determination of such interest rate.
At any time that Base Rate Loans are outstanding, the
Administrative Agent shall notify the Revolving Borrower and the
Lenders of any change in Bank of America's prime rate used in
determining the Base Rate promptly following the public
announcement of such change.
2.03 Letters of Credit.
(a) The Letter of Credit Commitment.
-------------------------------
(i) Subject to the terms and conditions set forth herein, (A) the
L/C Issuer agrees, in reliance upon the agreements of the Lenders set
forth in this Section 2.03, (1) from time to time on any Business Day
------------
during the period from the Closing Date until the Letter of Credit
Expiration Date, to issue Letters of Credit for the account of the
Revolving Borrower or its Subsidiaries, and to amend or extend Letters
of Credit previously issued by it, in accordance with subsection (b)
below, and (2) to honor drawings under the Letters of Credit; and (B)
C722003.23
29
the Lenders severally agree to participate in Letters of Credit issued
for the account of the Revolving Borrower or its Subsidiaries and any
drawings thereunder; provided that after giving effect to any L/C
--------
Credit Extension with respect to any Letter of Credit, (x) the Total
Outstandings shall not exceed the lesser of the Aggregate Commitments
and the Borrowing Base, (y) the aggregate Outstanding Amount of the
Committed Loans of any Lender, plus such Lender's Applicable
----
Percentage of the Outstanding Amount of all L/C Obligations, plus such
----
Lender's Applicable Percentage of the Outstanding Amount of all Swing
Line Loans, plus such Lender's Applicable Percentage of the
----
Outstanding Amount of all New Vehicle Swing Line Loans shall not
exceed such Lender's Commitment, and (z) the Outstanding Amount of the
L/C Obligations shall not exceed the Letter of Credit Sublimit. Each
request by the Revolving Borrower for the issuance or amendment of a
Letter of Credit shall be deemed to be a representation by the
Revolving Borrower that the L/C Credit Extension so requested complies
with the conditions set forth in the proviso to the preceding
sentence. Within the foregoing limits, and subject to the terms and
conditions hereof, the Revolving Borrower's ability to obtain Letters
of Credit shall be fully revolving, and accordingly the Revolving
Borrower may, during the foregoing period, obtain Letters of Credit to
replace Letters of Credit that have expired or that have been drawn
upon and reimbursed.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) except as provided in Section 2.03(b)(iii), the expiry
---------------------
date of such requested Letter of Credit would occur more than
twelve months after the date of issuance or last extension,
unless the Required Lenders have approved such expiry date; or
(B) the expiry date of such requested Letter of Credit would
occur after the Letter of Credit Expiration Date, unless (i) the
Revolving Borrower has Cash Collateralized the Outstanding Amount
of L/C Obligations related to such Letter of Credit, or (ii) all
the Lenders have approved such expiry date.
(iii) The L/C Issuer shall not be under any obligation to issue
any Letter of Credit if:
(A) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or
restrain the L/C Issuer from issuing such Letter of Credit, or
any Law applicable to the L/C Issuer or any request or directive
(whether or not having the force of law) from any Governmental
Authority with jurisdiction over the L/C Issuer shall prohibit,
or request that the L/C Issuer refrain from, the issuance of
letters of credit generally or such Letter of Credit in
particular or shall impose upon the L/C Issuer with respect to
such Letter of Credit any restriction, reserve or capital
requirement (for which the L/C Issuer is not otherwise
compensated hereunder) not in effect on the Closing Date, or
shall impose upon the L/C Issuer any unreimbursed loss, cost or
expense which was not applicable on the Closing Date and which
the L/C Issuer in good faith deems material to it;
C722003.23
30
(B) the issuance of such Letter of Credit would violate one
or more policies of the L/C Issuer;
(C) except as otherwise agreed by the Administrative Agent
and the L/C Issuer, such Letter of Credit is in an initial stated
amount of less than $500,000;
(D) such Letter of Credit is to be denominated in a currency
other than Dollars;
(E) such Letter of Credit contains any provisions for
automatic reinstatement of the stated amount after any drawing
thereunder; or
(F) a default of any Lender's obligations to fund under
Section 2.03(c) exists or any Lender is at such time a Defaulting
---------------
Lender hereunder, unless the L/C Issuer has entered into
satisfactory arrangements with the Revolving Borrower or such
Lender to eliminate the L/C Issuer's risk with respect to such
Lender.
(iv) The L/C Issuer shall not amend any Letter of Credit if the
L/C Issuer would not be permitted at such time to issue such Letter of
Credit in its amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any
Letter of Credit if (A) the L/C Issuer would have no obligation at
such time to issue such Letter of Credit in its amended form under the
terms hereof, or (B) the beneficiary of such Letter of Credit does not
accept the proposed amendment to such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lenders with
respect to any Letters of Credit issued by it and the documents
associated therewith, and the L/C Issuer shall have all of the
benefits and immunities (A) provided to the Administrative Agent in
Article IX with respect to any acts taken or omissions suffered by the
----------
L/C Issuer in connection with Letters of Credit issued by it or
proposed to be issued by it and the Issuer Documents pertaining to
such Letters of Credit as fully as if the term "Administrative Agent"
as used in Article IX included the L/C Issuer with respect to such
----------
acts or omissions, and (B) as additionally provided herein with
respect to the L/C Issuer.
(b) Procedures for Issuance and Amendment of Letters of Credit;
-----------------------------------------------------------------
Auto-Extension Letters of Credit.
---------------------------------
(i) Each Letter of Credit shall be issued or amended, as the case
may be, upon the request of the Revolving Borrower delivered to the
L/C Issuer (with a copy to the Administrative Agent) in the form of a
Letter of Credit Application, appropriately completed and signed by a
Responsible Officer of the Revolving Borrower. Such Letter of Credit
Application must be received by the L/C Issuer and the Administrative
Agent not later than 11:00 a.m. at least two Business Days (or such
later date and time as the Administrative Agent and the L/C Issuer may
agree in a particular instance in their sole discretion) prior to the
proposed issuance date or date of amendment, as the case may be. In
the case of a request for an initial issuance of a Letter of Credit,
C722003.23
31
such Letter of Credit Application shall specify in form and detail
satisfactory to the L/C Issuer: (A) the proposed issuance date of the
requested Letter of Credit (which shall be a Business Day); (B) the
amount thereof; (C) the expiry date thereof; (D) the name and address
of the beneficiary thereof; (E) the documents to be presented by such
beneficiary in case of any drawing thereunder; (F) the full text of
any certificate to be presented by such beneficiary in case of any
drawing thereunder; and (G) such other matters as the L/C Issuer may
reasonably require. In the case of a request for an amendment of any
outstanding Letter of Credit, such Letter of Credit Application shall
specify in form and detail satisfactory to the L/C Issuer (A) the
Letter of Credit to be amended; (B) the proposed date of amendment
thereof (which shall be a Business Day); (C) the nature of the
proposed amendment; and (D) such other matters as the L/C Issuer may
reasonably require. Additionally, the Revolving Borrower shall furnish
to the L/C Issuer and the Administrative Agent such other documents
and information pertaining to such requested Letter of Credit issuance
or amendment, including any Issuer Documents, as the L/C Issuer or the
Administrative Agent may reasonably require.
(ii) Promptly after receipt of any Letter of Credit Application,
the L/C Issuer will confirm with the Administrative Agent (by
telephone or in writing) that the Administrative Agent has received a
copy of such Letter of Credit Application from the Revolving Borrower
and, if not, the L/C Issuer will provide the Administrative Agent with
a copy thereof. Unless the L/C Issuer has received written notice from
any Lender, the Administrative Agent or any Loan Party, at least one
Business Day prior to the requested date of issuance or amendment of
the applicable Letter of Credit, that one or more applicable
conditions contained in Article IV shall not then be satisfied, then,
----------
subject to the terms and conditions hereof, the L/C Issuer shall, on
the requested date, issue a Letter of Credit for the account of the
Revolving Borrower (or the applicable Subsidiary) or enter into the
applicable amendment, as the case may be, in each case in accordance
with the L/C Issuer's usual and customary business practices.
Immediately upon the issuance of each Letter of Credit, each Lender
shall be deemed to, and hereby irrevocably and unconditionally agrees
to, purchase from the L/C Issuer a risk participation in such Letter
of Credit in an amount equal to the product of such Lender's
Applicable Percentage times the amount of such Letter of Credit.
(iii) If the Revolving Borrower so requests in any applicable
Letter of Credit Application, the L/C Issuer may, in its sole and
absolute discretion, agree to issue a Letter of Credit that has
automatic extension provisions (each, an "Auto-Extension Letter of
-------------------------
Credit"); provided that any such Auto-Extension Letter of Credit must
------ --------
permit the L/C Issuer to prevent any such extension at least once in
each twelve-month period (commencing with the date of issuance of such
Letter of Credit) by giving prior notice to the beneficiary thereof
not later than a day (the "Non-Extension Notice Date") in each such
---------------------------
twelve-month period to be agreed upon at the time such Letter of
Credit is issued. Unless otherwise directed by the L/C Issuer, the
Revolving Borrower shall not be required to make a specific request to
the L/C Issuer for any such extension. Once an Auto-Extension Letter
of Credit has been issued, the Lenders shall be deemed to have
authorized (but may not require) the L/C Issuer to permit the
extension of such Letter of Credit at any time to an expiry date not
later than the Letter of Credit Expiration Date (or to an expiry date
later than the Letter of Credit Expiration Date if, at the time of
C722003.23
32
such extension, the Revolving Borrower has Cash Collateralized the
Outstanding Amount of L/C Obligations related to such Letter of Credit
or the L/C Issuer and all the Lenders have approved such expiry date);
provided, however, that the L/C Issuer shall not permit any such
-------- -------
extension if (A) the L/C Issuer has determined that it would not be
permitted, or would have no obligation, at such time to issue such
Letter of Credit in its revised form (as extended) under the terms
hereof (by reason of the provisions of clause (ii) or (iii) of Section
-------
2.03(a) or otherwise), or (B) it has received notice (which may be by
-------
telephone or in writing) on or before the day that is five Business
Days before the Non-Extension Notice Date (1) from the Administrative
Agent that the Required Lenders have elected not to permit such
extension or (2) from the Administrative Agent, any Lender or the
Revolving Borrower that one or more of the applicable conditions
specified in Section 4.02 is not then satisfied, and in each such case
------------
directing the L/C Issuer not to permit such extension.
(iv) Promptly after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect
thereto or to the beneficiary thereof, the L/C Issuer will also
deliver to the Revolving Borrower and the Administrative Agent a true
and complete copy of such Letter of Credit or amendment.
(v) Promptly following the end of each calendar quarter, the L/C
Issuer Bank shall deliver to the Administrative Agent a notice
describing the aggregate undrawn amount of all Letters of Credit at
the end of such quarter.
(c) Drawings and Reimbursements; Funding of Participations.
------------------------------------------------------
(i) Upon receipt from the beneficiary of any Letter of Credit of
any notice of a drawing under such Letter of Credit, the L/C Issuer
shall notify the Revolving Borrower and the Administrative Agent of
(A) the receipt of such notice, (B) the date on which the L/C Issuer
expects to make a payment under such Letter of Credit and (C) the
amount of such drawing. Not later than 11:00 a.m. on the date of any
payment by the L/C Issuer under a Letter of Credit (each such date, an
"Honor Date"), the Revolving Borrower shall reimburse the L/C Issuer
----------
through the Administrative Agent in an amount equal to the amount of
such drawing. If the Revolving Borrower fails to so reimburse the L/C
Issuer by such time, the Administrative Agent shall promptly notify
each Lender of the Honor Date, the amount of the unreimbursed drawing
(the "Unreimbursed Amount"), and the amount of such Lender's
---------------------
Applicable Percentage thereof. In such event, the Revolving Borrower
shall be deemed to have requested a Committed Borrowing of Base Rate
Loans to be disbursed on the Honor Date in an amount equal to the
Unreimbursed Amount, without regard to the minimum and multiples
specified in Section 2.02 for the principal amount of Base Rate Loans,
------------
but subject to the amount of the unutilized portion of the Aggregate
Commitments and the conditions set forth in Section 4.02 (other than
------------
the delivery of a Committed Loan Notice). Any notice given by the L/C
Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i)
------------------
may be given by telephone if immediately confirmed in writing;
provided that the lack of such an immediate confirmation shall not
--------
affect the conclusiveness or binding effect of such notice.
C722003.23
33
(ii) Each Lender shall upon any notice pursuant to Section
-------
2.03(c)(i) make funds available to the Administrative Agent for the
----------
account of the L/C Issuer, at the Administrative Agent's Office in an
amount equal to its Applicable Percentage of the Unreimbursed Amount
not later than 1:00 p.m. on the Business Day specified in such notice
by the Administrative Agent (which shall be at least one Business Day
after Administrative Agent delivers such notice), whereupon, subject
to the provisions of Section 2.03(c)(iii), each Lender that so makes
---------------------
funds available shall be deemed to have made a Base Rate Committed
Loan in such amount to the Revolving Borrower. The Administrative
Agent shall remit the funds so received to the L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is not fully
refinanced by a Committed Borrowing of Base Rate Loans because the
conditions set forth in Section 4.02 cannot be satisfied or for any
-------------
other reason, the Revolving Borrower shall be deemed to have incurred
from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed
Amount that is not so refinanced, which L/C Borrowing shall be due and
payable on demand (together with interest) and shall bear interest at
the Default Rate. In such event, each Lender's payment to the
Administrative Agent for the account of the L/C Issuer pursuant to
Section 2.03(c)(ii) shall be deemed payment in respect of its
--------------------
participation in such L/C Borrowing and shall constitute an L/C
Advance from such Lender in satisfaction of its participation
obligation under this Section 2.03.
------------
(iv) Until each Lender funds its Committed Loan or L/C Advance
pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any
----------------
amount drawn under any Letter of Credit, interest in respect of such
Lender's Applicable Percentage of such amount shall be solely for the
account of the L/C Issuer.
(v) Each Lender's obligation to make Committed Loans or L/C
Advances to reimburse the L/C Issuer for amounts drawn under Letters
of Credit, as contemplated by this Section 2.03(c), shall be absolute
---------------
and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other
right which such Lender may have against the L/C Issuer, the Company,
the Revolving Borrower, or any other Person for any reason whatsoever;
(B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the
foregoing; provided, however, that each Lender's obligation to make
-------- -------
Committed Loans pursuant to this Section 2.03(c) is subject to the
----------------
conditions set forth in Section 4.02 (other than delivery by the
-------------
Revolving Borrower of a Committed Loan Notice). No such making of an
L/C Advance shall relieve or otherwise impair the obligation of the
Revolving Borrower to reimburse the L/C Issuer for the amount of any
payment made by the L/C Issuer under any Letter of Credit, together
with interest as provided herein.
(vi) If any Lender fails to make available to the Administrative
Agent for the account of the L/C Issuer any amount required to be paid
by such Lender pursuant to the foregoing provisions of this Section
-------
2.03(c) by the time specified in Section 2.03(c)(ii), the L/C Issuer
------- --------------------
shall be entitled to recover from such Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon
for the period from the date such payment is required to the date on
which such payment is immediately available to the L/C Issuer at a
C722003.23
34
rate per annum equal to the greater of the Federal Funds Rate and a
rate determined by the L/C Issuer in accordance with banking industry
rules on interbank compensation. A certificate of the L/C Issuer
submitted to any Lender (through the Administrative Agent) with
respect to any amounts owing under this clause (vi) shall be
conclusive absent manifest error.
(d) Repayment of Participations.
---------------------------
(i) At any time after the L/C Issuer has made a payment under any
Letter of Credit and has received from any Lender such Lender's L/C
Advance in respect of such payment in accordance with Section 2.03(c),
---------------
if the Administrative Agent receives for the account of the L/C Issuer
any payment in respect of the related Unreimbursed Amount or interest
thereon (whether directly from the Revolving Borrower or otherwise,
including proceeds of Cash Collateral applied thereto by the
Administrative Agent), the Administrative Agent will distribute to
such Lender its Applicable Percentage thereof (appropriately adjusted,
in the case of interest payments, to reflect the period of time during
which such Lender's L/C Advance was outstanding) and in the same funds
as those received by the Administrative Agent.
(ii) If any payment received by the Administrative Agent for the
account of the L/C Issuer pursuant to Section 2.03(c)(i) is required
-------------------
to be returned under any of the circumstances described in Section
-------
10.05 (including pursuant to any settlement entered into by the L/C
-----
Issuer in its discretion), each Lender shall pay to the Administrative
Agent for the account of the L/C Issuer its Applicable Percentage
thereof on demand of the Administrative Agent, plus interest thereon
from the date one Business Day after such demand to the date such
amount is returned by such Lender, at a rate per annum equal to the
Federal Funds Rate from time to time in effect. The obligations of the
Lenders under this clause shall survive the payment in full of the
Obligations and the termination of this Agreement.
(e) Obligations Absolute. The obligation of the Revolving Borrower to
--------------------
reimburse the L/C Issuer for each drawing under each Letter of Credit and
to repay each L/C Borrowing shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of
this Agreement under all circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of
Credit, this Agreement, or any other Loan Document;
(ii) the existence of any claim, counterclaim, setoff, defense or
other right that the Company, the Revolving Borrower, any Designated
Borrower or any Subsidiary may have at any time against any
beneficiary or any transferee of such Letter of Credit (or any Person
for whom any such beneficiary or any such transferee may be acting),
the L/C Issuer or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by such Letter of
Credit or any agreement or instrument relating thereto, or any
unrelated transaction;
C722003.23
35
(iii) any draft, demand, certificate or other document presented
under such Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect; or any loss or delay in the transmission
or otherwise of any document required in order to make a drawing under
such Letter of Credit;
(iv) any payment by the L/C Issuer under such Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of such Letter of Credit; or any payment made by
the L/C Issuer under such Letter of Credit to any Person purporting to
be a trustee in bankruptcy, debtor-in-possession, assignee for the
benefit of creditors, liquidator, receiver or other representative of
or successor to any beneficiary or any transferee of such Letter of
Credit, including any arising in connection with any proceeding under
any Debtor Relief Law; or
(v) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including any other circumstance
that might otherwise constitute a defense available to, or a discharge
of, the Company, the Revolving Borrower, any Designated Borrower or
any Subsidiary.
The Revolving Borrower shall promptly examine a copy of each Letter of
Credit and each amendment thereto that is delivered to it and, in the event of
any claim of noncompliance with the Revolving Borrower's instructions or other
irregularity, the Revolving Borrower will immediately notify the L/C Issuer. The
Company, the Revolving Borrower and each Designated Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given by the Revolving Borrower as
aforesaid.
(f) Role of L/C Issuer. Each Lender and the Revolving Borrower agree
------------------
that, in paying any drawing under a Letter of Credit, the L/C Issuer shall
not have any responsibility to obtain any document (other than any sight
draft, certificates and documents expressly required by the Letter of
Credit) or to ascertain or inquire as to the validity or accuracy of any
such document or the authority of the Person executing or delivering any
such document. None of the L/C Issuer, the Administrative Agent, any of
their respective Related Parties nor any correspondent, participant or
assignee of the L/C Issuer shall be liable to any Lender for (i) any action
taken or omitted in connection herewith at the request or with the approval
of the Lenders or the Required Lenders, as applicable; (ii) any action
taken or omitted in the absence of gross negligence or willful misconduct;
or (iii) the due execution, effectiveness, validity or enforceability of
any document or instrument related to any Letter of Credit or Issuer
Document. The Revolving Borrower hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided, however, that this assumption is not intended
-------- -------
to, and shall not, preclude the Revolving Borrower's pursuing such rights
and remedies as it may have against the beneficiary or transferee at law or
under any other agreement. None of the L/C Issuer, the Administrative
Agent, any of their respective Related Parties nor any correspondent,
participant or assignee of the L/C Issuer shall be liable or responsible
for any of the matters described in clauses (i) through (v) of Section
-------
2.03(e); provided, however, that anything in such clauses to the contrary
------- -------- -------
notwithstanding, the Revolving Borrower may have a claim against the L/C
Issuer, and the L/C Issuer may be liable to the Revolving Borrower, to the
extent, but only to the extent, of any direct, as opposed to consequential
C722003.23
36
or exemplary, damages suffered by the Revolving Borrower which the
Revolving Borrower proves were caused by the L/C Issuer's willful
misconduct or gross negligence or the L/C Issuer's willful failure to pay
under any Letter of Credit after the presentation to it by the beneficiary
of a sight draft and certificate(s) strictly complying with the terms and
conditions of a Letter of Credit. In furtherance and not in limitation of
the foregoing, the L/C Issuer may accept documents that appear on their
face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary, and the L/C Issuer
shall not be responsible for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole
or in part, which may prove to be invalid or ineffective for any reason.
(g) Cash Collateral. Upon the request of the Administrative Agent, (i)
---------------
if the L/C Issuer has honored any full or partial drawing request under any
Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii)
if, as of the Letter of Credit Expiration Date, any L/C Obligation for any
reason remains outstanding, the Revolving Borrower shall, in each case,
immediately Cash Collateralize the then Outstanding Amount of all L/C
Obligations. Sections 2.06 and 8.02(c) set forth certain additional
-------------- -------
requirements to deliver Cash Collateral hereunder. For purposes of this
Section 2.03, Section 2.06 and Section 8.02(c), "Cash Collateralize" means
------------ ------------ --------------- ------------------
to pledge and deposit with or deliver to the Administrative Agent, for the
benefit of the L/C Issuer and the Lenders, as collateral for the L/C
Obligations, cash or deposit account balances pursuant to documentation in
form and substance satisfactory to the Administrative Agent and the L/C
Issuer (which documents are hereby consented to by the Lenders).
Derivatives of such term have corresponding meanings. The Revolving
Borrower hereby grants to the Administrative Agent, for the benefit of the
L/C Issuer and the Lenders, a security interest in all such cash, deposit
accounts and all balances therein and all proceeds of the foregoing. Cash
Collateral shall be maintained in blocked, non-interest bearing deposit
accounts at Bank of America.
(h) Applicability of ISP. Unless otherwise expressly agreed by the L/C
--------------------
Issuer and the Revolving Borrower when a Letter of Credit is issued, the
rules of the ISP shall apply to each Letter of Credit.
(i) Letter of Credit Fees. The Revolving Borrower shall pay to the
---------------------
Administrative Agent for the account of each Lender in accordance with its
Applicable Percentage, a Letter of Credit fee (the "Letter of Credit Fee")
--------------------
for each Letter of Credit equal to the greater of (i) $5,000 or (ii) the
Applicable Rate times the daily amount available to be drawn under such
-----
Letter of Credit during the year following the due date of such Letter of
Credit Fee, which daily amount shall be determined on the date of payment
of such fee, provided that if the amount available to be drawn in any such
--------
year is increased or decreased during such year, the Letter of Credit Fee
previously paid with respect to such year shall be adjusted accordingly.
For purposes of computing the daily amount available to be drawn under any
Letter of Credit, the amount of such Letter of Credit shall be determined
in accordance with Section 1.06. Letter of Credit Fees shall be computed on
------------
an annual basis in advance and shall be due and payable (i) upon issuance
of such Letter of Credit and (ii) annually thereafter, commencing with the
first such date to occur after the issuance of such Letter of Credit, (iii)
on the Letter of Credit Expiration Date and (iv) thereafter on demand.
Notwithstanding anything to the contrary contained herein, upon the request
C722003.23
37
of the Required Lenders, while any Event of Default exists, all Letter of
Credit Fees shall accrue at the Default Rate.
(j) Fronting Fee and Documentary and Processing Charges Payable to L/C
------------------------------------------------------------------
Issuer. The Revolving Borrower shall pay directly to the L/C Issuer for its
------
own account, a fronting fee with respect to each Letter of Credit, at the
rate per annum specified in the Fee Letter, computed on the daily amount
available to be drawn under such Letter of Credit during the year following
the due date of such fronting fee, which daily amount shall be determined
on the date of payment of such fee, provided that if the amount available
--------
to be drawn in any such year is increased or decreased during such year,
the fronting fee previously paid with respect to such year shall be
adjusted accordingly. Such fronting fee shall be computed on an annual
basis in advance and shall be due and payable (i) on the date of issuance
of such Letter of Credit, (ii) annually thereafter, (iii) on the Letter of
Credit Expiration Date and (iv) thereafter on demand. For purposes of
computing the daily amount available to be drawn under any Letter of
Credit, the amount of such Letter of Credit shall be determined in
accordance with Section 1.06. In addition, the Revolving Borrower shall pay
------------
directly to the L/C Issuer, for its own account, the customary issuance,
presentation, amendment and other processing fees, and other standard costs
and charges, of the L/C Issuer relating to letters of credit as from time
to time in effect. Such customary fees and standard costs and charges are
due and payable on demand and are nonrefundable.
(k) Conflict with Issuer Documents. In the event of any conflict
---------------------------------
between the terms hereof and the terms of any Issuer Document, the terms
hereof shall control.
(l) Letters of Credit Issued for Subsidiaries. Notwithstanding that a
-----------------------------------------
Letter of Credit issued or outstanding hereunder is in support of any
obligations of, or is for the account of, a Subsidiary, the Revolving
Borrower shall be obligated to reimburse the L/C Issuer hereunder for any
and all drawings under such Letter of Credit. The Revolving Borrower hereby
acknowledges that the issuance of Letters of Credit for the account of
Subsidiaries inures to the benefit of the Revolving Borrower, and that the
Revolving Borrower's business derives substantial benefits from the
business of such Subsidiaries.
2.04 Swing Line Loans.
(a) The Swing Line. Subject to the terms and conditions set forth
---------------
herein, the Swing Line Lender agrees, in reliance upon the agreements of
the other Lenders set forth in this Section 2.04, to make loans (each such
loan, a "Swing Line Loan") to the Revolving Borrower from time to time on
---------------
any Business Day during the Availability Period in an aggregate amount not
to exceed at any time outstanding the amount of the Swing Line Sublimit,
notwithstanding the fact that such Swing Line Loans, when aggregated with
the Applicable Percentage of the Outstanding Amount of Committed Loans and
L/C Obligations of the Lender acting as Swing Line Lender, may exceed the
amount of such Lender's Commitment; provided, however, that after giving
-------- -------
effect to any Swing Line Loan, (i) the Total Outstandings shall not exceed
the lesser of the Aggregate Commitments and the Borrowing Base, and (ii)
the aggregate Outstanding Amount of the Committed Loans of any Lender, plus
----
such Lender's Applicable Percentage of the Outstanding Amount of all L/C
Obligations, plus such Lender's Applicable Percentage of the Outstanding
----
Amount of all Swing Line Loans, plus such Lender's Applicable Percentage of
----
C722003.23
38
the Outstanding Amount of all New Vehicle Swing Line Loans shall not exceed
such Lender's Commitment, and provided, further, that the Revolving
-------- -------
Borrower shall not use the proceeds of any Swing Line Loan to refinance any
outstanding Swing Line Loan. Notwithstanding the foregoing sentence,
however, in the event a Swing Line Loan is advanced and such Loan causes
the Outstanding Amount of Swing Line Loans or other Obligations to exceed
the Swing Line Sublimit or any limit set forth in Section 2.04(a), (1) the
---------------
Swing Line Lender shall be the sole Lender with respect to the portion of
any such Loan constituting a Bilateral Swing Line Loan and (2) no other
Lender shall be deemed to have purchased or be required to fund a risk
participation in such Bilateral Swing Line Loan. Within the foregoing
limits, and subject to the other terms and conditions hereof, the Revolving
Borrower may borrow under this Section 2.04, prepay under Section 2.06, and
------------ ------------
reborrow under this Section 2.04. Each Swing Line Loan may be a Base Rate
------------
Loan or a Eurodollar Rate Loan. Except as otherwise provided above in this
Section 2.04(a) with respect to Bilateral Swing Line Loans, immediately
----------------
upon the making of a Swing Line Loan, each Lender shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the Swing
Line Lender a risk participation in such Swing Line Loan in an amount equal
to the product of such Lender's Applicable Percentage times the amount of
-----
such Swing Line Loan.
(b) Borrowing Procedures. Each Swing Line Borrowing and each
----------------------
conversion of Swing Line Loans from one Type to the other shall be made
upon the Revolving Borrower's irrevocable notice to the Swing Line Lender
and the Administrative Agent, which may be given by telephone. Each such
notice must be received by the Swing Line Lender and the Administrative
Agent not later than 2:00 p.m. on the requested borrowing date or date of
conversion of Eurodollar Rate Loans to Base Rate Loans or of any conversion
of Base Rate Loans to Eurodollar Rate Loans, and in each case shall specify
(x) the amount to be borrowed, which shall be a minimum of $1,000,000, (y)
the requested borrowing date, which shall be a Business Day, and (z) the
Type of Swing Line Loan to be borrowed or to which existing Swing Line
Loans are to be converted. Each such telephonic notice must be confirmed
promptly by delivery to the Swing Line Lender and the Administrative Agent
of a written Swing Line Loan Notice, appropriately completed and signed by
a Responsible Officer of the Revolving Borrower. Promptly after receipt by
the Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing
Line Lender will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has also received such Swing Line
Loan Notice and, if not, the Swing Line Lender will notify the
Administrative Agent (by telephone or in writing) of the contents thereof.
Unless the Swing Line Lender has received notice (by telephone or in
writing) from the Administrative Agent (including at the request of any
Lender) prior to 3:00 p.m. on the date of the proposed Swing Line Borrowing
(A) directing the Swing Line Lender not to make such Swing Line Loan as a
result of the limitations set forth in the first proviso to the first
sentence of Section 2.04(a), or (B) that one or more of the applicable
----------------
conditions specified in Article IV is not then satisfied, then, subject to
----------
the terms and conditions hereof, the Swing Line Lender will, not later than
4:00 p.m. on the borrowing date specified in such Swing Line Loan Notice,
make the amount of its Swing Line Loan available to the Revolving Borrower
at its office by crediting the account of the Revolving Borrower on the
books of the Swing Line Lender in immediately available funds. If the
Revolving Borrower fails to provide a timely Swing Line Loan Notice
requesting a conversion of Eurodollar Rate Loans to Base Rate Loans, such
Loans shall continue as Eurodollar Rate Loans. If the Revolving Borrower
fails to specify a Type of Swing Line Loan in a Swing Line Loan Notice,
C722003.23
39
then the applicable Swing Line Loan shall be made as a Eurodollar Rate
Loan.
In order to facilitate the borrowing of Swing Line Loans, the
Revolving Borrower and the Swing Line Lender may mutually agree, and are
hereby authorized to, enter into an Autoborrow Agreement providing for the
automatic advance by the Swing Line Lender of Swing Line Loans under the
conditions set forth in such agreement and without the necessity for any
notice by the Revolving Borrower otherwise required by this subsection (b).
(c) Refinancing of Swing Line Loans.
-------------------------------
(i) The Swing Line Lender at any time in its sole and absolute
discretion may request, on behalf of the Revolving Borrower (which
hereby irrevocably authorizes the Swing Line Lender to so request on
its behalf), that each Lender make a Eurodollar Rate Committed Loan in
an amount equal to such Lender's Applicable Percentage of the amount
of Swing Line Loans then outstanding (including, subject to Section
-------
2.04(c)(ii), any Bilateral Swing Line Loan). Such request shall be
-----------
made in writing (which written request shall be deemed to be a
Committed Loan Notice for purposes hereof) and in accordance with the
requirements of Section 2.02, without regard to the minimum and
-------------
multiples specified therein for the principal amount of Eurodollar
Rate Loans, but subject to the unutilized portion of the Aggregate
Commitments and the conditions set forth in Section 4.02. The Swing
------------
Line Lender shall furnish the Revolving Borrower with a copy of the
applicable Committed Loan Notice promptly after delivering such notice
to the Administrative Agent. Each Lender shall make an amount equal to
its Applicable Percentage of the amount specified in such Committed
Loan Notice available to the Administrative Agent in immediately
available funds for the account of the Swing Line Lender at the
Administrative Agent's Office not later than 1:00 p.m. on the day
specified in such Committed Loan Notice (which shall be at least one
Business Day after any voluntary Committed Loan Notice issued by the
Swing Line Lender), whereupon, subject to Section 2.04(c)(ii), each
-------------------
Lender that so makes funds available shall be deemed to have made a
Eurodollar Rate Committed Loan to the Revolving Borrower in such
amount. The Administrative Agent shall remit the funds so received to
the Swing Line Lender.
(ii) If for any reason any Swing Line Loan (other than a
Bilateral Swing Line Loan) cannot be refinanced by such a Committed
Borrowing in accordance with Section 2.04(c)(i), the request for
-------------------
Eurodollar Rate Committed Loans submitted by the Swing Line Lender as
set forth herein shall be deemed to be a request by the Swing Line
Lender that each of the Lenders fund its risk participation in the
relevant Swing Line Loan and each Lender's payment to the
Administrative Agent for the account of the Swing Line Lender pursuant
to Section 2.04(c)(i) shall be deemed payment in respect of such
-------------------
participation.
(iii) If any Lender fails to make available to the Administrative
Agent for the account of the Swing Line Lender any amount required to
be paid by such Lender pursuant to the foregoing provisions of this
Section 2.04(c) by the time specified in Section 2.04(c)(i), the Swing
--------------- ------------------
Line Lender shall be entitled to recover from such Lender (acting
through the Administrative Agent), on demand, such amount with
interest thereon for the period from the date such payment is required
C722003.23
40
to the date on which such payment is immediately available to the
Swing Line Lender at a rate per annum equal to the greater of the
Federal Funds Rate and a rate determined by the Swing Line Lender in
accordance with banking industry rules on interbank compensation. A
certificate of the Swing Line Lender submitted to any Lender (through
the Administrative Agent) with respect to any amounts owing under this
clause (iii) shall be conclusive absent manifest error.
(iv) Each Lender's obligation to make Committed Loans or to
purchase and fund risk participations in Swing Line Loans pursuant to
this Section 2.04(c) shall be absolute and unconditional and shall not
---------------
be affected by any circumstance, including (A) any setoff,
counterclaim, recoupment, defense or other right which such Lender may
have against the Swing Line Lender, the Company, the Revolving
Borrower, any Designated Borrower or any other Person for any reason
whatsoever, (B) the occurrence or continuance of a Default, or (C) any
other occurrence, event or condition, whether or not similar to any of
the foregoing; provided, however, that each Lender's obligation to
-------- -------
make Committed Loans pursuant to this Section 2.04(c) is subject to
----------------
the conditions set forth in Section 4.02. No such funding of risk
-------------
participations shall relieve or otherwise impair the obligation of the
Revolving Borrower to repay Swing Line Loans, together with interest
as provided herein.
(d) Repayment of Participations.
---------------------------
(i) At any time after any Lender has purchased and funded a risk
participation in a Swing Line Loan, if the Swing Line Lender receives
any payment on account of such Swing Line Loan, the Swing Line Lender
will distribute to such Lender its Applicable Percentage of such
payment (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender's risk
participation was funded) in the same funds as those received by the
Swing Line Lender.
(ii) If any payment received by the Swing Line Lender in respect
of principal or interest on any Swing Line Loan (other than a
Bilateral Swing Line Loan) is required to be returned by the Swing
Line Lender under any of the circumstances described in Section 10.05
-------------
(including pursuant to any settlement entered into by the Swing Line
Lender in its discretion), then (x) the obligation or part thereof
originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made, (y) each
Lender shall pay to the Swing Line Lender its Applicable Percentage
thereof on demand of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned, at a
rate per annum equal to the applicable Federal Funds Rate and (z) such
Lender shall hold a participation in such reinstated obligation to the
extent of such Lender's payment. The Administrative Agent will make
such demand upon the request of the Swing Line Lender. The obligations
of the Lenders under this clause shall survive the payment in full of
the Obligations and the termination of this Agreement.
(e) Interest for Account of Swing Line Lender. The Swing Line Lender
-------------------------------------------
shall be responsible for invoicing the Revolving Borrower for interest on
the Swing Line Loans. Until each Lender funds its Eurodollar Rate Committed
Loan or risk participation pursuant to this Section 2.04 to refinance such
------------
C722003.23
41
Lender's Applicable Percentage of any Swing Line Loan, interest in respect
of such Applicable Percentage shall be solely for the account of the Swing
Line Lender. Interest in respect of any Bilateral Swing Line Loan shall be
solely for the account of the Swing Line Lender.
(f) Payments Directly to Swing Line Lender. The Revolving Borrower
---------------------------------------
shall make all payments of principal and interest in respect of the Swing
Line Loans directly to the Swing Line Lender.
2.05 New Vehicle Swing Line Loans.
(a) The New Vehicle Swing Line. Subject to the terms and conditions
---------------------------
set forth herein, the New Vehicle Swing Line Lender agrees, in reliance
upon the agreements of the other Lenders set forth in this Section 2.05, to
------------
make loans (each such loan, a "New Vehicle Swing Line Loan") to the
-------------------------------
Borrowers from time to time on any Business Day during the Availability
Period in an aggregate amount not to exceed at any time outstanding the
amount of the New Vehicle Swing Line Sublimit, notwithstanding the fact
that such New Vehicle Swing Line Loans, when aggregated with the Applicable
Percentage of the Outstanding Amount of Committed Loans, Swing Line Loans,
New Vehicle Swing Line Loans and L/C Obligations of the Lender acting as
New Vehicle Swing Line Lender, may exceed the amount of such Lender's
Commitment; provided, however, that after giving effect to any New Vehicle
-------- -------
Swing Line Loan, (i) the Total Outstandings shall not exceed the lesser of
the Aggregate Commitments and the Borrowing Base, and (ii) the aggregate
Outstanding Amount of the Committed Loans of any Lender, plus such Lender's
----
Applicable Percentage of the Outstanding Amount of all L/C Obligations,
plus such Lender's Applicable Percentage of the Outstanding Amount of all
----
Swing Line Loans plus such Lender's Applicable Percentage of the
----
Outstanding Amount of all New Vehicle Swing Line Loans shall not exceed
such Lender's Commitment, and (iii) such Loan, together with the aggregate
Outstanding Amount of all other New Vehicle Swing Line Loans made on or
prior to such date shall not exceed any applicable Within Line Limitation;
and provided, further, that the proceeds of New Vehicle Swing Line Loans
-------- -------
shall only be used (x) to honor New Vehicle drafts presented by the
applicable vehicle manufacturer or distributor to the Administrative Agent
pursuant to Payment Commitments or (y) otherwise to pay the purchase price
of New Vehicles. Notwithstanding the foregoing sentence, however, in the
case of a New Vehicle Swing Line Loan advanced to a manufacturer or
distributor pursuant to Section 2.05(b), if the conditions precedent to
----------------
such Loan (as set forth in the applicable Payment Commitment) have been
met, the New Vehicle Swing Line Lender shall be required to make such New
Vehicle Swing Line Loan, regardless of (x) whether such Loan would cause
the Outstanding Amount of New Vehicle Swing Loans or other Obligations to
exceed the New Vehicle Sublimit or any limit set forth in Section 2.05(a)
----------------
and (y) whether the conditions in Section 4.02 have otherwise been met;
------------
provided that, (1) the New Vehicle Swing Line Lender shall be the sole
--------
Lender with respect to the portion of any such Loan constituting a
Bilateral New Vehicle Swing Line Loan and (2) no other Lender shall be
deemed to have purchased or be required to fund a risk participation in
such Bilateral New Vehicle Swing Line Loan. Within the foregoing limits,
and subject to the other terms and conditions hereof, each Borrower may
borrow under this Section 2.05, prepay under Section 2.06, and reborrow
------------ -------------
under this Section 2.05. Each New Vehicle Swing Line Loan may be a Base
-------------
Rate Loan or a Eurodollar Rate Loan. Except as otherwise provided above in
this Section 2.05(a) with respect to Bilateral New Vehicle Swing Line
----------------
Loans, immediately upon the making of a New Vehicle Swing Line Loan, each
C722003.23
42
Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the New Vehicle Swing Line Lender a risk
participation in such New Vehicle Swing Line Loan in an amount equal to the
product of such Lender's Applicable Percentage times the amount of such New
Vehicle Swing Line Loan.
(b) Payment Commitment. The New Vehicle Swing Line Lender is
-------------------
authorized to make New Vehicle Swing Line Loans for the account of the
Borrowers directly to certain individual manufacturers or distributors that
provide New Vehicles to the Borrowers, in accordance with the terms and
conditions of the respective Payment Commitment agreed to between the New
Vehicle Swing Line Lender and each such manufacturer or distributor. Each
New Vehicle Swing Line Loan made pursuant to a Payment Commitment shall be
a Eurodollar Rate Loan at the time of such Borrowing, but may be converted
to a Base Rate Loan in accordance with the terms of this Agreement. The
Borrowers shall remain jointly and severally liable to the New Vehicle
Swing Line Lender for all payments made to a manufacturer or distributor
pursuant to a Payment Commitment.
(c) Borrowing Procedures. Each New Vehicle Swing Line Borrowing and
---------------------
each conversion of New Vehicle Swing Line Loans from one Type to the other
shall be made pursuant to a Payment Commitment or upon the Revolving
Borrower's irrevocable notice to the New Vehicle Swing Line Lender by
delivery of a written New Vehicle Swing Line Loan Notice, appropriately
completed and signed by a Responsible Officer. Each such notice from the
Revolving Borrower must be received by the New Vehicle Swing Line Lender
not later than 3:00 p.m. on the requested borrowing date or date of
conversion of Eurodollar Rate Loans to Base Rate Loans or of any conversion
of Base Rate Loans to Eurodollar Rate Loans, and shall specify (i) the
amount to be borrowed, (ii) the requested borrowing date, which shall be a
Business Day, (iii) the Type of New Vehicle Swing Line Loan to be borrowed
or to which existing New Vehicle Swing Line Loans are to be converted, and
(iv) the applicable Borrower. The New Vehicle Swing Line Lender will, not
later than 6:00 p.m. on the borrowing date specified in such New Vehicle
Swing Line Loan Notice, make the amount of its New Vehicle Swing Line Loan
available directly to the manufacturer or distributor pursuant to a Payment
Commitment or to the applicable Borrower at the New Vehicle Swing Line
Lender's office by crediting the account of such Borrower on the books of
the New Vehicle Swing Line Lender. If the Revolving Borrower fails to
provide a timely New Vehicle Swing Line Loan Notice requesting a conversion
of Eurodollar Rate Loans to Base Rate Loans, such Loans shall continue as
Eurodollar Rate Loans. If the Revolving Borrower fails to specify a Type of
New Vehicle Swing Line Loan in a New Vehicle Swing Line Loan Notice or if a
Payment Commitment fails to specify a Type of New Vehicle Swing Line Loan,
then the applicable New Vehicle Swing Line Loan shall be made as a
Eurodollar Rate Loan.
(d) Authorization. Each Borrower authorizes the New Vehicle Swing Line
-------------
Lender to enter into, modify or terminate Payment Commitments (in each
case, in the New Vehicle Swing Line Lender's discretion) and to advise each
manufacturer or distributor that provides New Vehicles to such Borrower of
any change or termination which may occur with respect to the New Vehicle
Swing Line. The New Vehicle Swing Line Lender will promptly notify the
Revolving Borrower of any such modification or termination.
C722003.23
43
(e) Refinancing of New Vehicle Swing Line Loans.
-------------------------------------------
(i) The New Vehicle Swing Line Lender at any time in its sole and
absolute discretion may request, on behalf of the applicable Borrower
(which hereby irrevocably authorizes the New Vehicle Swing Line Lender
to so request on its behalf), that each Lender make a Eurodollar Rate
Committed Loan in an amount equal to such Lender's Applicable
Percentage of the amount of New Vehicle Swing Line Loans then
outstanding (including, subject to Section 2.05(e)(ii), any Bilateral
-------------------
New Vehicle Swing Line Loans). Such request shall be made in writing
(which written request shall be deemed to be a Committed Loan Notice
for purposes hereof) and in accordance with the requirements of
Section 2.02, without regard to the minimum and multiples specified
------------
therein for the principal amount of Eurodollar Rate Loans, but subject
to the unutilized portion of the Aggregate Commitments and the
conditions set forth in Section 4.02. The New Vehicle Swing Line
-------------
Lender shall furnish the Revolving Borrower with a copy of the
applicable Committed Loan Notice promptly after delivering such notice
to the Administrative Agent. Each Lender shall make an amount equal to
its Applicable Percentage of the amount specified in such Committed
Loan Notice available to the Administrative Agent in immediately
available funds for the account of the New Vehicle Swing Line Lender
at the Administrative Agent's Office not later than 1:00 p.m. on the
day specified in such Committed Loan Notice (which shall be at least
one Business Day after any voluntary Committed Loan Notice issued by
the New Vehicle Swing Line Lender), whereupon, subject to Section
-------
2.05(e)(ii), each Lender that so makes funds available shall be deemed
-----------
to have made a Eurodollar Rate Committed Loan to the applicable
Borrower in such amount. The Administrative Agent shall remit the
funds so received to the New Vehicle Swing Line Lender.
(ii) If for any reason any New Vehicle Swing Line Loan (other
than a Bilateral New Vehicle Swing Line Loan) cannot be refinanced by
such a Committed Borrowing in accordance with Section 2.05(e)(i), the
------------------
request for Eurodollar Rate Committed Loans submitted by the New
Vehicle Swing Line Lender as set forth herein shall be deemed to be a
request by the New Vehicle Swing Line Lender that each of the Lenders
fund its risk participation in the relevant New Vehicle Swing Line
Loan and each Lender's payment to the Administrative Agent for the
account of the New Vehicle Swing Line Lender pursuant to Section
-------
2.05(e)(i) shall be deemed payment in respect of such participation.
----------
(iii) If any Lender fails to make available to the Administrative
Agent for the account of the New Vehicle Swing Line Lender any amount
required to be paid by such Lender pursuant to the foregoing
provisions of this Section 2.05(e) by the time specified in Section
---------------- -------
2.05(e)(i), the New Vehicle Swing Line Lender shall be entitled to
----------
recover from such Lender (acting through the Administrative Agent), on
demand, such amount with interest thereon for the period from the date
such payment is required to the date on which such payment is
immediately available to the New Vehicle Swing Line Lender at a rate
per annum equal to the greater of the Federal Funds Rate and a rate
determined by the New Vehicle Swing Line Lender in accordance with
banking industry rules on interbank compensation. A certificate of the
New Vehicle Swing Line Lender submitted to any Lender (through the
C722003.23
44
Administrative Agent) with respect to any amounts owing under this
clause (iii) shall be conclusive absent manifest error.
(iv) Each Lender's obligation to make Committed Loans or to
purchase and fund risk participations in New Vehicle Swing Line Loans
pursuant to this Section 2.05(e) shall be absolute and unconditional
----------------
and shall not be affected by any circumstance, including (A) any
setoff, counterclaim, recoupment, defense or other right which such
Lender may have against the New Vehicle Swing Line Lender, any
Borrower, the Company or any other Person for any reason whatsoever,
(B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the
foregoing; provided, however, that each Lender's obligation to make
-------- -------
Committed Loans pursuant to this Section 2.05(e) is subject to the
----------------
conditions set forth in Section 4.02. No such funding of risk
-------------
participations shall relieve or otherwise impair the obligation of
each Borrower (jointly and severally) to repay New Vehicle Swing Line
Loans, together with interest as provided herein.
(f) Repayment of Participations.
---------------------------
(i) At any time after any Lender has purchased and funded a risk
participation in a New Vehicle Swing Line Loan, if the New Vehicle
Swing Line Lender receives any payment on account of such New Vehicle
Swing Line Loan, the New Vehicle Swing Line Lender will distribute to
such Lender its Applicable Percentage of such payment (appropriately
adjusted, in the case of interest payments, to reflect the period of
time during which such Lender's risk participation was funded) in the
same funds as those received by the New Vehicle Swing Line Lender.
(ii) If any payment received by the New Vehicle Swing Line Lender
in respect of principal or interest on any New Vehicle Swing Line Loan
(other than a Bilateral New Vehicle Swing Line Loan) is required to be
returned by the New Vehicle Swing Line Lender under any of the
circumstances described in Section 10.05 (including pursuant to any
-------------
settlement entered into by the New Vehicle Swing Line Lender in its
discretion), then (x) the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made, (y) each Lender shall
pay to the New Vehicle Swing Line Lender its Applicable Percentage
thereof on demand of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned, at a
rate per annum equal to the applicable Federal Funds Rate and (z) such
Lender shall hold a participation in such reinstated obligation to the
extent of such Lender's payment. The Administrative Agent will make
such demand upon the request of the New Vehicle Swing Line Lender. The
obligations of the Lenders under this clause shall survive the payment
in full of the Obligations and the termination of this Agreement.
(g) Interest for Account of New Vehicle Swing Line Lender. The New
-------------------------------------------------------
Vehicle Swing Line Lender shall be responsible for invoicing the Revolving
Borrower (for itself and on behalf of the applicable Borrower) for interest
on the New Vehicle Swing Line Loans. Upon receipt of any such invoice, the
Revolving Borrower shall immediately provide copies of such invoice to each
Borrower. Until each Lender funds its Eurodollar Rate Committed Loan or
C722003.23
45
risk participation pursuant to this Section 2.05 to refinance such Lender's
------------
Applicable Percentage of any New Vehicle Swing Line Loan, interest in
respect of such Applicable Percentage shall be solely for the account of
the New Vehicle Swing Line Lender. Interest in respect of any Bilateral New
Vehicle Swing Line Loan shall be solely for the account of the New Vehicle
Swing Line Lender.
Payments Directly to New Vehicle Swing Line Lender. Each Borrower
-----------------------------------------------------
shall make all payments of principal and interest in respect of the New
Vehicle Swing Line Loans directly to the New Vehicle Swing Line Lender.
2.06 Prepayments. (a) The Revolving Borrower may, upon notice to the
Administrative Agent, at any time or from time to time voluntarily prepay
Committed Loans in whole or in part without premium or penalty; provided
--------
that (i) such notice must be received by the Administrative Agent not later
than 11:00 a.m. on the date of prepayment of such Committed Loans; and (ii)
any prepayment of Committed Loans shall be in a principal amount of
$500,000 or a whole multiple of $100,000 in excess thereof or, in each
case, if less, the entire principal amount thereof then outstanding. Each
such notice shall specify the date and amount of such prepayment and the
Type(s) of Committed Loans to be prepaid. The Administrative Agent will
promptly notify each Lender of its receipt of each such notice, and of the
amount of such Lender's Applicable Percentage of such prepayment. If such
notice is given by the Revolving Borrower, the Revolving Borrower shall
make such prepayment of principal and interest accrued thereon and the
payment amount specified in such notice shall be due and payable on the
date specified therein. Each such principal prepayment shall be applied to
the Committed Loans of the Lenders in accordance with their respective
Applicable Percentages.
(b) The Revolving Borrower may, upon notice to the Swing Line Lender
(with a copy to the Administrative Agent), at any time or from time to
time, voluntarily prepay Swing Line Loans in whole or in part without
premium or penalty; provided that (i) such notice must be received by the
--------
Swing Line Lender and the Administrative Agent not later than 2:00 p.m. on
the date of the prepayment, and (ii) any such prepayment shall be in a
minimum principal amount of $100,000. Each such notice shall specify the
date and amount of such prepayment. If such notice is given by the
Revolving Borrower, the Revolving Borrower shall make such prepayment and
the payment amount specified in such notice shall be due and payable on the
date specified therein.
(c) The Revolving Borrower may, upon notice to the New Vehicle Swing
Line Lender, at any time or from time to time, voluntarily prepay New
Vehicle Swing Line Loans in whole or in part without premium or penalty;
provided that such notice must be received by the New Vehicle Swing Line
--------
Lender not later than 4:00 p.m. on the date of the prepayment. Each such
notice shall specify the date and amount of such prepayment. If such notice
is given by the Revolving Borrower, the Revolving Borrower shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the dated specified therein.
(d) If for any reason the Total Outstandings at any time exceed the
lesser of the Aggregate Commitments then in effect and the Borrowing Base
then in effect, the Revolving Borrower shall, upon demand by the
Administrative Agent, immediately prepay Loans and/or Cash Collateralize
the L/C Obligations in an aggregate amount at least equal to such excess;
C722003.23
46
provided, however, that, the Revolving Borrower shall not be required to
-------- -------
Cash Collateralize the L/C Obligations pursuant to this Section 2.06(d)
---------------
unless after the prepayment in full of the Loans the Total Outstandings
exceed the Aggregate Commitments then in effect or the Borrowing Base then
in effect.
(e) If for any reason the aggregate Outstanding Amount of Swing Line
Loans exceeds the Swing Line Sublimit, the Revolving Borrower shall, upon
demand by the Administrative Agent, immediately prepay Swing Line Loans in
an aggregate amount at least equal to such excess.
(f) If for any reason the Outstanding Amount of any New Vehicle Swing
Line Loans exceeds any applicable Within Line Limitation, the Borrowers
(jointly and severally) shall, upon demand by the Administrative Agent,
immediately prepay such New Vehicle Swing Line Loans in an aggregate amount
at least equal to such excess.
(g) If for any reason the aggregate Outstanding Amount of New Vehicle
Swing Line Loans exceeds the New Vehicle Swing Line Sublimit, the Borrowers
(jointly and severally) shall, upon demand by the Administrative Agent,
immediately prepay New Vehicle Swing Line Loans in an aggregate amount at
least equal to such excess.
2.07 Termination or Reduction of Commitments. The Revolving Borrower
may, upon notice to the Administrative Agent, terminate the Aggregate
Commitments, or from time to time permanently reduce the Aggregate
Commitments; provided that (i) any such notice shall be received by the
--------
Administrative Agent not later than 11:00 a.m. 30 days prior to the date of
termination or reduction, (ii) any such partial reduction shall be in an
aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in
excess thereof, (iii) the Revolving Borrower shall not terminate or reduce
the Aggregate Commitments if, after giving effect thereto and to any
concurrent prepayments hereunder, the Total Outstandings would exceed the
lesser of the Aggregate Commitments and the Borrowing Base, and (iv) if,
after giving effect to any reduction of the Aggregate Commitments, the
Letter of Credit Sublimit, the Swing Line Sublimit, the New Vehicle Swing
Line Sublimit or any Within Line Limitation exceeds the amount of the
Aggregate Commitments, such sublimit or Within Line Limitation shall be
automatically reduced by the amount of such excess. The Administrative
Agent will promptly notify the Lenders of any such notice of termination or
reduction of the Aggregate Commitments. Any reduction of the Aggregate
Commitments shall be applied to the Commitment of each Lender according to
its Applicable Percentage. All fees accrued until the effective date of any
termination of the Aggregate Commitments shall be paid on the effective
date of such termination.
2.08 Repayment of Loans. (a) The Revolving Borrower shall repay to the
Lenders on the Maturity Date the aggregate principal amount of Committed
Loans outstanding on such date.
(b) The Revolving Borrower shall repay each Swing Line Loan (i) on the
first Business Day of each month (other than Swing Line Loans advanced on
such day), (ii) on one other Business Day of each month (other than Swing
Line Loans advanced on such day), which such day shall be on or after the
sixth day of such month, but on or before the twenty-fifth day of such
month, (iii) at any time on demand by the Swing Line Lender and (iv) on the
Maturity Date.
C722003.23
47
(c) The Borrowers (jointly and severally) shall repay each New Vehicle
Swing Line Loan (i) on the first Business Day of each month (other than New
Vehicle Swing Line Loans advanced on such day), (ii) on one other Business
Day of each month (other than New Vehicle Swing Line Loans advanced on such
day), which such day shall be on or after the sixth day of such month, but
on or before the twenty-fifth day of such month, (iii) at any time on
demand by the New Vehicle Swing Line Lender and (iv) on the Maturity Date.
2.09 Interest. (a) Subject to the provisions of subsection (b) below,
(i) each Eurodollar Rate Loan shall bear interest on the outstanding
principal amount thereof from the applicable borrowing date at a rate per
annum equal to the Eurodollar Rate plus the Applicable Rate; and (ii) each
----
Base Rate Loan shall bear interest on the outstanding principal amount
thereof from the applicable borrowing date at a rate per annum equal to the
Base Rate plus the Applicable Rate.
(b) (i) If any amount of principal of any Loan is not paid when
due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, such amount shall
thereafter bear interest at a fluctuating interest rate per annum at
all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.
(ii) If any amount (other than principal of any Loan) payable by
any Borrower under any Loan Document is not paid when due (without
regard to any applicable grace periods), whether at stated maturity,
by acceleration or otherwise, then upon the request of the Required
Lenders, such amount shall thereafter bear interest at a fluctuating
interest rate per annum at all times equal to the Default Rate to the
fullest extent permitted by applicable Laws.
(iii) Upon the request of the Required Lenders, while any Event
of Default exists, the Borrowers shall pay interest on the principal
amount of all outstanding Obligations hereunder at a fluctuating
interest rate per annum at all times equal to the Default Rate to the
fullest extent permitted by applicable Laws.
(iv) Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance
with the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
2.10 Fees. In addition to certain fees described in subsections (i)
and (j) of Section 2.03:
------------
(a) Commitment Fee. The Borrowers (jointly and severally) shall pay to
--------------
the Administrative Agent for the account of each Lender in accordance with
its Applicable Percentage, a commitment fee (the "Commitment Fee") equal to
--------------
the Applicable Rate times the actual daily amount by which the Aggregate
Commitments exceed the sum of (i) the Outstanding Amount of Committed Loans
C722003.23
48
and (ii) the Outstanding Amount of L/C Obligations. The Commitment Fee
shall accrue at all times during the Availability Period, including at any
time during which one or more of the conditions in Article IV is not met,
----------
and shall be due and payable quarterly in arrears on the last Business Day
of each March, June, September and December, commencing with the first such
date to occur after the Closing Date, and on the Maturity Date. The
Commitment Fee shall be calculated quarterly in arrears, and if there is
any change in the Applicable Rate during any quarter, the actual daily
amount shall be computed and multiplied by the Applicable Rate separately
for each period during such quarter that such Applicable Rate was in
effect. Such fees shall be fully earned when due and payable and shall not
be refundable for any reason whatsoever.
(b) Other Fees. (i) The Company shall pay to the Arranger and the
----------
Administrative Agent for their own respective accounts, fees in the amounts
and at the times specified in the Fee Letter. Such fees shall be fully
earned when paid and shall not be refundable for any reason whatsoever.
(ii) The Company and the Revolving Borrower, as applicable, shall
pay to the Lenders such other fees, if any, with respect to the Loan
Documents, the Loans or the Commitments, as shall have been separately
agreed upon in writing in the amounts and at the times so specified.
Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever.
2.11 Computation of Interest and Fees. All computations of interest
for Base Rate Loans when the Base Rate is determined by Bank of America's
"prime rate" shall be made on the basis of a year of 365 or 366 days, as
the case may be, and actual days elapsed. All other computations of fees
and interest shall be made on the basis of a 360-day year and actual days
elapsed (which results in more fees or interest, as applicable, being paid
than if computed on the basis of a 365-day year). Interest shall accrue on
each Loan for the day on which the Loan is made, and shall not accrue on a
Loan, or any portion thereof, for the day on which the Loan or such portion
is paid, provided that any Loan that is repaid on the same day on which it
--------
is made shall, subject to Section 2.13(a), bear interest for one day. Each
---------------
determination by the Administrative Agent of an interest rate or fee
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
2.12 Evidence of Debt. (a) The Credit Extensions made by each Lender
shall be evidenced by one or more accounts or records maintained by such
Lender and by the Administrative Agent in the ordinary course of business.
The accounts or records maintained by the Administrative Agent and each
Lender shall be conclusive absent manifest error of the amount of the
Credit Extensions made by the Lenders to the Borrowers and the interest and
payments thereon. Any failure to so record or any error in doing so shall
not, however, limit or otherwise affect the obligation of the Borrowers
hereunder to pay any amount owing with respect to the Obligations. In the
event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of the Administrative Agent in respect
of such matters, the accounts and records of the Administrative Agent shall
control in the absence of manifest error. Upon the request of any Lender to
a Borrower made through the Administrative Agent, such Borrower shall
execute and deliver to such Lender (through the Administrative Agent) a
Note, which shall evidence such Lender's Loans in addition to such accounts
C722003.23
49
or records. Each Lender may attach schedules to any of its Notes and
endorse thereon the date, Type (if applicable), amount and maturity of its
Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to in subsection
(a), each Lender and the Administrative Agent shall maintain in accordance
with its usual practice accounts or records evidencing the purchases and
sales by such Lender of participations in Letters of Credit, Swing Line
Loans and New Vehicle Swing Line Loans. In the event of any conflict
between the accounts and records maintained by the Administrative Agent and
the accounts and records of any Lender in respect of such matters, the
accounts and records of the Administrative Agent shall control in the
absence of manifest error.
2.13 Payments Generally; Administrative Agent's Clawback. (a) General.
-------
All payments to be made by any Borrower shall be made without condition or
deduction for any counterclaim, defense, recoupment or setoff. Except as
otherwise expressly provided herein, all payments by any Borrower hereunder
shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative
Agent's Office in Dollars and in immediately available funds not later than
2:00 p.m. on the date specified herein. The Administrative Agent will
promptly distribute to each Lender its Applicable Percentage (or other
applicable share as provided herein) of such payment in like funds as
received by wire transfer to such Lender's Lending Office. All payments
received by the Administrative Agent after 2:00 p.m. shall be deemed
received on the next succeeding Business Day and any applicable interest or
fee shall continue to accrue. If any payment to be made by any Borrower
shall come due on a day other than a Business Day, payment shall be made on
the next following Business Day, and such extension of time shall be
reflected in computing interest or fees, as the case may be.
(b) (i) Funding by Lenders; Presumption by Administrative Agent.
-------------------------------------------------------------
Unless the Administrative Agent shall have received notice from a
Lender prior to 12:00 noon on the date of any Committed Borrowing that
such Lender will not make available to the Administrative Agent such
Lender's share of such Committed Borrowing, the Administrative Agent
may assume that such Lender has made such share available on such date
and at the time required in accordance with Section 2.02 and may, in
------------
reliance upon such assumption, make available to the Revolving
Borrower a corresponding amount. In such event, if a Lender has not in
fact made its share of the applicable Committed Borrowing available to
the Administrative Agent, then the applicable Lender and the Revolving
Borrower severally agree to pay to the Administrative Agent forthwith
on demand such corresponding amount in immediately available funds
with interest thereon, for each day from and including the date such
amount is made available to the Revolving Borrower to but excluding
the date of payment to the Administrative Agent, at (A) in the case of
a payment to be made by such Lender, the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation and (B) in the
case of a payment to be made by the Revolving Borrower, the interest
rate applicable to Eurodollar Rate Loans; provided, however, that the
-------- -------
Administrative Agent shall demand such payment from the Revolving
Borrower only if such Lender has failed to make such payment forthwith
on demand or if the Administrative Agent is prohibited by Law or
otherwise from making such demand on such Lender. If the Revolving
Borrower and such Lender shall pay such interest to the Administrative
C722003.23
50
Agent for the same or an overlapping period, the Administrative Agent
shall promptly remit to the Revolving Borrower the amount of such
interest paid by the Revolving Borrower for such period. If such
Lender pays its share of the applicable Committed Borrowing to the
Administrative Agent, then the amount so paid shall constitute such
Lender's Committed Loan included in such Committed Borrowing. Any
payment by the Revolving Borrower shall be without prejudice to any
claim the Revolving Borrower may have against a Lender that shall have
failed to make such payment to the Administrative Agent.
(ii) Payments by Borrowers; Presumptions by Administrative Agent.
------------------------------------------------------------
Unless the Administrative Agent shall have received notice from the
Revolving Borrower (on its own behalf or on behalf of another
Borrower) prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the L/C Issuer
hereunder that such Borrower will not make such payment, the
Administrative Agent may assume that such Borrower has made such
payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders or the L/C Issuer, as the
case may be, the amount due. In such event, if such Borrower has not
in fact made such payment, then each of the Lenders or the L/C Issuer,
as the case may be, severally agrees to repay to the Administrative
Agent forthwith on demand the amount so distributed to such Lender or
the L/C Issuer, in immediately available funds with interest thereon,
for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent,
at the greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on
interbank compensation.
A notice of the Administrative Agent to any Lender or Borrower
with respect to any amount owing under this subsection (b) shall be
conclusive, absent manifest error.
(c) Failure to Satisfy Conditions Precedent. If any Lender makes
------------------------------------------
available to the Administrative Agent funds for any Loan to be made by such
Lender to any Borrower as provided in the foregoing provisions of this
Article II, and such funds are not made available to such Borrower by the
----------
Administrative Agent because the conditions to the applicable Credit
Extension set forth in Article IV are not satisfied or waived in accordance
----------
with the terms hereof, the Administrative Agent shall promptly return such
funds (in like funds as received from such Lender) to such Lender, without
interest.
(d) Obligations of Lenders Several. The obligations of the Lenders
-------------------------------
hereunder to make Committed Loans, to fund participations in Letters of
Credit, Swing Line Loans and New Vehicle Swing Line Loans and to make
payments pursuant to Section 10.04(c) are several and not joint. The
-----------------
failure of any Lender to make any Committed Loan, to fund any such
participation or to make any payment under Section 10.04(c) on any date
-----------------
required hereunder shall not relieve any other Lender of its corresponding
obligation to do so on such date, and no Lender shall be responsible for
the failure of any other Lender to so make its Committed Loan, to purchase
its participation or to make its payment under Section 10.04(c).
----------------
(e) Funding Source. Nothing herein shall be deemed to obligate any
---------------
Lender to obtain the funds for any Loan in any particular place or manner
or to constitute a representation by any Lender that it has obtained or
C722003.23
51
will obtain the funds for any Loan in any particular place or manner.
2.14 Sharing of Payments by Lenders. If any Lender shall, by
exercising any right of setoff or counterclaim or otherwise, obtain payment
in respect of any principal of or interest on any of the Committed Loans
made by it, or the participations in L/C Obligations, Swing Line Loans or
New Vehicle Swing Line Loans held by it resulting in such Lender's
receiving payment of a proportion of the aggregate amount of such Committed
Loans or participations and accrued interest thereon greater than its pro
rata share thereof as provided herein, then the Lender receiving such
greater proportion shall (a) notify the Administrative Agent of such fact,
and (b) purchase (for cash at face value) participations in the Committed
Loans and subparticipations in L/C Obligations, Swing Line Loans and New
Vehicle Swing Line Loans of the other Lenders, or make such other
adjustments as shall be equitable, so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate
amount of principal of and accrued interest on their respective Committed
Loans and other amounts owing them, provided that:
(i) if any such participations or subparticipations are purchased
and all or any portion of the payment giving rise thereto is
recovered, such participations or subparticipations shall be rescinded
and the purchase price restored to the extent of such recovery,
without interest; and
(ii) the provisions of this Section shall not be construed to
apply to (x) any payment made by any Borrower pursuant to and in
accordance with the express terms of this Agreement or (y) any payment
obtained by a Lender as consideration for the assignment of or sale of
a participation in any of its Committed Loans or subparticipations in
L/C Obligations, Swing Line Loans or New Vehicle Swing Line Loans to
any assignee or participant, other than to the Revolving Borrower or
any Subsidiary thereof (as to which the provisions of this Section
shall apply).
Each Loan Party consents to the foregoing and agrees, to the extent it
may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against
such Loan Party rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such
Loan Party in the amount of such participation.
2.15 Designated Borrowers. (a) Effective as of the date hereof, each
Subsidiary that has executed this Agreement shall be a "Designated
Borrower" hereunder and may receive New Vehicle Swing Line Loans for its
account on the terms and conditions set forth in this Agreement.
(b) If any Subsidiary (other than an Excluded Special Purpose Finance
Subsidiary) engages in the sale or leasing of new motor vehicles, the
Company shall designate such Subsidiary as a Designated Borrower in the
applicable Joinder Agreement, as a Designated Borrower to receive New
Vehicle Swing Line Loans hereunder, and shall deliver to the Administrative
Agent pursuant to Section 6.12, a Joinder Agreement executed by such
-------------
Subsidiary; provided that a Designated Borrower shall not be required to
--------
execute a Joinder Agreement if such Designated Borrower has executed and
C722003.23
52
delivered this Agreement on the Closing Date. The parties hereto
acknowledge and agree that prior to any such Subsidiary becoming entitled
to utilize the credit facilities provided for in Section 2.05, the
-------------
Administrative Agent and the Lenders shall have received the documents
required by Section 6.12. If the Administrative Agent agrees that such
-------------
Subsidiary shall be entitled to receive New Vehicle Swing Line Loans
hereunder, then promptly following receipt of all such documents required
by Section 6.12, the Administrative Agent shall send a notice in
-------------
substantially the form of Exhibit L (a "Designated Borrower Notice") to the
--------- --------------------------
Company and the Lenders specifying the effective date upon which such
Subsidiary shall constitute a Designated Borrower for purposes hereof,
whereupon each of the Lenders agrees to permit such Designated Borrower to
receive New Vehicle Swing Line Loans hereunder, on the terms and conditions
set forth herein, and each of the parties agrees that such Designated
Borrower otherwise shall be a Borrower for all purposes of this Agreement;
provided that no New Vehicle Swing Line Loan Notice (nor any Borrowing
--------
request by any vehicle manufacturer or distributor) may be submitted by or
on behalf of such Designated Borrower until the date five Business Days
after such effective date.
(c) Notwithstanding any other provision of this Agreement, each
Borrower shall be jointly and severally liable as a primary obligor, and
not merely as surety, for any and all Obligations now or hereafter owed to
the Administrative Agent, the L/C Issuer and the Lenders, whether voluntary
or involuntary and however arising, whether direct or acquired by any
Lender by assignment or succession, whether due or not due, absolute or
contingent, liquidated or unliquidated, determined or undetermined (such
Obligations, the "Borrowers' Liabilities").
----------------------
(d) Each Borrower expressly waives any and all defenses now or
hereafter arising or asserted by reason of (i) any lack of legality,
validity or enforceability of this Agreement, of any of the Notes, of any
other Loan Document, or of any other agreement or instrument creating,
providing security for, or otherwise relating to any of the Obligations or
any guaranty of any of the Borrowers' Liabilities (the Loan Documents and
all such other agreements and instruments being collectively referred to as
the "Related Agreements"); (ii) any action taken under any of the Related
-------------------
Agreements, any exercise of any right or power therein conferred, any
failure or omission to enforce any right conferred thereby, or any waiver
of any covenant or condition therein provided; (iii) any acceleration of
the maturity of any of the Borrowers' Liabilities or of any other
obligations or liabilities of any Person under any of the Related
Agreements; (iv) any release, exchange, non-perfection, lapse in
perfection, disposal, deterioration in value, or impairment of any security
for any of the Borrowers' Liabilities, or for any other obligations or
liabilities of any Person under any of the Related Agreements; (v) any
dissolution of any Borrower, any Loan Party or any other party to a Related
Agreement, or the combination or consolidation of any Borrower, any Loan
Party or any other party to a Related Agreement into or with another entity
or any transfer or disposition of any assets of any Borrower, any Loan
Party or any other party to a Related Agreement; (vi) any extension
(including without limitation extensions of time for payment), renewal,
amendment, restructuring or restatement of, any acceptance of late or
partial payments under, or any change in the amount of any borrowings or
any credit facilities available under, this Agreement, any of the Notes or
any other Loan Document or any other Related Agreement, in whole or in
part; (vii) the existence, addition, modification, termination, reduction
or impairment of value, or release of any other guaranty (or security
therefor) of the Borrowers' Liabilities; (viii) any waiver of, forbearance
or indulgence under, or other consent to any change in or departure from
any term or provision contained in this Agreement, any other Loan Document
C722003.23
53
or any other Related Agreement, including without limitation any term
pertaining to the payment or performance of any of the Borrowers'
Liabilities, or any of the obligations or liabilities of any party to any
other Related Agreement; and (ix) any other circumstance whatsoever (with
or without notice to or knowledge of such Borrower) which may or might in
any manner or to any extent vary the risks of such Borrower, or might
otherwise constitute a legal or equitable defense available to, or
discharge of, a surety or a guarantor, including without limitation any
right to require or claim that resort be had to any Borrower or any other
Loan Party or to any collateral in respect of the Borrowers' Liabilities.
It is the express purpose and intent of the parties hereto that the joint
and several liability of each Borrower for the Borrowers' Liabilities shall
be absolute and unconditional under any and all circumstances and shall not
be discharged except by payment as herein provided. Notwithstanding the
foregoing, the liability of each Borrower with respect to its Borrowers'
Liabilities shall be limited to an aggregate amount equal to the largest
amount that would not render its obligations hereunder subject to avoidance
under Section 548 of the United States Bankruptcy Code or any comparable
provisions of any applicable state law.
(e) Each Subsidiary that is or becomes a "Designated Borrower"
pursuant to this Section 2.15 hereby irrevocably appoints the Revolving
-------------
Borrower as its agent for all purposes relevant to this Agreement and each
of the other Loan Documents, including (i) the giving and receipt of
notices, (ii) the execution and delivery of all documents, instruments and
certificates contemplated herein and all modifications hereto, and (iii)
the receipt of the proceeds of any New Vehicle Swing Line Loans made by the
Lenders to any such Designated Borrower hereunder. Any acknowledgment,
consent, direction, certification or other action which might otherwise be
valid or effective only if given or taken by all Borrowers, or by any
Borrower acting singly, shall be valid and effective if given or taken only
by the Revolving Borrower, whether or not any such other Borrower joins
therein. Any notice, demand, consent, acknowledgement, direction,
certification or other communication delivered to the Revolving Borrower in
accordance with the terms of this Agreement shall be deemed to have been
delivered to each Designated Borrower.
ARTICLE IIA
SECURITY
2A.01 Security. As security for the full and timely payment and
performance of all Obligations, the Company and each Borrower shall, and
shall cause all other Loan Parties to, on or before the Closing Date, do or
cause to be done all things reasonably necessary in the opinion of the
Administrative Agent and its counsel to grant to the Administrative Agent
for the benefit of the Secured Parties a duly perfected first priority
security interest in all Collateral subject to no prior Lien or other
encumbrance except as expressly permitted hereunder. Without limiting the
foregoing, the Company and each Borrower shall deliver, and shall cause
each other Loan Party to deliver, to the Administrative Agent, in form and
substance reasonably acceptable to the Administrative Agent, (a) the
Security Agreement and (b) Uniform Commercial Code financing statements in
form, substance and number as requested by the Administrative Agent,
reflecting the Lien in favor of the Administrative Agent for the benefit of
the Secured Parties on the Collateral. In addition, and without limiting
the foregoing, the Company and each Borrower shall take and cause each
other Loan Party to take such further action, and deliver or cause to be
delivered such further documents and instruments, as required by the
Security Instruments or otherwise as the Administrative Agent may
reasonably request to create, perfect and maintain the effectiveness and
C722003.23
54
priority of the Liens contemplated by this Article IIA and each of the
Security Instruments.
2A.02 Further Assurances. At the request of the Administrative Agent
from time to time, the Company and each Borrower will or will cause all
other Loan Parties, as the case may be, to execute, by their respective
Responsible Officers, alone or with the Administrative Agent, any
certificate, instrument, financing statement, control agreement, statement
or document, or to procure any certificate, instrument, statement or
document or to take such other action (and pay all related costs) which the
Administrative Agent reasonably deems necessary from time to time to
create, continue or preserve the Liens in Collateral (and the perfection
and priority thereof) of the Administrative Agent for the benefit of the
Secured Parties contemplated hereby and by the other Loan Documents and
specifically including all Collateral acquired by the Company or any
Borrower or any other Loan Party after the Closing Date and all Collateral
moved to or from time to time located at locations owned by third parties,
including all leased locations, bailees, warehousemen and third party
processors. The Administrative Agent is hereby irrevocably authorized to
execute and file or cause to be filed, with or if permitted by applicable
law without the signature of the Company, any Borrower or any Loan Party
appearing thereon, all Uniform Commercial Code financing statements
reflecting the Company, any Borrower or any other Loan Party as "debtor"
and the Administrative Agent as "secured party", and continuations thereof
and amendments thereto, as the Administrative Agent reasonably deems
necessary or advisable to give effect to the transactions contemplated
hereby and by the other Loan Documents.
2A.03 Information Regarding Collateral. Each of the Company and each
Borrower represents, warrants and covenants that Schedule 2A.03(a) contains
-----------------
a true and complete list of (i) the exact legal name, jurisdiction of
formation and location of the chief executive office of the Company and
each Borrower and each other Person providing Collateral pursuant to a
Security Instrument on the Closing Date (such Persons, together with any
other Persons that provide Collateral at any time pursuant to a Security
Instrument, being referred to collectively as the "Grantors"), (ii) each
--------
trade name or other trade style used by such Grantor on the Closing Date,
(iii) each location at which Vehicles are located as of the Closing Date,
whether owned, leased or third-party locations, and (iv) with respect to
each leased or third party location, the name of each owner of such
location and a summary description of the relationship between the
applicable Grantor and such Person. Each of the Company and each Borrower
further covenants that it shall not change, and shall not permit any other
Grantor to change, its name, type of entity, jurisdiction of formation
(whether by reincorporation, merger or otherwise), or the location of its
chief executive office, except upon giving not less than 30 days' prior
written notice to the Administrative Agent and taking or causing to be
taken all such action at the Company's, such Borrower's or such other
Grantor's expense as may be reasonably requested by the Administrative
Agent to perfect or maintain the perfection of the Lien of the
Administrative Agent for the benefit of the Secured Parties in Collateral.
C722003.23
55
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes.
(a) Payments Free of Taxes. Any and all payments by or on account of
-----------------------
any obligation of the Company or any Borrower hereunder or under any other
Loan Document shall be made free and clear of and without reduction or
withholding for any Indemnified Taxes or Other Taxes, provided that if the
--------
Company or any Borrower shall be required by applicable law to deduct any
Indemnified Taxes (including any Other Taxes) from such payments, then (i)
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section) the Administrative Agent, Lender or L/C Issuer,
as the case may be, receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Company or such
Borrower, as applicable, shall make such deductions and (iii) the Company
or such Borrower, as applicable, shall timely pay the full amount deducted
to the relevant Governmental Authority in accordance with applicable law.
(b) Payment of Other Taxes by the Company and the Borrowers. Without
--------------------------------------------------------
limiting the provisions of subsection (a) above, the Company and each
Borrower shall timely pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.
(c) Indemnification by the Company and the Borrowers. The Company and
------------------------------------------------
each Borrower (jointly and severally) shall indemnify the Administrative
Agent, each Lender and the L/C Issuer, within 10 days after demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) paid by the
Administrative Agent, such Lender or the L/C Issuer, as the case may be,
and any penalties, interest and reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability,
setting forth in reasonable detail the calculation of such amount,
delivered to the Company or any Borrower by a Lender or the L/C Issuer
(with a copy to the Administrative Agent), or by the Administrative Agent
on its own behalf or on behalf of a Lender or the L/C Issuer, shall be
conclusive absent manifest error.
(d) Evidence of Payments. As soon as practicable after any payment of
--------------------
Indemnified Taxes or Other Taxes by the Company or any Borrower to a
Governmental Authority, the Company or such Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued
by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Status of Lenders. Any Foreign Lender that is entitled to an
------------------
exemption from or reduction of withholding tax under the law of the
jurisdiction in which the Company or any Borrower is resident for tax
purposes, or any treaty to which such jurisdiction is a party, with respect
to payments hereunder or under any other Loan Document shall deliver to the
Company (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law or reasonably requested by the Company or the
Administrative Agent, such properly completed and executed documentation
C722003.23
56
prescribed by applicable law as will permit such payments to be made
without withholding or at a reduced rate of withholding. In addition, any
Lender, if requested by the Company or the Administrative Agent, shall
deliver such other documentation prescribed by applicable law or reasonably
requested by the Company or the Administrative Agent as will enable the
Company or the Administrative Agent to determine whether or not such Lender
is subject to backup withholding or information reporting requirements.
Without limiting the generality of the foregoing, in the event that
the Company or any Borrower is resident for tax purposes in the United
States, any Foreign Lender shall deliver to Company and the Administrative
Agent (in such number of copies as shall be requested by the recipient) on
or prior to the date on which such Foreign Lender becomes a Lender under
this Agreement (and from time to time thereafter upon the request of the
Company or the Administrative Agent, but only if such Foreign Lender is
legally entitled to do so), whichever of the following is applicable:
(i) duly completed copies of Internal Revenue Service Form W-8BEN
claiming eligibility for benefits of an income tax treaty to which the
United States is a party,
(ii) duly completed copies of Internal Revenue Service Form
W-8ECI,
(iii) in the case of a Foreign Lender claiming the benefits of
the exemption for portfolio interest under section 881(c) of the Code,
(x) a certificate to the effect that such Foreign Lender is not (A) a
"bank" within the meaning of section 881(c)(3)(A) of the Code, (B) a
"10 percent shareholder" of the Company or the applicable Borrower
within the meaning of section 881(c)(3)(B) of the Code, or (C) a
"controlled foreign corporation" described in section 881(c)(3)(C) of
the Code and (y) duly completed copies of Internal Revenue Service
Form W-8BEN, or
(iv) any other form prescribed by applicable law as a basis for
claiming exemption from or a reduction in United States Federal
withholding tax duly completed together with such supplementary
documentation as may be prescribed by applicable law to permit the
Company to determine the withholding or deduction required to be made.
(f) Treatment of Certain Refunds. If the Administrative Agent, any
-----------------------------
Lender or the L/C Issuer determines, in its sole discretion, that it has
received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Company or any Borrower or with respect to which the
Company or any Borrower has paid additional amounts pursuant to this
Section, it shall pay to such Borrower, as applicable, an amount equal to
such refund (but only to the extent of indemnity payments made, or
additional amounts paid, by the Company or such Borrower under this Section
with respect to the Taxes or Other Taxes giving rise to such refund), net
of all out-of-pocket expenses of the Administrative Agent, such Lender or
the L/C Issuer, as the case may be, and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund), provided that the Company and each Borrower, upon the request of
--------
the Administrative Agent, such Lender or the L/C Issuer, agrees to repay
the amount paid over to the Company or such Borrower (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority)
to the Administrative Agent, such Lender or the L/C Issuer in the event the
C722003.23
57
Administrative Agent, such Lender or the L/C Issuer is required to repay
such refund to such Governmental Authority. This subsection shall not be
construed to require the Administrative Agent, any Lender or the L/C Issuer
to make available its tax returns (or any other information relating to its
taxes that it deems confidential) to the Company or any Borrower or any
other Person.
3.02 Illegality. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is
unlawful, for any Lender or its applicable Lending Office to make, maintain
or fund Eurodollar Rate Loans, or to determine or charge interest rates
based upon the Eurodollar Rate, then, on notice thereof by such Lender to
the Company through the Administrative Agent, any obligation of such Lender
to make or continue Eurodollar Rate Loans or to convert Base Rate Committed
Loans to Eurodollar Rate Loans, shall be suspended until such Lender
notifies the Administrative Agent and the Company that the circumstances
giving rise to such determination no longer exist. Upon receipt of such
notice, the Company and the Borrowers (jointly and severally) shall, upon
demand from such Lender (with a copy to the Administrative Agent), prepay
or, if applicable, convert all such Eurodollar Rate Loans of such Lender to
Base Rate Loans immediately. If any Lender determines that any Law has made
it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for such Lender or its applicable Lending Office to participate
in outstanding Eurodollar Rate Loans, then, on notice thereof by such
Lender to the Company through the Administrative Agent, the Company and the
Borrowers (jointly and severally) shall prepay such Eurodollar Rate Loans
of such Lender or convert all such Eurodollar Rate Loans of such Lender to
Base Rate Loans immediately. Upon any such prepayment or conversion, the
Company and the Borrowers (jointly and severally) shall also pay accrued
interest on the amount so prepaid or converted.
3.03 Inability to Determine Rates. If the Required Lenders determine
that for any reason in connection with any request for a Eurodollar Rate
Loan or a conversion thereto that (a) adequate and reasonable means do not
exist for determining the Eurodollar Rate for any requested Interest Period
with respect to a proposed Eurodollar Rate Loan, or (b) the Eurodollar Rate
with respect to a proposed Eurodollar Rate Loan does not adequately and
fairly reflect the cost to such Lenders of funding such Loan, the
Administrative Agent will promptly so notify the Company and each Lender.
Thereafter, the obligation of the Lenders to make or maintain Eurodollar
Rate Loans shall be suspended until the Administrative Agent (upon the
instruction of the Required Lenders) revokes such notice. Upon receipt of
such notice, the Company may revoke any pending request for a Borrowing of
or conversion to Eurodollar Rate Loans or, failing that, will be deemed to
have converted such request into (x) in the case of a Committed Loan, a
request for a Committed Borrowing of Base Rate Loans (y) in the case of a
Swing Line Loan, a request for a Swing Line Borrowing of Base Rate Loans
and (z) in the case of a New Vehicle Swing Line Loan, a request for a New
Vehicle Swing Line Borrowing of Base Rate Loans, in each case, in the
amount specified therein.
3.04 Increased Costs.
(a) Increased Costs Generally. If any Change in Law shall:
-------------------------
(i) impose, modify or deem applicable any reserve, special
deposit, compulsory loan, insurance charge or similar requirement
against assets of, deposits with or for the account of, or credit
C722003.23
58
extended or participated in by, any Lender (except any reserve
requirement contemplated by Section 3.04(e)) or the L/C Issuer;
---------------
(ii) subject any Lender or the L/C Issuer to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
participation in a Letter of Credit or any Eurodollar Rate Loan made
or participated in by it, or change the basis of taxation of payments
to such Lender or the L/C Issuer in respect thereof (except, in each
case, for Indemnified Taxes or Other Taxes covered by Section 3.01 and
------------
the imposition of, or any change in the rate of, any Excluded Tax
payable by such Lender or the L/C Issuer); or
(iii) impose on any Lender or the L/C Issuer or the London
interbank market any other condition, cost or expense affecting this
Agreement or Eurodollar Rate Loans made or participated in by such
Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining or participating in any Eurodollar
Rate Loan (or of maintaining its obligation to make or participate in any
such Loan), or to increase the cost to such Lender or the L/C Issuer of
participating in, issuing or maintaining any Letter of Credit (or of
maintaining its obligation to participate in or to issue any Letter of
Credit), or to reduce the amount of any sum received or receivable by such
Lender or the L/C Issuer hereunder (whether of principal, interest or any
other amount) then, upon request of such Lender or the L/C Issuer, the
Company and the Borrowers (jointly and severally) will pay to such Lender
or the L/C Issuer, as the case may be, such additional amount or amounts as
will compensate such Lender or the L/C Issuer, as the case may be, for such
additional costs incurred or reduction suffered.
(b) Capital Requirements. If any Lender or the L/C Issuer determines
---------------------
that any Change in Law affecting such Lender or the L/C Issuer or any
Lending Office of such Lender or such Lender's or the L/C Issuer's holding
company, if any, regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender's or the L/C Issuer's
capital or on the capital of such Lender's or the L/C Issuer's holding
company, if any, as a consequence of this Agreement, the Commitment of such
Lender or the Loans made by, or participations in Loans or Letters of
Credit held by, such Lender, or the Letters of Credit issued by the L/C
Issuer, to a level below that which such Lender or the L/C Issuer or such
Lender's or the L/C Issuer's holding company could have achieved but for
such Change in Law (taking into consideration such Lender's or the L/C
Issuer's policies and the policies of such Lender's or the L/C Issuer's
holding company with respect to capital adequacy), then from time to time
the Company and the Borrowers (jointly and severally) will pay to such
Lender or the L/C Issuer, as the case may be, such additional amount or
amounts as will compensate such Lender or the L/C Issuer or such Lender's
or the L/C Issuer's holding company for any such reduction suffered.
(c) Certificates for Reimbursement. A certificate of a Lender or the
-------------------------------
L/C Issuer setting forth in reasonable detail the calculation of the amount
or amounts necessary to compensate such Lender or the L/C Issuer or its
holding company, as the case may be, as specified in subsection (a) or (b)
of this Section and delivered to the Company shall be conclusive absent
C722003.23
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manifest error. The Company and the Borrowers (jointly and severally) shall
pay such Lender or the L/C Issuer, as the case may be, the amount shown as
due on any such certificate within 10 days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender or
------------------
the L/C Issuer to demand compensation pursuant to the foregoing provisions
of this Section shall not constitute a waiver of such Lender's or the L/C
Issuer's right to demand such compensation, provided that neither the
--------
Company nor any Borrower shall be required to compensate a Lender or the
L/C Issuer pursuant to the foregoing provisions of this Section for any
increased costs incurred or reductions suffered more than six months prior
to the date that such Lender or the L/C Issuer, as the case may be,
notifies the Company of the Change in Law giving rise to such increased
costs or reductions and of such Lender's or the L/C Issuer's intention to
claim compensation therefor (except that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the six-month
period referred to above shall be extended to include the period of
retroactive effect thereof).
(e) Reserves on Eurodollar Rate Loans. The Company and each Borrower,
---------------------------------
jointly and severally, shall pay to each Lender, as long as such Lender
shall be required to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency funds or deposits (currently
known as "Eurocurrency liabilities"), additional interest on the unpaid
principal amount of each Eurodollar Rate Loan equal to the actual costs of
such reserves allocated to such Loan by such Lender (as determined by such
Lender in good faith, which determination shall be conclusive), which shall
be due and payable on each date on which interest is payable on such Loan,
provided the Company shall have received at least 10 days' prior notice
--------
(with a copy to the Administrative Agent) of such additional interest from
such Lender. If a Lender fails to give notice 10 days prior to the relevant
Interest Payment Date, such additional interest shall be due and payable 10
days from receipt of such notice.
3.05 Mitigation Obligations; Replacement of Lenders.
(a) Designation of a Different Lending Office. If any Lender requests
------------------------------------------
compensation under Section 3.04, or any Borrower is required to pay any
-------------
additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 3.01, or if any Lender gives a
notice pursuant to Section 3.02, then such Lender shall use reasonable
-------------
efforts to designate a different Lending Office for funding or booking its
Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in
------------ ----
the future, or eliminate the need for the notice pursuant to Section 3.02,
------------
as applicable, and (ii) in each case, would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to
such Lender. The Borrowers (jointly and severally) hereby agree to pay all
reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment.
(b) Replacement of Lenders. If any Lender requests compensation under
----------------------
Section 3.04, or if the Company or any Borrower is required to pay any
-------------
additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 3.01, the Company may, at its
-------------
expense, replace such Lender in accordance with Section 10.13.
-------------
C722003.23
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3.06 Survival. All of the Company's and the Borrowers' obligations
under this Article III shall survive termination of the Aggregate
------------
Commitments and repayment of all other Obligations hereunder.
ARTICLE IV.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 Conditions of Initial Credit Extension. The obligation of the L/C
Issuer and each Lender to make its initial Credit Extension hereunder is
subject to satisfaction of the following conditions precedent:
(a) The Administrative Agent's receipt of the following, each of which
shall be originals or telecopies (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
signing Loan Party, each dated the Closing Date (or, in the case of
certificates of governmental officials, a recent date before the Closing
Date) and each in form and substance satisfactory to the Administrative
Agent and each of the Lenders:
(i) executed counterparts of (A) this Agreement, (B) the Security
Agreement, (C) the Guaranties and (D) each other Security Instrument
required to be delivered in connection herewith, in each case
sufficient in number for distribution to the Administrative Agent,
each Lender and the Company;
(ii) a Note executed by the Borrowers in favor of each Lender
requesting a Note;
(iii) such certificates of resolutions or other action,
incumbency certificates and/or other certificates of Responsible
Officers of each Loan Party as the Administrative Agent may reasonably
require evidencing the identity, authority and capacity of each
Responsible Officer thereof authorized to act as a Responsible Officer
in connection with this Agreement and the other Loan Documents to
which such Loan Party is a party;
(iv) such documents and certifications as the Administrative
Agent may reasonably require to evidence that each Loan Party is duly
organized or formed, and that each Loan Party is validly existing, in
good standing and qualified to engage in business in the respective
jurisdictions specified in Schedule 4.01, which include each
---------------
jurisdiction where its ownership, lease or operation of properties or
the conduct of its business requires such qualification, except to the
extent that failure to do so could not reasonably be expected to have
a Material Adverse Effect;
(v) a favorable opinion of McGuireWoods LLP, counsel to the Loan
Parties, addressed to the Administrative Agent and each Lender, as to
the matters set forth in Exhibit M and such other matters concerning
---------
the Loan Parties and the Loan Documents as the Required Lenders may
reasonably request;
(vi) a certificate of a Responsible Officer of each Loan Party
either (A) attaching copies of all consents, licenses and approvals
required in connection with the execution, delivery and performance by
such Loan Party and the validity against such Loan Party of the Loan
C722003.23
61
Documents to which it is a party, and such consents, licenses and
approvals shall be in full force and effect, or (B) stating that no
such consents, licenses or approvals are so required;
(vii) a certificate signed by a Responsible Officer of the
Company certifying (A) that the conditions specified in Sections
4.02(a) and (b) have been satisfied, (B) that there has not occurred a
material adverse change (x) in the business, assets, properties,
liabilities (actual or contingent), operations, condition (financial
or otherwise) or prospects of the Company and its Subsidiaries, taken
as a whole, since February 29, 2005, or (y) in the facts and
information regarding the Company and its Subsidiaries as represented
to date and (C) as to the absence of any action, suit, investigation
or proceeding pending, or to the knowledge of the Company, threatened
in any court or before any arbitrator or governmental authority that
either individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect;
(viii) a duly completed Compliance Certificate as of the last day
of the fiscal quarter of the Company ended on May 31, 2005, signed by
a Responsible Officer of the Company;
(ix) a duly completed Borrowing Base Certificate dated as of the
Closing Date certifying as to the Borrowing Base as of July 31, 2005,
signed by a Responsible Officer of the Company;
(x) a duly completed Borrowing Base Schedule as of July 31, 2005;
(xi) evidence that all insurance required to be maintained
pursuant to the Loan Documents has been obtained and is in effect;
(xii) evidence that the Existing Credit Agreement has been or
concurrently with the Closing Date is being terminated and all Liens
securing obligations under the Existing Credit Agreement have been or
concurrently with the Closing Date are being released;
(xiii) an executed Request for Credit Extension;
(xiv) Uniform Commercial Code financing statements for filing in
all places required by applicable law to perfect the Liens of the
Administrative Agent for the benefit of the Secured Parties under the
Security Instruments as a first priority Lien as to items of
Collateral in which a security interest may be perfected by the filing
of financing statements, and such other documents and/or evidence of
other actions as may be necessary under applicable law to perfect the
Liens of the Administrative Agent for the benefit of the Secured
Parties under the Security Instruments as a first priority Lien in and
to such other Collateral as the Administrative Agent may require;
(xv) (i) Uniform Commercial Code search results with respect to
the Borrowers showing only Liens acceptable to the Administrative
Agent, and (ii) such duly executed Landlord Waivers, if any, as may be
requested by the Administrative Agent in its sole discretion;
C722003.23
62
(xvi) the Audited Financial Statements, audited and accompanied
by (i) a report and opinion of the Public Accountant as to whether
such financial statements are free of material misstatement, which
report and opinion shall be prepared in accordance with audit
standards of the Public Company Accounting Oversight Board and
applicable Securities Laws and shall not be subject to any "going
concern" or like qualification or exception or any qualification or
exception as to the scope of such audit or with respect to the absence
of material misstatement and (ii) an attestation report of the Public
Accountant on management's assessment of the Company's internal
control over financial reporting prepared pursuant to Regulation S-X
Rule 2.02(f) and PCAOB No. 2 under the Securities Laws;
(xvii) the unaudited consolidated balance sheet of the Company
and its Subsidiaries as at May 31, 2005, and the related consolidated
statements of earnings and cash flows for the fiscal quarter then
ended;
(xviii) forecasts prepared by management of the Company, each in
form reasonably satisfactory to the Administrative Agent, of an annual
consolidated balance sheet, income statement and cash flow statement
of the Company and its Subsidiaries for each fiscal year ending in
February of 2006, 2007, 2008 and 2009; and
(xix) such other assurances, certificates, documents, consents or
opinions as the Administrative Agent, the L/C Issuer, the Swing Line
Lender, the New Vehicle Swing Line Lender or the Required Lenders
reasonably may require.
(b) Any fees required to be paid on or before the Closing Date shall
have been paid.
(c) Unless waived by the Administrative Agent, the Company shall have
paid all reasonable fees, charges and disbursements of counsel to the
Administrative Agent to the extent invoiced prior to or on the Closing
Date, plus such additional amounts of such fees, charges and disbursements
as shall constitute its reasonable estimate of such fees, charges and
disbursements incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude a
--------
final settling of accounts between the Company and the Administrative
Agent).
Without limiting the generality of the provisions of Section 9.04, for
------------
purposes of determining compliance with the conditions specified in this
Section 4.01, each Lender that has signed this Agreement shall be deemed to
------------
have consented to, approved or accepted or to be satisfied with, each
document or other matter required hereunder to be consented to or approved
by or acceptable or satisfactory to a Lender unless the Administrative
Agent shall have received notice from such Lender prior to the proposed
Closing Date specifying its objection thereto.
4.02 Conditions to all Credit Extensions (other than pursuant to a
Payment Commitment). The obligation of each Lender to honor any Request for
Credit Extension (other than pursuant to a Payment Commitment or a
Committed Loan Notice requesting only a conversion of Committed Loans to
the other Type) is subject to the following conditions precedent:
C722003.23
63
(a) The representations and warranties of (i) the Company and the
Borrowers contained in Article V and (ii) each Loan Party contained in each
---------
other Loan Document or in any document furnished at any time under or in
connection herewith or therewith, shall be true and correct on and as of
the date of such Credit Extension, except to the extent that such
representations and warranties specifically refer to an earlier date, in
which case they shall be true and correct as of such earlier date, and
except that for purposes of this Section 4.02, the representations and
-------------
warranties contained in subsections (a) and (b) of Section 5.05 shall be
------------
deemed to refer to the most recent statements furnished pursuant to clauses
(a) and (b), respectively, of Section 6.01.
------------
(b) No Default shall exist, or would result from such proposed Credit
Extension or the application of the proceeds thereof.
(c) The Administrative Agent and, if applicable, the L/C Issuer, the
Swing Line Lender or the New Vehicle Swing Line Lender shall have received
a Request for Credit Extension in accordance with the requirements hereof.
(d) The Total Outstandings, after giving effect to such Request for
Credit Extension, shall not exceed the Borrowing Base on such date.
(e) If the applicable Borrower is a Designated Borrower, then the
conditions of Section 2.15 to the designation of such Borrower as a
-------------
Designated Borrower shall have been met to the satisfaction of the
Administrative Agent.
Each Request for Credit Extension (other than a Committed Loan Notice
requesting only a conversion of Committed Loans to the other Type)
submitted by the Company shall be deemed to be a representation and
warranty that the conditions specified in Sections 4.02(a) and (b) have
----------------- ---
been satisfied on and as of the date of the applicable Credit Extension.
4.03 Conditions to all New Vehicle Swing Line Borrowings pursuant to a
Payment Commitment. The obligation of the New Vehicle Swing Line Lender to
honor any request for a New Vehicle Swing Line Borrowing pursuant to a
Payment Commitment is subject to the following conditions precedent:
(a) To the extent required pursuant to the terms of such Payment
Commitment, the Administrative Agent shall have received a
manufacturer/distributor invoice, cash draft, electronic record, depository
transfer check, sight draft, or such other documentation as may be
specified in such Payment Commitment, identifying the Vehicles delivered or
to be delivered to the applicable Borrower; and
(b) any other conditions precedent set forth in such Payment
Commitment.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Each of the Company, the Revolving Borrower and each other Borrower
represents and warrants to the Administrative Agent and the Lenders that:
C722003.23
64
5.01 Existence, Qualification and Power; Compliance with Laws. Each
Loan Party (a) is duly organized or formed, validly existing and in good
standing under the Laws of the jurisdiction of its incorporation or
organization, (b) has all requisite power and authority and all franchises
and all requisite governmental licenses, authorizations, consents and
approvals to (i) own or lease its assets and carry on its business and (ii)
execute, deliver and perform its obligations under the Loan Documents to
which it is a party, (c) is duly qualified and is licensed and in good
standing under the Laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification or license, and (d) is in compliance with all Laws; except in
each case referred to in clause (b)(i), (c) or (d), to the extent that
failure to do so could not reasonably be expected to have a Material
Adverse Effect.
5.02 Authorization; No Contravention. The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person
is party, have been duly authorized by all necessary corporate or other
organizational action, and do not and will not (a) contravene the terms of
any of such Person's Organization Documents; (b) conflict with or result in
any breach or contravention of, or the creation of any Lien under, or
require any payment to be made under (i) any Contractual Obligation to
which such Person is a party or by which such Person is bound or by which
the property of such Person or any of its Subsidiaries is bound, except to
the extent (A) such conflict or breach, or the creation of such Lien, or
such required payment, as the case may be, could not reasonably be expected
to have a Material Adverse Effect, and (B) such Lien does not attach to any
Collateral, or (ii) any order, injunction, writ or decree of any
Governmental Authority or any arbitral award to which such Person or its
property is subject; or (c) violate any Law.
5.03 Governmental Authorization; Other Consents. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with,
any Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document (other
than (i) any such filing necessary or advisable to perfect in favor of the
Administrative Agent, for the benefit of the Secured Parties, the Liens on
the Collateral and (ii) any such approval, consent, exemption,
authorization, other action, notice or filing that has been obtained,
taken, given or made and is in full force and effect).
5.04 Binding Effect. This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and
delivered by each Loan Party that is party thereto. This Agreement
constitutes, and each other Loan Document when so delivered will
constitute, a legal, valid and binding obligation of each Loan Party that
is party thereto, enforceable against such Loan Party in accordance with
its terms, except as such enforceability may be limited by Debtor Relief
Laws or by general principles of equity.
5.05 Financial Statements; No Material Adverse Effect.
(a) The Audited Financial Statements (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein; (ii) fairly present the
C722003.23
65
financial condition of the Company and its Subsidiaries as of the date
thereof and their results of operations for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein; and (iii) show, in
each case to the extent required by GAAP, all material indebtedness and
other material liabilities, direct or contingent, of the Company and its
Subsidiaries as of the date thereof, including liabilities for taxes,
material commitments and Indebtedness.
(b) The unaudited consolidated balance sheet of the Company and its
Subsidiaries as at May 31, 2005, and the related consolidated statements of
earnings and cash flows for the fiscal quarter ended on that date (i) were
prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein, (ii) fairly
present the financial condition of the Company and its Subsidiaries as of
the date thereof and their results of operations for the period covered
thereby, subject, in the case of clauses (i) and (ii), to the absence of
footnotes and to normal year-end audit adjustments, and (iii) show, in each
case to the extent required by GAAP, all material indebtedness and other
material liabilities, direct or contingent, of the Company and its
Subsidiaries as of the date of such financial statements, including
liabilities for taxes, material commitments and Indebtedness.
(c) Since the later of (i) the date of the Audited Financial
Statements and (ii) the date of the most recent financial statements
delivered pursuant to in Section 6.01(a), there has been no event or
----------------
circumstance, either individually or in the aggregate, that has had or
could reasonably be expected to have a Material Adverse Effect.
5.06 Litigation. There are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of the Company, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, by or against the Company or any of its Subsidiaries or against
any of their properties or revenues that (a) seek damages or other remedies
in an amount of $5,000,000 or more, (b) purport to affect or pertain to
this Agreement or any other Loan Document or any of the transactions
contemplated hereby or (c) either individually or in the aggregate, if
determined adversely, could reasonably be expected to have a Material
Adverse Effect (in each case (except as described in the proviso to this
sentence) other than such actions, suits, proceedings, claims or disputes
set forth on Schedule 5.06 or that have been disclosed in writing to the
--------------
Administrative Agent and the Lenders pursuant to Section 6.03(b)); provided
--------------- --------
that each of the Company, the Revolving Borrower and each other Borrower
further represents and warrants that there are no such actions, suits,
proceedings, claims or disputes described in clause (b) that are brought,
made, threatened, or contemplated by the Company or any Subsidiary.
5.07 No Default. Neither the Company nor any Subsidiary is in default
under or with respect to any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. No Default has occurred and is continuing or would result
from the consummation of the transactions contemplated by this Agreement or
any other Loan Document.
5.08 Ownership of Property; Liens. Each of the Company and each
Subsidiary has good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in the ordinary
conduct of its business, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The property of the Company and its Subsidiaries is subject
to no Liens, other than Liens permitted by Section 7.01.
------------
C722003.23
66
5.09 Insurance. The properties of the Company and its Subsidiaries are
insured with financially sound and reputable insurance companies not
Affiliates of the Company, in such amounts, with such deductibles and
covering such risks as are customarily carried by companies engaged in the
same or a similar business, owning similar properties in localities where
the Company or the applicable Subsidiary operates and otherwise similarly
situated to the Company or the applicable Subsidiary.
5.10 Environmental Compliance. The Company and its Subsidiaries
conduct in the ordinary course of business a review of the effect of
existing Environmental Laws and claims alleging potential liability or
responsibility for violation of any Environmental Law on their respective
businesses, operations and properties, and as a result thereof the Company
has reasonably concluded that such Environmental Laws and claims could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
5.11 Taxes. The Company and its Subsidiaries have filed all Federal,
state and other material tax returns and reports required to be filed, and
have paid all Federal, state and other material taxes, assessments, fees
and other governmental charges levied or imposed upon them or their
properties, income or assets otherwise due and payable, except those which
are being contested in good faith by appropriate proceedings diligently
conducted and for which adequate reserves have been provided in accordance
with GAAP. There is no proposed tax assessment against the Company or any
Subsidiary that would, if made, have a Material Adverse Effect. Neither the
Company nor any Subsidiary is party to any tax sharing agreement.
5.12 ERISA Compliance.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal or state Laws.
Each Plan that is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS or an application
for such a letter is currently being processed by the IRS with respect
thereto and, to the best knowledge of the Company, nothing has occurred
which would prevent, or cause the loss of, such qualification. The Company
and each ERISA Affiliate have made all required contributions to each Plan
subject to Section 412 of the Code, and no application for a funding waiver
or an extension of any amortization period pursuant to Section 412 of the
Code has been made with respect to any Plan.
(b) There are no pending or, to the knowledge of the Company,
threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan that could reasonably be expected to
have a Material Adverse Effect. There has been no non-exempt prohibited
transaction or violation of the fiduciary responsibility rules with respect
to any Plan that has resulted or could reasonably be expected to result in
a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability in excess of
$10,000,000; (iii) neither the Company nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of
ERISA with respect to any Pension Plan (other than premiums due and not
delinquent under Section 4007 of ERISA); (iv) neither the Company nor any
ERISA Affiliate has incurred, or reasonably expects to incur, any liability
(and no event has occurred which, with the giving of notice under Section
C722003.23
67
4219 of ERISA, would result in such liability) under Sections 4201 or 4243
of ERISA with respect to a Multiemployer Plan; and (v) neither the Company
nor any ERISA Affiliate has engaged in a transaction that could be subject
to Sections 4069 or 4212(c) of ERISA.
5.13 Subsidiaries; Equity Interests. As of the Closing Date, the
Company has no Subsidiaries other than those specifically disclosed in Part
(a) of Schedule 5.13, and all of the outstanding Equity Interests in such
-------------
Subsidiaries have been validly issued, are fully paid and nonassessable and
are owned by a Loan Party in the amounts specified on Part (a) of Schedule
--------
5.13 free and clear of all Liens. As of the Closing Date, the Company has
----
no equity investments in any other corporation or entity other than those
specifically disclosed in Part (b) of Schedule 5.13. All of the outstanding
-------------
Equity Interests in the Company have been validly issued and are fully paid
and nonassessable.
5.14 Margin Regulations; Investment Company Act; Public Utility
Holding Company Act.
(a) Neither the Company nor any Borrower is engaged or will engage,
principally or as one of its important activities, in the business of
purchasing or carrying margin stock (within the meaning of Regulation U
issued by the FRB), or extending credit for the purpose of purchasing or
carrying margin stock.
(b) None of the Company, any Person Controlling the Company, or any
Subsidiary (i) is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," within the meaning of the
Public Utility Holding Company Act of 1935, or (ii) is or is required to be
registered as an "investment company" under the Investment Company Act of
1940.
5.15 Disclosure. The Company has disclosed to the Administrative Agent
and the Lenders all agreements, instruments and corporate or other
restrictions to which it or any of its Subsidiaries is subject, and all
other matters known to it, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. No report,
financial statement, certificate or other written information furnished by
or on behalf of any Loan Party to the Administrative Agent or any Lender in
connection with the transactions contemplated hereby and the negotiation of
this Agreement or delivered hereunder or under any other Loan Document (in
each case, as modified or supplemented by other written information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, the Company represents
only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time.
5.16 Compliance with Laws. Each of the Company and each Subsidiary is
in compliance in all material respects with the requirements of all Laws
and all orders, writs, injunctions and decrees applicable to it or to its
properties, except in such instances in which (a) such requirement of Law
or order, writ, injunction or decree is being contested in good faith by
appropriate proceedings diligently conducted or (b) the failure to comply
C722003.23
68
therewith, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
5.17 Intellectual Property; Licenses, Etc. The Company and its
Subsidiaries own, or possess the right to use, all of the trademarks,
service marks, trade names, copyrights, patents, patent rights, franchises,
licenses and other intellectual property rights (collectively, "IP Rights")
---------
that are reasonably necessary for the operation of their respective
businesses, without conflict with the rights of any other Person (other
than any such conflict that could not reasonably be expected to have a
Material Adverse Effect). To the knowledge of the Company, no slogan or
other advertising device, product, process, method, substance, part or
other material now employed by the Company or any Subsidiary infringes upon
any rights held by any other Person. No claim or litigation regarding any
of the foregoing is pending or, to the knowledge of the Company,
threatened, which, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
5.18 Books and Records. Each of the Company and each Subsidiary
maintains proper books of record and account, in which full, true and
correct entries in conformity with GAAP consistently applied have been made
of all financial transactions and matters involving the assets and business
of the Company or such Subsidiary, as the case may be.
5.19 Franchise Agreements. The Company has provided to the
Administrative Agent true, correct and complete copies of all Franchise
Agreements in effect as of the Closing Date. Each such Franchise Agreement
is in full force and effect and is enforceable by the applicable Loan Party
in accordance with its terms. To the knowledge of the Company, (a) no party
to any Franchise Agreement is in breach of, or has failed to perform or is
in default under, such Franchise Agreement (except any such breach, failure
or default that, when taken as a whole with all other breaches, failures
and defaults under such Franchise Agreement, could not reasonably be
expected to have a Material Adverse Effect) and (b) no party to any
Franchise Agreement has given or received any notice of any proposed or
threatened termination of such Franchise Agreement (except any such notice
that has been disclosed to the Administrative Agent and each Lender, as the
case may be, pursuant to Section 6.03(f)).
---------------
5.20 Collateral.
(a) The provisions of each of the Security Instruments are effective
to create in favor of the Administrative Agent for the benefit of the
Secured Parties, a legal, valid and enforceable first priority, perfected
security interest in all right, title and interest of each applicable Loan
Party in the Collateral described therein, except as otherwise permitted
hereunder.
(b) No Contractual Obligation to which any Loan Party is a party or by
which the property of any Loan Party is bound prohibits the filing or
recordation of any of the Loan Documents or any other action which is
necessary or appropriate in connection with the perfection of the Liens on
Collateral evidenced and created by any of the Loan Documents.
C722003.23
69
ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, or any
Letter of Credit shall remain outstanding, the Company shall, and shall
(except in the case of the covenants set forth in Sections 6.01, 6.02, 6.03
------------- ---- ----
and 6.12) cause the Revolving Borrower and each other Subsidiary to:
----
6.01 Financial Statements. Deliver to the Administrative Agent (for
further distribution to each Lender):
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Company (or if earlier, 15 days after the
date required to be filed with the SEC) (commencing with the fiscal year
ended February 28, 2006), a consolidated balance sheet of the Company and
its Subsidiaries as at the end of such fiscal year, and the related
consolidated statements of earnings, shareholders' equity and cash flows
for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail and prepared
in accordance with GAAP, audited and accompanied by (i) a report and
opinion of the Public Accountant as to whether such financial statements
are free of material misstatement, which report and opinion shall be
prepared in accordance with audit standards of the Public Company
Accounting Oversight Board and applicable Securities Laws and shall not be
subject to any "going concern" or like qualification or exception or any
qualification or exception as to the scope of such audit or with respect to
the absence of material misstatement, and (ii)(A) a report of management on
the Company's internal control over financial reporting prepared pursuant
to Regulation S-K Item 308(a) (or any successor rule or regulation) under
the Securities Laws, and (B) an attestation report of the Public Accountant
on management's assessment of the Company's internal control over financial
reporting prepared pursuant to Regulation S-X Rule 2.02(f) (or any
successor rule or regulation) and PCAOB No. 2 (or any successor auditing
standard) under the Securities Laws;
(b) as soon as available, but in any event within 45 days after the
end of each of the first three fiscal quarters of each fiscal year of the
Company (or if earlier, five days after the date required to be filed with
the SEC) (commencing with the fiscal quarter ended August 31, 2005), a
consolidated balance sheet of the Company and its Subsidiaries as at the
end of such fiscal quarter, and the related consolidated statements of
earnings and cash flows for such fiscal quarter and for the portion of the
Company's fiscal year then ended, setting forth in each case in comparative
form the figures for the corresponding fiscal quarter of the previous
fiscal year and the corresponding portion of the previous fiscal year, all
in reasonable detail, certified by a Responsible Officer of the Company as
fairly presenting the financial condition, results of operations and cash
flows of the Company and its Subsidiaries in accordance with GAAP, subject
only to normal year-end audit adjustments and the absence of footnotes; and
(c) upon request by the Administrative Agent, to the extent not
duplicative of the financial statements required to be delivered pursuant
to Sections 6.01(a) and (b), copies of each financial statement required to
---------------- ---
be delivered to a vehicle manufacturer or distributor by any Franchise
Agreement.
C722003.23
70
As to any information contained in materials furnished pursuant to Section
-------
6.02(f), the Company shall not be separately required to furnish such
-------
information under clause (a) or (b) above, but the foregoing shall not be
in derogation of the obligation of the Company to furnish the information
and materials described in clauses (a) and (b) above at the times specified
therein.
6.02 Certificates; Other Information. Deliver to the Administrative
Agent and each Lender (or, if requested by the Company in a notice to the
Administrative Agent with respect to any specific item, deliver such item
to the Administrative Agent (for distribution to each Lender)), in form and
detail satisfactory to the Administrative Agent and the Required Lenders:
(a) concurrently with the delivery of the financial statements
referred to in Sections 6.01(a) and (b), a duly completed Compliance
----------------- ---
Certificate signed by a Responsible Officer of the Company;
(b) concurrently with (and in no event later than the times required
for) the delivery of the financial statements referred to in Sections
--------
6.01(a) and (b), a duly completed Borrowing Base Certificate as of the end
---------------
of the respective fiscal year or fiscal quarter, signed by a Responsible
Officer of the Company; provided that, if any Event of Default shall have
--------
occurred and be continuing, the Company shall deliver such Borrowing Base
Certificates, each signed by a Responsible Officer of the Company, as of
the end of each calendar month within 20 days after the end of such
calendar month and at any other time requested by the Administrative Agent;
(c) within 20 days after the end of each calendar month, a Borrowing
Base Schedule;
(d) within a reasonable period of time after any request by the
Administrative Agent, inventory lists of all Vehicles in form and substance
and containing such details as may be reasonably requested by the
Administrative Agent, provided, however, that, unless an Event of Default
--------
has occurred and is continuing, the Administrative Agent may not request
more than four inventory lists during any fiscal year of the Company;
(e) promptly after any request by the Administrative Agent or any
Lender, copies of any detailed audit reports or recommendations submitted
in writing to the board of directors (or the audit committee of the board
of directors) of the Company by independent accountants in connection with
the accounts or books of the Company or any Subsidiary, or any audit of any
of them;
(f) promptly after the same are sent or filed, as applicable, copies
of each annual report, proxy or financial statement or other report or
communication sent by or on behalf of the Company to the stockholders of
the Company, and notification (by telecopier or electronic mail) of the
filing of each annual report on Form 10-K, quarterly report on Form 10-Q,
current report on Form 8-K, or registration statement by the Company with
the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934,
in each case to the extent not otherwise required to be delivered to the
Administrative Agent pursuant hereto;
(g) promptly, and in any event within five Business Days, after
receipt thereof by the Company or any Subsidiary, copies of each notice or
other correspondence received from the SEC (or comparable agency in any
C722003.23
71
applicable non-U.S. jurisdiction) concerning any investigation by such
agency regarding financial or other operational results of the Company or
any Subsidiary thereof; and
(h) within a reasonable period of time after any request by the
Administrative Agent, such additional information regarding the business,
financial or corporate affairs of the Company or any Subsidiary, or
compliance with the terms of the Loan Documents, as the Administrative
Agent or the Required Lenders may from time to time reasonably request.
Documents required to be delivered pursuant to Section 6.01(a) or (b)
-------------- ---
or Section 6.02(f) (to the extent any such documents are included in
----------------
materials otherwise filed with the SEC) may be delivered electronically and
if so delivered, shall be deemed to have been delivered on the date (i) on
which the Company posts such documents, or provides a link thereto on the
Company's website on the Internet at the website address listed on Schedule
--------
10.02; or (ii) on which such documents are posted on the Company's behalf
-----
on an Internet or intranet website, if any, to which each Lender and the
Administrative Agent have access (whether a commercial, third-party website
or whether sponsored by the Administrative Agent); provided that: (i) the
--------
Company shall deliver paper copies of such documents to the Administrative
Agent or any Lender that requests the Company to deliver such paper copies
until a written request to cease delivering paper copies is given by the
Administrative Agent or such Lender and (ii) the Company shall notify the
Administrative Agent and each Lender (or if requested by the Company in
writing to the Administrative Agent with respect to any specific items, the
Company shall notify the Administrative Agent of such posting and the
Administrative Agent shall thereafter notify the Lenders of such posting)
(by telecopier or electronic mail) of the posting of any such documents and
provide to the Administrative Agent by electronic mail electronic versions
(i.e., soft copies) of such documents. Notwithstanding anything to the
contrary contained herein, in every instance the Company shall be required
to provide paper copies of the Compliance Certificates required by Section
-------
6.02(a) and Borrowing Base Certificates required by Section 6.02(b) to the
------- ---------------
Administrative Agent. Except for such Compliance Certificates and Borrowing
Base Certificates, the Administrative Agent shall have no obligation to
request the delivery or to maintain copies of the documents referred to
above, and in any event shall have no responsibility to monitor compliance
by the Company with any such request for delivery, and each Lender shall be
solely responsible for requesting delivery to it or maintaining its copies
of such documents.
The Company and each Borrower hereby acknowledge that (a) the
Administrative Agent and/or the Arranger will make available to the Lenders
and the L/C Issuer materials and/or information provided by or on behalf of
the Company and the Borrowers hereunder (collectively, "Borrower
Materials") by posting the Borrower Materials on IntraLinks or another
similar electronic system (the "Platform") and (b) certain of the Lenders
may be "public-side" Lenders (i.e., Lenders that do not wish to receive
material non-public information with respect to the Company and the
Borrowers or their securities) (each, a "Public Lender"). The Company and
each Borrower hereby agree that (w) all Borrower Materials that are to be
made available to Public Lenders shall be clearly and conspicuously marked
"PUBLIC" which, at a minimum, shall mean that the word "PUBLIC" shall
appear prominently on the first page thereof; (x) by marking Borrower
Materials "PUBLIC", the Company and each Borrower shall be deemed to have
authorized the Administrative Agent, the Arranger, the L/C Issuer and the
Lenders to treat such Borrower Materials as not containing any material
non-public information with respect to the Company or such Borrower or its
C722003.23
72
securities for purposes of United States Federal and state securities laws
(provided, however, that to the extent such Borrower Materials constitute
-------- -------
Information, they shall be treated as set forth in Section 10.07); (y) all
-------------
Borrower Materials marked "PUBLIC" are permitted to be made available
through a portion of the Platform designated "Public Investor"; and (z) the
Administrative Agent and the Arranger shall be entitled to treat any
Borrower Materials that are not marked "PUBLIC" as being suitable only for
posting on a portion of the Platform not designated "Public Investor".
6.03 Notices. Promptly after obtaining knowledge thereof, notify the
Administrative Agent and each Lender (or, if requested by the Company in
writing to the Administrative Agent with respect to any specific item, the
Company shall promptly notify the Administrative Agent and the
Administrative Agent shall thereafter notify the Lenders of such notice):
(a) of the occurrence of any Default;
(b) of (i) any breach or non-performance of, or any default under, any
Franchise Agreement or any other Contractual Obligation of the Company or
any Subsidiary that could reasonably be expected to have a Material Adverse
Effect, (ii) any notice or correspondence alleging that any such event has
occurred with respect to any Franchise Agreement; (iii) any action, suit,
proceeding, claim or dispute pending or, to the knowledge of the Company,
threatened or contemplated, at law, in equity, in arbitration or before any
Governmental Authority, by or against the Company or any of its
Subsidiaries or against any of their properties or revenues that seeks
damages or other remedies in an amount of $5,000,000 or more or that could
reasonably be expected to have a Material Adverse Effect; (iv) any material
development in any such action, suit, proceeding, claim or dispute; and (v)
any other matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect;
(c) of the occurrence of any ERISA Event;
(d) of any material change in accounting policies or financial
reporting practices by the Company or any Subsidiary;
(e) of the Public Accountant's determination (in connection with its
preparation of its report under Section 6.01(a)) or the Company's
-----------------
determination of the occurrence or existence of any Internal Control Event;
and
(f) of (i) any Franchise Agreement entered into after the Closing Date
(including the subject matter and term of such Franchise Agreement), (ii)
the termination or expiration of any Franchise Agreement and (iii) any
material adverse change in the relationship between the Company or any
Borrower and any vehicle manufacturer or distributor, including the
threatened loss of a new vehicle franchise or the threatened termination of
a Franchise Agreement.
Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer of the Company setting forth details of
the occurrence referred to therein and stating what action the Company has
taken and proposes to take with respect thereto. Each notice pursuant to
Section 6.03(a) shall describe with particularity any and all provisions of
this Agreement and any other Loan Document that have been breached.
C722003.23
73
6.04 Payment of Obligations. Pay and discharge as the same shall
become due and payable, all its obligations and liabilities, including (a)
all tax liabilities, assessments and governmental charges or levies upon it
or its properties or assets, including Vehicles, unless the same are being
contested in good faith by appropriate proceedings diligently conducted and
adequate reserves in accordance with GAAP are being maintained by the
Company or such Subsidiary; (b) all lawful claims which, if unpaid, would
by law become a Lien upon any Collateral; (c) all lawful claims which, if
unpaid, would by law become a Lien upon its property (other than the
Collateral); and (d) all Indebtedness permitted hereunder, as and when due
and payable, but subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness, except, in each case
referred to in clause (c) or (d), to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect.
6.05 Preservation of Existence, Etc. (a) Preserve, renew and maintain
in full force and effect its legal existence and good standing under the
Laws of the jurisdiction of its organization except in a transaction
permitted by Section 7.03 or 7.04; (b) take all reasonable action to
------------- ----
maintain all rights, privileges, permits, licenses and franchises,
necessary or desirable in the normal conduct of its business, except to the
extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; (c) preserve or renew all of its registered
patents, trademarks, trade names and service marks, the non-preservation or
non-renewal of which could reasonably be expected to have a Material
Adverse Effect; and (d) if applicable, preserve and maintain, in accordance
with its standard policies and procedures, all manufacturer statements of
origin, certificates of origin, certificates of title or ownership and
other customary vehicle title documentation (collectively, the "Vehicle
-------
Title Documentation") necessary or desirable in the normal conduct of its
--------------------
business.
6.06 Maintenance of Properties. (a) Maintain, preserve and protect all
of its material properties and equipment necessary in the operation of its
business in good working order and condition, ordinary wear and tear
excepted; (b) make all necessary repairs thereto and renewals and
replacements thereof except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect; and (c) use the standard of
care typical in the industry in the operation and maintenance of its
facilities.
6.07 Maintenance of Insurance. (a) Maintain with financially sound and
reputable insurance companies not Affiliates of the Company or any
Subsidiary, insurance with respect to its properties and business against
loss (including loss by reason of business interruption) or damage of the
kinds customarily insured against by Persons engaged in the same or a
similar business, owning similar properties in localities where the Company
or the applicable Subsidiary operates and otherwise similarly situated to
the Company or the applicable Subsidiary (and otherwise as required by the
Security Instruments); (b) maintain with financially sound and reputable
insurance companies not Affiliates of the Company or any Subsidiary, garage
liability or commercial general liability insurance (collectively, "CGL
---
Insurance") against liability on account of damage to persons and property;
---------
(c) maintain insurance under all applicable workers' compensation laws
(each policy of insurance described in clauses (a), (b) and (c) to have
such limits, deductibles, exclusions, co-insurance and other provisions as
are customarily maintained by Persons engaged in the same or a similar
business, owning similar properties in localities where the Company or the
applicable Subsidiary operates and otherwise similarly situated to the
Company or the applicable Subsidiary (and otherwise as required by the
Security Instruments); and (d) provide to the Administrative Agent with
C722003.23
74
respect to each property insurance policy or CGL Insurance policy, as
applicable, a certificate of insurance (i) providing that the insurer shall
give the Administrative Agent not less than thirty (30) days' prior written
notice before any cancellation of any such policy (except that not less
than ten (10) days' prior written notice shall be required before any
cancellation based on the non-payment of premiums), (ii) in the case of
each CGL Insurance policy, naming the Administrative Agent as an additional
insured, and (iii) in the case of each property insurance policy, naming
the Administrative Agent (as its interest appears in the Loan Documents) as
loss payee pursuant to a loss payee clause in form and substance
satisfactory to the Administrative Agent.
6.08 Compliance with Laws and Contractual Obligations. Comply in all
material respects with the requirements of all Laws and all orders, writs,
injunctions and decrees and all Contractual Obligations applicable to it or
to its business or property, except in such instances in which (a) such
requirement of Law or order, writ, injunction or decree or Contractual
Obligation (other than the Loan Documents) is being contested in good faith
by appropriate proceedings diligently conducted; or (b) the failure to
comply therewith could not reasonably be expected to have a Material
Adverse Effect.
6.09 Books and Records. Maintain proper books of record and account,
in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and
matters involving the assets and business of the Company or such
Subsidiary, as the case may be, including, if applicable, books and records
specifying the year, make, model, cost, price, location and vehicle
identification number of each Vehicle owned by the Company or such
Subsidiary.
6.10 Inspection Rights. Permit representatives and independent
contractors of the Administrative Agent and each Lender, in each case at
the expense of the Administrative Agent or such Lender, to visit and
inspect any of its properties (including inspecting Vehicles and conducting
random samples of the Net Book Value of the Vehicles), to examine its
corporate, financial and operating records, and make copies thereof or
abstracts therefrom, and to discuss its affairs, finances and accounts with
its directors, officers, and independent public accountants, all at such
reasonable times during normal business hours as may be requested upon
reasonable advance notice to the Company and (unless an Event of Default
exists) no more than twice during any period of 12 consecutive months;
provided, however, that (i) when an Event of Default exists the
-------- -------
Administrative Agent or any Lender (or any of their respective
representatives or independent contractors) may do any of the foregoing at
the expense of the Company at any time during normal business hours and
without advance notice and (ii) this Section 6.10 shall not apply to any
------------
Excluded Special Purpose Finance Subsidiary.
6.11 Use of Proceeds. Use the proceeds of the Credit Extensions to
refinance the Existing Credit Agreement, to fund the Borrowers' acquisition
of Vehicles, to provide for working capital, to finance capital
expenditures and for other general corporate purposes, in each case not in
contravention of any Law or of any Loan Document.
6.12 New Subsidiaries. As soon as practicable but in any event within
30 days following the acquisition or creation of any Subsidiary (other than
an Excluded Subsidiary) cause to be delivered to the Administrative Agent
each of the following:
C722003.23
75
(i) a Joinder Agreement duly executed by such Subsidiary (with
all schedules thereto appropriately completed), which Joinder
Agreement will, if such Subsidiary will engage in the business of
selling or leasing new motor vehicles, designate such Subsidiary as a
Designated Borrower;
(ii) Uniform Commercial Code financing statements naming such
Subsidiary as "Debtor" and naming the Administrative Agent for the
benefit of the Secured Parties as "Secured Party," in form, substance
and number sufficient in the reasonable opinion of the Administrative
Agent and its counsel to be filed in all Uniform Commercial Code
filing offices in which filing is necessary or advisable to perfect in
favor of the Administrative Agent for the benefit of the Secured
Parties the Liens on the Collateral conferred under such Joinder
Agreement to the extent such Lien may be perfected by Uniform
Commercial Code filings;
(iii) unless the Required Lenders expressly waive such
requirement in accordance with Section 10.01, an opinion or opinions
-------------
of counsel to such Subsidiary dated as of the date of delivery of such
Joinder Agreements (and other Loan Documents) provided for in this
Section 6.12 and addressed to the Administrative Agent, in form and
------------
substance reasonably acceptable to the Administrative Agent; and
(iv) current copies of the Organization Documents of such
Subsidiary, minutes of duly called and conducted meetings (or duly
effected consent actions) of the Board of Directors, partners, or
appropriate committees (and, if required by such Organization
Documents or applicable law, of the shareholders, members or partners)
of such Subsidiary authorizing the actions and the execution and
delivery of documents described in this Section 6.12, all certified by
------------
the applicable Governmental Authority or appropriate officer as the
Administrative Agent may elect.
6.13 Internal Control Events. Upon notification from the
Administrative Agent to the Company that the Required Lenders require
remediation of any Internal Control Event that constitutes a material
weakness in control over financial reporting of which they have received
notice pursuant to Section 6.03(e) or as reported in any report delivered
----------------
pursuant to Section 6.01(a), remediate or cause to be remediated such
----------------
Internal Control Event, and to test and confirm such remediation, not later
than the end of the time period reasonably agreed by the Required Lenders
with the Company as necessary for such remediation (the "Remediation
-----------
Period"). It is understood that the Remediation Period will require a
------
sufficient period of time to permit testing required by the relevant
Securities Laws.
6.14 Location of Vehicles. Keep the Vehicles only at the locations set
forth on Schedule 6.14, as such schedule may be revised from time to time
as set forth in the Compliance Certificate delivered pursuant to Section
-------
6.02(a), except that Vehicles may, in the ordinary course of business, be
-------
temporarily in transit to or between such locations or may be temporarily
removed from such locations for repair or when being test driven by
potential customers.
C722003.23
76
ARTICLE VII.
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, or any
Letter of Credit shall remain outstanding, the Company shall not, nor shall
it permit the Revolving Borrower or any other Subsidiary to, directly or
indirectly:
7.01 Liens. Create, incur, assume or suffer to exist any Lien upon any
of its current assets, whether now owned or hereafter acquired, other than
the following:
(a) Liens pursuant to any Loan Document;
(b) Liens existing on the date hereof and listed on Schedule 7.01 and
-------------
any renewals, extensions or replacements thereof, provided that (i) the
property covered thereby is not changed, (ii) the amount secured or
benefited thereby is not increased, and (iii) the direct or any contingent
obligor with respect thereto is not changed;
(c) Liens for Taxes not yet due or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate
reserves with respect thereto are maintained on the books of the applicable
Person in accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are
not overdue for a period of more than 60 days or which are being contested
in good faith and by appropriate proceedings diligently conducted, if
adequate reserves with respect thereto are maintained on the books of the
applicable Person in accordance with GAAP;
(e) pledges or deposits in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
social security legislation, other than any Lien imposed by ERISA, and
deposits in the ordinary course of business securing liability insurance
carriers under insurance or self-insurance arrangements;
(f) deposits to secure the performance of bids, trade contracts and
leases (other than Indebtedness), statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar
encumbrances affecting real property which do not in any case materially
detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the applicable
Person;
(h) other Liens on real property securing Indebtedness;
(i) Liens securing judgments for the payment of money not constituting
an Event of Default under Section 8.01(h);
---------------
(j) Liens securing Indebtedness in respect of capital leases,
Synthetic Lease Obligations and purchase money obligations for fixed or
capital assets; provided that (i) such Liens do not at any time encumber
--------
C722003.23
77
any property other than the property financed by such Indebtedness, and
(ii) the Indebtedness secured thereby does not exceed the cost or fair
market value, whichever is lower, of the property being acquired on the
date of acquisition;
(k) Liens on Permitted Retail Installment Contracts, the Related
Property and assets of Excluded Special Purpose Finance Subsidiaries
arising in connection with Permitted Sale Facilities;
(l) Liens arising in connection with operating leases entered into in
the ordinary course of business;
(m) Liens arising solely as a result of statutory or common law rights
of setoff or similar rights and remedies as to deposit accounts or other
funds maintained with depository institutions;
(n) Liens on specific property acquired pursuant to an Acquisition
permitted by Section 7.10, provided that (i) such Liens were in existence
------------- --------
at the time of such Acquisition, (ii) no such Lien extends to any property
other than the property acquired, and (iii) no such Lien attaches to any
Collateral, and provided further that the aggregate fair market value of
-----------------
all properties subject to Liens permitted by this clause (n) does not
exceed $15,000,000 at any time; and
(o) Liens not otherwise permitted under this Section 7.01; provided
------------ --------
that (i) at the time of the creation or incurrence of such Lien, no Default
shall exist or would result from such Lien, (ii) no such Lien attaches to
any Collateral, and (iii) the aggregate Indebtedness secured by all Liens
created or incurred in reliance on this clause (o) shall not exceed
$35,000,000 at any time.
Notwithstanding the foregoing, the Company shall not, nor shall it permit
the Revolving Borrower or any other Subsidiary (other than Excluded
Subsidiaries) to create, incur, assume or suffer to exist any Lien upon any
deposit account maintained by the Company or such Subsidiary, other than
Liens permitted by clause (a) and (m) above and Liens on the Collection
Account arising under one or more of the Permitted Sale Facilities.
7.02 Investments. Make any Investments, except:
(a) Investments existing on the date hereof and listed on Schedule
--------
7.02;
----
(b) Investments held by the Company or such Subsidiary in the form of
cash equivalents or short-term marketable securities;
(c) advances to officers, directors and employees of the Company and
Subsidiaries in an aggregate amount not to exceed $5,000,000 at any time
outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;
(d) Investments of any Loan Party in another Loan Party;
(e) Investments of any Loan Party in any Excluded Subsidiary (other
than any Excluded Special Purpose Finance Subsidiary), provided that the
--------
aggregate outstanding amount of such Investments does not exceed
$35,000,000 at any time;
C722003.23
78
(f) Investments consisting of extensions of credit in the nature of
accounts receivable or notes receivable arising from the grant of trade
credit in the ordinary course of business, and Investments received in
satisfaction or partial satisfaction thereof from financially troubled
account debtors to the extent reasonably necessary in order to prevent or
limit loss;
(g) Investments consisting of extensions of credit in the nature of
retail installment sale contracts arising from the sale of vehicles and
related goods and services in the ordinary course of business, provided
--------
that the aggregate outstanding principal amount of such Investments does
not exceed $300,000,000 (without giving effect to any reserves) at any time
(it being understood that any such retail installment contracts transferred
pursuant to a Permitted Sale Facility and not repurchased or otherwise
reacquired by the Company or any other Loan Party shall be excluded in
calculating such amount);
(h) Guarantees to the extent incurred in the ordinary course of
business and not otherwise prohibited hereunder, provided that the
aggregate amount of such Guarantees (other than Guarantees of Indebtedness
or other obligations of any other Loan Party) does not exceed $15,000,000
at any time;
(i) Investments in Excluded Special Purpose Finance Subsidiaries
pursuant to Permitted Sale Facilities;
(j) Investments by Excluded Special Purpose Finance Subsidiaries in
Other Special Purpose Finance Entities pursuant to Permitted Sale
Facilities;
(k) Investments consisting of securities (whether certificated or
uncertificated) received by the Company or any Subsidiary, or other rights
of the Company or any Subsidiary to receive money, in each case issued by
Other Special Purpose Finance Entities pursuant to Permitted Sale
Facilities;
(l) Swap Contracts entered into for bona fide hedging purposes and not
for speculation;
(m) promissory notes and other non-cash Investments received in
connection with Dispositions permitted under Section 7.04, provided that
------------ --------
the aggregate outstanding principal amount of such notes and other
Investments shall not exceed $35,000,000 at any time;
(n) Investments permitted under Section 7.10; and
------------
(o) other Investments not exceeding $35,000,000 in the aggregate in
any fiscal year of the Company.
7.03 Fundamental Changes. Dissolve, liquidate, merge or consolidate
with or into another Person, or Dispose of (whether in one transaction or
in a series of transactions) all or substantially all of its assets
(whether now owned or hereafter acquired) to or in favor of any Person,
except that, so long as no Default exists or would result therefrom:
(a) the Company or any Subsidiary may merge or consolidate with or
into any Person not an Affiliate of the Company as part of an Acquisition
permitted under Section 7.10, provided that the Company or such Subsidiary,
------------ --------
as applicable, shall be the continuing or surviving Person;
C722003.23
79
(b) (i) any Subsidiary may merge or consolidate with or into (x) the
Company, provided that the Company shall be the continuing or surviving
--------
Person, (y) the Revolving Borrower, provided that the Revolving Borrower
--------
shall be the continuing or surviving Person, or (z) any one or more other
Subsidiaries, provided that when any Subsidiary Guarantor is merging or
--------
consolidating with another Subsidiary, such Subsidiary Guarantor shall be
the continuing or surviving Person and (iii) the Company may merge or
consolidate with or into the Revolving Borrower; provided that the
--------
Revolving Borrower is the surviving Person;
(c) any Subsidiary may Dispose of all or substantially all of its
assets (upon voluntary liquidation or otherwise) to the Company or to
another Subsidiary; provided that if the transferor in such a transaction
--------
is the Revolving Borrower or a Subsidiary Guarantor, then the transferee
must either be the Company, the Revolving Borrower or a Subsidiary
Guarantor; and
(d) any Subsidiary may sell all or substantially all of its Permitted
Retail Installment Contracts and Related Property pursuant to Permitted
Sale Facilities;
provided, however, that (i) any Excluded Subsidiary may dissolve,
-------- -------
liquidate, or merge or consolidate with or into another Person, or Dispose
of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired)
to or in favor of any Person and (ii) any Specified Subsidiary may dissolve
or liquidate if, in connection with such dissolution or liquidation, all
assets of such Specified Subsidiary are distributed to a Loan Party.
7.04 Dispositions. Make any Disposition or enter into any agreement to
make any Disposition, except:
(a) Dispositions of obsolete or worn out property, whether now owned
or hereafter acquired, in the ordinary course of business;
(b) Dispositions of inventory, including Eligible Vehicle Inventory,
in the ordinary course of business (including sales of inventory to a
manufacturer or distributor in connection with the expiration or
termination of the related Franchise Agreement, provided that nothing
--------
contained in this Section 7.04(b) shall be deemed to be a waiver of any
----------------
Default or Event of Default otherwise resulting from such expiration or
termination);
(c) Dispositions of equipment or real property to the extent that (i)
such property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are
reasonably promptly applied to the purchase price of such replacement
property;
(d) Dispositions of property to the Company or to a Subsidiary
wholly-owned by the transferor of such property; provided that if the
--------
transferor of such property is the Company or a Subsidiary Guarantor, the
transferee thereof must either be the Company or a Subsidiary Guarantor;
(e) Dispositions permitted by Section 7.03;
------------
(f) Dispositions of property pursuant to sale-leaseback transactions;
C722003.23
80
(g) Dispositions of new car dealerships (including any inventory and
other property owned by such dealership);
(h) Dispositions of store locations in the ordinary course of
business;
(i) Dispositions in the ordinary course of business of improved or
unimproved real estate not necessary to any material line of business
conducted by the Company and its Subsidiaries;
(j) Dispositions of Permitted Retail Installment Contracts and Related
Property pursuant to Permitted Sale Facilities;
(k) non-exclusive licenses of IP Rights in the ordinary course of
business and substantially consistent with past practice for terms not
exceeding five years; and
(l) Dispositions not otherwise permitted under this Section 7.04;
------------
provided that (i) at the time of such Disposition, no Default shall exist
--------
or would result from such Disposition and (ii) the aggregate book value of
all property Disposed of in reliance on this clause (l) in any fiscal year
shall not exceed $30,000,000;
provided, however, that any Disposition pursuant to clauses (a) through (l)
-------- -------
shall be for not less than fair market value.
7.05 Change in Nature of Business. Engage in any material line of
business substantially different from those lines of business conducted by
the Company and its Subsidiaries on the date hereof or any business
substantially related or incidental thereto if, after giving effect
thereto, the business conducted by the Company and its Subsidiaries, taken
as a whole, would be substantially different from the business conducted by
the Company and its Subsidiaries on the date hereof.
7.06 Transactions with Affiliates. Enter into any transaction of any
kind with any Affiliate of the Company, whether or not in the ordinary
course of business, other than on fair and reasonable terms substantially
as favorable to the Company or such Subsidiary as would be obtainable by
the Company or such Subsidiary at the time in a comparable arm's length
transaction with a Person not an Affiliate of the Company, provided that
--------
the foregoing restriction shall not apply to transactions between or among
the Company and any Subsidiary Guarantor or transactions between or among
any Subsidiary Guarantors.
7.07 Burdensome Agreements. Enter into any Contractual Obligation
(other than this Agreement or any other Loan Document) that:
(a) limits the ability (i) of any Subsidiary to make Restricted
Payments to the Company or any Subsidiary Guarantor or to otherwise
transfer property to the Company or any Subsidiary Guarantor, (ii) of any
Subsidiary to Guarantee the Indebtedness of the Company or (iii) of the
Company or any Subsidiary to create, incur, assume or suffer to exist Liens
on property of such Person; provided, however, that this subsection (a)
-------- -------
shall not prohibit (A) any limitation imposed on an Excluded Subsidiary,
(B) any negative pledge incurred or provided in connection with Permitted
Sale Facilities solely to the extent any such negative pledge relates to
C722003.23
81
the Permitted Retail Installment Contracts or Related Property sold,
transferred or assigned, (C) any negative pledge incurred or provided in
favor of any holder of a Lien permitted under Section 7.01(j) solely to the
---------------
extent any such negative pledge relates to the property subject to such
Lien, (D) any limitation imposed in connection with a Disposition of
property or assets permitted under Section 7.04 pending the consummation of
------------
such Disposition or (E) any limitation that restricts in a customary manner
the subletting, assignment or transfer of any property or asset that is
subject to a lease or license or the assignment, transfer or encumbrance of
a lease or license or other Contractual Obligation; provided further,
-----------------
however, that no provision described in clauses (A) through (E) above shall
prohibit or restrict the Administrative Agent's Lien on any Collateral; or
(b) requires the grant of a Lien to secure an obligation of such
Person if a Lien is granted to secure another obligation of such Person.
7.08 Use of Proceeds. Use the proceeds of any Credit Extension,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, to purchase or carry margin stock (within the meaning of
Regulation U of the FRB) or to extend credit to others for the purpose of
purchasing or carrying margin stock or to refund indebtedness originally
incurred for such purpose.
7.09 Financial Covenants.
(a) Consolidated Current Ratio. Permit the Consolidated Current Ratio
---------------------------
as of the end of any fiscal quarter of the Company to be less than (i) 1.20
to 1.00 if the Total Outstandings as of the end of such fiscal quarter are
less than or equal to 65% of the Net Book Value of the Eligible Vehicle
Inventory as of the end of such fiscal quarter, or (ii) 1.50 to 1.00 if the
Total Outstandings as of the end of such fiscal quarter are greater than
65% of the Net Book Value of the Eligible Vehicle Inventory as of the end
of such fiscal quarter.
(b) Consolidated Total Liabilities to Tangible Net Worth Ratio. Permit
----------------------------------------------------------
the Consolidated Total Liabilities to Tangible Net Worth Ratio as of the
end of any fiscal quarter of the Company to be greater than 1.30 to 1.00.
(c) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated
----------------------------------------
Fixed Charge Coverage Ratio as of the end of any fiscal quarter of the
Company to
be less than 1.25 to 1.00.
(d) Consolidated Tangible Net Worth. Permit Consolidated Tangible Net
--------------------------------
Worth at any time to be less than the sum of (i) $700,000,000, (ii) an
amount equal to 50% of the Consolidated Net Income earned in each full
fiscal quarter ending after February 28, 2005 (with no deduction for a net
loss in any such fiscal quarter) and (iii) an amount equal to 100% of the
aggregate increases in Shareholders' Equity after February 28, 2005 by
reason of the issuance and sale of Equity Interests of the Company or any
Subsidiary (other than issuances to the Company or a wholly-owned
Subsidiary), including upon any conversion of debt securities of the
Company into such Equity Interests.
7.10 Acquisitions. Enter into any agreement, contract, binding
commitment or other arrangement providing for any Acquisition, or take any
action to solicit the tender of securities or proxies in respect thereof in
C722003.23
82
order to effect any Acquisition, unless (i) the Person to be (or whose
assets are to be) acquired does not oppose such Acquisition and the
material line or lines of business of the Person to be acquired are
substantially the same as one or more line or lines of business conducted
by the Company and its Subsidiaries, or substantially related or incidental
thereto, (ii) no Default shall have occurred and be continuing either
immediately prior to or immediately after giving effect to such Acquisition
and, (iii) if the Cost of Acquisition, together with the Cost of
Acquisition for all other Acquisitions consummated during the same fiscal
year, is in excess of $50,000,000, (x) the Required Lenders shall have
consented to such Acquisition, and (y) the Company shall have furnished to
the Administrative Agent (A) pro forma historical financial statements as
of the end of the most recently completed fiscal year of the Company and
most recent interim fiscal quarter, if applicable, giving effect to such
Acquisition and all other Acquisitions consummated since such fiscal year
end and (B) a Compliance Certificate prepared on a historical pro forma
basis as of the most recent date for which financial statements have been
furnished pursuant to Section 4.01(a) or Section 6.01(a) or (b) giving
---------------- ---------------- ---
effect to such Acquisitions, which certificate shall demonstrate that no
Default would exist immediately after giving effect to such Acquisitions,
(iv) the Person acquired shall be a wholly-owned Subsidiary, or be merged
into the Company or a wholly-owned Subsidiary, immediately upon
consummation of the Acquisition (or if assets are being acquired, the
acquiror shall be the Company or a wholly-owned Subsidiary), and (v) after
the consummation of the Acquisition the Company or any applicable
Subsidiary shall have complied with the provisions of Section 6.12.
------------
7.11 Borrowing Base. (a) Permit at any time the sum of the Total
Outstandings to exceed the Borrowing Base, unless the Revolving Borrower
shall have immediately complied with Section 2.06(d) with respect to such
---------------
excess; or (b) substantially change the method of valuation of the
Collateral from that used by the Company and its Subsidiaries on the
Closing Date.
7.12 Capital Expenditures. Make or become legally obligated to make
any expenditure in respect of the purchase or other acquisition of any
fixed or capital asset (excluding normal replacements and maintenance which
are properly charged to current operations), except for capital
expenditures in the ordinary course of business (including capital
expenditures in support of the motor vehicle retailing, buying, financing
reconditioning, servicing, wholesaling, distributing and storage operations
of the Company and its Subsidiaries) and in connection with Acquisitions
not otherwise prohibited by the Loan Documents.
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
8.01 Events of Default. Any of the following shall constitute an Event
of Default:
(a) Non-Payment. The Company or any other Loan Party fails to pay (i)
-----------
when and as required to be paid herein, any amount of principal of any Loan
or any L/C Obligation, or (ii) within five Business Days after the same
becomes due, any interest on any Loan or on any L/C Obligation, or any fee
due hereunder, or (iii) within seven Business Days after the same becomes
due, any other amount payable hereunder or under any other Loan Document;
or
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(b) Specific Covenants. The Company or any other Loan Party fails to
-------------------
perform or observe any term, covenant or agreement contained in any of
Section 6.03, 6.05, 6.10, 6.11 or 6.12 or Article VII; or
------------ ---- ---- ---- ---- -----------
(c) Other Defaults. (i) The Company or any other Loan Party fails to
---------------
perform or observe any covenant or agreement contained in Section 6.02(b)
----------------
or (c) and such failure continues for five Business Days after a
---
Responsible Officer of the Company, the Revolving Borrower, any other
Borrower or any other Loan Party receives notice or otherwise acquires
knowledge of such failure, or (ii) the Company, the Revolving Borrower, any
other Borrower or any other Loan Party fails to perform or observe any
other covenant or agreement (not specified in subsection (a) or (b) above
or in clause (c) (i) above) contained in any Loan Document on its part to
be performed or observed and such failure continues for 30 days after a
Responsible Officer of the Company, the Revolving Borrower, any other
Borrower or any other Loan Party receives notice or otherwise acquires
knowledge of such failure; or
(d) Representations and Warranties. Any representation, warranty,
-------------------------------
certification or statement of fact made or deemed made by or on behalf of
the Company or any other Loan Party herein, in any other Loan Document, or
in any document delivered in connection herewith or therewith shall be
incorrect or misleading in any material respect when made or deemed made;
or
(e) Cross-Default. (i) The Company or any Subsidiary (A) fails to make
-------------
any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or
Guarantee (other than Indebtedness hereunder and Indebtedness under Swap
Contracts) having an aggregate principal amount (including undrawn
committed or available amounts and including amounts owing to all creditors
under any combined or syndicated credit arrangement) of more than the
Threshold Amount, or (B) fails to observe or perform any other agreement or
condition relating to any such Indebtedness or Guarantee or contained in
any instrument or agreement evidencing, securing or relating thereto, or
any other event occurs, the effect of which default or other event is to
cause, or to permit the holder or holders of such Indebtedness or the
beneficiary or beneficiaries of such Guarantee (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause,
with the giving of notice if required, such Indebtedness to be demanded or
to become due or to be repurchased, prepaid, defeased or redeemed
(automatically or otherwise), or an offer to repurchase, prepay, defease or
redeem such Indebtedness to be made, prior to its stated maturity, or such
Guarantee to become payable or cash collateral in respect thereof to be
demanded (collectively referred to herein as "Acceleration Events") unless,
-------------------
in the case of clause (B) above, (1) such default or event is capable of
being cured, (2) the Company or such Subsidiary, as applicable, is
diligently pursuing such cure and (3) the holder or holders, beneficiary or
beneficiaries (or trustee or agent of such holder or holders or beneficiary
or beneficiaries), as applicable, have not instituted any Acceleration
Event; or (ii) there occurs under any one or more Swap Contracts to which
the Company or any Subsidiary is a party an Early Termination Date (as
defined in such Swap Contracts) resulting from (A) any event of default
under such Swap Contracts as to which the Company or any Subsidiary is the
Defaulting Party (as defined in such Swap Contracts) or (B) any Termination
Event (as so defined) under such Swap Contracts as to which the Company or
any Subsidiary is an Affected Party (as so defined) and, in either event,
the Swap Termination Value owed by the Company or such Subsidiary as a
result thereof is greater than the Threshold Amount; (iii) there occurs any
C722003.23
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event the effect of which is to cause the early termination, acceleration
or early amortization of any ABCP Facility, provided, however, that this
--------
clause (iii) shall not apply if each of the following conditions is
satisfied: (X) such event does not involve a breach by the Company or any
of its Subsidiaries of any representation, warranty, covenant or other
agreement, (Y) such early termination, acceleration or early amortization
of such ABCP Facility could not reasonably be expected to have a Material
Adverse Effect, and (Z) such event could not reasonably be expected to
result in any recourse against the Company or any Subsidiary (other than an
Excluded Special Purpose Finance Subsidiary) in an aggregate amount of more
than the Threshold Amount, it being understood that (for the purposes of
--------------------
clause (X) above) a breach of any covenant relating to, or any early
termination, acceleration or early amortization caused by, the performance
of the related Permitted Retail Installment Contracts shall not constitute
a breach by the Company or any of its Subsidiaries of any covenant or other
agreement; or (iv) there occurs any event the effect of which is to cause
the early termination, acceleration or early amortization of any Term
Securitization Program, provided, however, that this clause (iv) shall not
--------
apply if (Y) such early termination, acceleration or early amortization of
such Term Securitization Program could not reasonably be expected to have a
Material Adverse Effect, and (Z) such event could not reasonably be
expected to result in any recourse against the Company or any Subsidiary
(other than an Excluded Special Purpose Finance Subsidiary) in an aggregate
amount of more than the Threshold Amount; or
(f) Insolvency Proceedings, Etc. The Company or any Subsidiary
-----------------------------
institutes or consents to the institution of any proceeding under any
Debtor Relief Law, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee,
custodian, conservator, liquidator, rehabilitator or similar officer for it
or for all or any material part of its property; or any receiver, trustee,
custodian, conservator, liquidator, rehabilitator or similar officer is
appointed without the application or consent of such Person and the
appointment continues undischarged or unstayed for 60 calendar days; or any
proceeding under any Debtor Relief Law relating to any such Person or to
all or any material part of its property is instituted without the consent
of such Person and continues undismissed or unstayed for 60 calendar days,
or an order for relief is entered in any such proceeding; or
(g) Inability to Pay Debts; Attachment. (i) The Company or any
-------------------------------------
Subsidiary becomes unable or admits in writing its inability or fails
generally to pay its debts as they become due, or (ii) any writ or warrant
of attachment or execution or similar process is issued or levied against
all or any material part of the property of any such Person and is not
released, vacated or fully bonded within 30 days after its issue or levy;
or
(h) Judgments. There is entered against the Company or any Subsidiary
---------
(i) one or more final judgments or orders for the payment of money in an
aggregate amount exceeding the Threshold Amount (to the extent not covered
by independent third-party insurance as to which the insurer does not
dispute coverage), or (ii) any one or more non-monetary final judgments
that have, or could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect and, in either case, (A) enforcement
proceedings are commenced by any creditor upon such judgment or order, or
(B) there is a period of 30 consecutive days during which such judgment is
not vacated or a stay of enforcement of such judgment, by reason of a
pending appeal or otherwise, is not in effect; or
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(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
-----
Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of the Company under Title IV of ERISA to the Pension
Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of
the Threshold Amount, or (ii) the Company or any ERISA Affiliate fails to
pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section
4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess
of the Threshold Amount; or
(j) Invalidity of Loan Documents and Collateral. (i) Any material
----------------------------------------------
provision of any Loan Document, at any time after its execution and
delivery and for any reason other than as expressly permitted hereunder or
thereunder or satisfaction in full of all the Obligations, ceases to be in
full force and effect; or the Company or any Subsidiary contests in any
manner the validity or enforceability of any provision of any Loan
Document; or any Loan Party denies that it has any or further liability or
obligation under any Loan Document, or purports to revoke, terminate or
rescind any provision of any Loan Document; or (ii) any Security Instrument
shall for any reason (other than pursuant to the terms thereof) cease to
create a valid security interest in the Collateral purported to be covered
thereby or such security interest shall for any reason cease to be (or any
Loan Party shall claim that such security interest is not) a perfected and
first priority security interest subject only to those Liens permitted by
Section 7.01; or
------------
(k) Change of Control. There occurs any Change of Control; or
-----------------
(l) Franchise Agreements. (i) Any Franchise Agreement is terminated or
--------------------
suspended or expires and a replacement for such Franchise Agreement is not
entered into within 30 days of such termination, suspension or expiration;
or (ii) there occurs a default by any Person in the performance or
observance of any term of any Franchise Agreement which is not cured within
any applicable cure period therein, except in each case referred to in
clauses (i) and (ii) to the extent such termination, suspension,
expiration, or default could not reasonably be expected to have a Material
Adverse Effect.
8.02 Remedies Upon Event of Default. If any Event of Default occurs
and is continuing, the Administrative Agent shall, at the request of, or
may, with the consent of, the Required Lenders, take any or all of the
following actions:
(a) declare the commitment of each Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions to be
terminated, whereupon such commitments and obligation shall be terminated;
provided that, to the extent permitted by applicable law, the
--------
Administrative Agent shall use good faith efforts to provide notice to the
Revolving Borrower of such declaration, provided further, however, that the
--------
failure to provide such notice will not impair the effectiveness of such
declaration or give rise to any liability of the Administrative Agent, any
Lender or the L/C Issuer with respect thereto;
(b) upon notice to the Revolving Borrower, declare the unpaid
principal amount of all outstanding Loans, all interest accrued and unpaid
thereon, and all other amounts owing or payable hereunder or under any
other Loan Document to be immediately due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby
expressly waived by the Company and the Borrowers;
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86
(c) require that any Borrower or Borrowers Cash Collateralize the L/C
Obligations (in an amount equal to the then Outstanding Amount thereof);
(d) exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or Law;
(e) to the extent permitted pursuant to such Payment Commitment,
revise, terminate or suspend Payment Commitments with any manufacturer or
distributor; and
(f) require that the Company or any other Borrower deliver any Vehicle
Title Documentation to the Administrative Agent;
provided, however, that upon the occurrence of an actual or deemed entry of
-------- -------
an order for relief with respect to the Company or any Borrower under the
Bankruptcy Code of the United States, the obligation of each Lender to make
Loans and any obligation of the L/C Issuer to make L/C Credit Extensions
shall automatically terminate, the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable, and the obligation of the Borrowers
(jointly or severally) to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without
further act of the Administrative Agent or any Lender.
8.03 Application of Funds. After the exercise of remedies provided for
in Section 8.02 (or after the Loans have automatically become immediately
------------
due and payable and the L/C Obligations have automatically been required to
be Cash Collateralized as set forth in the proviso to Section 8.02), any
------------
amounts received on account of the Obligations shall be applied by the
Administrative Agent in the following order:
First, to payment of that portion of the Obligations constituting
-----
fees, indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable
under Article III) payable to the Administrative Agent in its capacity as
-----------
such;
Second, to payment of that portion of the Obligations constituting
------
fees, indemnities and other amounts (other than principal, interest and
Letter of Credit Fees) payable to the Lenders and the L/C Issuer (including
fees, charges and disbursements of counsel to the respective Lenders and
the L/C Issuer and amounts payable under Article III), ratably among them
-----------
in proportion to the respective amounts described in this clause Second
------
payable to them;
Third, to payment of that portion of the Obligations constituting
-----
accrued and unpaid Letter of Credit Fees and interest on the Loans, L/C
Borrowings and other Obligations, ratably among the Lenders and the L/C
Issuer in proportion to the respective amounts described in this clause
Third payable to them;
-----
Fourth, to payment of that portion of the Obligations constituting
------
unpaid principal of the Loans and L/C Borrowings, ratably among the Lenders
and the L/C Issuer in proportion to the respective amounts described in
this clause Fourth held by them;
------
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Fifth, to the Administrative Agent for the account of the L/C Issuer,
-----
to Cash Collateralize that portion of L/C Obligations comprised of the
aggregate undrawn amount of Letters of Credit; and
Last, the balance, if any, after all of the Obligations have been
----
indefeasibly paid in full, to the Company or as otherwise required by Law.
Subject to Section 2.03(c), amounts used to Cash Collateralize the
----------------
aggregate undrawn amount of Letters of Credit pursuant to clause Fifth
above shall be applied to satisfy drawings under such Letters of Credit as
they occur. If any amount remains on deposit as Cash Collateral after all
Letters of Credit have either been fully drawn or expired, such remaining
amount shall be applied to the other Obligations, if any, in the order set
forth above.
ARTICLE IX.
ADMINISTRATIVE AGENT
9.01 Appointment and Authority. Each of the Lenders and the L/C Issuer
hereby irrevocably appoints Bank of America to act on its behalf as the
Administrative Agent hereunder and under the other Loan Documents and
authorizes the Administrative Agent to take such actions on its behalf and
to exercise such powers as are delegated to the Administrative Agent by the
terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto. The provisions of this Article are solely
for the benefit of the Administrative Agent, the Lenders and the L/C
Issuer, and neither the Company nor any Borrower shall have rights as a
third party beneficiary of any of such provisions.
9.02 Rights as a Lender. The Person serving as the Administrative
Agent hereunder shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not
the Administrative Agent and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated or unless the context otherwise requires,
include the Person serving as the Administrative Agent hereunder in its
individual capacity. Such Person and its Affiliates may accept deposits
from, lend money to, act as the financial advisor or in any other advisory
capacity for and generally engage in any kind of business with the Company
or any Borrower or any Subsidiary or other Affiliate thereof as if such
Person were not the Administrative Agent hereunder and without any duty to
account therefor to the Lenders.
9.03 Exculpatory Provisions. The Administrative Agent shall not have
any duties or obligations except those expressly set forth herein and in
the other Loan Documents. Without limiting the generality of the foregoing,
the Administrative Agent:
(a) shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that the
Administrative Agent is required to exercise as directed in writing by the
Required Lenders (or such other number or percentage of the Lenders as
shall be expressly provided for herein or in the other Loan Documents),
provided that the Administrative Agent shall not be required to take any
--------
C722003.23
88
action that, in its opinion or the opinion of its counsel, may expose the
Administrative Agent to liability or that is contrary to any Loan Document
or applicable law; and
(c) shall not, except as expressly set forth herein and in the other
Loan Documents, have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Company or any of the
Borrowers or any of their respective Affiliates that is communicated to or
obtained by the Person serving as the Administrative Agent or any of its
Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or
not taken by it (i) with the consent or at the request of the Required
Lenders (or such other number or percentage of the Lenders as shall be
necessary, or as the Administrative Agent shall believe in good faith shall
be necessary, under the circumstances as provided in Sections 10.01 and
---------------
8.02) or (ii) in the absence of its own gross negligence or willful
-----
misconduct. The Administrative Agent shall be deemed not to have knowledge
of any Default unless and until notice describing such Default is given to
the Administrative Agent by the Company, a Lender or the L/C Issuer.
The Administrative Agent shall not be responsible for or have any duty
to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with this Agreement or any other Loan Document,
(ii) the contents of any certificate, report or other document delivered
hereunder or thereunder or in connection herewith or therewith, (iii) the
performance or observance of any of the covenants, agreements or other
terms or conditions set forth herein or therein or the occurrence of any
Default, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement, any other Loan Document or any other agreement, instrument
or document or (v) the satisfaction of any condition set forth in Article
-------
IV or elsewhere herein, other than to confirm receipt of items expressly
--
required to be delivered to the Administrative Agent.
9.04 Reliance by Administrative Agent. The Administrative Agent shall
be entitled to rely upon, and shall not incur any liability for relying
upon, any notice, request, certificate, consent, statement, instrument,
document or other writing (including any electronic message, Internet or
intranet website posting or other distribution) believed by it to be
genuine and to have been signed, sent or otherwise authenticated by the
proper Person. The Administrative Agent also may rely upon any statement
made to it orally or by telephone and believed by it to have been made by
the proper Person, and shall not incur any liability for relying thereon.
In determining compliance with any condition hereunder to the making of a
Loan, or the issuance of a Letter of Credit, that by its terms must be
fulfilled to the satisfaction of a Lender or the L/C Issuer, the
Administrative Agent may presume that such condition is satisfactory to
such Lender or the L/C Issuer unless the Administrative Agent shall have
received notice to the contrary from such Lender or the L/C Issuer prior to
the making of such Loan or the issuance of such Letter of Credit. The
Administrative Agent may consult with legal counsel (who may be counsel for
the Company), independent accountants and other experts selected by it, and
shall not be liable for any action taken or not taken by it in accordance
with the advice of any such counsel, accountants or experts.
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9.05 Delegation of Duties. The Administrative Agent may perform any
and all of its duties and exercise its rights and powers hereunder or under
any other Loan Document by or through any one or more sub agents appointed
by the Administrative Agent. The Administrative Agent and any such sub
agent may perform any and all of its duties and exercise its rights and
powers by or through their respective Related Parties. The exculpatory
provisions of this Article shall apply to any such sub agent and to the
Related Parties of the Administrative Agent and any such sub agent, and
shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as
activities as Administrative Agent.
9.06 Resignation of Administrative Agent. The Administrative Agent may
at any time give notice of its resignation to the Lenders, the L/C Issuer
and the Company. Upon receipt of any such notice of resignation, the
Required Lenders shall have the right, in consultation with the Company, to
appoint a successor, which shall be a bank with an office in the United
States, or an Affiliate of any such bank with an office in the United
States. If no such successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may on behalf of the Lenders and the L/C
Issuer, appoint a successor Administrative Agent meeting the qualifications
set forth above; provided that if the Administrative Agent shall notify the
--------
Company and the Lenders that no qualifying Person has accepted such
appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (1) the retiring Administrative Agent shall
be discharged from its duties and obligations hereunder and under the other
Loan Documents (except that in the case of any collateral security held by
the Administrative Agent on behalf of the Lenders or the L/C Issuer under
any of the Loan Documents, the retiring Administrative Agent shall continue
to hold such collateral security until such time as a successor
Administrative Agent is appointed) and (2) all payments, communications and
determinations provided to be made by, to or through the Administrative
Agent shall instead be made by or to each Lender and the L/C Issuer
directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section. Upon the
acceptance of a successor's appointment as Administrative Agent hereunder,
such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring (or retired) Administrative
Agent, and the retiring Administrative Agent shall be discharged from all
of its duties and obligations hereunder or under the other Loan Documents
(if not already discharged therefrom as provided above in this Section).
The foregoing notwithstanding, upon the discharge of the retiring
Administrative Agent's duties hereunder, neither the retiring
Administrative Agent nor the successor Administrative Agent or any New
Vehicle Swing Line Lender shall be required to honor any request by a
vehicle manufacturer or distributor for advance of a New Vehicle Swing Line
Loan, unless and until (A) such successor Administrative Agent and such
manufacturer or distributor (and if required pursuant to the terms of such
Payment Commitment, the applicable Borrower) have entered into a new
Payment Commitment, and (B) any existing Payment Commitment between such
manufacturer or distributor and the retiring Administrative Agent has been
terminated. The fees payable by the Company to a successor Administrative
Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Company and such successor. After the retiring
Administrative Agent's resignation hereunder and under the other Loan
Documents, the provisions of this Article and Section 10.04 shall continue
-------------
in effect for the benefit of such retiring Administrative Agent, its sub
agents and their respective Related Parties in respect of any actions taken
C722003.23
90
or omitted to be taken by any of them while the retiring Administrative
Agent was acting as Administrative Agent.
Any resignation by Bank of America as Administrative Agent pursuant to
this Section shall also constitute its resignation as L/C Issuer, Swing
Line Lender and New Vehicle Swing Line Lender. Upon the acceptance of a
successor's appointment as Administrative Agent hereunder, (a) such
successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring L/C Issuer, Swing Line Lender
and New Vehicle Swing Line Lender, (b) the retiring L/C Issuer, Swing Line
Lender and New Vehicle Swing Line Lender shall be discharged from all of
their respective duties and obligations hereunder or under the other Loan
Documents, and (c) the successor L/C Issuer shall issue letters of credit
in substitution for the Letters of Credit, if any, outstanding at the time
of such succession or make other arrangements satisfactory to the retiring
L/C Issuer to effectively assume the obligations of the retiring L/C Issuer
with respect to such Letters of Credit.
9.07 Non-Reliance on Administrative Agent and Other Lenders. Each
Lender and the L/C Issuer acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender or any
of their Related Parties and based on such documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender and the L/C Issuer also acknowledges that
it will, independently and without reliance upon the Administrative Agent
or any other Lender or any of their Related Parties and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or
based upon this Agreement, any other Loan Document or any related agreement
or any document furnished hereunder or thereunder.
9.08 No Other Duties, Etc. Anything herein to the contrary
notwithstanding, none of the Arrangers, Book Managers, Co-Syndication
Agents or Co-Documentation Agents listed on the cover page hereof shall
have any powers, duties or responsibilities under this Agreement or any of
the other Loan Documents, except in its capacity, as applicable, as the
Administrative Agent, a Lender or the L/C Issuer hereunder.
9.09 Administrative Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent
(irrespective of whether the principal of any Loan or L/C Obligation shall
then be due and payable as herein expressed or by declaration or otherwise
and irrespective of whether the Administrative Agent shall have made any
demand on the Company or any Borrower) shall be entitled and empowered, by
intervention in such proceeding or otherwise
(a) to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans, L/C Obligations and
all other Obligations that are owing and unpaid and to file such other
documents as may be necessary or advisable in order to have the claims of
the Lenders, the L/C Issuer and the Administrative Agent (including any
claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders, the L/C Issuer and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders, the
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L/C Issuer and the Administrative Agent under Sections 2.03(i) and (j),
----------------- ---
2.10 and 10.04) allowed in such judicial proceeding; and
---- -----
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized
by each Lender and the L/C Issuer to make such payments to the
Administrative Agent and, in the event that the Administrative Agent shall
consent to the making of such payments directly to the Lenders and the L/C
Issuer, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due
the Administrative Agent under Sections 2.10 and 10.04.
------------- -----
Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on
behalf of any Lender or the L/C Issuer any plan of reorganization,
arrangement, adjustment or composition affecting the Obligations or the
rights of any Lender or to authorize the Administrative Agent to vote in
respect of the claim of any Lender in any such proceeding.
9.10 Collateral and Guaranty Matters. The Lenders and the L/C Issuer
irrevocably authorize the Administrative Agent, at its option and in its
discretion,
(a) to release any Lien on any property granted to or held by the
Administrative Agent under any Loan Document (i) upon termination of the
Aggregate Commitments and payment in full of all Obligations (other than
contingent indemnification obligations) and the expiration or termination
of all Letters of Credit, (ii) that is sold or to be sold as part of or in
connection with any sale permitted hereunder or under any other Loan
Document, or (iii) subject to Section 10.01, if approved, authorized or
--------------
ratified in writing by the Required Lenders;
(b) to subordinate any Lien on any property granted to or held by the
Administrative Agent under any Loan Document to the holder of any Lien on
such property that is permitted by Section 7.01(j); and
---------------
(c) to release any Subsidiary Guarantor from its obligations under the
Subsidiary Guaranty Agreement (and to release any Lien on any property of
such Subsidiary Guarantor) if such Person ceases to be a Subsidiary as a
result of a transaction permitted hereunder.
Upon request by the Administrative Agent at any time, the Required
Lenders will confirm in writing the Administrative Agent's authority to
release or subordinate its interest in particular types or items of
property, or to release any Subsidiary Guarantor from its obligations under
the Subsidiary Guaranty Agreement pursuant to this Section 9.10.
------------
C722003.23
92
ARTICLE X.
MISCELLANEOUS
10.01 Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by
the Company or any other Loan Party therefrom, shall be effective unless in
writing and signed by the Required Lenders and the Company or the
applicable Loan Party, as the case may be, and the Administrative Agent's
receipt of such writing is acknowledged by the Administrative Agent, and
each such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however,
-------- -------
that no such amendment, waiver or consent shall:
(a) waive any condition set forth in Section 4.01(a) without the
----------------
written consent of each Lender;
(b) extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 8.02) without the written consent
------------
of such Lender;
(c) postpone any date fixed by this Agreement or any other Loan
Document for any payment or mandatory prepayment of principal, interest,
fees or other amounts due to the Lenders (or any of them) hereunder or
under any other Loan Document without the written consent of each Lender
directly affected thereby;
(d) reduce the principal of, or the rate of interest specified herein
on, any Loan or L/C Borrowing, or (subject to clause (v) of the proviso
following paragraph (h) of this Section 10.01) any fees or other amounts
--------------
payable hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby; provided, however, that
-------- -------
only the consent of the Required Lenders shall be necessary to amend the
definition of "Default Rate" or to waive any obligation of any Borrower to
pay interest or Letter of Credit Fees at the Default Rate;
(e) change Section 2.14 or Section 8.03 in a manner that would alter
------------- ------------
the pro rata sharing of payments required thereby without the written
consent of each Lender;
(f) change any provision of this Section or the definition of
"Required Lenders" or any other provision hereof specifying the number or
percentage of Lenders required to amend, waive or otherwise modify any
rights hereunder or make any determination or grant any consent hereunder
without the written consent of each Lender;
(g) release the Company from the Company Guaranty Agreement or release
all or substantially all of the value of the Subsidiary Guaranty Agreement
without the written consent of each Lender; or
(h) release all or substantially all of the Collateral or all or
substantially all of the Designated Borrowers in any transaction or series
of related transactions, except as specifically required by the Loan
Documents, without the written consent of each Lender;
and, provided further, that (i) no amendment, waiver or consent shall,
-------- -------
unless in writing and signed by the L/C Issuer in addition to the Lenders
required above, affect the rights or duties of the L/C Issuer under this
C722003.23
93
Agreement or any Issuer Document relating to any Letter of Credit issued or
to be issued by it; (ii) no amendment, waiver or consent shall, unless in
writing and signed by the Swing Line Lender in addition to the Lenders
required above, affect the rights or duties of the Swing Line Lender under
this Agreement; (iii) no amendment, waiver or consent shall, unless in
writing and signed by the New Vehicle Swing Line Lender in addition to the
Lenders required above, affect the rights or duties of the New Vehicle
Swing Line Lender under this Agreement; (iv) no amendment, waiver or
consent shall, unless in writing and signed by the Administrative Agent in
addition to the Lenders required above, affect the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document; and
(v) the Fee Letter may be amended, or rights or privileges thereunder
waived, in a writing executed only by the parties thereto. Notwithstanding
anything to the contrary contained herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Commitment of such Lender may not be increased
or extended without the consent of such Lender.
10.02 Notices; Effectiveness; Electronic Communication.
(a) Notices Generally. Except in the case of notices and other
------------------
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent
by telecopier as follows, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows, provided, that any notice under
--------
Section 2.06(c) shall be accomplished through automatic electronic payment
---------------
procedures established from time to time between the Revolving Borrower and
the New Vehicle Swing Line Lender:
(i) if to the Company, a Borrower, the Administrative Agent, the
L/C Issuer, the Swing Line Lender or the New Vehicle Swing Line
Lender, to the address, telecopier number, electronic mail address or
telephone number specified for such Person on Schedule 10.02; and
--------------
(ii) if to any other Lender, to the address, telecopier number,
electronic mail address or telephone number specified in its
Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified
or registered mail, shall be deemed to have been given when received;
notices sent by telecopier shall be deemed to have been given when sent
(except that, if not sent during normal business hours for the recipient,
shall be deemed to have been given at the opening of business on the next
business day for the recipient). Notices delivered through electronic
communications to the extent provided in subsection (b) below, shall be
effective as provided in such subsection (b).
(b) Electronic Communications. Notices and other communications to the
-------------------------
Lenders and the L/C Issuer hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet
websites) pursuant to procedures approved by the Administrative Agent,
provided that the foregoing shall not apply to notices to any Lender or the
--------
L/C Issuer pursuant to Article II, Section 6.03 or Section 10.14(d) if such
---------- ------------ ----------------
Lender or the L/C Issuer, as applicable, has notified the Administrative
C722003.23
94
Agent that it is incapable of receiving notices under such Article by
electronic communication. The Administrative Agent or the Company may, in
its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by
it, provided that approval of such procedures may be limited to particular
notices or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and
other communications sent to an e-mail address shall be deemed received
upon the sender's receipt of an acknowledgement from the intended recipient
(such as by the "return receipt requested" function, as available, return
e-mail or other written acknowledgement), provided that if such notice or
--------
other communication is not sent during the normal business hours of the
recipient, such notice or communication shall be deemed to have been sent
at the opening of business on the next business day for the recipient, and
(ii) notices or communications posted to an Internet or intranet website
shall be deemed received upon the deemed receipt by the intended recipient
at its e-mail address as described in the foregoing clause (i) of
notification that such notice or communication is available and identifying
the website address therefor.
(c) The Platform. THE PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE."
------------
THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR
COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND
EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER
MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY,
INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR
OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE
BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative
Agent or any of its Related Parties (collectively, the "Agent Parties")
have any liability to the Company, any Borrower, any Lender, the L/C Issuer
or any other Person for losses, claims, damages, liabilities or expenses of
any kind (whether in tort, contract or otherwise) arising out of the
Company's, any Borrower's or the Administrative Agent's transmission of
Borrower Materials through the Internet, except to the extent that such
losses, claims, damages, liabilities or expenses are determined by a court
of competent jurisdiction by a final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Agent
Party; provided, however, that in no event shall any Agent Party have any
-------- -------
liability to the Company, any Borrower, any Lender, the L/C Issuer or any
other Person for indirect, special, incidental, consequential or punitive
damages (as opposed to direct or actual damages).
(d) Change of Address, Etc. Each of the Company (for itself and on
-----------------------
behalf of the other Borrowers), the Administrative Agent, the L/C Issuer,
the Swing Line Lender and the New Vehicle Swing Line Lender may change its
address, telecopier or telephone number and electronic mail addresses for
notices and other communications hereunder by notice to the other parties
hereto. Each other Lender may change its address, telecopier or telephone
number and electronic mail addresses for notices and other communications
hereunder by notice to the Company, the Administrative Agent, the L/C
Issuer, the Swing Line Lender and the New Vehicle Swing Line Lender. In
addition, each Lender agrees to notify the Administrative Agent from time
to time to ensure that the Administrative Agent has on record (i) an
effective address, contact name, telephone number, telecopier number and
C722003.23
95
electronic mail address to which notices and other communications may be
sent and (ii) accurate wire instructions for such Lender.
(e) Reliance by Administrative Agent, L/C Issuer and Lenders. The
------------------------------------------------------------
Administrative Agent, the L/C Issuer and the Lenders shall be entitled to
rely and act upon any notices (including telephonic Committed Loan Notices,
Swing Line Loan Notices and New Vehicle Swing Line Loan Notices)
purportedly given by or on behalf of any Borrower even if (i) such notices
were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii)
the terms thereof, as understood by the recipient, varied from any
confirmation thereof. The Company and each Borrower (jointly and severally)
shall indemnify the Administrative Agent, the L/C Issuer, each Lender and
the Related Parties of each of them from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Company or any Borrower. All
telephonic notices to and other telephonic communications with the
Administrative Agent may be recorded by the Administrative Agent, and each
of the parties hereto hereby consents to such recording.
10.03 No Waiver; Cumulative Remedies. No failure by any Lender, the
L/C Issuer or the Administrative Agent to exercise, and no delay by any
such Person in exercising, 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 the exercise of any other right, remedy, power
or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.
10.04 Expenses; Indemnity; Damage Waiver.
(a) Costs and Expenses. The Company and each Borrower (jointly and
-------------------
severally) shall pay (i) all reasonable out of pocket expenses incurred by
the Administrative Agent and its Affiliates (including the reasonable fees,
charges and disbursements of counsel for the Administrative Agent), in
connection with the syndication of the credit facilities provided for
herein, the preparation, negotiation, execution, delivery and
administration of this Agreement and the other Loan Documents or any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out of pocket expenses incurred by the
L/C Issuer in connection with the issuance, amendment, renewal or extension
of any Letter of Credit or any demand for payment thereunder and (iii) all
out of pocket expenses incurred by the Administrative Agent, any Lender or
the L/C Issuer (including the fees, charges and disbursements of any
counsel for the Administrative Agent, any Lender or the L/C Issuer), in
connection with the enforcement or protection of its rights, including any
audit fees incurred when conducting any audit of any Loan Party or any
Collateral during the continuance of an Event of Default (A) in connection
with this Agreement and the other Loan Documents, including its rights
under this Section, or (B) in connection with the Loans made or Letters of
Credit issued hereunder, including all such out of pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans
or Letters of Credit.
C722003.23
96
(b) Indemnification by the Company and the Borrowers. The Company and
------------------------------------------------
each Borrower (jointly and severally) shall indemnify the Administrative
Agent (and any sub-agent thereof), each Lender and the L/C Issuer, and each
Related Party of any of the foregoing Persons (each such Person being
called an "Indemnitee") against, and hold each Indemnitee harmless from,
----------
any and all losses, claims, damages, liabilities and related expenses
(including the fees, charges and disbursements of any counsel for any
Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee
by any third party or by the Company or any Borrower or any other Loan
Party arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by
the parties hereto of their respective obligations hereunder or thereunder,
the consummation of the transactions contemplated hereby or thereby, or, in
the case of the Administrative Agent (and any sub-agent thereof) and its
Related Parties only, the administration of this Agreement and the other
Loan Documents, (ii) any Loan or Letter of Credit or the use or proposed
use of the proceeds therefrom (including any refusal by the L/C Issuer to
honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the
terms of such Letter of Credit), (iii) any actual or alleged presence or
release of Hazardous Materials on or from any property owned or operated by
the Company, any Borrower or any of its Subsidiaries, or any Environmental
Liability, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based
on contract, tort or any other theory, whether brought by a third party or
by the Company or any other Loan Party, and regardless of whether any
Indemnitee is a party thereto, in all cases, whether or not caused by or
arising, in whole or in part, out of the comparative, contributory or sole
negligence of the Indemnitee; provided that such indemnity shall not, as to
--------
any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses (x) are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnitee or (y)
result from a claim brought by the Company or any other Loan Party against
an Indemnitee for breach in bad faith of such Indemnitee's obligations
hereunder or under any other Loan Document, if the Company or such other
Loan Party has obtained a final and nonappealable judgment in its favor on
such claim as determined by a court of competent jurisdiction.
(c) Reimbursement by Lenders. To the extent that the Company or any
-------------------------
Borrower for any reason fails to indefeasibly pay any amount required under
subsection (a) or (b) of this Section to be paid by it to the
Administrative Agent (or any sub-agent thereof), the L/C Issuer or any
Related Party of any of the foregoing, each Lender severally agrees to pay
to the Administrative Agent (or any such sub-agent), the L/C Issuer or such
Related Party, as the case may be, such Lender's Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or
indemnity payment is sought) of such unpaid amount, provided that the
--------
unreimbursed expense or indemnified loss, claim, damage, liability or
related expense, as the case may be, was incurred by or asserted against
the Administrative Agent (or any such sub-agent) or the L/C Issuer in its
capacity as such, or against any Related Party of any of the foregoing
acting for the Administrative Agent (or any such sub-agent) or L/C Issuer
in connection with such capacity. The obligations of the Lenders under this
subsection (c) are subject to the provisions of Section 2.13(d).
---------------
C722003.23
97
(d) Waiver of Consequential Damages, Etc. To the fullest extent
---------------------------------------
permitted by applicable law, neither the Company nor any Borrower shall
assert, and each of the Company and each Borrower hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement, any
other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit
or the use of the proceeds thereof. No Indemnitee referred to in subsection
(b) above shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed by
it through telecommunications, electronic or other information transmission
systems in connection with this Agreement or the other Loan Documents or
the transactions contemplated hereby or thereby.
(e) Payments. All amounts due under this Section shall be payable not
--------
later than ten Business Days after demand therefor.
(f) Survival. The agreements in this Section shall survive the
--------
resignation of the Administrative Agent and the L/C Issuer, the replacement
of any Lender, the termination of the Aggregate Commitments and the
repayment, satisfaction or discharge of all the other Obligations.
10.05 Payments Set Aside. To the extent that any payment by or on
behalf of the Company or any Borrower is made to the Administrative Agent,
the L/C Issuer, the Swing Line Lender, the New Vehicle Swing Line Lender or
any other Lender, or the Administrative Agent, the L/C Issuer, the Swing
Line Lender, the New Vehicle Swing Line Lender or any other Lender
exercises its right of setoff, and such payment or the proceeds of such
setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to
any settlement entered into by the Administrative Agent, the L/C Issuer or
such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law
or otherwise, then (a) to the extent of such recovery, the obligation or
part thereof originally intended to be satisfied shall be revived and
continued in full force and effect as if such payment had not been made or
such setoff had not occurred, and (b) each Lender and the L/C Issuer
severally agrees to pay to the Administrative Agent upon demand its
applicable share (without duplication) of any amount so recovered from or
repaid by the Administrative Agent (other than (1) any amount consisting of
the Administrative Agent's fees under Section 2.10(b)(i) or (2) principal
------------------
or interest on any Bilateral Swing Line Loan or Bilateral New Vehicle Swing
Line Loan), plus interest thereon from the date of such demand to the date
such payment is made at a rate per annum equal to the Federal Funds Rate
from time to time in effect. The obligations of the Lenders and the L/C
Issuer under clause (b) of the preceding sentence shall survive the payment
in full of the Obligations and the termination of this Agreement.
10.06 Successors and Assigns.
(a) Successors and Assigns Generally. The provisions of this Agreement
--------------------------------
shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns permitted hereby, except that
neither the Company nor any Borrower may assign or otherwise transfer any
of its rights or obligations hereunder without the prior written consent of
C722003.23
98
the Administrative Agent and each Lender and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (i) to
an Eligible Assignee in accordance with the provisions of subsection (b) of
this Section, (ii) by way of participation in accordance with the
provisions of subsection (d) of this Section, or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of subsection
(f) of this Section (and any other attempted assignment or transfer by any
party hereto shall be null and void). Nothing in this Agreement, expressed
or implied, shall be construed to confer upon any Person (other than the
parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in subsection (d) of this Section and,
to the extent expressly contemplated hereby, the Related Parties of each of
the Administrative Agent, the L/C Issuer and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Assignments by Lenders. Any Lender may at any time assign to one
----------------------
or more Eligible Assignees all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Commitment and the
Loans (including for purposes of this subsection (b), participations in L/C
Obligations, in Swing Line Loans and in New Vehicle Swing Line Loans) at
the time owing to it); provided that
--------
(i) except in the case of an assignment of the entire remaining
amount of the assigning Lender's Commitment and the Loans at the time
owing to it or in the case of an assignment to a Lender or an
Affiliate of a Lender or an Approved Fund with respect to a Lender,
the aggregate amount of the Commitment (which for this purpose
includes Loans outstanding thereunder) or, if the Commitment is not
then in effect, the outstanding principal balance of the Loans of the
assigning Lender subject to each such assignment, determined as of the
date the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent or, if "Trade Date" is specified
in the Assignment and Assumption, as of the Trade Date, shall not be
less than $5,000,000 unless each of the Administrative Agent and, so
long as no Event of Default has occurred and is continuing, the
Company otherwise consents (each such consent not to be unreasonably
withheld or delayed); provided, however, that concurrent assignments
-------- -------
to members of an Assignee Group and concurrent assignments from
members of an Assignee Group to a single Eligible Assignee (or to an
Eligible Assignee and members of its Assignee Group) will be treated
as a single assignment for purposes of determining whether such
minimum amount has been met;
(ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and
obligations under this Agreement with respect to the Loans or the
Commitment assigned, except that this clause (ii) shall not apply to
rights in respect of Swing Line Loans and New Vehicle Swing Line
Loans;
(iii) any assignment of a Commitment must be approved by the
Administrative Agent, the L/C Issuer, the Swing Line Lender and the
New Vehicle Swing Line Lender unless the Person that is the proposed
assignee is itself a Lender (whether or not the proposed assignee
would otherwise qualify as an Eligible Assignee); and
(iv) the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee in the amount, if any, required as set
C722003.23
99
forth in Schedule 10.06, and the Eligible Assignee, if it shall not be
--------------
a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire
Subject to acceptance and recording thereof by the Administrative Agent
pursuant to subsection (c) of this Section, from and after the effective
date specified in each Assignment and Assumption, the Eligible Assignee
thereunder shall be a party to this Agreement and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment
and Assumption, be released from its obligations under this Agreement (and,
in the case of an Assignment and Assumption covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall
cease to be a party hereto) but shall continue to be entitled to the
benefits of Sections 3.01, 3.04, and 10.04 with respect to facts and
-------------- ---- -----
circumstances occurring prior to the effective date of such assignment.
Upon request, each Borrower (at its expense) shall execute and deliver a
Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance
with subsection (d) of this Section.
(c) Register. The Administrative Agent, acting solely for this
--------
purpose as an agent of the Borrowers, shall maintain at the
Administrative Agent's Office a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal
amounts of the Loans and L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The
--------
entries in the Register shall be conclusive, and the Borrowers, the
Administrative Agent and the Lenders may treat each Person whose name
is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by
each of the Borrowers and the L/C Issuer at any reasonable time and
from time to time upon reasonable prior notice. In addition, at any
time that a request for a consent for a material or substantive change
to the Loan Documents is pending, any Lender may request and receive
from the Administrative Agent a copy of the Register.
(d) Participations. Any Lender may at any time, without the
--------------
consent of, or notice to, the Company, any Borrower, the Swing Line
Lender, the New Vehicle Swing Line Lender, the L/C Issuer or the
Administrative Agent, sell participations to any Person (other than a
natural person or the Company or any of the Company's Affiliates or
Subsidiaries) (each, a "Participant") in all or a portion of such
-----------
Lender's rights and/or obligations under this Agreement (including all
or a portion of its Commitment and/or the Loans (including such
Lender's participations in L/C Obligations, Swing Line Loans and/or
New Vehicle Swing Line Loans) owing to it); provided that (i) such
--------
Lender's obligations under this Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Company,
the Borrowers, the Administrative Agent, the Lenders and the L/C
Issuer shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement.
C722003.23
100
Any agreement or instrument pursuant to which a Lender sells such
a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
waiver or other modification described in the first proviso to Section
-------
10.01 that affects such Participant. Subject to subsection (e) of this
-----
Section, each of the Company and each Borrower agrees that each
Participant shall be entitled to the benefits of Sections 3.01 and
--------------
3.04 to the same extent as if it were a Lender and had acquired its
----
interest by assignment pursuant to subsection (b) of this Section. To
the extent permitted by law, each Participant also shall be entitled
to the benefits of Section 10.08 as though it were a Lender, provided
------------- --------
that such Participant agrees to be subject to Section 2.14 as though
------------
it were a Lender.
(e) Limitation upon Participant Rights. A Participant shall not
-----------------------------------
be entitled to receive any greater payment under Section 3.01 or 3.04
------------ ----
than the applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale
of the participation to such Participant is made with the Company's
prior written consent. A Participant that would be a Foreign Lender if
it were a Lender shall not be entitled to the benefits of Section 3.01
------------
unless the Company is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the
Borrowers, to comply with Section 3.01(e) as though it were a Lender.
---------------
(f) Certain Pledges. Any Lender may at any time pledge or assign
---------------
a security interest in all or any portion of its rights under this
Agreement (including under any of its Notes, if any) to secure
obligations of such Lender, including any pledge or assignment to
secure obligations to a Federal Reserve Bank; provided that no such
--------
pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.
(g) Electronic Execution of Assignments. The words "execution,"
------------------------------------
"signed," "signature," and words of like import in any Assignment and
Assumption shall be deemed to include electronic signatures or the
keeping of records in electronic form, each of which shall be of the
same legal effect, validity or enforceability as a manually executed
signature or the use of a paper-based recordkeeping system, as the
case may be, to the extent and as provided for in any applicable law,
including the Federal Electronic Signatures in Global and National
Commerce Act, the New York State Electronic Signatures and Records
Act, or any other similar state laws based on the Uniform Electronic
Transactions Act.
(h) Resignation as L/C Issuer, Swing Line Lender or New Vehicle
------------------------------------------------------------
Swing Line Lender after Assignment. Notwithstanding anything to the
-----------------------------------
contrary contained herein, if at any time Bank of America assigns all
of its Commitment and Loans pursuant to subsection (b) above, Bank of
America may, (i) upon 30 days' notice to the Company and the Lenders,
resign as L/C Issuer and/or (ii) upon 30 days' notice to the Company,
resign as Swing Line Lender and/or (iii) upon 30 days' notice to the
Company, resign as New Vehicle Swing Line Lender. In the event of any
such resignation as L/C Issuer, Swing Line Lender or New Vehicle Swing
Line Lender, the Company shall be entitled to appoint from among the
Lenders a successor L/C Issuer, Swing Line Lender or New Vehicle Swing
Line Lender hereunder; provided, however, that no failure by the
-------- -------
Company to appoint any such successor shall affect the resignation of
Bank of America as L/C Issuer, Swing Line Lender or New Vehicle Swing
C722003.23
101
Line Lender, as the case may be. If Bank of America resigns as L/C
Issuer, it shall retain all the rights, powers, privileges and duties
of the L/C Issuer hereunder with respect to all Letters of Credit
outstanding as of the effective date of its resignation as L/C Issuer
and all L/C Obligations with respect thereto (including the right to
require the Lenders to make Base Rate Committed Loans or fund risk
participations in Unreimbursed Amounts pursuant to Section 2.03(c)).
---------------
If Bank of America resigns as Swing Line Lender, it shall retain all
the rights of the Swing Line Lender provided for hereunder with
respect to Swing Line Loans made by it and outstanding as of the
effective date of such resignation, including the right to require the
Lenders to make Eurodollar Rate Committed Loans or fund risk
participations in outstanding Swing Line Loans pursuant to Section
-------
2.04(c). If Bank of America resigns as New Vehicle Swing Line Lender,
-------
it shall retain all the rights of the New Vehicle Swing Line Lender
provided for hereunder with respect to New Vehicle Swing Line Loans
made by it and outstanding as of the effective date of such
resignation, including the right to require the Lenders to make
Eurodollar Rate Committed Loans or fund risk participations in
outstanding New Vehicle Swing Line Loans pursuant to Section 2.05(e).
----------------
Upon the appointment of a successor L/C Issuer, Swing Line Lender
and/or New Vehicle Swing Line Lender, (a) such successor shall succeed
to and become vested with all of the rights, powers, privileges and
duties of the retiring L/C Issuer, Swing Line Lender or New Vehicle
Swing Line Lender, as the case may be, and (b) the successor L/C
Issuer shall issue letters of credit in substitution for the Letters
of Credit, if any, outstanding at the time of such succession or make
other arrangements satisfactory to Bank of America to effectively
assume the obligations of Bank of America with respect to such Letters
of Credit.
10.07 Treatment of Certain Information; Confidentiality. Each of
the Administrative Agent, the Lenders and the L/C Issuer agrees to
maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its Affiliates and to
its and its Affiliates' respective partners, directors, officers,
employees, agents, advisors and representatives (it being understood
that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any
regulatory authority purporting to have jurisdiction over it
(including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal
process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or
any action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder or thereunder, (f)
subject to an agreement containing provisions substantially the same
as those of this Section, to (i) any assignee of or Participant in, or
any prospective assignee of or Participant in, any of its rights or
obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction
relating to a Borrower and its obligations, (g) with the consent of
the Company or (h) to the extent such Information (x) becomes publicly
available other than as a result of a breach of this Section or (y)
becomes available to the Administrative Agent, any Lender, the L/C
Issuer or any of their respective Affiliates on a nonconfidential
basis from a source other than the Company.
For purposes of this Section, "Information" means all information
-----------
received from the Company or any Subsidiary relating to the Company or
any Subsidiary or any of their respective businesses, other than any
such information that is available to the Administrative Agent, any
C722003.23
102
Lender or the L/C Issuer on a nonconfidential basis prior to
disclosure by the Company or any Subsidiary, provided that, in the
--------
case of information received from the Company or any Subsidiary after
the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such
Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its
own confidential information.
Each of the Administrative Agent, the Lenders and the L/C Issuer
acknowledges that (a) the Information may include material non-public
information concerning the Company or a Subsidiary, as the case may
be, (b) it has developed compliance procedures regarding the use of
material non-public information and (c) it will handle such material
non-public information in accordance with applicable Law, including
Federal and state securities Laws.
10.08 Right of Setoff. Subject to Section 2.14, if an Event of
-------------
Default shall have occurred and be continuing, each Lender, the L/C
Issuer and each of their respective Affiliates is hereby authorized at
any time and from time to time, to the fullest extent permitted by
applicable law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final, in whatever currency)
at any time held and other obligations (in whatever currency) at any
time owing by such Lender, the L/C Issuer or any such Affiliate to or
for the credit or the account of the Company or any Borrower against
any and all of the obligations of the Company or such Borrower, as
applicable, now or hereafter existing under this Agreement or any
other Loan Document to such Lender or the L/C Issuer, irrespective of
whether or not such Lender or the L/C Issuer shall have made any
demand under this Agreement or any other Loan Document and although
such obligations of the Company or such Borrower may be contingent or
unmatured or are owed to a branch or office of such Lender or the L/C
Issuer different from the branch or office holding such deposit or
obligated on such indebtedness; provided, however, that the Lenders,
--------
the L/C Issuer and their respective Affiliates shall not set off or
apply any such deposits at any time held in the Collection Account,
except pursuant to the terms of any Permitted Sale Facility. The
rights of each Lender, the L/C Issuer and their respective Affiliates
under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Lender, the L/C Issuer or
their respective Affiliates may have. Each Lender and the L/C Issuer
agrees to notify the Company and the Administrative Agent promptly
after any such setoff and application, provided, however, that the
--------
failure to give such notice shall not affect the validity of such
setoff and application.
10.09 Interest Rate Limitation. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed
to be paid under the Loan Documents shall not exceed the maximum rate
of non-usurious interest permitted by applicable Law (the "Maximum
-------
Rate"). If the Administrative Agent or any Lender shall receive
----
interest in an amount that exceeds the Maximum Rate, the excess
interest shall be applied to the principal of the Loans or, if it
exceeds such unpaid principal, refunded to the Company. In determining
whether the interest contracted for, charged, or received by the
Administrative Agent or a Lender exceeds the Maximum Rate, such Person
may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather
than interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or
C722003.23
103
unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.
10.10 Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto in
different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single
contract. This Agreement and the other Loan Documents constitute the
entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall
-------------
become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have
received counterparts hereof that, when taken together, bear the
signatures of each of the other parties hereto. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy
shall be effective as delivery of a manually executed counterpart of
this Agreement.
10.11 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any other Loan
Document or other document delivered pursuant hereto or thereto or in
connection herewith or therewith shall survive the execution and
delivery hereof and thereof. Such representations and warranties have
been or will be relied upon by the Administrative Agent and each
Lender, regardless of any investigation made by the Administrative
Agent or any Lender or on their behalf and notwithstanding that the
Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in
full force and effect as long as any Loan or any other Obligation
hereunder shall remain unpaid or unsatisfied or any Letter of Credit
shall remain outstanding.
10.12 Severability. If any provision of this Agreement or the
other Loan Documents is held to be illegal, invalid or unenforceable,
(a) the legality, validity and enforceability of the remaining
provisions of this Agreement and the other Loan Documents shall not be
affected or impaired thereby and (b) the parties shall endeavor in
good faith negotiations to replace the illegal, invalid or
unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a
particular jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.
10.13 Replacement of Lenders. If any Lender requests compensation
under Section 3.04, or if the Company or any Borrower is required to
-------------
pay any additional amount to any Lender or any Governmental Authority
for the account of any Lender pursuant to Section 3.01, or if any
-------------
Lender is a Defaulting Lender, then the Company may, at its sole
expense and effort, upon notice to such Lender and the Administrative
Agent, require such Lender to assign and delegate, without recourse
(in accordance with and subject to the restrictions contained in, and
consents required by, Section 10.06), all of its interests, rights and
-------------
obligations under this Agreement and the related Loan Documents to an
assignee that shall assume such obligations (which assignee may be
another Lender, if a Lender accepts such assignment), provided that:
--------
(a) the Company shall have paid to the Administrative Agent the
assignment fee specified in Section 10.06(b);
----------------
C722003.23
104
(b) such Lender shall have received payment of an amount equal to
the outstanding principal of its Loans and L/C Advances, accrued
interest thereon, accrued fees and all other amounts payable to it
hereunder and under the other Loan Documents from the assignee (to the
extent of such outstanding principal and accrued interest and fees) or
the Company (in the case of all other amounts);
(c) in the case of any such assignment resulting from a claim for
compensation under Section 3.04 or payments required to be made
-------------
pursuant to Section 3.01, such assignment will result in a reduction
------------
in such compensation or payments thereafter; and
(d) such assignment does not conflict with applicable Laws.
A Lender shall not be required to make any such assignment or
delegation if, prior thereto, as a result of a waiver by such Lender
or otherwise, the circumstances entitling the Company to require such
assignment and delegation cease to apply.
10.14 Governing Law; Jurisdiction; Etc.
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
--------------
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) SUBMISSION TO JURISDICTION. THE COMPANY AND EACH BORROWER
----------------------------
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY,
TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT
COURT OF THE SOUTHERN DISTRICT OF SUCH STATE, AND ANY APPELLATE COURT
FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES
HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT
THE ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT AGAINST THE COMPANY OR ANY BORROWER OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(c) WAIVER OF VENUE. EACH OF THE PARTIES HERETO IRREVOCABLY AND
---------------
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN
C722003.23
105
PARAGRAPH (b) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION
OR PROCEEDING IN ANY SUCH COURT.
(d) SERVICE OF PROCESS. EACH PARTY HERETO HEREBY IRREVOCABLY
------------------
CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN
SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY
-------------
PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW.
10.15 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
10.16 USA PATRIOT Act Notice. Each Lender that is subject to the
Act (as hereinafter defined) and the Administrative Agent (for itself
and not on behalf of any Lender) hereby notifies the Company and the
Borrowers that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
"Act"), it is required to obtain, verify and record information that
identifies the Company and the Borrowers, which information includes
the name and address of the Company and each Borrower and other
information that will allow such Lender or the Administrative Agent,
as applicable, to identify the Company and such Borrower in accordance
with the Act.
C722003.23
106
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
CARMAX, INC.
By: /s/ Keith D. Browning
---------------------------------------
Name: Keith D. Browning
-------------------------------------
Title: Executive Vice President
------------------------------------
CARMAX AUTO SUPERSTORES, INC.
By: /s/ Keith D. Browning
---------------------------------------
Name: Keith D. Browning
-------------------------------------
Title: Executive Vice President
------------------------------------
CARMAX OF LAUREL, LLC
By: /s/ Keith D. Browning
---------------------------------------
Name: Keith D. Browning
-------------------------------------
Title: President
------------------------------------
CARMAX AUTO MALL, LLC
By: /s/ Keith D. Browning
---------------------------------------
Name: Keith D. Browning
-------------------------------------
Title: President
------------------------------------
CARMAX AUTO SUPERSTORES CALIFORNIA, LLC
By: /s/ Keith D. Browning
---------------------------------------
Name: Keith D. Browning
-------------------------------------
Title: President
------------------------------------
CREDIT AGREEMENT
Signature Page
C722003.23
BANK OF AMERICA, N.A., as
Administrative Agent
By: /s/ Anne M. Zeschke
---------------------------------------
Name: Anne M. Zeschke
-------------------------------------
Title: Assistant Vice President
------------------------------------
CREDIT AGREEMENT
Signature Page
C722003.23
BANK OF AMERICA, N.A., as a Lender, L/C
Issuer, Swing Line Lender and New
Vehicle Swing Line Lender
By: /s/ M. Patricia Kay
--------------------------------------
Name: M. Patricia Kay
Title: Senior Vice President
CREDIT AGREEMENT
Signature Page
C722003.23
JPMORGAN CHASE BANK, N.A., as a Lender
By: /s/ H. David Jones
--------------------------------------
Name: H. David Jones
-------------------------------------
Title: Vice President
-----------------------------------
CREDIT AGREEMENT
Signature Page
C722003.23
WACHOVIA BANK, NATIONAL ASSOCIATION,
as a Lender
By: /s/ Michael R. Jordan
--------------------------------------
Name: Michael R. Jordan
-------------------------------------
Title: Managing Director
-----------------------------------
CREDIT AGREEMENT
Signature Page
C722003.23
SUNTRUST BANK, as a Lender
By: /s/ Mark Flatin
--------------------------------------
Name: Mark Flatin
-------------------------------------
Title: Managing Director
-----------------------------------
CREDIT AGREEMENT
Signature Page
C722003.23
TOYOTA MOTOR CREDIT CORPORATION, as a Lender
By: /s/ David Pelliccioni
--------------------------------------
Name: David Pelliccioni
-------------------------------------
Title: Group VP, Sales & Marketing - TFS
-----------------------------------
CREDIT AGREEMENT
Signature Page
C722003.23
WELLS FARGO BANK, N.A., as a Lender
By: /s/ Peter W. Clark
--------------------------------------
Name: Peter W. Clark
-------------------------------------
Title: Vice President
-----------------------------------
CREDIT AGREEMENT
Signature Page
C722003.23
SCOTIABANC, INC., as a Lender
By: /s/ William E. Zarrett
--------------------------------------
Name: William E. Zarrett
-------------------------------------
Title: Managing Director
-----------------------------------
CREDIT AGREEMENT
Signature Page
C722003.23
CREDIT SUISSE, CAYMAN ISLAND BRANCH,
as a Lender
By: /s/ David Dodd
--------------------------------------
Name: David Dodd
------------------------------------
Title: Vice President
-----------------------------------
By: /s/ Cassandra Drogan
--------------------------------------
Name: Cassandra Drogan
-------------------------------------
Title: Associate
-----------------------------------
CREDIT AGREEMENT
Signature Page
C722003.23
ROYAL BANK OF CANADA, as a Lender
By: /s/ Howard Lee
--------------------------------------
Name: Howard Lee
-------------------------------------
Title: Authorized Signatory
-----------------------------------
CREDIT AGREEMENT
Signature Page
C722003.23
U.S. BANK NATIONAL ASSOCIATION,
as a Lender
By: /s/ Andrew Hein
--------------------------------------
Name: Andrew Hein
-------------------------------------
Title: Vice President
-----------------------------------
CREDIT AGREEMENT
Signature Page
C722003.23
FIFTH THIRD BANK, as a Lender
By: /s/ Mark Olson
--------------------------------------
Name: Mark Olson
-------------------------------------
Title: Vice President
-----------------------------------
CREDIT AGREEMENT
Signature Page
C722003.23
EXHIBIT A
FORM OF COMMITTED LOAN NOTICE
Date: ___________, _____
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of August 24,
2005 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "Agreement;" the terms defined therein being used
---------
herein as therein defined), among CarMax Auto Superstores, Inc., a Virginia
corporation (the "Revolving Borrower"), CarMax, Inc., a Virginia corporation,
-------------------
the Designated Borrowers from time to time party thereto, the Lenders from time
to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C
Issuer, Swing Line Lender and New Vehicle Swing Line Lender.
The Revolving Borrower hereby requests (select one):
|_| A Borrowing of Committed Loans |_| A conversion of Loans
1. On _________________________ (a Business Day).
2. In the amount of _______________.
3. Comprised of ______________________________.
[Type of Committed Loan requested]
The Committed Borrowing, if any, requested herein complies with the
provisos to the first sentence of Section 2.01 of the Agreement.
------------
CARMAX AUTO SUPERSTORES, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
A-1
Form of Committed Loan Notice
C722003.23
EXHIBIT B
FORM OF SWING LINE LOAN NOTICE
Date: ___________, _____
To: Bank of America, N.A., as Swing Line Lender
Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of August 24,
2005 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "Agreement;" the terms defined therein being used
---------
herein as therein defined), among CarMax Auto Superstores, Inc., a Virginia
corporation (the "Revolving Borrower"), CarMax, Inc., a Virginia corporation,
-------------------
the Designated Borrowers from time to time party thereto, the Lenders from time
to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C
Issuer, Swing Line Lender and New Vehicle Swing Line Lender.
The Revolving Borrower hereby requests (select one):
|_| A Borrowing of a Swing Line Loan |_| A conversion of Loans
1. On _________________________ (a Business Day).
2. In the amount of $_______________.
3. Comprised of ____________ [Type of Swing Line Loan requested].
The Swing Line Borrowing requested herein complies with the
requirements of the provisos to the first sentence of Section 2.04(a) of the
Agreement.
CARMAX AUTO SUPERSTORES, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
B-1
Form of Swing Line Loan Notice
C722003.23
EXHIBIT C
FORM OF NEW VEHICLE SWING LINE LOAN NOTICE
STRAIGHT LINE TRANSACTION REQUEST
Date: ___________, _____
To: Bank of America, N.A., as New Vehicle Swing Line Lender
Bank of America Auto Group Dealer # Line 07
Floor Plan Operations Class 007
FAX: (800) 833-1221 Serial #
Dealership Name: [______________________]
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of August 24,
2005 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "Agreement;" the terms defined therein being used
---------
herein as therein defined), among CarMax Auto Superstores, Inc., a Virginia
corporation (the "Revolving Borrower"), CarMax, Inc., a Virginia corporation,
-------------------
the Designated Borrowers from time to time party thereto, the Lenders from time
to time party thereto, and Bank of America, N.A., as Administrative Agent, L/C
Issuer, Swing Line Lender and New Vehicle Swing Line Lender.
The Revolving Borrower hereby requests (select 1 or 2):
1. PAYMENT TRANSACTION
Pay funds into the STRAIGHTLINE account in the amount of $________________
from Designated CHECKING Account on FITS.
2. ADVANCE TRANSACTION
Advance funds from the STRAIGHT LINE account in the amount of $ ___________
and credit Designated CHECKING account on FITS.
3. On _________________________ (a Business Day).
4. Comprised of ______________________________.
[Type of New Vehicle Swing Line Loan requested: Eurodollar
Rate Loan or Base Rate Loan]
C-1
Form of New Vehicle Swing Line Loan Notice
C722003.23
The New Vehicle Swing Line Borrowing requested herein complies with the
provisos to the first sentence of Section 2.05(a) of the Agreement.
CARMAX AUTO SUPERSTORES, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
C-2
Form of New Vehicle Swing Line Loan Notice
C722003.23
EXHIBIT D
FORM OF NOTE
August 24, 2005
FOR VALUE RECEIVED, each of the undersigned (each a "Borrower" and,
--------
collectively, the "Borrowers") hereby promises, jointly and severally, to pay to
---------
_____________________ or registered assigns (the "Lender"), in accordance with
------
the provisions of the Agreement (as hereinafter defined), the principal amount
of each Loan from time to time made by the Lender to CarMax Auto Superstores,
Inc. (the "Revolving Borrower") or any Designated Borrower under that certain
-------------------
Credit Agreement, dated as of August 24, 2005 (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the
"Agreement;" the terms defined therein being used herein as therein defined),
---------
among the Revolving Borrower, CarMax, Inc., the Designated Borrowers from time
to time party thereto, the Lenders from time to time party thereto, and Bank of
America, N.A., as Administrative Agent, L/C Issuer, Swing Line Lender and New
Vehicle Swing Line Lender.
Each Borrower promises, jointly and severally, to pay interest on the
unpaid principal amount of each Loan from the date of such Loan until such
principal amount is paid in full, at such interest rates and at such times as
provided in the Agreement. Except as otherwise provided in Section 2.04(f) of
----------------
the Agreement with respect to Swing Line Loans and in Section 2.05(h) of the
----------------
Agreement with respect to New Vehicle Swing Line Loans, all payments of
principal and interest shall be made to the Administrative Agent for the account
of the Lender in Dollars in immediately available funds at the Administrative
Agent's Office. If any amount is not paid in full when due hereunder, such
unpaid amount shall bear interest, to be paid upon demand, from the due date
thereof until the date of actual payment (and before as well as after judgment)
computed at the per annum rate set forth in the Agreement.
This Note is one of the Notes referred to in the Agreement, is entitled to
the benefits thereof and may be prepaid in whole or in part subject to the terms
and conditions provided therein. This Note is also entitled to the benefits of
the Guaranties and is secured by the Collateral. Upon the occurrence and
continuation of 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. Loans made
by the Lender shall be evidenced by one or more loan accounts or records
maintained by the Lender in the ordinary course of business. The Lender may also
attach schedules to this Note and endorse thereon the date, amount and maturity
of its Loans and payments with respect thereto.
Each Borrower, for itself and for its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.
D-1
Form of Note
C722003.23
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
[CARMAX AUTO SUPERSTORES, INC.]
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
[EACH DESIGNATED BORROWER]
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
D-2
Form of Note
C722003.23
LOANS AND PAYMENTS WITH RESPECT THERETO
Date Type of Loan Amount of Amount of Principal Outstanding Notation Made
or Interest Paid Principal Balance
Made Loan Made This Date This Date By
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D-3
Form of Note
C722003.23
EXHIBIT E
FORM OF COMPLIANCE CERTIFICATE
Financial Statement Date: _______________, _____
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of August 24,
2005 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "Agreement;" the terms defined therein being used
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herein as therein defined), among CarMax Auto Superstores, Inc., a Virginia
corporation (the "Revolving Borrower"), CarMax, Inc., a Virginia corporation
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(the "Company"), the Designated Borrowers from time to time party thereto, the
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Lenders from time to time party thereto, and Bank of America, N.A., as
Administrative Agent, L/C Issuer, Swing Line Lender and New Vehicle Swing Line
Lender.
The undersigned Responsible Officer of the Company hereby certifies as of
the date hereof that he/she is the _____________________________________________
of the Company, and that, as such, he/she is authorized to execute and deliver
this Certificate to the Administrative Agent on the behalf of the Company, and
that:
[Use following paragraph 1 for fiscal year-end financial statements]
1. Attached hereto as Schedule 1 are the year-end audited financial
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statements required by Section 6.01(a) of the Agreement for the fiscal year of
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the Company ended as of the above date, together with the report and opinion of
an independent certified public accountant required by such section.
[Use following paragraph 1 for fiscal quarter-end financial statements]
1. Attached hereto as Schedule 1 are the unaudited financial statements
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required by Section 6.01(b) of the Agreement for the fiscal quarter of the
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Company ended as of the above date. Such financial statements fairly present the
financial condition, results of operations and cash flows of the Company and its
Subsidiaries in accordance with GAAP as at such date and for such period,
subject only to normal year-end audit adjustments and the absence of footnotes.
2. The undersigned has reviewed and is familiar with the terms of the
Agreement and has made, or has caused to be made under his/her supervision, a
detailed review of the transactions and condition (financial or otherwise) of
the Company during the accounting period covered by the attached financial
statements.
3. A review of the activities of the Company during such fiscal period has
been made under the supervision of the undersigned with a view to determining
whether during such fiscal period the Company performed and observed all its
Obligations under the Loan Documents, and
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Form of Compliance Certificate
C722003.23
[select one:]
[to the best knowledge of the undersigned, during such fiscal period the
Company performed and observed each covenant and condition of the Loan Documents
applicable to it, and no Default has occurred and is continuing.]
--or--
[the following covenants or conditions have not been performed or observed
and the following is a list of each such Default and its nature and status:]
4. The representations and warranties of (i) the Company, the Revolving
Borrower and each other Borrower contained in Article V of the Agreement and
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(ii) each Loan Party contained in each other Loan Document or in any document
furnished at any time under or in connection with the Loan Documents, are true
and correct on and as of the date hereof, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they are true and correct as of such earlier date, and except that for
purposes of this Compliance Certificate, the representations and warranties
contained in subsections (a) and (b) of Section 5.05 of the Agreement shall be
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deemed to refer to the most recent statements furnished pursuant to clauses (a)
and (b), respectively, of Section 6.01 of the Agreement, including the
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statements in connection with which this Compliance Certificate is delivered.
5. The financial covenant analyses and information set forth on Schedule 2
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attached hereto are true and accurate on and as of the date of this Certificate.
6. Schedule 3 sets forth the Borrowers' dealer locations as required
pursuant to Section 6.14 of the Agreement.
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IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
_______________, ________
CARMAX, INC.
By:
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Name:
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Title:
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E-2
Form of Compliance Certificate
C722003.23
For the Quarter/Year ended ___________________("Statement Date")
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SCHEDULE 2
to the Compliance Certificate
($ in 000's)
I. Section 7.09 (a) - Consolidated Current Ratio.
A. Consolidated Current Assets at Statement Date: $
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B. Consolidated current liabilities at Statement Date:
C. Total Outstandings (under the Agreement) at Statement Date
(without duplication of Line I.B.): $
D. Consolidated Current Liabilities (Line I.B. + Line I.C.): $
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E. Consolidated Current Ratio (Line I.A. / Line I.D.): to 1.00
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F. Total Outstandings at Statement Date (Line I.C.): $
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G. Net Book Value of Eligible Vehicle Inventory at
Statement Date: $
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H. Utilization Percentage (Line I.F. / Line I.G.): %
Minimum permitted (Utilization Percentage < 65%): 1.20 to 1.00
-
Minimum permitted (Utilization Percentage > 65%): 1.50 to 1.00
II. Section 7.09 (b) - Consolidated Total Liabilities to Consolidated Tangible Net Worth Ratio.
A. Consolidated Total Liabilities at Statement Date:
1. Consolidated current liabilities at Statement Date: $
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2. Consolidated long-term liabilities at Statement Date: $
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3. Consolidated contingent liabilities (without duplication of
Line II.A.1 or 2) at Statement Date: $
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4. Synthetic Lease Obligations (without duplication of Line
II.A.1 or 2) at Statement Date: $
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5. Other Off-Balance Sheet Liabilities (without duplication of
Line II.A.1 or 2) at Statement Date: $
6. Consolidated Total Liabilities (Line II.A.1 + 2 + 3 + 4 + 5): $
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B. Consolidated Tangible Net Worth at Statement Date:
1. Shareholders' Equity at Statement Date: $
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2. Intangible Assets at Statement Date: $
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3. Consolidated Tangible Net Worth (Line II.B.1 - 2): $
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Form of Compliance Certificate
C722003.23
C. Consolidated Total Liabilities to Tangible Net Worth (Line
II.A.6 / Line II.B.3): ------------- to 1.00
1.30 to 1.00
Maximum permitted:
III. Section 7.09 (c) - Consolidated Fixed Charge Coverage Ratio.
A. Consolidated EBITDAR for four consecutive fiscal quarters
ending on above date ("Subject Period"):
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1. Consolidated Net Income for Subject Period: $
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2. Consolidated Interest Charges for Subject Period: $
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3. Provision for income taxes payable for Subject Period: $
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4. Depreciation expenses for Subject Period: $
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5. Amortization expenses for Subject Period: $
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6. Other non-recurring non-cash expenses reducing
Consolidated Net Income for Subject Period: $
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7. Income tax credits for Subject Period: $
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8. Non-cash items increasing Consolidated Net
Income for Subject Period: $
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9. Consolidated EBITDA (Lines III.A.1 + 2 + 3 + 4 + 5 +
6 -7 - 8): $
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10. Consolidated Rental Obligations for Subject Period: $
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11. Consolidated EBITDAR (Lines III.A.9 + 10): $
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B. Consolidated Fixed Charges for Subject Period: $
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1. Consolidated Interest Charges for Subject Period
(Line III.A.2 above): $
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2. Consolidated Rental Obligations for Subject Period
(Line III.A.10 above): $
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3. Income taxes paid in cash for Subject Period: $
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4. Restricted Payments for Subject Period: $
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5. Consolidated Scheduled Principal Payments for Subject
Period (excluding any scheduled payments of principal
that were (i) paid during the Subject Period with the
proceeds of replacement Indebtedness or (ii) deferred
to a later period by an appropriate written
amendment, but including payments of principal that
were deferred to the Subject Period): $
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Form of Compliance Certificate
C722003.23
6. Consolidated Fixed Charges for Subject Period (Line
III.B.1 + 2 + 3 + 4 + 5): $
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C. Consolidated Fixed Charge Coverage Ratio (Line III.A.11 / Line III.B.6): to 1.00
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Minimum required: 1.25 to 1.00
IV. Section 7.09 (d) - Consolidated Tangible Net Worth.
A. Actual Consolidated Tangible Net Worth at Statement Date (Line
II.B.3): $
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B. 50% of Consolidated Net Income for each full fiscal quarter
ending after February 28, 2005 (no reduction for losses): $
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C. 100% of increases in Shareholders' Equity after February 28,
2005 from issuance and sale of Equity Interests (including
from conversion of debt securities): $
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D. Minimum required Consolidated Tangible Net Worth
(Lines IV.B + IV.C plus $700,000,000): $
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E. Excess (deficit) for covenant compliance (Line IV.A - IV.D): $
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E-5
Form of Compliance Certificate
C722003.23
SCHEDULE 3
Closed Dealer Locations
[List]
New Dealer Locations
[List]
E-6
Form of Compliance Certificate
C722003.23