Preview of our top selling Revolving and Facility Credit Agreement
Team Rental Group - Revolving Credit Agreement Dated 2/6/96
REVOLVING CREDIT AGREEMENT
by and between
VPSI, INC., as Borrower,
and
NATIONSBANK, NATIONAL ASSOCIATION (SOUTH), as Lender
February 6, 1996
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Terms
1.01 Definitions................................................ 2
1.02 Accounting Terms........................................... 20
ARTICLE II
The Loans
2.01 Revolving Credit Facility.................................. 21
2.02 Payment of Interest........................................ 22
2.03 Payment of Principal....................................... 22
2.04 Mandatory Repayments....................................... 24
2.05 Note .................................................... 24
2.06 Reductions................................................. 24
2.07 Conversions and Elections of Subsequent Interest
Periods............................................. 24
2.08 Fees .................................................... 25
2.09 Use of Proceeds............................................ 26
2.10 Adjustment of Advance Rate................................. 26
ARTICLE III
Yield Protection and Illegality
3.01 Additional Costs........................................... 27
3.02 Suspension of Loans........................................ 28
3.03 Illegality................................................. 29
3.04 Compensation............................................... 29
3.05 Taxes .................................................... 30
ARTICLE IV
Conditions to Making Loans
4.01 Conditions of Initial Advance.............................. 32
4.02 Conditions of Loans........................................ 33
ARTICLE V
Representations and Warranties
5.01 Representations and Warranties............................. 35
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ARTICLE VI
SECURITY
6.01 Security................................................... 43
6.02 Further Assurances......................................... 43
6.03 Certificates of Title...................................... 43
ARTICLE VII
Affirmative Covenants
7.01 Financial Reports, Etc..................................... 44
7.02 Additional Financial Reports, Etc.......................... 45
7.03 Maintain Properties........................................ 45
7.04 Existence, Qualification, Etc.............................. 46
7.05 Regulations and Taxes...................................... 46
7.06 Insurance. ............................................... 46
7.07 True Books................................................. 46
7.08 Pay Indebtedness to Lenders and Perform Other
Covenants........................................... 46
7.09 Right of Inspection........................................ 46
7.10 Observe all Laws........................................... 46
7.11 Officer's Knowledge of Default or Other Events............. 47
7.12 Suits or Other Proceedings................................. 47
7.13 Notice of Discharge of Hazardous Material or
Environmental Complaint. .......................... 47
7.14 Environmental Compliance................................... 47
7.15 Indemnification............................................ 48
7.16 Further Assurances......................................... 48
7.17 ERISA Requirement.......................................... 48
7.18 Continued Operations....................................... 49
7.19 Use of Proceeds............................................ 49
7.20 Repurchase Party........................................... 49
7.21 Vehicle Turn-in; Vehicle Records........................... 49
7.22 New Repurchase Agreements.................................. 49
ARTICLE VIII
Additional Negative Covenants
8.01 Indebtedness............................................... 50
8.02 Transfer of Assets......................................... 50
8.03 Investments; Acquisitions.................................. 50
8.04 Liens .................................................... 50
8.05 Merger or Consolidation.................................... 51
8.06 Change in Control.......................................... 51
8.07 Transactions with Affiliates............................... 51
8.08 ERISA .................................................... 51
8.09 Fiscal Year................................................ 52
8.10 Dissolution, etc........................................... 52
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Page
8.11 Rate Hedging Obligations................................... 52
ARTICLE IX
Events of Default and Acceleration
9.01 Events of Default.......................................... 53
9.02 Lender to Act.............................................. 56
9.03 Cumulative Rights.......................................... 56
9.04 No Waiver.................................................. 56
ARTICLE X
Miscellaneous
10.01 Participations............................................. 57
10.02 Notices.................................................... 57
10.03 Setoff .................................................... 58
10.04 Survival................................................... 58
10.05 Expenses................................................... 59
10.06 Amendments................................................. 60
10.07 Counterparts............................................... 60
10.08 Waivers by Borrower........................................ 60
10.09 Termination................................................ 60
10.10 Governing Law.............................................. 61
10.11 Headings and References.................................... 61
10.12 Severability............................................... 61
10.13 Entire Agreement........................................... 61
10.14 Agreement Controls......................................... 62
EXHIBIT A Notice of Appointment (or Revocation) of
Authorized Representative........................... 65 EXHIBIT B Form of Borrowing Base Certificate............................. 66 EXHIBIT 1 TO BORROWING BASE CERTIFICATE SALES AND ADVANCE
RATE ADJUSTMENT REPORT.............................. 68 EXHIBIT D Form of Interest Rate Selection Notice......................... 73 EXHIBIT E Form of Revolving Note......................................... 74 EXHIBIT F Form of Opinion of Borrower's and Guarantor's
Counsel............................................. 79 EXHIBIT G Form of Guaranty and Suretyship Agreement...................... 80
Schedule 1 Repurchase Agreements.................. 95 Schedule 2 Closing Date Vehicles.................. 96 Schedule 5.01(d) Subsidiaries and Investments........... 97 Schedule 5.01(f) Contingent Liabilities................. 98 Schedule 5.01(g) Liens.................................. 99 Schedule 5.01(j) Litigation.............................100 Schedule 7.05 Existing Insurance.....................101 Schedule 8.01 Indebtedness...........................102
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REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT, dated as of February 6, 1996 (the "Agreement"), is made by and between:
VPSI, INC., a Delaware corporation having its principal place of business in Troy, Michigan (the "Borrower"); and
NATIONSBANK, NATIONAL ASSOCIATION (SOUTH), a national banking association organized and existing under the laws of the United States of America (the "Lender").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lender make available to the Borrower a revolving credit facility of up to $50,000,000, the proceeds of which shall be used to finance the Borrower's van fleet; and
WHEREAS, the Lender is willing to make such facility available to the Borrower upon the terms and conditions set forth herein;
NOW, THEREFORE, the Borrower and the Lender hereby agree as follows:
ARTICLE I
Definitions and Terms
1.01 Definitions. For the purposes of this Agreement, in addition to the definitions set forth above, the following terms shall have the respective meanings set forth below:
"Acquire" or "Acquisition", as applied to a Person, means
the acquiring or acquisition of a controlling interest in such Person
by purchase (including all or substantially all of the assets),
exchange, issuance of stock or other securities, or by merger,
reorganization or other method;
"Advance" means a borrowing under the Revolving Credit
Facility consisting of the aggregate principal amount of a Floating
Loan or a Eurodollar Loan, as the case may be;
"Advance Rate" means 94%, as such rate may be adjusted
downward from time to time pursuant to Section 2.10 hereof;
"Affiliate" means a Person (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or
is under common control with the Borrower; (ii) which beneficially
owns or holds 10% or more of any class of the outstanding voting
stock (or in the case of a Person which is not a corporation, 10% or
more of the equity interest) of the Borrower; (iii) 10% or more of
any class of the outstanding voting stock of which is beneficially
owned or held by the Borrower. The term "control" means the
possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether
through ownership of voting stock, by contract or otherwise;
"Applicable Margin" means (a) with respect to Eurodollar
Loans, 1.25% per annum, and (b) with respect to CD Loans, 1.35% per
annum;
"Applicable Reserve Percentage" means, for any day, for any
CD Loan or Eurodollar Loan with respect thereto, that percentage
(expressed as a decimal) which is in effect from time to time under
Regulation D of the Board, as such regulation may be amended from
time to time or any successor regulation, as the maximum reserve
requirement (including, without limitation, any basic, supplemental,
emergency, special, or marginal reserves) applicable with respect to
(i) Eurocurrency liabilities as that term is defined in Regulation D
(or against any other category of liabilities that includes deposits
by reference to which the interest rate of Eurodollar Loans is
determined) in the case of any Eurodollar Loan, or (ii) non-personal
Dollar time deposits in an amount of $100,000 or more in the case of
any CD Loan, in each case
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whether or not the Lender has any Eurocurrency liabilities or Dollar
time deposits subject to such reserve requirement at that time.
Eurodollar Loans shall be deemed to constitute Eurocurrency
liabilities and as such shall be deemed subject to reserve
requirements without benefits of credit for proration, exceptions or
offsets that may be available from time to time to the Lender. The
Eurodollar Rate or CD Rate, as the case may be, shall be adjusted
automatically on and as of the effective date of any change in the
Applicable Reserve Percentage;
"Assessment Rate" means the rate per annum (rounded upward
to the nearest 1/100 of 1%) determined in good faith by the Lender in
accordance with its usual procedures for its customers generally
(which determination shall be conclusive absent manifest error) to be
the current net assessment rate per annum payable by the Lender to
the Federal Deposit Insurance Corporation (or any successor) on such
day of determination for insurance on Dollar time deposits of the
Lender in the United States. The CD Rate shall be adjusted
automatically as of the effective date of each change in the
Assessment Rate;
"Assignment of Indebtedness" means the Assignment of
Indebtedness and Liens dated as of the date hereof, among CFC, the
Borrower and the Lender, pursuant to which CFC has assigned to the
Lender the CFC Indebtedness, CFC Indebtedness Documents and CFC's
Lien on each of the Closing Date Vehicles;
"Assignment of Repurchase Agreement" means each of the
Collateral Assignments of Repurchase Agreement substantially in the
form of Exhibit A to the Security Agreement, given by the Borrower in
favor of the Lender, whereby the Borrower assigns to the Lender all
of its rights under a Repurchase Agreement;
"Authorized Representative" means any of the President, the
Chief Executive Officer, the Treasurer, the Chief Operating Officer
or the Vice President of the Borrower or any other person expressly
designated by the Board of Directors of the Borrower (or the
appropriate committee thereof) as an Authorized Representative of the
Borrower, as set forth from time to time in a certificate in the form
attached hereto as Exhibit A;
"Board" means the Board of Governors of the Federal
Reserve System (or any successor body);
"Book-Value-to-Proceeds Ratio" means, with respect to any
calendar month, the ratio (as reported in the Sales and Advance Rate
Adjustment Report for such month) of (i) the aggregate Eligible Net
Book Value of Eligible Risk Vehicles and Closing Date Eligible
Vehicles sold by the Borrower during
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such month to (ii) the aggregate of actual net proceeds received by
the Borrower on the sales of such Eligible Risk Vehicles and Closing
Date Eligible Vehicles;
"Borrowing Base" shall mean, at any time, an amount equal to
the aggregate (without duplication) of the following:
(a) with respect to each Closing Date Eligible
Vehicle, the lesser of (i) the Capitalized Cost of such
Closing Date Eligible Vehicle, or (ii) the product of the
Closing Date Advance Rate and the Eligible Net Book Value of
such Closing Date Eligible Vehicle, plus
(b) with respect to each Eligible Repurchase
Vehicle (other than a Closing Date Vehicle), the Eligible
Net Book Value of such Eligible Repurchase Vehicle, plus
(c) with respect to each Eligible Risk Vehicle
(other than a Closing Date Vehicle), the product of the
Advance Rate and the Eligible Net Book Value of such
Eligible Risk Vehicle, plus
(d) the Eligible Repurchase Receivables;
"Borrowing Base Certificate" means a certificate of an
Authorized Representative in the form attached hereto as
Exhibit B;
"Borrowing Notice" means the notice delivered by an
Authorized Representative in connection with an Advance, in the form
attached hereto as Exhibit C;
"Business Day" means any day which is not a Saturday, Sunday
or a day on which banks in the States of Florida and North Carolina
are authorized or obligated by law, executive order or governmental
decree to be closed;
"Capital Leases" means all leases which have been or should
be capitalized in accordance with Generally Accepted Accounting
Principles as in effect from time to time including Statement No. 13
of the Financial Accounting Standards Board and any successor
thereof;
"Capitalized Cost" means for each Vehicle, the price paid
for such Vehicle by the Borrower to the Dealer, including dealer
profit not to exceed $200 and delivery charges but excluding taxes
and any registration or titling fees (or, in the case of a Vehicle
which was not new when acquired by the Borrower, if less, the
purchase price thereof exclusive of taxes and any registration or
titling fees or other charges), provided that the Capitalized Cost
for a Closing Date Vehicle shall be the amount set forth for such
Vehicle on Schedule 2 attached hereto (as such Schedule shall be
revised by the
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Borrower pursuant to Section 7.01(g), provided that the aggregate
Capitalized Cost of all of the Closing Date Vehicles shall be
$36,280,649);
"CD Base Rate" means, for any CD Loan, the rate of interest
expressed as a percentage and rounded upwards if necessary to the
nearest 1/100 of 1%) determined in good faith by the Lender in
accordance with the usual procedures for its customers generally
(which determination shall be conclusive absent manifest error) to be
the average of the secondary market bid rates at approximately 10:00
A.M. Charlotte, North Carolina time on each day of at least two
dealers of recognized standing in negotiable certificates of deposit
for the purchase at face value of negotiable certificates of deposit
of major money center banks for delivery on such day in an amount
approximately equal to the principal amount of such CD Loan for a
period of 90 days;
"CD Loan" means a Loan for which the rate of interest is
determined by reference to the CD Rate;
"CD Rate" means, for any CD Loan, the rate of interest per
annum determined by the following formula:
CD Rate = CD Base Rate
--------------------------------- + Assessment + Applicable
1- Applicable Reserve Percentage Rate Margin
"Certificate of Title" means, for each Vehicle, the
manufacturer's certificate or statement of origin, the certificate of
title, certificate of ownership, bill of sale or any such other
instrument evidencing the ownership of such Vehicle and, where the
context requires, the one such instrument evidencing the ownership of
such Vehicle;
"CFC" means Chrysler Financial Corporation, a Michigan
corporation;
"CFC Indebtedness" means any and all Indebtedness owed by
the Borrower to CFC (i) the proceeds of which were used to finance or
refinance any of the Closing Date Vehicles or (ii) which Indebtedness
is secured by any of the Closing Date Vehicles;
"CFC Indebtedness Documents" means, collectively, all notes,
agreements, security agreements, lien documents, and other
instruments relating to the CFC Indebtedness or any Liens securing
such Indebtedness;
"Clear Certificate of Title" means, with respect to any
Vehicle, the Certificate of Title for such vehicle if the Lender (or
an agent designated by the Lender) shall have received, in form and
substance satisfactory to the Lender, the Certificate of Title and
duly executed and authorized
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releases or assignments, together with a copy of the duly executed
power of attorney, if applicable, with respect to any Liens of third
Persons which appear on the records of any jurisdiction or which have
been filed with respect to such vehicle or which have otherwise been
granted to, or created in favor of, the applicable lienholder,
including, without limitation, any Lien noted on the Certificate of
Title for such Vehicle;
"Closing Date" means the date as of which this Agreement is
executed by the Borrower and the Lender and on which the conditions
set forth in Section 4.01 hereof have been satisfied;
"Closing Date Advance Rate" means 100%, as such rate may be
adjusted downward from time to time pursuant to Section 2.10 hereof;
"Closing Date Vehicles" means, collectively, each of the
Vehicles identified on Schedule 2 attached hereto;
"Closing Date Eligible Vehicles" means, collectively,
each of the Closing Date Vehicles which is an Eligible
Vehicle;
"Closing Date Indebtedness" means any and all Indebtedness
(including without limitation the CFC Indebtedness, but excluding the
Obligations under this Agreement) which (i) was incurred on or prior
to the Closing Date by the Borrower to finance or refinance any of
the Closing Date Vehicles, or (ii) is secured by any of the Closing
Date Vehicles;
"Closing Date Indebtedness Documents" means, collectively,
all notes, agreements, security agreements, lien documents, and other
instruments relating to any Closing Date Indebtedness or any Liens
securing such Indebtedness;
"Code" means the Internal Revenue Code of 1986, as
amended, any successor provision or provisions and any
regulations promulgated thereunder;
"Collateral" means, collectively, the Vehicles, the
Repurchase Agreements, the Repurchase Receivables, the Closing Date
Indebtedness, the Closing Date Indebtedness Documents, and any other
property of the Borrower or any other Person from time to time
securing any of the Obligations;
"Consistent Basis" in reference to the application of
Generally Accepted Accounting Principles means the accounting
principles observed in the period referred to are comparable in all
material respects to those applied in the preparation
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of the audited financial statements of the Borrower referred
to in Section 5.01(f)(i) hereof;
"Dealer" means any Person (including a Repurchase Party)
from whom the Borrower purchases Eligible Vehicles, and shall include
dealers of Repurchase Parties whose vehicles, when sold to the
Borrower, constitute Eligible Vehicles;
"Default" means any event or condition which, with the
giving or receipt of notice or lapse of time or both, would
constitute an Event of Default hereunder;
"Depreciation Rate" means, (a) with respect to each
Repurchase Vehicle, the monthly depreciation charge, if any, set
forth in the respective Repurchase Agreement, or, if there is no such
charge, then a monthly depreciation charge of 1.65% per month, and
(b) with respect to each Risk Vehicle, a monthly depreciation charge
of 1.65% per month;
"Dollars" and the symbol "$" means dollars constituting
legal tender for the payment of public and private debts in the
United States of America;
"Eligible Net Book Value" means, as to any Eligible Vehicle
as of any date of determination, the total of (a) its Capitalized
Cost, less (b) accrued depreciation for such Eligible Vehicle using a
depreciation rate which is not less than 100% of the Depreciation
Rate applicable thereto;
"Eligible Repurchase Party" means a Repurchase Party
which is not the subject of a Repurchase Party Default or a
Repurchase Party Adverse Change;
"Eligible Repurchase Receivables" means, at any time of
determination, all payments due from and payable by an Eligible
Repurchase Party, the amount of which shall be deemed to be the sum
of the Eligible Net Book Values of the related Eligible Repurchase
Vehicles on their respective Repurchase Dates, resulting from the
acceptance of such Eligible Repurchase Vehicles by the Repurchase
Party for repurchase under a Repurchase Agreement with such
Repurchase Party, which, in any case, are assigned to the Lender
under the Security Agreement and are not unpaid for more than ninety
(90) days after the respective Repurchase Dates for such Eligible
Vehicles. Payments which would otherwise constitute Eligible
Repurchase Receivables shall not constitute Eligible Repurchase
Receivables if they are due from and payable by a Repurchase Party
which has become subject to a Repurchase Party Default;
"Eligible Repurchase Vehicles" means, collectively,
Eligible Vehicles that are Repurchase Vehicles;
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"Eligible Risk Vehicles" means, collectively, Eligible
Vehicles that are Risk Vehicles;
"Eligible Securities" means the following obligations:
(a) Government Securities;
(b) the following debt securities of the following
agencies or instrumentalities of the United States of
America if at all times the full faith and credit of the
United States of America is pledged to the full and timely
payment of all interest and principal thereof:
(i) all direct or fully guaranteed
obligations of the United States Treasury; and
(ii) mortgage-backed securities and
participation certificates guaranteed by the
Government National Mortgage Association;
(c) the following obligations of the following
agencies or instrumentalities of the United States of
America:
(i) participation certificates and debt
obligations of the Federal Home Loan Mortgage
Corporation;
(ii) consolidated debt obligations, and
obligations secured by a letter of credit, of the
Federal Home Loan Banks; and
(iii) debt obligations and mortgage-backed
securities of the Federal National Mortgage
Association which have not had the interest portion
thereof severed therefrom;
(d) obligations of any corporation organized under
the laws of any state of the United States of America or
under the laws of any other nation, payable in the United
States of America, expressed to mature not later than 92
days following the date of issuance thereof and rated in an
investment grade rating category by S&P and Moody's;
(e) interest bearing demand or time deposits issued
by the Lender or certificates of deposit maturing within one
year from the date of acquisition issued by a bank or trust
company organized under the laws of the United States or of
any state thereof having capital surplus and undivided
profits aggregating at least $400,000,000 and being rated
A-3 or better by S&P or A or better by Moody's;
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(f) Pre-Refunded Municipal Obligations;
(g) shares of mutual funds which invest in
obligations described in paragraphs (a) through (g) above,
the shares of which mutual funds are at all times rated
"AAA" by S&P; and
(h) asset-backed remarketed certificates of
participation representing a fractional undivided interest
in the assets of a trust, which certificates are rated at
least "A-1" by S&P and "P-1" by Moody's;
Obligations listed in paragraphs (a), (b) and (c) above
which are in book-entry form must be held in a trust account with the
Federal Reserve Bank or with a clearing corporation or chain of
clearing corporations which has an account with the Federal Reserve
Bank;
"Eligible Vehicles" means, collectively, vehicles owned by
the Borrower (not to include vehicles leased to Borrower) and
included in the Borrower's vehicle rental fleet the purchase of which
was financed or refinanced with the proceeds of an Advance hereunder,
and with respect to which, in each case, the Borrower has granted to
the Lender (or an agent designated by the Lender) a first priority
Lien under the Security Agreement and:
(a) such Lien has become perfected and is of first
priority in accordance with the priority and perfection
rules of each applicable jurisdiction (such perfection to
include, without limitation (except for Liens on vehicles
subject to Certificates of Title issued by states where the
lien of a creditor cannot be indicated on the Certificate of
Title, but where the security interest in which can be
perfected notwithstanding such absence of indication), the
due notation on the Vehicle's Certificate of Title of the
Lien of the Lender (or an agent designated by the Lender) in
the form and otherwise as required by the applicable
jurisdiction; or
(b) the Borrower has delivered to the Lender (or an
agent designated by the Lender) Clear Certificates of Title,
which Clear Certificates of Title are held by the Lender (or
an agent designated by the Lender) on behalf of the Lender
in the Restricted Space;
provided, however, that if the respective Repurchase Party for an
Eligible Repurchase Vehicle becomes subject to a Repurchase Party
Default, then such Vehicle shall no longer be an Eligible Vehicle;
"Environmental Laws" means, collectively, the
Comprehensive Environmental Response, Compensation and
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Liability Act of 1980, as amended, the Superfund Amendments and
Reauthorization Act of 1986, the Resource Conservation and Recovery
Act, the Toxic Substances Control Act, as amended, the Clean Air Act,
as amended, the Clean Water Act, as amended, any other "Superfund" or
"Superlien" law or any other federal, or applicable state or
applicable published local statute, law, ordinance, code, rule,
regulation, order or decree regulating, relating to, or imposing
liability or standards of conduct concerning, any hazardous, toxic or
dangerous waste, substance or material;
"ERISA" means, at any date, the Employee Retirement Income
Security Act of 1974, as amended, and the regulations thereunder, all
as the same shall be in effect at such date;
"Eurodollar Business Day" means a Business Day on which the
relevant international financial markets are open for the transaction
of the business contemplated by this Agreement in London, England and
New York, New York;
"Eurodollar Loan" means a Loan for which the rate of
interest is determined by reference to the Eurodollar Rate;
"Eurodollar Rate" means, for the Interest Period for any
Eurodollar Loan, the rate of interest per annum determined pursuant
to the following formula:
Interbank Offered Rate
Eurodollar Rate = ---------------------------------- + Applicable
1 - Applicable Reserve Percentage Margin
"Event of Default" means any of the occurrences set forth
as such in Section 9.01 hereof;
"Existing Credit Agreement" means the First Amended and
Restated Credit Agreement dated as of January 12, 1995, among
Team Fleet Services Corporation, the Guarantor and NBD Bank,
N.A.;
"Federal Funds Effective Rate" means, for any day, the rate
per annum (rounded upward to the nearest 1/100% of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions
...
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