Exhibit 10.2
MODIFICATION NUMBER
ONE
TO UNCONDITIONAL
GUARANTY
AND REAFFIRMATION OF
UNCONDITIONAL GUARANTY
THIS MODIFICATION NUMBER ONE TO
UNCONDITIONAL GUARANTY AND REAFFIRMATION OF UNCONDITIONAL GUARANTY
(the “Agreement”), dated as of May 7, 2009,
effective as of April 29, 2009 (the “Effective
Date”) between ASBURY AUTOMOTIVE GROUP, INC., a Delaware
corporation (“Guarantor”), and WACHOVIA BANK, NATIONAL
ASSOCIATION, a national banking association (together with its
successors and assigns, “Lender”).
RECITALS
A. Guarantor has guaranteed (the
“Guaranty”) to Lender the payment and performance of
all obligations of Asbury Atlanta Jaguar, L.L.C., Asbury Atlanta
LEX L.L.C., CN Motors, Ltd., C&O Properties, Ltd., CFP Motors,
Ltd., Avenues Motors, Ltd., AF Motors, L.L.C., ALM Motors, L.L.C.,
Asbury-Deland Imports, L.L.C., Coggin Chevrolet L.L.C., Coggin Cars
L.L.C., CH Motors, Ltd., HFP Motors L.L.C., Crown GPG L.L.C., Crown
CHV L.L.C., Crown GHO L.L.C., Crown GDO L.L.C., Crown RIB L.L.C.,
Crown Motorcar Company L.L.C., Asbury Automotive Atlanta L.L.C.,
McDavid Irving-Hon, L.L.C., McDavid Plano-Acra, L.L.C., McDavid
Austin-Acra, L.L.C., McDavid Houston-Hon, L.L.C., McDavid
Houston-Niss, L.L.C. and Asbury Automotive Texas Real Estate
Holdings L.L.C. (each referred to herein individually and
collectively as “Borrower”) to Lender (collectively,
the “Credit Facility”), including any renewals or
modifications of the Credit Facility.
B. Lender and Borrower are
negotiating a modification of the Credit Facility.
C. Borrower and Lender have agreed
to modify the terms of the Credit Facility and in connection
therewith, the Guaranty is being modified and must be
reaffirmed.
In consideration of Lender’s
continued extension of credit and the agreements contained herein,
the parties agree as follows:
AGREEMENT
DEFINITIONS.
Terms used in this Agreement which
are capitalized and not otherwise defined herein shall have the
meanings ascribed to such terms in that certain Master Loan
Agreement between Lender, Wachovia Financial Services, Inc. and
Borrower, dated as of June 4, 2008, as modified from time to
time (the “Loan Agreement”).
MODIFICATIONS.
1. Section 5.1 of the Guaranty is hereby
deleted in its entirety and the following new Section 5.1 is
hereby substituted in lieu thereof:
“ 5.1 Debt Prior to
Modified Covenant Triggering Event . Shall not create or permit
to exist any Debt, including any guaranties or other contingent
obligations. Notwithstanding anything set forth herein to the
contrary: (a) Guarantor may create or permit to exist
(i) any Debt evidenced by the Revolving Credit Facility or any
refinancing, modification, renewal or amendment of the Revolving
Credit Facility, including any increases in the aggregate principal
amounts; (ii) a one time real estate term loan in an amount
not to exceed $12,000,000.00 for the purpose of acquiring real
estate or for any other purpose approved by Lender in its sole
discretion, to be secured by real estate which is not included in
the Collateral and to mature no earlier than the Term Loan Maturity
Date, (iii) Debt existing as of March 31, 2009 which is
set forth on Exhibit 5.1 hereof and all renewals and extensions
thereof on substantially the same terms and conditions; and
(iv) Floor Plan Debt; provided, however, that nothing
contained in this Section 5.1 shall be deemed to modify
Section 5.15 of the Loan Agreement; and (b) upon the
occurrence of a Modified Covenant Triggering Event (as hereinafter
defined), this Section 5.1 shall be null and void and of no
further force and effect.”
2. The Loan Agreement is hereby amended by adding
the following new Section 5.7 thereto:
“ 5.7 Debt Upon
Occurrence of Modified Covenant Triggering Event . Shall not,
at any time following the occurrence of a Modified Covenant
Triggering Event, create or permit to exist any Debt, including any
guaranties or other contingent obligations, that is secured by the
Property (other than the Guaranteed Obligations) or is otherwise
not permitted under the Revolving Credit Facility. Notwithstanding
anything set forth herein to the contrary, Guarantor may create or
permit to exist (a) any Debt evidenced by the Revolving Credit
Facility or any refinancing, modification, renewal or amendment of
the Revolving Credit Facility, including any increases in the
aggregate principal amounts, and (b) any other Debt permitted
under the Revolving Credit Facility or any refinancing,
modification, renewal or amendment thereof; provided, however, that
nothing contained in this Section 5.7 shall be deemed to
modify Section 5.15 of the Loan Agreement.”
3. Section 6.3 of the Guaranty is hereby
deleted in its entirety and the following new Section 6.3 is
hereby substituted in lieu thereof:
“6.3 Total Leverage
Ratio . Guarantor shall not, at any time following the
occurrence of a Modified Covenant Triggering Event, permit its
Total Leverage Ratio to be greater than 5.00 to 1.00. ‘Total
Leverage Ratio’ means, as of any date of determination, for
Guarantor, the ratio on such date of (a) Adjusted Total Debt
to (b) Consolidated Pro Forma EBITDA.”
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4. Section 6.6 “ Definitions
” of the Guaranty is hereby amended as follows:
(a) The definition of
“EBITDA” is hereby deleted in its entirety and the
following new definition of “EBITDA” is hereby
substituted in lieu thereof:
“‘ EBITDA ’
means, for any Person, for any period, Net Income for such period,
plus (a) the following to the extent deducted in the
determination of Net Income and without duplication with items
included in the adjustments under GAAP to Net Income in the
determination of net income: (i) provisions for income taxes,
(ii) non-floorplan interest expense, and (iii) non-cash
income or charges, including depreciation and amortization expense
and minus (b) to the extent included in the
determination of Net Income, all gains or losses on repurchases of
long-term debt.”
(b) The definition of “Fixed
Charges” is hereby deleted in its entirety and the following
new definition of “Fixed Charges” is hereby substituted
in lieu thereof:
“‘ Fixed Charges
’ means, for any period of determination, the sum of
(a) non-floorplan interest expense (but excluding all non-cash
interest expense), (b) scheduled amortization of the principal
portion of all funded Debt, (c) lease expenses, and
(d) the cash portion of income taxes (but excluding income
taxes associated with the gains on repurchases of long-term debt),
in each case, for Guarantor and its Subsidiaries, determined on a
consolidated basis.”
5. The Guaranty is hereby amended by adding the
following new Section 14 thereto:
“14. Occurrence of
Modified Covenant Triggering Event . Guarantor shall have the option, at any time
after April 30, 2010, to request, in writing, that the
covenants contained in Section 5.7 and Section 6.3 hereof
commence and be deemed effective as of a date after April 30,
2010. Guarantor shall exercise such option, if at all, by written
notice to Lender and Lender shall acknowledge such election by
written notice to Guarantor within thirty (30) days of the
date of Guarantor’s notice. If Lender fails to acknowledge,
in writing, Guarantor’s exercise of the option contained in
this Section 14 within such thirty (30) day period,
Lender shall be deemed to have acknowledged such election as of the
last day of said thirty (30) day period. For purposes of this
Guaranty, a ‘Modified Covenant Triggering Event’ shall
be deemed to have occurred as of the date set forth in
Guarantor’s election notice or, if no such date is set forth
in such notice, then on the last day of the month following the
date Lender acknowledges or is deemed to have acknowledged
Guarantor’s election of its option.”
REAFFIRMATION
. The Guarantor hereby reaffirms all
of the Guarantor’s liabilities, obligations, duties and
responsibilities under and pursuant to the Guaranty, and said
Guaranty shall continue in full force and effect as modified
hereby, shall continue to guaranty the full, prompt and
unconditional payment of the principal, interest and any other
amounts to be paid by the Borrower and the full, prompt and
unconditional performance of all of the covenants, agreements and
obligations of the Borrower under the Loan Documents, as modified.
Lender and Borrower are negotiating a modification of the
Guaranteed Obligations (as defined in the Guaranty). Guarantor
hereby reaffirms, by executing this Modification an
