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HomeMy WebLinkAboutC-2188LINE OF CREDIT AGREEMENT BACKGROUND Ga, $S) �\,oz -4( 0 A. Dealer is engaged in business as an authorized motor vehicle dealer, which includes the sale and service of new and used motor vehicles parts and accessories. B. In addition to the loans that VCI currently provides to Dealer and its related entities, Dealer desires to borrow money from VCI for working capital purposes and the acquisition of dealership assets. C. VCI is willing to lend to Dealer on the terms and conditions contained in this Agreement. D. Dealer desires to expand his new and used automobile dealership located at 55 W. Huntington in the City of Arcadia, California. E. The Redevelopment Agency of the City of Arcadia (Agency) has entered into the 2004 Land Assembly and Development Agreement (Development Agreement) whereby certain real properly within the redevelopment area of the city of Arcadia will be made available for sale to Dealer. F. In lieu of a standard standby letter of credit as required by the Development Agreement, the Agency has agreed to accept this Agreement established by Dealer with VCI in the amount of $4,000,000. G. As between the Agency and VCI, the Agency may draw upon this Agreement in full or partial draws by submission of the Agency's draft at sight on VW Credit, Inc. 3800 Hamlin Road, Auburn Hills, MI 48326, or, alternatively, VW Credit, Inc., 5388 Sterling Center Drive, Westlake Village, CA, 91361. All such drafts must be marked "Drawn under VW Credit, Inc.! Arcadia Line of Credit Agreement dated NQ✓ ? � 2005." P+u4w�* Ial0or7�.�g H. VCI shall pay such drafts within two business days of presentation by wiring the amount drawn to the following acco nt: The amount of any such draft shall constitute an advance under this Agreement. k+* I. The Agency's right to draft shall be irrevocable until the Arcadia Line of Credit Agreement Expiration Date. J. This agreement shall automatically renew for two additional consecutive twelve month periods. The Agency shall have the right to draw on such line unless: a. This Agreement is drawn in full by the Agency; b. This Agreement is released by the Agency; c. VCI, within 120 days prior to the Arcadia Line of Credit Agreement Expiration Date, provides written notice to the Agency of its intent not to renew. (Such notice shall not impair the Agency's right to draw prior to any Arcadia Line of Credit Agreement Expiration date.) d. This Agreement expires and is not renewed in writing by VCI. L. VCI shall pay an authorized draft presented under this Agreement without further notice or inquiry and charge the amount of any such paid draft against the outstanding balance under this Agreement. Dealer shall hold VCI harmless for the payment of any draft drawn under this Agreement. Based on the above background and other good and valuable consideration, the receipt and sufficiency of which is acknowledged, and intending to be legally bound, the parties agree as follows: TERMS AND CONDITIONS 1.0 DEFINITIONS When used in this Agreement, the following terms shall have the indicated meanings: any means any and all. �. LINE OF CREDIT AG *EMENT (CONrD) • Base Rate means LIBOR plus 215 Basis Points with respect to the Line of Credit Loans Basis Point means .01 %. Dealer is defined in the preamble to this Agreement. Default Rate means 200 Basis Points over the Base Rate. Event of Default means a default under this Agreement or any of the other Loan Documents Expenses means all fees and out -of- pocket disbursements incurred by VCI, including fees of counsel and court costs, in any way arising from or in connection with this Agreement, any of the other Loan Documents, any of the collateral or the business relationship between VCI, on the one hand, and the Dealer, on the other hand including, without limitation, VCI's cost and expenses incurred in (a) documenting the loan transactions contemplated in this Agreement or any amendment or modification thereto including stamp, recording, or similar taxes or fees, costs associated with lien searches, title searches and examinations, title insurance policies and similar data, (b) enforcing its rights and remedies under this Agreement or any Loan Document (including reasonable legal fees and costs), (c) preserving and /or liquidating the collateral and (d) defending against claims arising in connection with the Loans, this Agreement or any Loan Document which are asserted by Dealer or any third party. include, includes and includino are to be read as if followed by "without limitation ". LIBOR means the rate of interest determined by VCI as being the daily rate available at approximately 11:00 a.m. London time in the London Interbank Market, as referenced by Bloomberg Screen "US0001M ", in accordance with the usual practice in such market, for the 30 day interest period in effect, or in the event that the London Interbank Market is closed, such rate for the most recent preceding day the London Interbank Market was open. Loan Documents means all existing and future agreements and documents related to financing provided by VCI to Dealer including, without limitation, the Security Agreement, this Agreement, any promissory notes, guaranties, mortgages and security agreements. Obligations means any liability, obligation, or indebtedness owed by Dealer to VCI arising from or in connection with this Agreement, any of the other Loan Documents or any of the collateral, whether now or hereafter in existence including, without limitation, the Loans, the Acquisition Line of Credit Loan Fee and Expenses. Arcadia Line of Credit Agreement Expiration Date means November , 2006 VCI is defined in the preamble to this Agreement. 2.0 LOANS 2.1 Line of Credit Loans. From time to time prior to the Line of Credit Loan Expiration Date, VCI will, subject to the terms and conditions in this Agreement, make Line of Credit Loans to Dealer up to the amount provided in paragraph F above, provided however, Dealer will be obligated for the full amount of the Line of Credit Loans regardless whether such amount is in excess of the approved amount of the line under this Agreement. So long as an Event of Default has not occurred or if an Event of Default has occurred, the Event of Default has been timely remedied, Dealer may convert the principal balance outstanding under this Agreement at any time to a term loan (the "Conversion ") which will amortize over a period of up to five years from the dale of Conversion (the "Term Loan "). The Term Loan shall be fully secured by collateral and will be evidenced by a promissory note in form and substance satisfactory to VCI in its sole discretion and will be repayable in accordance therewith. 2.2 Interest Rate: Default Interest Rate. The aggregate outstanding amount of all Obligations shall bear interest at the applicable Base Rate. The aggregate outstanding amount of all Obligations shall bear interest, from and after the occurrence of an Event of Default and without constituting a waiver of any such Event of Default, at the applicable Default Rate. All interest payable under the Loan Documents shall be computed on the basis of a three hundred sixty (360) day year for the actual number of days elapsed, based on the aggregate amount of the Obligations that are outstanding on each day payable on the first day of each month in arrears. Interest shall continue to accrue until all of the Obligations are paid in full. 2.3 Noteless Agreement. Any amounts loaned under this Agreement will not be evidenced by a promissory note and a copy of VCI's books and records will constitute sufficient evidence of any outstanding amounts. 3.0 DEALER'S WARRANTIES Dealer reaffirms all of its representations and warranties contained in the Loan Documents. LINE OF CREDIT AAEMENT (CONrD) • 4.0 GENERAL 4.1 At all times. VCI shall have the right to setoff and apply any credits, monies or properties of Dealer in VCI's possession or control against any Obligations of Dealer to VCI. 4.2 The acceptance by VCI of any installment or payment after it becomes due or the waiver by VCI of any other Event of Default shall not be deemed to alter or affect Dealer's Obligations and/or VCI's rights with respect to any subsequent payment or Event of Default. 4.3 All of the agreements, representations and warranties contained in this Agreement or in any other Loan Document shall survive the execution of this Agreement and the other Loan Documents, and any extensions, renewals or substitutions thereof and shall continue in full force and effect as long as any Obligations are outstanding. 4.4 This Agreement may not be assigned by Dealer without the prior wdtlen consent of VCI. VCI may assign this Agreement at any time without the prior written consent of Dealer. This Agreement may be amended or modified only by a written instrument executed by the authorized representatives of VCI (or its assigns) and Dealer. 4.5 The unenforceability for any reason of any provision in this Agreement shall not impair or limit the operation or validity of any other provisions of this Agreement or any other existing or future agreements between VCI and Dealer. Likewise, this Agreement and the Loan Documents are expressly limited so that the amount of interest paid or agreed to be paid to VCI shall not exceed the highest rate of interest permissible under applicable law, and any interest paid in excess of the highest lawful rate shall be applied to reduce the Obligations or refunded to Dealer if no Obligations remain outstanding. 4.6 Any notice given under this Agreement shall be in writing and given by personal delivery or shall be sent by U.S. mail, or recognized overnight courier, postage prepaid, addressed to the intended recipient, at the respective address set forth at the beginning of this Agreement, or such other address as may be provided in writing. 4.7 This Agreement shall be binding upon and shall inure to the benefit of the executors, administrators, legal representatives, successors and permitted assigns of the parties. 4.8 This Agreement, and all rights and obligations under this Agreement, shall not be binding on VCI until it has been accepted by VCI at its offices in Auburn Hills, Michigan and will be governed by the laws of the State of Michigan. 4.9 Dealer waives (for itself and its successors and assigns) all rights to require a marshalling of assets by VCI or to require VCI to resort to any portion of the collateral before selling or realizing on any other portion. 4.10 In interpreting this Agreement, unless the context requires otherwise: (a) references to a party shall include a party's successors and permitted assigns; (b) all terms contained in this Agreement shall have the meanings given in the UCC; (c) headings and subheadings are for convenience only and are not intended to modify or affect the interpretation; and (d) the singular includes the plural and vice versa. 5.0 AUTHORITY Dealer shall furnish to VCI upon request, proof of its authority to enter into this Agreement and to grant security to VCI as VCI may request, including, without limitation, an opinion of Dealer's counsel and certified copies of resolutions of Dealer's stockholders and board of directors. 6.0 REMEDIES If an Event of Default occurs: (a) at VCI's option, without demand or notice of any kind, all Obligations will be immediately due and payable and will accrue interest at the Default Rate (b) VCI may resort to any remedies available under applicable law or the Loan Documents. VCI's exercise of any remedy hereunder shall not impair the right of the Agency to draft any amounts otherwise provided for herein. 7.0 WAIVER OF JURY TRIAL VCI AND DEALER ACKNOWLEDGE AND AGREE THAT THERE MAY BE A CONSTITUTIONAL RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY CLAIM, DISPUTE OR LAWSUIT ARISING BETWEEN THEM, BUT THAT SUCH RIGHT MAY BE WAIVED. ACCORDINGLY, THE PARTIES AGREE: A. IN THIS COMMERCIAL MATTER THE PARTIES BELIEVE AND AGREE THAT IT IS IN THEIR BEST INTEREST TO WAIVE SUCH RIGHT AND, ACCORDINGLY, WAIVE SUCH RIGHT TO A JURY TRIAL AND FURTHER AGREE THAT THE BEST FORUM FOR HEARING ANY CLAIM, DISPUTE OR LAWSUIT, IF ANY, ARISING IN CONNECTION WITH THIS AGREEMENT OR RELATIONSHIP BETWEEN VCI AND DEALER, INCLUDING IN CONNECTION WITH THE COLLECTION OF THE LOANS OR OTHER OBLIGATIONS SHALL BE A COURT OF COMPETENT JURISDICTION SITTING WITHOUT A JURY, B. THIS WAIVER OF JURY TRIAL IS FREELY, KNOWINGLY AND VOLUNTARILY GIVEN BY EACH PARTY, WITHOUT DURESS OR COERCION, AFTER EACH PARTY HAS CONSULTED WITH ITS LEGAL COUNSEL (OR BEEN GIVEN THE OPPORTUNITY TO LINE OF CREDIT AGREMENT (CONrD) • CONSULT WITH LEGAL COUNSEL) AND HAS CAREFULLY AND COMPLETELY READ ALL OF THE TERMS OF THIS AGREEMENT, INCLUDING THIS WAIVER OF JURY TRIAL PROVISION. C. NEITHER VCI NOR DEALER SHALL BE DEEMED TO HAVE RELINQUISHED THIS PROVISION WAIVING JURY TRIAL EXCEPT BY A WRITING SIGNED BY AN OFFICER OF VCI AND DEALER RELINQUISHING THIS WAIVER OF JURY TRIAL PROVISION. Date: I (. Z. l7 S Operator Rusn k/Arcadi a California corporation By: V Its: (1(Ll r un 1(ro Date: d Owner Paul Rusnak, as Trustee of the Paul P. Rusnak Family Trust Dated Novemper 14,1988 By: Date: u•e.oq Agency Redevelopment Agency of the City of Arcadia 'A By: Uir—U Its: Executive Director Date: Lender VW Credit, Inc. By: /� /� APPROVED AS TO FORM: Stephen P. Deitsch Agency Counsel