Item 1.01. Entry Into a Material Definitive Agreement.
Indenture and 4.375% Senior Notes due 2031
On
The Senior Notes were issued pursuant to an indenture dated as of
The Senior Notes will be the Company's senior unsecured obligations, will rank equally in right of payment with all of the Company's existing and future senior debt, be effectively subordinated to any of the Company's existing and future secured debt to the extent of the value of the assets securing such debt, rank senior in right of payment to all of the Company's existing and future subordinated debt and be structurally subordinated to all of the existing and future liabilities of each of the Company's subsidiaries that do not guarantee the Senior Notes.
The Senior Notes will bear interest from
The terms of the Indenture, among other things, limit the ability of the Company and its restricted subsidiaries to (i) incur additional indebtedness and guarantee indebtedness, (ii) pay dividends or make other distributions or repurchase or redeem capital stock, (iii) prepay, redeem or repurchase certain debt, (iv) issue certain preferred stock or similar equity securities, (v) make loans and investments, (vi) sell assets, (vii) incur liens, (viii) enter into transactions with affiliates, (ix) enter into agreements restricting the Company's non-guarantor subsidiaries' ability to pay dividends and (x) consolidate, merge or sell all or substantially all of the Company's assets. These covenants are subject to a number of important exceptions and qualifications. The Indenture provides for customary events of default which include, among other things, (subject in certain cases to customary grace and cure periods) defaults based on: (i) the failure to make payments under the Indenture when due, (ii) breach of covenants, (iii) acceleration of other material indebtedness, (iv) bankruptcy or insolvency events and (v) material judgments. Generally, if an event of default occurs, the trustee or the holders of at least 30% in principal amount of the then outstanding Senior Notes may declare all of the Senior Notes to be due and payable, or, in certain circumstances, the Senior Notes automatically will become due and payable immediately.
The Trustee and its affiliates maintain relationships in the ordinary course of business with the Company and its subsidiaries, including the provision of commercial banking, investment banking, trustee and/or other financial services.
A copy of the Indenture is set forth as Exhibit 4.1 to this Current Report on Form 8-K, and is incorporated herein by reference. The descriptions of the Indenture and the Senior Notes (a form of which is attached as an exhibit to the Indenture) in this report are only summaries and are qualified in their entirety by reference to the actual terms of the Indenture and the Senior Notes, respectively.
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Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth above under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits Exhibit No. Description 4.1 Indenture, dated as ofOctober 9, 2020 , amongLithia Motors, Inc. , the Guarantors and the Trustee. 4.2 Form of 4.375% Senior Notes due 2027 (included as part of Exhibit 4.1). 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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