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EXHIBIT 4(E)(5)
FOURTH AMENDMENT TO NOTE PURCHASE AGREEMENT
RE:
CREDIT ACCEPTANCE CORPORATION
FIRST AMENDED AND RESTATED 8.02% SENIOR NOTES DUE OCTOBER 1, 2001
Dated as of December 1, 1999
To the Noteholders listed on Annex I hereto
Ladies and Gentlemen:
Credit Acceptance Corporation, a Michigan corporation (together with
its successors and assigns, the "Company"), hereby agrees with you as follows:
SECTION 1. INTRODUCTORY MATTERS.
1.1 DESCRIPTION OF OUTSTANDING NOTES. The Company currently has
outstanding $30,792,613.68 in aggregate unpaid principal amount of its First
Amended and Restated 8.02% Senior Notes due October 1, 2001 (collectively, the
"Notes") which it issued pursuant to the separate Note Purchase Agreements, each
dated as of March 25, 1997 (collectively, as amended by the First Amendment to
Note Purchase Agreement, dated as of December 12, 1997, the Second Amendment to
Note Purchase Agreement, dated as of July 1, 1998, and the Third Amendment to
Note Purchase Agreement, dated as of April 13, 1999, the "Agreement"), entered
into by the Company with each of the original holders of the Notes listed on
Annex 1 thereto, respectively. Terms used herein but not otherwise defined
herein shall have the meanings assigned thereto in the Agreement, as amended
hereby.
1.2 PURPOSE OF AMENDMENT. The Company and you desire to amend the
Agreement as set forth in Section 2 hereof.
SECTION 2. AMENDMENT TO THE AGREEMENT.
Pursuant to Section 10.5 of the Agreement, the Company hereby agrees
with you that the Agreement shall be amended by this Fourth Amendment to Note
Purchase Agreement (this "Fourth Amendment") in the following respects:
2.1 SECTION 1.1. Section 1.1 is hereby amended and restated in its
entirety as set forth below.
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"1.1 AUTHORIZATION OF NOTES.
(a) On March 28, 1997, the Company issued Seventy-One
Million Seven Hundred Fifty Thousand Dollars ($71,750,000) in
aggregate principal amount of its 7.77% Senior Notes due
October 1, 2001 (the "Original Notes," such term to include
each Original Note delivered from time to time prior to the
effectiveness of the Second Amendment in accordance with any
of the Note Purchase Agreements), each:
(i) bearing interest (computed on the basis
of a 360-day year of twelve 30-day months) on the
unpaid principal balance thereof from the date of
such Original Note at the rate of seven and
seventy-seven one-hundredths percent (7.77%) per
annum, payable semi-annually on the first (1st) day
of April and the first (1st) day of October in each
year commencing on the later of October 1, 1997 or
the payment date next succeeding the date of such
Original Note;
(ii) bearing interest, payable on demand, on
any overdue principal (including any overdue
prepayment of principal) and Make-Whole Amount, if
any, and (to the extent permitted by applicable law)
on any overdue installment of interest, at a rate
equal to the lesser of
(A) the highest rate allowed by
applicable law, or
(B) nine and seventy-seven
one-hundredths percent (9.77%) per annum;
(iii) maturing on October 1, 2001; and
(iv) in the form of the Original Note set
out in Exhibit A, as in effect on the Closing Date.
(b) Pursuant to the Second Amendment, the Company and
the holders of the Original Notes have agreed to amend and
restate in full the Original Notes substantially in the form
attached to the Second Amendment as Attachment 1 thereto (the
"First Amended and Restated Notes," such term to include each
Original Note, as amended and restated pursuant to the Second
Amendment, and each First Amended and Restated Note delivered
from time to time on or after the effectiveness of the Second
Amendment in accordance with any of the Note Purchase
Agreements). Each First Amended and Restated Note will:
(i) be designated a "First Amended and
Restated 8.02% Senior Note Due October 1, 2001";
(ii) bear interest (computed on the basis of
a 360-day year of twelve 30-day months) on the unpaid
principal balance thereof from the date
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of such Note at the rate of seven and seventy-seven
one-hundredths percent (7.77%) per annum through (but
not including) July 1, 1998, and at the rate of eight
and two one-hundredths percent (8.02%) per annum from
and after July 1, 1998 through, but not including,
December 1, 1999, payable semi-annually on the first
(1st) day of April and the first (1st) day of October
in each year commencing on the payment date next
succeeding the date of such First Amended and
Restated Note;
(iii) bear interest, payable on demand, on
any overdue principal (including any overdue
prepayment of principal) and Make-Whole Amount, if
any, and (to the extent permitted by applicable law)
on any overdue installment of interest, at a rate
equal to the lesser of
(A) the highest rate allowed by
applicable law, or
(B) (I) nine and seventy-seven
one-hundredths percent (9.77%) per annum if
such time is prior to July 1, 1998, or (II)
ten and two one-hundredths percent (10.02%)
per annum if such time is on or after July
1, 1998 and prior to December 1, 1999;
(iv) mature on October 1, 2001; and
(v) be in the form of the First Amended and
Restated Note set out in Exhibit A (as in effect upon
the effectiveness of the Second Amendment).
(c) Pursuant to the Fourth Amendment, the Company and
the holders of the Notes have agreed to amend and restate in
full the First Amended and Restated Notes which remain
outstanding at and after December 1, 1999 substantially in the
form attached to the Fourth Amendment as Attachment 4 thereto
(the "Second Amended and Restated Notes," such term to include
each Original Note, as amended and restated pursuant to the
Second Amendment, each First Amended and Restated Note
delivered from time to time on or after the effectiveness of
the Second Amendment in accordance with any of the Note
Purchase Agreements, and each Second Amended and Restated Note
delivered from time to time on or after December 1, 1999 in
accordance with any of the Note Purchase Agreements). Each
Second Amended and Restated Note will:
(i) (A) from and including December 1, 1999
through, but not including, January 15, 2000 be
designated a "Second Amended and Restated 8.77%
Senior Note Due October 1, 2001" and (B) from and
after January 15, 2000 be designated a "Second
Amended and Restated 9.27% Senior Note Due October 1,
2001";
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(ii) bear interest (computed on the basis of
a 360-day year of twelve 30-day months) on the unpaid
principal balance thereof from the date of such Note
at the rate of eight and seventy-seven one-hundredths
percent (8.77%) per annum from and including December
1, 1999 through, but not including, January 15, 2000,
and at the rate of nine and twenty-seven
one-hundredths percent (9.27%) per annum from and
after January 15, 2000 to and including the date of
maturity thereof, payable semi-annually on the first
(1st) day of April and the first (1st) day of October
in each year commencing on the payment date next
succeeding the date of such Second Amended and
Restated Note;
(iii) bear interest, payable on demand, on
any overdue principal (including any overdue
prepayment of principal) and Make-Whole Amount, if
any, and (to the extent permitted by applicable law)
on any overdue installment of interest, at a rate
equal to the lesser of
(A) the highest rate allowed by
applicable law, or
(B) (I) ten and seventy-seven
one-hundredths percent (10.77%) per annum if
such time is from and including December 1,
1999 through, but not including, January 15,
2000, or (II) eleven and twenty-seven
one-hundredths percent (11.27%) per annum if
such time is on or after January 15, 2000;
(iv) mature on October 1, 2001; and
(v) be in the form of the Second Amended and
Restated Note set out in Exhibit A (as in effect upon
the effectiveness of the Fourth Amendment).
(d) The Original Notes, the First Amended and
Restated Notes and the Second Amended and Restated Notes are
referred to herein, collectively, as the "Notes". The term
"Notes" as used herein shall include each Note delivered
pursuant to the Note Purchase Agreements and each Note
delivered in substitution or exchange for any such Note
pursuant to Section 5.2 or Section 5.3, and shall be deemed
(i) when reference is made to a date prior to the effective
date of the Second Amendment, to be a reference to the
Original Notes, (ii) when reference is made to a date on or
after the effective date of the Second Amendment, to be a
reference to the First Amended and Restated Notes, and (iii)
when reference is made to a date on or after December 1, 1999,
to be a reference to the Second Amended and Restated Notes."
2.2 ARTICLE 6. Article 6 is hereby amended and restated in its entirety
as set forth below.
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"6. COVENANTS
The Company covenants that on and after the Closing Date and so long as
any of the Notes shall be outstanding:
6.1 DEBT AND ADVANCES.
(A) TOTAL DEBT. The Company will not at any time permit
Consolidated Total Debt to exceed any of the following:
(i)(A) two hundred seventy-five percent (275%) of
Consolidated Tangible Net Worth prior to the effective date of
the Second Amendment, and (B) two hundred percent (200%) of
Consolidated Tangible Net Worth from the effective date of the
Second Amendment until such time (but in no event prior to
December 31, 1998) as the Company has maintained a ratio of
(A) Consolidated Income Available for Fixed Charges for the
four consecutive fiscal quarters of the Company most recently
ended at such time to (B) Consolidated Fixed Charges for such
period of not less than 2.25 to 1.0 for two consecutive fiscal
quarters, then two hundred seventy-five percent (275%) of
Consolidated Tangible Net Worth, provided however, that for
the purposes of this test, Consolidated Total Debt shall be
calculated by including all Debt incurred by a Special Purpose
Subsidiary, whether or not included therein under GAAP;
(ii) Seventy-Five Percent (75%) of the sum of (A)
Advances and (B) Leased Vehicles; and
(iii) Sixty Percent (60%) of the sum of (A) Gross
Current Installment Contract Receivables and (B) Gross Current
Leased Vehicles.
(B) SENIOR FUNDED DEBT. The Company will not at any time
permit Consolidated Senior Funded Debt to exceed either
(i) two hundred percent (200%) of Consolidated
Tangible Net Worth at such time, or
(ii) (A) the sum of (I) Net Installment Contract
Receivables less Net Dealer Holdbacks and (II) Leased Vehicles
less Net Leased Vehicle Dealer Holdbacks, in each case at such
time, divided by
(B) 1.10.
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(C) SUBORDINATED FUNDED DEBT. The Company will not at any time
permit Consolidated Subordinated Funded Debt to exceed one hundred
fifty percent (150%) of Consolidated Tangible Net Worth at such time.
(D) RESTRICTED SUBSIDIARY DEBT. The Company will not at any
time permit the sum of (i) Total Restricted Subsidiary Debt at such
time plus, without duplication, (ii) the aggregate amount of all Debt
and other obligations outstanding at such time secured by Liens
permitted by clause (v), clause (vi) and clause (vii) of Section 6.6(a)
to exceed (A) on or before July 31, 1997, fifteen percent (15%) of
Consolidated Tangible Net Worth or (B) on or after August 1, 1997,
twenty percent (20%) of Consolidated Tangible Net Worth.
(E) COMMERCIAL PAPER. The Company will not, and will not
permit any Restricted Subsidiary to, issue commercial paper unless the
obligations of the Company or such Restricted Subsidiary with respect
to such commercial paper are backed by a Letter of Credit Facility.
(F) GROSS ADVANCES. The Company will not at any time permit
Gross Advances to exceed seventy percent (70%) of Net Installment
Contract Receivables; provided, however, that at any time at which the
Credit Agreement (as from time to time amended, restated, refinanced,
replaced or supplemented) does not permit the amount of Gross Advances
to exceed 65% of Net Installment Contract Receivables, the Company
shall not permit Gross Advances to exceed sixty-five percent (65%) of
Net Installment Contract Receivables.
6.2 FIXED CHARGE COVERAGE.
The Company will not at any time permit the ratio of
(a) Consolidated Income Available for Fixed Charges
for the period of four (4) consecutive fiscal quarters of the
Company most recently ended at such time to
(b) Consolidated Fixed Charges for such period
to be less than (i) 2.5 to 1.0 for any period of four fiscal
quarters ended on or prior to September 30, 1997, (ii) 1.9 to
1.0 for the four fiscal quarters ended December 31, 1997,
(iii) 1.7 to 1.0 for the four fiscal quarters ended March 31,
1998, (iv) 1.6 to 1.0 for the four fiscal quarters ended June
30, 1998, (v) 2.0 to 1.0 for the four fiscal quarters ended
September 30, 1998 and (vi) 2.25 to 1.0 for any four fiscal
quarters ended on or after December 31, 1998.
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6.3 CONSOLIDATED TANGIBLE NET WORTH.
The Company will not at any time permit Consolidated Tangible Net
Worth, determined at such time, to be less than the result of
(a) Two Hundred Eighteen Million Seven Hundred Twenty Five
Thousand Dollars ($218,725,000), plus
(b) the sum of (i) seventy-five percent (75%) of Consolidated
Net Income for each fiscal year ended during the period beginning on
January 1, 1999 and ending on such date (unless Consolidated Net Income
shall be a loss in any such fiscal year, in which event the amount
determined pursuant to this clause (b)(i) for such fiscal year shall be
zero) and (ii) 100% of the proceeds of each Equity Offering conducted
on and after July 1, 1998 by the Company or any of its Restricted
Subsidiaries, net of related costs of issuance payable to third
parties, on a cumulative basis.
6.4 SALE AND LEASEBACK TRANSACTIONS.
The Company will not, and will not permit any Restricted Subsidiary to,
enter into, at any time, any Sale and Leaseback Transaction unless,
(a) after giving effect thereto,
(i) the sale of Property in connection with such Sale
and Leaseback Transaction is permitted pursuant to Section 6.8
and
(ii) the Debt to be secured by a Lien on the Property
to be leased in connection with such Sale and Leaseback
Transaction is permitted pursuant to the provisions of Section
6.1 and Section 6.6, and
(b) the lease of such Property constitutes a Capital Lease.
6.5 RESTRICTED INVESTMENTS.
The Company will not, and will not permit any Restricted Subsidiary to,
make any Restricted Investment.
6.6 LIENS.
(A) NEGATIVE PLEDGE. The Company will not, and will not permit
any Restricted Subsidiary to, cause or permit to exist, or agree or
consent to cause or permit to exist in the future (upon the happening
of a contingency or otherwise), any of their Property, whether now
owned or hereafter acquired, to be subject to any Lien except:
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(i) (A) Liens securing Property taxes, assessments or
governmental charges or levies or the claims or demands of
materialmen, mechanics, carriers, warehousemen, vendors,
landlords and other like Persons, provided that the payment
thereof is not at the time required by Section 6.12, (B) any
Lien encumbering Securitization Property which is the subject
of a Transfer pursuant to a Permitted Securitization, and (C)
any Lien granted in favor of the "Collateral Agent" (as
defined in the Intercreditor Agreement) for the benefit of the
Banks, the holders of Notes and "Future Debt Holders" (as
defined in the Intercreditor Agreement) and subject to the
Intercreditor Agreement;
(ii) Liens
(A) arising from judicial attachments and
judgments,
(B) securing appeal bonds or supersedeas
bonds, and
(C) arising in connection with court
proceedings (including, without limitation, surety
bonds and letters of credit or any other instrument
serving a similar purpose),
provided that (1) the execution or other enforcement of such
Liens is effectively stayed, (2) the claims secured thereby
are being contested in good faith and by appropriate
proceedings, (3) adequate book reserves in accordance with
GAAP shall have been established and maintained and shall
exist with respect thereto, (4) such Liens do not in the
aggregate detract from the value of such Property and (5) the
title of the Company or the Restricted Subsidiary, as the case
may be, to, and its right to use, such Property, is not
materially adversely affected thereby;
(iii) Liens incurred or deposits made in the ordinary
course of business
(A) in connection with workers'
compensation, unemployment insurance, social security
and other like laws, and
(B) to secure the performance of letters of
credit, bids, tenders, sales contracts, leases,
statutory obligations, surety and performance bonds
(of a type other than set forth in Section
6.6(a)(ii)) and other similar obligations not
incurred in connection with the borrowing of money,
the obtaining of advances or the payment of the
deferred purchase price of Property;
(iv) Liens in the nature of reservations, exceptions,
encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases and other similar title
exceptions or encumbrances affecting real Property, provided
that (1) such
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exceptions and encumbrances do not in the aggregate materially
detract from the value of such Property and (2) title of the
Company or the Restricted Subsidiary, as the case may be, to,
and the right to use, such Property, is not materially
adversely affected thereby;
(v) Liens in existence on the Closing Date securing
Debt, provided that such Liens are described in Part 6.6(a)(v)
of Annex 3;
(vi) Purchase Money Liens, if, after giving effect
thereto and to any concurrent transactions:
(A) each such Purchase Money Lien secures
Debt in an amount not exceeding the cost of
acquisition or construction of the particular
Property to which such Debt relates; and
(B) immediately after giving effect thereto,
no Default or Event of Default would exist; and
(vii) Liens on Property not otherwise permitted under
clause (i) through clause (vi) of this Section 6.6(a) if the
obligations secured by such Liens, when added to (A) the
obligations secured by Liens pursuant to clause (v) and clause
(vi) of this Section 6.6(a) plus, without duplication, (B)
Total Restricted Subsidiary Debt at such time, do not exceed
(1) on or before July 31, 1997, fifteen percent (15%) of
Consolidated Tangible Net Worth or (2) on or after August 1,
1997, twenty percent (20%) of Consolidated Tangible Net Worth.
(B) EQUAL AND RATABLE LIEN; EQUITABLE LIEN. In case any
Property shall be subjected to a Lien in violation of this Section 6.6,
the Company will immediately make or cause to be made, to the fullest
extent permitted by applicable law, provision whereby the Notes will be
secured equally and ratably with all other obligations secured thereby
pursuant to such agreements and instruments as shall be approved by the
Required Holders, and the Company will cause to be delivered to each
holder of a Note an opinion, satisfactory in form and substance to the
Required Holders, of independent counsel to the effect that such
agreements and instruments are enforceable in accordance with their
terms, and in any such case the Notes shall have the benefit, to the
fullest extent that, and with such priority as, the holders of Notes
may be entitled thereto under applicable law, of an equitable Lien on
such Property securing the Notes (provided that, notwithstanding the
foregoing, each holder of Notes shall have the right to elect at any
time, by delivery of written notice of such election to the Company, to
cause the Notes held by such holder not to be secured by such Lien or
such equitable Lien). A violation of this Section 6.6 will constitute
an Event of Default, whether or not any such provision is made pursuant
to this Section 6.6(b).
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(C) FINANCING STATEMENTS. The Company will not, and will not
permit any Restricted Subsidiary to, sign or file a financing statement
under the Uniform Commercial Code of any jurisdiction that names the
Company or such Restricted Subsidiary as debtor, or sign any security
agreement authorizing any secured party thereunder to file any such
financing statement, except, in any such case, a financing statement
filed or to be filed to perfect or protect a security interest that the
Company or such Restricted Subsidiary is permitted to create, assume or
incur, or permit to exist, under the foregoing provisions of this
Section 6.6 or to evidence for informational purposes a lessor's
interest in Property leased to the Company or any such Restricted
Subsidiary.
6.7 MERGER AND CONSOLIDATION; COVENANT TO MERGE CAC INTERNATIONAL.
(A) MERGER AND CONSOLIDATION. The Company will not, and will
not permit any Restricted Subsidiary to, merge or consolidate with or
into, or sell, lease, transfer or otherwise dispose of all or
substantially all of its Property to, any other Person or permit any
other Person to merge or consolidate with or into it (the Company, the
Restricted Subsidiary or such other Person that is the surviving
corporation or transferee being herein referred to as the "Surviving
Corporation"), provided that the foregoing restrictions shall not apply
to:
(i) the merger or consolidation of the Company with
or into, or the sale of all or substantially all of the
Property of the Company to, another corporation, if:
(A) the Surviving Corporation is solvent and
is organized under the laws of the United States of
America or any state thereof;
(B) the due and punctual payment of the
principal of and Make-Whole Amount, if any, and
interest on all of the Notes, according to their
tenor, and the due and punctual performance and
observance of all the covenants in the Notes and this
Agreement to be performed or observed by the Company,
are expressly assumed or acknowledged by the
Surviving Corporation in a manner satisfactory to the
Required Holders, and the Company causes to be
delivered to each holder of Notes an opinion of
independent counsel, in form, scope and substance
satisfactory to the Required Holders, to the effect
that such assumption or acknowledgment is enforceable
in accordance with its terms; and
(C) immediately prior to, and immediately
after the consummation of the transaction, and after
giving effect thereto, no Default or Event of Default
exists or would exist;
(ii) the merger or consolidation of a Restricted
Subsidiary with or into, or the sale of all or substantially
all of the Property of such Restricted Subsidiary to, the
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Company, another Restricted Subsidiary or any other Person
that concurrently with such merger, consolidation or sale
becomes a Restricted Subsidiary, if:
(A) the Surviving Corporation is organized
under the laws of the United States of America or any
state thereof; and
(B) immediately prior to, and immediately
after the consummation of the transaction, and after
giving effect thereto, no Default or Event of Default
exists or would exist;
(iii) the Transfer of Securitization Property to any
Special Purpose Subsidiary in connection with a Permitted
Securitization; and
(iv) a merger, consolidation or Transfer of a
Restricted Subsidiary or Restricted Subsidiaries pursuant to
the Montana Disposition or the Arlington Disposition.
(B) COVENANT TO MERGE CAC INTERNATIONAL. The Company covenants
and agrees that it shall merge CAC International with and into the
Company (with the Company being the survivor) on or before May 15,
1997, in accordance with Section 6.7(a).
6.8 TRANSFERS OF PROPERTY; SUBSIDIARY STOCK.
(A) TRANSFERS OF PROPERTY. Except as permitted under Section
6.7(a), the Company will not, and will not permit any Restricted
Subsidiary to, sell, lease as lessor, transfer or otherwise dispose of
any Property (including, without limitation, Restricted Subsidiary
Stock) (collectively, "Transfers"), except:
(i) Transfers from a Restricted Subsidiary to the
Company or to a Wholly-Owned Restricted Subsidiary;
(ii) any other Transfer at any time of any Property
to a Person, other than an Affiliate, for an Acceptable
Consideration, if each of the following conditions would be
satisfied with respect to such Transfer:
(A) the result of
(1) the sum of
(aa) the current book value
of such Property, plus
(bb) the aggregate book
value of all other Property of the
Company and the Restricted
Subsidiaries, determined
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on a consolidated basis, Transferred
(other than in Transfers referred to
in clauses (i), (iii), (iv), (v) and
(vi) of this Section 6.8(a) (the
"Excluded Transfers"), but including
Transfers pursuant to Section 6.8(b)
other than in connection with the
Montana Disposition or the Arlington
Disposition) during the twelve (12)
month period ended immediately prior
to the date of such Transfer, minus
(2) the aggregate cost of all
Capital Assets acquired by the Company and
the Restricted Subsidiaries, determined on a
consolidated basis, during such twelve (12)
month period,
would not exceed ten percent (10%) of Consolidated
Net Tangible Assets determined as at the end of the
most recently ended fiscal year of the Company prior
to giving effect to such Transfer, and
(B) immediately before and after the
consummation of such Transfer, and after giving
effect thereto, no Default or Event of Default would
exist;
(iii) Transfers of Securitization Property to a
Restricted Subsidiary or a Special Purpose Subsidiary pursuant
to a Permitted Securitization if, immediately before and after
the consummation of such Transfer, and after giving effect
thereto, no Default or Event of Default would exist;
(iv) Transfers of the capital stock of a Special
Purpose Subsidiary to the Company or a Restricted Subsidiary
if, immediately before and after the consummation of such
Transfer, and after giving effect thereto, no Default or Event
of Default would exist;
(v) any Transfer made pursuant to the Montana
Disposition (including without limitation the transfer by the
Company of its intellectual property rights to the name
Tele-Track, Inc.) or the Arlington Disposition if, immediately
before and after the consummation of such Transfer, and after
giving effect thereto, no Default or Event of Default would
exist; and
(vi) any Transfer of Installment Contracts or Leases
made to a Dealer due to the termination of a Dealer Agreement,
for which Transfer the Company or any of its Restricted
Subsidiaries receives an Acceptable Consideration.
(b) TRANSFERS OF SUBSIDIARY STOCK. The Company will not, and
will not permit any Restricted Subsidiary to, Transfer any shares of
the stock (or any warrants, rights or options to purchase stock or
other Securities exchangeable for or convertible into stock) of a
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Restricted Subsidiary (such stock, warrants, rights, options and other
Securities herein called "Restricted Subsidiary Stock"), nor will any
Restricted Subsidiary issue, sell or otherwise dispose of any shares of
its own Restricted Subsidiary Stock, provided that the foregoing
restrictions do not apply to:
(i) the issuance by a Restricted Subsidiary of shares
of its own Restricted Subsidiary Stock to the Company or a
Wholly-Owned Restricted Subsidiary;
(ii) Transfers by the Company or a Restricted
Subsidiary of shares of Restricted Subsidiary Stock to the
Company or a Wholly-Owned Restricted Subsidiary;
(iii) the issuance by a Restricted Subsidiary of
directors' qualifying shares; and
(iv) the Transfer of all of the Restricted Subsidiary
Stock of a Restricted Subsidiary owned by the Company and the
other Restricted Subsidiaries pursuant to the Montana
Disposition or the Arlington Disposition or if:
(A) such Transfer satisfies the requirements
of Section 6.8(a)(ii);
(B) in connection with such Transfer the
entire Investment (whether represented by stock,
Debt, claims or otherwise) of the Company and the
other Restricted Subsidiaries in such Restricted
Subsidiary is Transferred to a Person other than the
Company or a Restricted Subsidiary not simultaneously
being disposed of;
(C) the Restricted Subsidiary being disposed
of has no continuing Investment in any other
Restricted Subsidiary not simultaneously being
disposed of or in the Company; and
(D) immediately before and after the
consummation of such Transfer, and after giving
effect thereto, no Default or Event of Default would
exist.
For purposes of determining the book value of Property constituting
Restricted Subsidiary Stock being Transferred as provided in clause
(iv) above, such book value shall be deemed to be the aggregate book
value of all assets of the Restricted Subsidiary that shall have issued
such Restricted Subsidiary Stock. Any Transfer of Restricted Subsidiary
Stock pursuant to clause (iv) above shall be deemed to be a Transfer of
the accounts receivable of such Restricted Subsidiary which must
satisfy the requirements of Section 6.8(c).
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(c) ACCOUNTS RECEIVABLE. Notwithstanding the provisions of
Section 6.8(a), except in connection with a Permitted Securitization or
in connection with the Montana Disposition or the Arlington
Disposition, neither the Company nor any Restricted Subsidiary will
Transfer any accounts receivable if the sum of
(i) the face value of the accounts receivable
proposed to be Transferred, plus
(ii) the face value of accounts receivable
Transferred by the Company and all Restricted Subsidiaries
during the then current fiscal year of the Company,
would exceed five percent (5%) of the face value of the accounts
receivable of the Company and the Restricted Subsidiaries determined on
a consolidated basis as at the end of the most recently ended fiscal
year of the Company prior to giving effect to such Transfer (but
excluding for purposes of such calculation accounts receivable
attributable to assets the title to which is held by a Special Purpose
Subsidiary pursuant to a Permitted Securitization).
6.9 LINE OF BUSINESS.
The Company will not, and will not permit any Restricted Subsidiary to,
engage in, or make any Investment in any business engaged in, the provision of
property and casualty insurance unless the Company or such Restricted Subsidiary
shall maintain reinsurance of its underwriting risk, with one or more reinsurers
rated "A-" or better by Standard & Poor's Ratings Group or "A3" or better by
Xxxxx'x Investors Service, Inc., for all of the Company's or such Restricted
Subsidiary's exposure in excess of one hundred percent (100%) of the premiums
written by the Company or such Restricted Subsidiary. In addition to the
foregoing, the Company will not, and will not permit any Restricted Subsidiary
to, engage in any business if, after giving effect thereto, the general nature
of the businesses of the Company and the Restricted Subsidiaries, taken as a
whole, would no longer be the provision of financing programs for the purchase
or lease of used motor vehicles, motor vehicle service protection programs,
credit life, accident and health insurance programs and other programs related
to the foregoing (it being understood that, in the course of the provision of
such programs, the Company may be obligated to remit monies held by it in
connection with dealer holdbacks, claims or refunds under insurance policies,
claims or refunds under service contracts, and to make deposits in trust or
otherwise as required under reinsurance agreements or pursuant to state
regulatory requirements). The Company shall manage and operate such businesses
in substantially the same manner that they are managed and operated as of the
date hereof.
6.10 TRANSACTIONS WITH AFFILIATES.
The Company will not, and will not permit any Restricted Subsidiary to,
enter into any transaction, including, without limitation, the purchase, sale or
exchange of Property or the rendering of any service, with any Affiliate, except
(a) a Permitted Securitization or (b) in the ordinary course of and pursuant to
the reasonable requirements of the Company's or such Restricted Subsidiary's
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business and upon fair and reasonable terms no less favorable to the Company or
such Restricted Subsidiary than would obtain in a comparable arm's-length
transaction with a Person not an Affiliate.
6.11 MAINTENANCE OF PROPERTIES; CORPORATE EXISTENCE; ETC.
The Company will, and will cause each Restricted Subsidiary to:
(a) PROPERTY -- maintain, preserve and keep its Property in
good condition and working order, ordinary wear and tear excepted, and
make all necessary repairs, renewals, replacements, additions,
betterments and improvements thereto, except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect;
(b) INSURANCE -- maintain, with financially sound and
reputable insurers, insurance with respect to its Property and business
against such casualties and contingencies, of such types (including,
without limitation, insurance with respect to losses arising out of
Property loss or damage, public liability, business interruption,
larceny, workers' compensation, embezzlement or other criminal
misappropriation) and in such amounts as is customary in the case of
corporations of established reputations engaged in the same or a
similar business and similarly situated, provided that such insurance
is commercially available, it being understood that the Company and the
Restricted Subsidiaries may self-insure against hazards and risks with
respect to which, and in such amounts as, the Company in good faith
determines to be prudent and consistent with sound financial and
business practice;
(c) FINANCIAL RECORDS -- keep accurate and complete books of
records and accounts in which accurate and complete entries shall be
made of all its business transactions and that will permit the
provision of accurate and complete financial statements in accordance
with GAAP;
(d) CORPORATE EXISTENCE AND RIGHTS --
(i) do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises,
except where the failure to do so, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect, and
(ii) to maintain each Subsidiary as a Subsidiary,
in each case except as permitted or required by Section 6.7(a) and
Section 6.8(b); and
(e) COMPLIANCE WITH LAW -- not be in violation of any law,
ordinance or governmental rule or regulation to which it is subject
(including, without limitation, any Environmental Protection Law and
OSHA) and not fail to obtain any license, certificate,
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permit, franchise or other governmental authorization necessary to the
ownership of its Properties or to the conduct of its business if such
violations or failures to obtain, in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
6.12 PAYMENT OF TAXES AND CLAIMS.
The Company will, and will cause each Subsidiary to, pay before they
become delinquent:
(a) all taxes, assessments and governmental charges or levies
imposed upon it or its Property; and
(b) all claims or demands of materialmen, mechanics, carriers,
warehousemen, vendors, landlords and other like Persons that, if
unpaid, might result in the creation of a Lien upon its Property;
provided, that items of the foregoing description need not be paid
(i) while being contested in good faith and by
appropriate proceedings as long as adequate book reserves have
been established and maintained and exist with respect
thereto, and
(ii) so long as the title of the Company or the
Subsidiary, as the case may be, to, and its right to use, such
Property, is not materially adversely affected thereby.
6.13 PAYMENT OF NOTES AND MAINTENANCE OF OFFICE.
The Company will punctually pay, or cause to be paid, the principal of
and interest (and Make-Whole Amount, if any) on, the Notes, as and when the same
shall become due according to the terms hereof and of the Notes, and will
maintain an office at the address of the Company set forth in Section 10.1 where
notices, presentations and demands in respect hereof or of the Notes may be made
upon it. Such office will be maintained at such address until such time as the
Company shall notify the holders of the Notes in writing of any change of
location of such office, which will in any event be located within the United
States of America.
6.14 PENSION PLANS.
(a) COMPLIANCE. The Company will, and will cause each ERISA
Affiliate to, at all times with respect to each Pension Plan, make
timely payment of contributions required to meet the minimum funding
standard set forth in ERISA or the IRC with respect thereto, and to
comply with all other applicable provisions of ERISA and the IRC.
(b) RELATIONSHIP OF VESTED BENEFITS TO PENSION PLAN ASSETS.
The Company will not at any time permit the present value of all
employee benefits vested under each Pension
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Plan to exceed the assets of such Pension Plan allocable to such vested
benefits at such time, in each case determined pursuant to Section
6.14(c).
(c) VALUATIONS. All assumptions and methods used to determine
the actuarial valuation of vested employee benefits under Pension Plans
and the present value of assets of Pension Plans will be reasonable in
the good faith judgment of the Company and will comply with all
requirements of law.
(d) PROHIBITED ACTIONS. The Company will not, and will not
permit any ERISA Affiliate to:
(i) engage in any "prohibited transaction" (as
defined in section 406 of ERISA or section 4975 of the IRC)
that would result in the imposition of a material tax or
penalty;
(ii) incur with respect to any Pension Plan any
"accumulated funding deficiency" (as defined in section 302 of
ERISA), whether or not waived;
(iii) terminate any Pension Plan in a manner that
could result in the imposition of a Lien on the Property of
the Company or any Subsidiary pursuant to section 4068 of
ERISA or the creation of any liability under section 4062 of
ERISA;
(iv) fail to make any payment required by section 515
of ERISA; or
(v) at any time be an "employer" (as defined in
section 3(5) of ERISA) required to contribute to any
Multiemployer Plan or a "substantial employer" (as defined in
section 4001 of ERISA) required to contribute to any Multiple
Employer Pension Plan if, at such time, it could reasonably be
expected that the Company or any Subsidiary will incur
withdrawal liability in respect of such Multiemployer Plan or
Multiple Employer Pension Plan and such liability, if
incurred, together with the aggregate amount of all other
withdrawal liability as to which there is a reasonable
expectation of incurrence by the Company or any Subsidiary
under any one or more Multiemployer Plans or Multiple Employer
Pension Plans, could reasonably be expected to have a Material
Adverse Effect.
6.15 PRO-RATA OFFERS; MANDATORY PURCHASE.
(a) GENERAL. Except as provided in Section 6.15(b), the
Company will not, and will not permit any Subsidiary or any Affiliate
to, directly or indirectly, acquire or make any offer to acquire any
Notes unless the Company or such Subsidiary or Affiliate shall have
offered to acquire Notes, pro rata, from all holders of the Notes and
upon the same terms. In case the Company acquires any Notes pursuant to
this Section 6.15, such Notes will immediately thereafter be canceled
and no Notes will be issued in substitution therefor. Each
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purchase of the Notes pursuant to this Section 6.15 shall be applied to
reduce ratably each of the Mandatory Principal Amortization Payments
remaining after the date of such purchase.
(b) MANDATORY PURCHASE OF NOTES. The Company shall, on or
before January 15, 2000, acquire from the holders thereof the Notes
listed on Attachment 6 to the Fourth Amendment (the "Repurchased
Notes") for a price equal to the outstanding principal amount of such
Repurchased Notes at such time as set forth on Attachment 6, plus
interest accrued but unpaid to, but not including, the date of such
purchase. The Company shall give written notice to the holders of the
Repurchased Notes, no later than the second Business Day prior to such
payment, of the date on which such payment is to be made. It is
understood and acknowledged by the parties to this Agreement that (i)
compliance by the Company with the obligations in this Section 6.15(b)
shall not be deemed a breach of any of the Company's obligations under
Section 4 of this Agreement; (ii) upon payment of the price provided in
this Section 6.15(b) to the holders of the Repurchased Notes, the
Company shall immediately cancel the Repurchased Notes and no Notes
will be issued in substitution therefor (except that a substitute Note
shall be issued for the balance outstanding if less than the full
amount of the Note is to be repurchased pursuant hereto); and (iii) the
Company's failure to comply with the obligation to make any payment
required by this Section 6.15(b) on or before the required payment date
shall be considered a failure to make a principal payment when due for
purposes of Section 8.1(a) of this Agreement. The purchase of
Repurchased Notes pursuant to this Section 6.15(b) shall be applied to
reduce ratably each of the Mandatory Principal Amortization Payments
remaining after the date of such purchase.
6.16 PRIVATE OFFERING.
The Company will not, and will not permit any Person acting on its
behalf to, offer the Notes or any part thereof or any similar Securities for
issuance or sale to, or solicit any offer to acquire any of the same from, any
Person so as to bring the issuance and sale of the Notes within the provisions
of section 5 of the Securities Act.
6.17 DESIGNATION OF SUBSIDIARIES.
(a) RIGHT OF DESIGNATION. Subject to the satisfaction of the
requirements of Section 6.17(c), the Company shall have the right to
designate any newly acquired or formed Subsidiary as an Unrestricted
Subsidiary by delivering to each holder of Notes a writing, signed by a
Vice President or the President of the Company, so designating such
Subsidiary within thirty (30) days of the acquisition or formation of
such Subsidiary by the Company or any Restricted Subsidiary. Any such
Subsidiary so designated within such thirty (30) day period shall be
deemed to have been an Unrestricted Subsidiary as of the date of such
acquisition or formation and any such Subsidiary not so designated
within such thirty (30) day period shall be deemed to have been a
Restricted Subsidiary as of the date of such acquisition or formation.
For all purposes of this Agreement, each Subsidiary designated as an
Unrestricted Subsidiary in Part 6.17(a) of Annex 3 shall, subject to
Section 6.17(b), be an
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Unrestricted Subsidiary and all other Subsidiaries, if any, listed in
Part 2.3 of Annex 3 shall be Restricted Subsidiaries.
(b) RIGHT OF REDESIGNATION. No Restricted Subsidiary shall be
redesignated as an Unrestricted Subsidiary. Subject to the satisfaction
of the requirements of Section 6.17(c), the Company may at any time
designate any Unrestricted Subsidiary as a Restricted Subsidiary by
delivering a written notice to such effect, signed by a Vice President
or the Chairman, President or Treasurer of the Company, to each holder
of Notes.
(c) DESIGNATION CRITERIA.
(i) No corporation acquired or formed after the
Closing Date shall be designated as a Restricted Subsidiary
(including deemed designation pursuant to Section 6.17(a))
unless:
(A) such Subsidiary at such time meets all
of the requirements of a "Restricted Subsidiary" as
set forth in the definition thereof; and
(B) immediately before and after, and after
giving effect to such designation, no Default or
Event of Default exists or would exist.
(ii) No Subsidiary shall at any time after the
Closing Date be designated as an Unrestricted Subsidiary
pursuant to Section 6.17(a) unless:
(A) immediately before and after, and after
giving effect to such designation, no Default or
Event of Default exists or would exist; and
(B) such Subsidiary does not own, directly
or indirectly, any Funded Debt or capital stock of
any Restricted Subsidiary.
(d) EFFECTIVENESS. Any designation under Section 6.17(b) that
satisfies all of the conditions set forth in Section 6.17(c) shall
become effective, for purposes of this Agreement, on the day that
notice thereof shall have been mailed (postage prepaid, by registered
or certified mail, return receipt requested) by the Company to each
holder of Notes at the addresses as provided in Section 10.1.
6.18 AMENDMENT OF BANK TERM DEBT OR SUBORDINATED DEBT DOCUMENTS;
TERMINATION OF RESTRICTION ON BANK TERM DEBT AMENDMENTS; NO
FURTHER RESTRICTIONS ON AMENDMENTS OF THIS AGREEMENT.
(a) AMENDMENT OF BANK TERM DEBT OR SUBORDINATED DEBT
DOCUMENTS. The Company will not amend, modify or otherwise alter (or
suffer to be amended, modified or
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altered), or waive (or permit to be waived), in any material respect,
any of the terms or provisions of any document or instrument:
(i) evidencing or otherwise relating to any Bank Term
Debt so as to shorten the maturity or original amortization of
such Bank Term Debt, or
(ii) evidencing or otherwise relating to any
Subordinated Debt so as to increase the original interest rate
on, or the principal amount of, such Subordinated Debt,
shorten the original amortization of such Subordinated Debt,
change any other repayment terms or any default or remedial
provisions in any such document or instrument, or change the
subordination provisions contained in any such document or
instrument,
in each case without the prior written approval of the Required Holders.
(b) TERMINATION OF RESTRICTION ON BANK TERM DEBT AMENDMENTS.
Subject to Section 6.18(c), the provisions of Section 6.18(a), insofar
as such provisions relate to amendments, modifications, alterations or
waivers of Bank Term Debt, will terminate and be of no further force or
effect at such time as the Company causes to be delivered to each
holder of Notes a duly executed copy of an amendment or modification of
the Credit Agreement (or any new agreement contemplated by Section
6.18(c)(ii) below) deleting Section 8.13 of the Credit Agreement (or
the comparable provision in such new agreement) effective on or prior
to the date of such delivery.
(c) NO FURTHER RESTRICTIONS ON AMENDMENTS OF THIS AGREEMENT.
The Company will not:
(i) amend, modify or otherwise alter (or suffer to be
amended, modified or altered) the Credit Agreement (including,
without limitation, Section 8.13 thereof) or any document or
instrument relating thereto to include any covenant or other
provision (other than Section 8.13 of the Credit Agreement as
in effect on the Closing Date) that requires, as a condition
to the amendment of any term or provision of this Agreement,
or the waiver of any term or provision herein, the approval or
consent of any other creditor of the Company; or
(ii) enter into any other agreement (or suffer to be
amended, modified or altered any other agreement to which the
Company is a party) that requires, as a condition to the
amendment of any term or provision of this Agreement, or the
waiver of any term or provision herein, the approval or
consent of any other creditor of the Company; provided that if
(A) any such agreement is entered into to replace, refinance
or supplement the Credit Agreement and (B) Section 8.13 of the
Credit Agreement (as in effect on the Closing Date) shall not
have been deleted from the Credit Agreement as of the time
such new agreement is to be entered into, such new
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agreement may include a covenant substantially the same as
(and not more onerous on the Company than) Section 8.13 of the
Credit Agreement (as in effect on the Closing Date).
6.19 AMENDMENT OF SECURITIZATION DOCUMENTS. Once executed and delivered
pursuant to a Permitted Securitization, the Company covenants that it will not
permit the "pertinent terms, conditions or provisions" of the Securitization
Documents to be waived, amended, modified or otherwise altered in any material
respect adverse to the Company or any Restricted Subsidiary or Special Purpose
Subsidiary without the prior written approval of the Required Holders. For
purposes of the Securitization Documents, the "pertinent terms, conditions or
provisions" thereof shall be deemed solely those terms, conditions or provisions
with respect to servicer fees, servicer expenses, defaults, events of default,
recourse to the Company or any Restricted Subsidiary, Cleanup Calls or
conditions contained therein which are required under or necessary for
compliance with this Agreement.
6.20 RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, declare, make, set apart any
funds or other property for, or incur any liability to make any
Restricted Payment unless, at the time of such action, at least two of
the following four organizations shall have assigned an Investment
Grade Rating to the Company, the Notes or any other senior unsecured
debt obligation of the Company: Xxxxx'x Investors Service, Inc.,
Standard & Poor's Ratings Group, the National Association of Insurance
Commissioners (the "NAIC"), or Fitch Investors Services, Inc.
(b) The parties hereto specifically acknowledge that the NAIC
is not in any way a rating agency with functions such as those
performed by Xxxxx'x Investors Service, Inc., Standard & Poor's Ratings
Group, or Fitch Investors Services, Inc. Further, the parties hereto
specifically acknowledge that any rating given to the Notes by the NAIC
is not to be interpreted as an expression by the NAIC with respect to
the suitability of an investment in the Notes or the likelihood of any
payment in respect thereof. In addition, the signatories hereto
specifically affirm that the holders of the Notes will not obtain any
benefit from satisfaction of the requirement set forth in Section
6.20(a).
(c) If the NAIC makes specific reference to Section 6.20(a)
and states that it will withdraw any rating or designation of the
Notes, or will take any other action adverse to any one or more of the
holders of the Notes, as a result of the agreement set forth in Section
6.20(a), the parties hereto hereby agree that:
(i) Section 6.20(a) shall, in lieu of the requirement
set forth therein, be deemed to require an Investment Grade
Rating from at least two of the following three organizations:
Xxxxx'x Investors Service, Inc., Standard & Poor's Ratings
Group, or Fitch Investors Services, Inc.; and
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(ii) Clause (iii) of the definition of "Investment
Grade Rating" shall be deemed to have been deleted.
Such changes shall take effect upon delivery of written notice to the
Company by the Required Holders referring to such proposed withdrawal
or other action and stating that the condition set forth in this
Section 6.20(c) has occurred.
6.21 NO SECURITIZATIONS OTHER THAN PERMITTED SECURITIZATIONS. The
Company will not, and will not permit any Restricted Subsidiary to, engage in
any Securitization Transaction other than a Permitted Securitization."
2.3 SECTION 7.1. Section 7.1 is hereby amended and restated in its
entirety as set forth below.
"7.1 Financial and Business Information.
The Company will deliver to each holder of Notes:
(A) QUARTERLY STATEMENTS -- as soon as practicable after the
end of each quarterly fiscal period in each fiscal year of the Company
(other than the last quarterly fiscal period of each such fiscal year),
and in any event within sixty (60) days thereafter, duplicate copies of
(i) a consolidated balance sheet of the Company and
its consolidated subsidiaries and consolidated and
consolidating balance sheets of the Company and the Restricted
Subsidiaries, as at the end of such quarter, and
(ii) consolidated statements of income and cash flows
of the Company and its consolidated subsidiaries and
consolidated and consolidating statements of income and cash
flows of the Company and the Restricted Subsidiaries, for such
quarter and (in the case of the second and third quarters) for
the portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the immediately preceding fiscal year, all in
reasonable detail, prepared in accordance with GAAP applicable to
quarterly financial statements generally, and accompanied by the
certificate required by Section 7.2, and, in the case of the financial
statements relating to the Company and its Restricted Subsidiaries,
certified as complete and correct, subject to changes resulting from
year-end adjustments, by a Senior Financial Officer, and, in the case
of the financial statements relating to the Company and its
consolidated subsidiaries at any time when a Quarterly Report on Form
10-Q is not filed by the Company with the Securities and Exchange
Commission and delivered to the holders of the Notes pursuant to clause
(d) of
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this Section 7.1, certified as complete and correct, subject to changes
resulting from year-end adjustments, by a Senior Financial Officer;
(B) ANNUAL STATEMENTS -- as soon as practicable after the
end of each fiscal year of the Company, and in any event within one
hundred twenty (120) days thereafter, duplicate copies of
(i) a consolidated balance sheet of the Company and
its consolidated subsidiaries and consolidated and
consolidating balance sheets of the Company and the Restricted
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, shareholders'
equity and cash flows of the Company and its consolidated
subsidiaries and consolidated and consolidating statements of
income, shareholders' equity and cash flows of the Company and
the Restricted Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
immediately preceding fiscal year, all in reasonable detail, prepared
in accordance with GAAP, and accompanied by
(A) in the case of the financial statements
relating to the Company and its consolidated
subsidiaries, an opinion of independent certified
public accountants of recognized national standing,
which opinion shall, without qualification, state
that such financial statements present fairly, in all
material respects, the financial position of the
companies being reported upon and their results of
operations and cash flows and have been prepared in
conformity with GAAP, and that the examination of
such accountants in connection with such financial
statements has been made in accordance with generally
accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the
circumstances, and
(B) in the case of the financial statements
relating to the Company and its Restricted
Subsidiaries, certified as complete and correct by a
Senior Financial Officer, and
(C) the certificate required by Section 7.2
and, in the case of the financial statements relating
to the Company and its consolidated subsidiaries, the
certificate required by Section 7.3;
(C) AUDIT REPORTS -- promptly upon receipt thereof, a
copy of each other report submitted to the Company or any Restricted
Subsidiary by independent accountants in connection with any
management report, special audit report or comparable analysis prepared
by them with respect to the books of the Company or any Restricted
Subsidiary;
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(D) SEC AND OTHER REPORTS -- promptly upon their becoming
available, a copy of each financial statement, report (including,
without limitation, each Quarterly Report on Form 10-Q, each Annual
Report on Form 10-K and each Current Report on Form 8-K), notice or
proxy statement sent by the Company or any Subsidiary to stockholders
generally and of each regular or periodic report and any registration
statement, prospectus or written communication (other than transmittal
letters), and each amendment thereto, in respect thereof filed by the
Company or any Subsidiary with, or received by, such Person in
connection therewith from, the National Association of Securities
Dealers, any securities exchange or the Securities and Exchange
Commission or any successor agency;
(E) ERISA --
(i) immediately upon becoming aware of the occurrence
of any
(A) "reportable event" (as defined in
section 4043 of ERISA), excluding, however, such
events as to which the PBGC by regulation shall have
waived the requirement of section 4043(a) of ERISA
that it be notified within thirty (30) days of the
occurrence of such event (provided that a failure to
meet the minimum funding standard of section 412 of
the IRC and of section 302 of ERISA shall not be so
excluded regardless of the issuance of any such
waiver of the notice requirement in accordance with
either section 4043(a) of ERISA or section 412(d) of
the IRC), or
(B) "prohibited transaction" (as defined in
section 406 of ERISA or section 4975 of the IRC),
in connection with any Pension Plan or any trust created
thereunder, a written notice specifying the nature thereof,
what action the Company is taking or proposes to take with
respect thereto and, when known, any action taken by the IRS,
the DOL or the PBGC with respect thereto, and
(ii) prompt written notice of and, where applicable, a
description of
(A) any notice from the PBGC in respect of the
commencement of any proceedings pursuant to section 4042 of
ERISA to terminate any Pension Plan or for the appointment of
a trustee to administer any Pension Plan,
(B) any distress termination notice delivered to the
PBGC under section 4041 of ERISA in respect of any Pension
Plan, and any determination of the PBGC in respect thereof,
(C) the placement of any Multiemployer Plan in
reorganization status under Title IV of ERISA,
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(D) any Multiemployer Plan becoming "insolvent" (as
defined in section 4245 of ERISA) under Title IV of ERISA, and
(E) the whole or partial withdrawal of the Company
or any ERISA Affiliate from any Multiemployer Plan or Multiple
Employer Pension Plan and the withdrawal liability incurred in
connection therewith;
(F) ACTIONS, PROCEEDINGS -- promptly after the commencement
thereof, notice of any action or proceeding relating to the Company or
any Subsidiary in any court or before any Governmental Authority or
arbitration board or tribunal as to which there is a reasonable
possibility of an adverse determination and that, if adversely
determined, would have a Material Adverse Effect;
(G) CERTAIN ENVIRONMENTAL MATTERS -- prompt written notice of
and a description of any event or circumstance that, had such event or
circumstance occurred or existed immediately prior to the Closing Date,
would have been required to be disclosed as an exception to any
statement set forth in Section 2.13;
(H) NOTICE OF DEFAULT OR EVENT OF DEFAULT -- immediately upon
becoming aware of the existence of any condition or event that
constitutes a Default or an Event of Default, a written notice
specifying the nature and period of existence thereof and what action
the Company is taking or proposes to take with respect thereto;
(I) NOTICE OF CLAIMED DEFAULT -- immediately upon becoming
aware that the holder of any Note, or of any Debt or any Security of
the Company or any Subsidiary, shall have given notice or taken any
other action with respect to a claimed Default, Event of Default,
default or event of default, a written notice specifying the notice
given or action taken by such holder and the nature of the claimed
Default, Event of Default, default or event of default and what action
the Company is taking or proposes to take with respect thereto; and
(J) REQUESTED INFORMATION -- with reasonable promptness, such
other data and information as from time to time may be reasonably
requested by any holder of Notes, including, without limitation,
(i) copies of any statement, report or certificate
furnished to any holder of any Debt or any Security of the
Company or any Subsidiary,
(ii) information requested to comply with any request
of the National Association of Insurance Commissioners in
respect of the designation of the Notes, and
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(iii) information requested to comply with 17 C.F.R.
ss.230.144A, as amended from time to time;
provided that any such request with respect to any of the data and
information referred to in the foregoing clauses (i), (ii) and (iii)
shall be deemed to be reasonable for purposes of this Section 7.1(j).
In addition to the foregoing, the Company will also deliver to each
holder of Notes:
(1) as soon as available, and in any event within
sixty (60) days of the end of each fiscal quarter, (A) a
"static pool analysis" substantially in the form of Exhibit F
attached hereto and in any event satisfactory in form and
substance to the Required Holders, which analyzes the
performance of the Company's and each Restricted Subsidiary's
Installment Contracts (segregated between the Company's North
American operations and its UK operations) on a quarterly
basis, and (B) for quarters beginning with the quarter ended
September 30, 1999, a comparable "static pool analysis" which
analyzes the performance of the Company's and each Restricted
Subsidiary's Leases on a quarterly basis (segregated between
the Company's North American operations and its UK
operations), in each case, with respect to clauses (A) and (B)
above, certified by an authorized officer of the Company as to
consistency with prior such analyses, accuracy and fairness of
presentation;
(2) promptly upon the request of the Required Holders
from time to time (but no more often than semi-annually), a
"static pool analysis" which analyzes the performance of any
Installment Contracts or Leases transferred or encumbered
pursuant to a Permitted Securitization comparable to the
static pool analysis required to be delivered pursuant to
clause (1) of this Section 7.1(j); and
(3) within five (5) Business Days after the execution
and delivery thereof, a copy of any amendment to, or waiver of
any provisions of, the Credit Agreement or Securitization
Documents (in each case, as from time to time amended,
restated, refinanced, replaced or supplemented)."
2.4 SECTION 9.1. Section 9.1 is hereby amended and restated in its
entirety as set forth below.
"9.1 Terms Defined.
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
ACCEPTABLE CONSIDERATION -- means, with respect to any Transfer of any
Property of the Company or a Restricted Subsidiary, cash consideration,
promissory notes or such other
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consideration (or any combination of the foregoing) received by such Person in
connection with such Transfer as is, in each case, determined by the Board of
Directors, in its good faith opinion, to be in the best interests of the Company
and to reflect the Fair Market Value of such Property. It is understood that the
Company's or such Restricted Subsidiary's acceptance of any such consideration
in connection with such Transfer will constitute an Investment and may,
depending upon the form of such consideration, constitute a Restricted
Investment made by the Company or such Restricted Subsidiary.
ADVANCES -- means, at any time, the dollar amount of advances in
respect of Installment Contracts, as such amount would appear in the footnotes
to the financial statements of the Company and the Restricted Subsidiaries
prepared in accordance with GAAP (if such amount would not appear net of
reserves, then net of any reserves established by the Company as an allowance
for credit losses related to such advances not expected to be recovered),
provided that Advances shall not include (a) any such advances (and the related
Installment Contracts) transferred or encumbered pursuant to a Permitted
Securitization (whether or not attributable to the Company under GAAP) unless
and until such advances (and the related Installment Contracts) are reassigned
to the Company or a Restricted Subsidiary or such encumbrances are discharged,
or (b) Charged-Off Advances to the extent that such Charged-Off Advances exceed
the portion of the Company's allowance for credit losses related to reserves
against such advances not expected to be recovered, as such allowance would
appear in the footnotes to the financial statements of the Company and the
Restricted Subsidiaries prepared in accordance with GAAP.
AFFILIATE -- means, at any time, a Person (other than a Restricted
Subsidiary):
(a) that directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common
Control with, the Company;
(b) that beneficially owns or holds five percent (5%) or more
of any class of the Voting Stock of the Company;
(c) five percent (5%) or more of the Voting Stock (or in the
case of a Person that is not a corporation, five percent (5%) or more
of the equity interest) of which is beneficially owned or held by the
Company or a Subsidiary; or
(d) that is an officer or director (or a member of the
immediate family of an officer or director) of the Company or any
Subsidiary;
at such time.
As used in this definition:
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 the ownership of voting
securities, by contract or otherwise.
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AGREEMENT, THIS -- means this agreement, as it may be amended and
restated from time to time.
ALLOWANCES FOR CREDIT LOSSES -- means those allowances or reserves
established by the Company or its Restricted Subsidiaries in arriving at
installment contracts receivable, net or Leased Vehicles, as the case may be, on
its Consolidated balance sheets, as specifically identified in such financial
statements or as disclosed in the footnotes thereto, provided that Allowances
for Credit Losses shall not include allowances or reserves attributable to
retail installment contracts or leases which are not at such time "Installment
Contracts" or "Leases", as the case may be, due to the proviso in the definition
of such terms in this Agreement.
ARLINGTON DISPOSITION -- means the sale of the business of Arlington
Investment Company and/or any of its subsidiaries for net proceeds totaling at
least $4,000,000 in cash (all of which net proceeds are used to reduce Debt
outstanding under the Credit Agreement), pursuant to (i) the sale of all or
substantially all of the assets of Arlington Investment Company and/or any of
its subsidiaries or divisions, (ii) the sale of all of the capital stock of
Arlington Investment Company and/or any of its subsidiaries or (iii) the merger
of Arlington Investment Company and/or any of its subsidiaries with and into any
Person other than the Company or a Restricted Subsidiary; in each case,
immediately prior to and immediately after the consummation of which, and after
giving effect thereto, no Default or Event of Default would exist.
BACK-END DEALER AGREEMENT(S) -- means Dealer Agreements referred to in
clause (a) of the definition of Dealer Agreements.
BANK TERM DEBT -- means term Debt of the Company or any Restricted
Subsidiary owed to banks and having an initial maturity of more than one (1)
year and a fixed amortization schedule, but in any event excluding any Debt
which by its terms is permitted to be readvanced or reborrowed, whether or not
subject to mandatory reductions or stepdowns in the availability thereof.
BANKS -- means the Banks that are parties to the Credit Agreement.
BOARD OF DIRECTORS -- means the board of directors of the Company or
any committee thereof that, in the instance, shall have the lawful power to
exercise the power and authority of such board of directors.
BUSINESS DAY -- means, at any time, a day other than a Saturday, a
Sunday or a day on which the bank designated by the holder of a Note to receive
(for such holder's account) payments on such Note is required by law (other than
a general banking moratorium or holiday for a period exceeding four (4)
consecutive days) to be closed.
CACI GUARANTY -- Section 2.17(c).
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CAC INTERNATIONAL -- means CAC International, Inc., a wholly-owned
Subsidiary of the Company.
CAC LIFE -- means Credit Acceptance Corporation Life Insurance Company,
a Wholly-Owned Restricted Subsidiary of the Company.
CAC UK -- means Credit Acceptance Corporation UK Limited, a
wholly-owned Subsidiary of the Company incorporated under the laws of England
for the purpose of acquiring substantially all of the assets of CAC
International.
CAPITAL ASSETS -- means all assets of a Person other than Intangible
Assets, inventories, accounts receivable and Investments (as defined in clause
(a) of the definition of such term) in and Securities of any other Person.
CAPITAL LEASE -- means, at any time, a lease with respect to which the
lessee is required by GAAP to recognize the acquisition of an asset and the
incurrence of a liability at such time.
CHANGE IN CONTROL -- means, at any time, either
(a) the failure of Xxxxxx X. Xxxx, his wife and children, or
trusts for his or their benefit, to beneficially own, in the aggregate,
at least thirty-five percent (35%) (by number of votes) of the Voting
Stock of the Company outstanding at such time (excluding for such
purpose Persons who own shares through any employee benefit plan of the
Company or any trust established in connection therewith), or
(b) except for the individuals and trusts identified in the
foregoing clause (a), the acquisition, holding or control (whether
directly or indirectly) by
(i) any "person" (as such term is used in section
13(d) and section 14(d)(2) of the Exchange Act as in effect on
the Closing Date), or
(ii) related Persons constituting a "group" (as such
term is used in Rule 13d-5 under the Exchange Act as in effect
on the Closing Date),
of beneficial ownership of more than twenty-five percent (25%) (by
number of votes) of the Voting Stock of the Company outstanding at such
time (excluding for such purpose Persons who own shares through any
employee benefit plan of the Company or any trust established in
connection therewith), or
(c) all or substantially all of the assets of the Company are
sold or otherwise transferred, in a single transaction or in a series
of related transactions, to any "person" or "group of persons" (as such
terms are used in section 13(d)(3) of the Exchange Act as in effect on
the Closing Date).
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CHARGED-OFF ADVANCES -- means those Advances which the Company or any
of its Restricted Subsidiaries has determined, based on the application of a
static pool analysis or otherwise are completely or partially impaired, to the
extent of such impairment.
CHARGED-OFF LEASE ADVANCES -- means those Leased Vehicles which the
Company or any of its Subsidiaries has determined, based on the application of a
static pool or comparable analysis or otherwise, are completely or partially
impaired, to the extent of such impairment.
CLEANUP CALL(S) -- means
(a) in the case of an optional cleanup call, a cleanup call to
be exercised at the option of the Company or a Special Purpose
Subsidiary under the terms of the applicable Permitted Securitization
(provided that, both before and after giving effect thereto, no Default
or Event of Default has occurred and is continuing when such option is
exercised), in an amount not in excess of (i) Fifteen Percent (15%) of
the initial amount received by the Company or the Special Purpose
Subsidiary pursuant to such Permitted Securitization (before fees and
other deductions), it being understood that, for purposes of this
clause (a)(i) of this definition, each tranche of a multi-tranche
Permitted Securitization shall be considered a separate Permitted
Securitization or (ii) in the case of any Securitization Transaction
structured on a revolving basis, Fifteen Percent (15%) of the maximum
aggregate availability at any time to the Company or a Special Purpose
Subsidiary, and
(b) in the case of a mandatory cleanup call, a mandatory
cleanup call to be exercised at the option of the investors under the
terms of the applicable Permitted Securitization(s), in an amount not
in excess of (i) Two and One-Half Percent (2 1/2%) of the aggregate
amount received by the Company or the Special Purpose Subsidiary
pursuant to the Permitted Securitization (before fees and other
deductions), it being understood that, for purposes of this clause
(b)(i) of this definition, all tranches of a multi-tranche Permitted
Securitization shall be together be considered one Permitted
Securitization, or (ii) in the case of any Securitization Transaction
structured on a revolving basis, Two and One-Half Percent (2 1/2%) of
the maximum aggregate availability at any time to the Company or a
Special Purpose Subsidiary,
in either case, such Cleanup Call being accompanied by the repurchase of or
release of encumbrances on Advances, Leased Vehicles, Installment Contracts
(whether assigned outright or related to Advances) or Leases (whether assigned
outright or related to Leased Vehicles), as the case may be, previously
transferred or encumbered pursuant to such Permitted Securitization in at least
the amount of such cleanup call.
CLOSING -- Section 1.2(b).
CLOSING DATE -- Section 1.2(b).
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COMPANY -- introductory paragraph hereof.
CONSOLIDATED CURRENT LIABILITIES -- means, at any time, the aggregate
amount of current liabilities of the Company and the Restricted Subsidiaries,
determined at such time after eliminating inter-company transactions among the
Company and the Restricted Subsidiaries and liabilities incurred solely by a
Special Purpose Subsidiary pursuant to a Permitted Securitization but
attributable to the Company or a Restricted Subsidiary under GAAP.
CONSOLIDATED FIXED CHARGES -- means, for any period, the sum of
(a) Consolidated Interest Expense for such period, plus
(b) the amount payable in respect of such period with respect
to Operating Rentals payable by the Company and the Restricted
Subsidiaries, determined after eliminating intercompany transactions
among the Company and the Restricted Subsidiaries.
CONSOLIDATED INCOME AVAILABLE FOR FIXED CHARGES -- means, for any
period, the sum of
(a) Consolidated Net Income, plus
(b) the aggregate amount of income taxes, depreciation,
amortization (including the amortization of any excess servicing asset)
and Consolidated Fixed Charges (to the extent, and only to the extent,
that such aggregate amount was reflected in the computation of
Consolidated Net Income for such period), plus
(c) with respect to the periods ending September 30, 1997,
December 31, 1997, March 31, 1998 and June 30, 1998, $30,000,000
representing the portion of the non-cash charge recorded by the Company
during the period ended September 30, 1997 attributable to the present
valuing of future cash flows consistent with Statement of Financial
Accounting Standards No. 114 `Accounting by Creditors for Impairment of
a Loan', plus
(d) with respect to the periods ending September 30, 1999,
December 31, 1999, March 31, 2000 and June 30, 2000, $47,300,000
representing the accounting adjustment to the Company's reserve against
advances recorded by the Company during the period ended September 30,
1999,
in each case accrued for such period by the Company and the Restricted
Subsidiaries, determined on a consolidated basis for such Persons.
CONSOLIDATED INTEREST EXPENSE -- means, for any period, the amount of
interest accrued or capitalized on, or with respect to, Consolidated Total Debt
for such period, including, without limitation, amortization of debt discount,
imputed interest on Capital Leases and interest on the Notes.
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CONSOLIDATED NET INCOME -- means, for any period, net earnings (or
loss) after income taxes of the Company and the Restricted Subsidiaries,
determined on a consolidated basis for such Persons, but excluding:
(a) net earnings (or loss) of any Restricted Subsidiary
accrued prior to the date it became a Restricted Subsidiary;
(b) any gain or loss (net of tax effects applicable thereto)
resulting from the sale, conversion or other disposition of Capital
Assets other than in the ordinary course of business;
(c) any extraordinary or nonrecurring gains or losses
(including, without limitation, any gain on sale generated by a
Permitted Securitization, except to the extent the Company has received
a cash benefit therefrom in the applicable reporting period); and any
interest income generated by a Permitted Securitization, except to the
extent the Company has received a cash benefit therefrom in the
applicable reporting period;
(d) any gain arising from any reappraisal or write-up of
assets;
(e) any portion of the net earnings of any Restricted
Subsidiary that for any reason is unavailable for payment of dividends
to the Company or a Restricted Subsidiary, provided that the net
earnings of CAC Life that are unavailable (due to regulatory
requirements applicable to CAC Life) for the payment of dividends to
the Company may be included in the determination of Consolidated Net
Income, to the extent that such unavailable net earnings do not exceed
five percent (5%) of Consolidated Net Income (determined without giving
effect to this proviso), and provided, further that so long as the net
earnings of CAC Life shall be included in Consolidated Net Income
pursuant to the preceding proviso, CAC Life shall not have outstanding
any Debt, regardless of whether any other Restricted Subsidiary may be
permitted to have Debt outstanding at such time by reason of a waiver
of or an amendment to Section 6.1(d);
(f) any gain or loss (net of tax effects applicable thereto)
during such period resulting from the receipt of any proceeds of any
insurance policy;
(g) any earnings of any Person acquired by the Company or any
Restricted Subsidiary through purchase, merger or consolidation or
otherwise, or earnings of any Person substantially all of whose assets
have been acquired by the Company or any Restricted Subsidiary, for any
period prior to the date of acquisition;
(h) net earnings of any Person (other than a Restricted
Subsidiary) in which the Company or any Restricted Subsidiary shall
have an ownership interest unless such net
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earnings shall have actually been received by the Company or such
Restricted Subsidiary in the form of cash distributions; and
(i) any restoration during such period to income of any
contingency reserve, except to the extent that provision for such
reserve
(i) was made during such period out of income accrued
during such period,
(ii) was made in connection with the Company's
program of financing Installment Contracts or Leases
(A) to provide for warranty claims
for which the Company may be responsible, or
(B) to cover credit losses in
connection with Advances, Installment
Contracts, Leased Vehicles or Leases,
or
(iii) is required by applicable law with respect to
reserves for claims related to the operation of CAC Life,
provided that the aggregate restoration to income during any period
from reserves described in clause (ii) and clause (iii) above shall not
exceed ten percent (10%) of Consolidated Net Income for such period,
prior to giving effect to such restoration.
CONSOLIDATED NET TANGIBLE ASSETS -- means, at any time, the remainder
of
(a) Consolidated Total Assets at such time minus
(b) the sum of
(i) Consolidated Current Liabilities at such time,
plus
(ii) Intangible Assets of the Company and the
Restricted Subsidiaries as would be reflected on a
consolidated balance sheet of such Persons at such time.
CONSOLIDATED SENIOR FUNDED DEBT -- means, at any time, Funded Debt of
the Company and the Restricted Subsidiaries, other than Subordinated Funded
Debt, determined on a consolidated basis for such Persons at such time.
CONSOLIDATED SUBORDINATED FUNDED DEBT -- means, at any time, the
aggregate amount of Subordinated Funded Debt of the Company and the Restricted
Subsidiaries, determined on a consolidated basis for such Persons at such time.
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CONSOLIDATED TANGIBLE NET WORTH -- means, at any time, the result of
(a) the shareholders' equity of the Company and its
Subsidiaries, minus
(b) the retained earnings of the Unrestricted Subsidiaries,
minus
(c) all Intangible Assets of the Company and the Subsidiaries,
minus
(d) without duplication, (i) any excess servicing asset
resulting from the Transfer, pursuant to a Permitted
Securitization, of Advances, Leased Vehicles, Installment
Contracts (whether assigned outright or related to
Advances) or Leases (whether assigned outright or related
to Leased Vehicles) and (ii) the equity interest in any
Special Purpose Subsidiary to the extent such equity
interest is included in Consolidated Net Worth,
in each case as would be reflected on a consolidated balance sheet of such
Persons at such time. As used in this definition, "Consolidated Net Worth"
means, at any time, the amount of "consolidated total assets" less the amount of
"consolidated total liabilities", as each would be reflected on a consolidated
balance sheet of the Company and its Subsidiaries at such time, prepared in
accordance with GAAP.
CONSOLIDATED TOTAL ASSETS -- means, at any time, all assets of the
Company and the Restricted Subsidiaries, determined on a consolidated basis for
such Persons at such time (but excluding from the determination thereof, without
duplication, (a) any excess servicing asset resulting from the Transfer,
pursuant to a Permitted Securitization, of Advances, Leased Vehicles,
Installment Contracts (whether assigned outright or related to Advances) or
Leases (whether assigned outright or related to Leased Vehicles) and (b) the
equity interest in any Special Purpose Subsidiary to the extent such equity
interest is included in the assets of the Company and the Restricted
Subsidiaries, determined on a consolidated basis in accordance with GAAP for
such Persons at such time).
CONSOLIDATED TOTAL DEBT -- means, at any time, the aggregate amount of
Funded Debt and Current Debt of the Company and the Restricted Subsidiaries,
determined on a consolidated basis for such Persons at such time.
CONTROL EVENT -- means the execution of any written agreement that,
when fully performed by the parties thereto, would result in a Change in
Control.
CONTROL PREPAYMENT DATE -- Section 4.3(a).
CREDIT AGREEMENT -- means the Credit Agreement described in Part 2.2(b)
of Annex 3, as may be amended, restated, refinanced, replaced, supplemented or
otherwise modified from time to time.
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CURRENT DEBT -- means, with respect to any Person, at any time, all
Debt of such Person other than Funded Debt.
DEALER -- means a Person engaged in the business of the retail sale or
lease of new or used motor vehicles, including businesses exclusively selling or
leasing used motor vehicles and businesses principally selling or leasing new
motor vehicles, but having a used vehicle department, including any such Person
which constitutes an Affiliate of the Company.
DEALER AGREEMENTS -- means the sales and/or servicing agreements
between the Company or its Subsidiaries and a participating Dealer which sets
forth the terms and conditions under which the Company or its Subsidiaries (a)
accepts, as nominee for such Dealer, the assignment of Installment Contracts or
Leases for purposes of administration, servicing and collection and under which
the Company or its Subsidiary may make advances to such Dealers included in
Advances or Leased Vehicles and (b) accepts outright assignments of Installment
Contracts or Leases from Dealers or funds Installment Contracts or Leases
originated by such Dealer in the name of the Company or any of its Subsidiaries,
in each case as such agreements may be in effect from time to time.
DEBT -- means, with respect to any Person, without duplication:
(a) its liabilities for borrowed money (whether or not
evidenced by a Security);
(b) any liabilities secured by any Lien existing on Property
owned by such Person (whether or not such liabilities have been
assumed);
(c) its liabilities in respect of Capital Leases;
(d) the present value of all payments due under any
arrangement for retention of title or any conditional sale agreement
(other than a Capital Lease) discounted at the implicit rate, if known,
with respect thereto or, if unknown, at eight and eighty-seven
one-hundredths percent (8.87%) per annum; and
(e) its Guaranties of any liabilities of another Person
constituting liabilities of a type set forth above.
Except as provided in Section 6.1(a)(i), neither Debt of any Special Purpose
Subsidiary which is an Unrestricted Subsidiary incurred pursuant to a Permitted
Securitization (whether or not such Debt is reflected on the consolidated
balance sheet of the Company and its Restricted Subsidiaries prepared in
accordance with GAAP) nor dealer holdbacks shall be considered Debt of the
Company or any Restricted Subsidiary.
DEFAULT -- means an event or condition the occurrence of which would,
with the lapse of time or the giving of notice or both, become an Event of
Default.
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DOL -- means the Department of Labor and any successor agency.
DOLLARS or $ -- means United States of America dollars.
ENVIRONMENTAL PROTECTION LAWS -- means any federal, state, county,
regional or local law, statute or regulation (including, without limitation,
CERCLA, RCRA and XXXX) enacted in connection with or relating to the protection
or regulation of the environment, including, without limitation, those laws,
statutes and regulations regulating the disposal, removal, production, storing,
refining, handling, transferring, processing or transporting of Hazardous
Substances, and any regulations issued or promulgated in connection with such
statutes by any Governmental Authority, and any orders, decrees or judgments
issued by any court of competent jurisdiction in connection with any of the
foregoing.
As used in this definition:
CERCLA -- means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended from time to time
(by XXXX or otherwise), and all rules and regulations promulgated in
connection therewith.
RCRA -- means the Resource Conservation and Recovery Act of
1976, as amended from time to time, and all rules and regulations
promulgated in connection therewith.
XXXX -- means the Superfund Amendments and Reauthorization Act
of 1986, as amended from time to time, and all rules and regulations
promulgated in connection therewith.
EQUITY OFFERING -- means the issuance and sale for cash by the Company
or any of its Restricted Subsidiaries of additional capital stock or other
equity interests, other than upon the exercise of employee and dealer stock
options pursuant to stock option plans maintained or offered by the Company or
its Restricted Subsidiaries in the ordinary course of business and not in
anticipation of any sale of capital stock or equity interests to the general
public.
ERISA -- means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
ERISA AFFILIATE -- means any corporation or trade or business that:
(a) is a member of the same controlled group of corporations
(within the meaning of section 414(b) of the IRC) as the Company; or
(b) is under common control (within the meaning of section
414(c) of the IRC) with the Company.
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EVENT OF DEFAULT -- Section 8.1.
EXCHANGE ACT -- means the Securities Exchange Act of 1934, as amended.
EXCLUDED TRANSFERS -- Section 6.8(a).
FAIR MARKET VALUE -- means, at any time, with respect to any Property,
the sale value of such Property that would be realized in an arm's-length sale
at such time between an informed and willing buyer and an informed and willing
seller under no compulsion to buy or sell, respectively.
FIRST AMENDED AND RESTATED NOTES -- Section 1.1(b).
FOREIGN PENSION PLAN -- means any plan, fund or other similar program
(a) established or maintained outside of the United States of
America by any one or more of the Company or the Subsidiaries primarily
for the benefit of the employees (substantially all of whom are aliens
not residing in the United States of America) of the Company or such
Subsidiaries which plan, fund or other similar program provides for
retirement income for such employees or results in a deferral of income
for such employees in contemplation of retirement, and
(b) not otherwise subject to ERISA.
401(K) PLAN -- Section 2.12(a).
FOURTH AMENDMENT -- means the Fourth Amendment, dated as of December 1,
1999, to this Agreement.
FUNDED DEBT -- means, at any time of determination, with respect to any
borrower, all Debt of such borrower that is expressed to mature more than one
(1) year from the date of the creation thereof or that is extendible or
renewable at the option of such borrower to a time more than one (1) year after
the date of the creation thereof (whether or not at such time of determination
such Debt is payable within one (1) year).
GAAP -- means accounting principles as promulgated from time to time in
statements, opinions and pronouncements by the American Institute of Certified
Public Accountants and the Financial Accounting Standards Board and in such
statements, opinions and pronouncements of such other entities with respect to
financial accounting of for-profit entities as shall be accepted by a
substantial segment of the accounting profession in the United States.
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GOVERNMENTAL AUTHORITY -- means:
(a) the government of
(i) the United States of America and any state or
other political subdivision thereof, or
(ii) any other jurisdiction (y) in which the Company
or any Subsidiary conducts all or any part of its business or
(z) that asserts jurisdiction over the conduct of the affairs
or Properties of the Company or any Subsidiary; and
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
GROSS ADVANCES -- means, as of any applicable date of determination,
the dollar amount of Advances, plus any reserves established by the Company as
an allowance for credit losses related to such advances not expected to be
recovered, plus Charged-Off Advances to the extent such Charged-Off Advances
exceed the amount of such reserves.
GROSS CURRENT INSTALLMENT CONTRACT RECEIVABLES -- means, as of any
applicable date of determination, the aggregate amount of Gross Installment
Contract Receivables, less the amount of such receivables which are classified
as being on "non-accrual" in the financial statements of the Company and its
Restricted Subsidiaries prepared in accordance with GAAP.
GROSS CURRENT LEASED VEHICLES -- means, as of any applicable date of
determination, the aggregate amount of Gross Leased Vehicles, less the amount of
Leased Vehicles in respect of which the underlying Leases are classified as
being on "non-accrual" in the financial statements of the Company and its
Restricted Subsidiaries prepared in accordance with GAAP.
GROSS DEALER HOLDBACKS -- means the aggregate amount, as of any
applicable date of determination, of dealer holdbacks utilized in arriving at
"Dealer holdbacks, net" on the consolidated balance sheet of the Company and its
Restricted Subsidiaries, as disclosed in the footnotes thereto, provided that
Gross Dealer Holdbacks shall not include the amount of dealer holdbacks
attributable to retail installment contracts which are not at such time
"Installment Contracts" due to the proviso in the definition of such term in
this Agreement.
GROSS INSTALLMENT CONTRACT RECEIVABLES -- means, as of any applicable
date of determination, the aggregate amount of installment contract receivables
utilized in arriving at "Installment contract receivables, net" on the
consolidated balance sheet of the Company and its Restricted Subsidiaries, as
determined in the footnotes thereto, provided that Gross Installment Contract
Receivables shall not include receivables attributable to retail installment
contracts which are not at such time "Installment Contracts" due to the proviso
in the definition of such term in this Agreement.
GROSS LEASED VEHICLES -- means, as of any applicable date of
determination, the dollar amount of Leased Vehicles, plus any reserves
established by the Company as an allowance for credit
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losses related to such Leased Vehicles not expected to be recovered, plus
Charged-Off Lease Advances to the extent such Charged-Off Lease Advances exceed
the amount of such reserves, provided that Gross Leased Vehicles shall not
include the dollar amount of Leased Vehicles attributable to leases which are
not at such time "Leases" due to the proviso in the definition of such term in
this Agreement.
GUARANTY -- means, with respect to any Person (for the purposes of this
definition, the "Guarantor"), any obligation (except the endorsement in the
ordinary course of business of negotiable instruments for deposit or collection)
of the Guarantor guaranteeing or in effect guaranteeing (including, without
limitation, by means of a surety bond, letter of credit or other similar
instrument, whether or not designated as a "guaranty") any indebtedness,
dividend or other obligation of any other Person (the "Primary Obligor") in any
manner, whether directly or indirectly, including, without limitation,
obligations incurred through an agreement, contingent or otherwise, by the
Guarantor:
(a) to purchase such indebtedness or obligation or any
Property constituting security therefor;
(b) to advance or supply funds
(i) for the purpose of payment of such indebtedness
or obligation, or
(ii) to maintain working capital or other balance
sheet (or statement of financial condition) condition or any
income statement condition of the Primary Obligor or otherwise
to advance or make available funds for the purchase or payment
of such indebtedness or obligation;
(c) to lease Property or to purchase Securities or other
Property or services primarily for the purpose of assuring the owner of
such indebtedness or obligation of the ability of the Primary Obligor
to make payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of the indebtedness or
obligation of the Primary Obligor against loss in respect thereof.
For purposes of computing the amount of any Guaranty in connection with any
computation of indebtedness or other liability, it shall be assumed that the
indebtedness or other liabilities that are the subject of such Guaranty are
direct obligations of the issuer of such Guaranty. Without limiting the
generality of the foregoing, it is agreed and understood that each general
partner of a partnership shall be deemed to be a Guarantor of all indebtedness
and other obligations of such partnership and such partnership shall be deemed
to be the Primary Obligor in respect of such indebtedness and other obligations.
For purposes of the immediately preceding sentence, a Person shall be deemed to
be a general partner of any so-called "joint venture" or other arrangement
(whether or not constituting a partnership), and such joint venture or other
arrangement shall be deemed to be a partnership, if,
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pursuant to applicable law, by contract or otherwise, such Person is liable,
directly or indirectly, contingently or otherwise, either individually or
jointly with one or more other Persons, for the indebtedness or other
obligations of such joint venture or other arrangement.
HAZARDOUS SUBSTANCES -- means any and all pollutants, contaminants,
toxic or hazardous wastes and any other substances that might pose a hazard to
health or safety, the removal of which may be required or the generation,
manufacture, refining, production, processing, treatment, storage, handling,
transportation, transfer, use, disposal, release, discharge, spillage, seepage
or filtration of which is or shall be, in each of the foregoing cases,
restricted, prohibited or penalized by any applicable law.
INSTALLMENT CONTRACTS -- means retail installment contracts for the
sale of new or used motor vehicles assigned outright by Dealers to the Company
or a Restricted Subsidiary or written by Dealers in the name of the Company or a
Restricted Subsidiary (and funded by the Company or such Restricted Subsidiary)
or assigned by Dealers to the Company or a Restricted Subsidiary, as nominee for
the Dealer, for administration, servicing and collection, in each case pursuant
to an applicable Dealer Agreement; provided, however, that to the extent the
Company or any Restricted Subsidiary transfers or encumbers its interest in any
Installment Contracts (or any Advances related thereto) pursuant to a Permitted
Securitization, such Installment Contracts shall, from and after the date of
such transfer or encumbrance, cease to be considered Installment Contracts under
this Agreement (reducing the amount of Advances by the outstanding amount of
such advances, if any, attributable to such Installment Contracts) unless and
until such installment contracts are reassigned to the Company or a Restricted
Subsidiary or such encumbrances are discharged.
INSTITUTIONAL INVESTOR -- means the Purchasers, any affiliate of any of
the Purchasers and any holder or beneficial owner of Notes that is an
"accredited investor" as defined in section 2(15) of the Securities Act or a
"qualified institutional buyer" as defined in 17 C.F.R. ss.230.144A, as amended
from time to time.
INTANGIBLE ASSETS -- means any assets of a Person that would be
classified as "intangible assets" under GAAP, including, without limitation,
goodwill, trademarks, trade names, patents, copyrights, franchises and other
intangible assets of such Person.
INTERCREDITOR AGREEMENT -- means the Intercreditor Agreement, dated as
of December 15, 1998, by and among the Banks, the holders of Notes, the holders
of "Future Debt" (as defined in such agreement) and Comerica Bank, as collateral
agent, as such agreement may be amended from time to time.
INVESTMENT -- means any investment, made in cash or by delivery of
Property, by the Company or any Restricted Subsidiary:
(a) in any Person, whether by acquisition of stock,
indebtedness or other obligation or Security, or by loan, Guaranty,
advance, capital contribution or otherwise; or
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(b) in any Property.
Investments shall be valued at cost less any net return of capital through the
sale or liquidation thereof or other return of capital thereon. Any designation
of a Subsidiary as an Unrestricted Subsidiary pursuant to Section 6.17 shall be
deemed to be an Investment, in an amount equal to the net worth of such
Subsidiary, at the time of such designation and any Investments of a Person
existing at the time it shall become a Restricted Subsidiary shall be deemed to
have been made immediately after such time.
INVESTMENT GRADE RATING -- means a rating of at least, but not lower
than:
(i) "Baa3" by Xxxxx'x Investors Service, Inc.,
(ii) "BBB-" by Standard & Poor's Ratings Group,
(iii) a category "1" or category "2" designation from the
National Association of Insurance Commissioners, and
(iv) "BBB-" by Fitch Investors Services, Inc.
IRC -- means the Internal Revenue Code of 1986, together with all rules
and regulations promulgated pursuant thereto, as amended from time to time.
IRS -- means the Internal Revenue Service and any successor agency.
LEASED VEHICLES -- means, as of any applicable date of determination,
the dollar amount of advances in respect of Leases, as such amount would appear
in the footnotes to the financial statements of the Company and its Restricted
Subsidiaries prepared in accordance with GAAP or, if specifically identified,
elsewhere in such financial statements, net of depreciation on the motor
vehicles which are covered by Leases with respect to which such Leased Vehicles
are attributable (and if such amount is not shown net of such reserves, then net
of any reserves established by the Company as an allowance for credit losses
related to such advances not expected to be recovered), provided that Leased
Vehicles shall not include (a) the amount of any such advances attributable to
any Leases transferred or encumbered pursuant to a Permitted Securitization
(whether or not attributable to the Company under GAAP) unless and until such
advances (and the related Leases) are reassigned to the Company or a Restricted
Subsidiary or such encumbrances are discharged, or (b) Charged-Off Lease
Advances, to the extent that such Charged-Off Lease Advances (i) exceed the
portion of the allowance for credit losses related to reserves against such
advances not expected to be recovered, as such allowance would appear in the
footnotes to the financial statements of the Company and its Restricted
Subsidiaries prepared in accordance with GAAP at such time or if specifically
identified, elsewhere in such financial statements and (ii) have not already
been eliminated in the determination of Leased Vehicles.
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LEASE(S) -- means the retail agreements for the lease of motor vehicles
assigned outright by Dealers to the Company or a Restricted Subsidiary or
written by a Dealer in the name of the Company or a Restricted Subsidiary (and
funded by the Company or such Restricted Subsidiary) or assigned by Dealers to
the Company or a Restricted Subsidiary, as nominee for the Dealer, for
administration, servicing and collection, in each case pursuant to an applicable
Dealer Agreement; provided, however, that to the extent the Company or any
Restricted Subsidiary transfers or encumbers its interest in any Leases pursuant
to a Permitted Securitization, such Leases shall, from and after the date of
such transfer or encumbrance, cease to be considered Leases under this Agreement
(reducing the amount of Leased Vehicles by the outstanding amount of Leased
Vehicles attributable to such Leases) unless and until such Leases are
reassigned to the Company or a Restricted Subsidiary or such encumbrances have
been discharged.
LETTER OF CREDIT FACILITY -- means a letter of credit issued by a
commercial bank for the account of the Company or a Restricted Subsidiary,
solely in support of the Company's or such Restricted Subsidiary's obligations
in respect of commercial paper issued by the Company or such Restricted
Subsidiary.
LIEN -- means any interest in Property securing an obligation owed to,
or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, and including, but not
limited to, the security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale, sale with recourse or a trust receipt, or a lease,
consignment or bailment for security purposes. The term "Lien" includes, without
limitation, reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting real Property and includes, without limitation, with
respect to stock, stockholder agreements, voting trust agreements, buy-back
agreements and all similar arrangements. For the purposes hereof, the Company
and each Subsidiary shall be deemed to be the owner of any Property that it
shall have acquired or holds subject to a conditional sale agreement, Capital
Lease or other arrangement pursuant to which title to the Property has been
retained by or vested in some other Person for security purposes, and such
retention or vesting is deemed a Lien. The term "Lien" does not include negative
pledge clauses in agreements relating to the borrowing of money or the
obligation of the Company (a) to remit monies held by it in connection with
dealer holdbacks (including, without limitation, with respect to Leases or
Installment Contracts), claims or refunds under insurance policies, or claims or
refunds under service contracts or (b) to make deposits in trust or otherwise as
required under reinsurance agreements or pursuant to state regulatory
requirements, unless the Company has encumbered its interest in such monies or
deposits or in other Property of the Company to secure such obligations. The
term "Lien" also does not include the rights of the "Agent" (as defined in the
Credit Agreement) and the Banks to money, consisting either of net proceeds of
any "Permitted Securitization" (as defined in the Credit Agreement) or net
proceeds from the issuance of "Future Debt" (as defined in the Credit Agreement)
deposited by the Company or any Restricted Subsidiary in a cash collateral
account, in lieu of the Company's reduction of indebtedness outstanding under
the Credit Agreement, for the purpose of avoiding breakage charges in connection
with "Eurocurrency-based Advances" (as defined in the
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Credit Agreement) under the Credit Agreement, all in accordance with clause (d)
of the definition of "Permitted Securitization" and clause (d) of the definition
of "Funding Conditions" in the Credit Agreement, as applicable; it being also
understood and agreed that the holders of Notes shall have no rights to a
security interest in or Lien on the money so deposited.
MAKE-WHOLE AMOUNT -- means, with respect to any date (a "Prepayment
Date") and any principal amount ("Prepaid Principal") of Notes required for any
reason to be paid prior to the regularly scheduled maturity thereof on such
Prepayment Date, the greater of
(a) Zero Dollars ($0), and
(b) (i) the sum of the present values of the then remaining
scheduled payments of principal and interest that would be
payable in respect of such Prepaid Principal but for such
prepayment or acceleration, minus
(ii) the sum of
(1) the amount of such Prepaid Principal, plus
(2) the amount of interest accrued on such
Prepaid Principal since the scheduled interest payment
date immediately preceding such Prepayment Date.
In determining such present values, a discount rate equal to the Make-Whole
Discount Rate with respect to such Prepayment Date and Prepaid Principal divided
by two (2), and a discount period of six (6) months of thirty (30) days each,
shall be used.
As used in this definition:
Make-Whole Discount Rate -- means, with respect to any
Prepayment Date and Prepaid Principal, the sum of
(a) the per annum percentage rate (rounded to the
nearest three (3) decimal places) equal to the bond equivalent
yield to maturity derived from the Bloomberg Rate with respect
to such Prepaid Principal, or if such Bloomberg Rate is not
then available, the Applicable H.15 Rate, in either case,
determined as of the date that is two (2) Business Days prior
to such Payment Date, plus
(b) fifty one-hundredths percent (0.50%) per annum.
For purposes of clause (a) of the preceding sentence, if no United
States Treasury obligation with a Treasury Constant Maturity
corresponding exactly to the Weighted Average Life to Maturity of such
Prepaid Principal is listed, the yields for the two (2) published
United States
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Treasury obligations with Treasury Constant Maturities most closely
corresponding to such Weighted Average Life to Maturity (one (1) with a
longer maturity and one (1) with a shorter maturity, if available)
shall be calculated pursuant to the immediately preceding sentence and
the Make-Whole Discount Rate shall be interpolated or extrapolated from
such yields on a straight-line basis.
Applicable H.15 -- means, at any time, United States Federal
Reserve Statistical Release H.15(519) or its successor publication then
most recently published and available to the public or, if no such
successor publication is available, then any other source of current
information in respect of interest rates on securities of the United
States of America that is generally available and, in the judgment of
the Required Holders, provides information reasonably comparable to the
H.15(519) report.
Applicable H.15 Rate -- means, at any time with respect to any
Prepaid Principal, the then most current annual yield to maturity of
the hypothetical United States Treasury obligation listed in the
Applicable H.15 for the then most recently available day in such
Applicable H.15 with a Treasury Constant Maturity (as defined in such
Applicable H.15) equal to the Weighted Average Life to Maturity of such
Prepaid Principal determined as of such Prepayment Date. If no such
United States Treasury obligation with a Treasury Constant Maturity
corresponding exactly to such Weighted Average Life to Maturity is
listed, then the yields for the two (2) published United States
Treasury obligations with Treasury Constant Maturities most closely
corresponding to such Weighted Average Life to Maturity (one (1) with a
longer maturity and one (1) with a shorter maturity, if available)
shall be calculated pursuant to the immediately preceding sentence and
the Make-Whole Discount Rate shall be interpolated or extrapolated from
such yields on a straight-line basis.
Bloomberg Rate -- means, on any date, with respect to any
Prepaid Principal, the yields reported, as of 10:00 A.M. (New York City
time) on such date with respect to such Prepaid Principal, on the
display designated as "USD" on the Bloomberg Financial Market Service
(or such other display as may replace Page USD on the Bloomberg
Financial Market Service) for actively traded U.S. Treasury securities
having a maturity equal to the Weighted Average Life to Maturity of
such Prepaid Principal as of such date. If no such U.S. Treasury
security with a maturity corresponding exactly to the Weighted Average
Life to Maturity of such Prepaid Principal is reported, then the yields
for the two (2) U.S. Treasury securities with maturities most closely
corresponding to the Weighted Average Life to Maturity of such Prepaid
Principal (one (1) with a longer maturity and one (1) with a shorter
maturity, if available) shall be calculated pursuant to the immediately
preceding sentence and the Make-Whole Discount Rate shall be
interpolated or extrapolated from such yields on a straight-line basis.
Weighted Average Life to Maturity -- means, with respect to
any Prepayment Date and Prepaid Principal, the number of years obtained
by dividing the Remaining Dollar-Years of such Prepaid Principal
determined on such Prepayment Date by such Prepaid Principal.
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Remaining Dollar-Years -- means, with respect to any
Prepayment Date and Prepaid Principal, the result obtained by
(a) multiplying, in the case of each required payment
of principal (including payment at maturity) that would be
payable in respect of such Prepaid Principal but for such
prepayment,
(i) an amount equal to such required payment of
principal, by
(ii) the number of years (calculated to the
nearest one-twelfth (1/12)) that will elapse between
such Prepayment Date and the date such required
principal payment would be due if such Prepaid
Principal had not been so prepaid, and
(b) calculating the sum of each of the products
obtained in the preceding subsection (a).
MANDATORY PRINCIPAL AMORTIZATION PAYMENT -- Section 4.1.
MARGIN SECURITY -- means "margin stock" within the meaning of
Regulations G, T, U and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R., Chapter II, as amended from time to time.
MATERIAL ADVERSE EFFECT -- means a material adverse effect on the
business, profits, Properties or financial condition of the Company and the
Restricted Subsidiaries, taken as a whole, or on the ability of the Company to
perform its obligations set forth herein and in the Notes.
MONTANA DISPOSITION -- means the sale of Montana Investment Group, Inc.
and/or any of its subsidiaries for net proceeds totaling at least $16,000,000 in
cash (all of which net proceeds are used to reduce Debt outstanding under the
Credit Agreement), pursuant to (i) the sale of all or substantially all of the
assets of Montana Investment Group, Inc. and/or any of its subsidiaries, (ii)
the sale of all of the capital stock of Montana Investment Group, Inc. or (iii)
the merger of Montana Investment Group, Inc. with and into any Person other than
the Company or a Restricted Subsidiary; in each case, immediately prior to and
immediately after the consummation of which, and after giving effect thereto, no
Default or Event of Default would exist.
MULTIEMPLOYER PLAN -- means any "multiemployer plan" (as defined in
section 3 of ERISA) in respect of which the Company or any ERISA Affiliate is an
"employer" (as defined in section 3 of ERISA).
MULTIPLE EMPLOYER PENSION PLAN -- means any "employee benefit plan"
within the meaning of section 3(3) of ERISA (other than a Multiemployer Plan),
subject to Title IV of ERISA,
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constituting a "single-employer plan" (as defined in section 4001 of ERISA)
which has two (2) or more "contributing sponsors" (as defined in section 4001 of
ERISA), at least two (2) of which are not under "common control" (as defined in
section 4001 of ERISA) and to which the Company or any ERISA Affiliate
contribute.
NET DEALER HOLDBACKS -- means, at any time, (a) Gross Dealer Holdbacks
minus (b) Advances at such time.
NET INSTALLMENT CONTRACT RECEIVABLES -- means, at any time, the amount
computed as the result of (a) Gross Installment Contract Receivables minus (b)
Unearned Finance Charges minus (c) Allowances for Credit Losses relating to
Installment Contracts (but excluding any such allowances which are related to
Leases), at such time.
NET LEASED VEHICLE DEALER HOLDBACKS -- means, at any time, with respect
to Dealer Agreements relating to Leases, amounts due to Dealers at such time
from collections of Leased Vehicles by the Company or any Restricted Subsidiary
(other than with respect to Leases which have been transferred or encumbered
pursuant to a Permitted Securitization and (x) have not been reassigned to the
Company or a Restricted Subsidiary or (y) with respect to which such
encumbrances have not been discharged) pursuant to the applicable Dealer
Agreements.
1994 NOTE PURCHASE AGREEMENT -- means and includes the separate Note
Purchase Agreements, each dated as of October 1, 1994, between the Company and
each of the holders, from time to time, of the Company's 8.87% Senior Notes due
November 1, 2001 issued pursuant thereto, each as amended by the First Amendment
to Note Purchase Agreement dated as of November 15, 1995 and the Second
Amendment to Note Purchase Agreement dated as of August 29, 1996.
1996 NOTE PURCHASE AGREEMENT -- means and includes the separate Note
Purchase Agreements, each dated as of August 1, 1996, between the Company and
each of the holders, from time to time, of the Company's 7.99% Senior Notes due
July 1, 2001 issued pursuant thereto.
NON-RECOURSE DEBT -- means Debt of a partnership, joint venture or
similar entity in which the Company or a Restricted Subsidiary is a participant,
so long as the holder or holders of such Debt shall have no rights or recourse
against any Property of the Company or any Restricted Subsidiary, other than
Property used solely in connection with such partnership, joint venture or
similar entity.
NOTE PURCHASE AGREEMENTS -- Section 1.2(c).
NOTES -- Section 1.1.
OPERATING LEASE -- means, with respect to any Person, any lease other
than a Capital Lease.
OPERATING RENTALS -- means all fixed payments that the lessee is
required to make by the terms of any Operating Lease.
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ORIGINAL NOTES -- Section 1.1(a).
OSHA -- means the Occupational Safety and Health Act of 1970, together
with all rules, regulations and standards promulgated pursuant thereto, all as
amended from time to time.
OTHER PURCHASERS -- Section 1.2(c).
OUTRIGHT DEALER AGREEMENT(S) -- means Dealer Agreements referred to in
clause (b) of the definition of Dealer Agreements.
PBGC -- means the Pension Benefit Guaranty Corporation and any
successor corporation or governmental agency.
PENSION PLAN -- means, at any time, any "employee pension benefit plan"
(as defined in section 3 of ERISA) maintained at such time by the Company or any
ERISA Affiliate for employees of the Company or such ERISA Affiliate, excluding
any Multiemployer Plan, but including any Multiple Employer Pension Plan.
PERMITTED SECURITIZATION(S) -- means each transfer or encumbrance (each
a "disposition") of specific Advances or Leased Vehicles funded under Back-End
Dealer Agreements (and any interest in or lien on the Installment Contracts,
Leases, motor vehicles or other rights relating thereto) or of specific
Installment Contracts or Leases (and any interest in or lien on motor vehicles
or other rights relating thereto) arising under Outright Dealer Agreements, in
each case by the Company or one or more Restricted Subsidiaries to a Special
Purpose Subsidiary conducted in accordance with the following requirements:
(a) Each disposition shall identify with reasonable
certainty the specific Advances, Leased Vehicles,
Installment Contracts or Leases covered by such
disposition; and such Advances or Leased Vehicles
(and the Installment Contracts, Leases, motor
vehicles or other rights relating thereto) and the
Installment Contracts and Leases shall have
performance and other characteristics so that the
quality of such Advances, Leased Vehicles,
Installment Contracts or Leases, as the case may be,
is comparable to, but not materially better than, the
overall quality of the Company's Advances, Leased
Vehicles, Installment Contracts or Leases, as
applicable, as a whole, as determined in good faith
by the Company in its reasonable discretion;
(b) (i) The disposition of Advances, Leased Vehicles,
Installment Contracts or Leases will not result in
the aggregate principal amount of Debt at any time
outstanding, and (without duplication) of similar
securities at any time issued and outstanding (other
than subordinated securities issued to and held by
the Company or a Subsidiary), of any Special Purpose
Subsidiary pursuant to
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Permitted Securitizations exceeding $100,000,000,
which amount may be readvanced and reborrowed and
(ii) the Company or the Restricted Subsidiary
disposing of Advances, Leased Vehicles, Installment
Contracts or Leases to a Special Purpose Subsidiary
pursuant to such Permitted Securitization shall
itself actually receive (substantially
contemporaneously with such disposition) cash from
each disposition of such financial assets in
connection with any such Securitization Transaction
in an amount not less than Seventy-Five Percent (75%)
of the sum of (A) the amount of such Advances, (B)
the amount of Net Installment Contract Receivables in
respect of Installment Contracts arising under
Outright Dealer Agreements, and (C) the amount of
Leased Vehicles, in each case determined on the date
of such Securitization Transaction;
(c) Each such disposition shall be without recourse
(except to the extent of normal and customary
representations and warranties given as of the date
of each such disposition, and not as continuing
representations and warranties) and otherwise on
normal and customary terms and conditions for
comparable asset-based securitization transactions
which may include, without limitation, Cleanup Call
provisions;
(d) Each such Securitization Transaction shall be
structured on the basis of the issuance of
non-recourse Debt or other similar securities by the
Special Purpose Subsidiary; and
(e) Both immediately before and after giving effect to
such disposition, no Default or Event of Default
(whether or not related to such disposition) exists
or would exist.
In connection with each Permitted Securitization conducted
hereunder, not less than ten (10) Business Days prior to the
date of consummation thereof, the Company shall provide to
each holder of a Note (i) a schedule in the form attached
hereto as Exhibit E identifying the specific Installment
Contracts or Leases or the Advances or Leased Vehicles (and
providing collection information regarding the related
Installment Contracts or Leases) proposed to be covered by
such transaction (with evidence supporting its determination
under subparagraph (a) of this definition, including without
limitation a "static pool analysis" comparable to the static
pool analysis required to be delivered under Section 7.1(j)(1)
hereof with respect to such Installment Contracts or Leases)
and (ii) proposed drafts of the material Securitization
Documents covering the applicable securitization (and the term
sheet or commitment relating thereto). Within five (5)
Business Days following the consummation thereof, the Company
shall have provided to each holder of Notes copies of the
material Securitization Documents, as executed, including an
updated schedule, substantially in the form of the schedule
delivered under clause (i) above,
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identifying the financial assets actually covered by such
transaction (and, if such financial assets are materially
different, as reasonably determined by the Company, from those
shown in the schedule delivered under clause (i) above,
collection information and evidence supporting its
determination under subparagraph (a) of this definition,
including a comparable "static pool analysis," as aforesaid,
with respect to such financial assets).
PERSON -- means an individual, sole proprietorship, partnership,
corporation, limited liability company, trust, joint venture, unincorporated
organization, or a government or agency or political subdivision thereof.
PLACEMENT AGENT -- means Xxxxxxx Xxxxx & Company, L.L.C.
PLACEMENT MEMORANDUM -- Section 2.1.
PROPERTY -- means any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.
PURCHASE MONEY LIEN -- means a Lien held by any Person (whether or not
the seller of such Property) on tangible Property (or a group of related items
of Property the substantial portion of which is tangible) acquired or
constructed by the Company or any Restricted Subsidiary, which Lien secures all
or a portion of the related purchase price or construction costs of such
Property, provided that such Lien
(a) is created contemporaneously with, or within thirty (30)
days of, such acquisition or construction,
(b) encumbers only Property purchased or constructed after the
Closing Date and acquired with the proceeds of the Debt secured
thereby, and
(c) is not thereafter extended to any other Property.
PURCHASERS -- means you and the Other Purchasers.
REQUIRED HOLDERS -- means, at any time, the holders of at least
sixty-six and two-thirds percent (66-_%) in principal amount of the Notes at the
time outstanding (exclusive of Notes then owned by any one or more of the
Company, any Restricted Subsidiary and any Affiliate).
RESTRICTED INVESTMENT -- means, at any time, all Investments except the
following:
(a) Investments in Property to be used in the ordinary course
of business of the Company and the Restricted Subsidiaries;
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(b) subject to clause (k) of this definition, Investments in
receivables, advances, Leases and Leased Vehicles arising from the sale
or lease of goods and services, in each case in the ordinary course of
business of the Company and the Restricted Subsidiaries;
(c) Investments by the Company or any Restricted Subsidiary in
the ordinary course of its business in one or more Restricted
Subsidiaries or any corporation that concurrently with such Investment
becomes a Restricted Subsidiary, provided that the aggregate amount of
all Investments made pursuant to this paragraph (c) and paragraph (d)
of this definition (excluding Guaranties by the Company of Debt of
Restricted Subsidiaries) does not at any time exceed twenty-five
percent (25%) of Consolidated Tangible Net Worth (it being understood
that loans and advances to any Restricted Subsidiary by any Person
other than the Company or any other Restricted Subsidiary, regardless
of whether such loans and advances are guaranteed by the Company or any
other Restricted Subsidiary, shall not be taken into account in
determining the aggregate amount of Investments made pursuant to this
paragraph (c) and paragraph (d) of this definition);
(d) Investments consisting of loans by the Company or any
Restricted Subsidiary, and advances from the Company or any Restricted
Subsidiary, in each case to the Company or any Restricted Subsidiary in
the ordinary course of business of the Company and the Restricted
Subsidiaries, provided that the aggregate amount of all Investments
made pursuant to paragraph (c) of this definition and this paragraph
(d) (excluding Guarantees by the Company of Debt of Restricted
Subsidiaries) does not at any time exceed twenty-five percent (25%) of
Consolidated Tangible Net Worth (it being understood that loans and
advances to any Restricted Subsidiary by any Person other than the
Company or any other Restricted Subsidiary, regardless of whether such
loans and advances are guaranteed by the Company or any other
Restricted Subsidiary, shall not be taken into account in determining
the aggregate amount of Investments made pursuant to this paragraph (d)
and paragraph (c) of this definition);
(e) Investments in direct obligations of, or obligations
guarantied by, the United States of America or any agency of the United
States of America the obligations of which agency carry the full faith
and credit of the United States of America, provided that such
obligations (other than Investments by CAC Life in such obligations
made to match liabilities incurred in the ordinary course of business)
mature within one (1) year from the date of acquisition thereof;
(f) Investments in any obligation of any state or municipality
thereof that at the time of acquisition thereof have an assigned rating
of "A" or higher by Standard & Poor's Ratings Group (or an equivalent
or higher rating by another credit rating agency of recognized national
standing in the United States of America), provided that such
obligations (other than Investments by CAC Life in such obligations
made to match liabilities incurred in the ordinary course of business)
mature within one (1) year from the date of acquisition thereof;
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(g) Investments in negotiable certificates of deposit issued
by commercial banks organized under the laws of the United States of
America or any state thereof, having capital, surplus and undivided
profits aggregating at least Fifty Million Dollars ($50,000,000) and
the long-term unsecured debt obligations of which are rated "A" or
higher by Standard & Poor's Ratings Group (or an equivalent or higher
rating by another credit rating agency of recognized national standing
in the United States of America), provided that such certificates of
deposit (other than Investments by CAC Life in such certificates of
deposit made to match liabilities incurred in the ordinary course of
business) mature within one (1) year from the date of acquisition
thereof;
(h) Investments in corporate debt obligations of corporations
organized under the laws of the United States of America or any state
thereof that at the time of acquisition thereof have an assigned rating
of "A" or higher by Standard & Poor's Ratings Group (or an equivalent
or higher rating by another credit rating agency of recognized national
standing in the United States of America);
(i) Investments in preferred stock of corporations organized
under the laws of the United States of America or any state thereof
that have an assigned rating of "A" or higher by Standard & Poor's
Ratings Group (or an equivalent or higher rating by another credit
rating agency of recognized national standing in the United States of
America);
(j) Investments in loans or advances, in the ordinary course
of business and necessary to carrying on the business of the Company or
any Restricted Subsidiary, to officers, directors and employees of the
Company and the Restricted Subsidiaries, provided that the aggregate
amount of all such Investments does not at any time exceed One Million
Dollars ($1,000,000);
(k) Investments in receivables arising from floor plan
receivables and note receivables due from dealers in the ordinary
course of business of the Company and the Restricted Subsidiaries,
provided that the aggregate amount of all such Investments does not at
any time exceed ten percent (10%) of Consolidated Total Assets;
(l) Investments by the Company or any Restricted Subsidiary in
the Company, any Restricted Subsidiary or any Special Purpose
Subsidiary from and after the effective date of the Second Amendment,
consisting of (i) dispositions of specific Advances, Leased Vehicles,
Installment Contracts (whether assigned outright or related to
Advances) or Leases (whether assigned outright or related to Leased
Vehicles) made pursuant to a Permitted Securitization and the resultant
Debt issued by a Special Purpose Subsidiary to another Subsidiary as
part of a Permitted Securitization, in each case to the extent
constituting Investments, (ii) advances by the Company, as servicer of
the Installment Contracts or Leases covered by a Permitted
Securitization, in an aggregate amount not to exceed $1,500,000
outstanding at any time, to cover the interest component of obligations
issued as
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part of a Permitted Securitization and payable from collections on such
Installment Contracts (such advances to be repayable to the Company on
a priority basis from such collections), (iii) the repurchase or
replacement from and after the date of the effectiveness of the Second
Amendment of an aggregate amount not to exceed $5,000,000 in Advances,
Leased Vehicles, Installment Contracts (whether assigned outright or
related to Advances) or Leases (whether assigned outright or related to
Leased Vehicles) subsequently determined not to satisfy the eligibility
standards contained in the applicable Securitization Documents relating
to a Permitted Securitization, so long as (x) such replacement is
accompanied by the repurchase of or release of encumbrances on such
financial assets previously transferred or encumbered pursuant to such
securitization and in the amount thereof, (y) any replacement Advances,
Leased Vehicles, Installment Contracts (whether assigned outright or
related to Advances) or Leases (whether assigned outright or related to
Leased Vehicles) are selected by the Company according to the
requirements set forth in clause (a) of the definition of Permitted
Securitization and (z) such replacements are made at a time when (both
before and after giving effect thereto) no Default or Event of Default
exists or would exist, (iv) amounts required to fund any Cleanup Call
under the terms of such Permitted Securitization, and (v) the
disposition of the capital stock of a Special Purpose Subsidiary; and
(m) Investments not otherwise included in clause (a) through
clause (l) of this definition, provided that the aggregate amount of
all such Investments does not at any time exceed Two Million Five
Hundred Thousand Dollars ($2,500,000).
RESTRICTED PAYMENT -- means (x) any dividend or other distribution,
direct or indirect and whether payable in cash or property, on account of any
capital stock or other equity interest of the Company or any of its Restricted
Subsidiaries and (y) any redemption, retirement, purchase, or other acquisition,
direct or indirect, of any capital stock or other equity interests of the
Company or any of its Restricted Subsidiaries now or hereafter outstanding, or
of any warrants, rights or options to acquire any such capital stock or other
equity interests or any securities convertible into such capital stock or other
equity interests, except to the extent that any such dividend or distribution,
or any such redemption, retirement, purchase or other acquisition (i) is payable
to the Company or any of its Restricted Subsidiaries or (ii) is payable solely
in capital stock or other equity interests of the Company or any such Restricted
Subsidiary.
RESTRICTED SUBSIDIARY -- means any Subsidiary (a) in respect of which
the Company owns, directly or indirectly, (i) at least eighty percent (80%) (by
number of votes) of each class of such Subsidiary's Voting Stock, or (ii) in the
case of CAC Insurance Agency of Ohio, Inc., at least 99% of the shares of
capital stock issued and outstanding of all classes in the aggregate, (b) that
is organized under the laws of the United States of America or any jurisdiction
thereof, the United Kingdom or any jurisdiction thereof (including, without
limitation, England, Scotland and Wales), Canada or any jurisdiction thereof or
the Republic of Ireland or any jurisdiction thereof, and that conducts all of
its business in, and has all of its Property located in, the Xxxxxx Xxxxxx xx
Xxxxxxx, xxx Xxxxxx Xxxxxxx, Xxxxxx and/or the Republic of Ireland and (c) that
is not an Unrestricted Subsidiary. Any Restricted Subsidiary in compliance with
the requirements set forth in the first sentence of this definition and
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designated as a Restricted Subsidiary on the Closing Date shall be deemed to
have been a Restricted Subsidiary for all periods prior to the Closing Date.
Notwithstanding any provision in Section 6.17 to the contrary, CAC International
and CAC UK shall be deemed Restricted Subsidiaries as of October 1, 1995 and CAC
of Canada Limited and any Subsidiary formed by the Company to provide property
and casualty insurance shall each be deemed a Restricted Subsidiary as of the
date of its formation.
RESTRICTED SUBSIDIARY STOCK -- Section 6.8(b).
SALE AND LEASEBACK TRANSACTION -- means any transaction or series of
related transactions in which the Company or a Restricted Subsidiary sells or
transfers any of its Property to any Person (other than to the Company or to a
Restricted Subsidiary) and concurrently with such sale or transfer, or
thereafter, rents or leases such transferred Property or substantially similar
Property from any Person.
SECOND AMENDMENT -- means the Second Amendment, dated as of July 1,
1998, to this Agreement.
SECURITIES ACT -- means the Securities Act of 1933, as amended.
SECURITIZATION DOCUMENTS -- means any note purchase agreement (and any
notes issued thereunder), transfer or security documents, master trust or other
trust agreements, servicing agreement, indenture, pooling agreement,
contribution or sale agreement or other documents, instruments and certificates
executed and delivered, subject to the terms of this Agreement, to evidence or
secure (or otherwise relating to) a Permitted Securitization, as the same may be
amended from time to time (subject to the terms hereof) and any and all other
documents executed in connection therewith or replacement or renewal thereof.
SECURITIZATION PROPERTY -- means (i) amounts advanced by the Company or
a Restricted Subsidiary under a Dealer Agreement and payable from collections,
including servicing charges, insurance charges and service policies and all
related finance charges, late charges, and all other fees and charges charged to
customers and all monies due or to become due, and all monies received, with
respect thereto ("Loans"); (ii) all proceeds (including "proceeds" as defined in
the Uniform Commercial Code) thereof; (iii) all of the Company's or a Restricted
Subsidiary's interest in the Dealer Agreements and Installment Contracts
securing payment of Loans, all security interests or liens purporting to secure
payment of Loans and all other property obtained upon foreclosure of any
security interest securing payment of Loans or any related Installment Contract
and all guarantees, insurance (including insurance insuring the priority or
perfection of any lien) or other agreements or arrangements of any kind from
time to time supporting or securing payment of such Installment Contract whether
pursuant to such Installment Contract or otherwise; (iv) all records with
respect to Loans, (v) the Company's or a Restricted Subsidiary's right, title
and interest in and to business interruption insurance, and (vi) all payments
received by the Company in respect of Transferred Loans in the form of cash,
checks, wire transfers or other form of payment.
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SECURITIZATION TRANSACTION -- means a Transfer of, or grant of a Lien
on, Advances, Installment Contracts, Leased Vehicles, Leases, accounts
receivable and/or other financial assets by the Company or any Restricted
Subsidiary to a Special Purpose Subsidiary or other special purpose or limited
purpose entity and the issuance (whether by such Special Purpose Subsidiary or
other special purpose or limited purpose entity or any other Person) of Debt or
of any Securities secured directly or indirectly by interests in, or of trust
certificates or other Securities directly or indirectly evidencing interests in,
such Advances, Installment Contracts, Leased Vehicles, Leases, accounts
receivable and/or other financial assets.
SECURITY -- means "security" as defined in section 2(1) of the
Securities Act.
SENIOR FINANCIAL OFFICER -- means the chief financial officer, the
principal accounting officer, the controller or the treasurer of the Company.
SENIOR OFFICER -- means the chief executive officer, the president or
the chief financial officer of the Company.
SPECIAL PURPOSE SUBSIDIARY -- means any Unrestricted Subsidiary of the
Company, all of the capital stock of which is owned by the Company or a
Restricted Subsidiary, which Unrestricted Subsidiary is formed for the sole
purpose of conducting one or more Permitted Securitizations and is operated for
such purpose in accordance with customary industry practices.
STANDARD & POOR'S RATINGS GROUP -- means Standard & Poor's Ratings
Group, a division of XxXxxx-Xxxx, Inc.
SUBORDINATED DEBT -- means, at any time, unsecured Debt of the Company
that is junior and subordinate in right of payment to the Notes on terms and
conditions satisfactory to the Required Holders, as evidenced by their written
consent.
SUBORDINATED FUNDED DEBT -- means, at any time, Funded Debt of the
Company or any Restricted Subsidiary that is:
(a) junior and subordinate in right of payment to the Notes on
terms and conditions satisfactory to the Required Holders, as evidenced
by their written consent thereto,
(b) not subject to any sinking fund or required prepayment
provisions that would result in its having at any time an average life
to maturity, computed in accordance with accepted financial practice,
shorter than the Weighted Average Life to Maturity (as defined in the
definition of "Make-Whole Amount") of the Notes at such time or a final
maturity earlier than the stated final maturity of the Notes, and
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(c) not secured by a Lien on the Property of the Company or
any Restricted Subsidiary (whether or not such Funded Debt is recourse
to the Company or any Restricted Subsidiary).
SUBSIDIARY -- means, at any time, a corporation of which the Company
owns, directly or indirectly, more than fifty percent (50%) (by number of votes)
of each class of the Voting Stock at such time.
SURVIVING CORPORATION -- Section 6.7(a).
TOTAL RESTRICTED SUBSIDIARY DEBT -- means, at any time, the aggregate
amount of Debt of all Restricted Subsidiaries determined at such time after
eliminating intercompany transactions among the Company and the Restricted
Subsidiaries. For the avoidance of doubt, the Company hereby acknowledges that
Total Restricted Subsidiary Debt includes the amount of Debt of any Restricted
Subsidiary attributable to its Guaranty of any liabilities of another Person
(including the Company or any Subsidiary) made in favor of any Person other than
the Company or another Restricted Subsidiary. Notwithstanding the foregoing, (i)
Total Restricted Subsidiary Debt does not include the amount of Debt of any
Restricted Subsidiary attributable to its Guaranty of obligations under the
Credit Agreement (and any related notes, letters of credit and other agreements)
of any Person (including the Company or any Subsidiary) made in favor of the
Banks if, concurrently with the giving of any such Guaranty, the holders of the
Notes at such time are given the benefit of an equal and ratable Guaranty on
substantially similar terms; and (ii) the term "Total Restricted Subsidiary
Debt" shall not, at any time prior to May 15, 1997 (but shall, at all times from
and after May 15, 1997), be deemed to include any Debt of CAC International
attributable to its Guaranty, for the benefit of the Banks, of the liabilities
of the Company and certain Subsidiaries under the Credit Agreement.
TRANSFERS -- Section 6.8(a).
UNEARNED FINANCE CHARGES -- means, as of any applicable date of
determination, the unearned finance charges utilized in deriving installment
contract receivables, net on the consolidated balance sheet of the Company and
its Restricted Subsidiaries, as disclosed in the footnotes thereto, provided
that Unearned Finance Charges shall not include unearned finance charges
attributable to retail installment contracts which are not at such time
"Installment Contracts" due to the proviso in the definition of such term in
this Agreement.
UNRESTRICTED SUBSIDIARY -- means any Subsidiary that, as of the date of
this Agreement, is designated in Part 6.17(a) of Annex 3 as an Unrestricted
Subsidiary or, after the date of this Agreement, has been designated as an
Unrestricted Subsidiary as provided in Section 6.17.
VOTING STOCK -- means capital stock of any class or classes of a
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect corporate directors (or Persons performing
similar functions).
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WHOLLY-OWNED RESTRICTED SUBSIDIARY -- means, at any time, any
Restricted Subsidiary one hundred percent (100%) of all of the equity Securities
(except directors' qualifying shares) and voting Securities of which are owned
by, and all of the Debt of which is held by, any one or more of the Company and
the other Wholly-Owned Restricted Subsidiaries at such time."
2.5 AMENDMENT AND RESTATEMENT OF EXHIBIT A. The form of First Amended
and Restated Note set forth as Exhibit A to the Agreement is hereby amended and
restated, in its entirety, to be in the form of Attachment 4 attached to this
Fourth Amendment. All references to "Exhibit A" in the Note Purchase Agreements
shall, if in reference to a date on or after the date of the Fourth Amendment,
refer to the form of Second Amended and Restated 8.77% (or 9.27%, if on or after
January 15, 2000) Senior Note Due October 1, 2001, as amended and restated
hereby.
2.6 AMENDMENT OF FIRST AMENDED AND RESTATED NOTES. The forms of the
respective First Amended and Restated Notes are hereby amended in their entirety
to conform to the form of Second Amended and Restated Note attached to this
Fourth Amendment as Attachment 4. On the date of this Fourth Amendment, each of
the terms of each outstanding First Amended and Restated Note shall be deemed to
be amended to conform with such form, without any further action on the part of
the Company or any holder of any First Amended and Restated Note (including,
without limitation, any requirement that any holder surrender its outstanding
First Amended and Restated Notes to the Company). Upon surrender of any
outstanding First Amended and Restated Note, the Company shall deliver to the
registered holder thereof a Second Amended and Restated Note in the form
attached hereto as Attachment 4, dated the date of the last interest payment on
such surrendered First Amended and Restated Note and in an aggregate principal
amount equal to the unpaid principal amount of such surrendered First Amended
and Restated Note, all in accordance with the provisions of Section 5.2 of the
Agreement. Without limitation of the foregoing, the amendment and restatement of
the First Amended and Restated Notes provided for herein, including, without
limitation, the increase in the interest rate applicable to the Notes, shall be
effective with respect to any and all of the Notes irrespective of whether any
such Notes are surrendered to the Company for reissuance in the form attached to
this Fourth Amendment as Attachment 4.
SECTION 3. MISCELLANEOUS
3.1 COUNTERPARTS. This Fourth Amendment may be executed in any number
of counterparts, each executed counterpart constituting an original, but all
together only one Fourth Amendment.
3.2 HEADINGS. The headings of the sections of this Fourth Amendment are
for purposes of convenience only and shall not be construed to affect the
meaning or construction of any of the provisions hereof.
3.3 GOVERNING LAW. This Fourth Amendment shall be governed by and
construed in accordance with the internal laws of the State of New York.
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3.4 EFFECT OF AMENDMENT. Except as expressly provided herein (a) no
other terms and provisions of the Agreement shall be modified or changed by this
Fourth Amendment and (b) the terms and provisions of the Agreement, as amended
by this Fourth Amendment, shall continue in full force and effect. The Company
hereby acknowledges and reaffirms all of its obligations and duties under the
Agreement, as modified by this Fourth Amendment, and the Notes.
3.5 REFERENCES TO THE AGREEMENT. Any and all notices, requests,
certificates and other instruments executed and delivered concurrently with or
after the execution of the Fourth Amendment may refer to the Agreement without
making specific reference to this Fourth Amendment but nevertheless all such
references shall be deemed to include, to the extent applicable, this Fourth
Amendment unless the context shall otherwise require.
3.6 COMPLIANCE. The Company certifies that immediately before and after
giving effect to this Fourth Amendment, no Default or Event of Default exists or
would exist after giving effect hereto; provided that the Company may not be in
compliance with the covenant contained in Section 6.2 before giving effect to
this Fourth Amendment.
3.7 FULL DISCLOSURE. The Company warrants and represents to you that,
as of the effective date hereof, none of the written statements, documents or
other written materials furnished by, or on behalf of, the Company to you in
connection with the negotiation, execution and delivery of this Fourth Amendment
contain any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein or herein not misleading in
light of the circumstances in which they were made. There is no fact of which
any of the Company's executive officers has actual knowledge which the Company
has not disclosed to you which materially affects adversely or, so far as the
Company can now reasonably foresee, will materially affect adversely the
business, prospects, profits, Properties or condition (financial or otherwise)
of the Company and the Subsidiaries, taken as a whole, or the ability of the
Company to perform its obligations set forth in the Agreement (after giving
effect to this Fourth Amendment) and the Notes.
3.8 EFFECTIVENESS OF AMENDMENTS. The amendments to the Agreement
contemplated by Section 2 hereof shall (in accordance with Section 10.5(a) of
the Agreement) become effective (retroactive to September 30, 1999), if at all,
at such time as the Company and the Required Holders of the Notes shall have
indicated their written consent to such amendments by executing and delivering
the applicable counterparts of this Fourth Amendment. It is understood that any
holder of Notes may withhold its consent for any reason, including, without
limitation, any failure of the Company to satisfy all of the following
conditions:
(a) This Fourth Amendment shall have been executed and delivered by
the Company and each of the Required Holders of the Notes.
(b) The execution, delivery and effectiveness of an agreement,
signed by the Company and the requisite holders of the Company's First
Amended and Restated 9.12%
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Senior Notes due November 1, 2001 issued under Note Purchase Agreements
dated as of October 1, 1994, containing amendments to such Note
Purchase Agreements identical in substance to the amendments set forth
in Section 2 hereof.
(c) The execution, delivery and effectiveness of an agreement,
signed by the Company and the requisite holders of the Company's First
Amended and Restated 8.24% Senior Notes due July 1, 2001 issued under
Note Purchase Agreements dated as of August 1, 1996, containing
amendments to such Note Purchase Agreements identical in substance to
the amendments set forth in Section 2 hereof.
(d) The Company shall have paid the statement for reasonable fees
and disbursements of Xxxxxxx Xxxx LLP, your special counsel, presented
to the Company on or prior to the effective date of this Fourth
Amendment.
(e) The Company's legal counsel shall have delivered an opinion,
dated the effective date of this Fourth Amendment, substantially in the
form attached as Attachment 5 to this Fourth Amendment.
(f) The holders of Notes shall have received from the Company a
certificate of a Senior Officer, dated the effective date of this
Fourth Amendment, certifying as to the resolutions attached thereto and
other corporate proceedings relating to the authorization, execution
and delivery of this Fourth Amendment and the transactions contemplated
hereby.
3.9 AMENDMENT FEE. The Company shall pay a fee to all holders of
Notes, in consideration of the amendment set forth herein, in an amount equal to
0.20% of the outstanding principal amount of the Notes held by such holder as of
the date hereof. Such fee shall be paid no later than the fifth business day
after all of the Required Holders have executed this Fourth Amendment.
3.10 COMMITMENT TO SELL NOTES. Each of the holders listed on Attachment
6 to this Fourth Amendment hereby irrevocably commits to sell the Repurchased
Notes held by such holder upon payment therefor by the Company on or before
January 15, 2000 in accordance with, and in the amount provided in, Section
6.15(b) of the Agreement (as amended by this Fourth Amendment) and such
Attachment 6.
3.11 WAIVER OF DELIVERY REQUIREMENT. In order to facilitate the
Company's prompt compliance with its obligations under Section 6.15(b) of the
Agreement (as amended by this Fourth Amendment), each of the Note holders hereby
waives, with respect to the Securitization Transaction to be consummated in
connection with the fulfillment of the Company's obligations under Section
6.15(b), the requirement in the definition of Permitted Securitization that
certain deliveries be made by the Company not less than ten Business Days prior
to the date of the consummation of a Permitted Securitization; provided,
however, that the Company shall make such deliveries as
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promptly as reasonably practicable and, in any event, not less than five
Business Days prior to the consummation of such Securitization Transaction.
[Remainder of page intentionally blank. Next page is signature page.]
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ACCEPTED:
THE GUARDIAN LIFE INSURANCE
COMPANY OF AMERICA
By /S/ Xxxxxx X. Dowshue
-------------------------------------
Name: Xxxxxx X. Dowshue
Title: Vice President
[Signature Page to Fourth Amendment to Note Purchase Agreement in respect of
8.02% Senior Notes Due October 1, 2001 of Credit Acceptance Corporation]
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ACCEPTED:
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By /S/ Xxxxxxx X Xxxxxxx XX
--------------------------------
Name: Xxxxxxx X Xxxxxxx XX
Title:
[Signature Page to Fourth Amendment to Note Purchase Agreement in respect of
8.02% Senior Notes Due October 1, 2001 of Credit Acceptance Corporation]
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ACCEPTED:
NATIONWIDE LIFE INSURANCE COMPANY
By /S/ Xxxx Xxxxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Authorized Signatory
[Signature Page to Fourth Amendment to Note Purchase Agreement in respect of
8.02% Senior Notes Due October 1, 2001 of Credit Acceptance Corporation]
62
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ACCEPTED:
AMERICAN BANKERS INSURANCE
COMPANY OF FLORIDA
By /S/ Xxx Xxxxxxxxx
------------------------------------
Name: Xxx Xxxxxxxxx
Title: Director of Investments
VOYAGER PROPERTY & CASUALTY INSURANCE CO.
By /S/ Xxx Xxxxxxxxx
------------------------------------
Name: Xxx Xxxxxxxxx
Title: Director of Investments
[Signature Page to Fourth Amendment to Note Purchase Agreement in respect of
8.02% Senior Notes Due October 1, 2001 of Credit Acceptance Corporation]
63
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ACCEPTED:
ASSET ALLOCATION & MANAGEMENT
COMPANY AS AGENT FOR AMERICAN
PIONEER LIFE INSURANCE COMPANY OF
NEW YORK
By /S/ X. Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Portfolio Manager
ASSET ALLOCATION & MANAGEMENT
COMPANY AS AGENT FOR AMERICAN
PROGRESSIVE LIFE AND HEALTH
INSURANCE COMPANY OF NEW YORK
By /S/ X. Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Portfolio Manager
ASSET ALLOCATION & MANAGEMENT
COMPANY AS AGENT FOR FEDERATED
RURAL ELECTRIC INSURANCE CORP.
By /S/ X. Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Portfolio Manager
ASSET ALLOCATION & MANAGEMENT
COMPANY AS AGENT FOR TOWER
LIFE INSURANCE COMPANY
By /S/ X. Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Portfolio Manager
ASSET ALLOCATION & MANAGEMENT
COMPANY AS AGENT FOR MUTUAL
PROTECTIVE INSURANCE COMPANY
By /S/ X. Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Portfolio Manager
[Signature Page to Fourth Amendment to Note Purchase Agreement in respect of
8.02% Senior Notes Due October 1, 2001 of Credit Acceptance Corporation]
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ASSET ALLOCATION & MANAGEMENT
COMPANY AS AGENT FOR PHYSICIANS
LIFE INSURANCE COMPANY VISTA 500
By /S/ X. Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Portfolio Manager
ASSET ALLOCATION & MANAGEMENT
COMPANY AS AGENT FOR WORLD
INSURANCE COMPANY
By /S/ X. Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Portfolio Manager
ASSET ALLOCATION & MANAGEMENT
COMPANY AS AGENT FOR UNITED
TEACHERS ASSOCIATES INSURANCE
COMPANY
By /S/ X. Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Portfolio Manager
ASSET ALLOCATION & MANAGEMENT
COMPANY AS AGENT FOR MEDICO
LIFE INSURANCE COMPANY
By /S/ X. Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Portfolio Manager
[Signature Page to Fourth Amendment to Note Purchase Agreement in respect of
8.02% Senior Notes Due October 1, 2001 of Credit Acceptance Corporation]
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ACCEPTED:
FARM BUREAU LIFE INSURANCE COMPANY
By /S/ Xxxxxx X Xxxxxxxxxx
-----------------------------------
Name: Xxxxxx X Xxxxxxxxxx
Title: Fixed Income-Vice President
FARM BUREAU MUTUAL INSURANCE COMPANY
By /S/ Xxxxxx X Xxxxxxxxxx
-----------------------------------
Name: Xxxxxx X Xxxxxxxxxx
Title: Fixed Income-Vice President
[Signature Page to Fourth Amendment to Note Purchase Agreement in respect of
8.02% Senior Notes Due October 1, 2001 of Credit Acceptance Corporation]
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If this Fourth Amendment is satisfactory to you, please sign the form
of acceptance on the enclosed counterpart of this letter and return the same to
the Company, whereupon this Fourth Amendment shall become binding between us in
accordance with its terms.
Very truly yours,
CREDIT ACCEPTANCE CORPORATION
By /S/ Xxxxx X Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
[Signature Page to Fourth Amendment to Note Purchase Agreement in respect of
8.02% Senior Notes Due October 1, 2001 of Credit Acceptance Corporation]
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ATTACHMENT 4
EXHIBIT A
[FORM OF NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). ANY RESALE OR TRANSFER OF THIS NOTE WITHOUT
REGISTRATION UNDER THE SECURITIES ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
CREDIT ACCEPTANCE CORPORATION
SECOND AMENDED AND RESTATED 8.77% SENIOR NOTE DUE OCTOBER 1, 2001
[FROM AND INCLUDING DECEMBER 1, 1999 TO, BUT NOT INCLUDING, JANUARY 15, 2000]
SECOND AMENDED AND RESTATED 9.27% SENIOR NOTE DUE OCTOBER 1, 2001
[FROM AND AFTER JANUARY 15, 2000]
NO. R-
----
$
------------
PPN: 225310 A# 8 [DATE]
CREDIT ACCEPTANCE CORPORATION, a Michigan corporation (the "Company"),
for value received, hereby promises to pay to or registered assigns
the principal sum of DOLLARS ($ ) on October 1, 2001 and
to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the unpaid principal balance thereof from the date of this Note (i)
at the rate of seven and seventy-seven one-hundredths percent (7.77%) per annum
through (but not including) July 1, 1998, (ii) at the rate of eight and two
one-hundredths percent (8.02%) per annum from and after July 1, 1998 through
(but not including) December 1, 1999, (iii) at the rate of eight and
seventy-seven one-hundredths percent (8.77%) per annum from (and including) and
after December 1, 1999 through (but not including) January 15, 2000, and (iv) at
the rate of nine and twenty-seven one-hundredths percent (9.27%) per annum from
and after January 15, 2000, payable semi-annually on the first (1st) day of
April and October in each year, commencing on the payment date next succeeding
the date hereof, until the principal amount hereof shall become due and payable;
and to pay on demand interest on any overdue principal (including any overdue
prepayment of principal) and Make-Whole Amount, if any, and (to the extent
permitted by applicable law) on any overdue installment of interest, at a rate
equal to the lesser of (a) the highest rate allowed by applicable law or (b)
nine and seventy-seven one-hundredths percent (9.77%) per annum if such
A-1
69
time is prior to July 1, 1998, ten and two one-hundredths percent (10.02%) per
annum if such time is on or after July 1, 1998 but prior to December 1, 1999,
ten and seventy-seven one-hundredths percent (10.77%) per annum if such time is
on or after December 1, 1999 but prior to January 15, 2000 and eleven and
twenty-seven one-hundredths percent (11.27%) per annum if such time is on or
after January 15, 2000.
Payments of principal, Make-Whole Amount, if any, and interest shall be
made in such coin or currency of the United States of America as at the time of
payment is legal tender for the payment of public and private debts to the
registered holder hereof at the address shown in the register maintained by the
Company for such purpose, in the manner provided in the Note Purchase Agreement
(defined below).
This Note is one of an issue of Notes of the Company issued in an
aggregate principal amount limited to Seventy-One Million Seven Hundred Fifty
Thousand Dollars ($71,750,000) pursuant to the Company's separate Note Purchase
Agreements, each dated as of March 25, 1997 (collectively, as may be amended
from time to time, the "Note Purchase Agreement"), with the purchasers listed on
Annex 1 thereto. This Note is entitled to the benefits of the Note Purchase
Agreement and the terms thereof are incorporated herein by reference.
Capitalized terms used herein and not otherwise defined herein have the meanings
specified in the Note Purchase Agreement. As provided in the Note Purchase
Agreement, this Note is subject to prepayment, in whole or in part, in certain
cases without a Make-Whole Amount and in other cases with a Make-Whole Amount.
The Company agrees to make required prepayments on account of such Notes in
accordance with the provisions of the Note Purchase Agreement.
This Note is a registered Note and is transferable only by surrender
hereof at the principal office of the Company as specified in the Note Purchase
Agreement, duly endorsed or accompanied by a written instrument of transfer duly
executed by the registered holder of this Note or its attorney duly authorized
in writing.
Under certain circumstances, as specified in the Note Purchase
Agreement, the principal of this Note (in certain cases together with any
applicable Make-Whole Amount) may be declared due and payable in the manner and
with the effect provided in the Note Purchase Agreement.
The Company's Second Amended and Restated [8.77%] [9.27%] Senior Notes
due October 1, 2001 (the "Second Amended and Restated Notes") amend and restate
the Company's First Amended and Restated 8.02% Senior Notes due October 1, 2001
(the "First Amended and Restated Notes") and its 7.77% Senior Notes due October
1, 2001 (the "Original Notes"). The obligations formerly evidenced by the First
Amended and Restated Notes and the Original Notes are continuing obligations
which are evidenced by the Second Amended and Restated Notes and nothing
contained in the Second Amended and Restated Notes shall be deemed to constitute
payment, settlement or a novation of such obligations.
A-2
70
THIS NOTE AND THE NOTE PURCHASE AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, INTERNAL NEW YORK LAW.
CREDIT ACCEPTANCE CORPORATION
By
-----------------------------------
Name:
Title:
X-0
00
XXXXXXXXXX 5
[FORM OF COMPANY COUNSEL LEGAL OPINION]
December 1, 1999
To each of the Persons
listed on Annex 1 hereto
Re: Credit Acceptance Corporation, a Michigan
corporation (the "Company")
Ladies and Gentlemen:
We have acted as special counsel to the Company and have provided this
opinion pursuant to the Fourth Amendment to Note Purchase Agreement, dated as of
December 1, 1999 (the "Fourth Amendment"), among the Company and the Persons
listed on Annex 1 thereto (the "Holders"), in respect of the separate Note
Purchase Agreements, each dated as of March 25, 1997 (collectively, as amended
by the First Amendment to Note Purchase Agreement dated as of December 12, 1997,
the Second Amendment to Note Purchase Agreement dated as of July 1, 1998 and the
Third Amendment to Note Purchase Agreement dated as of April 13, 1999, the
"Existing Note Agreement", and as further amended by the Fourth Amendment, the
"Amended Note Agreement"), between the Company and each of the Persons listed on
Annex 1 thereto (the "Purchasers"), pursuant to which the Company sold to the
Purchasers the Original Notes in the aggregate principal amount of $71,750,000.
The capitalized terms used herein and not defined herein have the meanings
specified in the Amended Note Agreement.
The law covered by the opinions expressed herein is limited to the
federal law of the United States and the laws of the State of Michigan. In
rendering the opinion in paragraph (2) below, we have assumed that the laws of
the State of New York as to the enforceability of the Amended Note Agreement and
the Notes are not different from the State of Michigan (excluding the choice of
law rules).
In our examination, we have assumed the genuineness of all signatures
(other than signatures of officers of the Company), the legal capacity of
natural persons, the authenticity of all documents submitted to us as originals
or copies, the conformity with originals of all documents submitted to us as
copies and, as to documents executed by the Holders and Persons other than the
Company, that each such Person executing documents had the power to enter into
and perform its obligations under such documents, and that such documents have
been duly authorized, executed and delivered by, and are binding upon and
enforceable against, such Persons.
1
72
In rendering our opinion, we have relied, without further investigation
or analysis, upon certificates of officers of the Company attached hereto;
warranties and representations as to certain factual matters made by the Company
and by the Holders in the Amended Note Agreement and in the certificate
delivered to the Holders pursuant to the Fourth Amendment.
In acting as such counsel, we have examined (a) the Existing Note
Agreement, (b) the Fourth Amendment, including the form of the Company's Second
Amended and Restated 8.77% Senior Note due October 1, 2001 attached to the
Fourth Amendment as Attachment 4, (c) the bylaws of the Company, (d) the records
of proceedings of the board of directors of the Company, (e) a certified copy of
the articles of incorporation of the Company, as in effect on the date hereof,
and (f) originals, or copies certified or otherwise identified to our
satisfaction, of such other documents, records, instruments and certificates of
public officials as we have deemed necessary or appropriate to enable us to
render this opinion. The First Amended and Restated Notes held by the Holders,
as amended and restated pursuant to the Fourth Amendment, are referred to herein
as the "Notes".
Based upon and subject to the foregoing and to the additional
assumptions, qualifications and limitations set forth herein, we are of the
opinion that:
1. The Fourth Amendment has been duly authorized by all necessary
corporate action on the part of the Company and has been executed and delivered
by a duly authorized officer of the Company.
2. Each of the Amended Note Agreement and the Notes constitute a legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as (a) the enforceability thereof may be
limited by or subject to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws now or hereafter affecting creditors'
rights generally, and (b) rights or remedies (including, without limitation,
acceleration, specific performance and injunctive relief) may be limited by
equitable principles of general applicability (including, without limitation,
standards of materiality, good faith, fair dealing and reasonableness) whether
such principles are considered in a proceeding in equity or at law, and may be
subject to the discretion of the court before which any proceedings therefor may
be brought.
3. All consents, approvals and authorizations of Governmental
Authorities required on the part of the Company have been obtained in connection
with the execution and delivery of the Fourth Amendment.
4. The execution and delivery of the Amended Note Agreement in
accordance with, and subject to the terms and conditions of, the Amended Note
Agreement, by the Company and the performance by the Company of its obligations
thereunder and under the Notes do not violate any applicable statute, rule or
regulation to which the Company is subject.
2
73
5. Under existing law, the amendment of the First Amended and Restated
Notes under the circumstances contemplated by the Fourth Amendment is an exempt
transaction under the Securities Act and neither the registration of the Notes
under the Securities Act, nor the qualification of an indenture with respect
thereto under the Trust Indenture Act of 1939, as amended, is required in
connection with such transaction.
In rendering this opinion, we assume no obligation to revise or
supplement this opinion should any law now in effect be changed by legislative
action, judicial decision or otherwise.
We acknowledge that this opinion is being issued at the request of the
Company pursuant to the Fourth Amendment and we agree that the parties listed on
Annex 1 thereto are relying hereon. Future holders of the Notes may rely on this
opinion as if it were addressed to them. Except as otherwise provided in this
paragraph, no one is entitled to rely on this opinion.
This opinion is solely for the information of the addressees hereof,
and is not to be quoted in whole or in part or otherwise referred to, nor is it
to be filed with any governmental agency or other person without our prior
written consent (except that you may furnish a copy hereof (i) to any one or
more of your employees, officers, directors, agents, attorneys, accountants or
professional consultants, (ii) to any state or federal authority or independent
insurance board or body having regulatory jurisdiction over any holder of a
Note, (iii) pursuant to order or legal process of any court or governmental
agency, (iv) in connection with any legal action in which you are a party
arising out of or in respect of the transactions contemplated under the Amended
Note Agreement, and (v) for informational and due diligence purposes only, to
prospective transferees of the Notes).
Very truly yours,
3
74
ATTACHMENT 6
LIST OF HOLDERS OF NOTES WHOSE NOTES WILL BE PURCHASED
BY COMPANY PURSUANT TO SECTION 6.15(B)
1997 Series Reg. No. Principal Outstanding
----------- -------- ---------------------
The Guardian Life Insurance Company of America R-1 $ 10,210,452.96
Massachusetts Mutual Life Insurance Company R-2 $ 5,105,226.48
Nationwide Life Insurance Company R-3 $ 5,105,226.48
Farm Bureau Life Insurance Company R-6 $ 1,531,567.95
Farm Bureau Mutual Insurance Company R-7 $ 1,021,045.30
American Bankers Insurance Company of Florida R-8 $ 1,531,567.95
Voyager Property & Casualty Insurance Co. R-9 $ 1,021,045.30
---------------
Subtotal $ 25,526,132.42
1996 Series
-----------
Massachusetts Mutual Life Insurance Company R-1 $ 3,764,285.71
R-3 $ 1,217,857.14
R-4 $ 332,142.86
R-30 $ 1,328,571.43
Nationwide Life Insurance Company R-5 $ 5,535,714.29
Security Benefit Life Insurance Company R-17 $ 2,657,142.86
Combined Insurance Company of America R-29 $ 2,214,285.71
---------------
Subtotal $ 17,050,000.00
1994 Series
-----------
Western Farm Bureau Life Insurance R-12 $ 1,095,833.34
FBL Insurance Company R-13 $ 2,410,833.34
Ohio Casualty Insurance Co. R-17 $ 1,315,000.00
Ohio Life Insurance Company R-18 $ 876,666.66
Washington National Insurance Company R-39 $ 258,497.17
Xxxxxxx Xxxxx & Company, L.L.C. R-40 $ 500,000.00*
Lincoln Life & Annuity Company of New York R-44 $ 317,951.52
R-45 $ 206,797.74
---------------
Subtotal $ 6,981,579.77
TOTAL $49,557,712.19
*Represents a portion of Note which has a total of $646,242.92 principal amount
outstanding.
