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EXHIBIT 4(f)(7)
AMENDMENT NO. 2 TO
SECURITY AGREEMENT
AMENDMENT NO. 2 TO SECURITY AGREEMENT (this "Amendment"),
dated as of September 29, 1999, among KITTY HAWK FUNDING CORPORATION, a Delaware
corporation, as a secured party (together with its successors and assigns, the
"Company"), CAC FUNDING CORP., a Nevada corporation, as debtor (together with
its successors and assigns, the "Debtor"), CREDIT ACCEPTANCE CORPORATION, a
Michigan corporation, individually and as servicer (together with its successors
and assigns, the "Servicer"), and BANK OF AMERICA, N.A., a national banking
association ("Bank of America"), individually and as collateral agent (together
with its successors and assigns in such capacity, the "Collateral Agent"),
amending that certain Security Agreement (as amended to the date hereof, the
"Security Agreement"), dated as of July 7, 1998, between the Company, the
Debtor, the Servicer and Bank of America (known under the Security Agreement as
"NationsBank, N.A."), individually and as Collateral Agent.
WHEREAS, on the terms and conditions set forth herein, the
parties to the Security Agreement wish to amend the Security Agreement as
provided herein.
NOW, THEREFORE, the parties hereby agree as follows:
SECTION 1. Defined Terms. As used in this Amendment
capitalized terms have the same meanings assigned thereto in the Security
Agreement.
SECTION 2. Amendment of Certain Terms.
(1) Section 1.1 of the Security Agreement is hereby amended by
deleting the definition of "Optional Clean-Up Event" and replacing it with the
following:
""Optional Clean-Up Event" shall mean either an Initial
Funding Optional Clean-Up Event or a Subsequent Funding Optional Clean-Up Event,
as applicable."
(2) Section 1.1 of the Security Agreement is hereby amended by
inserting the following definition after the definition of "Initial Funding":
""Initial Funding Optional Clean-Up Event" shall mean, with
respect to the Initial Funding, any day on which the Net Investment
relating to the Initial Funding is equal to or less than 5% of the
amount of the highest Net Investment relating to the Initial Funding on
any preceding day."
(3) Section 1.1 of the Security Agreement is hereby amended by
inserting the following definition after the definition of "Subsequent Funding
Date":
""Subsequent Funding Optional Clean-Up Event" shall mean, with
respect to any Subsequent Funding, any day on which the Net Investment
relating to such Subsequent Funding is equal to or less than 15% of the
amount of the highest Net Investment relating to such Subsequent
Funding on any preceding day."
(4) Section 5.4 of the Security Agreement is hereby amended by:
(I) deleting all references to "Servicer" and replacing each
such reference with "Debtor";
(ii) inserting the following before the semi-colon in the
eleventh line thereof:
"in the case of a Mandatory Clean-Up Event or, in the case of
an Optional Clean-Up Event, to pay all amounts outstanding that relate
to the Funding to which such Optional Clean-Up Event applies under the
Note Purchase Agreement, the Note and any other Transaction Document";
and
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(iii) deleting all words after the word "withdraw" in the sixteenth
line thereof and replacing them with the following:
"on the next Remittance Date (I) in the case of a Mandatory
Clean-Up Event, all funds on deposit in the Collection Account and the
Reserve Account, and (ii) in the case of an Optional Clean-Up Event,
the funds in the Collection Account and, if necessary, the Reserve
Account, that relate to the Funding to which such Optional Clean-Up
Event applies, and in each case pay such amounts to the Company, the
Bank Investors and any Noteholder, as applicable."
SECTION 3. Representations and Warranties.
(a) The Debtor hereby makes to the Collateral Agent, the Company
and the Bank Investors, on and as of the date hereof, all of the representations
and warranties set forth in Sections 3.1 and 3.2 of the Security Agreement,
except that to the extent that any of such representations and warranties
expressly relate to an earlier date, such representations and warranties shall
be true and correct as of such earlier date.
SECTION 4. Effectiveness. This Amendment shall become
effective on the date hereof.
SECTION 5. Costs and Expenses. The Debtor shall pay all of the
Company's, the Bank Investors' and the Collateral Agent's cost and expenses
(including out of pocket expenses and reasonable attorneys fees and
disbursements) incurred by them in connection with the preparation, execution
and delivery of this Amendment.
SECTION 6. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. Severability; Counterparts. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
instrument. Any provisions of this Amendment which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 8. Captions. The captions in this Amendment are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
SECTION 9. Ratification. Except as expressly affected by the
provisions hereof, the Security Agreement as amended shall remain in full force
and effect in accordance with its terms and ratified and confirmed by the
parties hereto. On and after the date hereof, each reference in the Security
Agreement to "this Agreement", "hereunder", "herein" or words of like import
shall mean and be a reference to the Security Agreement as amended by this
Amendment.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment No. 2 to the Security Agreement as of the date first written above.
CAC FUNDING CORP., as Debtor
By: /S/XXXXXXX X. XXXX
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Name: Xxxxxxx X. Xxxx
Title: Vice President-Finance
and Treasurer
CREDIT ACCEPTANCE CORPORATION,
Individually and as Servicer
By: /S/XXXXXXX X. XXXX
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Name: Xxxxxxx X. Xxxx
Title: Vice President-Finance
and Treasurer
KITTY HAWK FUNDING CORPORATION,
as Company
By: /S/XXXXXXX X. XXXXXX
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Name: Xxxxxxx X. Xxxxxx
Title: Vice President
BANK OF AMERICA, N.A., Individually
and as Collateral Agent
By: /S/XXXXXXX X. XXXXX
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Name: Xxxxxxx X. Xxxxx
Title: Vice President
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