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EXHIBIT 4(F)(9)
AMENDMENT NO. 3 TO
SECURITY AGREEMENT
AMENDMENT NO.3 TO SECURITY AGREEMENT (this "Amendment"), dated as of
December 15, 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 "Required Reserve Account Balance" and replacing it with the
following:
"Required Reserve Account Balance" shall mean an amount equal to the
sum of (A) the product of (i) 1.45% and (ii) the Net Investment related to
the Initial Funding (after application of funds pursuant to Section 5.1 on
the related Remittance Date), (B) the product of (i) 1.00% and (ii) the Net
Investment related to the sum of all Subsequent Fundings (after application
of funds pursuant to Section 5.1
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on the related Remittance Date), and (C) the Supplemental Reserve
Requirement."
(2) Section 1.1 of the Security Agreement is hereby amended by deleting
the word "and" appearing before clause (d) of the definition of "Servicer Event
of Default" and by adding the following to the end of such definition:
", (e) on a Consolidated basis, the Servicer's Consolidated Tangible
Net Worth is less than $205,000,000, plus the sum of (i) 75% of
Consolidated Net Income for each fiscal quarter of the Servicer (A)
beginning on or after January 1, 2000, (B) ending on or before the
applicable date of determination thereof, and (C) for which Consolidated
Net Income as determined above is a positive amount, and (ii) the Equity
Offering Adjustment, or (f) on a Consolidated basis, at the end of any
fiscal quarter, the Fixed Charge Coverage Ratio is less than 1.75 to 1.0."
(3) Section 1.1 of the Security Agreement is hereby amended by inserting
the following parenthetical before the period at the end of the definition of
"Collections":
"(including any additional amounts received from pools of contracts
for a given Dealer pursuant to a Dealer Agreement which are applied to
reduce the balance of the Loans)".
(4) Section 1.1 of the Security Agreement is hereby amended by inserting
the following definition after the definition of "Company":
"Consolidated Income Available for Fixed Charges" shall mean, for any
period, the sum of (i) Consolidated Net Income, plus (ii) the aggregate
amount of income taxes, depreciation, amortization 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), determined on a Consolidated basis for such Persons in accordance
with generally accepted accounting principles. "
(5) Section 1.1 of the Security Agreement is hereby amended by inserting
the following definition after the definition of "Consolidated Interest
Expense":
"Consolidated Tangible Net Worth" shall mean the total preferred
shareholders' investment and common shareholders' investment (common stock,
paid-in-capital and retained earnings) as computed
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under generally accepted accounting principles, less assets properly
classified as intangible assets according to generally accepted accounting
principles."
(6) Section 1.1 of the Security Agreement is hereby amended by inserting
the following definition after the definition of "Successor Servicer":
"Supplemental Reserve Requirement" shall mean an amount equal to (i)
as of December 15, 1999 through February 14, 2000, $800,000; (ii) as of
February 14, 2000 and any date thereafter, provided that the Net Investment
related to the Subsequent Funding taking place on December 15, 1999 is
equal to or less than $43,500,000, $0."
(7) Section 1.1 of the Security Agreement is hereby amended by inserting
the following definition after the definition of "Standard & Poor's":
"Structuring Agent" shall mean Banc of America Securities LLC.
(8) Section 5.3 of the Security Agreement is hereby amended by inserting
the following before the period at the end of paragraph (b) thereof:
";provided, that any such excess amounts attributable to a decrease in
the Supplemental Reserve Requirement shall be paid to the Structuring Agent
by wire transfer in immediately available funds to: Account #
1093601650000; ABA # 000000000: Reference:CAC Reserve Release."
(9) Article I of the Security Agreement is hereby amended by inserting the
following section at the end thereof
"SECTION 1.2 Additional Definitions. The following definitions shall
have the meanings assigned thereto in that certain Third Amended and
Restated Credit Agreement, dated as of June 15, 1999, between Credit
Acceptance Corporation, Comerica Bank, as administrative agent and
collateral agent, NationsBank, N.A., as syndication agent and Banc of
America Securities LLC, as sole lead arranger and sole book manager, as
amended to the date hereof: Consolidated; Consolidated Fixed Charges;
Consolidated Net Income; Equity Offering Adjustment; and Fixed Charge
Coverage Ratio.".
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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. 3 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
CREDIT ACCEPTANCE CORPORATION,
Individually and as Servicer
By: /S/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
Title: Vice President-Finance
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/ Xxxxx X Xxxx
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Name: Xxxxx X. Xxxx
Title: Vice President
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