EXHIBIT 4(f)(42)
THIRD AMENDMENT TO
SECOND AMENDED AND RESTATED SECURITY AGREEMENT
This Third Amendment to Second Amended and Restated Security Agreement
("Third Amendment") dated as of August 30, 2002, by and between Credit
Acceptance Corporation, a Michigan corporation (the "Company"), the Subsidiaries
of the Company from time to time parties hereto, including the undersigned
subsidiaries (collectively, with the Company, and either or any of them, the
"Debtors" and individually, each a "Debtor") and Comerica Bank, a Michigan
banking corporation ("Comerica"), as agent (in such capacity, the "Collateral
Agent") for the benefit of the "Lenders", the "Noteholders" and the "Future Debt
Holders" (each as referred to in the Security Agreement, defined below).
R E C I T A L S:
A. Pursuant to the Credit Agreement, the Senior Debt Documents and the
Intercreditor Agreement (each as defined in the Security Agreement), Debtors
executed and delivered to the Collateral Agent that certain Second Amended and
Restated Security Agreement dated as of June 11, 2001.
B. Debtors and the Collateral Agent entered into that certain First
Amendment to Second Amended and Restated Security Agreement ("First Amendment")
dated as of September 7, 2001 and that certain Second Amendment to Second
Amended and Restated Security Agreement ("Second Amendment") dated as of June
10, 2002, amending the Security Agreement referred to in Recital A on the terms
set forth therein (such Security Agreement, as amended by the First Amendment
and the Second Amendment, the "Security Agreement").
C. Company and Debtors intend, concurrently with this Third Amendment,
to consummate the Stapled Stock Restructuring.
D. Debtors and the Collateral Agent, with the concurrence of the Banks
(as defined in the Intercreditor Agreement), desire to further amend the
Security Agreement as set forth below.
NOW THEREFORE, the parties agree as follows:
1. Section 1.1 of the Security Agreement is amended, as follows:
(a) The following new definitions are added to Section 1.1, and
inserted in appropriate alphabetical order:
"Assignation" is defined in Section 2.1(i) of this Agreement.
"Consent and Release" shall mean that certain consent and release
letter issued by the Collateral Agent on July 3, 2002 and relating to certain
Releases and Transfers (as part of the Stapled Stock Restructuring) described in
such letter.
(b) The following definitions are amended and restated in their
entirety, as follows:
"T & C Subsidiary" shall mean CAC (TCI) Ltd., a company established
under the laws of the Turks & Caicos Islands.
2. Section 2.1 of the Security Agreement is hereby amended, as
follows:
(a) Section 2.1(i) is amended to add, at the end of said Section
(immediately preceding the semicolon) the following:
"and any monies and other property from time to time received,
receivable or otherwise distributed or distributable in
respect of or in exchange for the T&C Subisidiary's
partnership interest in CAC Scotland to the extent such
partnership interest has been pledged and assigned, for
collateral purposes, to the Collateral Agent, for and on
behalf of the Benefited Parties pursuant to that certain
Assignation in Security by and among the T&C Subsidiary, the
Collateral Agent, CAC International Holdings, L.L.C. and CAC
Scotland (as amended from time to time, the "Assignation");"
(b) Section 2.1 is amended and restated in its entirety, as follows:
"(l) the Proceeds, in cash or otherwise, of any of the
property described in the foregoing clauses (a) through (k)
and all liens, security, rights, remedies and claims of such
Debtor with respect thereto, including without limitation any
such Proceeds deposited from time to time in the Special
Account or in any other cash collateral account maintained by
a Debtor with the Collateral Agent under, or in connection
with, this Agreement or any other Financing Agreement and all
such Debtor's rights in each such account."
3. Section 4.14 of the Security Agreement is hereby amended to add a
new clause (c), as follows:
"(c) Concurrently with the effective date of the Third
Amendment, the Collateral Agent shall establish, for the
benefit of the Benefited Parties in the name of the Collateral
Agent, a segregated non-interest bearing blocked account (the
"Receiving Account") under which CAC (TCI) and the other
Debtors shall have no withdrawal or other rights (whether or
not a Default or Event of Default has occurred and is
continuing), such account being subject to the security
interest and lien established by this Agreement. All
dividends, distributions and other sums paid (or payable) in
respect of CAC (TCI)'s partnership interest in CAC Scotland
assigned, for collateral purposes, to the Collateral Agent,
for and on behalf of
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the Benefited Parties pursuant to the Assignation, shall be
received and held by Collateral Agent for the benefit of the
Benefited Parties, and thereafter promptly deposited by
Collateral Agent to the Receiving Account established under
this clause (c). So long as no Default or Event of Default has
occurred and is continuing, the Collateral Agent shall
promptly transfer all such sums on deposit in the Receiving
Account to another account, as specified from time to time in
writing by CAC (TCI). Upon the occurrence and during the
continuance of any Default or Event of Default, all such sums
on deposit in the Receiving Account shall be retained in the
Receiving Account for disposition in accordance with this
Agreement. Furthermore, CAC (TCI) shall cause all dividends,
distributions and other sums paid (or payable) in respect of
its partnership interest in CAC Scotland assigned for
collateral purposes, to the Collateral Agent, for and on
behalf of the Benefited Parties pursuant to the Assignation,
to be paid directly by CAC Scotland to the Collateral Agent in
accordance with the terms of the Assignation, and shall cause
any such dividends, distributions or other sums received by
any other Person, including without limitation any Debtor, to
be promptly delivered and paid over to the Collateral Agent
for disposition according to the terms hereof.
4. Pursuant to the Consent and Release, the First Amendment and each of
the changes contained therein was rescinded and set aside so that such
amendments shall have no further force and effect, provided, however, that the
Security Agreement, as amended by the Second Amendment and the Third Amendment,
shall otherwise remain in full force and effect according to its terms.
5. Concurrently with the effective date of this Third Amendment:
(a) CAC South Dakota shall be considered, and deemed to be, for all
purposes of the Security Agreement, a Debtor under the Security Agreement as
fully as though CAC South Dakota had executed and delivered the Security
Agreement at the time originally executed and delivered by the existing Debtors,
and hereby ratifies and confirms (as of the effective date of this Third
Amendment) its obligations under the Security Agreement, all in accordance with
the terms hereof.
(b) Schedule A to the Security Agreement shall be deemed to be amended
to add CAC South Dakota and the information pertaining thereto, as shown on
Attachment 1 hereto, and Schedule B to the Security Agreement shall be amended
to add a reference to CAC South Dakota and the information pertaining thereto,
as shown on Attachment 1 hereto.
(c) CAC Reinsurance shall be considered, and deemed to be, solely for
purposes of the stock pledge over all of its shares of stock in the T&C
Subsidiary, granted under Section 2.1(i) and (l) of the Security Agreement, a
Debtor under the Security Agreement as fully as though CAC Reinsurance had
executed and delivered the Security Agreement at the time
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originally executed and delivered by the existing Debtors, and hereby ratifies
and confirms (as of the effective date of this Third Amendment), its obligations
under the Security Agreement (to the extent relating thereto), all in accordance
with the terms hereof.
(d) To effectuate the pledge by the Company and CAC Reinsurance of all
of the shares of capital stock of the T&C Subsidiary, the replacement Schedule D
(Pledged Shares) to the Security Agreement set forth on Attachment 2 hereto,
adding CAC South Dakota and the T&C Subsidiary and deleting CAC Canada, shall be
deemed to replace in its entirety the existing Schedule D (Pledged Shares) to
the Security Agreement, and Schedule E to the Security Agreement shall be
amended to add a reference to CAC South Dakota and under such reference, the
word "none".
(e) The T&C Subsidiary shall be considered, and deemed to be, solely
for purposes of the grant of a security interest and lien over all of its
property described in Sections 2.1(i) and 2.1(l) of the Security Agreement and
the maintenance of the Receiving Account to be established under Section 4.14(c)
of the Security Agreement, a Debtor under the Security Agreement as fully as
though the T&C Subsidiary had executed and delivered the Security Agreement at
the time originally executed and delivered by the existing Debtors, and hereby
ratifies and confirms (as of the effective date of this Third Amendment), its
obligations under the Security Agreement (to the extent relating thereto), all
in accordance with the terms hereof.
(f) The Collateral Agent, for itself and for and on behalf of each of
the Banks, confirms its consent to the Stapled Stock Restructuring.
6. Debtors shall deliver to Collateral Agent, within 10 days from the
date hereof, opinions of counsel in form and substance reasonably satisfactory
to the Collateral Agent confirming the due authorization, execution and delivery
by Debtors of this Amendment and such other matters as reasonably required by
Collateral Agent.
7. Except as expressly modified hereby, all the terms and conditions of
the Security Agreement shall remain in full force and effect. Except as
expressly set forth herein, nothing in this Amendment shall constitute a waiver
of any term or condition of the Security Agreement or any of the rights and
remedies provided to the Secured Party thereunder or as otherwise provided by
law.
[SIGNATURES FOLLOW ON SUCCEEDING PAGES]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of the day and year first written above.
DEBTORS:
CREDIT ACCEPTANCE CORPORATION
By: /s/ Xxxxxxx X. Xxxx
----------------------------------------
Name: Xxxxxxx X. Xxxx
--------------------------------------
Title: Chief Financial Officer and Treasurer
-------------------------------------
Address for Notices:
Credit Acceptance Corporation
00000 X. 00 Xxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Fax No.: 000-000-0000
Telephone No.: 000-000-0000
Attention: Xxx Xxxxxx
AUTO FUNDING AMERICA OF NEVADA INC.
CREDIT ACCEPTANCE CORPORATION
LIFE INSURANCE COMPANY
BUYERS VEHICLE PROTECTION PLAN, INC.
CAC LEASING, INC.
VEHICLE REMARKETING SERVICES, INC.
CREDIT ACCEPTANCE CORPORATION OF
NEVADA, INC.
CREDIT ACCEPTANCE CORPORATION OF
SOUTH DAKOTA
By: /s/ Xxxxxxx X. Xxxx
----------------------------------------
Name: Xxxxxxx X. Xxxx
--------------------------------------
Title: Chief Financial Officer and Treasurer
-------------------------------------
Address for Notices:
c/o Credit Acceptance Corporation
00000 X. 00 Xxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Fax No.: 000-000-0000
Telephone No.: 000-000-0000
Attention: Xxx Xxxxxx
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CAC REINSURANCE LIMITED
By: /s/ Xxxxxxx X. Xxxx
----------------------------------------
Name: Xxxxxxx X. Xxxx
--------------------------------------
Title: Chief Financial Officer and Treasurer
-------------------------------------
Address for Notices:
c/o Credit Acceptance Corporation
00000 X. 00 Xxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Fax No.: 000-000-0000
Telephone No.: 000-000-0000
Attention: Xxx Xxxxxx
CAC (TCI), LTD.
By: /s/ Xxxxxxx X. Xxxx
----------------------------------------
Name: Xxxxxxx X. Xxxx
--------------------------------------
Title: Chief Financial Officer and Treasurer
-------------------------------------
Address for Notices:
c/o Credit Acceptance Corporation
00000 X. 00 Xxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Fax No.: 000-000-0000
Telephone No.: 000-000-0000
Attention: Xxx Xxxxxx
COLLATERAL AGENT:
----------------
COMERICA BANK as Collateral Agent
By: /s/ Xxxxx Xxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxx
---------------------------------------
Title: Assistant Vice President
-------------------------------------
Address for Notices:
Metropolitan Loans D
One Detroit Center, 6th Floor
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax No.: 313/000-0000
Telephone No.:313/000-0000
Attention: Xxxxx X. Xxxx
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EXHIBIT 4(f)(42)
ATTACHMENT 1
(AMENDING SCHEDULES A AND B
TO
SECURITY AGREEMENT)
SCHEDULE A (AMENDMENTS ONLY)
SCHEDULE B (AMENDMENTS ONLY)
EXHIBIT 4(f)(42)
ATTACHMENT 2
REPLACEMENT SCHEDULE D TO SECURITY AGREEMENT
Pledged Shares
Pledged Shares as %
of Total Shares Total Shares
Certificate No. of Pledged Issued and Issued and
Issuer Owner No. Shares Outstanding Outstanding
Auto Funding America of Company 1 1,000 100% 1,000
Nevada, Inc.
Buyers Vehicle Protection Company 1 1,000 100% 1,000
Plan, Inc.
CAC Leasing, Inc. Company 1 1,000 100% 1,000
Vehicle Remarketing Company 1 10 100% 10
Services, Inc.
Credit Acceptance Company 2 100,000 100% 100,000
Corporation Life Insurance
Company
Credit Acceptance Company 1 1,000 100% 1,000
Corporation of Nevada, Inc.
Credit Acceptance Company 1 1,000 100% 1,000
Corporation of South
Dakota, Inc.
CAC (TCI) Limited Company 1,2 4,500 90% 5,000
CAC (TCI) Limited CAC 3 500 10% 5,000
Reinsurance
The entire Non-Specified
Interest of Company in the
Titling Subsidiary,
evidenced by Certificate
No. 1 under the Titling
Subsidiary Agreements
