EXHIBIT 4(f)53
CONTRIBUTION AGREEMENT
This CONTRIBUTION AGREEMENT, dated as of September 30, 2003 (the
"Agreement"), is made between CREDIT ACCEPTANCE CORPORATION, a Michigan
corporation ("CAC") and CAC WAREHOUSE FUNDING CORPORATION II, a Nevada
corporation ("Funding").
Funding desires to acquire from time to time certain Loans and related
rights and collateral, including certain of CAC's rights in the Dealer
Agreements, all of the related Contracts, and the Collections (other then Dealer
Collections) derived therefrom during the full term of this Agreement, and CAC
desires to transfer, convey and assign from time to time such Loans and related
property to the Purchaser upon the terms and conditions hereinafter set forth.
CAC has also agreed to service the Loans and related property to be transferred,
conveyed and assigned to Funding.
In consideration of the premises and the mutual agreements set forth
herein, it is hereby agreed by and between CAC and Funding as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. All capitalized terms used herein shall have
the meanings specified herein or, if not so specified, the meaning specified in,
or incorporated by reference into the Loan and Security Agreement and shall
include in the singular number the plural and in the plural number the singular:
"Contributed Property" means the Initial Contributed Property and the
Subsequent Contributed Property.
"Initial Contribution Property" means (i) Loans listed on Exhibit A
hereto delivered to the Servicer, the Collateral Agent and the Backup Servicer
on the Initial Funding Date and (ii) all Related Security with respect thereto.
"Loan and Security Agreement" shall mean the Loan and Security
Agreement dated as of September 30, 2003 among Funding, CAC, the Investors named
therein, the CP Conduits named therein, Wachovia Capital Markets, LLC, as the
Deal Agent and the Collateral Agent, the Liquidity Agents named therein and
Systems & Services Technologies, Inc.
"Related Security" With respect to any Loan all of CAC's interest in:
(i) the Dealer Agreements (other than Excluded Dealer
Agreement Rights, but including CAC's rights to service the Loans and the
related Contracts and receive the related collection fee and receive
reimbursement of certain recovery expenses, in accordance with the terms of the
Dealer Agreements) and Contracts securing payment of such Loan;
(ii) all security interests or liens purporting to secure
payment of such Loan, whether pursuant to such Loan, the related Dealer
Agreement or otherwise, together with all financing statements signed by the
related Obligor describing any collateral securing such Loan and all other
property obtained upon foreclosure of any security interest securing payment of
such Loan or any related Contract;
(iii) all guarantees, insurance (including insurance insuring
the priority of perfection of any lien) or other agreements or arrangements of
any kind from time to time supporting or securing payment of each Contract
whether pursuant to such Contract or otherwise; including any of the foregoing
relating to any Contract securing payment of such Loan;
(iv) all of CAC's interests in all Records, documents and
writing evidencing or related to such Loan;
(v) all Collections (other than Dealer Collections), the
Collection Account, the Reserve Account, and all amounts on deposit therein and
investments thereof; and
(vi) the Proceeds of each of the foregoing.
For the avoidance of doubt, the term "Related Security" with respect to any Loan
includes all rights arising after the end of the Revolving Period under such
Loan which rights are attributable to advances made under such Loan as the
result of Contracts being added after the last date of the last full Collection
Period during the Revolving Period to the identifiable group of Contracts to
which such Loan relates.
"Subsequent Contributed Property" means, with respect to the date of
any Incremental Funding, (i) the Loans added to Exhibit A hereto as of the date
of such Incremental Funding and (ii) all Related Security with respect thereto.
SECTION 1.2. Other Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. All terms used in Article 9
of the UCC, and not specifically defined herein, are used herein as defined in
such Article 9.
SECTION 1.3. Computation of Time Periods. Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word "from" means "from and including" and the words
"to" and "until" each means "to but excluding."
ARTICLE II
CONTRIBUTION AND SERVICING OF LOANS
SECTION 2.1 Contribution and Sale of Loans. (a) In consideration of the
payments described in Section 3.1, effective as of the Initial Funding Date, CAC
does hereby convey, assign, sell and transfer without recourse, except as set
forth herein, to Funding all of its right, title and interest in and to the
Initial Contributed Property.
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(b) CAC hereby further agrees that on the date of each Incremental
Funding during the Revolving Period, in consideration of the payment described
in Section 3.1 with respect to the date of such Incremental Funding, CAC shall,
and CAC does hereby agree to, convey, assign, sell and transfer without
recourse, except as set forth in this Agreement, to Funding all of its right,
title and interest in and to the Subsequent Contributed Property with respect to
the date of such Incremental Funding.
(c) CAC hereby further agrees that the above-described conveyances
shall, without the need for any further action on the part of CAC or Funding,
include all rights arising after the end of the Revolving Period under any Loan
included in the Initial Contributed Property or Subsequent Contributed Property
which rights are attributable to advances made under such Loans as the result of
Contracts being added after the last day of the last full Collection Period
during the Revolving Period to the identifiable group of Contracts to which such
Loan relates.
(d) Each such sale, assignment, transfer and conveyance does not
constitute an assumption by Funding of any obligations of CAC or any other
Person to Obligors or to any other Person in connection with the Loans or under
any Contract, Dealer Agreement or other agreement and instrument relating to the
Loans.
(e) In connection with any such foregoing conveyance, CAC agrees to
record and file on or prior to the Initial Funding Date, at its own expense, a
financing statement or statements with respect to the Contributed Property
conveyed by CAC hereunder meeting the requirements of applicable state law in
such manner and in such jurisdictions as are necessary to perfect the interests
of Funding created hereby, and to deliver either the originals of such financing
statements or a file-stamped copy of such financing statements or other evidence
of such filings to Funding on or before the Initial Funding Date.
(f) CAC agrees that from time to time, at its expense, it will promptly
execute and deliver all instruments and documents and take all actions as may be
necessary or as Funding may reasonably request in order to perfect or protect
the interest of Funding in the Loans and other Contributed Property purchased
hereunder or to enable Funding to exercise or enforce any of its rights
hereunder. CAC shall, upon request of Funding, obtain such additional search
reports as Funding shall request. To the fullest extent permitted by applicable
law, Funding shall be authorized and permitted to file continuation statements
and amendments to financing statements and assignments thereof to preserve and
protect its right, title and interest in, to and under the Contributed Property.
(g) It is the express intent of CAC and Funding that the conveyance of
the Loans and other Contributed Property by CAC to Funding pursuant to this
Agreement be construed as a absolute sale and contribution of such Loans and
other Contributed Property by CAC to Funding. Further, it is not the intention
of CAC and Funding that such conveyance be deemed a grant of a security interest
in the Loans and other Contributed Property by CAC to Funding in the nature of a
consensual lien securing an obligation. However, in the event that,
notwithstanding the express intent of the parties, the Loans and other
Contributed Property are construed to constitute property of CAC, then (i) this
Agreement also shall be deemed to be, and hereby is, a security
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agreement within the meaning of the UCC as enacted in the State of Michigan; and
(ii) the conveyance by CAC provided for in this Agreement shall be deemed to be,
and CAC hereby grants to Funding, a security interest in, to and under all of
CAC's right, title and interest in, to and under the Contributed Property, to
secure the rights of Funding set forth in this Agreement or as may be determined
in connection therewith by applicable law. CAC and Funding shall, to the extent
consistent with this Agreement, take such actions as may be necessary to ensure
that, if this Agreement were deemed to create a security interest in the Loans
and other Contributed Property, such security interest would be deemed to be a
perfected security interest in favor of Funding under applicable law and will be
maintained as such throughout the term of this Agreement.
(h) In connection with such conveyance, CAC agrees to deliver to
Funding on the Initial Funding Date, one or more computer files or microfiche
lists containing true and complete lists of all Dealer Agreements and Loans
conveyed to Funding on the Initial Funding Date, and all Contracts securing all
such Loans, identified by account number, dealer number and pool number. Such
file or list shall be marked as Exhibit A to this Agreement, shall be delivered
to Funding as confidential and proprietary, and is hereby incorporated into and
made a part of this Agreement. Such list and such Exhibit A shall be
supplemented and updated by lists delivered by CAC to Funding on the date of
each Incremental Funding in the Revolving Period describing all Contributed
Property conveyed on the date of each such Incremental Funding so that, on each
such date, Funding will have an aggregate list constituting Exhibit A that
describes all Loans conveyed by CAC to Funding hereunder on or prior to said
date of Incremental Funding and the related Dealer Agreements.
(i) CAC will reflect the transactions described in paragraph (a) of
this Section 2.1 on its internal non-consolidated financial statements and on
its non-consolidated state tax returns as a sale or other absolute transfer of
the Loans from CAC to Funding, even though CAC will reflect this transaction on
its consolidated financial statements as an "on-balance sheet" item in
accordance with generally accepted accounting principles. CAC will present the
data in its consolidated financial statements with an accompanying footnote
describing Funding's separate existence and stating that such item is a
financing secured by the Loans and is non-recourse to CAC.
SECTION 2.2. Servicing of Loans. The servicing, administering and
collection of the Loans shall be conducted by the Servicer, which hereby agrees
to perform, take or cause to be taken all such action as may be necessary or
advisable to collect each Loan from time to time, all in accordance with
applicable laws, rules and regulations and with the care and diligence which the
Servicer employs in servicing similar loans for its own account, in accordance
with the Credit Guidelines and the Collection Guidelines. Funding hereby
appoints the Servicer as its agent to enforce Funding's and any Assignee's
rights and interests in, to and under the Loans, the Related Security, the
Collections, and the other Contributed Property. The Servicer shall hold in
trust for Funding and any Assignees, in accordance with its interests, all
Records which evidence or relate to the Loans, Related Security, Collections and
other Contributed Property.
ARTICLE III
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CONSIDERATION AND PAYMENT; LOANS
SECTION 3.1. Consideration. The consideration for the Loans and other
Contributed Property conveyed on the Initial Funding Date to Funding by CAC
under this Agreement shall be an amount equal to (i) the net cash proceeds of
each advance to Funding under the Loan and Security Agreement used by Funding to
purchase the Loans and other Contributed Property conveyed on the Initial
Funding Date, plus (ii) the value attributable to CAC's common stock in Funding
(which constitutes and will constitute all of the equity interests issued by
Funding) as a result of the conveyance of such Loans and other Contributed
Property. Thereafter, on the date of each Incremental Funding in the Revolving
Period, the consideration for the Loans and other Contributed Property conveyed
on the date of such Incremental Funding will be cash in the amount of (i) the
Aggregate Outstanding Eligible Loan Net Balance of such Loans, plus (ii) the
value attributable to CAC's common stock in Funding (which constitutes and will
constitute all of the equity interests issued by Funding) as a result of the
conveyance of such Loans and other Contributed Property. The Contributed
Property shall be deemed to have a value equal to the aggregate principal amount
of the Loans sold and contributed by CAC to Funding.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Representations and Warranties. CAC represents and
warrants to Funding as of the Closing Date, the Initial Funding Date and the
date of each Incremental Funding during the Revolving Period, that:
(a) Organization and Good Standing. CAC is duly organized and is
validly existing as a corporation in good standing under the laws of the State
of Michigan, with power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is presently
conducted, and has and had at all relevant times, full power, authority, and
legal right to acquire, own, sell, and service the Loans and the related
Contracts, and to perform its obligations under the Transaction Documents.
(b) Due Qualification. CAC is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of property
or the conduct of its business, including the servicing of the Loans and the
related Contracts as required by this Agreement, requires such qualifications
except where such failure will not have a Material Adverse Effect.
(c) Power and Authority. CAC has the power and authority to execute and
deliver this Agreement and the other Transaction Documents to which it is a
party and to carry out their respective terms; and the execution, delivery, and
performance of this Agreement and the other Transaction Documents to which it is
a party have been duly authorized by CAC by all necessary corporate action.
(d) Valid Sale; Binding Obligations. This Agreement evidences a valid
sale, transfer, and assignment of the Contributed Property enforceable against
creditors of and purchasers from
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CAC; and this Agreement and the other Transaction Documents to which CAC is a
party constitute legal, valid and binding obligations of CAC enforceable in
accordance with their terms, subject to the effects of bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of creditors'
rights generally and to general principles of equity.
(e) No Violation. The consummation of the transactions contemplated by
this Agreement and the other Transaction Documents to which it is a party and
the fulfillment of the terms hereof and thereof do not conflict with, result in
any breach of any of the terms and provisions of, or constitute (with or without
notice or lapse of time) a default under, the Articles of Incorporation or
by-laws of CAC, or any indenture, agreement, or other instrument to which CAC is
a party or by which it is or may be bound; nor result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement (other than this Agreement), or other instrument; or
violate any law or, to the best of CAC's knowledge, any order, rule, or
regulation applicable to CAC of any court or of any federal or state regulatory
body, administrative agency, or other governmental instrumentality having
jurisdiction over CAC or its properties.
(f) No Proceedings. There are no proceedings or investigations pending,
or to CAC's best knowledge threatened, before any court, regulatory body,
administrative agency, or other governmental instrumentality having jurisdiction
over CAC or its properties: A) asserting the invalidity of this Agreement or any
other Transaction Document to which it is a party; B) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or any
other Transaction Document to which it is a party; or C) seeking any
determination or ruling that might materially and adversely affect the
performance by CAC of its obligations under, or the validity or enforceability
of, this Agreement, or any other Transaction Document to which it is a party.
(g) Solvency; Fraudulent Conveyance. CAC is solvent, is able to pay its
debts as they become due and will not be rendered insolvent by the transactions
contemplated by the Transaction Documents and, after giving effect thereto, will
not be left with an unreasonably small amount of capital with which to engage in
its business. CAC does not intend to incur, nor does it believe that it has
incurred, debts beyond its ability to pay such debts as they mature. CAC does
not contemplate the commencement of insolvency, bankruptcy, liquidation or
consolidation proceedings or the appointment of a receiver, liquidator,
conservator, trustee or similar official or any of its assets. The amount of
consideration being received by CAC upon the sale or other absolute transfer of
the Contributed Property to Funding constitutes reasonably equivalent value and
fair consideration for the Contributed Property. CAC is not transferring the
Contributed Property to Funding with any intent to hinder, delay or defraud any
of its creditors.
(h) Security Interest. As of the Initial Funding Date, CAC has granted
a security interest (as defined in the UCC as enacted in the State of Michigan)
to Funding in the Contributed Property, which is enforceable in accordance with
Applicable Law upon the Initial Funding Date. Upon the filing of UCC-1 financing
statements naming Funding as secured party and CAC as debtor, Funding shall have
a first priority perfected security interest in the
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Contributed Property. All filings (including, without limitation, UCC filings)
as are necessary in any jurisdiction to perfect the interest of Funding in the
Contributed Property have been made.
(i) Contribution Agreement. This Contribution Agreement is the only
agreement pursuant to which Funding purchases Loans from CAC.
(j) Perfection. As of the Initial Funding Date, CAC will be the owner
of all of the Loans and the other Contributed Property, free and clear of all
Liens. On or prior to the date of each contribution of Loans and the other
Contributed Property to Funding pursuant to this Agreement, all financing
statements and other documents required to be recorded or filed in order to
perfect and protect the ownership interest of Funding in and to the Loans and
the other Contributed Property against all creditors of and purchasers from CAC
will have been duly filed in each filing office necessary for such purpose and
all filing fees and taxes, if any, payable in connection with such filings shall
have been paid in full.
(k) Accuracy of Information. All information with respect to the Loans
and other Contributed Property provided to Funding hereunder by CAC was true and
correct in all material respects as of the date such information was provided to
Funding and did not omit to state any material facts necessary to make the
statements contained therein not misleading.
(l) Taxes. CAC has filed on or before their respective due dates, all
tax returns which are required to be filed in any jurisdiction or has obtained
extensions for filing such tax returns and has paid all taxes, assessments, fees
and other governmental charges against CAC or any of its properties, income or
franchises, to the extent that such taxes have become due, other than any taxes
or assessments, the validity of which are being contested in good faith by
appropriate proceedings and with respect to which adequate provision has been
made on the books of the Seller as may be required by GAAP. To the best of the
knowledge of CAC, all such tax returns were true and correct in all material
respects and CAC knows of any proposed material additional tax assessment
against it nor any basis therefor. Any taxes, assessments, fees and other
governmental charges payable by CAC in connection with the execution and
delivery of the Transaction Documents have been paid or shall have been paid at
or prior to Closing Date.
(m) Place of Business. The principal place of business and chief
executive office of CAC is in Southfield, Michigan, and the office where CAC
keeps all of its Records is at the address listed in Section 8.3, or such other
locations notified to Funding and the Deal Agent in accordance with this
Agreement in jurisdictions where all action required by the terms of this
Agreement has been taken and completed.
(n) Good Title. Upon the contribution of the Loans and related property
to Funding pursuant to this Agreement, Funding shall acquire all of CAC's
ownership and other interest in each Loan, and in the Related Security,
Collections and proceeds with respect thereto, in each case free and clear of
any Lien.
(o) Tradenames, Etc. As of the date hereof CAC has not, within the last
five (5) years, operated under any tradenames other than its corporate name, nor
has it changed its name,
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merged with or into or consolidated with any other corporation or been the
subject of any proceeding under Xxxxx 00, Xxxxxx Xxxxxx Code (Bankruptcy).
(p) Nature of Loans, Contracts. Each Loan represented by CAC to be an
Eligible Loan, or included in the calculation of the Aggregate Outstanding
Eligible Loan Balance, at the time of such representation, or at the time of
such calculation, as applicable, in fact satisfies the definition of "Eligible
Loan" set forth in the Loan and Security Agreement. Each Contract classified as
an "Eligible Contract" (or included in any aggregation of balances of "Eligible
Contracts") by CAC satisfies at the time of such classification the definition
of "Eligible Contract" set forth in the Loan and Security Agreement.
(q) Amount of Loans. The Funding Notice shall provide (A) the aggregate
Outstanding Balance of the Contracts; (B) the Aggregate Outstanding Eligible
Loan Balance; and (C) the Aggregate Outstanding Eligible Loan Net Balance; each
as of the Cut-off Date and as reported in the Loan Servicing System.
(r) Collections and Servicing. Since June 30, 2003, there has been no
material adverse change in the ability of the Servicer to service and collect
the Loans.
(s) Not an Investment Company. CAC is not, and is not controlled by, an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or each is exempt from all provisions of such Act.
(t) ERISA. CAC is in compliance in all material respects with the
Employee Retirement Income Security Act of 1974, as amended.
(u) Bulk Sales. No transaction contemplated by this Agreement requires
compliance with any bulk sales act or similar law.
(v) Preference; Voidability. The transfer of the Loans, Collections,
Related Security and other Contributed Property by CAC to Funding, has not been
made for or on account of an antecedent debt owed by Funding to CAC, or by CAC
to Funding, and such transfer is not voidable under any Section of the
Bankruptcy Reform Act of 1978 (11 U.S.C. Section Section 101 et seq.), as
amended.
(w) No Consents. With respect to each Loan and the other Contributed
Property, all consents, licenses, approvals or authorizations of or
registrations or declarations with any Governmental Authority required to be
obtained, effected or given by CAC, in connection with the pledge of such
Contributed Property to Funding have been duly obtained, effected or given and
are in full force and effect.
(x) Exhibit A. Upon delivery, Exhibit A to this Agreement and each
supplement or addendum thereto will be an accurate and complete listing of all
Loans and the related Dealer Agreements and Contracts in all material respects
on the date each such Loan was sold to Funding hereunder, and the information
contained therein is and will be true and correct in all material respects as of
such date.
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(y) Adverse Selection. No selection procedure believed by CAC to be
adverse to the interests of Funding has been or will be used in selecting the
Dealer Agreements or the Loans.
(z) Use of Proceeds. No proceeds of any sale of Contributed Property
will be used (i) for a purpose that violates, or would be inconsistent with,
Regulation T, U or X promulgated by the Board of Governors of the Federal
Reserve System from time to time or (ii) to acquire any security in any
transaction which is subject to Section 12, 13 or 14 of the Securities Exchange
Act of 1934, as amended.
SECTION 4.2. Reaffirmation of Representations and Warranties by CAC;
Notice of Breach. The representations and warranties set forth in Section 4.1
shall survive the conveyance of the Loans to Funding, and termination of the
rights and obligations of Funding and CAC under this Agreement. Upon discovery
by Funding or CAC of a breach of any of the foregoing representations and
warranties, the party discovering such breach shall give prompt written notice
to the other within three Business Days of such discovery.
ARTICLE V
COVENANTS OF CAC
SECTION 5.1. Affirmative Covenants. So long as this Agreement is in
effect, and until all Loans, which have been conveyed to Funding pursuant
hereto, shall have been paid in full or written-off, and all amounts owed by CAC
pursuant to this Agreement have been paid in full, CAC hereby covenants and
agrees as follows:
(a) Preservation of Corporate Existence; Conduct of Business. CAC will
preserve and maintain its existence, rights, franchises and privileges in the
jurisdiction of its formation, and qualify and remain qualified in good standing
as a foreign corporation in each jurisdiction where the failure to preserve and
maintain such existence, rights, franchises, privileges and qualification has
had, or could reasonably be expected to have, a material adverse effect on the
Contributed Property. CAC will carry on and conduct its business in
substantially the same manner and in substantially the same fields of enterprise
as it is presently conducted and do all things necessary to remain duly
incorporated, validly existing and in good standing as a domestic corporation in
its jurisdiction of incorporation and CAC will maintain all requisite authority
to conduct its business in each jurisdiction in which its business is conducted.
(b) Compliance with Laws. CAC will comply in all material respects with
all Applicable Laws.
(c) Furnishing of Information and Inspection of Records. CAC will
furnish to Funding from time to time such information with respect to the Loans
as Funding may reasonably request, including, without limitation, listings
identifying the Obligor and the Outstanding Balance for each Loan. CAC will at
any time and from time to time during regular business hours permit Funding, or
its agents or representatives, (i) to examine and make copies of and abstracts
from all Records and (ii) to visit the offices and properties of CAC for the
purpose of examining such Records, and to discuss matters relating to Loans or
CAC's
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performance hereunder with any of the officers, directors, employees or
independent public accountants of CAC having knowledge of such matters.
(d) Keeping of Records and Books of Account. CAC will maintain and
implement administrative and operating procedures (including without limitation,
an ability to recreate records evidencing the Loans and the Contracts in the
event of the destruction of the originals thereof), and keep and maintain all
documents, books, records and other information reasonably necessary or
advisable for the collection of all Loans.
(e) Performance and Compliance with Loans and Dealer Agreements. CAC,
at its expense, will timely and fully perform and comply with all provisions,
covenants and other promises required to be observed by it under the Dealer
Agreements related to the Loans in all material respects.
(f) Credit and Collection Policies. As long as it is the Servicer, CAC
will comply in all material respects with the Credit Guidelines (as in effect on
the Closing Date) and the Collection Guidelines in regard to each Loan and the
related Dealer Agreement.
(g) Collections Received. CAC shall hold in trust, and deposit to the
Collection Account, not later than the close of business on the second Business
Day following the Date of receipt, all Collections received from time to time by
CAC or the Servicer.
(h) Sale Treatment. CAC agrees to treat the conveyance of the
Contributed Property made pursuant to this Agreement for all purposes
(including, without limitation, tax and financial accounting purposes) as an
absolute contribution and, to the extent any such reporting is required, shall
report the transactions contemplated by this Agreement on all relevant books,
records, tax returns, financial statements and other applicable documents as a
complete disposition of the Contributed Party to Funding.
(i) ERISA. CAC will promptly give Funding written notice upon becoming
aware that CAC is not in compliance in all material respects with ERISA or that
any ERISA lien on any of the Loans exists.
(j) Preservation of Security Interest. CAC will file such financing and
continuation statements and any other documents that may be required by any law
or regulation of any Governmental Authority to preserve and perfect the security
interest of Funding in, to and under the Contributed Property. CAC will maintain
possession of the Dealer Agreements and the Contract Files and Records, as
custodian for the Collateral Agent, as set forth in Section 6.2(c) of the Loan
and Security Agreement. CAC, as Servicer, will comply with its covenants under
Section 5.4(d) of the Loan and Security Agreement.
(k) Separateness. CAC will take such actions that are required on its
part to be performed to cause (i) Funding to be in compliance, at all relevant
times, with Section 5.2(o) of the Loan and Security Agreement, and (ii) all
factual assumptions set forth in the opinion letters delivered by Xxxxxx Xxxxxxx
PLLC on the date hereof with respect to certain bankruptcy matters to remain
true at all relevant times.
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SECTION 5.2. Negative Covenants. During the term of this Agreement:
(a) No Sales, Liens, Etc. Except as otherwise provided herein, CAC will
not sell, assign (by operation of law or otherwise) or otherwise dispose of, or
create or suffer to exist any Lien upon (or the filing of any financing
statement) or with respect to (i) any of the Loans, the Related Security,
Collections or other Contributed Property, (ii) any goods (other than
inventory), the sale, which may give rise to any Loan, Related Security or
Collections or other Contributed Property or (iii) any account to which any
Collections of any Loan are sent, or, in each case, assign any right to receive
income in respect thereof. CAC shall, and will cause each of its Subsidiaries
to, specifically exclude from the property subject to any Lien granted on
inventory any and all accounts receivable generated by sales of such inventory
and the proceeds thereof and shall provide, upon Funding's request, evidence
satisfactory to Funding that any such Lien (and each related UCC financing
statement or other related filing) expressly excludes any such accounts
receivable. CAC will provide Funding and the Deal Agent with a copy of any
inventory financing agreement at least three Business Days prior to the
effectiveness thereof.
(b) No Extension or Amendment of Loans. CAC will not extend, amend or
otherwise modify the terms of any Loan, or amend, modify or waive any term or
condition of any Dealer Agreement related thereto, except as permitted by any
other Transaction Document.
(c) Credit Guidelines and Collection Guidelines. CAC will not amend,
modify, restate or replace, in whole or in part, the Credit Guidelines or
Collection Guidelines, which change would impair the collectibility of any Loan
or Contract or otherwise adversely affect the interests or the remedies of
Funding under this Agreement or any other Transaction Document, unless such
change is permitted under the Loan and Security Agreement and unless CAC obtains
the prior written consent of Funding.
(d) Change in Payment Instructions to Obligors. CAC will not make any
change in its instructions to Obligors regarding payments to be made directly or
indirectly, unless such change is permitted under the Loan and Security
Agreement and Funding and CAC have each consented to such change and have
received duly executed documentation related thereto.
(e) Change of Name, Etc. CAC will not change its name, identity,
jurisdiction of organization or structure or location of its chief executive
office, unless at least ten (10) days prior to the effective date of any such
change CAC delivers to Funding and the Deal Agent such documents, instruments or
agreements, including, without limitation, appropriate financing statements
under the UCC, executed by CAC, as are necessary to reflect such change and to
continue the perfection of Funding's and any assignee's interest in the Loans.
(f) Separate Business. CAC will not: (i) fail to maintain separate
books, financial statements, accounting records and other corporate documents
from those of Funding; (ii) commingle any of its assets or the assets of any of
its Affiliates with those of Funding; (iii) pay from its own assets any
obligation or indebtedness of any kind incurred by Funding; (iv) directly, or
through any of its Affiliates, borrow funds or accept credit or guaranties from
Funding.
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SECTION 5.3 Indemnities by CAC.
(a) Without limiting any other rights that any such Person may have
hereunder or under Applicable Law, CAC hereby agrees to indemnify Funding, or
its assignee, and each of their respective Affiliates and officers, directors,
employees and agents thereof (collectively, the "Indemnified Parties"),
forthwith on demand, from and against any and all damages, losses, claims,
liabilities and related costs and expenses, including attorneys' fees and
disbursements (all of the foregoing being collectively referred to as the
"Indemnified Amounts") awarded against or incurred by such Indemnified Party
arising out of or as a result of this Agreement or in respect of any Loan or any
Contract, excluding, however, (a) Indemnified Amounts to the extent resulting
from gross negligence or willful misconduct on the part of such Indemnified
Party or (b) Indemnified Amounts that arise as a result of non-payment of Loans
due to credit problems of the Dealers or Obligors. If CAC has made any indemnity
payment pursuant to this Section 5.3 and such payment fully indemnified the
recipient thereof and the recipient thereafter collects any payments from others
in respect of such Indemnified Amounts then, the recipient shall repay to CAC an
amount equal to the amount it has collected from others in respect of such
indemnified amounts. Without limiting the foregoing, CAC shall indemnify each
Indemnified Party for Indemnified Amounts relating to or resulting from:
(i) any Contract or Loan treated as or represented by CAC to
be an Eligible Contract or Eligible Loan that is not at the applicable time an
Eligible Contract or Eligible Loan;
(ii) reliance on any representation or warranty made or deemed
made by CAC or any of its officers under or in connection with this Agreement,
which shall have been false or incorrect in any material respect when made or
deemed made or delivered;
(iii) the failure by CAC to comply with any term, provision or
covenant contained in this Agreement or any agreement executed in connection
with this Agreement, or with any Applicable Law, with respect to any Loan,
Dealer Agreement, any Contract, or the nonconformity of any Loan, Dealer
Agreement or Contract with any such Applicable Law;
(iv) the failure to vest and maintain vested in Funding, or
its assignees, a first priority perfected security interest in the Contributed
Property, free and clear of any Lien;
(v) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other Applicable Laws with respect to the Contributed
Property, whether on the Initial Funding Date or at any subsequent time;
(vi) any dispute, claim, offset or defense (other than the
discharge in bankruptcy of the Dealer or Obligor) of the relevant Dealer or
Obligor to the payment of any Loan or Contract (including, without limitation, a
defense based on such Loan or Contract not being a legal, valid and binding
obligation of such Obligor enforceable against it in accordance with its terms);
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(v) any failure of CAC to perform its duties or obligations in
accordance with the provisions of this Agreement or any failure by CAC to
perform its respective duties under the Loans;
(vi) the failure by CAC to pay when due any Taxes for which
CAC is liable, including without limitation, sales, excise or personal property
taxes payable in connection with the Contributed Property;
(vii) the commingling of Collections of the Loans and
Contracts at any time with other funds;
(viii) any investigation, litigation or proceeding related to
this Agreement or in respect of any Loan or Contract; and
(ix) the failure by CAC to pay when due any Taxes for which
CAC is liable, including without limitation, sales, excise or personal property
taxes payable in connection with the Contributed Property;
(x) the failure of CAC, in its individual capacity, or any of
its agents or representatives to remit to the Servicer, the Deal Agent, or the
Collateral Agent Collections of the Loans and Contracts remitted to CAC, in its
individual capacity, or any such agent or representative;
(xi) the failure of a Contract File to contain the relevant
original Contract.
Notwithstanding the foregoing, CAC shall have no indemnification
obligation hereunder with respect to any Loan or Contract in respect of which
CAC shall have paid the Release Price under the Loan and Security Agreement
after the date of such payment.
(b) Any amounts subject to the indemnification provisions of this
Section 5.3 shall be paid by CAC to the Indemnified Party within five (5)
Business Days following the the Indemnified Party's demand therefor.
(c) The obligations of CAC under this Section 5.3 shall survive the
termination of this Agreement.
ARTICLE VI
REPURCHASE OBLIGATION
SECTION 6.1. Mandatory Repurchase upon Breach of Warranty. If any Loan,
which has been contributed to Funding by CAC hereunder and which has been
reported by CAC to be an Eligible Loan, shall fail to meet the conditions set
forth in the definition of "Eligible Loan" on
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the date of such report or for which any representation or warranty made herein
in respect of such Loan shall fail to be true on the date so made, CAC shall be
deemed to have received on such day a Collection of such Loan in full and shall
on such day pay to Funding an amount equal to the Release Price of such Loan. If
on any day any Contract, which has been contributed to Funding by CAC hereunder
and which has been reported by CAC to be an Eligible Contract, shall fail to
meet the conditions set forth in the definition of "Eligible Contract" on the
date of such report or for which any representation or warranty made herein in
respect of such Contract shall fail to be true on the date so made, CAC shall be
deemed to have received on such day a Collection in the amount of the Release
Price of such Contract and shall on such day pay to Funding an amount equal to
the Release Price of such Contract. For purposes of this Section 6.1, Release
Price shall be calculated as of the last day of the immediately preceding
collection period. Upon the request of CAC, Funding shall release its security
interest on the Loans and the Contracts for which payment has been made in
accordance with this Section 6.1; provided, however, that any Income Collections
relating to any such Loans accrued through the date of the release of the
security interest in such Loans shall continue to be owned by Funding.
SECTION 6.2. No Recourse. Except as otherwise provided in this Article
VI, the purchase and sale of the Loans under this Agreement shall be without
recourse to CAC or the Servicer.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.1. Conditions to Funding's Obligations Regarding Loans.
Consummation of the transactions contemplated hereby on the Closing Date, the
Initial Funding Date and, where applicable, on the date of each Incremental
Funding, shall be subject to the satisfaction of the following conditions:
(a) All representations and warranties of CAC contained in this
Agreement shall be true and correct on the Closing Date, the Initial Funding
Date and the date of each Incremental Funding with the same effect as though
such representations and warranties had been made on such date and the date of
each Incremental Funding;
(b) With respect to those Loans contributed on the Initial Funding Date
and the date of each Incremental Funding, all information concerning such Loans
provided to Funding shall be true and correct in all material respects as of the
Initial Funding Date and the date of each Incremental Funding;
(c) CAC shall have substantially performed all other obligations
required to be performed by the provisions of this Agreement;
(d) CAC shall have filed or caused to be filed, or shall have delivered
for filing, the financing statement(s) required to be filed pursuant to Section
2.1(e);
(e) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to
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Funding, and Funding shall have received from CAC copies of all documents
(including, without limitation, records of corporate proceedings) relevant to
the transactions herein contemplated as Funding may reasonably have requested;
and
(f) On the Initial Funding Date, CAC shall deliver to Funding and the
Deal Agent a Monthly Report as of the Initial Funding Date.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
SECTION 8.1. Amendment. This Agreement and the rights and obligations
of the parties hereunder may not be changed orally, but only by an instrument in
writing signed by Funding and CAC and consented to in writing by the Deal Agent.
SECTION 8.2. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Michigan.
SECTION 8.3. Notices. Except where telephonic instructions or notices
are authorized herein to be given, all notices, demands, instructions and other
communications required or permitted to be given to or made upon any party
hereto shall be in writing and shall be sent by facsimile transmission with a
confirmation of the receipt thereof and shall be deemed to be given for purposes
of this Agreement on the day that the receipt of such facsimile transmission is
confirmed in accordance with the provisions of this Section 8.3. Unless
otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section, notices, demands, instructions (including
payment instructions) and other communications in writing shall be given to or
made upon the respective parties hereto at their respective addresses and
accounts indicated below, and, in the case of telephonic instructions or
notices, by calling the telephone number or numbers indicated for such party
below:
(a) in the case of Funding:
CAC Funding Corp.
Silver Triangle Building
00000 Xxxx Xxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx, Xx.
Telephone: (000) 000-0000 (ext. 884)
Telecopy: (000) 000-0000
with a copy to:
Wachovia Securities, Inc.
Xxx Xxxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Conduit Administrator
Telephone: (000) 000-0000
15
Facsimile: (000) 000-0000
(b) in the case of CAC and in the case of the Servicer (for so long as
the Servicer is CAC):
Credit Acceptance Corporation
Silver Triangle Building
00000 Xxxx Xxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx, Xx.
Telephone: (000) 000-0000 (ext. 884)
Telecopy: (000) 000-0000
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party.
SECTION 8.4. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions,
or terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement.
SECTION 8.5. Assignment. This Agreement may not be assigned by the
parties hereto, except that Funding may assign its rights hereunder pursuant to
the Loan and Security Agreement to the Collateral Agent or the Deal Agent, for
the benefit of VFCC and any Additional Conduits and the Investors, and that VFCC
and any Additional Conduits may assign any or all of its rights to any Liquidity
Bank. Funding hereby notifies CAC (and CAC hereby acknowledges) that Funding,
pursuant to the Loan and Security Agreement, has assigned its rights hereunder
to the Deal Agent. All rights of Funding hereunder may be exercised by the Deal
Agent or its assignees, to the extent of their respective rights pursuant to
such assignments.
SECTION 8.6. Further Assurances. Funding, CAC and the Servicer agree to
do and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by the other parties in
order to more fully to effect the purposes of this Agreement, including, without
limitation, the execution of any financing statements or continuation statements
or equivalent documents relating to the Loans for filing under the provisions of
the UCC or other laws of any applicable jurisdiction.
SECTION 8.7. No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of Funding, CAC or the Deal Agent, any
right, remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exhaustive of any
rights, remedies, powers and privilege provided by law.
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SECTION 8.8. Counterparts. This Agreement may be executed in two or
more counterparts including telecopy transmission thereof (and by different
parties on separate counterparts), each of which shall be an original, but all
of which together shall constitute one and the same instrument.
SECTION 8.9. Binding Effect; Third-Party Beneficiaries. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. The Deal Agent, the Collateral
Agent on behalf of VFCC and the Investors, and any Liquidity Bank are intended
by the parties hereto to be third-party beneficiaries of this Agreement.
SECTION 8.10. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
SECTION 8.11. Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
SECTION 8.12. Exhibits. The schedules and exhibits referred to herein
shall constitute a part of this Agreement and are incorporated into this
Agreement for all purposes.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Funding and CAC each have caused this Contribution
Agreement to be duly executed by their respective officers as of the day and
year first above written.
FUNDING: CAC WAREHOUSE FUNDING
CORPORATION II
By: /s/ XXXXXXX X. XXXX
-------------------------------------------
Name: Xxxxxxx X. Xxxx
----------------------------------------
Title: Vice President -- Finance and Treasurer
----------------------------------------
CAC Warehouse Funding Corporation II
Silver Triangle Building
00000 Xxxx Xxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx, Xx.
Facsimile No.: 000-000-0000
Confirmation No.: 000-000-0000 (ext. 884)
CAC: CREDIT ACCEPTANCE CORPORATION
By: /s/ XXXXXXX X. XXXX
-------------------------------------------
Name: Xxxxxxx X. Xxxx
-----------------------------------------
Title: Treasurer and Chief Financial Officer
----------------------------------------
CAC Warehouse Funding Corp.
Silver Triangle Building
00000 Xxxx Xxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx, Xx.
Facsimile No. 000-000-0000
Confirmation No.: 000-000-0000 (ext. 884)
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