EXHIBIT 4(G)(7)
EXECUTION COPY
RELEASE AND FOURTH AMENDMENT TO SECURITY AGREEMENT
This Release and Fourth Amendment to Security Agreement ("Fourth
Amendment") is dated as of June 9, 2004 by and between Credit Acceptance
Corporation, a Michigan corporation ("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" 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 requirements of that certain Amended and Restated
Credit Agreement dated as of June 11, 2001 (the "Original 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, and that certain Third Amendment to Second Amended and Restated
Security Agreement ("Third Amendment") dated as August 31, 2002, in each case
amending the Security Agreement referred to in Recital A on the terms set forth
therein (such Security Agreement, as amended by the First Amendment, the Second
Amendment and the Third Amendment, the "Security Agreement").
C. Company and Debtors intend, concurrently with this Fourth Amendment,
to consummate the New Restructuring, and to enter into that certain Third
Amended and Restated Credit Agreement dated as of June 9, 2004 (as the same may
be further amended, restated or otherwise modified from time to time, the
"Credit Agreement").
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 as execution and delivery of this Fourth
Amendment is a condition to effectiveness of the Credit Agreement.
NOW THEREFORE, the parties agree as follows:
1. The following is inserted in the post-amble to Section 2.1 as
new subsection (iv):
"or (iv) any equity interests in Foreign Subsidiaries except
to the extent a pledge or grant of lien was made pursuant to a
Collateral Document (other than this Security Agreement) in
existence on the Effective Date."
2. The following is inserted as new Section 3.8 of the Security
Agreement:
"Section 3.8 Intellectual Property.
Each Debtor owns the United States registered copyrights,
letters patent and trademarks and intellectual property
license agreements set forth on the attached Schedule G,
together with the applications for registration of copyrights,
trademarks or patents, and such mask works set forth on the
attached Schedule G, together with such additional
intellectual property as such Debtor may disclose to the
Collateral Agent from time to time."
3. The following is inserted as new Section 4.18 of the Security
Agreement:
"Section 4.18 Preservation of Intellectual Property.
(a) Each Debtor agrees to take all necessary steps,
including, without limitation, in the United States Copyright
Office or the United States Patent and Trademark Office or in
any court, to defend, enforce, and preserve the validity and
ownership of the intellectual property identified on Schedule
G hereto and all such additional registered intellectual
property as may be acquired or held by each Debtor, except in
each case in which the Debtors have determined, using their
commercially reasonable judgment, that any of the foregoing is
not of material economic value to them.
(b) Each Debtor shall not abandon any registered
intellectual property registrations or applications therefor
without the written consent of the Collateral Agent, unless
the Debtors shall have previously determined, using their
commercially reasonable judgment, that such use or pursuit or
maintenance of such intellectual property registrations or
applications, is not of material economic value to them.
(c) In the event that a Debtor becomes aware that any
item of the intellectual property which such Debtor has
determined, using its commercially reasonable judgment, to be
material to its business (either singly or when taken as a
whole together with other such intellectual property rights
then being infringed against or misappropriated) is infringed
or misappropriated by a third party, such Debtor shall notify
the Collateral Agent promptly and in writing, in reasonable
detail, and shall take such actions as such Debtor or the
Collateral Agent deems necessary or appropriate (using its
reasonable commercial judgment) including, without limitation,
suing for infringement or misappropriation and for an
injunction against such infringement or misappropriation. Any
expense incurred in connection with such activities shall be
borne by the Debtors. Each Debtor will advise the Collateral
Agent promptly and in writing and in reasonable detail, of
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any adverse determination or the institution of any proceeding
(including, without limitation, the institution of any
proceeding in the United States Patent and Trademark Office,
the United States Copyright Office or any court) regarding any
material item of the intellectual property collateral.
(d) Promptly following application for registration,
registration or acquisition by a Debtor of any trademark,
patent or copyright, such Debtor shall provide notice to the
Collateral Agent of such application, registration or
acquisition so that the Collateral Agent may make such filings
as it may deem necessary or desirable to perfect its interest
in such intellectual property, and such Debtor shall execute
an amendment to the Security Agreement in substantially the
form of Exhibit C in order to for the Collateral Agent to
perfect its interests in any intellectual property held by
such Debtor."
4. The Security Agreement is amended by attaching Annex 1 hereto to the
Security Agreement as Schedule G and Annex 2 hereto to the Security Agreement as
Exhibit C.
5. Upon the due execution of this Fourth Amendment by all parties
hereto (and, in the case of the release of the assets, equity interests and
guaranty of the T&C Subsidiary, upon completion of the New Restructuring), the
Collateral Agent hereby (i) releases and discharges any security interests and
other Liens or encumbrances over the assets of the T&C Subsidiary, CAC Life or
over the equity interests of the T&C Subsidiary or CAC Life which are held by
the Collateral Agent for the benefit of the Lenders or Future Debt Holders,
except for any pledge of the equity interests of CAC Scotland, the equity
interests of which shall be transferred to CAC South Dakota subject to such
pledge (collectively, the "Security on the Collateral"); (ii) acknowledges that
the Security on the Collateral shall cease to be of any force or effect
whatsoever and that neither the T&C Subsidiary nor CAC Life shall be bound by
any the representations, warranties, covenants, obligations or agreements set
forth in the Security Agreement; (iii) authorizes the Company and each Debtor to
file, at Company's or such Debtor's expense, such Uniform Commercial Code
financing statements or such other filings which are necessary to terminate the
Security on the Collateral, and (iv) releases T&C Subsidiary and CAC Life from
any and all obligations under that certain Amended and Restated Domestic
Guaranty dated as of June 9, 2004, provided, however, that (x) retroactive to
consummation of the CAC Life Restructuring, CAC Reinsurance, Ltd. hereby assumes
all of the obligations of CAC Life under the Loan Documents executed by CAC Life
prior to this Fourth Amendment and (y) the release of CAC Life described in this
section shall not extend to any of the obligations of CAC Reinsurance Ltd. (the
company into which CAC Life was liquidated pursuant to the CAC Life
Restructuring) under any Loan Document, which in each case remains in full force
and effect.
6. Each undersigned Debtor hereby reaffirms its obligations under the
Security Agreement as amended as of the date hereof. Each reference in the
Security Agreement to "this Agreement" or "the Agreement" shall be deemed to
refer to the Security Agreement as amended by the First Amendment, the Second
Amendment, the Third Amendment and this Fourth Amendment, and each further
amendment which may be executed and delivered from time to time.
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7. Unless otherwise defined to the contrary herein, all capitalized
terms used in this Fourth Amendment shall have the meaning set forth in the
Credit Agreement.
8. This Fourth Amendment shall be construed in accordance with and
governed by the laws of the State of Michigan.
9. This Fourth Amendment may be executed in counterparts in accordance
with Section 13.10 of the Credit Agreement.
10. Except as expressly modified hereby, all the terms and conditions
of the Security Agreement shall remain in full force and effect, and except as
expressly set forth herein, nothing set forth in this Fourth Amendment shall
constitute a waiver or release of any term or condition of the Security
Agreement or any of the Collateral Agent's rights and remedies provided
thereunder or as otherwise provided by law.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Fourth
Amendment as of the day and year first written above.
DEBTORS:
CREDIT ACCEPTANCE CORPORATION
By:
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Name:
------------------------------------
Title:
-----------------------------------
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: Xxxxxxx Xxxx
AUTO FUNDING AMERICA OF NEVADA INC.
BUYERS VEHICLE PROTECTION PLAN, INC.
CAC LEASING, INC.
VEHICLE REMARKETING SERVICES, INC.
CREDIT ACCEPTANCE CORPORATION OF
NEVADA, INC.
CREDIT ACCEPTANCE CORPORATION OF
SOUTH DAKOTA, INC.
By:
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Name:
------------------------------------
Title:
-----------------------------------
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: Xxxxxxx Xxxx
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CAC REINSURANCE, LTD
By:
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Name:
------------------------------------
Title:
-----------------------------------
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: Xxxxxxx Xxxx
CAC (TCI), LTD.
By:
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Name:
------------------------------------
Title:
-----------------------------------
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: Xxxxxxx Xxxx
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COLLATERAL AGENT:
COMERICA BANK as Collateral Agent
By:
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Name:
------------------------------------
Title:
-----------------------------------
Address for Notices:
Metropolitan Loans F
One Detroit Center, 5th Floor
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax No.: 313/000-0000
Telephone No.: 313/000-0000
Attention: Xxxxx X. Light
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ANNEX 1
SCHEDULE G
COPYRIGHT SCHEDULE
CREDIT ACCEPTANCE CORPORATION
COPYRIGHT REG. NO.
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CAC program review: 18 minutes that can change the profitability of TX3449287
your dealership : ser. 100
CAC program review: 18 minutes that can change the profitability of TX3449289
your dealership : ser. 200
CAC Sales and management video seminar TX3377499
CAC sales and management video seminar TX3395660
CAC Sales and management video seminar : owner's manual TX3395659
Century Club stock option plan for dealers TX3724334
Century Club stock option plan for dealers TX3770159
Credit Acceptance Corporation dealership procedures XX0000000
Credit Acceptance Corporation dealership procedures TX3572818
Credit Acceptance Corporation management conference XX0000000
Credit Acceptance Corporation management conference TX3439695
Credit Acceptance Corporation management conference manual. By Credit TX4348146
Acceptance Corporation
Credit Acceptance Corporation servicing agreement instructions TX3436544
Credit Acceptance Corporation: servicing agreement instructions TX3577877
Credit acceptance corporation's 100% plus plan TX4160147
Credit Acceptance Corporation's value advance program (VAP) XX0000000
Xxx Xxxx/Credit Acceptance Corporation sales training tapes PA565492
Xxx Xxxx Credit Acceptance Corporation seminar TX3349797
Xxx Xxxx Credit Acceptance Corporation seminar TX3349798
Xxx Xxxx Credit Acceptance Corporation seminar; sales training manual. XX0000000
By Credit Acceptance Corporation
Get started video--easy steps to successful CAC selling TX3449288
Get started video--easy steps to successful CAC selling : ser. 200 TX3449286
Giving care dealers new avenues for profits : brochure series 100 TX3432531
Giving car dealers new avenues for profits, brochure series 100. XX0000000
By Credit Acceptance Corporation
Giving car dealers new avenues for profits : brochure series 200 TX3431952
and contents
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COPYRIGHT REG. NO.
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Giving car dealers new avenues for profits; brochure series 200 and contents. TX4182062
By Credit Acceptance Corporation
No-risk financing for high-risk buyers TX3432894
No-risk financing for high-risk buyers brochure. By Credit Acceptance TX4379523
Corporation
The advantages and disadvantages of "buy here, pay here" / by Xxxxxxx TX3432530
Xxxxxxxxxx
The CAC sales and management video training seminar TX3360449
TRADEMARK SCHEDULE
CREDIT ACCEPTANCE CORPORATION
XXXX SERIAL/REGIS. NO.
------------------------------------------------ -----------------
ASK ABOUT OUR GUARANTEED CREDIT APPROVAL 76/367134
ASK XXXX 2,699,904
CAC CREDIT ACCEPTANCE CORPORATION 1,576,794
CREDIT ACCEPTANCE WE CHANGE LIVES! 2,644,387
MISCELLANEOUS DESIGN 2,657,196
PROFIT PROTECTOR 2,451,702
WE CHANGE LIVES 2,660,738
XXXX (and Design) 76/447928
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ANNEX 2
EXHIBIT C
FORM OF AMENDMENT
This Amendment, dated ________________, 20__, is delivered pursuant to
Section 4.18(d) of the Security Agreement referred to below. The undersigned
hereby agrees that this Amendment may be attached to the Second Amended and
Restated Security Agreement dated as of June 11, 2001, between the undersigned
and Comerica Bank, as the Collateral Agent, as the same may be amended, restated
or otherwise modified from time to time (the "Security Agreement"), and that the
intellectual property listed on Schedule G annexed hereto shall be and become
part of the Collateral referred to in the Security Agreement and shall secure
payment and performance of all Indebtedness as provided in the Security
Agreement.
Capitalized terms used herein but not defined herein shall have the
meanings therefor provided in the Security Agreement.
[Debtors]
By:
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Name:
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Title:
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Comerica Bank, as Collateral Agent
By:
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Name:
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Title:
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