AMENDMENT NUMBER 2 TO
SECURITY AGREEMENT
AMENDMENT NUMBER 2 TO SECURITY AGREEMENT (this "Amendment"),
dated as of September 9, 1999 by and among UNION ACCEPTANCE FUNDING CORPORATION,
a Delaware corporation, as debtor (in such capacity, the "Debtor"), UNION
ACCEPTANCE CORPORATION, an Indiana corporation ("UAC"), individually and in its
capacity as collection agent (in such capacity, the "Collection Agent"),
ENTERPRISE FUNDING CORPORATION, a Delaware corporation (the "Company"), MBIA
INSURANCE CORPORATION, a New York stock insurance company, as financial guaranty
insurer (the "Insurer") and BANK OF AMERICA, N.A., a national banking
association (formerly known as NationsBank, N.A.) ("Bank of America"),
individually and as collateral agent for the Company, the Bank Investors, and
the Insurer (in such capacity, the "Collateral Agent") amending that certain
Security Agreement dated as of September 18, 1998, as amended by Amendment
Number 1 thereto, dated as of May 25, 1999 (such agreement as so amended, the
"Security Agreement").
WHEREAS, the consent of the Insurer to this Amendment shall
constitute a Revolving Period Extension (as defined in the Insurance Agreement);
WHEREAS, the parties hereto mutually desire to make certain
amendments to the Security Agreement as hereinafter set forth.
NOW, THEREFORE, the parties hereby agree as follows:
SECTION 1. Defined Terms. As used in this Amendment, and
except as otherwise provided in this Section 1, capitalized terms shall have the
same meanings assigned thereto in the Security Agreement.
(a) Section 1.1 of the Security Agreement is hereby amended by deleting
the definition of "Commitment Termination Date" and replacing it with the
following:
""Commitment Termination Date" shall mean September 7, 2000, or
such later date to which the Commitment Termination Date may be
extended by the Debtor, the Agent and the Bank Investors not later
than 30 days prior to the then current Commitment Termination
Date."
(b) Section 1.1 of the Security Agreement is hereby amended by deleting
the definition of "Facility Limit" and replacing it with the following:
""Facility Limit" shall mean $500,000,000."
(c) Section 1.1 of the Security Agreement is hereby amended by deleting
the reference to "September 17, 1999" in clause (vi) of the definition of
"Termination Date" and replacing such reference with "September 7, 2000".
(d) Section 1.1 of the Security Agreement is hereby amended by deleting
the definition of "Insurer Default" and replacing it with the following:
""Insurer Default" shall mean, at any time, any failure by the
Insurer to make any payment when due under the Insurance Agreement
or under the Policy."
SECTION 2. Amendment to Section 2.3(a)(i). Section 2.3(a)(i)
of the Security Agreement is hereby deleted and replaced with the following:
"(i) first, (A) to pay any amounts due under any Acceptable
Hedging Arrangements, pro rata, in accordance with the amounts due
thereunder, and (B) to the Reserve Account, in the amount of
Reserve Account Advances related to such Settlement Period;"
SECTION 3. Limited Scope. This amendment is specific to the
circumstances described above and does not imply any future amendment or waiver
of rights allocated to the Debtor, the Collection Agent, the Insurer or the
Collateral Agent under the Security Agreement.
SECTION 4. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 5. 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 6. 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.
SECTION 7. Revolving Period Extension. The Insurer agrees and
acknowledges that by giving its consent to this Amendment, this Amendment shall
constitute a Revolving Period Extension under and as defined in the Insurance
Agreement, notwithstanding that the date of this Amendment is less than 30 days
prior to September 17, 1999.
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IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Amendment Number 2 as of the date first written above.
ENTERPRISE FUNDING CORPORATION,
as Company
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
UNION ACCEPTANCE FUNDING
CORPORATION, as Debtor
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
UNION ACCEPTANCE CORPORATION,
individually and as Collection Agent
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
MBIA INSURANCE CORPORATION,
as Insurer
By: /s/ Xxxxxxxx Xxxxxxx
------------------------------------
Name:Xxxxxxxx Xxxxxxx
Title: Managing Director
BANK OF AMERICA, N.A.,
individually and as Collateral Agent
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Brain X. Xxxx
Title: Vice President
