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EXHIBIT 4(g)(1)
REVISED EXECUTION COPY
12/15/98
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (the "Agreement") dated as of December 15,
1998, is entered into by and between Credit Acceptance Corporation, a Michigan
corporation (the "Debtor") and Comerica Bank, a Michigan banking corporation
("Comerica"), as agent for the benefit of the "Lenders", the "Noteholders" and
the "Future Debt Holders" (each as referred to below) (in such capacity, the
"Collateral Agent"). The addresses for Debtor and Collateral Agent are set forth
on the signature pages.
RECITALS:
A. The Debtor, Comerica and the other financial institutions signatory
thereto, each as "Banks" thereunder (and, in the case of Comerica, in its
separate additional capacity as "Issuing Bank" thereunder) (together with any
Successor Lenders (as hereinafter defined) party thereto from time to time,
collectively the "Lenders"), entered into that certain Second Amended and
Restated Credit Agreement dated as of December 4, 1996, as amended by First
Amendment and Consent dated as of June 4, 1997, Second Amendment dated as of
December 12, 1997, Third Amendment dated as of May 11, 1998 and Fourth Amendment
dated as of July 30, 1998 by and among the Debtor, the financial institutions
from time to time parties thereto and Comerica, as Agent (said credit agreement,
as further amended, restated or otherwise modified from time to time, the
"Credit Agreement").
B. The Debtor entered into the separate note purchase agreements with
the 1994 Noteholders (as hereinafter defined) dated as of October 1, 1994
(collectively, as amended by First Amendment to Note Purchase Agreement dated as
of November 15, 1995, Second Amendment to Note Purchase Agreement dated as of
August 29, 1996, Third Amendment to Note Purchase Agreement dated as of December
12, 1997 and Fourth Amendment to Note Purchase Agreement dated as of July 1,
1998, and as further amended, restated or otherwise modified from time to time,
the "1994 Note Agreements"), pursuant to which the First Amended and Restated
9.12% Senior Notes due November 1, 2001 (collectively, as amended, restated or
otherwise modified from time to time, the "1994 Senior Notes") are outstanding.
C. The Debtor entered into the separate note purchase agreements with
the 1996 Noteholders (as hereinafter defined) dated as of August 1, 1996
(collectively, as amended by First Amendment to Note Purchase Agreement dated as
of December 12, 1997 and Second Amendment to Note Purchase Agreement dated as of
July 1, 1998 and as further amended, restated or otherwise modified from time to
time, the "1996 Note Agreements"), pursuant to which the First Amended and
Restated 8.24% Senior Notes due July 1, 2001 (collectively, as amended, restated
or otherwise modified from time to time, the "1996 Senior Notes") are
outstanding.
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D. The Debtor entered into the separate note purchase agreements with
the 1997 Noteholders (as hereinafter defined) dated as of March 25, 1997
(collectively, as amended by the First Amendment to Note Purchase Agreement
dated as of December 12, 1997 and the Second Amendment to Note Purchase
Agreement dated as of July 1, 1998, as further amended, restated or otherwise
modified from time to time, the "1997 Note Agreements") pursuant to which the
First Amended and Restated 8.02% Senior Notes due October 1, 2001 (collectively,
as amended, restated or otherwise modified from time to time, the "1997 Senior
Notes") are outstanding.
E. Pursuant to Section 7.23 of the Credit Agreement, the Lenders have
required that the Debtor grant (or cause to be granted) certain liens and
security interests to Comerica Bank, as agent for the benefit of the Lenders,
Noteholders, and the Future Debt Holders, all to secure the obligations of the
Debtor under the Credit Documents, the obligations of the Debtor under the
Noteholder Documents and the obligations of the Debtor under the Future Debt
Documents.
F. The Lenders and the Noteholders have consented to the transactions
contemplated hereby, and by the Security Documents, and the Lenders and the
Noteholders have agreed that the Debtor's obligations under the Credit
Agreement, the Note Agreements and the Future Debt Documents (as defined below)
shall be equally and ratably secured pursuant to this Agreement and the other
Security Documents.
G. The Debtor has directly and indirectly benefitted and will directly
and indirectly benefit from the transactions evidenced by and contemplated in
the Credit Agreement, the Note Agreements and the Future Debt Documents (defined
below) and has consented to the execution and delivery of that certain
Intercreditor Agreement among Comerica, as Collateral Agent, the Lenders
(including Comerica), the Noteholders and the Future Debt Holders, dated as of
the date of this Agreement (as amended, restated or otherwise modified from time
to time according to the terms thereof, the "Intercreditor Agreement").
H. The Lenders, the Noteholders and the Collateral Agent have entered
into the Intercreditor Agreement to define the rights, duties, authority and
responsibilities of the Collateral Agent, acting on behalf of such parties
regarding the Collateral (as defined below), and the relationship among the
parties regarding their equal and ratable interests in the Collateral.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the adequacy, receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. As used in this Agreement, capitalized terms
not otherwise defined herein or expressly referenced as being defined in the
Credit Agreement have the meanings provided for such terms in the Intercreditor
Agreement. References to "Sections," "subsections," "Exhibits" and "Schedules"
shall be to Sections, subsections, Exhibits and Schedules, respectively, of this
Agreement unless otherwise specifically provided. All references to statutes and
regulations shall include any amendments of the same and any successor statutes
and regulations. References to particular sections of the UCC should be read to
refer also to parallel sections of the Uniform Commercial Code as enacted in
each state or other jurisdiction where any portion of the Collateral is or may
be located.
The following terms have the meanings indicated below, all such
definitions to be equally applicable to the singular and plural forms of the
terms defined:
"Account" means any "account," as such term is defined in Article or
Chapter 9 of the UCC, now owned or hereafter acquired by the Debtor, and, in any
event, shall include, without limitation, each of the following, whether now
owned or hereafter acquired by the Debtor: (a) all rights of the Debtor to
payment for goods sold or leased or services rendered, whether or not earned by
performance, (b) all accounts receivable of the Debtor, (c) all rights of the
Debtor to receive any payment of money or other form of consideration, (d) all
security pledged, assigned or granted to or held by the Debtor to secure any of
the foregoing, (e) all guaranties of, or indemnifications with respect to, any
of the foregoing, and (f) all rights of the Debtor as an unpaid seller of goods
or services, including, but not limited to, all rights of stoppage in transit,
replevin, reclamation and resale.
"Advances to Dealers" shall mean any and all advances by the Debtor to
Dealers under the Dealer Agreements, as outstanding from time to time.
"Benefited Obligations" has the meaning specified in the Intercreditor
Agreement.
"Chattel Paper" means any "chattel paper," as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by the Debtor.
"Collateral" has the meaning specified in Section 2.1 of this
Agreement.
"Computer Records" has the meaning specified in Section 2.1(g) of this
Agreement.
"Dealer(s)" shall mean a Person engaged in the business of the retail
sale of used motor vehicles, including both businesses exclusively selling used
motor vehicles and businesses principally selling new motor vehicles, but having
a used vehicle department, including any such Person which constitutes an
Affiliate of Debtor.
"Dealer Agreement(s)" shall mean the servicing agreements between the
Debtor and a participating Dealer which sets forth the terms and conditions
under which the Debtor accepts, as
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nominee for such Dealer, the assignment of Installment Contracts for purposes of
administration, servicing and collection and under which the Debtor may make
advances to such Dealers, as such agreements may be in effect from time to time.
"Document" means any "document," as such term is defined in Article or
Chapter 9 of the UCC, now owned or hereafter acquired by the Debtor, including,
without limitation, all documents of title and all receipts covering, evidencing
or representing goods now owned or hereafter acquired by the Debtor.
"Election" is defined in Section 6.4 of this Agreement.
"Equipment" means any "equipment," as such term is defined in Article
or Chapter 9 of the UCC, now owned or hereafter acquired by the Debtor and, in
any event, shall include, without limitation, all machinery, equipment,
furniture, trade fixtures, tractors, trailers, rolling stock, vessels, aircraft
and vehicles now owned or hereafter acquired by the Debtor and any and all
additions, substitutions and replacements of any of the foregoing, wherever
located, together with all attachments, components, parts, equipment and
accessories installed thereon or affixed thereto.
"Event of Default" has the meaning specified in the Intercreditor
Agreement.
"Financing Agreements" has the meaning specified in the Intercreditor
Agreement.
"Future Debt Holders" has the meaning specified in the Intercreditor
Agreement.
"General Intangibles" means any "general intangibles," as such term is
defined in Article or Chapter 9 of the UCC, now owned or hereafter acquired by
the Debtor and, in any event, shall include, without limitation, each of the
following, whether now owned or hereafter acquired by the Debtor: (a) all of the
Debtor's service marks, trade names, trade secrets, registrations, goodwill,
franchises, licenses, permits, proprietary information, customer lists, designs
and inventions; (b) all of the Debtor's books, records, data, plans, manuals,
computer software, computer tapes, computer disks, computer programs, source
codes, object codes and all rights of the Debtor to retrieve data and other
information from third parties; (c) all of the Debtor's contract rights,
partnership interests, membership interests, joint venture interests,
securities, deposit accounts, investment accounts and certificates of deposit;
(d) all rights of the Debtor to payment under letters of credit and similar
agreements; (e) all tax refunds and tax refund claims of the Debtor; (f) all
CHOSES in action and causes of action of the Debtor (whether arising in
contract, tort or otherwise and whether or not currently in litigation) and all
judgments in favor of the Debtor; (g) all rights and claims of the Debtor under
warranties and indemnities; and (h) all rights of the Debtor under any
insurance, surety or similar contract or arrangement.
"Installment Contract(s)" shall mean retail installment contracts for
the sale of used motor vehicles assigned by Dealers to Debtor, as nominee for
the Dealer, for administration, servicing, and collection pursuant to an
applicable Dealer Agreement; provided, however, that to the extent the Debtor
transfers or encumbers its interest in any Installment Contracts (or any
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Advances to Dealers related thereto) pursuant to a Permitted Securitization,
such Installment Contracts shall, from and after the date of such transfer or
encumbrance, cease to be considered Installment Contracts under this Agreement
unless and until such installment contracts are reassigned to the Debtor or such
encumbrances are discharged.
"Instrument" means any "instrument," as such term is defined in Article
or Chapter 9 of the UCC, now owned or hereafter acquired by the Debtor, and, in
any event, shall include all promissory notes, drafts, bills of exchange and
trade acceptances of the Debtor, whether now owned or hereafter acquired.
"Inventory" means any "inventory," as such term is defined in Article
or Chapter 9 of the UCC, now owned or hereafter acquired by the Debtor, and, in
any event, shall include, without limitation, each of the following, whether now
owned or hereafter acquired by the Debtor: (a) all goods and other personal
property of the Debtor that are held for sale or lease or to be furnished under
any contract of service; (b) all raw materials, work-in-process, finished goods,
supplies and materials of the Debtor; (c) all wrapping, packaging, advertising
and shipping materials of the Debtor; (d) all goods that have been returned to,
repossessed by or stopped in transit by the Debtor; and (e) all Documents
evidencing any of the foregoing.
"Lenders" has the meaning specified in the Intercreditor Agreement.
"Noteholders" has the meaning specified in the Intercreditor Agreement.
"Permitted Liens" has the meaning specified in Section 3.1 of this
Agreement.
"Permitted Securitization" shall mean a "Permitted Securitization"
under each of the applicable Financing Agreements.
"Pledged Shares" means the shares of capital stock or other equity,
partnership or membership interests described on Schedule D attached hereto and
incorporated herein by reference.
"Proceeds" means any "proceeds," as such term is defined in Article or
Chapter 9 of the UCC and, in any event, shall include, but not be limited to,
(a) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to the Debtor from time to time with respect to any of the Collateral,
(b) any and all payments (in any form whatsoever) made or due and payable to the
Debtor from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Collateral by any
governmental authority (or any Person acting, or purporting to act, for or on
behalf of any governmental authority), and (c) any and all other amounts from
time to time paid or payable under or in connection with any of the Collateral.
"Records" is defined in Section 4.9 of this Agreement.
"Security Documents" has the meaning specified in the Intercreditor
Agreement.
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"Software" has the meaning specified in Section 2.1(g) of this
Agreement.
"UCC" means the Uniform Commercial Code as in effect in the State of
Michigan; provided, that if, by applicable law, the perfection or effect of
perfection or non-perfection of the security interest created hereunder in any
Collateral is governed by the Uniform Commercial Code as in effect on or after
the date hereof in any other jurisdiction, "UCC" means the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such perfection or the effect of perfection or
non-perfection.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. SECURITY INTEREST. As collateral security for the prompt
payment and performance in full when due of the Benefited Obligations (whether
at stated maturity, by acceleration or otherwise), the Debtor hereby pledges and
assigns (as collateral) to the Collateral Agent, and grants the Collateral Agent
a continuing lien on and security interest in, all of the Debtor's right, title
and interest in and to the following, whether now owned or hereafter arising or
acquired and wherever located (collectively, the "Collateral"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all General Intangibles;
(d) all Equipment;
(e) all Inventory;
(f) all Advances to Dealers, Dealer Agreements (and any amounts
advanced to or liens granted by Dealers thereunder), and the
Installment Contracts securing the repayment of such Advances
to Dealers (and other indebtedness of Dealers to Debtor) and
related financial property (the security interest granted
hereby in such Dealer Agreements, Advances to Dealers and
Installment Contracts, and the Accounts, Chattel Paper,
General Intangibles and proceeds therefrom relating to such
Dealer Agreements, Advances to Dealers and Installment
Contracts being subject to the rights of Dealers under Dealer
Agreements);
(g) all computer records ("Computer Records") and software
("Software"), whether relating to the foregoing Collateral or
otherwise, but in the case of such Software, subject to the
rights of any non-affiliated licensee of software;
(h) all shares of stock, and other equity, partnership or
membership interests constituting securities, of the
Significant Domestic Subsidiaries of Debtor from time to time
owned or acquired by the Debtor in any manner (including,
without
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limitation, the Pledged Shares), and the certificates and
all dividends, cash, instruments, rights and other property
from time to time received, receivable or otherwise
distributed or distributable in respect of or in exchange
for any or all of such shares; and
(i) the Proceeds, in cash or otherwise, of any of the property
described in the foregoing clauses (a) through (h) and all
liens, security, rights. remedies and claims of the Debtor
with respect thereto;
provided, however, that "Collateral" shall not include rights under or with
respect to any General Intangible, license, permit or authorization to the
extent any such General Intangible, license, permit or authorization, by its
terms or by law, prohibits the assignment of, or the granting of a security
interest in, the rights of a Grantor thereunder or which would be invalid or
enforceable upon any such assignment or grant; and provided further that
"Collateral" shall not include any Advances to Dealers, Installment Contracts,
rights or interests under Dealer Agreements and related financial property
transferred by the Debtor prior to the date hereof pursuant to a Permitted
Securitization, except to the extent any such property is re-transferred to the
Debtor according to the terms of such Permitted Securitization.
SECTION 2.2. DEBTOR REMAINS LIABLE. Notwithstanding anything to the
contrary contained herein, (a) the Debtor shall remain liable under the
contracts, agreements, documents and instruments included in the Collateral
(including without limitation Dealer Agreements, Advances to Dealers and
Installment Contracts) to the extent set forth therein to perform all of its
duties and obligations thereunder to the same extent as if this Agreement had
not been executed and pay when due any taxes, including without limitation, any
sales taxes payable in connection with the Dealer Agreements, Advances to
Dealers or Installment Contracts and their creation and satisfaction, (b) the
exercise by the Collateral Agent or any of the Benefited Parties of any of their
respective rights or remedies hereunder shall not release the Debtor from any of
its duties or obligations under the contracts, agreements, documents and
instruments included in the Collateral, and (c) subject to the rights of Dealers
under Dealer Agreements to the extent of collections on Installment Contracts
for the account of such Dealers received by the Collateral Agent or any
Benefited Party, neither the Collateral Agent nor any of the Benefited Parties
shall have any indebtedness, liability or obligation (by assumption or
otherwise) under any of the contracts, agreements, documents and instruments
included in the Collateral (including without limitation any Dealer Agreement or
Installment Contract) by reason of this Agreement, and none of such parties
shall be obligated to perform any of the obligations or duties of the Debtor
thereunder (including without limitation any obligation to make future advances
to or on behalf of any Dealer or other obligor) or to take any action to collect
or enforce any claim for payment assigned hereunder.
SECTION 2.3. DELIVERY OF COLLATERAL. All certificates or instruments
representing or evidencing the Pledged Shares, promptly upon the Debtor gaining
any rights therein, shall be delivered to and held by or on behalf of the
Collateral Agent pursuant hereto in suitable form for transfer by delivery, or
accompanied by duly executed stock powers or instruments of transfer or
assignments in blank, all in form and substance reasonably satisfactory to the
Collateral Agent.
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SECTION 2.4. MARKING COMPUTER FILES. In connection with the security
interest and lien established hereby, the Debtor hereby agrees, at its sole
expense, to indicate clearly and unambiguously in its computer files with
respect to the Dealer Agreements, Advances to Dealers and Installment Contracts
encumbered hereby, that Debtor's rights to payment under such Dealer Agreements,
Advances to Dealers and Installment Contracts have been pledged to the
Collateral Agent pursuant to this Agreement for the benefit of the Benefited
Parties.
SECTION 2.5. AFFIXING LEGENDS. The Debtor shall, within thirty (30)
days from the date hereof with respect to each Dealer Agreement which
constitutes Collateral on the date hereof and, with respect to each Dealer
Agreement which subsequently becomes Collateral hereunder, within five (5) days
of the Debtor's entering into any such agreement, clearly xxxx each such Dealer
Agreement encumbered hereby with the following legend: "THIS AGREEMENT HAS BEEN
PLEDGED TO COMERICA BANK, AS COLLATERAL AGENT FOR THE BENEFIT OF CERTAIN
BENEFITED PARTIES". Such legend shall be in bold, in type face at least as large
as 12 point and shall be entirely in capital letters.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Collateral Agent to enter into this Agreement and the
Intercreditor Agreement, and to induce the Lenders and the Noteholders to enter
into the Financing Agreements, the Debtor represents and warrants to the
Collateral Agent and to each Lender and each Noteholder that as of the date
hereof:
SECTION 3.1. TITLE. The Debtor is, and with respect to Collateral
acquired after the date hereof the Debtor will be, the legal and beneficial
owner of the Collateral free and clear of any Lien or other encumbrance, except
for (a) Liens which constitute both (x) Liens which are permitted under Section
8.6 of the Credit Agreement and (y) Liens described in any of clauses (i)
through (vii) of Section 6.6(a) of the Note Agreements (hereinafter, "Permitted
Liens"), provided that, other than the Lien established hereby, no Lien on the
Collateral described in clause (h) of Section 2.1 shall constitute a Permitted
Lien, (b) with respect to Dealer Agreements and Advances to Dealers, and the
Installment Contracts, Accounts, Chattel Paper and General Intangibles (and
proceeds therefrom) relating to such Dealer Agreements and Advances to Dealers,
the rights of Dealers under such Dealer Agreements and (c) with respect to
Installment Contracts, Dealers' interests in financed vehicles and the proceeds
of such Installment Contracts and interests, the security interest and lien
granted by Dealers to Debtor to secure repayment of Advances to Dealers (and all
other indebtedness of Dealers to Debtor) pursuant to the applicable Dealer
Agreement.
SECTION 3.2. FINANCING STATEMENTS. No financing statement, security
agreement or other Lien instrument covering all or any part of the Collateral is
on file in any public office with respect to any outstanding obligation of
Debtor except (i) as may have been filed in favor of the Collateral Agent
pursuant to this Agreement, (ii) financing statements filed to perfect Permitted
Liens, and (iii) Liens described in Section 3.1(c) hereof. As of the date
hereof, and to the best of
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Debtor's knowledge, except as otherwise disclosed on Schedule E hereto, the
Debtor does not do business and has not done business within the past five (5)
years under a trade name or any name other than its legal name set forth at the
beginning of this Agreement.
SECTION 3.3. PRINCIPAL PLACE OF BUSINESS. The principal place of
business and chief executive office of the Debtor, and the office where the
Debtor keeps its books and records, is located at the address of the Debtor
shown on the signature page hereto.
SECTION 3.4. LOCATION OF COLLATERAL. All Inventory (except Inventory
in transit) and Equipment (other than vehicles) of the Debtor in the possession
of the Debtor are located at the places specified on Schedule A hereto. If any
such location is leased by the Debtor as of the date hereof, the name and
address of the landlord leasing such location is identified on Schedule A
hereto. None of the Inventory or Equipment of the Debtor (other than trailers,
rolling stock, vessels, aircraft and vehicles) is evidenced by a Document
(including, without limitation, a negotiable document of title). All
certificates of the Debtor representing shares of stock of any Significant
Domestic Subsidiary (including, without limitation, the Pledged Shares) will be
delivered to the Collateral Agent, accompanied by duly executed stock powers or
instruments of transfer or assignments in blank with respect thereto.
SECTION 3.5. PERFECTION. Upon the filing of Uniform Commercial Code
financing statements in the jurisdictions listed on Schedule B attached hereto,
and upon the Collateral Agent's obtaining possession of the certificates
evidencing the Pledged Shares accompanied by duly executed stock powers or
instruments of transfer or assignments in blank, the security interest in favor
of the Collateral Agent created herein will constitute a valid and perfected
Lien upon and security interest in the Collateral which may be created and
perfected under the UCC by filing financing statements or obtaining possession
thereof, subject to no equal or prior Liens except for those (if any) which
constitute Permitted Liens.
SECTION 3.6. PRIMARY COMPUTER SYSTEMS AND SOFTWARE; COMPUTER RECORDS
AND INTELLECTUAL PROPERTY. The only material service and computer systems and
related Software utilized by Debtor to service its Dealer Agreements, Advances
to Dealers and Installment Contracts (whether or not encumbered hereby) are (a)
the Application and Contract System which is used from the time a dealer faxes
an application to the Debtor until the relevant Installment Contract is received
and funded, (b) the Loan Servicing System which contains all payment information
and is the primary source for management information reporting, and (c) the
Collection System which is used by the Debtor's collections personnel to track
and service all active customer accounts. Such computer systems and software are
defined (and described in greater detail) on Schedule C, attached hereto.
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SECTION 3.7. PLEDGED SHARES.
(a) The Pledged Shares that are shares of a corporation have been duly
authorized and validly issued and are fully paid and nonassessable, and the
Pledged Shares that are membership interests or partnership units (if any) have
been validly granted, under the laws of the jurisdiction of organization of the
issuers thereof, and, to the extent applicable, are fully paid and
nonassessable.
(b) The Debtor is the legal and beneficial owner of the Pledged Shares,
free and clear of any Lien (other than the Liens created by this Agreement and
the Permitted Liens), and the Debtor has not sold, granted any option with
respect to, assigned, transferred or otherwise disposed of any of its rights or
interest in or to the Pledged Shares. None of the Pledged Shares are subject to
any contractual or other restrictions upon the pledge or other transfer of such
Pledged Shares, other than those imposed by securities laws generally.
(c) On the date hereof, the Pledged Shares constitute the percentage of
the issued and outstanding shares of stock, partnership units or membership
interests of the Issuers thereof indicated on Schedule D and such schedule
contains a description of all shares of capital stock, membership interests and
other equity interests of or in its Significant Domestic Subsidiaries owned by
the Debtor (as such Schedule D may from time to time be supplemented, amended or
modified in accordance with the terms of this Agreement).
ARTICLE IV
COVENANTS
The Debtor covenants and agrees with the Collateral Agent that until
the Benefited Obligations are paid and performed in full and all commitments to
lend or provide other credit accommodations under the Credit Agreement have been
terminated:
SECTION 4.1. ENCUMBRANCES. The Debtor shall not create, permit or
suffer to exist, and shall defend the Collateral against, any Lien or other
encumbrance (other than the Liens created by this Agreement and the Permitted
Liens) or any restriction upon the pledge or other transfer thereof (other than
as provided in the Financing Agreements), and shall, subject to the Permitted
Liens, defend the Debtor's title to and other rights in the Collateral and the
Collateral Agent's pledge and collateral assignment of and security interest in
the Collateral against the claims and demands of all Persons. Except to the
extent permitted by the Financing Agreements or in connection with any release
of Collateral under Section 7.13 hereof (but only to the extent of any
Collateral so released), the Debtor shall do nothing to impair the rights of the
Collateral Agent in the Collateral.
SECTION 4.2. COLLECTION OF ACCOUNTS AND CONTRACTS; NO COMMINGLING. The
Debtor shall, in accordance with its usual business practices, endeavor to
collect or cause to be collected from each account debtor under its Accounts, as
and when due, any and all amounts owing under such Accounts and from any Dealer
or from any obligor under an Installment Contract, as
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the case may be, any amounts owing under a Dealer Agreement or Installment
Contract, as applicable. Debtor shall take the steps required under the
documents relating to Permitted Securitizations to segregate any Collateral
transferred, encumbered or otherwise affected by a Permitted Securitization from
the Collateral encumbered under this Agreement and all proceeds or other sums
received in respect thereof (provided that Dealer Agreements which cover
Advances to Dealers which have been transferred pursuant to a Permitted
Securitization, but which also cover Advances to Dealers encumbered hereby, may
contain the legend affixed in connection with the applicable Permitted
Securitization, so long as such Dealer Agreements also contain the legend
required under Section 2.5 hereof).
SECTION 4.3. DISPOSITION OF COLLATERAL. To the extent prohibited by
the terms of the Financing Agreements, the Debtor shall not enter into or
consummate any transfer or other disposition of assets without the prior written
consent of the applicable Benefited Parties, according to the terms of the
applicable Financing Agreements.
SECTION 4.4. FURTHER ASSURANCES. At any time and from time to time,
upon the request of the Collateral Agent, and at the sole expense of the Debtor,
the Debtor shall promptly execute and deliver all such further agreements,
documents and instruments and take such further action as the Collateral Agent
may reasonably deem necessary or appropriate to preserve and perfect its
security interest in and pledge and collateral assignment of the Collateral and
carry out the provisions and purposes of this Agreement or to enable the
Collateral Agent to exercise and enforce its rights and remedies hereunder with
respect to any of the Collateral; provided, however, that nothing contained in
this Section 4.4 shall require Debtor to affix legends to the Dealer Agreements
or Installment Contracts (or folders containing the same) prior to the times set
forth in Sections 2.5 and 6.4, respectively. Except as otherwise expressly
permitted by the terms of the Financing Agreements relating to disposition of
assets, including without limitation any Permitted Securitization and except for
Permitted Liens, the Debtor agrees to maintain and preserve the Collateral
Agent's security interest in and pledge and collateral assignment of the
Collateral hereunder. Without limiting the generality of the foregoing, the
Debtor shall (a) execute and deliver to the Collateral Agent such financing
statements as the Collateral Agent may from time to time require; and (b)
execute and deliver to the Collateral Agent such other agreements, documents and
instruments, including without limitation stock powers, as the Collateral Agent
may require to perfect and maintain the validity, effectiveness and priority of
the Liens intended to be created by the Security Documents. The Debtor
authorizes the Collateral Agent to file one or more financing or continuation
statements, and amendments thereto, relating to all or any part of the
Collateral without the signature of the Debtor unless otherwise prohibited by
law.
SECTION 4.5. INSURANCE. The Debtor shall maintain insurance of the
types and in amounts, and under the terms and conditions, specified in the
Financing Agreements. Recoveries under any such policy of insurance shall be
paid as provided in the Financing Agreements and Intercreditor Agreement.
SECTION 4.6. BAILEES. If any of the Collateral is at any time in the
possession or control of any warehouseman, bailee or any of the Debtor's agents
or processors, the Debtor shall, at the request of the Collateral Agent, notify
such warehouseman, bailee, agent or processor of the
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security interest created hereunder and shall instruct such Person to hold such
Collateral for the Collateral Agent's account subject to the Collateral Agent's
instructions.
SECTION 4.7. FURNISHING OF INFORMATION AND INSPECTION RIGHTS. (a)
Within 30 days following the execution and delivery of this Agreement, the
Debtor agrees to deliver to the Collateral Agent one or more computer files or
microfiche lists containing true and complete (and updated to the most recent
month end) lists of all Dealer Agreements and Advances to Dealers, and all
Installment Contracts securing all such Advances to Dealers, identified by
account number, dealer number, and pool number and outstanding balance as of the
date of such file or list. Such file or list shall be delivered to the
Collateral Agent as confidential and proprietary.
(b) Thereafter:
(i) so long as no Event of Default has occurred and is
continuing, upon the written request of the Collateral Agent (as
directed by the Majority Benefited Parties), the Debtor shall be
obligated, but not more frequently than monthly; and
(ii) upon the occurrence and during the continuance of an
Event of Default, the Debtor shall be obligated, on a monthly
basis whether or not Collateral Agent shall so request, and more
frequently upon the written request of the Collateral Agent (as
directed by the Majority Benefited Parties);
to furnish to the Collateral Agent, a computer file, microfiche list or other
list identifying each of the Dealer Agreements, Advances to Dealers and
Installment Contracts encumbered hereby by pool number, account number and
dealer number and by the outstanding balance thereof and identifying the obligor
on the relevant Installment Contract, and the Debtor shall also furnish to the
Collateral Agent from time to time such other information with respect to Dealer
Agreements, the Advances to Dealers and Installment Contracts encumbered hereby
as the Collateral Agent may reasonably request. Without impairing the rights of
any Benefited Party to obtain information from the Debtor under any of the other
Financing Agreements, as applicable, the Collateral Agent shall furnish copies
of the foregoing to any Lender, Noteholder or Future Debt Holder upon its
request following the occurrence and during the continuance of any Default or
Event of Default, and Debtor hereby authorizes and approves such release. The
Debtor will, at any time and from time to time during regular business hours,
upon 5 days prior notice (except if any Event of Default has occurred and is
continuing, when no prior notice shall be required), permit the Collateral
Agent, or its agents or representatives, to examine and make copies of and
abstracts from all Records, to visit the offices and properties of the Debtor
for the purpose of examining such Records, and to discuss matters relating to
the Advances to Dealers or Installment Contracts or the Debtor's performance
hereunder and under the other Financing Documents with any of the officers,
directors, employees or independent public accountants of the Debtor having
knowledge of such matters; provided, however, that the Collateral Agent
acknowledges that, in exercising the rights and privileges conferred in this
Section 4.7, it or its agents and representatives may, from time to time, obtain
knowledge of information, practices,
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books, correspondence and records of a confidential nature and in which the
Debtor has a proprietary interest. The Collateral Agent agrees that all such
information, practices, books, correspondence and records are to be regarded as
confidential information and agrees that it shall retain in strict confidence
and shall use its reasonable efforts to ensure that its agents and
representatives retain in strict confidence, and will not disclose without the
prior written consent of the Debtor, any such information, practices, books,
correspondence and records furnished to them except that the Collateral Agent
may disclose such information (i) to its officers, directors, employees, agents,
counsel, accountants, auditors, affiliates, advisors or representatives
(provided that such Persons are informed of the confidential nature of such
information), (ii) to the extent such information has become available to the
public other than as a result of a disclosure by or through the Collateral Agent
or its officers, directors, employees, agents, counsel, accountants, auditors,
affiliates, advisors or representatives, (iii) to the extent such information
was available to the Collateral Agent on a nonconfidential basis prior to its
disclosure to the Collateral Agent hereunder, (iv) to the extent the Collateral
Agent is (A) required in connection with any legal or regulatory proceeding or
(B) requested by any bank or other regulatory authority to disclose such
information, (v) to any prospective assignee of any note or other instrument
evidencing a Benefited Obligation; provided, that the Collateral Agent shall
notify such assignee of the confidentiality provisions of this Section 4.7 and
such assignee shall agree to be bound thereby, or (vi) to any Benefited Party,
subject to the confidentiality provisions contained in this Agreement and any
other Financing Agreement to which it is a party, upon the request of such party
following the occurrence and during the continuance of such Default or Event of
Default (but with no obligation on the part of any such Benefited Party
hereunder to return such information to Collateral Agent or the Company if any
such Default or Event of Default is subsequently cured or waived).
Notwithstanding anything to the contrary in this Agreement, the Collateral Agent
may reply to a request from any Person for a list of Advances to Dealers, Dealer
Agreements, Installment Contracts or other information related to any Collateral
referred to in any financing statement filed to perfect the security interest
and liens established hereby, to the extent necessary to maintain the perfection
or priority of such security interests or liens, or otherwise required under
applicable law. The Collateral Agent agrees (at Debtor's sole cost and expense)
to take such measures as shall be reasonably requested by the Debtor to protect
and maintain the security and confidentiality of such information. The
Collateral Agent shall exercise good faith and make diligent efforts to provide
the Debtor with written notice at least five (5) Business Days prior to any
disclosure pursuant to this subsection 4.7(b).
(c) Furthermore, the Debtor shall permit the Collateral Agent
and its representatives to examine, inspect and audit the Collateral and to
examine, inspect and audit the Debtor's books and Records as otherwise provided
under the Financing Agreements.
SECTION 4.8. CORPORATE CHANGES. The Debtor shall not change its name,
identity or corporate structure in any manner that might make any financing
statement filed in connection with this Agreement seriously misleading within
the meaning of Section 9-402(8) of the UCC unless the Debtor shall have given
the Collateral Agent thirty (30) days prior written notice thereof and shall
have taken all action deemed necessary or desirable by the Collateral Agent to
protect its Liens and the perfection and priority thereof. The Debtor shall not
change its
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xxxxxxxxx xxxxx xx xxxxxxxx, xxxxx executive office or the place where it keeps
its books and records unless it shall have given the Collateral Agent thirty
(30) days prior written notice thereof and shall have taken all action deemed
necessary or desirable by the Collateral Agent to cause its security interest in
the Collateral to be perfected with the priority required by this Agreement.
SECTION 4.9. BOOKS AND RECORDS; INFORMATION. The Debtor shall keep
accurate and complete books and records (the "Records") of the Collateral and
the Debtor's business and financial condition in accordance with the Financing
Agreements. Subject to Section 4.7, the Debtor shall from time to time at the
request of the Collateral Agent deliver to the Collateral Agent such information
regarding the Collateral and the Debtor as the Collateral Agent may reasonably
request, including, without limitation, lists and descriptions of the Collateral
and evidence of the identity and existence of the Collateral. Debtor shall xxxx
its books and records to reflect the security interest of the Collateral Agent
under this Agreement; provided, however, that with respect to its computer
files, Debtor's compliance with Section 2.4 hereof shall be deemed to satisfy
its obligations under this sentence.
SECTION 4.10. ADMINISTRATIVE AND OPERATING PROCEDURES. The Debtor will
maintain and implement administrative and operating procedures (including
without limitation an ability to recreate records relating to the Dealer
Agreements, Advances to Dealers and Installment Contracts encumbered hereby in
the event of the destruction of the originals thereof), and keep and maintain,
or obtain, as and when required, all documents, books, records and other
information reasonably necessary or advisable for the collection of all amounts
due under the Dealer Agreements, Advances to Dealers and Installment Contracts
encumbered hereby (including without limitation records adequate to permit
adjustments to amounts due under each of such Dealer Agreements, Advances to
Dealers and Installment Contracts). The Debtor will give the Collateral Agent
notice of any material change in the administrative and operating procedures of
the Debtor referred to in the previous sentence. Notwithstanding the foregoing,
Debtor shall not be required to make or retain duplicate copies of Installment
Contracts.
SECTION 4.11. EQUIPMENT AND INVENTORY.
(a) The Debtor shall keep the Equipment (other than vehicles) and
Inventory (other than Inventory in transit) which is in Debtor's possession at
any of the locations specified on Schedule A hereto or, upon thirty (30) days
prior written notice to the Collateral Agent, at such other places within the
United States of America or Canada where all action required to perfect the
Collateral Agent's security interest in the Equipment and Inventory with the
priority required by this Agreement shall have been taken.
(b) The Debtor shall maintain the Equipment and Inventory in accordance
with the terms of the Financing Agreements.
SECTION 4.12. NOTIFICATION. The Debtor shall promptly notify the
Collateral Agent in writing of any Lien, encumbrance or claim (other than a
Permitted Lien) that has attached to or been made or asserted against any of the
Collateral upon becoming aware of the existence of such Lien, encumbrance or
claim.
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SECTION 4.13. COLLECTION OF ACCOUNTS. So long as no Event of Default
has occurred and is continuing and except as otherwise provided in this Section
4.13 and in Section 5.1, the Debtor shall have the right to collect and receive
payments on the Accounts, Dealer Agreements, Advances to Dealers and Installment
Contracts, and to use and expend the same in its operations, in each case in
compliance with the terms of each of the Financing Agreements. In connection
with such collections, the Debtor may take (and, at the Collateral Agent's
direction following the occurrence and during the continuance of an Event of
Default, shall take) such actions as the Debtor or the Collateral Agent may deem
necessary or advisable to enforce collection of the Accounts.
SECTION 4.14. VOTING RIGHTS; DISTRIBUTIONS, ETC.
(a) So long as no Event of Default shall have occurred and be
continuing (both before and after giving effect to any of the actions or other
matters described in clauses (i) or (ii) of this subparagraph):
(i) The Debtor shall be entitled to exercise any and all voting
and other consensual rights (including, without limitation, the right
to give consents, waivers and ratifications) pertaining to any of the
Pledged Shares or any part thereof; provided, however, that no vote
shall be cast or consent, waiver or ratification given or action taken
without the prior written consent of the Collateral Agent which would
violate any provision of this Agreement or any other Financing
Agreement; and
(ii) Except as otherwise provided by any of the other Financing
Agreements, the Debtor shall be entitled to receive and retain any and
all dividends, distributions and interest paid in respect to any of the
Pledged Shares.
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(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) The Collateral Agent may, without notice to the Debtor,
transfer or register in the name of the Collateral Agent or any of its
nominees, for the equal and ratable benefit of the Lenders, the
Noteholders and the Future Debt Holders, any or all of the Pledged
Shares and the Proceeds thereof (in cash or otherwise) held by the
Collateral Agent hereunder, and the Collateral Agent or its nominee may
thereafter, after delivery of notice to the Debtor, exercise all voting
and corporate rights at any meeting of any corporation issuing any of
the Pledged Shares and any and all rights of conversion, exchange,
subscription or any other rights, privileges or options pertaining to
any of the Pledged Shares as if the Collateral Agent were the absolute
owner thereof, including, without limitation, the right to exchange, at
its discretion, any and all of the Pledged Shares upon the merger,
consolidation, reorganization, recapitalization or other readjustment
of any corporation issuing any of such Pledged Shares or upon the
exercise by any such issuer or the Collateral Agent of any right,
privilege or option pertaining to any of the Pledged Shares, and in
connection therewith, to deposit and deliver any and all of the Pledged
Shares with any committee, depositary, transfer agent, registrar or
other designated agency upon such terms and conditions as the
Collateral Agent may determine, all without liability except to account
for property actually received by it, but the Collateral Agent shall
have no duty to exercise any of the aforesaid rights, privileges or
options, and the Collateral Agent shall not be responsible for any
failure to do so or delay in so doing.
(ii) All rights of the Debtor to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise
pursuant to Subsection 4.14(a)(i) and to receive the dividends,
interest and other distributions which it would otherwise be authorized
to receive and retain pursuant to Subsection 4.14(a)(ii) shall be
suspended until such Event of Default shall no longer exist, and all
such rights shall, until such Event of Default shall no longer exist,
thereupon become vested in the Collateral Agent which shall thereupon
have the sole right to exercise such voting and other consensual rights
and to receive, hold and dispose of as Pledged Shares such dividends,
interest and other distributions.
(iii) All dividends, interest and other distributions which are
received by the Debtor contrary to the provisions of this Subsection
4.14(b) shall be received in trust for the benefit of the Collateral
Agent, shall be segregated from other funds of the Debtor and shall be
forthwith paid over to the Collateral Agent as Collateral in the same
form as so received (with any necessary endorsement).
(iv) The Debtor shall execute and deliver (or cause to be
executed and delivered) to the Collateral Agent all such proxies and
other instruments as the Collateral Agent may reasonably request for
the purpose of enabling the Collateral Agent to exercise the voting and
other rights which it is entitled to exercise pursuant to this
Subsection 4.14(b) and to receive the dividends, interest and other
distributions which it is entitled to receive and retain pursuant to
this Subsection 4.14(b). The foregoing shall
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not in any way limit the Collateral Agent's power and authority granted
pursuant to Section 5.1.
SECTION 4.15. TRANSFERS AND OTHER LIENS; ADDITIONAL INVESTMENTS. The
Debtor agrees that, (a) except with the written consent of the Collateral Agent,
it will not permit any Significant Domestic Subsidiary to issue to Debtor or any
of Debtor's other Subsidiaries any shares of stock, membership interests,
partnership units, notes or other securities or instruments (including without
limitation the Pledged Shares) in addition to or in substitution for any of the
Collateral, unless, concurrently with each issuance thereof, any and all such
shares of stock, membership interests, partnership units, notes or instruments
are encumbered in favor of the Collateral Agent under this Agreement or
otherwise (it being understood and agreed that all such shares of stock,
membership interests, partnership units, notes or instruments issued to Debtor
shall, without further action by Debtor or Collateral Agent, be automatically
encumbered by this Agreement as Pledged Shares) and (b) it will promptly upon
the written request of Collateral Agent following the issuance thereof (and in
any event within three Business Days following such request) deliver to the
Collateral Agent (i) an amendment, duly executed by the Debtor, in substantially
the form of Exhibit A hereto (an "Amendment"), in respect of such shares of
stock, membership interests, partnership units, notes or instruments issued to
Debtor or (ii) a new stock pledge, duly executed by the applicable Subsidiary,
in substantially the form of this Agreement (a "New Pledge"), in respect of such
shares of stock, membership interests, partnership units, notes or instruments
issued to any Subsidiary granting to Collateral Agent, for the benefit of the
Benefited Parties, a first priority security interest, pledge and lien thereon,
together in each case with all certificates, notes or other instruments
representing or evidencing the same. The Debtor hereby (x) authorizes the
Collateral Agent to attach each Amendment to this Agreement, (y) agrees that all
such shares of stock, membership interests, partnership units, notes or
instruments listed in any Amendment delivered to the Collateral Agent shall for
all purposes hereunder constitute Pledged Shares, and (z) is deemed to have
made, upon the delivery of each such Amendment, the representations and
warranties contained in Sections 3.1, 3.2, 3.4, 3.5 and 3.7 of this Agreement
with respect to the Collateral covered thereby.
SECTION 4.16. POSSESSION; REASONABLE CARE. Regardless of whether an
Event of Default has occurred or is continuing, the Collateral Agent shall have
the right to hold in its possession all Pledged Shares pledged, assigned or
transferred hereunder and from time to time constituting a portion of the
Collateral. The Collateral Agent may appoint one or more agents (which in no
case shall be the Debtor or an affiliate of the Debtor) to hold physical
custody, for the account of the Collateral Agent, of any or all of the
Collateral. The Collateral Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which the
Collateral Agent accords its own property, it being understood that the
Collateral Agent shall not have any responsibility for (a) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities, tenders
or other matters relative to any Collateral, whether or not the Collateral Agent
has or is deemed to have knowledge of such matters, or (b) taking any necessary
steps to preserve rights against any parties with respect to any Collateral,
except, subject to the terms hereof, upon the written instructions of the
Majority Benefited Parties. Following the occurrence and continuance (beyond any
applicable grace or cure period) of an Event of Default, the
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Collateral Agent shall be entitled to take possession of the Collateral in
accordance with the UCC.
SECTION 4.17. FUTURE SIGNIFICANT DOMESTIC SUBSIDIARIES. With respect to
each Person which becomes a Significant Domestic Subsidiary subsequent to the
date hereof, on the date such Person is created, acquired or otherwise becomes a
Significant Domestic Subsidiary (whichever first occurs), Debtor will cause such
Subsidiary to execute and deliver to the Collateral Agent a security agreement,
substantially in the form of this Agreement, granting to the Collateral Agent,
for the benefit of the Benefited Parties, a first priority security interest,
mortgage and lien encumbering all right, title and interest of such Person in
property, rights and interests of the type included in the definition of the
Collateral.
ARTICLE V
RIGHTS OF THE COLLATERAL AGENT
SECTION 5.1. POWER OF ATTORNEY. The Debtor hereby irrevocably
constitutes and appoints the Collateral Agent and any officer or agent thereof,
with full power of substitution, as its true and lawful attorney-in-fact with
full irrevocable power and authority in the name of the Debtor or in its own
name, to take, after the occurrence and during the continuance of an Event of
Default, any and all actions, and to execute any and all documents and
instruments which the Collateral Agent at any time and from time to time deems
necessary or desirable, to accomplish the purposes of this Agreement and,
without limiting the generality of the foregoing, the Debtor hereby gives the
Collateral Agent the power and right on behalf of the Debtor and in its own name
to do any of the following after the occurrence and during the continuance of an
Event of Default, without notice to or the consent of the Debtor:
(i) to demand, xxx for, collect or receive, in the name of the
Debtor or in its own name, any money or property at any time payable or
receivable on account of or in exchange for any of the Collateral and,
in connection therewith, endorse checks, notes, drafts, acceptances,
money orders, documents of title or any other instruments for the
payment of money under the Collateral or any policy of insurance;
(ii) to pay or discharge taxes, Liens or other encumbrances
levied or placed on or threatened against the Collateral;
(iii) (A) to direct account debtors, Dealers, any obligors under
Installment Contracts, as applicable, and any other parties liable for
any payment under any of the Collateral to make payment of any and all
monies due and to become due thereunder directly to the Collateral
Agent or as the Collateral Agent shall direct; (B) to receive payment
of and receipt for any and all monies, claims and other amounts due and
to become due at any time in respect of or arising out of any
Collateral; (C) to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, proxies, stock powers, verifications and notices
in connection with accounts and other documents relating to the
Collateral; (D) to
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commence and prosecute any suit, action or proceeding at law or in
equity in any court of competent jurisdiction to collect the Collateral
or any part thereof and to enforce any other right in respect of any
Collateral; (E) to defend any suit, action or proceeding brought
against the Debtor with respect to any Collateral; (F) to settle,
compromise or adjust any suit, action or proceeding described above
and, in connection therewith, to give such discharges or releases as
the Collateral Agent may deem appropriate; (G) to exchange any of the
Collateral for other property upon any merger, consolidation,
reorganization, recapitalization or other readjustment of the issuer
thereof and, in connection therewith, deposit any of the Collateral
with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms as the Collateral Agent may
determine; (H) to add or release any guarantor, indorser, surety or
other party to any of the Collateral; (I) to renew, extend or otherwise
change the terms and conditions of any of the Collateral; (J) to make,
settle, compromise or adjust any claim under or pertaining to any of
the Collateral (including claims under any policy of insurance); and
(K) to sell, transfer, pledge, convey, make any agreement with respect
to, or otherwise deal with, any of the Collateral as fully and
completely as though the Collateral Agent were the absolute owner
thereof for all purposes, and to do, at the Collateral Agent's option
and the Debtor's expense, at any time, or from time to time, all acts
and things which the Collateral Agent deems necessary to protect,
preserve, maintain, or realize upon the Collateral and the Collateral
Agent's security interest therein.
This power of attorney is a power coupled with an interest and shall be
irrevocable. The Collateral Agent shall be under no duty to exercise or withhold
the exercise of any of the rights, powers, privileges and options expressly or
implicitly granted to the Collateral Agent in this Agreement, and shall not be
liable for any failure to do so or any delay in doing so. This power of attorney
is conferred on the Collateral Agent solely to protect, preserve, maintain and
realize upon its security interest in the Collateral. The Collateral Agent shall
not be responsible for any decline in the value of the Collateral and shall not
be required to take any steps to preserve rights against prior parties or to
protect, preserve or maintain any Lien given to secure the Collateral.
SECTION 5.2. SETOFF. In addition to and not in limitation of any
rights of any Benefited Party under applicable law, the Collateral Agent and
each Benefited Party shall, upon acceleration of any Benefited Obligation owing
to such party under the Credit Agreement, the Note Agreements or the Future Debt
Documents, as the case may be, or when and to the extent any such Benefited
Obligation shall otherwise be due and payable, and without notice or demand of
any kind, have the right to appropriate and apply to the payment of the
Benefited Obligations owing to it (whether or not then due) any and all
balances, credits, deposits, accounts or moneys of Debtor then or thereafter on
deposit with such Benefited Party; provided, however, that any such amount so
applied by any Benefited Party on any of the Benefited Obligations owing to it
shall be subject to the provisions of Sections 5 and 10 of the Intercreditor
Agreement.
SECTION 5.3. ASSIGNMENT BY THE COLLATERAL AGENT. The Collateral Agent
may at any time assign or otherwise transfer all or any portion of its rights
and obligations as Collateral Agent under this Agreement and the other Security
Documents (including, without limitation, the Benefited Obligations) to any
other Person, to the extent permitted by, and upon the conditions
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contained in, the Intercreditor Agreement and the other Financing Agreements, as
applicable, and such Person shall thereupon become vested with all the benefits
and obligations thereof granted to the Collateral Agent herein or otherwise.
SECTION 5.4. PERFORMANCE BY THE COLLATERAL AGENT. If the Debtor shall
fail to perform any covenant or agreement contained in this Agreement, the
Collateral Agent may perform or attempt to perform such covenant or agreement on
behalf of the Debtor, in which case Collateral Agent shall exercise good faith
and make diligent efforts to give Debtor prompt prior written notice of such
performance or attempted performance. In such event, the Debtor shall, at the
request of the Collateral Agent, promptly pay any reasonable amount expended by
the Collateral Agent in connection with such performance or attempted
performance to the Collateral Agent, together with interest thereon at the
interest rate set forth in the Credit Agreement, from and including the date of
such expenditure to but excluding the date such expenditure is paid in full.
Notwithstanding the foregoing, it is expressly agreed that the Collateral Agent
shall not have any liability or responsibility for the performance of any
obligation of the Debtor under this Agreement.
SECTION 5.5. RESTRICTIONS UNDER DEALER AGREEMENTS. In exercising the
rights and remedies set forth in this Agreement, the Collateral Agent shall take
no action with regard to any Dealer which is expressly prohibited by the related
Dealer Agreement.
SECTION 5.6. CERTAIN COSTS AND EXPENSES. The Debtor shall pay or
reimburse the Collateral Agent within five (5) Business Days after demand for
all reasonable costs and expenses (including reasonable attorney's and paralegal
fees and expenses supported by an itemized billing) incurred by it in connection
with the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Agreement or any other Security Document during the
existence of an Event of Default or after acceleration of any of the Benefited
Obligations (including in connection with any "workout" or restructuring
regarding the Benefited Obligations, and including in any insolvency proceeding
or appellate proceeding); provided, however, that the Debtor shall only be
required to pay or reimburse the Collateral Agent in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or any other Security Document for the fees and expenses of
one law firm in each jurisdiction governing the establishment, perfection or
priority of any security interest or lien established hereby, or governing any
dispute, claim or other matter arising hereunder, at any given time, engaged on
behalf of the Collateral Agent. The agreements in this Section 5.6 shall survive
the payment in full of the Benefited Obligations. Notwithstanding the foregoing,
the reimbursement of any fees and expenses incurred by the Benefited Parties
shall be governed by the terms and conditions of the applicable Financing
Agreements.
SECTION 5.7. INDEMNIFICATION. The Debtor shall indemnify, defend and
hold the Collateral Agent and each Benefited Party and each of their respective
officers, directors, employees, counsel, agents and attorneys-in-fact (each, an
"Indemnified Person") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including reasonable attorneys' and
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paralegals' fees and expenses supported by an itemized billing) of any kind or
nature whatsoever which may at any time (including at any time following
repayment of the Benefited Obligations and the termination, resignation or
replacement of the Collateral Agent or replacement of any Benefited Party) be
imposed on, incurred by or asserted against any such Indemnified Person in any
way relating to or arising out of this Agreement or any other Security Document
or any document contemplated by or referred to herein or therein, or the
transactions contemplated hereby, or any action taken or omitted by any such
Indemnified Person under or in connection with any of the foregoing, including
with respect to any investigation, litigation or proceeding (including any
"Bankruptcy Proceeding" (as defined in the Intercreditor Agreement) or appellate
proceeding) related to or arising out of this Agreement or the Benefited
Obligations or the use of the proceeds thereof, whether or not any Indemnified
Person is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities); provided, that the Debtor shall have no obligation under this
Section 5.7 to any Indemnified Person (a) with respect to Indemnified
Liabilities to the extent resulting from the gross negligence or willful
misconduct of such Indemnified Person or (b) if, in the case of an action solely
among the Collateral Agent and/or the Benefited Parties (or any of them),
neither the Debtor nor any of its Affiliates or employees or agents is (or has
been) finally determined, in a court of competent jurisdiction, to have engaged
in any wrongful conduct or in any breach of this Agreement or any of the
Financing Agreements or (c) if, in the case of an action solely as between or
among the Collateral Agent and/or the Benefited Parties (or any of them) on the
one hand and the Debtor on the other hand, (i) Debtor has obtained a final,
non-appealable judgment from a court of competent jurisdiction that neither it
nor any of its Affiliates, employees or agents has engaged in any wrongful
conduct or in any breach of this Agreement or any of the other Financing
Agreements or (ii) the Debtor by non-appealable judgment is the prevailing
party. The agreements in this Section 5.7 shall survive payment of all other
Benefited Obligations.
ARTICLE VI
DEFAULT
SECTION 6.1. RIGHTS AND REMEDIES. If an Event of Default shall have
occurred and be continuing, the Collateral Agent shall have the following rights
and remedies subject to the direction and/or consent of the Majority Benefited
Parties as required under the Intercreditor Agreement:
(i) In addition to all other rights and remedies granted to the
Collateral Agent in this Agreement, the Intercreditor Agreement or in
any other Financing Agreement or by applicable law, the Collateral
Agent shall have all of the rights and remedies of a secured party
under the UCC (whether or not the UCC applies to the affected
Collateral) and the Collateral Agent may also, without notice except as
specified below or in the Intercreditor Agreement, sell the Collateral
or any part thereof in one or more parcels at public or private sale,
at any exchange, broker's board or at any of the Collateral Agent's
offices or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Collateral Agent may, in its reasonable
discretion, deem commercially reasonable or otherwise as may be
permitted by law. Without limiting the generality of the foregoing, the
Collateral Agent may (A) without demand or notice to the Debtor (except
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as required under the Financing Agreements or applicable law), collect,
receive or take possession of the Collateral or any part thereof, and
for that purpose the Collateral Agent (and/or its agents, servicers or
other independent contractors) may enter upon any premises on which the
Collateral is located and remove the Collateral therefrom or render it
inoperable, and/or (B) sell, lease or otherwise dispose of the
Collateral, or any part thereof, in one or more parcels at public or
private sale or sales, at the Collateral Agent's offices or elsewhere,
for cash, on credit or for future delivery, and upon such other terms
as the Collateral Agent may, in its reasonable discretion, deem
commercially reasonable or otherwise as may be permitted by law. The
Collateral Agent and, subject to the terms of the Intercreditor
Agreement, each of the Benefited Parties shall have the right at any
public sale or sales, and, to the extent permitted by applicable law,
at any private sale or sales, to bid (which bid may be, in whole or in
part, in the form of cancellation of indebtedness) and become a
purchaser of the Collateral or any part thereof free of any right of
redemption on the part of the Debtor, which right of redemption is
hereby expressly waived and released by the Debtor to the extent
permitted by applicable law. Upon the request of the Collateral Agent,
the Debtor shall assemble the Collateral and make it available to the
Collateral Agent at any place designated by the Collateral Agent that
is reasonably convenient to the Debtor and the Collateral Agent. The
Debtor agrees that the Collateral Agent shall not be obligated to give
more than ten (10) days prior written notice of the time and place of
any public sale or of the time after which any private sale may take
place and that such notice shall constitute reasonable notice of such
matters. The Collateral Agent shall not be obligated to make any sale
of Collateral if, in the exercise of its reasonable discretion, it
shall determine not to do so, regardless of the fact that notice of
sale of Collateral may have been given. The Collateral Agent may,
without notice or publication (except as required by applicable law),
adjourn any public or private sale or cause the same to be adjourned
from time to time by announcement at the time and place fixed for sale,
and such sale may, without further notice, be made at the time and
place to which the same was so adjourned. The Debtor shall be liable
for all reasonable expenses of retaking, holding, preparing for sale or
the like, and all reasonable attorneys' fees, legal expenses and other
costs and expenses incurred by the Collateral Agent in connection with
the collection of the Benefited Obligations and the enforcement of the
Collateral Agent's rights under this Agreement and the Intercreditor
Agreement. The Debtor shall, to the extent permitted by applicable law,
remain liable for any deficiency if the Proceeds of any such sale or
other disposition of the Collateral (conducted in conformity with this
clause (i) and applicable law) applied to the Benefited Obligations are
insufficient to pay the Benefited obligations in full. The Collateral
Agent shall apply the proceeds from the sale of the Collateral
hereunder against the Benefited Obligations in such order and manner as
is provided in the Intercreditor Agreement.
(ii) The Collateral Agent may cause any or all of the Collateral
held by it to be transferred into the name of the Collateral Agent or
the name or names of the Collateral Agent's nominee or nominees.
(iii) The Collateral Agent may exercise any and all rights and
remedies of the Debtor under or in respect of the Collateral,
including, without limitation, any and all
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rights of the Debtor to demand or otherwise require payment of any
amount under, or performance of any provision of any of the Collateral
and any and all voting rights and corporate powers in respect of the
Collateral.
(iv) On any sale of the Collateral, the Collateral Agent is
hereby authorized to comply with any limitation or restriction with
which compliance is necessary (based on a reasoned opinion of the
Collateral Agent's counsel) in order to avoid any violation of
applicable law or in order to obtain any required approval of the
purchaser or purchasers by any applicable Governmental Authority.
(v) For purposes of enabling the Collateral Agent to exercise
its rights and remedies under this Section 6.1 and enabling the
Collateral Agent and its successors and assigns to enjoy the full
benefits of the Collateral, the Debtor hereby grants to the Collateral
Agent an irrevocable, nonexclusive license (exercisable without payment
of royalty or other compensation to the Debtor) to use, assign, license
or sublicense any of the Computer Records or Software (including in
such license reasonable access to all media in which any of the
licensed items may be recorded or stored and all computer programs used
for the completion or printout thereof), exercisable upon the
occurrence and during the continuance of an Event of Default (and
thereafter if Collateral Agent succeeds to any of the Collateral
pursuant to an enforcement proceeding or voluntary arrangement with
Debtor), except as may be prohibited by any licensing agreement
relating to such Computer Records or Software. This license shall also
inure to the benefit of all successors, assigns, transferees of and
purchasers from the Collateral Agent.
SECTION 6.2. PRIVATE SALES.
(a) In view of the fact that applicable securities laws may impose
certain restrictions on the method by which a sale of the Pledged Shares may be
effected after an Event of Default, Debtor agrees that upon the occurrence and
during the continuance of an Event of Default, Collateral Agent may from time to
time attempt to sell all or any part of the Pledged Shares by a private sale in
the nature of a private placement, restricting the bidders and prospective
purchasers to those who will represent and agree that they are "accredited
investors" within the meaning of Regulation D promulgated pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), and are purchasing
for investment only and not for distribution. In so doing, Collateral Agent may
solicit offers for the Pledged Shares, or any part thereof, from a limited
number of investors who might be interested in purchasing the Pledged Shares.
Without limiting the methods or manner of disposition which could be determined
to be commercially reasonable, if Collateral Agent hires a firm of regional or
national reputation that is engaged in the business of rendering investment
banking and brokerage services to solicit such offers and facilitate the sale of
the Pledged Shares, then Collateral Agent's acceptance of the highest offer
(including its own offer, or the offer of any of the Benefited Parties at any
such sale) obtained through such efforts of such firm shall be deemed to be a
commercially reasonable method of disposition of such Pledged Shares. The
Collateral Agent shall not be under any obligation to delay a sale of any of the
Pledged Shares for the period of time necessary to permit the issuer of such
securities to register such securities under the laws of any jurisdiction
outside the United States, under the
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Securities Act or under any applicable state securities laws, even if such
issuer would agree to do so.
(b) The Debtor further agrees to do or cause to be done, to the extent
that the Debtor may do so under applicable law, all such other reasonable acts
and things as may be necessary to make such sales or resales of any portion or
all of the Collateral valid and binding and in compliance with any and all
applicable laws, regulations, orders, writs, injunctions, decrees or awards of
any and all courts, arbitrators or governmental instrumentalities, domestic or
foreign, having jurisdiction over any such sale or sales, all at the Debtor's
expense.
6.3 ESTABLISHMENT OF SPECIAL ACCOUNT; AND LOCK BOX. Upon the occurrence
and during the continuance of any Event of Default, there shall be established
by the Debtor with Collateral Agent, for the benefit of the Benefited Parties in
the name of the Collateral Agent, a segregated non-interest bearing cash
collateral account ("Special Account") bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Collateral
Agent and the Benefited Parties; provided, however, that the Special Account may
be an interest-bearing account with a commercial bank (including Comerica or any
other Benefited Party which is a commercial bank) if determined by the
Collateral Agent, in its reasonable discretion, to be practicable, invested by
Collateral Agent in its sole discretion, but without any liability for losses or
the failure to achieve any particular rate of return. Subject to the terms
hereof and to the rights of Dealers under applicable Dealer Agreement and to the
rights of the applicable creditor in respect of Permitted Securitizations, the
Collateral Agent shall possess all right, title and interest in and to all funds
deposited from time to time in such account. Furthermore, upon the occurrence
and during the continuance of any Event of Default, the Debtor agrees, upon the
written election of Collateral Agent, to establish and maintain at Debtor's sole
expense a United States Post Office lock box (the "Lock Box"), to which
Collateral Agent shall have exclusive access and control. Debtor expressly
authorizes Collateral Agent, from time to time, to remove the contents from the
Lock Box, for disposition in accordance with this Agreement. Upon the occurrence
and during the continuance of an Event of Default, Debtor shall, upon Collateral
Agent's request, notify all account debtors, all Dealers under Dealer Agreements
encumbered hereby, and all obligors under Installment Contracts encumbered
hereby that all payments made to Debtor (a) other than by electronic funds
transfer, shall be remitted, for the credit of Debtor, to the Lock Box, and
Debtor shall include a like statement on all invoices, and (b) by electronic
funds transfer, shall be remitted to the Special Account, and Debtor shall
include a like statement on all invoices. Debtor shall execute all documents and
authorizations as reasonably required by the Collateral Agent to establish and
maintain the Lock Box and the Special Account. It is acknowledged by the parties
hereto that any lockbox presently maintained or subsequently established by
Debtor with Collateral Agent may be used, subject to the terms hereof, to
satisfy the requirements set forth in the first sentence of this Section 6.3.
6.4 LEGENDING INSTALLMENT CONTRACTS ON DEFAULT. Upon the occurrence and
during the continuance of any Event of Default, the Majority Benefited Parties
may elect (the "Election"), by directing the Collateral Agent to notify the
Debtor of such election, to affix to each Installment Contract securing or
otherwise related to a Dealer Agreement encumbered
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hereby (or, at Debtor's option, to the file folders containing such Installment
Contracts) the following legend: "THIS AGREEMENT HAS BEEN PLEDGED TO COMERICA
BANK, AS COLLATERAL AGENT FOR THE BENEFIT OF CERTAIN BENEFITED PARTIES". The
Election, once made by the Majority Benefited Parties, as aforesaid, shall
remain in effect, and Debtor shall remain obligated to comply with such
Election, notwithstanding any subsequent waiver or cure of the applicable Event
of Default giving rise to such election, unless the Election is withdrawn by the
Majority Benefited Parties.
6.5. DEFAULT UNDER FINANCING AGREEMENTS. It shall constitute an Event
of Default under each of the Financing Agreements if (a) any representation or
warranty made or deemed made by the Debtor herein or in any instrument submitted
pursuant hereto proves untrue in any material adverse respect when made or
deemed made, or (b) the Debtor shall breach any covenant or other provision
hereof, and such breach shall continue for a period of three (3) consecutive
days, in the case of any failure to pay any money due hereunder, and thirty (30)
consecutive days, in the case of any other breach hereunder or (c) this
Agreement shall at any time for any reason (other than in accordance with its
terms or the terms of each of the Financing Agreements or with the consent of
the requisite Benefited Parties) cease to be valid and binding and enforceable
against the Debtor, or (d) the validity, binding effect or enforceability hereof
shall be contested by any Person, or (e) the Debtor shall deny, prior to payment
of the Benefited Obligations in full or the termination of this Agreement
according to its terms, that it has any further liability hereunder, or (f) this
Agreement (other than in accordance with its terms or the terms of each of the
Financing Agreements) shall be terminated, invalidated, revoked or set aside or
in any way cease to give or provide to the Collateral Agent and the Benefited
Parties the benefits purported to be created hereby.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. NO WAIVER; CUMULATIVE REMEDIES. No failure on the part of
the Collateral Agent to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege under this Agreement preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege. The
rights and remedies provided for in this Agreement are cumulative and not
exclusive of any rights and remedies provided by law.
SECTION 7.2. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the Debtor and the Collateral Agent and their
respective heirs, successors and assigns, except that the Debtor may not assign
any of its rights or obligations under this Agreement without the prior written
consent of the Collateral Agent.
SECTION 7.3. AMENDMENT; ENTIRE AGREEMENT. THIS AGREEMENT (AND THE
FINANCING AGREEMENTS REFERRED TO HEREIN) EMBODIES THE FINAL, ENTIRE AGREEMENT
AMONG THE PARTIES HERETO AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS AND
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UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF
AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO. The provisions of this
Agreement may be amended or waived only by an instrument in writing signed by
the parties hereto.
SECTION 7.4. NOTICES. All notices, requests, consents, approvals,
waivers and other communications hereunder shall be in writing (including, by
facsimile transmission) and mailed, faxed or delivered to the address or
facsimile number specified for notices on signature pages hereto; or, as
directed to the Debtor or the Collateral Agent, to such other address or number
as shall be designated by such party in a written notice to the other. All such
notices, requests and communications shall, when sent by overnight delivery, or
faxed, be effective when delivered for overnight (next business day) delivery,
or transmitted in legible form by facsimile machine, respectively, or if mailed,
upon the third "Business Day" (as defined in the Credit Agreement) after the
date deposited into the U.S. mail, or if otherwise delivered, upon delivery;
except that notices to the Collateral Agent shall not be effective until
actually received by the Collateral Agent.
SECTION 7.5. GOVERNING LAW; SUBMISSION TO JURISDICTION; SERVICE OF
PROCESS. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF MICHIGAN.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER SECURITY DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF
MICHIGAN OR OF THE UNITED STATES FOR THE EASTERN DISTRICT OF MICHIGAN, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE DEBTOR AND THE COLLATERAL
AGENT CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH OF THE DEBTOR AND THE COLLATERAL AGENT
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF THIS AGREEMENT OR ANY SECURITY DOCUMENT.
SECTION 7.6. HEADINGS. The headings, captions, and arrangements used
in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
SECTION 7.7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made in this Agreement or in any certificate
delivered pursuant hereto shall survive the execution and delivery of this
Agreement, and no investigation by the Collateral Agent shall affect the
representations and warranties or the right of the Collateral Agent, the
Lenders, the Noteholders or the Future Debt Holders to rely upon them.
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SECTION 7.8. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
SECTION 7.9. WAIVER OF BOND. In the event the Collateral Agent seeks
to take possession of any or all of the Collateral by judicial process, the
Debtor hereby irrevocably waives any bonds and any surety or security relating
thereto that may be required by applicable law as an incident to such
possession, and waives any demand for possession prior to the commencement of
any such suit or action.
SECTION 7.10. SEVERABILITY. Any provision of this Agreement which is
determined by a court of competent jurisdiction to be 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 of this Agreement, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 7.11. CONSTRUCTION. The Debtor and the Collateral Agent
acknowledge that each of them has had the benefit of legal counsel of its own
choice and has been afforded an opportunity to review this Agreement with its
legal counsel and that this Agreement shall be construed as if jointly drafted
by the Debtor and the Collateral Agent.
SECTION 7.12. TERMINATION. If all of the Benefited Obligations (other
than contingent liabilities pursuant to any indemnity, including without
limitation Sections 5.6 and 5.7 hereof, for claims which have not been asserted,
or which have not yet accrued) shall have been paid and performed in full and
all commitments to extend credit or other credit accommodations under the Credit
Agreement have been terminated, the Collateral Agent shall, upon the written
request of the Debtor, execute and deliver to the Debtor a proper instrument or
instruments acknowledging the release and termination of the security interests
created by this Agreement, and shall duly assign and deliver to the Debtor
(without recourse and without any representation or warranty) such of the
Collateral as may be in the possession of the Collateral Agent and has not
previously been sold or otherwise applied pursuant to this Agreement.
SECTION 7.13 RELEASE OF COLLATERAL. The Collateral Agent shall, upon
the written request of Debtor, execute and deliver to the Debtor a proper
instrument or instruments acknowledging the release of the security interest and
liens established hereby (a) on any Collateral (other than the Pledged Shares)
(i) which is permitted to be sold or disposed of by Debtor or any other grantor
in connection with a Permitted Securitization, or (ii) the sale or other
disposition of which is not otherwise prohibited under the terms of any of the
other Financing Agreements (or in the event any Financing Agreement prohibits
such sale or disposition, the applicable Benefited Parties under such Financing
Agreement shall have consented to such sale or disposition in accordance with
the terms thereof) and, at the time of such proposed release, both before and
after giving effect thereto, no Default or Event of Default has occurred and is
continuing, or (b) if such release has been approved by the requisite Benefited
Parties in
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accordance with Section 3(g) of the Intercreditor Agreement.
SECTION 7.14. WAIVER OF JURY TRIAL. THE DEBTOR AND THE COLLATERAL AGENT
EACH WAIVES ITS RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER SECURITY
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY EITHER SUCH PARTY AGAINST
THE OTHER, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
THE DEBTOR AND THE COLLATERAL AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, EACH SUCH PARTY FURTHER AGREES THAT ITS RIGHT TO A TRIAL BY JURY IS
WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER SECURITY DOCUMENTS OR ANY
PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
SECTION 7.15. CONSISTENT APPLICATION. The rights and duties created by
this Agreement shall, in all cases, be interpreted consistently with, and shall
be in addition to (and not in lieu of), the rights and duties created by the
Financing Agreements. In the event that any provision of this Agreement shall be
inconsistent with any provision of any other Financing Agreements, such
provision of this Agreement shall govern.
* * * *
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first written above.
DEBTOR:
CREDIT ACCEPTANCE CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxx
--------------------------------------
Title: Executive Vice President and CFO
-------------------------------------
Address for Notices:
Credit Acceptance Corporation
00000 X. 00 Xxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
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Fax No.: 000-000-0000
Telephone No.: 000-000-0000
Attention: Xxxx Xxxx
COLLATERAL AGENT:
COMERICA BANK as Collateral Agent
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
--------------------------------------
Title: Vice President
--------------------------------------
Address for Notices:
Metropolitan Loans B
One Detroit Center, 6th Floor
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax No.: 313/000-0000
Telephone No.:313/000-0000
Attention: Xxxxxxx X. Xxxxxxxxx
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