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4(g)(4)
SECOND AMENDED AND RESTATED SECURITY AGREEMENT
THIS SECOND AMENDED AND RESTATED SECURITY AGREEMENT (the "Agreement")
dated as of June 11, 2001, is entered into by and between Credit Acceptance
Corporation, a Michigan corporation (the "Company"), the Subsidiaries of the
Company from time to time parties hereto (collectively, with the Company, and
either or any of them, the "Debtors" and individually, each a "Debtor") and
Comerica Bank, a Michigan banking corporation ("Comerica"), as agent 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 the Debtors and Collateral Agent are set forth on the signature pages.
R E C I T A L S:
A. The Company and certain of its foreign Subsidiaries, Comerica
(individually, and in the capacities referred to below) and the other financial
institutions signatory thereto, each as "Banks" thereunder (and, in the case of
Comerica, in its capacity as Agent for the Lenders and in its separate
additional capacities 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 Amended and Restated Credit Agreement
dated as of June 11, 2001 (amending and restating the Prior Credit Agreement),
(said credit agreement, as further amended, restated or otherwise modified from
time to time, the "Credit Agreement").
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B. The Company 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, 0000, Xxxxxx Xxxxxxxxx to Note Purchase Agreement dated as of July 1, 1998,
as amended by Fifth Amendment to Note Purchase Agreement dated as of April 13,
1999, Sixth Amendment to the Note Purchase Agreement dated as of December 1,
1999, Seventh Amendment to the Note Purchase Agreement dated as of April 27,
2000, Eighth Amendment to Note Purchase Agreement dated as of March 8, 2001 and
Ninth Amendment to Note Purchase Agreement dated as of June 7, 2001, and as
further amended, restated or otherwise modified from time to time, the "1994
Note Agreements"), pursuant to which the Second Amended and Restated 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 Company 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, Second Amendment to Note Purchase Agreement dated as of
July 1, 1998, Third Amendment to Note Purchase Agreement dated as of April 13,
0000, Xxxxxx Xxxxxxxxx to the Note Purchase Agreement dated as of December 1,
1999, and Fifth Amendment to the Note Purchase Agreement dated as of April 27,
2000, Sixth Amendment to Note Purchase Agreement dated as of March 8, 2001 and
Seventh Amendment to Note Purchase Agreement dated as of June 7, 2001, and as
further amended, restated or otherwise modified from time to time, the "1996
Note Agreements"), pursuant to which the Second Amended and Restated 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 Company 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, the Second Amendment to Note Purchase Agreement
dated as of July 1, 1998, Third Amendment to Note Purchase Agreement dated as of
April 13, 0000, Xxxxxx Xxxxxxxxx to the Note Purchase Agreement dated as of
December 1, 1999, and Fifth Amendment to the Note Purchase Agreement dated as of
April 27, 2000, Sixth Amendment to Note Purchase Agreement dated as of March 8,
2001 and Seventh Amendment to Note Purchase Agreement dated as of June 7, 2001,
as further amended, restated or otherwise modified from time to time, the "1997
Note Agreements") pursuant to which the Second Amended and Restated Senior Notes
due October 1, 2001 (collectively, as amended, restated or otherwise modified
from time to time, the "1997 Senior Notes") are outstanding.
E. Each of the Debtors (other than the Company) have guaranteed payment
and performance of the obligations of the Company and the Permitted Borrowers
under the Credit Agreement (pursuant to the Domestic Guaranty, the obligations
of each such Debtor thereunder constituting additional Credit Obligations) and
under the 1994 Note Agreements, the 1996 Note Agreements and the 1997 Note
Agreements (and such guaranties constitute additional Senior Note Obligations,
as defined in the Intercreditor Agreement) and will be required to guarantee the
payment and performance of the Company under the Future Debt Documents (and such
guaranties, when executed and delivered, will constitute additional Future Debt
Obligations).
F. Pursuant to the Credit Agreement (and under the Prior Credit
Agreement), the Lenders have required that the Debtors grant (or cause to be
granted) certain liens and security interests to Comerica, as agent for the
benefit of the Lenders, the Noteholders, and the Future Debt Holders, all to
secure the obligations of the Company and the Permitted Borrowers under the
Credit Documents, the obligations of the Company under
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the Noteholder Documents and the obligations of the Company under the Future
Debt Documents.
G. 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 Debtors' obligations under the Credit
Documents, the Noteholder Documents and the Future Debt Documents (as defined
below) shall be equally and ratably secured pursuant to this Agreement and the
other Security Documents.
H. The Debtors have directly and indirectly benefited and will directly
and indirectly benefit from the transactions evidenced by and contemplated in
the Credit Agreement and other Credit Documents, the Note Agreements and the
Future Debt Documents (defined below) and 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 December 15, 1998, as amended by First Amendment to
Intercreditor Agreement dated as of March 30, 2001 (as so amended, and as
further amended, restated or otherwise modified from time to time according to
the terms thereof, the "Intercreditor Agreement").
I. 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 (including the
recitals), 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 an applicable Debtor,
and, in any event, shall include, without limitation, each of the following,
whether now owned or hereafter acquired by such Debtor: (a) all rights of such
Debtor to payment for goods sold or leased or services rendered, whether or not
earned by performance, (b) all accounts receivable of such Debtor, (c) all
rights of such Debtor to receive any payment of money or other form of
consideration, (d) all security pledged, assigned or granted to or held by such
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
such Debtor as an unpaid seller of goods or services, including, but not limited
to, all rights of stoppage in transit, replevin, reclamation and resale.
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"Administrative Agency Agreement" is defined in the definition of
Titling Subsidiary Agreements.
"Advances to Dealers" shall mean any and all advances by an applicable
Debtor to Dealers under the Dealer Agreements whether in respect of Installment
Contracts or Leases, as outstanding from time to time.
"Benefited Obligations" has the meaning specified in the Intercreditor
Agreement.
"Benefited Parties" 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 an
applicable 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 OR LEASE OF MOTOR VEHICLES, WHETHER NEW OR USED, INCLUDING ANY SUCH PERSON
WHICH CONSTITUTES AN AFFILIATE OF DEBTOR.
"Dealer Agreement(s)" shall mean the sales and/or servicing agreements
between an applicable Debtor or its Subsidiaries and a participating Dealer
which sets forth the terms and conditions under which such Debtor or its
Subsidiaries may (i) accept, as nominee for such Dealer, the assignment of
Installment Contracts or Leases for purposes of administration, servicing and
collection and under which such Debtor or its Subsidiaries may make Advances to
Dealers or (ii) accept outright assignments of Installments Contracts or Leases
from Dealers or funds Installments Contracts or Leases originated by
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such Dealer in the name of such Debtor or any of its Subsidiaries, in each case
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 an applicable Debtor,
including, without limitation, all documents of title and all receipts covering,
evidencing or representing goods now owned or hereafter acquired by the Debtor.
"Domestic Guaranty" has the meaning specified in the Credit Agreement.
"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 an applicable 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 such 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
an applicable Debtor and, in any event, shall include, without limitation, each
of the following, whether now owned or hereafter acquired by such Debtor: (a)
all of such Debtor's service marks, trade
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names, trade secrets, registrations, goodwill, franchises, licenses, permits,
proprietary information, customer lists, designs and inventions; (b) all of such
Debtor's books, records, data, plans, manuals, computer software, computer
tapes, computer disks, computer programs, source codes, object codes and all
rights of such Debtor to retrieve data and other information from third parties;
(c) all of such Debtor's contract rights, partnership interests, membership
interests, joint venture interests, securities, deposit accounts, investment
accounts and certificates of deposit; (d) all rights of such Debtor to payment
under letters of credit and similar agreements; (e) all tax refunds and tax
refund claims of such Debtor; (f) all choses in action and causes of action of
such Debtor (whether arising in contract, tort or otherwise and whether or not
currently in litigation) and all judgments in favor of such Debtor; (g) all
rights and claims of such Debtor under warranties and indemnities; and (h) all
rights of such Debtor under any insurance, surety or similar contract or
arrangement.
"INSTALLMENT CONTRACT(S)" SHALL MEAN RETAIL INSTALLMENT CONTRACTS FOR
THE SALE OF NEW OR USED MOTOR VEHICLES ASSIGNED OUTRIGHT BY DEALERS TO AN
APPLICABLE DEBTOR OR WRITTEN BY DEALERS IN THE NAME OF SUCH DEBTOR OR A
SUBSIDIARY OF SUCH DEBTOR (AND FUNDED BY DEBTOR OR SUCH SUBSIDIARY) OR ASSIGNED
BY DEALERS TO DEBTOR OR A SUBSIDIARY OF DEBTOR, AS NOMINEE FOR THE DEALER, FOR
ADMINISTRATION, SERVICING, AND COLLECTION, IN EACH CASE PURSUANT TO AN
APPLICABLE DEALER AGREEMENT; PROVIDED, HOWEVER, THAT TO THE EXTENT SUCH DEBTOR
OR ANY SUBSIDIARY TRANSFERS OR ENCUMBERS ITS INTEREST IN ANY INSTALLMENT
CONTRACTS (OR ANY 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 (REDUCING THE AGGREGATE AMOUNT OF ADVANCES TO DEALERS BY THE
OUTSTANDING AMOUNT OF SUCH ADVANCES, IF ANY, ATTRIBUTABLE TO SUCH INSTALLMENT
CONTRACTS) UNLESS AND UNTIL SUCH INSTALLMENT CONTRACTS ARE REASSIGNED TO SUCH
DEBTOR OR A SUBSIDIARY OF SUCH 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 an applicable
Debtor, and, in any event, shall include all promissory notes, drafts, bills of
exchange and trade acceptances of such Debtor, whether now owned or hereafter
acquired.
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"Intercompany Notes" shall mean the promissory notes, if any, issued or
to be issued by the Company or any Subsidiary (including the Debtors) to
evidence any loan or advance in the nature of a loan by the Company to any
Subsidiary, or by any Subsidiary to any other Subsidiary or to the Company.
"Inventory" means any "inventory," as such term is defined in Article
or Chapter 9 of the UCC, now owned or hereafter acquired by an applicable
Debtor, and, in any event, shall include, without limitation, each of the
following, whether now owned or hereafter acquired by such Debtor: (a) all goods
and other personal property of such 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 such Debtor; (c) all
wrapping, packaging, advertising and shipping materials of such Debtor; (d) all
goods that have been returned to, repossessed by or stopped in transit by such
Debtor; and (e) all Documents evidencing any of the foregoing.
"Lease(s)" shall mean the retail agreements for the lease of motor
vehicles assigned outright by Dealers to an applicable Debtor or written by a
Dealer in the name of such Debtor (and funded by Debtor or such Subsidiary) or
assigned by Dealers to Debtor, as nominee for the Dealer, for administration,
servicing and collection, in each case pursuant to an applicable Dealer
Agreement; provided, however, that to the extent such Debtor transfers or
encumbers its interest in any Leases pursuant to a Permitted Securitization,
such Leases shall, from and after the date of such transfer or encumbrance,
cease to be considered Leases under this Agreement (reducing the aggregate
amount of Advances to Dealers by the outstanding amount of Advances to Dealers
attributable to such Leases) unless and until such Leases are reassigned to
Debtor or such encumbrances have been discharged.
"Lenders" has the meaning specified in the Intercreditor Agreement.
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"Majority Benefited Parties" has the meaning specified in the
Intercreditor Agreement.
"Non-Specified Assets" has the meaning specified in the Titling
Subsidiary Agreements.
"Non-Specified Interest" has the meaning specified in the Titling
Subsidiary Agreements.
"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, including without limitation the Non-Specified
Interest, as such schedule may be amended, modified or replaced from time to
time.
"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 an applicable 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 such 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
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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.
"Significant Domestic Subsidiary" has the meaning specified in the
Credit Agreement.
"Software" has the meaning specified in Section 2.1(g) of this
Agreement.
"Specified Assets" has the meaning specified in the Titling Subsidiary
Agreements.
"Specified Interest(s)" has the meaning specified in the Titling
Subsidiary Agreements.
"Titling Subsidiary" shall mean Auto Lease Services LLC, a Delaware
limited liability company controlled by the Company and a direct Subsidiary of
the Company.
"Titling Subsidiary Agreements" shall mean that certain Limited
Liability Company Agreement of the Titling Subsidiary, dated and effective as of
March 1, 2001 and the related Certificate of Formation (as therein defined), and
that certain Administrative Agency Agreement dated as of March 1, 2001 between
the Company and the Titling Subsidiary ("Administrative Agency Agreement"), each
as amended from time to time.
"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
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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), each 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 such 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 Leases;
(d) all General Intangibles;
(e) all Equipment;
(f) all Inventory;
(g) all Advances to Dealers, Dealer Agreements (and any amounts
advanced to or liens granted by Dealers thereunder), and the
Installment Contracts or Leases securing the repayment of such
Advances to Dealers (and other
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indebtedness of Dealers to such Debtor) and related financial
property (the security interest granted hereby in such Dealer
Agreements, Advances to Dealers, Installment Contracts and
Leases, and the Accounts, Chattel Paper, General Intangibles
and proceeds therefrom relating to such Dealer Agreements,
Advances to Dealers, Installment Contracts and Leases being
subject to the rights of Dealers under Dealer Agreements);
(h) 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;
(i) all shares of stock, and other equity, partnership or
membership interests constituting ownership interests (or
evidence thereof) or other securities, of the Significant
Domestic Subsidiaries of Debtor from time to time owned or
acquired by such Debtor in any manner (including without
limitation, as applicable, the Pledged Shares), and any
certificates at any time evidencing the same, 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;
(j) the Non-Specified Interest from time to time owned or acquired
by such Debtor in any manner and any certificates or other
instruments at any time evidencing the same, and all
dividends, cash, instruments, rights and other property
(including any Non-Specified Assets) from time to time
received or otherwise distributed in respect of or in exchange
for any or all of such interest;
(k) all Intercompany Notes issued in favor of such Debtor; and
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(l) the Proceeds, in cash or otherwise, of any of the property
described in the foregoing clauses (a) through (j) and all
liens, security, rights. remedies and claims of such 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 (i) Advances to Dealers, Installment
Contracts, Leases, rights or interests under Dealer Agreements and related
financial property transferred by an applicable Debtor prior to the date hereof
pursuant to a Permitted Securitization, except to the extent any such property
is re-transferred to such Debtor according to the terms of such Permitted
Securitization or (ii) Specified Interests or any Specified Assets, unless and
until any such Specified Interest or Specified Asset is redesignated by an
applicable Debtor, the Titling Subsidiary or any other Subsidiary of such Debtor
as or to the Non-Specified Interest or the Non-Specified Assets, as the case may
be.
SECTION 2.2. DEBTORS REMAINS LIABLE. Notwithstanding anything to the
contrary contained herein, (a) each Debtor shall remain liable under the
contracts, agreements, documents and instruments included in the Collateral
(including without limitation Dealer Agreements, Advances to Dealers,
Installment Contracts and Leases) 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, Installment Contracts or Leases 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 any 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
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collections on Installment Contracts or Leases 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, Installment Contract or Lease) by reason of
this Agreement, and none of such parties shall be obligated to perform any of
the obligations or duties of any 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. (a) All certificates or other
instruments representing or evidencing the Pledged Shares, promptly upon an
applicable 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.
(b) Each of the Intercompany Notes, promptly upon an applicable Debtor
gaining any rights therein, shall be delivered to and held by or on behalf of
the Collateral Agent pursuant hereto, endorsed to the Collateral Agent without
representation, warranty or recourse (except as provided herein) for security
purposes, or accompanied by separate assignments to Collateral Agent (on
comparable terms), all in form and substance reasonably satisfactory to the
Collateral Agent.
SECTION 2.4. MARKING COMPUTER FILES. In connection with the security
interest and lien established hereby, each 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, Installment Contracts and
Leases encumbered hereby, that such Debtor's rights to payment under such Dealer
Agreements, Advances to Dealers, Installment
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Contracts and Leases have been pledged to the Collateral Agent pursuant to this
Agreement for the benefit of the Benefited Parties.
SECTION 2.5. AFFIXING LEGENDS. Each 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 such 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, each of the Debtors 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 applicable Debtor is, and with respect to
Collateral acquired after the date hereof such 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 clauses (i) or (j) of Section 2.1
shall constitute a Permitted Lien, (b) with respect to Dealer Agreements and
Advances to Dealers, and the
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Installment Contracts, Accounts, Chattel Paper, Leases 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 or Leases (other than those owned outright by Debtor),
Dealers' interests in financed vehicles and in the proceeds of such Installment
Contracts or Leases and Dealers' interests, and 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 the
Debtors 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 the applicable Debtor's knowledge, except as
otherwise disclosed on Schedule E hereto, such 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 applicable Debtor, and the office
where such Debtor keeps its books and records, is located at the address of such
Debtor shown on Schedule A hereto.
SECTION 3.4. LOCATION OF COLLATERAL. All Inventory (except Inventory in
transit) and Equipment (other than vehicles) of the applicable Debtor in the
possession of such Debtor are located at the places specified on Schedule A
hereto. If any such location is leased by such 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 such 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 or
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other instruments owned by such Debtor representing shares of stock or other
ownership interests of any Significant Domestic Subsidiary (including, without
limitation, the Pledged Shares) or representing or evidencing the Non-Specified
Interest 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 and of the Intercompany Notes
(duly endorsed, as aforesaid), and upon acknowledgment by the Titling
Subsidiary, in favor of the Collateral Agent, of a Notice of Registered Pledge
in the form attached hereto as Schedule F, 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, obtaining an acknowledgment of lien from
an issuer or obtaining possession of the Collateral, subject to no junior, 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 the applicable Debtor to service Dealer Agreements,
Advances to Dealers, Installment Contracts and Leases (whether or not encumbered
hereby) are (a) the Application and Contract System which is used from the time
a dealer faxes an application to such Debtor until the relevant Installment
Contract or Lease 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 such
Debtor's collections personnel to track and service all active customer
accounts.
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Such computer systems and software are defined (and described in greater detail)
on Schedule C, attached hereto.
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 non-assessable, and the
Pledged Shares, including the Non-Specified Interests, which are membership,
partnership or other similar ownership interests 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 applicable 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 such 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 Non-Specified Interests. None of the
Non-Specified Interests are subject to any contractual or other restrictions
upon the pledge or other transfer of such Non-Specified Interests, 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 or
other ownership interests of the Issuers thereof indicated on Schedule D, if
applicable, and such schedule contains a description of all shares of capital
stock, partnership units, membership interests and other ownership interests of
or in its Significant Domestic Subsidiaries owned by the applicable Debtor or
with respect to the Non-Specified Interest in the Titling Subsidiary (as such
Schedule D may from time to time be supplemented, amended or modified in
accordance with the terms of this Agreement).
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ARTICLE IV
COVENANTS
Each of the Debtors 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 applicable 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 such 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), such 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
applicable 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 or Lease, as
the case may be, any Advances to Dealers or other amounts owing under a Dealer
Agreement, Installment Contract or Lease, as applicable. The 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
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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). The applicable Debtor
shall also cause the Titling Subsidiary to take the steps required under the
Titling Subsidiary Agreements properly to allocate Non-Specified Assets to the
Non-Specified Interest and Specified Assets to the applicable Specified
Interests and clearly and unambiguously to indicate such allocations on its
records.
SECTION 4.3. DISPOSITION OF COLLATERAL. To the extent prohibited by the
terms of the Financing Agreements, the applicable 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
Debtors, the applicable 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 such Debtor to affix legends to the
Dealer Agreements, Installment Contracts or Leases (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 applicable 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 applicable 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
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deliver to the Collateral Agent, or cause to be so executed and delivered, such
other agreements, acknowledgments, 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 applicable 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 such Debtor unless otherwise prohibited by law.
SECTION 4.5. INSURANCE. The applicable Debtor shall maintain insurance
of the types and in amounts, and under the terms and conditions, specified in
the Financing Agreements and shall cause the Collateral Agent to be named as
"lender loss payee" thereunder to the full extent required to perfect and/or
protect the Lien established hereby. 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 applicable
Debtor's agents or processors, the applicable Debtor shall, at the request of
the Collateral Agent (as directed by the Majority Benefited Parties), notify
such warehouseman, bailee, agent or processor of the 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, and
shall obtain such acknowledgments and/or undertakings from such Persons as
reasonably requested by Collateral Agent (as directed by the Majority Benefited
Parties).
SECTION 4.7. FURNISHING OF INFORMATION AND INSPECTION RIGHTS. (a)
Within 30 days following the execution and delivery of this Agreement, the
applicable 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 or Leases, as applicable, securing
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all such Advances to Dealers or owned outright by such Debtor, identified by
account number, dealer number (if not owned outright by such Debtor), and pool
number and the 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
applicable 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 applicable 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, Installment
Contracts and Leases encumbered hereby by pool number, account number and dealer
number (if not owned outright by such Debtor) and by the outstanding balance
thereof and identifying the obligor on the relevant Installment Contract or
Lease, and such Debtor shall also furnish to the Collateral Agent from time to
time such other information with respect to Dealer Agreements, the Advances to
Dealers, Installment Contracts and Leases encumbered hereby as the Collateral
Agent may reasonably request. Without impairing the rights of any Benefited
Party to obtain information from such 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
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during the continuance of any Default or Event of Default, and each Debtor
hereby authorizes and approves such release. Each 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 such Debtor for the purpose of examining
such Records, and to discuss matters relating to the Advances to Dealers,
Installment Contracts, Leases or such Debtor's performance hereunder and under
the other Financing Documents with any of the officers, directors, employees or
independent public accountants of such 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, books, correspondence and records of a confidential nature and in
which such 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 applicable 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
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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 applicable Debtor 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, Leases or other information related to any Collateral referred to in
any financing statement filed or acknowledgment obtained 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 Debtors' sole
cost and expense) to take such measures as shall be reasonably requested by the
Debtors 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 Debtors with written notice at least five (5) Business
Days prior to any disclosure pursuant to this Subsection 4.7(b).
(c) Furthermore, each Debtor shall permit the Collateral Agent
and its representatives to examine, inspect and audit the Collateral and to
examine, inspect and audit such Debtor's books and Records as otherwise provided
under the Financing Agreements.
SECTION 4.8. CORPORATE CHANGES. None of the Debtors shall 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 such Debtor shall have
given the Collateral Agent thirty (30) days
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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. None of the Debtors shall change its principal place of
business, chief 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. Each Debtor shall keep
accurate and complete books and records (the "Records") of the Collateral and
such Debtor's business and financial condition in accordance with the Financing
Agreements. Subject to Section 4.7, each Debtor shall from time to time at the
request of the Collateral Agent deliver to the Collateral Agent such information
regarding the Collateral and such 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. Each 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, such 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. Each 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, Installment Contracts and Leases 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, Installment
Contracts and Leases encumbered hereby (including without limitation records
adequate to permit adjustments to amounts due under each of such Dealer
Agreements, Advances to
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Dealers, Installment Contracts and Leases), and, unless it services the
financial assets owned by the Titling Subsidiary, shall cause the Titling
Subsidiary to maintain and implement comparable procedures and keep, maintain
and/or obtain comparable information. Each Debtor will give the Collateral Agent
notice of any material change in the administrative and operating procedures of
such Debtor (or the Titling Subsidiary) referred to in the previous sentence.
Notwithstanding the foregoing, the Debtors shall not be required to make or
retain duplicate copies of Installment Contracts or Leases.
SECTION 4.11. EQUIPMENT AND INVENTORY.
(a) Each Debtor shall keep the Equipment (other than vehicles) and
Inventory (other than Inventory in transit) which is in such 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) Each Debtor shall maintain the Equipment and Inventory in
accordance with the terms of the Financing Agreements.
SECTION 4.12. NOTIFICATION. Each 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.
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 applicable Debtor shall have the right to collect
and receive payments on the Accounts, Dealer Agreements, Advances to Dealers,
Installment Contracts, Leases and other
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financial assets, 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 applicable 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 such Debtor or the Collateral
Agent may deem necessary or advisable to enforce collection of the Accounts,
Dealer Agreements, Advances to Dealers, Installment Contracts and other
financial assets.
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) Each 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 in this Agreement or any of
the other Financing Agreements, each Debtor shall be entitled to
receive and retain any and all dividends, distributions and interest
paid in respect to any of the Pledged Shares; provided, however, that
in the case of any Non-Specified Assets distributed to or for the
account of such Debtor or in respect of the Non-Specified Interest,
such Dealer Agreements, Advances to Dealers, Leases and other
Non-Specified Assets shall immediately become subject to the Lien
established by this Agreement, and the applicable terms and conditions
hereof, without the requirement of any additional action on the part of
Collateral Agent or the Benefited Parties.
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(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) The Collateral Agent may, at the direction or with the
concurrence of the Majority Benefited Parties as required under the
Intercreditor Agreement, (without notice to the Debtors), 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, at
the direction or with the concurrence of the Majority Benefited Parties
as required under the Intercreditor Agreement, after delivery of notice
to the applicable Debtor, exercise all voting and corporate or similar
rights at any meeting of any corporation or other entity issuing any of
the Pledged Shares, and any and all rights of conversion, exchange,
subscription, distribution or any other rights, privileges or options
pertaining to any of the Pledged Shares (including without limitation
the right to direct the Titling Subsidiary to distribute all or any
portion of the Non-Specified Assets to or for the account of such
Debtor) 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 or other entity 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.
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(ii) All rights of the Debtors 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, at the direction or with the concurrence
of the Majority Benefited Parties as required under the Intercreditor
Agreement, to exercise such voting and other consensual rights and to
receive, hold and dispose of as Pledged Shares, as the case may be,
such dividends, interest and other distributions.
(iii) All dividends, interest and other distributions which
are received by the Debtors contrary to the provisions of this
Subsection 4.14(b) (including, without limitation, any Non-Specified
Assets received in respect of the Non-Specified Interest) shall be
received in trust for the benefit of the Collateral Agent, shall be
segregated from other funds and property of the Debtors 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 Debtors 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 not in any way limit the
Collateral Agent's power and authority granted pursuant to Section 5.1.
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(v) Upon notice from the Collateral Agent, given, at the
direction or with the concurrence of the Majority Benefited Parties as
required under the Intercreditor Agreement, the applicable Debtor shall
cause the Titling Subsidiary to transfer to or for the account of such
Debtor all or such portion of the Non-Specified Assets as the
Collateral Agent shall specify (subject to the direction or concurrence
of the Majority Benefited Parties, as aforesaid), and to deliver all
documents or instruments evidencing the same to or for the account of
such Debtor, as so directed, accompanied by such instruments of
transfer as necessary or appropriate to effectuate such transfer (as
Collateral Agent shall direct), duly executed by the Titling
Subsidiary.
(vi) All rights of the applicable Debtor to designate or
redesignate any Non-Specified Assets as Specified Assets and to create
any additional Specified Interests (or in either case to allow the
Titling Subsidiary to do so), shall be suspended and shall remain so
suspended until such Event of Default shall no longer exist.
SECTION 4.15. TRANSFERS AND OTHER LIENS; ADDITIONAL INVESTMENTS. Each
Debtor agrees that, (a) except with the written consent of the Collateral Agent,
it will not permit any Significant Domestic Subsidiary to issue to it or any of
its 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 such Debtor shall,
without further action by such 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 applicable 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 such Debtor or (ii) a new stock pledge, duly executed by the
applicable Subsidiary, in substantially the form of this
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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, and the acknowledgment of any issuer necessary or appropriate to perfect
such pledge, security interest and lien on any membership or similar ownership
interest. Each 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. Furthermore, the applicable Debtor agrees that it will not
permit the Titling Subsidiary to issue any other class or type of membership or
other ownership interest to such Debtor, other than the Non-Specified Interest,
or to issue or create any Specified Interests, except in connection with and
pursuant to a Permitted Securitization and only while no Default or Event of
Default has occurred and is continuing.
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 a Debtor or an affiliate of a 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, distribution or other
matters relative to any Collateral, whether or not the Collateral Agent has or
is
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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 Collateral Agent
shall be entitled to take possession of the Collateral in accordance with the
UCC.
SECTION 4.17. FUTURE SIGNIFICANT DOMESTIC SUBSIDIARIES. (a) 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),
the Company shall cause such Subsidiary to execute and deliver, to the
Collateral Agent a joinder agreement, substantially in the form of Exhibit B
hereto, by which such Subsidiary shall become obligated as Debtor hereunder, as
fully as though an original signatory hereto.
(b) Furthermore, promptly following the effective date of each
acquisition or creation of a Significant Domestic Subsidiary, the Company from
time to time shall revise Schedule D hereto and deliver a copy thereto to the
Collateral Agent, adding to Schedule D the name of each such Significant
Domestic Subsidiary so acquired or created (and supplying the other information
required on such schedule including ownership information), and upon such
revision the Company and/or the applicable Debtor shall be deemed to have
pledged 100% of the capital stock, partnership interests, membership interests
or other ownership interests (to the extent owned by the Company and/or such
Debtor) of each such Significant Domestic Subsidiary so acquired or created to
Collateral Agent, for and on behalf of Benefited Parties.
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ARTICLE V
RIGHTS OF THE COLLATERAL AGENT
SECTION 5.1. POWER OF ATTORNEY. Each 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 such 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, each Debtor hereby gives the
Collateral Agent the power and right on behalf of such 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 Debtors:
(i) to demand, xxx for, collect or receive, in the name of the
Debtors 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 or Leases, 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
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shall direct; and to direct the Titling Subsidiary to distribute all or
such portion of the Non-Specified Assets to or for the account of the
applicable Debtor, as the Collateral Agent shall specify (at the
direction or with the concurrence of the Majority Benefited Parties)
and deliver all documents or instruments evidencing the same to or for
the account of such Debtor, as so directed, accompanied by such
instruments of transfer as necessary or appropriate to effectuate such
transfer (as Collateral Agent shall direct), duly executed and
delivered by the Titling Subsidiary; (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 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 Debtors 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
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and the Debtors' sole 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 the Debtors 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
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limitation, the Benefited Obligations) to any other Person, to the extent
permitted by, and upon the conditions 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 any 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 such Debtor, in which case Collateral Agent shall exercise good faith
and make diligent efforts to give Debtors prompt prior written notice of such
performance or attempted performance. In such event, the Debtors 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 Debtors under this Agreement.
SECTION 5.5. RESTRICTIONS UNDER DEALER AGREEMENTS; NON-PETITION
COVENANT. In exercising the rights and remedies set forth in this Agreement, the
Collateral Agent (i) shall take no action with regard to any Dealer which is
expressly prohibited by the related Dealer Agreement and (ii) acknowledges that,
with respect to the Titling Subsidiary, the Non-Specified Interest and any
Specified Interests, it shall be bound by the non-petition covenant contained in
the Notice of Registered Pledge delivered by it to the Titling Subsidiary under
Section 3.5 hereof.
SECTION 5.6. CERTAIN COSTS AND EXPENSES. The Debtors 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
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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 Debtors 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 Debtors 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
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,
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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 Debtors 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 any 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 a Debtor, on the other hand, (i) such 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) such 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:
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(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 Debtors
(except 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 Debtors, which right of redemption is
hereby expressly waived and released by the Debtors to the extent
permitted by applicable law. Upon the request of the Collateral Agent,
the applicable Debtor shall assemble the Collateral and
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make it available to the Collateral Agent at any place designated by
the Collateral Agent that is reasonably convenient to such Debtor and
the Collateral Agent. The Debtors agree 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
Debtors 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 Debtors 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 (A) 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 and (B) may direct the Titling Subsidiary to distribute all or
such portion of the Non-Specified Assets to or for the
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account of the applicable Debtor, as the Collateral Agent shall specify
(at the direction or with the concurrence of the Majority Benefited
Parties) and to deliver all documents or instruments evidencing the
same to or for the account of such Debtor, as so directed, accompanied
by such instruments of transfer as necessary or appropriate to
effectuate such transfer (as Collateral Agent shall direct), duly
executed and delivered by the Titling Subsidiary.
(iii) The Collateral Agent may exercise any and all rights and
remedies of the Debtors under or in respect of the Collateral,
including, without limitation, any and all rights of the Debtors 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, each Debtor hereby grants to the Collateral
Agent an irrevocable, nonexclusive license (exercisable without payment
of royalty or other compensation to such 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
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any of the Collateral pursuant to an enforcement proceeding or
voluntary arrangement such 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, each 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 (to the extent applicable) for the period of time
necessary to permit the issuer of such securities to register such securities
under the laws
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of any jurisdiction outside the United States, under the Securities Act or under
any applicable state securities laws, even if such issuer would agree to do so.
(b) Each Debtor further agrees to do or cause to be done, to the extent
that such 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 Debtors'
sole 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 Debtors 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 Debtors agree, upon the
written election of Collateral Agent, to establish and maintain at Debtors' sole
expense a United States Post Office lock box (the "Lock Box"), to which
Collateral Agent shall have exclusive access and control. Each Debtor expressly
authorizes Collateral Agent, from time
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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, the applicable Debtor shall, upon Collateral Agent's request, notify
all account debtors, all Dealers under Dealer Agreements encumbered hereby, and
all obligors under Installment Contracts or Leases encumbered hereby that all
payments made to such Debtor (a) other than by electronic funds transfer, shall
be remitted, for the credit of such Debtor, to the Lock Box, and each Debtor
shall include a like statement on all invoices, and (b) by electronic funds
transfer, shall be remitted to the Special Account, and each Debtor shall
include a like statement on all invoices. The Debtors 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 the Debtors 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 AND LEASES 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 Debtors of such election, to affix to each Installment Contract
and Lease encumbered by this Agreement or securing Advances to Dealers or
otherwise related to a Dealer Agreement encumbered hereby (or, at Debtors'
option, to the file folders containing such Installment Contracts or Leases) 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 Debtors 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.
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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 Debtors herein or in any instrument
submitted pursuant hereto proves untrue in any material adverse respect when
made or deemed made, or (b) the Debtors 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 Debtors, or (d) the validity, binding effect or
enforceability hereof shall be contested by any Person, or (e) the Debtors 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.
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SECTION 7.2. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the Debtors and the Collateral Agent and their
respective heirs, successors and assigns, except that no Debtor may 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 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 Debtors 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.
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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 DEBTORS AND THE
COLLATERAL AGENT CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE DEBTORS 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, each
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. Each 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 Debtors 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 Debtors, execute and deliver to the Debtors 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
Debtors
49
50
(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 the applicable Debtor, execute and deliver to such 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 a 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 accordance with Section 3(g) of the Intercreditor
Agreement.
SECTION 7.14. WAIVER OF JURY TRIAL. THE DEBTORS 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
50
51
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.
SECTION 7.16. AMENDMENT AND RESTATEMENT. This Agreement shall be deemed
to amend, restate, renew and replace, in its entirety (as to the Company) the
prior amended and restated security agreement executed and delivered by the
parties as of March 30, 2001, amending and restating the earlier security
agreement executed and delivered by such parties as of December 15, 1998.
* * * *
51
52
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first written above.
DEBTORS:
CREDIT ACCEPTANCE CORPORATION
By: /S/ Xxxxxxx X. Xxxx
--------------------------------
Name: Xxxxxxx X. Xxxx
------------------------------
Title: Chief Financial Officer
-----------------------------
Address for Notices:
Credit Acceptance Corporation
00000 X. 00 Xxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Fax No.: 000-000-0000
Telephone No.: 000-000-0000
Attention: Xxxx Xxxx
AUTO FUNDING AMERICA OF NEVADA INC.
CREDIT ACCEPTANCE CORPORATION LIFE
INSURANCE COMPANY
BUYERS VEHICLE PROTECTION PLAN, INC.
52
53
CAC LEASING, INC.
VEHICLE REMARKETING SERVICES, INC.
CREDIT ACCEPTANCE CORPORATION OF
NEVADA, INC.
By:
Name:
Title:
Address for Notices:
c/o Credit Acceptance Corporation
00000 X. 00 Xxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Fax No.: 000-000-0000
Telephone No.: 000-000-0000
Attention: Xxxx Xxxx
53
54
COLLATERAL AGENT:
COMERICA BANK as Collateral Agent
By: /S/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------------
Title:
Address for Notices:
Metropolitan Loans D
One Detroit Center, 6th Floor
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax No.: 313/000-0000
Telephone No.: 313/000-0000
Attention: Xxxxxxx X. Xxxxxx
54
55
SCHEDULE A
TO
SECURITY AGREEMENT
Principal Place of Business, Locations of Equipment and Inventory
(including leased locations) in the Possession of Debtors
Credit Acceptance Corporation
00000 Xxxx Xxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Auto Funding America of Nevada, Inc.
a. 00000 Xxxx Xxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
b. 00000 X. 0 Xxxx
Xxxxxxxx, XX 00000
Buyers Vehicle Protection Plan, Inc.
00000 Xxxx Xxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
CAC Leasing, Inc.
00000 Xxxx Xxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
56
Vehicle Remarketing Services, Inc.
a. 00000 Xxxx Xxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
b. 0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Credit Acceptance Corporation Life Insurance Company
00000 Xxxx Xxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Credit Acceptance Corporation of Nevada, Inc.
a. 00000 Xxxx Xxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
b. 0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
57
SCHEDULE B
TO
SECURITY AGREEMENT
Jurisdictions for Filing
UCC-1 Financing Statements
Credit Acceptance Corporation
Michigan
Nevada
Auto Funding America of Nevada, Inc.
Michigan
Nevada
Buyers Vehicle Protection Plan, Inc.
Michigan
CAC Leasing, Inc.
Michigan
Vehicle Remarketing Services, Inc.
Michigan
Nevada
58
Credit Acceptance Corporation Life Insurance Company
Michigan
Arizona
Credit Acceptance Corporation of Nevada, Inc.
Michigan
Nevada
SCHEDULE C
TO
SECURITY AGREEMENT
Primary Computer Systems and Software
Application and Contract System is software which utilizes the HP Unix
operating system and is resident on the Company's HP9000-K410 server. It was
designed by in-house personnel and TUSC, a consulting firm hired to assist with
the project.
The Loan Servicing System is software which utilizes the HP Unix
operating system and is resident on the Company's HP9000-K420 server. It was
designed by in-house personnel and TUSC.
59
The Collection System is software which utilizes the HP Unix operating
system and is resident on the Company's HP9000-T520 server. It was developed and
is owned by Ontario Systems Corporation and licensed to the Company under an
agreement dated November 15, 1989.
Further information regarding these systems is contained on the
attached excerpt from the Company's Form 10-K for the year ended December 31,
2000.
60
SCHEDULE D
TO
SECURITY AGREEMENT
Pledged Shares
Name of Entity Ownership
-------------- ---------
1. The entire Non-Specified Interest of Company Company
in the Titling Subsidiary, evidenced by Certificate No. 1
issued under the Titling Subsidiary Agreements.
2. Auto Funding America of Nevada, Inc. Company
3. Buyers Vehicle Protection Plan, Inc. Company
4. CAC Leasing, Inc. Company
5. Vehicle Remarketing Services, Inc. Company
6. Credit Acceptance Corporation Life Insurance Company Company
7. Credit Acceptance Corporation of Nevada, Inc. Company
61
SCHEDULE E
TO
SECURITY AGREEMENT
Trade and Other Names
Credit Acceptance Corporation
STATES
AL - Alabama None
AK - Alaska AutoNet Xxxxxxx.xxx, CAC Auto Leasing
AZ - Arizona AutoNet Xxxxxxx.xxx, CAC Auto Leasing
AR - Arkansas AutoNet Xxxxxxx.xxx, CAC Auto Leasing
CA - California Los Angelos County ONLY - AutoNet Xxxxxxx.xxx, CAC
Auto Leasing
CO - Colorado AutoNet Xxxxxxx.xxx, CAC Auto Leasing
CT - Connecticut Town of Granby ONLY - AutoNet Xxxxxxx.xxx, CAC Auto
Leasing
DE - Delaware None
DC - Dist. Of Col. None
FL - Florida None
GA - Xxxxxxx Xxxxxx County ONLY - AutoNet Xxxxxxx.xxx
HI - Hawaii AutoNet Xxxxxxx.xxx, CAC Auto Leasing
ID - Idaho AutoNet Xxxxxxx.xxx, CAC Auto Leasing
IL - Illinois AutoNet Xxxxxxx.xxx, CAC Auto Leasing
IN - Indiana AutoNet Xxxxxxx.xxx, CAC Auto Leasing
IA - Iowa AutoNet Xxxxxxx.xxx, CAC Auto Leasing
KS - Kansas None
KY - Kentucky AutoNet Xxxxxxx.xxx, CAC Auto Leasing
LA - Louisiana None
ME - Maine AutoNet Xxxxxxx.xxx, CAC Auto Leasing
MD - Maryland AutoNet. Xxxxxxx.xxx
MA - Mass. AutoNet Xxxxxxx.xxx, CAC Auto Leasing
MI - Michigan AutoNet Xxxxxxx.xxx, CAC Auto Leasing
MN - Minnesota AutoNet Xxxxxxx.xxx, CAC Auto Leasing
MS - Mississippi None
MO - Missouri AutoNet Xxxxxxx.xxx, CAC Auto Leasing
MT - Montana AutoNet Xxxxxxx.xxx, CAC Auto Leasing
NE - Nebraska None
NV - Nevada None
NH - New Hamp. AutoNet Xxxxxxx.xxx, CAC Auto Leasing
NJ - New Jersey AutoNet Xxxxxxx.xxx, CAC Auto Leasing
NM - New Mexico None
NY - New York None
NC - North Car. None
62
ND - North Dak. AutoNet Xxxxxxx.xxx, CAC Auto Leasing
OH - Ohio AutoNet Xxxxxxx.xxx, CAC Auto Leasing
OK - Oklahoma AutoNet Xxxxxxx.xxx, CAC Auto Leasing
OR - Oregon None
PA - Penn. AutoNet Xxxxxxx.xxx, CAC Auto Leasing, Credit
Acceptance Financial Services, Inc.
RI - Rhode Island None
SC - South Car. Richand County ONLY - AutoNet Xxxxxxx.xxx
SD - South Dak. None
TN - Tennessee AutoNet Xxxxxxx.xxx, CAC Auto Leasing
TX - Texas AutoNet Xxxxxxx.xxx, CAC Auto Leasing
UT - Utah AutoNet Xxxxxxx.xxx, CAC Auto Leasing
VT - Vermont AutoNet Xxxxxxx.xxx, CAC Auto Leasing
VA - Virginia City of Virginia Beach ONLY -AutoNet Xxxxxxx.xxx,
CAC Auto Leasing
WA - Washington AutoNet Xxxxxxx.xxx, CAC Auto Leasing
WV - West Vir. AutoNet Xxxxxxx.xxx, CAC Auto Leasing
WI - Wisconsin None
WY - Wyoming None
Auto Funding America of Nevada, Inc.
None
Buyers Vehicle Protection Plan, Inc.
None
CAC Leasing, Inc.
None
Vehicle Remarketing Services, Inc.
Oklahoma - Vehicle Remarketing Services of Michigan, Inc.
Credit Acceptance Corporation Life Insurance Company
None
Credit Acceptance Corporation of Nevada, Inc.
None
63
SCHEDULE F
TO
SECURITY AGREEMENT
[FORM OF NOTICE OF REGISTERED PLEDGE]
AUTO LEASE SERVICES LLC
NOTICE OF REGISTERED PLEDGE
64
___________, 2001
TO: Auto Lease Service LLC and
Credit Acceptance Corporation
as Administrative Agent
for Auto Lease Services LLC
(the "Administrative Agent")
RE: Pledge of Certificate related to
Non-Specified Interest
Reference is made to the Limited Liability Company Agreement, dated as
of March 1, 2001, as amended (the "Titling Company Agreement"), among Credit
Acceptance Corporation ("CAC") as Founding Member and Auto Lease Services LLC,
as Titling Company, and the Administrative Agency Agreement dated as of March 1,
2001, between such parties, as amended (the "Administrative Agency Agreement")
Each of the undersigned hereby certifies, represents and warrants as
follows:
1. Pursuant to Sections 5.7 and 5.9 of the Titling Company Agreement,
the Non-Specified Interest Certificate, Certificate No. 1, (the "Pledged
Certificate"), has been pledged by CAC, the existing registered Holder thereof,
(the "Pledgor"), to Comerica Bank, a Michigan banking corporation, in its
capacity as Collateral Agent for the Benefited Parties pursuant to the
Intercreditor Agreement (as such terms are defined in the attached Pledge
Documents, referred to in item 2 of this Notice) (the "Pledgee").
65
2. Attached hereto as Exhibits A and B are true and complete copies of
the related security agreements and other agreements (the "Pledge Documents")
governing the exercise by the Pledgee of the Pledged Rights (as defined below)
of the Pledgor with respect to the Pledged Certificate, as follows:
a. Second Amended and Restated Security Agreement dated as of
June 11, 2001 by CAC and certain of its Subsidiaries (as
debtors) in favor of Comerica Bank, as Collateral Agent, for
and on behalf of the Benefited Parties; and
b. Intercreditor Agreement dated as of December 15, 1998 by and
among Comerica Bank, as Collateral Agent, the Lenders and the
Noteholders, and consented to by CAC, as amended by First
Amendment thereto dated as of March 30, 2001.
3. Pursuant to the Pledge Documents, the Pledgor has agreed that
the Pledgee may exercise the rights set forth in the Pledge Documents
(collectively, the "Pledged Rights").
4. The pledge of the Pledged Certificate by the Pledgor to the
Pledgee pursuant to the Pledge Documents, and the exercise by the Pledgee of the
Pledged Rights, are each permitted by the Titling Company Agreement, and the
Pledge Documents have been duly authorized, executed and delivered, and are
enforceable by and against Pledgor and Pledgee, in accordance with their
respective terms, subject to applicable bankruptcy, reorganization, insolvency,
moratorium and similar laws affecting creditors rights generally and to general
equitable principles.
5. Accordingly, you are hereby authorized and directed to cause
the Titling Company Registry to reflect that the Pledgee has become the
Registered Pledgee with
66
respect to the Pledged Certificate, entitled to exercise the Pledged Rights with
respect to the Pledged Certificate.
6. Furthermore, Pledgee, for itself and for and on behalf of the
Benefited Parties, hereby covenants that for a period of one year and one day
after payment in full of all distributions to all Holders pursuant to the terms
of the Titling Company Agreement, the Administrative Agency Agreement and the
Series Supplements, it will not institute against, or join any Person in
instituting against, the Titling Company any bankruptcy, reorganization,
insolvency or liquidation proceeding, or other similar proceeding, under the
laws of the United States or any state or other political subdivision thereof.
IN WITNESS WHEREOF, each of the undersigned has caused this Notice of
Registered Pledge to be duly executed and delivered by its respective officer
hereunto duly authorized, as of the date and year first above written.
CREDIT ACCEPTANCE CORPORATION,
as Pledgor
By: /S/ Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title: Chief Financial Officer
COMERICA BANK, as Collateral Agent
for the Benefited Parties pursuant to the
Intercreditor Agreement, as Pledgee
By: /S/ Xxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
67
FORM OF ACKNOWLEDGMENT AND CONSENT OF
AUTO LEASE SERVICES, LLC
The undersigned acknowledges receipt of: (i) notice, pursuant to Notice
of Registered Pledge dated _____________, 2001, that CREDIT ACCEPTANCE
CORPORATION ("Assigning Member") has assigned, pledged and granted to Comerica
Bank in its capacity as Collateral Agent for the Benefited Parties ("Collateral
Agent") a security interest in such Assigning Member's entire interest (which
constitutes the entire Non-Specified Interest) as a member in Auto Lease
Services, LLC, a Delaware limited liability company ("Titling Company") and (ii)
a copy of the Second Amended and Restated Security Agreement dated as of June
__, 2001 made between the Assigning Member (and others) and Collateral Agent (in
each case, as amended or otherwise modified from time to time, the "Security
Agreement"). The undersigned consents to such assignment, pledge and grant of
security and agrees that upon the written request of Collateral Agent, given at
the direction or with the concurrence of the Majority Benefited Parties as
required under the Intercreditor Agreement, the undersigned will (x) pay or
cause to be paid to Collateral Agent all monies to the extent required in the
Security Agreement, due the Assigning Member arising out of the interest of
Assigning Member in Subsidiary and (y) transfer or cause to be transferred to
Collateral Agent all or such portion of the Non-Specified Assets as Collateral
Agent shall direct, due the Assigning Member arising out of the Non-Specified
Interest of the Assigning Member in the Titling Company.
The undersigned warrants and represents to Collateral Agent that the
membership interests of Subsidiary assigned hereunder to Collateral Agent are
not (i) dealt in or traded on securities exchanges or in securities markets,
(ii) interests in a unit investment trust that is registered as an investment
company under Federal Investment Company laws and (iii) are not face amount
certificates issued by a face-amount certificate company that is registered as
an investment company under Federal Investment Company laws. And the undersigned
further represents and warrants that the undersigned is not registered as an
investment company under Federal Investment Company laws.
The undersigned warrants and represents to Collateral Agent that the
Titling Company Agreement ("Titling Company Agreement") governing the Titling
Company continues to be in full force and effect and that, to the knowledge of
the undersigned, no event has occurred or condition exists which reasonably
would be expected to result in a defense, offset or counterclaim limiting the
Titling Company's obligations to distribute any monies due or to become due to
the Assigning Member in accordance with such operating agreement. The
undersigned further warrants and represents to Collateral Agent that the Titling
Company Agreement authorizes the assignment and security interest made by such
Assigning Member to Collateral Agent. The undersigned agrees that, unless and
until Collateral Agent shall have exercised its rights and remedies under the
Security Agreement and then only to the extent set forth therein, Collateral
Agent shall have no responsibility
68
for any of the liabilities or obligations of the Assigning Member to the
undersigned nor any interest in any of the rights of the Assigning Member under
the Titling Company Agreement. Nothing in this Acknowledgment and Consent shall
be construed to expand the rights of the Collateral Agent under the Security
Agreement.
In Witness Whereof, each of the undersigned parties has executed this
acknowledgment and consent as of ____________, 2001.
AUTO LEASE SERVICES, LLC
By:_____________________________________________________
Its:____________________________________________________
CREDIT ACCEPTANCE CORPORATION,
as Administrative Agent pursuant to the Administrative
Agency Agreement
By:/S/ Xxxxxxx X. Xxxx
Its: Chief Financial Officer
69
EXHIBIT A
TO
SECURITY AGREEMENT
FORM OF AMENDMENT
This Amendment, dated ____, 20__, is delivered pursuant to Section 4.15
of the Security Agreement referred to below. The undersigned hereby agrees that
this Amendment may be attached to the Second Amended and Restated Security
Agreement dated as of June 11, 2001, between the undersigned and Comerica Bank,
as the Collateral Agent for the benefit of the Banks, the Noteholders and the
Future Debt Holders referred to therein (the "Security Agreement"), and that the
shares of stock, membership interests, partnership units, notes or other
instruments listed on Schedule 1 annexed hereto shall be and become part of the
Collateral referred to in the Security Agreement and shall secure payment and
performance of all Benefited Obligations as provided in the Security Agreement.
Capitalized terms used herein but not defined herein shall have the
meanings therefor provided in the Security Agreement.
CREDIT ACCEPTANCE CORPORATION
By: /S/ Xxxxxxx X. Xxxx
--------------------------------------
70
Name: Xxxxxxx X. Xxxx
-----------------------------------
Title: Chief Financial Officer
-----------------------------------
AUTO FUNDING AMERICA OF NEVADA INC.
CREDIT ACCEPTANCE CORPORATION LIFE
INSURANCE COMPANY
BUYERS VEHICLE PROTECTION PLAN, INC.
CAC LEASING, INC.
VEHICLE REMARKETING SERVICES, INC.
CREDIT ACCEPTANCE CORPORATION OF
NEVADA, INC.
By:
Name:
Title:
COMERICA BANK, as Collateral Agent
By: /S/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
71
EXHIBIT B
TO
SECURITY AGREEMENT
JOINDER AGREEMENT
THIS JOINDER AGREEMENT is dated as of _____________ , ____ by the
undersigned ("New Debtor").
WHEREAS, pursuant to Section 4.17 of that certain Second Amended and
Restated Security Agreement dated as of June 11, 2001 as amended or otherwise
modified from time to time, the "Credit Agreement") executed and delivered by
the Debtors signatory thereto, in favor of Comerica Bank, as Collateral Agent
for the benefit of the Banks, the Noteholders and the Future Debt Holders
referred to therein (the "Security Agreement), the New Debtor must execute and
deliver a Joinder Agreement so as to become obligated under the Security
Agreement.
NOW THEREFORE, as a further inducement to the Banks to continue to
provide Credit accommodations to the Company, New Debtor hereby covenants and
agrees as follows:
1. All capitalized terms used herein shall have the meanings
assigned to them in the Credit Agreement unless expressly
defined to the contrary.
2. New Debtor hereby enters into this Joinder Agreement in order
to comply with Section 4.17 of the Security Agreement and does
so in consideration of the credit accommodations made or to be
made by the Banks, the Noteholders and any Future Debt
Holders.
3. New Debtor shall be considered, and deemed to be, for all
purposes of the Security Agreement, a Debtor under the
Security Agreement as fully as though New Debtor had executed
and delivered the Security Agreement at the time originally
executed and delivered by the existing debtors, and hereby
ratifies and confirms its obligations under the Security
Agreement, all in accordance with the terms thereof.
4. No Default or Event of Default (each such term being defined
in the Intercreditor Agreement) has occurred and is
continuing.
5. This Joinder Agreement shall be governed by the laws of the
State of Michigan and shall be binding upon New Debtor and its
successors and assigns.
72
IN WITNESS WHEREOF, the undersigned New Debtor has executed and
delivered this Joinder Agreement as of the day and year first above written.
[NEW DEBTOR]
By:
Its:
Address for notices:
Filing Locations:
Tradenames:
73
SCHEDULE I
TO
SECURITY AGREEMENT
---------------------------------- -------------- ----------------- ---------- -------------- --------------------
CLASS
OF NUMBER
ISSUER OF STOCK STOCK OR CERTIFICATE PAR OF OUTSTANDING
OR OTHER INTEREST OTHER NO(S) VALUE SHARES SHARES(1)
INTEREST
---------------------------------- -------------- ----------------- ---------- -------------- --------------------
---------------------------------- -------------- ----------------- ---------- -------------- --------------------
---------------------------------- -------------- ----------------- ---------- -------------- --------------------
---------------------------------- -------------- ----------------- ---------- -------------- --------------------
----------------------------------- --------------------- --------- ----------- ---------- ---------
ENTIRE
AUTO LEASE SERVICES LLC NON-SPECIFIED 1 N/A N/A N/A
INTEREST
----------------------------------- --------------------- --------- ----------- ---------- ---------
----------------------------------- --------------------- --------- ----------- ---------- ---------
----------------------------------- --------------------- --------- ----------- ---------- ---------
----------------------------------- --------------------- --------- ----------- ---------- ---------
--------
(1) Modify headings to the extent necessary to identify membership
interests, partnership units, notes or other instruments.
