EXHIBIT 4(f)(47)
CONTRIBUTION AGREEMENT
This CONTRIBUTION AGREEMENT, dated as of June 27, 2003 (the
"Agreement"), is made between CREDIT ACCEPTANCE CORPORATION, a Michigan
corporation ("CAC") and CREDIT ACCEPTANCE FUNDING LLC 2003-1, a Delaware limited
liability company ("Funding").
Funding desires to acquire from time to time certain Dealer Loans and
related rights and collateral, including certain of CAC's rights in the Dealer
Agreements related thereto, all of the related Contracts, and the Collections
(other than Dealer Collections) derived therefrom during the full term of this
Agreement, and CAC desires to transfer, convey and assign from time to time such
Dealer Loans and related property to the Purchaser upon the terms and conditions
hereinafter set forth. CAC has also agreed to service the Dealer Loans and
related property to be transferred, conveyed and assigned to Funding.
In consideration of the premises and the mutual agreements set forth
herein, it is hereby agreed by and between CAC and Funding as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. Capitalized terms used herein shall have the
respective meanings specified herein or, if not so specified, the respective
meanings specified in, or incorporated by reference into, the Sale and Servicing
Agreement, and shall include in the singular number the plural and in the plural
number the singular:
"Applicable Pool Cap" means the maximum number of Contracts that could,
under the applicable Dealer Agreement, be allocated to a pool of Contracts that
support advances which advances, when taken together, constitute a Dealer Loan.
"Contributed Property" means the Initial Contributed Property and the
Subsequent Contributed Property.
"Initial Contributed Property" means (i) the Dealer Loans listed on
Schedule A hereto delivered to the Servicer, the Class A Insurer, the Backup
Servicer and the Trust Collateral Agent on the Closing Date and (ii) all Related
Security with respect thereto.
"Related Security" means, with respect to any Dealer Loans, (i) all
rights under the Dealer Agreements related thereto (other than the Excluded
Dealer Agreement Rights), including Credit Acceptance's right to service the
Dealer Loans and the related Contracts and receive the related collection fee
and receive reimbursement of certain recovery and repossession expenses, in
accordance with the terms of the Dealer Agreements; (ii) Collections (other than
Dealer Collections) after the applicable Cut-off Date; (iii) a security interest
in each Contract securing such Dealer Loan; (iv) all records and documents
relating to such Dealer Loans and the Contracts; (vi) all security interests
purporting to secure payment of such Dealer Loans; (vii) all security interests
purporting to secure payment of each Contract (including a security interest in
each Financed Vehicle); (viii) all guarantees, insurance (including insurance
insuring the priority or perfection of any Contract) or other agreements or
arrangements securing the Contracts; and (ix) all Proceeds of the foregoing. For
the avoidance of doubt, the term "Related Security" with respect to any Dealer
Loan includes all rights arising after the end of the Revolving Period under
such Dealer Loans which rights are attributable to advances made under such
Dealer Loans as the result of Contracts being added after the last day of the
last full Collection Period during the Revolving Period to the identifiable
group of Contracts to which such Dealer Loan relates.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement dated as of June 27, 2003 among CAC, Funding, Credit Acceptance Auto
Dealer Loan Trust 2003-1, as the Issuer, JPMorgan Chase Bank as the Trust
Collateral Agent and Indenture Trustee, and Systems & Services Technologies,
Inc., as the Backup Servicer.
"Subsequent Contributed Property" means, with respect to any
Distribution Date, (i) the Dealer Loans added to Schedule A hereto as of such
Distribution Date and (ii) all Related Security with respect thereto.
SECTION 1.2. Other Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. All terms used in Article 9
of the UCC, and not specifically defined herein, are used herein as defined in
such Article 9.
SECTION 1.3. Computation of Time Periods. Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word "from" means "from and including" and the words
"to" and "until" each means "to but excluding."
ARTICLE II
CONTRIBUTION AND SALE OF DEALER LOANS
SECTION 2.1 Contribution and Sale of Dealer Loans. (a) In consideration
of the payments described in Section 3.1, effective as of the Closing Date, CAC
does hereby convey, assign, sell and transfer without recourse, except as set
forth herein, to Funding all of its right, title and interest in and to the
Initial Contributed Property.
(b) CAC hereby further agrees that on each Distribution Date
during the Revolving Period, in consideration of the payment described in
Section 3.1 with respect to such Distribution Date, CAC shall, and CAC does
hereby agree to, convey, assign, sell and transfer without recourse, except as
set forth in this Agreement, to Funding all of its right, title and interest in
and to the Subsequent Contributed Property with respect to such Distribution
Date.
(c) CAC hereby further agrees that the above-described conveyances
shall, without the need for any further action on the part of CAC or Funding,
include all rights arising after the end of the Revolving Period under any
Dealer Loan included in the Initial Contributed Property or Subsequent
Contributed Property which rights are attributable to advances made under such
Dealer Loans as the result of Contracts being added after the last day of the
last full Collection
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Period during the Revolving Period to the identifiable group of Contracts to
which such Dealer Loan relates.
(d) Each such sale, assignment, transfer and conveyance does not
constitute an assumption by Funding of any obligations of CAC or any other
Person to Obligors or to any other Person in connection with the Dealer Loans or
under any Contract, Dealer Agreement or other agreement and instrument relating
to the Dealer Loans.
(e) In connection with any such foregoing conveyance, CAC agrees
to record and file on or prior to the Closing Date, at its own expense, a
financing statement or statements with respect to the Contributed Property
conveyed by CAC hereunder meeting the requirements of applicable state law in
such manner and in such jurisdictions as are necessary to perfect the interests
of Funding created hereby, and to deliver either the originals of such financing
statements or a file-stamped copy of such financing statements or other evidence
of such filings to Funding on the Closing Date.
(f) CAC agrees that from time to time, at its expense, it will
promptly execute and deliver all instruments and documents and take all actions
as may be necessary or as Funding may reasonably request in order to perfect or
protect the interest of Funding in the Dealer Loans and other Contributed
Property purchased hereunder or to enable Funding to exercise or enforce any of
its rights hereunder. CAC shall, upon request of Funding, obtain such additional
search reports as Funding shall request. To the fullest extent permitted by
applicable law, Funding shall be authorized and permitted to file continuation
statements and amendments to financing statements and assignments thereof to
preserve and protect its right, title and interest in, to and under the
Contributed Property.
(g) It is the express intent of CAC and Funding that the
conveyance of the Dealer Loans and other Contributed Property by CAC to Funding
pursuant to this Agreement be construed as an absolute sale and contribution of
such Dealer Loans and other Contributed Property by CAC to Funding. Further, it
is not the intention of CAC and Funding that such conveyance be deemed a grant
of a security interest in the Dealer Loans and other Contributed Property by CAC
to Funding in the nature of a consensual lien securing an obligation. However,
in the event that, notwithstanding the express intent of the parties, the Dealer
Loans and other Contributed Property are construed to constitute property of
CAC, then (i) this Agreement also shall be deemed to be, and hereby is, a
security agreement within the meaning of the UCC as enacted in the State of
Michigan; and (ii) the conveyance by CAC provided for in this Agreement shall be
deemed to be, and CAC hereby grants to Funding, a security interest in, to and
under all of CAC's right, title and interest in, to and under the Contributed
Property, to secure the rights of Funding set forth in this Agreement or as may
be determined in connection therewith by applicable law. CAC and Funding shall,
to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create such a
security interest in the Dealer Loans and other Contributed Property, such
security interest would be a perfected security interest in favor of Funding
under applicable law and will be maintained as such throughout the term of this
Agreement.
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(h) In connection with such conveyance, CAC agrees to deliver to
Funding on the Closing Date, one or more computer files or microfiche lists
containing true and complete lists of all Dealer Agreements and Dealer Loans
conveyed to Funding on the Closing Date, and all Contracts securing all such
Dealer Loans, identified by account number, dealer number and pool number. Such
file or list shall be marked as Exhibit A to this Agreement, shall be delivered
to Funding as confidential and proprietary, and is hereby incorporated into and
made a part of this Agreement. Such list and such Exhibit A shall be
supplemented and updated by lists delivered by CAC to Funding on each
Distribution Date in the Revolving Period describing all Contributed Property
conveyed on each such Distribution Date so that, on each such date, Funding will
have an aggregate list and Exhibit A that describes all Dealer Loans conveyed by
CAC to Funding hereunder on or prior to said Distribution Date and the related
Dealer Agreements.
(i) CAC will reflect the transactions described in paragraph (a)
of this Section 2.01 on its internal non-consolidated financial statements and
on its non-consolidated state tax returns as a sale or other absolute transfer
of the Dealer Loans from CAC to Funding, even though CAC will reflect this
transaction on its consolidated financial statements as an "on-balance sheet"
item in accordance with generally accepted accounting principles. CAC will
present the data in its consolidated financial statements with an accompanying
footnote describing Funding's separate existence and stating that such item is a
financing secured by the Dealer Loans and is non-recourse to CAC.
SECTION 2.2. Servicing of Dealer Loans. The servicing, administering
and collection of the Dealer Loans shall be conducted by the Servicer then
authorized to act as such under the Sale and Servicing Agreement.
ARTICLE III
CONSIDERATION AND PAYMENT
SECTION 3.1. Consideration. The consideration for the Dealer Loans and
other Contributed Property conveyed on the Closing Date to Funding by CAC under
this Agreement shall be an amount equal to the net cash proceeds received by
Funding arising out of its conveyance on the Closing Date of Contributed
Property to the Issuer under the Sale and Servicing Agreement, plus 100% of the
sole membership interest in Funding. Thereafter, on each Distribution Date in
the Revolving Period, the consideration for the Dealer Loans and other
Contributed Property conveyed on such Distribution Date will be cash in the
amount of the Aggregate Outstanding Net Eligible Loan Balance of such Dealer
Loans. The Contributed Property shall be deemed to have a value equal to the
aggregate principal amount of the Dealer Loans sold and contributed by CAC to
Funding.
SECTION 3.2. Membership Interest. The membership interest of CAC in
Funding shall arise on the Closing Date. Such membership interest may not be
sold or otherwise transferred by CAC except as otherwise permitted in the Sale
and Servicing Agreement.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Representations and Warranties. CAC represents and
warrants to Funding, as of the Closing Date and each Distribution Date during
the Revolving Period, that:
(a) Organization and Good Standing. CAC is duly organized and is
validly existing as a corporation in good standing under the laws of the State
of Michigan, with power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is presently
conducted, and has and had at all relevant times, full power, authority, and
legal right to acquire, own, sell, and service the Dealer Loans and the related
Contracts, and to perform its obligations under the Basic Documents.
(b) Due Qualification. CAC is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals in all jurisdictions in which the ownership or lease of property
or the conduct of its business, including the servicing of the Dealer Loans and
the related Contracts as required by this Agreement, requires such
qualifications except where such failure will not have a material adverse
effect.
(c) Power and Authority. CAC has the power and authority to
execute and deliver this Agreement and the other Basic Documents to which it is
a party and to carry out their respective terms; and the execution, delivery,
and performance of this Agreement and the other Basic Documents to which it is a
party have been duly authorized by CAC by all necessary corporate action.
(d) Valid Sale; Binding Obligations. This Agreement evidences a
valid sale, transfer, and assignment of the Contributed Property enforceable
against creditors of and purchasers from CAC; and this Agreement and the other
Basic Documents to which CAC is a party constitute legal, valid and binding
obligations of CAC enforceable in accordance with their terms, subject to the
effects of bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights generally and to general
principles of equity.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Basic Documents to which it is a
party and the fulfillment of the terms hereof and thereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time) a default under, the Articles of
Incorporation or by-laws of CAC, or any indenture, agreement, or other
instrument to which CAC is a party or by which it is or may be bound; nor result
in the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement (other than this Agreement), or other
instrument; or violate any law or, to the best of CAC's knowledge, any order,
rule, or regulation applicable to CAC of any court or of any federal or state
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over CAC or its properties.
(f) No Proceedings. There are no proceedings or investigations
pending, or to CAC's best knowledge threatened, before any court, regulatory
body, administrative agency, or other governmental instrumentality having
jurisdiction over CAC or its properties: A) asserting the invalidity of this
Agreement or any other Basic Document to which it is a party; B) seeking to
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prevent the consummation of any of the transactions contemplated by this
Agreement or any other Basic Document to which it is a party; or C) seeking any
determination or ruling that might materially and adversely affect the
performance by CAC of its obligations under, or the validity or enforceability
of, this Agreement, or any other Basic Document to which it is a party.
(g) Place of Business. The principal place of business and chief
executive office of CAC is in Southfield, Michigan, and the office where CAC
keeps all of its Records is at the address listed in Section 8.3, or such other
locations notified to Funding and the Trust Collateral Agent in accordance with
this Agreement in jurisdictions where all action required by the terms of this
Agreement has been taken and completed.
(h) Eligibility of Dealer Agreements. Each Dealer Agreement
classified as an "Eligible Dealer Agreement" (or included in any aggregation of
balances of "Eligible Dealer Agreements") by CAC in any document or report
delivered hereunder satisfied the requirements contained in the definition of
Eligible Dealer Agreement on the date so delivered.
(i) Eligibility of Dealer Loans. Each Dealer Loan classified as an
"Eligible Loan" (or included in any aggregation of balances of "Eligible Loans")
by CAC in any document or report delivered hereunder satisfied the requirements
contained in the definition of Eligible Loan on the date so delivered. Each
Dealer Loan represents, or will represent, a non-recourse obligation of a Dealer
with respect to advances related to a pool of Contracts, and CAC has, and will
maintain, a policy that each such pool will have Contracts allocated to it (as
generated by relevant Dealer) until the number of Contracts in such pool reaches
the Applicable Pool Cap. The Applicable Pool Cap for each Dealer Loan will equal
or exceed 75.
(j) Eligibility of Contracts. Each Contract classified as an
"Eligible Contract" (or included in any aggregation of balances of "Eligible
Contracts") by CAC in any document or report delivered hereunder satisfied the
requirements contained in the definition of Eligible Contract on the date so
delivered.
(k) Accuracy of Information. All information with respect to the
Dealer Loans and other Contributed Property provided to Funding hereunder by CAC
was true and correct in all material respects as of the date such information
was provided to Funding and did not omit to state any material facts necessary
to make the statements contained therein not misleading.
(l) No Liens. Each Dealer Loan and the other Contributed Property
has been pledged to Funding free and clear of any Lien of any Person, and in
compliance, in all material respects, with all Applicable Laws.
(m) No Consents. With respect to each Dealer Loan and the other
Contributed Property, all consents, licenses, approvals or authorizations of or
registrations or declarations with any Governmental Authority required to be
obtained, effected or given by CAC, in connection with the pledge of such
Contributed Property to Funding have been duly obtained, effected or given and
are in full force and effect.
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(n) Schedule A. Schedule A to this Agreement and each supplement
or addendum thereto is and will be an accurate and complete listing of all
Dealer Loans and the related Dealer Agreements and Contracts in all material
respects on the date each such Dealer Loan was sold to Funding hereunder, and
the information contained therein is and will be true and correct in all
material respects as of such date.
(o) Adverse Selection. No selection procedure believed by CAC to
be adverse to the interests of Funding has been or will be used in selecting the
Dealer Agreements, Dealer Loans or Contracts.
(p) Contribution Agreement. This Contribution Agreement is the
only agreement pursuant to which Funding purchases Dealer Loans from CAC.
(q) Security Interest. CAC has granted a security interest (as
defined in the UCC as enacted in the State of Michigan) to Funding in the
Contributed Property, which is enforceable in accordance with Applicable Law
upon the Closing Date. Upon the filing of UCC-1 financing statements naming
Funding as secured party and CAC as debtor, Funding shall have a first priority
perfected security interest in the Contributed Property. All filings (including,
without limitation, UCC filings) as are necessary in any jurisdiction to perfect
the interest of Funding have been made.
(r) Credit Score. The weighted average (based on Contract
principal balance) of the Final Scores of each "Contract Group" is 630 or
greater. A "Contract Group" is a group of Contracts related to a group of Dealer
Loans that becomes Contributed Property on the Closing Date or on a particular
Distribution Date during the Revolving Period.
(s) Use of Proceeds. No proceeds of any sale of Contributed
Property will be used (i) for a purpose that violates, or would be inconsistent
with, Regulation T, U or X promulgated by the Board of Governors of the Federal
Reserve System from time to time or (ii) to acquire any security in any
transaction which is subject to Section 12, 13 or 14 of the Securities Exchange
Act of 1934, as amended.
(t) Taxes. CAC has filed on or before their respective due dates,
all tax returns which are required to be filed in any jurisdiction or has
obtained extensions for filing such tax returns and has paid all taxes,
assessments, fees and other governmental charges against CAC or any of its
properties, income or franchises, to the extent that such taxes have become due,
other than any taxes or assessments, the validity of which are being contested
in good faith by appropriate proceedings and with respect to which adequate
provision has been made on the books of the Seller as may be required by GAAP.
To the best of the knowledge of CAC, all such tax returns were true and correct
in all material respects and CAC knows of any proposed material additional tax
assessment against it nor any basis therefor. Any taxes, assessments, fees and
other governmental charges payable by CAC in connection with the execution and
delivery of the Basic Documents and the issuance of the Class A Notes have been
paid or shall have been paid at or prior to Closing Date.
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(u) Consolidated Returns. CAC, the Seller and the Issuer are
members of an affiliated group within the meaning of Section 1504 of the
Internal Revenue Code which will file a consolidated federal income tax return
at all times until the termination of the Basic Documents.
(v) ERISA. CAC is in compliance in all material respects with the
Employee Retirement Income Security Act of 1974, as amended.
(w) Compliance with Laws. CAC has complied in all material
respects with all applicable, laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject.
(x) Material Adverse Change. Since the date of its formation, no
event has occurred that would have a material adverse effect on (i) the
financial condition or operations of CAC, (ii) the ability of CAC to perform its
obligations under the Basic Documents, or (ii) the collectibility of the Dealer
Loans generally or any material portion of the Dealer Loans.
(y) Solvency; Fraudulent Conveyance. CAC is solvent, is able to
pay its debts as they become due and will not be rendered insolvent by the
transactions contemplated by the Basic Documents and, after giving effect
thereto, will not be left with an unreasonably small amount of capital with
which to engage in its business. CAC does not intend to incur, or believes that
it has incurred, debts beyond its ability to pay such debts as they mature. CAC
does not contemplate the commencement of insolvency, bankruptcy, liquidation or
consolidation proceedings or the appointment of a receiver, liquidator,
conservator, trustee or similar official or any of its assets. The amount of
consideration being received by CAC upon the sale or other absolute transfer of
the Contributed Property to Funding constitutes reasonably equivalent value and
fair consideration for the Contributed Property. CAC is not transferring the
Contributed Property to Funding with any intent to hinder, deal or defraud any
of its creditors.
(z) Voidability. The transfers of Contributed Property made
hereunder were not made for or on account of an antecedent debt. No transfer by
CAC of any Contributed Property hereunder is or may be voidable under any
section of the Bankruptcy Code.
(aa) Investment Company. CAC is not an investment company which is
required to register under the Investment Company Act of 1940, as amended.
(bb) Perfection. The perfection representations, warranties and
covenants made by CAC and set forth on Schedule A hereto shall be a part of this
Agreement for all purposes.
SECTION 4.2. Reaffirmation of Representations and Warranties by CAC;
Notice of Breach. The representations and warranties set forth in Section 4.1
shall survive the conveyance of the Dealer Loans to Funding, and termination of
the rights and obligations of Funding and CAC under this Agreement. Upon
discovery by Funding or CAC of a breach of any of the foregoing representations
and warranties, the party discovering such breach shall give prompt written
notice to the other within three Business Days of such discovery.
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ARTICLE V
COVENANTS OF CAC AND THE SERVICER
SECTION 5.1. Affirmative Covenants. So long as this Agreement is in
effect, and until all Dealer Loans which have been conveyed to Funding pursuant
hereto shall have been paid in full or written-off as uncollectible, and all
amounts owed by CAC pursuant to this Agreement have been paid in full, unless
Funding otherwise consents in writing, CAC hereby covenants and agrees as
follows:
(a) Compliance with Law. CAC will comply in all material respects
with all Applicable Laws.
(b) Preservation of Existence. CAC will preserve and maintain its
existence, rights, franchises and privileges in the jurisdiction of its
formation, and qualify and remain qualified in good standing as a foreign
corporation in each jurisdiction where the failure to preserve and maintain such
existence, rights, franchises, privileges and qualification has had, or could
reasonably be expected to have, a material adverse effect on the Contributed
Property.
(c) Obligations and Compliance with Dealer Loans and Dealer
Agreements. CAC will duly fulfill and comply with all obligations on the part of
CAC to be fulfilled or complied with under or in connection with each Dealer
Loan and each Dealer Agreement and will do nothing to impair the rights of
Funding in, to and under the Contributed Property.
(d) Keeping of Records and Books of Account. CAC will maintain and
implement administrative and operating procedures (including without limitation,
an ability to recreate records evidencing the Dealer Loans and the Contracts in
the event of the destruction of the originals thereof), and keep and maintain
all documents, books, records and other information reasonably necessary or
advisable for the collection of all Dealer Loans, or it will cause the Servicer
to do so.
(e) Preservation of Security Interest. CAC will file such
financing and continuation statements and any other documents that may be
required by any law or regulation of any Governmental Authority to preserve and
perfect the security interest of Funding in, to and under the Contributed
Property. CAC will maintain possession of the Dealer Agreements and the Contract
Files and Records, as custodian for the Trust and the Trust Collateral Agent, as
set forth in Section 3.03(a) of the Sale and Servicing Agreement. CAC, as
Servicer, will comply with its covenants under Sections 4.06(a)(vii) and
4.06(a)(viii) of the Sale and Servicing Agreement.
(f) Collection Guidelines. As long as it is the Servicer, CAC will
(A) comply in all material respects with the Collection Guidelines in regard to
each Dealer Loan and Contract, and (B) furnish to Funding quarterly, prompt
notice of any change in the Collection Guidelines and will deliver a copy of
such changes to Funding, quarterly.
(g) Separateness. CAC will take such actions that are required on
its part to be performed to cause (i) Funding to be in compliance, at all
relevant times, with Sections 6.01(xviii) and 6.04 of the Sale and Servicing
Agreement, and (ii) all factual assumptions set
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forth in the opinion letters delivered by Xxxxxx Xxxxxxx PLLC with respect to
certain bankruptcy matters under the Sale and Servicing Agreement to remain true
at all relevant times.
SECTION 5.2. Negative Covenants. During the term of this Agreement,
unless Funding shall otherwise consent in writing:
(a) Change of Name or Location of Records. CAC shall not (A)
change its name or its state of organization, move the location of its principal
place of business and chief executive office, and the offices where it keeps
records concerning the Dealer Loans from the location referred to in Section
3.03(c) of the Sale and Servicing Agreement, or (B) move the Records from the
location thereof on the Closing Date, unless CAC or the Servicer has given at
least thirty (30) days' written notice to Funding and has taken all actions
required under the UCC of each relevant jurisdiction in order to continue the
first priority perfected security interest of Funding in the Contributed
Property.
(b) Change in Payment Instructions to Obligors. CAC will not make
any change in its instructions to Obligors regarding payments to be made
directly or indirectly, unless such change is permitted under the Sale and
Servicing Agreement and Funding have each consented to such change and have
received duly executed documentation related thereto.
(c) No Instruments. CAC shall take no action to cause any Dealer
Loan to be evidenced by any instrument (as defined in the UCC as in effect in
the relevant jurisdictions).
(d) No Liens. CAC shall not sell, pledge, assign or transfer to
any other Person, or grant, create, incur, assume or suffer to exist any Lien
(other than in favor of the Trust Collateral Agent or the Trust as specifically
contemplated herein) on, the Contributed Property. CAC shall defend the right,
title and interest of Funding in, to and under the Contributed Property against
all claims of third parties claiming through or under CAC.
(e) Credit Guidelines and Collection Guidelines. CAC will not
amend, modify, restate or replace, in whole or in part, the Credit Guidelines or
Collection Guidelines, which change would impair the collectibility of any
Dealer Loan or Contract or otherwise adversely affect the interests or the
remedies of Funding under this Agreement or any other Basic Document, unless
such change is permitted under the Sale and Servicing Agreement and unless CAC
obtains the prior written consent of Funding.
(f) Release of Contracts. Except for a release to an insurer in
exchange for insurance proceeds paid by such insurer resulting from a claim for
the total insured value of a vehicle, neither CAC nor the Servicer shall release
the Financed Vehicle securing each such Contract from the security interest
granted by such Contract in whole or in part except in the event of payment in
full by or on behalf of the Obligor thereunder or repossession, nor shall CAC
impair the rights of Funding in the Contracts, except as may be required by
applicable law.
(g) Change in Structure. CAC shall not change its jurisdiction of
organization or merge or consolidate with and into any other entity or otherwise
change its name, corporate structure or tax identification number or its
location (within the meaning of the UCC) unless (i)
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Funding shall have received at least thirty (30) days advance written notice of
such change and CAC has taken all action necessary or appropriate to perfect or
maintain the perfection of Funding's interest in the Contributed Property
(including, without limitation, the filing of all financing statements and the
taking of such other action as Funding or its assigns may request in connection
with such change); (ii) in the event of a merger or consolidation, (x) if CAC is
then Servicer, such merger or consolidation satisfies all conditions in Section
7.03 of the Sale and Servicing Agreement and, (y) if CAC is not the surviving
entity, the surviving entity shall have executed an agreement of assumption
acceptable to Funding and the Class A Insurer to perform every obligation of CAC
under this Agreement and the other Basic Documents to which CAC is a party, and
(iv) CAC shall have delivered to Funding, the Indenture Trustee and the Class A
Insurer an opinion of counsel confirming that the security interest created
hereunder remains perfected and of first priority, subject only to such
limitations and qualifications as are contained in the opinions of Xxxxxx
Xxxxxxx PLLC delivered on the Closing Date or are otherwise consented to by the
addressees of such opinion.
SECTION 5.3 Indemnities by CAC.
(a) Without limiting any other rights that any such Person may
have hereunder or under Applicable Law, CAC hereby agrees to indemnify Funding,
or its assignee, and each of their respective Affiliates and officers,
directors, employees and agents thereof (collectively, the "Indemnified
Parties"), forthwith on demand, from and against any and all damages, losses,
claims, liabilities and related costs and expenses, including attorneys' fees
and disbursements (all of the foregoing being collectively referred to as the
"Indemnified Amounts") awarded against or incurred by such Indemnified Party
arising out of or as a result of this Agreement or in respect of any Dealer Loan
or any Contract, excluding, however, (a) Indemnified Amounts to the extent
resulting from gross negligence or willful misconduct on the part of such
Indemnified Party or (b) Indemnified Amounts that arise as a result of
non-payment of Dealer Loans due to credit problems of Dealers or Obligors. If
CAC has made any indemnity payment pursuant to this Section 5.3 and such payment
fully indemnified the recipient thereof and the recipient thereafter collects
any payments from others in respect of such Indemnified Amounts then, the
recipient shall repay to CAC an amount equal to the amount it has collected from
others in respect of such indemnified amounts. Without limiting the foregoing,
CAC shall indemnify each Indemnified Party for Indemnified Amounts relating to
or resulting from:
(i) any Contract or Dealer Loan treated as or represented by
CAC to be an Eligible Contract or Eligible Loan that is not at the applicable
time an Eligible Contract or Eligible Loan;
(ii) reliance on any representation or warranty made or deemed
made by CAC or any of its officers under or in connection with this Agreement,
which shall have been false or incorrect in any material respect when made or
deemed made or delivered;
(iii) the failure by CAC to comply with any term, provision or
covenant contained in this Agreement or any agreement executed in connection
with this Agreement, or with any Applicable Law, with respect to any Dealer
Loan, Dealer Agreement, any Contract, or
11
the nonconformity of any Dealer Loan, Dealer Agreement or Contract with any such
Applicable Law;
(iv) the failure to vest and maintain vested in Funding, or
its assignees, a first priority perfected security interest in the Contributed
Property, free and clear of any Lien;
(v) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the UCC of any
applicable jurisdiction or other Applicable Laws with respect to the Contributed
Property, whether at the time of the Closing or at any subsequent time;
(vi) any dispute, claim, offset or defense (other than the
discharge in bankruptcy of the Dealer or Obligor) of the relevant Dealer or
Obligor to the payment of any Dealer Loan or Contract (including, without
limitation, a defense based on such Dealer Loan or Contract not being a legal,
valid and binding obligation of such Obligor enforceable against it in
accordance with its terms);
(v) any failure of CAC to perform its duties or obligations in
accordance with the provisions of this Agreement or any failure by CAC to
perform its respective duties under the Dealer Loans;
(vi) the failure by CAC to pay when due any taxes for which
CAC is liable, including without limitation, sales, excise or personal property
taxes payable in connection with the Contributed Property;
(vii) the commingling of Collections of the Dealer Loans and
Contracts at any time with other funds;
(viii) any investigation, litigation or proceeding related to
this Agreement or in respect of any Dealer Loan or Contract;
(ix) the failure by CAC to pay when due any taxes for which
CAC is liable, including without limitation, sales, excise or personal property
taxes payable in connection with the Contributed Property;
(x) the failure of CAC, in its individual capacity, or any of
its agents or representatives to remit to the Servicer or the Trust Collateral
Agent Collections of the Dealer Loans and Contracts remitted to CAC, in its
individual capacity, or any such agent or representative; and
(xi) the failure of a Contract File to contain the relevant
original Contract.
Notwithstanding the foregoing, CAC shall have no indemnification
obligation hereunder with respect to any Dealer Loan or Contract in respect of
which CAC shall have paid the Purchase Amount under the Sale and Servicing
Agreement.
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(b) Any amounts subject to the indemnification provisions of this
Section 5.3 shall be paid by CAC to Funding within five (5) Business Days
following the Funding's demand therefor.
(c) The obligations of CAC under this Section 5.3 shall survive
the termination of this Agreement.
ARTICLE VI
PAYMENT OBLIGATION
SECTION 6.1. Mandatory Payments. CAC, in its individual capacity or as
Servicer, as the case may be, shall perform its obligations under Sections 3.02
and 4.07 of the Sale and Servicing Agreement.
SECTION 6.2. No Recourse. Except as otherwise provided in this Article
VI, the purchase and sale of the Dealer Loans under this Agreement shall be
without recourse to CAC or the Servicer.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.1. Conditions to Funding's Obligations Regarding Dealer
Loans. Consummation of the transactions contemplated hereby on the Closing Date
shall be subject to the satisfaction of the following conditions:
(a) All representations and warranties of CAC and the Servicer
contained in this Agreement shall be true and correct on the Closing Date with
the same effect as though such representations and warranties had been made on
such date;
(b) With respect to those Dealer Loans contributed on the Closing
Date, all information concerning such Dealer Loans provided to Funding shall be
true and correct in all material respects as of the Closing Date;
(c) CAC and the Servicer shall have substantially performed all
other obligations required to be performed by the provisions of this Agreement;
(d) CAC shall have filed or caused to be filed, or shall have
delivered for filing, the financing statement(s) required to be filed pursuant
to Section 2.1(b);
(e) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to Funding, and Funding shall have received
from CAC copies of all documents (including, without limitation, records of
corporate proceedings) relevant to the transactions herein contemplated as
Funding may reasonably have requested; and
13
ARTICLE VIII
MISCELLANEOUS PROVISIONS
SECTION 8.1. Amendment. This Agreement and the rights and obligations
of the parties hereunder may not be changed orally, but only by an instrument in
writing signed by Funding and CAC and consented to in writing by the Trust
Collateral Agent.
SECTION 8.2. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Michigan.
SECTION 8.3. Notices. Except where telephonic instructions or notices
are authorized herein to be given, all notices, demands, instructions and other
communications required or permitted to be given to or made upon any party
hereto shall be in writing and shall be sent by facsimile transmission with a
confirmation of the receipt thereof and shall be deemed to be given for purposes
of this Agreement on the day that the receipt of such facsimile transmission is
confirmed in accordance with the provisions of this Section 8.3. Unless
otherwise specified in a notice sent or delivered in accordance with the
foregoing provisions of this Section, notices, demands, instructions (including
payment instructions) and other communications in writing shall be given to or
made upon the respective parties hereto at their respective addresses and
accounts indicated below, and, in the case of telephonic instructions or
notices, by calling the telephone number or numbers indicated for such party
below:
14
(a) in the case of Funding:
Credit Acceptance Funding LLC 2003-1
Silver Triangle Building
00000 Xxxx Xxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx, Xx.
Telephone: (000) 000-0000 (ext. 884)
Telecopy: (000) 000-0000
with a copies to:
Wachovia Securities, Inc.
Asset Backed Finance
NC 0610
One Wachovia Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
And
Radian Asset Assurance, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Risk Officer and Chief Legal Officer
(b) in the case of CAC and in the case of the Servicer (for so
long as the Servicer is CAC):
Credit Acceptance Corporation
Silver Triangle Building
00000 Xxxx Xxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx, Xx.
Telephone: (000) 000-0000 (ext. 884)
Telecopy: (000) 000-0000
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party.
SECTION 8.4. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held
15
invalid, then such covenants, agreements, provisions, or terms shall be deemed
severable from the remaining covenants, agreements, provisions, or terms of this
Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Agreement.
SECTION 8.5. Assignment. This Agreement may not be assigned by the
parties hereto, except that Funding may assign its rights hereunder pursuant to
the Sale and Servicing Agreement to the Trust for the benefit of the Trust, the
Class A Insurer, the Indenture Trustee, the Trust Collateral Agent and the Class
A Noteholders. Funding hereby notifies CAC (and CAC hereby acknowledges) that
Funding, pursuant to the Sale and Servicing Agreement, has assigned its rights
hereunder to the Trust. All rights of Funding hereunder may be exercised by the
Trust or its assignees, to the extent of their respective rights pursuant to
such assignments.
SECTION 8.6. Further Assurances. Funding, CAC and the Servicer agree to
do and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by the other parties in
order to more fully to effect the purposes of this Agreement, including, without
limitation, the execution of any financing statements or continuation statements
or equivalent documents relating to the Dealer Loans for filing under the
provisions of the UCC or other laws of any applicable jurisdiction.
SECTION 8.7. No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of Funding, CAC or the Trust Collateral
Agent, any right, remedy, power or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exhaustive of any rights, remedies, powers and privilege provided by law.
SECTION 8.8. Counterparts. This Agreement may be executed in two or
more counterparts including telecopy transmission thereof (and by different
parties on separate counterparts), each of which shall be an original, but all
of which together shall constitute one and the same instrument.
SECTION 8.9. Binding Effect; Third-Party Beneficiaries. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. The Trust and the Trust Collateral
Agent on behalf of the Trust, the Class A Noteholders and the Class A Insurer
are intended by the parties hereto to be third-party beneficiaries of this
Agreement.
SECTION 8.10. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
SECTION 8.11. Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
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SECTION 8.12. Exhibits. The schedules and exhibits referred to herein
shall constitute a part of this Agreement and are incorporated into this
Agreement for all purposes.
SECTION 8.13 Covenant Not to File a Bankruptcy Petition. CAC agrees
that until one year and one day after such time as the Class A Notes issued
under the Indenture are paid in full, it shall not (i) institute the filing of a
bankruptcy petition against Funding or the Trust based upon any claim in its
favor arising hereunder or under the Basic Documents; (ii) file a petition or
consent to a petition seeking relief on behalf of Funding or the Trust under the
Bankruptcy Law; or (iii) consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or similar official) of Funding or the Trust or
any portion of the property of Funding or the Trust.
[remainder of page intentionally left blank]
17
IN WITNESS WHEREOF, Funding and CAC each have caused this Contribution
Agreement to be duly executed by their respective officers as of the day and
year first above written.
FUNDING: CREDIT ACCEPTANCE FUNDING LLC 2003-1
By: /S/ Xxxxxxx X. Xxxx
-----------------------------------
Name: Xxxxxxx X. Xxxx
Title: VP Finance & Treasurer
Credit Acceptance Funding LLC 2003-1
Silver Triangle Building
00000 Xxxx Xxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx, Xx.
Facsimile No.: (000) 000-0000
Confirmation No.: (000) 000-0000 (ext. 884)
CAC: CREDIT ACCEPTANCE CORPORATION
By: /S/ Xxxxxxx X. Xxxx
-----------------------------------
Name: Xxxxxxx X. Xxxx
Title: Chief Financial Officer & Treasurer
Credit Acceptance Corporation
Silver Triangle Building
00000 Xxxx Xxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx, Xx.
Facsimile No. (000) 000-0000
Confirmation No.: (000) 000-0000 (ext. 884)
SCHEDULE A
to
Contribution Agreement
PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS
In addition to the representations, warranties and covenants contained
in the Agreement, CAC hereby represents, warrants, and covenants to Funding as
follows on the Closing Date and on each Distribution Date on which Funding
purchases Dealer Loans, in each case only with respect to the Contributed
Property conveyed to Funding on such Closing Date or the relevant Distribution
Date:
GENERAL
1. This Agreement creates a valid and continuing security interest (as
defined in UCC Section 9-102) in the Contributed Property in favor of Funding,
which security interest is prior to all other Liens, and is enforceable as such
as against creditors of and purchasers from and assignees of CAC.
2. Each Contract constitutes "tangible chattel paper" or a "payment
intangible", within the meaning of UCC Section 9-102. Each Dealer Loan
constitutes a "payment intangible" or a "general intangible" within the meaning
of UCC Section 9-102.
3. Each Dealer Agreement constitutes either a "general intangible" or
"tangible chattel paper" within the meaning of UCC Section 9-102.
4. CAC has taken or will take all steps necessary actions with respect to
the Dealer Loans to perfect Funding's security interest in the Dealer Loans and
in the property securing the Dealer Loans.
CREATION
1. CAC owns and has good and marketable title to the Initial Contributed
Property or Subsequent Contributed Property, as applicable, free and clear of
any Lien, claim or encumbrance of any Person, excepting only liens for taxes,
assessments or similar governmental charges or levies incurred in the ordinary
course of business that are not yet due and payable or as to which any
applicable grace period shall not have expired, or that are being contested in
good faith by proper proceedings and for which adequate reserves have been
established, but only so long as foreclosure with respect to such a lien is not
imminent and the use and value of the property to which the Lien attaches is not
impaired during the pendency of such proceeding.
PERFECTION
1. CAC has caused or will have caused, within ten days after the effective
date of the Indenture, the filing of all appropriate financing statements in the
proper filing office in the appropriate jurisdictions under applicable law in
order to perfect the contribution and sale of the Contributed Property from the
Originator to the Seller, the transfer and sale of the Seller Property
from the Seller to the Issuer, and the security interest in the Collateral
granted to the Indenture Trustee under the Indenture.
2. With respect to Seller Property that constitutes tangible chattel
paper, such tangible chattel paper is in the possession of the Servicer, in its
capacity as custodian for the Trust and the Trust Collateral Agent, and the
Trust Collateral Agent has received a written acknowledgment from the Servicer,
in its capacity as custodian, that it is holding such tangible chattel paper
solely on its behalf and for the benefit of the Trust Collateral Agent, the
Seller, the Trust and the relevant Dealer(s). All financing statements filed or
to be filed against CAC in favor of Funding in connection with this Contribution
Agreement describing the Contributed Property contain a statement to the
following effect: "A purchase of or security interest in any collateral
described in this financing statement will violate the rights of the Secured
Party."
PRIORITY
1. None of CAC, the Servicer nor Funding has authorized the filing of, or
is aware of any financing statements against either Funding, CAC or the Trust
that includes a description of the Contributed Property and proceeds related
thereto other than any financing statement: (i) relating to the sale of
Contributed Property by the Originator to the Seller under the Contribution
Agreement, (ii) relating to the security interest granted to the Trust under the
Sale and Servicing Agreement, (iii) relating to the security interest granted to
the Indenture Trustee under the Indenture; or (iv) that has been terminated or
amended to reflect a release of the Contributed Property. Other than the
security interest granted to Funding pursuant to this Contribution Agreement,
CAC has not pledged, assigned, sold, granted a security interest in, or
otherwise conveyed any of the Contributed Property.
2. Neither the Seller, the Originator nor the Trust is aware of any
judgment, ERISA or tax lien filings against either the Seller, the Originator or
the Trust.
3. None of the tangible chattel paper that constitutes or evidences the
Contracts or the Dealer Agreements has any marks or notations indicating that it
has been pledged, assigned or otherwise conveyed to any Person other than CAC,
the Servicer, Funding, the Trust, a collection agent or the Trust Collateral
Agent.
SURVIVAL OF PERFECTION REPRESENTATIONS
1. Notwithstanding any other provision of this Agreement, the Sale and
Servicing Agreement, the Indenture or any other Basic Document, the Perfection
Representations, Warranties and Covenants contained in this Schedule shall be
continuing, and remain in full force and effect (notwithstanding any replacement
of the Servicer or termination of Servicer's rights to act as such) until such
time as all obligations under the Sale and Servicing Agreement, Contribution
Agreement and the Indenture have been finally and fully paid and performed.
NO WAIVER
1. The parties hereto: (i) shall not, without obtaining a confirmation of
the then-current rating of the Class A Notes (without giving effect to the Class
A Note Insurance Policy), waive any of the Perfection Representations,
Warranties or Covenants; (ii) shall provide the Rating
Agency with prompt written notice of any breach of the Perfection
Representations, Warranties or Covenants, and shall not, without obtaining a
confirmation of the then-current rating of the Class A Notes (without giving
effect to the Class A Note Insurance Policy) as determined after any adjustment
or withdrawal of the ratings following notice of such breach) waive a breach of
any of the Perfection Representations, Warranties or Covenants.
