Exhibit 4(f)(69)
EXECUTION COPY
U.S. $325,000,000
FIRST AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
Dated as of February 15, 2006
Among
CAC WAREHOUSE FUNDING CORPORATION II
as the Borrower
CREDIT ACCEPTANCE CORPORATION
as the Servicer and Custodian
WACHOVIA BANK, NATIONAL ASSOCIATION
as an Investor
JPMORGAN CHASE BANK, N.A.
as an Investor, and the other Investors
from time to time party hereto
VARIABLE FUNDING CAPITAL COMPANY, LLC
as a CP Conduit and a Lender
PARK AVENUE RECEIVABLES COMPANY LLC
as a CP Conduit and a Lender, and the other CP Conduits
from time to time party hereto
WACHOVIA CAPITAL MARKETS, LLC
as the Deal Agent and the Collateral Agent
WACHOVIA BANK, NATIONAL ASSOCIATION
as the Liquidity Agent for the VFCC Purchaser Group
JPMORGAN CHASE BANK, N.A.
as the Liquidity Agent for the PARCO Purchaser Group, and the
other Liquidity Agents from time to time party hereto
and
SYSTEMS & SERVICES TECHNOLOGIES, INC.
as the Backup Servicer
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS............................................................. 2
Section 1.1. Certain Defined Terms........................................... 2
Section 1.2. Other Terms..................................................... 27
Section 1.3. Computation of Time Periods..................................... 27
Section 1.4. Interpretation.................................................. 27
ARTICLE II THE LOAN FACILITY....................................................... 28
Section 2.1. Funding of the Advance.......................................... 28
Section 2.2. Grant of Security Interest; Acceptance by Collateral Agent...... 30
Section 2.3. Procedures for Funding of Advances.............................. 31
Section 2.4. Determination of Yield.......................................... 32
Section 2.5. Reduction of the Facility Limit and a Purchaser Group
Facility Limit; Repurchase...................................... 32
Section 2.6. Actions with Respect to Advance................................. 33
Section 2.7. Settlement Procedures........................................... 33
Section 2.8. [Reserved.]..................................................... 35
Section 2.9. Collections and Allocations..................................... 35
Section 2.10. Payments, Computations, Etc..................................... 36
Section 2.11. [Reserved.]..................................................... 37
Section 2.12. Fees............................................................ 37
Section 2.13. Increased Costs; Capital Adequacy; Illegality................... 37
Section 2.14. Taxes........................................................... 39
Section 2.15. Assignment of the Contribution Agreement........................ 40
Section 2.16. Take-Out........................................................ 40
ARTICLE III CONDITIONS TO THE CLOSING, EACH FUNDING AND AMENDMENT AND
RESTATEMENT............................................................. 42
Section 3.1. Conditions to the Closing and the Initial Funding............... 42
Section 3.2. Conditions Precedent To All Fundings............................ 43
ARTICLE IV REPRESENTATIONS AND WARRANTIES.......................................... 45
Section 4.1. Representations and Warranties of the Borrower.................. 45
Section 4.2. Representations and Warranties of the Borrower Relating to
the Loans and the Related Contracts............................. 50
Section 4.3. Representations and Warranties of the Servicer.................. 51
Section 4.4. Representations and Warranties of the Backup Servicer........... 52
Section 4.5. Breach of Representations and Warranties........................ 52
ARTICLE V GENERAL COVENANTS....................................................... 53
Section 5.1. Affirmative Covenants of the Borrower........................... 53
Section 5.2. Negative Covenants of the Borrower.............................. 58
Section 5.3. Covenant of the Borrower Relating to the Hedging Agreement...... 63
Section 5.4. Affirmative Covenants of the Servicer........................... 63
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Section 5.5. Negative Covenants of the Servicer.............................. 65
Section 5.6. Negative Covenants of the Backup Servicer....................... 66
ARTICLE VI ADMINISTRATION AND SERVICING OF CONTRACTS............................... 66
Section 6.1. Servicing....................................................... 66
Section 6.2. Duties of the Servicer and Custodian............................ 67
Section 6.3. Rights After Designation of Successor Servicer.................. 70
Section 6.4. Responsibilities of the Borrower................................ 70
Section 6.5. Reports......................................................... 70
Section 6.6. Additional Representations and Warranties of Credit
Acceptance as Servicer.......................................... 71
Section 6.7. Establishment of the Accounts................................... 72
Section 6.8. Payment of Certain Expenses by Servicer......................... 73
Section 6.9. Annual Independent Public Accountant's Servicing Reports........ 73
Section 6.10. The Servicer Not to Resign...................................... 73
Section 6.11. Servicer Termination Events..................................... 74
Section 6.12. Appointment of Successor Servicer............................... 75
Section 6.13. Responsibilities of the Borrower................................ 76
Section 6.14. Segregated Payment Account...................................... 76
ARTICLE VII BACKUP SERVICER......................................................... 76
Section 7.1. Designation of the Backup Servicer.............................. 76
Section 7.2. Duties of the Backup Servicer................................... 76
Section 7.3. Backup Servicing Compensation................................... 77
ARTICLE VIII [Reserved].............................................................. 77
ARTICLE IX SECURITY INTEREST....................................................... 77
Section 9.1. Security Agreement.............................................. 77
Section 9.2. Release of Lien................................................. 77
Section 9.3. Further Assurances.............................................. 77
Section 9.4. Remedies........................................................ 77
Section 9.5. Waiver of Certain Laws.......................................... 78
Section 9.6. Power of Attorney............................................... 78
ARTICLE X TERMINATION EVENTS...................................................... 78
Section 10.1. Termination Events.............................................. 78
Section 10.2. Remedies........................................................ 80
ARTICLE XI INDEMNIFICATION......................................................... 81
Section 11.1. Indemnities by the Borrower..................................... 81
Section 11.2. Indemnities by the Servicer..................................... 83
Section 11.3. After-Tax Basis................................................. 84
ARTICLE XII THE DEAL AGENT AND THE LIQUIDITY AGENTS................................. 84
Section 12.1. Authorization and Action........................................ 84
Section 12.2. Delegation of Duties............................................ 85
Section 12.3. Exculpatory Provisions.......................................... 86
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Section 12.4. Reliance........................................................ 87
Section 12.5. Non-Reliance on Deal Agent, Liquidity Agents, Collateral
Agent and Other Lenders......................................... 88
Section 12.6. Reimbursement and Indemnification............................... 88
Section 12.7. Deal Agent, Liquidity Agents and Collateral Agent in their
Individual Capacities........................................... 89
Section 12.8. Successor Deal Agent, Liquidity Agents or Collateral Agent...... 89
ARTICLE XIII ASSIGNMENTS; PARTICIPATIONS............................................. 90
Section 13.1. Assignments and Participations.................................. 90
ARTICLE XIV MISCELLANEOUS........................................................... 93
Section 14.1. Amendments and Waivers.......................................... 93
Section 14.2. Notices, Etc.................................................... 94
Section 14.3. Ratable Payments................................................ 94
Section 14.4. No Waiver; Remedies............................................. 94
Section 14.5. Binding Effect; Benefit of Agreement............................ 95
Section 14.6. Term of this Agreement.......................................... 95
Section 14.7. Governing Law; Consent to Jurisdiction; Waiver of Objection
to Venue........................................................ 95
Section 14.8. Waiver of Jury Trial............................................ 95
Section 14.9. Costs, Expenses and Taxes....................................... 95
Section 14.10. No Proceedings.................................................. 96
Section 14.11. Recourse Against Certain Parties................................ 96
Section 14.12. Protection of Right, Title and Interest in Assets; Further
Action Evidencing the Funding................................... 97
Section 14.13. Confidentiality; Tax Treatment Disclosure....................... 98
Section 14.14. Execution in Counterparts; Severability; Integration............ 100
Section 14.15. Waiver of Setoff................................................ 100
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EXHIBITS
EXHIBIT A Form of Funding Notice
EXHIBIT B Form of Assignment and Acceptance
EXHIBIT C Form of Monthly Report
EXHIBIT D Form of Joinder
EXHIBIT E Form of Hedging Agreement (including Schedule and Confirmation)
EXHIBIT F Form of Officer's Certificate as to Solvency
EXHIBIT G Form of Take-Out Release
EXHIBIT H Form of Contribution Agreement
EXHIBIT I Form of Variable Funding Note
EXHIBIT J-1 Form 1 of Dealer Agreement
EXHIBIT J-2 Form 2 of Dealer Agreement
EXHIBIT J-3 Form 3 of Dealer Agreement
EXHIBIT J-4 Form 4 of Dealer Agreement
EXHIBIT K [Reserved]
EXHIBIT L Forms of Contracts
EXHIBIT M [Reserved]
EXHIBIT N [Reserved]
EXHIBIT O Form of Backup Servicing Agreement
SCHEDULES
SCHEDULE I Condition Precedent Documents
SCHEDULE II Credit Guidelines
SCHEDULE III Tradenames, Fictitious Names and "Doing Business As" Names
SCHEDULE IV Location of Records and Contract Files
SCHEDULE V Loan and Contract List
SCHEDULE VI Collection Guidelines
SCHEDULE VII Forecasted Collections
SCHEDULE VIII Commitment Amount of Each Investor
SCHEDULE IX List of Dealer Agreements and Pools
SCHEDULE X Condition Precedent Documents Relating to Amendment and
Restatement
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THIS FIRST AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (the
"Agreement") is made as of February 15, 2006, among:
(1) CAC WAREHOUSE FUNDING CORPORATION II, a Nevada corporation, (the
"Borrower");
(2) CREDIT ACCEPTANCE CORPORATION, a Michigan corporation, ("Credit
Acceptance", the "Originator", the "Servicer" or the "Custodian");
(3) WACHOVIA BANK, NATIONAL ASSOCIATION, as an investor for the VFCC
Purchaser Group (an "Investor");
(4) JPMORGAN CHASE BANK, N.A., as an investor for the PARCO Purchaser
Group ("JPMorgan" or an "Investor") and the other Investors from time to time
party hereto;
(5) VARIABLE FUNDING CAPITAL COMPANY, LLC, a Delaware limited liability
company ("VFCC", a "CP Conduit" or a "Lender");
(6) Park Avenue Receivables Company LLC, a Delaware limited liability
company ("PARCO", a "CP Conduit" or a "Lender") and the other CP Conduits from
time to time party hereto;
(7) WACHOVIA CAPITAL MARKETS, LLC, a Delaware limited liability company
("WCM"), as deal agent (the "Deal Agent");
(8) WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association
with its headquarters in Charlotte, North Carolina ("Wachovia"), as the
liquidity agent for the VFCC Purchaser Group (a "Liquidity Agent");
(9) JPMORGAN CHASE BANK, N.A., a national banking association with its
headquarters in New York, New York ("JPMorgan"), as the liquidity agent for the
PARCO Purchaser Group (a "Liquidity Agent") and the other Liquidity Agents from
time to time party hereto;
(10) SYSTEMS & SERVICES TECHNOLOGIES, INC., a Delaware corporation (the
"Backup Servicer"); and
(11) WACHOVIA CAPITAL MARKETS, LLC, a Delaware corporation (the
"Collateral Agent").
WHEREAS, the Borrower, Credit Acceptance, Wachovia, in its capacity as
Investor and in its capacity as Liquidity Agent, VFCC, WCM, in its capacity as
Deal Agent and in its capacity as Collateral Agent and the Backup Servicer have
entered into a Loan and Security Agreement dated as of September 30, 2003 (as
amended through the date hereof, the "Original Loan and Security Agreement");
and
WHEREAS, the parties hereto desire to amend and restate the Original Loan
and Security Agreement in its entirety as provided herein.
IT IS AGREED as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Certain Defined Terms.
(a) Certain capitalized terms used throughout this Agreement are defined
above or in this Section 1.1.
(b) As used in this Agreement and its schedules, exhibits and other
attachments, unless the context requires a different meaning, the following
terms shall have the following meanings:
Accrual Period: For any Payment Date, the calendar month immediately
preceding such Payment Date.
Addition Date: With respect to any open Pool, the date on which any
additional Loans are added to such Pool.
Additional Amount: Defined in Section 2.14.
Additional Conduit: Each commercial paper conduit which satisfies the
conditions set forth in the definition of "Eligible Assignee" and becomes party
hereto by execution of a Joinder.
Additional Loans: All Loans that become part of the Collateral after the
Initial Funding.
Adjusted Eurodollar Rate: For any Accrual Period, an interest rate per
annum equal to the sum of 1.0% and a fraction, expressed as a percentage and
rounded upwards (if necessary), to the nearest 1/100 of 1%, (i) the numerator of
which is equal to the LIBOR Rate for such Accrual Period and (ii) the
denominator of which is equal to 100% minus the Eurodollar Reserve Percentage
for such Accrual Period.
Additional Cut-Off Date: Each date on and after which Collections on an
Additional Loan are to be transferred to the Collateral.
Additional Principal Payment Amount: With respect to any Payment Date
during the Amortization Period, the lesser of: (i) Capital as of the immediately
preceding Payment Date (after giving effect to all payments in reduction of
principal on such Payment Date); and (ii) Collections remaining after
distribution of amounts described in Section 2.7 (a)(i) through (vii).
Administration Agreement: That certain Amended and Restated Administration
Agreement, dated as of July 1, 1998, executed between VFCC and WCM, as the same
may be amended, supplemented, or otherwise modified from time to time.
Advance: As defined in Section 2.1.
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Affected Party: Each of the Lenders, each Investor, each Liquidity Bank,
any assignee or participant of any Lender, Investor or Liquidity Bank, WCM, any
successor to WCM as Deal Agent, any sub-agent of the Deal Agent, Wachovia,
JPMorgan and any successor to any initial Liquidity Agent.
Affiliate: With respect to a Person, means any other Person that, directly
or indirectly, controls, is controlled by or under common control with such
Person, or is a director or officer of such Person. For purposes of this
definition, "control" (including the terms "controlling," "controlled by" and
"under common control with") when used with respect to any specified Person
means the possession, direct or indirect, of the power to vote 5% or more of the
voting securities of such Person or to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
Agent's Account: An account at Wachovia Bank, National Association in the
name of the Deal Agent or at such other account as may be designated by the Deal
Agent from time to time.
Aggregate Outstanding Eligible Loan Balance: On any date of determination,
the sum of the Outstanding Balances of all Eligible Loans on such day.
Aggregate Outstanding Eligible Loan Net Balance: On any date of
determination the Aggregate Outstanding Eligible Loan Balance less the related
Loan Loss Reserves at the end of the most recent Collection Period.
Aggregate Unpaids: At any time, an amount, equal to the sum of all accrued
and unpaid Capital, Yield, Breakage Costs, Hedge Breakage Costs and all other
amounts owed by the Borrower hereunder, under any Hedging Agreement (including,
without limitation, payments in respect of the termination of any such Hedging
Agreement or under any other Transaction Document or by the Borrower or any
other Person under any fee letter (including, without limitation, the Fee
Letter) delivered in connection with the transactions contemplated by this
Agreement (whether due or accrued) and any unpaid fees due to the Backup
Servicer, both before and after the Assumption Date.
Alternative Rate: An interest rate per annum equal to the Adjusted
Eurodollar Rate; provided, however, that the Alternative Rate shall be the Base
Rate if a Eurodollar Disruption Event occurs.
Amortization Event: The occurrence of any of the following events: (i) the
Payment Rate averaged for any three (3) consecutive Collection Periods is less
than 6.0%; (ii) the Net Yield Percentage is less than 7.5%; (iii) the Weighted
Average Performing Advance Rate exceeds 45.0%; (iv) a Reserve Advance is made,
except if on the date of such Reserve Advance, the Capital is zero; or (v)
Collections are less than 75.0% of Forecasted Collections for any two (2)
consecutive Collection Periods.
Amortization Period: With respect to each Purchaser Group, the period
beginning on the earlier of: (i) the occurrence of an Amortization Event and
(ii) the occurrence of the Termination Date, and ending on the Collection Date.
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Applicable Law: For any Person, all existing and future applicable laws,
rules, regulations (including proposed, temporary and final income tax
regulations), statutes, treaties, codes, ordinances, permits, certificates,
orders and licenses of and interpretations by any Governmental Authority
(including, without limitation, usury laws, the Federal Truth in Lending Act,
and Regulation Z and Regulation B of the Board of Governors of the Federal
Reserve System), and applicable judgments, decrees, injunctions, writs, orders,
or action of any Court, arbitrator or other administrative, judicial, or
quasi-judicial tribunal or agency of competent jurisdiction.
Assignment and Acceptance: An assignment and acceptance entered into by an
Investor and an Eligible Assignee, and accepted by the Deal Agent and the
Liquidity Agent for the related Purchaser Group, in substantially the form of
Exhibit B hereto.
Assumption Date: Defined in the Backup Servicing Agreement.
Available Funds: With respect to any Payment Date: (i) all amounts
deposited in the Collection Account during the Collection Period (other than
Dealer Collections and Repossession Expenses) that ended on the last day of the
calendar month immediately preceding the calendar month in which such Payment
Date occurs and investment earnings thereon; (ii) all Reserve Advances (which
shall be applied in accordance with Section 2.7(c) hereof); (iii) all amounts
paid by the Borrower pursuant to Section 4.5 hereof during or with respect to
the prior Collection Period in respect of Ineligible Loans; (iv) amounts paid by
the Borrower pursuant to Section 2.16 hereof; and (v) all amounts paid under any
Dealer Agreement.
Backup Servicer: Systems & Services Technologies, Inc.
Backup Servicing Fee: The fee payable by the Borrower to the Backup
Servicer pursuant to the Backup Servicing Agreement and Section 7.3 hereof.
Bankruptcy Code: The United States Bankruptcy Reform Act of 1978 (11
U.S.C.Section 101, et seq.), as amended from time to time.
Base Rate: On any date, a fluctuating interest rate per annum equal to the
higher of (a) the Prime Rate or (b) the Federal Funds Rate plus 2.0%.
Benefit Plan: Any employee benefit plan as defined in Section 3(3) of
ERISA in respect of which the Borrower or any ERISA Affiliate of the Borrower
is, or at any time during the immediately preceding six years was, an "employer"
as defined in Section 3(5) of ERISA.
Borrower: CAC Warehouse Funding Corporation II, a Nevada corporation.
Borrowing Base: On any date of termination, the product of (i) Aggregate
Outstanding Eligible Loan Net Balance and (ii) the Net Advance Rate.
Breakage Costs: Any amount or amounts as shall compensate any Lender for
any loss, cost or expense incurred by such Lender (as determined by such Lender
(or, in the case of a CP Conduit, its Liquidity Agent) in such Person's sole
discretion) as a result of a prepayment by the Borrower of Capital or Yield.
4
Business Day: Any day other than a Saturday or a Sunday on which (a) banks
are not required or authorized to be closed in New York City, New York,
Charlotte, North Carolina, Detroit, Michigan or Nevada, or if the Backup
Servicer has become the Servicer, Missouri or Indiana and (b) if the term
"Business Day" is used in connection with the determination of the LIBOR Rate,
dealings in United States dollar deposits are carried on in the London interbank
market.
Capital: The amounts advanced to the Borrower by the Lenders pursuant to
Section 2.1(a) and Section 2.3, reduced from time to time by Collections
distributed on account of such Capital pursuant to Section 2.7; provided,
however, if such Capital shall have been reduced by any distribution and
thereafter all or a portion of such distribution is rescinded or must otherwise
be returned for any reason, such Capital shall be increased by the amount of
such rescinded or returned distribution, as though it had not been made;
provided, further, that the aggregate amount of Capital may not, at any time,
exceed the lesser of: (i) the Facility Limit and (ii) the Borrowing Base.
Capped Servicing Fee: With respect to any Collection Period when the
Backup Servicer has become the Servicer, the greater of (x) an amount equal to
the product of (i) 10.00% and (ii) Collections received during such Collection
Period (exclusive of amounts received under any Hedging Agreement) and (y)
$5,000.
Carrying Costs: with respect to any Payment Date, the sum of amounts
payable under Section 2.7(a)(v)(A)-(C).
Change-in-Control: Any of the following:
(a) the creation or imposition of any Lien on any shares of capital stock
of the Borrower; or
(b) the failure by Originator to own all of the issued and outstanding
capital stock of the Borrower.
Closing Date: September 30, 2003.
Code: The Internal Revenue Code of 1986, as amended from time to time.
Collateral: Defined in Section 2.2(a).
Collateral Agent: Wachovia Capital Markets, LLC
Collection Account: Defined in Section 6.7(a).
Collection Date: The date following the Termination Date on which the
Aggregate Unpaids have been reduced to zero and indefeasibly paid in full.
Collection Guidelines: With respect to Credit Acceptance, the policies and
procedures of the Servicer, attached hereto as Schedule VI, relating to the
collection of amounts due on contracts for the sale of automobiles and/or
light-duty trucks, as in effect on the Cut-Off Date
5
and as amended from time to time in accordance herewith and with the other
Transaction Documents, and with respect to the Backup Servicer, as Successor
Servicer, the servicing policies and procedures set forth in the Backup
Servicing Agreement.
Collection Period: Each calendar month, except in the case of the first
Collection Period, the period beginning on the Cut-Off Date to and including the
last day of the calendar month in which the Funding Date occurs.
Collections: All payments (including Recoveries, credit-related insurance
proceeds and proceeds of Related Security and so long as Credit Acceptance is
the Servicer, excluding certain recovery and repossession expenses, in
accordance with the terms of the Dealer Agreements) received by the Servicer,
Credit Acceptance or the Borrower on or after the Cut-Off Date in respect of the
Loans in the form of cash, checks, wire transfers or other form of payment in
accordance with the Loans and the Dealer Agreements and all net amounts received
under any Hedging Agreement.
Commercial Paper Notes: With respect to any CP Conduit, on any day, any
short-term promissory notes issued by such CP Conduit.
Commitment: For each Investor, the commitment of such Investor to make
Advances to the Borrower in an amount not to exceed the amount set forth
opposite such Investor's name on Schedule VIII to this Agreement or as set forth
in the Joinder executed by such Investor, as the case may be.
Commitment Termination Date: With respect to each Purchaser Group,
February 14, 2007, or with respect to each Purchaser Group, such later date to
which the Commitment Termination Date may be extended in the sole discretion of
such Purchaser Group in accordance with the terms of Section 2.1(b).
Contract: Each retail installment sales contract, in substantially one of
the forms attached hereto as Exhibit L, relating to the sale of a new or used
automobile or light-duty truck originated by a Dealer and in which Credit
Acceptance shall have been granted a security interest and shall have acquired
certain other rights under the related Dealer Agreement to secure the related
dealer's obligation to repay one or more related Loans.
Contract Files: With respect to each Contract, the fully executed original
counterpart (for UCC purposes) of the Contract, either a copy of the application
to the appropriate state authorities for a certificate of title with respect to
the related financed vehicle or a standard assurance in the form commonly used
in the industry relating to the provision of a certificate of title or other
evidence of lien, all original instruments modifying the terms and conditions of
such Contract and the original endorsements or assignments of such Contract.
Contribution Agreement: The Contribution Agreement, dated as of the
Closing Date, substantially in the form of Exhibit H hereto, between Credit
Acceptance and the Borrower, as the same may be amended, restated, supplemented
or otherwise modified from time to time.
Contractual Obligation: With respect to any Person, means any provision of
any securities issued by such Person or any indenture, mortgage, deed of trust,
contract, undertaking,
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agreement, instrument or other document to which such Person is a party or by
which it or any of its property is bound or is subject.
CP Conduit: VFCC, PARCO and any Additional Conduit.
CP Rate: (a) With respect to VFCC, for any day during any Accrual Period,
the per annum rate equivalent to the weighted average of the per annum rates
paid or payable by VFCC from time to time as interest on or otherwise (by means
of interest rate xxxxxx or otherwise taking into consideration any incremental
carrying costs associated with short-term promissory notes issued by VFCC
maturing on dates other than those certain dates on which VFCC is to receive
funds) in respect of the promissory notes issued by VFCC that are allocated, in
whole or in part, by the Deal Agent (on behalf of VFCC) to fund or maintain
Capital during such period, as determined by the Deal Agent (on behalf of VFCC)
and reported to the Borrower and the Servicer, which rates shall reflect and
give effect to (i) the commissions of placement agents and dealers in respect of
such promissory notes, to the extent such commissions are allocated, in whole or
in part, to such promissory notes by the Deal Agent (on behalf of VFCC) and (ii)
other borrowings by VFCC, including, without limitation, borrowings to fund
small or odd dollar amounts that are not easily accommodated in the commercial
paper market; provided, however, that if any component of such rate is a
discount rate, in calculating the CP Rate, the Deal Agent shall for such
component use the rate resulting from converting such discount rate to an
interest bearing equivalent rate per annum, (b) with respect to PARCO, for any
day during any Accrual Period, (i) the actual interest rate (or discount) paid
to purchasers of PARCO's Commercial Paper Notes, together with the commissions
of placement agents and dealers in respect of such Commercial Paper Notes, to
the extent such commissions are allocated, in whole or in part, to such
Commercial Paper Notes by PARCO or its Liquidity Agent, (ii) certain
documentation and transaction costs directly associated with the issuance of
such Commercial Paper Notes, as are customarily charged by PARCO to its
customers in similar transactions, (iii) any incremental costs incurred with
respect to Commercial Paper Notes maturing on dates other than those on which
corresponding funds are received by PARCO, and (d) other borrowings by PARCO
(other than under any program facilities (such as committed loan facilities,
lines of credit, purchase facilities and other financial accommodations)
provided to PARCO as credit enhancement or liquidity in connection with the
issuance of, and to support, its Commercial Paper Notes), including borrowings
to fund small or odd dollar amounts that are not easily accommodated in the
commercial paper market, in each case, without any duplication; and (c) with
respect to any other CP Conduit, the rate identified as the "CP Rate" in the
Joinder related to its Purchaser Group.
Credit Acceptance: Credit Acceptance Corporation, a Michigan corporation,
and its successors and permitted assigns.
Credit Acceptance Payment Account: The clearinghouse account number
xxxxxx5068 maintained by Credit Acceptance at Comerica Bank, where payments
received in respect of all loans and contracts are deposited or paid.
Credit Agreement: The Fourth Amended and Restated Credit Agreement, dated
as of February 7, 2006 among Credit Acceptance, Comerica Bank, as Administrative
Agent and Collateral Agent and the banks signatory thereto; provided, however,
to the extent the Credit
7
Agreement is amended or terminated after the Effective Date, references to the
Credit Agreement shall refer to the Credit Agreement on the Effective Date
unless otherwise consented to by the Deal Agent.
Credit Guidelines: The policies and procedures of Credit Acceptance,
relating to the extension of credit to automobile and light-duty truck dealers
in respect of retail installment contracts for the sale of automobiles and/or
light-duty trucks, including, without limitation, the policies and procedures
for determining the creditworthiness of such dealers and relating to this
extension of credit to such dealers and the maintenance of installment sale
contracts, as in effect on the Cut-Off Date and as amended from time to time in
accordance herewith and with the other Transaction Documents, attached hereto as
Schedule II.
Custodian: Credit Acceptance, or any person appointed as Custodian
pursuant to Section 6.2(d).
Cut-Off Date: With respect to the Initial Funding, August 31, 2003, and
with respect to each Incremental Funding, the related Additional Cut-Off Date.
Date of Processing: With respect to any transaction relating to a Loan or
a Contract, the date on which such transaction is first recorded on the
Servicer's master servicing file (without regard to the effective date of such
recordation).
Deal Agent: Defined in the preamble of the Agreement.
Dealer: Any new or used automobile and/or light-duty truck dealer who has
entered into a Dealer Agreement with Credit Acceptance.
Dealer Agreement: Each agreement between Credit Acceptance and any Dealer,
in substantially the forms attached hereto as Exhibit J-1 and Exhibit J-2.
Dealer Collections: Defined in Section 2.9(d).
Dealer Concentration Limit: With respect to any Dealer, an amount equal
to, in the case of Loans related to any Dealer, 4.0% of the aggregate Net Loan
Balance, on the Funding Date.
Defaulted Contract: A Contract shall be deemed a Defaulted Contract no
later than the earlier of (x) the day it becomes 90 days delinquent, based on
the date the last payment thereon was received by the Servicer and (y) the day
on which an auction check is posted to the relevant account.
Derivatives: Any exchange-traded or over-the-counter (i) forward, future,
option, swap, cap, collar, floor or foreign exchange contract or any combination
thereof, whether for physical delivery or cash settlement, relating to any
interest rate, interest rate index, currency, currency exchange rate, currency
exchange rate index, debt instrument, debt price, debt index, depository
instrument, depository price, depository index, equity instrument, equity price,
equity index, commodity, commodity price or commodity index, (ii) any similar
transaction, contract, instrument, undertaking or security, or (iii) any
transaction, contract, instrument, undertaking or security containing any of the
foregoing.
8
Determination Date: The fourth (4th) Business Day prior to the related
Payment Date.
Dissenting Investor: Defined in Section 2.1(b)(ii).
Downgraded Investor: Defined in Section 2.5(b).
Effective Date: The date this First Amended and Restated Loan and Security
Agreement becomes effective, which shall be February 15, 2006.
Eligible Assignee: With respect to any CP Conduit: (a) a Person whose
short-term rating is at least A-1 from S&P and P-1 from Xxxxx'x, or whose
obligations under this Agreement are guaranteed by a Person whose short-term
rating is at least A-1 from S&P and P-1 from Xxxxx'x, or (b) such other Person
satisfactory to such CP Conduit, the Deal Agent and each of the rating agencies
rating the Commercial Paper Notes of such CP Conduit.
Eligible Contract: Each Contract which at the time of its pledge by the
applicable Dealer to the Originator, satisfied the requirements for "Qualified
Loan" set forth in the related Dealer Agreement.
Eligible Dealer Agreement: Each Dealer Agreement:
(a) which was originated by the Originator in compliance with all
applicable requirements of law and which complies with all applicable
requirements of law;
(b) with respect to which all material consents, licenses, approvals or
authorizations of, or registrations or declarations with, any Governmental
Authority required to be obtained, effected or given by the Borrower, Credit
Acceptance or by the Servicer in connection with the origination of such Dealer
Agreement or the execution, delivery and performance by the Borrower, Credit
Acceptance or by the Servicer of such Dealer Agreement have been duly obtained,
effected or given and are in full force and effect;
(c) as to which at the time of the transfer of rights thereunder to the
Collateral Agent and the Secured Parties, the Borrower will have good and
marketable title thereto, free and clear of all Liens;
(d) the Borrower's rights under which have been the subject of a valid
grant by the Borrower of a first priority perfected security interest in such
rights and in the proceeds thereof in favor of the Collateral Agent;
(e) which will at all times be the legal, valid and binding obligation of
the Dealer party thereto (it being understood that recourse for such payment
obligation shall be limited to the extent set forth in the Dealer Agreement),
enforceable against such Dealer in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
affecting the enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity);
9
(f) which constitutes either a "general intangible" or "tangible chattel
paper" under and as defined in Article 9 of the UCC;
(g) which, at the time of the pledge of the rights to payment thereunder
to the Collateral Agent and the Secured Parties, no right to payment thereunder
has been waived or modified;
(h) which is not subject to any right of rescission, setoff, counterclaim
or other defense (including the defense of usury), other than defenses arising
out of applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights in general;
(i) as to which Credit Acceptance, the Servicer and the Borrower have
satisfied all obligations to be fulfilled at the time the rights to payment
thereunder are pledged to the Collateral Agent and the Secured Parties;
(j) as to which the related Dealer has not asserted that such agreement is
void or unenforceable;
(k) as to which the related Dealer is not bankrupt or insolvent;
(l) as to which the related Dealer is not an Affiliate of or an executive
of Credit Acceptance or an Affiliate of Credit Acceptance;
(m) as to which the related Dealer is located in the United States; and
(n) as to which none of Credit Acceptance, the Servicer nor the Borrower
has done anything, at the time of its pledge to the Collateral Agent and Secured
Parties, to impair the rights of the Collateral Agent and Secured Parties
therein.
Eligible Loans: Each Loan, at the time of its transfer to the Borrower
under the Contribution Agreement:
(a) which has arisen under a Dealer Agreement that, on the day the Loan
was created, qualified as an Eligible Dealer Agreement;
(b) which was created in compliance with all applicable requirements of
law and pursuant to an Eligible Dealer Agreement which complies with all
applicable requirements of law;
(c) with respect to which all material consents, licenses, approvals or
authorizations of, or registrations or declarations with, any Governmental
Authority required to be obtained, effected or given by the Borrower, in
connection with the creation of such Loan or the execution, delivery and
performance by the Borrower, of the related Eligible Dealer Agreement have been
duly obtained, effected or given and are in full force and effect;
10
(d) as to which at the time of the pledge of such Loan to the Collateral
Agent and the Secured Parties, the Borrower will have good and marketable title
thereto, free and clear of all Liens;
(e) as to which a valid first priority perfected security interest in such
Loan, related security and in the Proceeds thereof has been granted by the
Originator in favor of the Borrower and by the Borrower in favor of the
Collateral Agent;
(f) which will at all times be the legal, valid and binding payment
obligation of the Obligor thereof (it being understood that recourse for such
payment obligation shall be limited to the extent set forth in the Dealer
Agreement), enforceable against such Obligor in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws, now or hereafter
in effect, affecting the enforcement of creditors' rights in general and except
as such enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity);
(g) which constitutes a "general intangible" under and as defined in
Article 9 of the UCC as in effect in the Relevant UCC State;
(h) the financing of which with the proceeds of commercial paper would
constitute a "current transaction" within the meaning of Section 3(a)(3) of the
Securities Act;
(i) which is denominated and payable in United States dollars;
(j) which, at the time of its pledge to the Collateral Agent and the
Secured Parties, has not been waived or modified;
(k) which is not subject to any right of rescission (subject to the
rights of the related Dealer to repay the outstanding balance of the Loan and
terminate the related Dealer Agreement), setoff, counterclaim or other defense
(including the defense of usury), other than defenses arising out of applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights in general;
(l) as to which Credit Acceptance, the Servicer and the Borrower have
satisfied all obligations to be fulfilled at the time it is pledged to the
Collateral Agent and the Secured Parties;
(m) as to which the related Dealer has not asserted that the related
Dealer Agreement is void or unenforceable;
(n) as to which the related Dealer is not bankrupt or insolvent;
(o) as to which none of Credit Acceptance, the Servicer nor the Borrower
has done anything, at the time of its pledge to the Collateral Agent and the
Secured Parties, to impair the rights of the Collateral Agent and the Secured
Parties;
(p) is not an Overconcentration Loan; and
11
(q) the proceeds of which were used to finance the purchases of new or
used automobiles and/or light-duty trucks and related products.
ERISA: The United States Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder.
ERISA Affiliate: (a) Any corporation that is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Code) as the Borrower, (b) a trade or business (whether or not incorporated)
under common control (within the meaning of Section 414(c) of the Code) with the
Borrower, or (c) a member of the same affiliated service group (within the
meaning of Section 414(m) of the Code) as the Borrower, any corporation
described in clause (a) above or any trade or business described in clause (b)
above.
Eurocurrency Liabilities: Defined in Regulation D of the Board of
Governors of the Federal Reserve System, as in effect from time to time.
Eurodollar Disruption Event: The occurrence of any of the following: (a) a
determination by a Lender that it would be contrary to law or to the directive
of any central bank or other governmental authority (whether or not having the
force of law) to obtain United States dollars in the London interbank market to
make, fund or maintain the Funding, (b) the failure of one or more of the
Reference Banks to furnish timely information for purposes of determining the
Adjusted Eurodollar Rate, (c) a determination by a Lender that the rate at which
deposits of United States dollars are being offered to such Lender in the London
interbank market does not accurately reflect the cost to such Lender of making,
funding or maintaining the Funding or (d) the inability of a Lender to obtain
United States dollars in the London interbank market to make, fund or maintain
the Advance.
Eurodollar Reserve Percentage: Of any Reference Bank for any period, for
Capital means the percentage applicable during such period (or, if more than one
such percentage shall be so applicable, the daily average of such percentages
for those days in such period during which any such percentage shall be so
applicable) under regulations issued from time to time by the Board of Governors
of the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for such Reference Bank with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities having
a term of one month.
Excess Reserve Amount: With respect to any Payment Date, the excess, if
any, of the amount on deposit in the Reserve Account over the Required Reserve
Account Amount.
Excluded Dealer Agreement Rights: With respect to any Dealer Agreement,
the rights of Credit Acceptance thereunder related to loans made to the related
Dealer which are not Loans pledged by the Borrower to the Collateral Agent
hereunder, including rights of set-off and rights of indemnification, related to
such Loans.
Facility Fee: With respect to each Purchaser Group, defined in the Fee
Letter related to such Purchaser Group.
12
Facility Limit: $325,000,000; or as such amount may vary from time to time
upon the written agreement of the Borrower, Credit Acceptance, the Deal Agent
and the Liquidity Agents; provided, however, that on any date on or after the
end of the Revolving Period with respect to all Purchaser Groups, the Facility
Limit shall mean the aggregate outstanding Capital on such date, and; provided,
further, if the Termination Date occurs with respect to fewer than all Purchaser
Groups, the Facility Limit shall be equal to the sum of the Purchaser Group
Facility Limits for each Purchaser Group for which the Termination Date has not
occurred plus the outstanding Capital on the Termination Date for each Purchaser
Group for which the Termination Date has occurred.
Federal Funds Rate: For any period, a fluctuating interest rate per annum
equal for each day during such period to the weighted average of the federal
funds rates as quoted by Wachovia and confirmed in Federal Reserve Board
Statistical Release H.15(519) or any successor or substitute publication
selected by Wachovia (or, if such day is not a Business Day, for the next
preceding Business Day), or, if, for any reason, such rate is not available on
any day, the rate determined, in the sole opinion of Wachovia, to be the rate at
which federal funds are being offered for sale in the national federal funds
market at 9:00 a.m. Charlotte, North Carolina time.
Fee Letter: With respect to each Purchaser Group, the Fee Letter, dated as
of the date hereof, in the case of the VFCC Purchaser Group and the PARCO
Purchaser Group, or in the case of any other Purchaser Group, the date of the
Joinder related to such Purchaser Group, among the Borrower, the Servicer and
the Deal Agent, in the case of VFCC, among the Borrower, the Servicer and the
related Liquidity Agent, in the case of PARCO and among the Borrower, the
Servicer, the Deal Agent and the related Liquidity Agent, in the case of any
other Purchaser Group, as any such letter may be amended, modified,
supplemented, restated or replaced from time to time.
Financed Vehicle: With respect to a Contract, any new or used automobile,
light-duty truck, minivan or sport utility vehicle, together with all
accessories thereto, securing the related Obligor's indebtedness thereunder.
Forecasted Collections: The expected amount of Collections to be received
with respect to the Aggregate Outstanding Eligible Loan Balance each month as
determined by Credit Acceptance in accordance with its forecasting model, which
shall be submitted to the Deal Agent with each Funding Notice related to a
proposed Advance when new Pools are pledged to the Collateral Agent.
Funding: An Advance by a Lender pursuant to Section 2.1 and Section 2.3
hereof.
Funding Date: In the case of the Initial Funding, and as to any
Incremental Funding, the second Business Day immediately following receipt by
the Deal Agent and the Liquidity Agents of a Funding Notice, delivered in
accordance with Section 2.2, provided that such Funding Notice is received by
5:00 pm, Charlotte time.
Funding Notice: The notice, in the form of Exhibit A hereto, delivered in
accordance with Section 2.3 hereof.
13
GAAP: Generally accepted accounting principles as in effect from time to
time in the United States.
Governmental Authority: Any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any body or entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any court or arbitrator having jurisdiction over such Person,
and any accounting board or authority (whether or not a part of government)
which is responsible for the establishment or interpretation of national or
international accounting principles, in each case whether foreign or domestic.
H.15: Federal Reserve Statistical Release H.15.
Hedge Breakage Costs: For any Hedging Agreement, any amount payable by the
Borrower for the early termination of such Hedging Agreement or any portion
thereof.
Hedge Costs: For any Hedging Agreement, any amount payable by the Borrower
with respect thereto, including any swap payments, any breakage payments, any
termination payments, any notional reduction payments and any other amounts due
to the Hedge Counterparty.
Hedge Counterparty: Any entity that (a) on the date of entering into any
Hedge Transaction (i) is an interest rate swap dealer that is either a Lender or
an Affiliate of a Lender, or has been approved in writing by the Deal Agent
(which approval shall not be unreasonably withheld), and (ii) unless otherwise
agreed to by the Deal Agent, has a long-term unsecured debt rating of not less
than "A" by S&P and not less than "A2" by Xxxxx'x ("Long-term Rating
Requirement") and a short-term unsecured debt rating of not less than "A-1" by
S&P and not less than "P-1" by Xxxxx'x ("Short-term Rating Requirement"), and
(b) in a Hedging Agreement (i) consents to the assignment of the Borrower's
rights under the Hedging Agreement to the Deal Agent pursuant to Section 2.2(a)
and (ii) agrees that in the event that Xxxxx'x or S&P reduces its long-term
unsecured debt rating below the Long-term Rating Requirement, or reduces its
short-term unsecured debt rating below the Short-term Rating Requirement, it
shall transfer its rights and obligations under each Hedging Agreement to
another entity that meets the requirements of clause (a) and (b) hereof and has
entered into a Hedging Agreement with the Borrower on or prior to the date of
such transfer.
Hedge Transaction: Each interest rate swap or other interest rate
protection transaction between the Borrower and a Hedge Counterparty that is
entered into pursuant to Section 5.3 hereof and is governed by a Hedging
Agreement.
Hedging Agreement: Each agreement between the Borrower and a Hedge
Counterparty that governs one or more Hedge Transactions entered into pursuant
to Section 5.3 hereof, substantially in the form of Exhibit E hereto or such
other form as shall be approved in writing by the Liquidity Agents for each of
the VFCC Purchaser Group and the PARCO Purchaser Group, and each "Confirmation"
thereunder confirming the specific terms of each such Hedge Transaction.
14
Increased Costs: Any amounts required to be paid by the Borrower to an
Affected Party pursuant to Section 2.13.
Incremental Funding: Any Advance made after the Initial Funding that
increases the aggregate outstanding Capital hereunder.
Independent Director: Defined in Section 5.2(o)(xxvii).
Ineligible Contract: Each Contract other than an Eligible Contract.
Ineligible Loan: Each Loan other than an Eligible Loan.
Indebtedness: With respect to any Person at any date, (a) all indebtedness
of such Person for borrowed money or for the deferred purchase price of property
or services (other than current liabilities incurred in the ordinary course of
business and payable in accordance with customary trade practices) or that is
evidenced by a note, bond, debenture or similar instrument, (b) all obligations
of such Person under leases that shall have been or should be, in accordance
with generally accepted accounting principles, recorded as capital leases, (c)
all obligations of such Person in respect of acceptances issued or created for
the account of such Person, (d) all liabilities secured by any Lien on any
property owned by such Person even though such Person has not assumed or
otherwise become liable for the payment thereof, (e) all indebtedness,
obligations or liabilities of that Person in respect of Derivatives, and (f)
obligations under direct or indirect guaranties in respect of obligations
(contingent or otherwise) to purchase or otherwise acquire, or to otherwise
assure a creditor against loss in respect of, indebtedness or obligations of
others of the kind referred to in clauses (a) through (e) above.
Indemnified Amounts: Defined in Section 11.1(a).
Indemnified Parties: Defined in Section 11.1(a).
Initial Facility Limit: $325,000,000.
Initial Funding: Defined in Section 2.3(a).
Insolvency Event: With respect to a specified Person, (a) the filing of a
decree or order for relief by a court having jurisdiction in the premises in
respect of such Person or any substantial part of its property in an involuntary
case under any applicable Insolvency Law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such decree
or order shall remain unstayed and in effect for a period of 60 consecutive
days; or (b) the commencement by such Person of a voluntary case under any
applicable Insolvency Law now or hereafter in effect, or the consent by such
Person to the entry of an order for relief in an involuntary case under any such
law, or the consent by such Person to the appointment of or taking possession by
a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or the
making by such Person of any general assignment for the benefit of creditors, or
the failure by such Person generally to pay its debts as such debts become due,
or the taking of action by such Person in furtherance of any of the foregoing.
15
Insolvency Laws: The Bankruptcy Code and all other applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, receivership,
insolvency, reorganization, suspension of payments, or similar debtor relief
laws from time to time in effect affecting the rights of creditors generally.
Insolvency Proceeding: Any case, action or proceeding before any court or
other Governmental Authority relating to any Insolvency Event.
Instrument: Any "instrument" (as defined in Article 9 of the UCC), other
than an instrument that constitutes part of chattel paper.
Investors: With respect to the VFCC Purchaser Group, Wachovia Bank,
National Association, with respect to the PARCO Purchaser Group, JPMorgan Chase
Bank, N.A. and with respect to each other Purchaser Group, the financial
institutions identified as "Investors" on the Joinder related to such Purchaser
Group and with respect to any Purchaser Group, any other Person who becomes an
Investor as provided in Section 13.1(a).
Investment: With respect to any Person, any direct or indirect loan,
advance or investment by such Person in any other Person, whether by means of
share purchase, capital contribution, loan or otherwise, excluding the
acquisition of Assets pursuant to the Contribution Agreement and excluding
commission, travel and similar advances to officers, employees and directors
made in the ordinary course of business.
Issuer: VFCC, PARCO, each CP Conduit and any other Lender, whose principal
business consists of issuing commercial paper or other securities to fund its
acquisition or maintenance of receivables, accounts, instruments, chattel paper,
general intangibles and other similar assets.
JPMorgan: as Defined in the Preamble hereto.
Joinder: With respect to each Purchaser Group, other than the VFCC
Purchaser Group, the agreement among a CP Conduit, its related Investors, its
related Liquidity Agent, the Borrower, Credit Acceptance and the Deal Agent,
substantially in the form of Exhibit D hereto.
Late Fees: If the Backup Servicer has become the successor Servicer, any
late fees collected with respect to any Contract in accordance with the
Collection Guidelines.
Lenders: Collectively, VFCC and its related Investors, PARCO and its
related Investors, each other CP Conduit and its related Investors and any other
Person that agrees, pursuant to the pertinent Assignment and Acceptance, to make
or maintain Fundings pursuant to this Agreement.
LIBOR Rate: For any portion of Capital and any day during any Accrual
Period, an interest rate per annum equal to:
(i) the posted rate for 30-day deposits in United States Dollars
appearing on Telerate page 3750 as of 11:00 a.m. (London time) on the
Business Day which is the
16
second Business Day immediately preceding the first day of the applicable
Accrual Period; or
(ii) if no such rate appears on Telerate page 3750 at such time and
day, then the LIBOR Rate shall be determined by Wachovia at its principal
office in Charlotte, North Carolina as its rate (each such determination,
absent manifest error, to be conclusive and binding on all parties hereto
and their assignees) at which 30-day deposits in United States Dollars are
being, have been, or would be offered or quoted by Wachovia to major banks
in the applicable interbank market for Eurodollar deposits at or about
11:00 a.m. (Charlotte, North Carolina time) on such day.
Lien: With respect to any Loan, Dealer Agreement or Contract, any
mortgage, lien, pledge, charge, security interest or encumbrance of any kind
(other than any tax liens, mechanics' liens, liens of collection attorneys or
agents collecting the property subject to such tax lien or mechanics' lien and
any liens which attach thereto by operation of law).
Liquidity Agent: With respect to the VFCC Purchaser Group, Wachovia Bank,
National Association, with respect to the PARCO Purchaser Group, JPMorgan Chase
Bank, N.A. and with respect to each other Purchaser Group, the financial
institution identified as the "Liquidity Agent" on the Joinder related to such
Purchaser Group.
Liquidity Agreement: (a) With respect to VFCC, the Liquidity Purchase
Agreement, dated as of the Closing Date among VFCC, as seller, the Investors
named therein, WCM, as Deal Agent and documentation agent, and Wachovia Bank,
National Association, as liquidity agent (b) with respect to PARCO, the Asset
Purchase Agreement, dated as of the Effective Date among PARCO, as seller, the
Investors named therein and JPMorgan Chase Bank, N.A., as liquidity agent and
(c) with respect to each other CP Conduit, the liquidity and/or credit support
agreement identified as the "Liquidity Agreement" on the Joinder related to such
Purchaser Group, which shall include any agreement to purchase an assignment of
or participation in a CP Conduit's portion of the Capital.
Liquidity Bank: (i) With respect to VFCC, each liquidity bank that is a
party to the Liquidity Agreement (ii) with respect to PARCO, each liquidity bank
that is a party to the Liquidity Agreement and (iii) with respect to each other
CP Conduit any bank, insurance company or other financial institution extending
or having a commitment to extend funds to or for the account of such CP Conduit
(including by an agreement to purchase an assignment of or participation in such
CP Conduit's portion of the Capital) under a Liquidity Agreement. Each Investor
shall be deemed to be a Liquidity Bank for its related CP Conduit.
Loan: All amounts advanced by Credit Acceptance under a Dealer Agreement
and payable from Collections, including servicing charges, insurance charges and
service policies and all related finance charges, late charges, and all other
fees and charges; provided, however, that the term "Loan" shall, for the
purposes of this Agreement, include only those Loans identified from time to
time on Schedule V hereto, as amended from time to time in accordance herewith.
17
Loan Loss Reserve: The loan loss reserve, calculated in accordance with
Credit Acceptance's periodic analysis of the performance of each Dealer,
maintained against the Loans of such Dealer.
Material Adverse Effect: With respect to any event or circumstance, means
a material adverse effect on (a) the business, condition (financial or
otherwise), operations, performance, properties or prospects of the Originator,
the Servicer or the Borrower, (b) the validity, enforceability or collectibility
of this Agreement or any other Transaction Document or the validity,
enforceability or collectibility of the Loans, (c) the rights and remedies of
the Deal Agent, the Collateral Agent or Secured Parties, (d) the ability of the
Borrower, the Originator or the Servicer to perform its obligations under this
Agreement or any Transaction Document, or (e) the status, existence, perfection,
priority or enforceability of the Collateral Agent's or any Secured Party's
interest in the Collateral.
Material Debt: Defined in Section 6.11(i).
Monthly Principal Payment Amount: With respect to any Payment Date, the
amount, if any, necessary to reduce the Capital as of the prior Payment Date to
the Borrowing Base as of the last day of the related Collection Period.
Monthly Report: Defined in Section 6.5(a).
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Multiemployer Plan: A "multiemployer plan" as defined in Section
4001(a)(3) of ERISA that is or was at any time during the current year or the
immediately preceding five years contributed to by the Borrower or any ERISA
Affiliate on behalf of its employees.
Net Advance Rate: 75%.
Net Loan Balance: With respect to any Loan, the excess of the related
Outstanding Balance over the related Loan Loss Reserve.
Net Yield Percentage: For any Collection Period, the ratio, expressed as a
percentage, the numerator of which is equal to the product of (i) 12 and (ii)
the excess of (A) the product of (I) Collections (for the respective Collection
Period) and (II) 20% over the (B) the sum of amounts distributed under Section
2.7(a)(i) through (v) and the denominator of which is equal to the Capital as of
the first day of such Collection Period.
Nonconforming Contract: Defined in Section 6.2(c)(ii).
Nonconforming Contract Payment Amount: With respect to a Nonconforming
Contract, an amount equal to the sum of (i): (x) the product of the Outstanding
Balance of such Contract as of the last day of the related Collection Period and
a fraction, the numerator of which is Capital as of the Funding Date and the
denominator of which is the Outstanding Balance of Eligible Contracts as of the
Funding Date; (ii) accrued and unpaid Carrying Costs, Increased Costs,
Indemnified Amounts and Additional Amounts related to such Contract through the
date of such deposit; (iii) any related Servicer Advances; and (iv) and all
Hedge Costs due to the relevant
18
Hedge Counterparties for any termination in whole or in part of one or more
transactions related to the relevant Hedging Agreement, as required by the terms
of any Hedging Agreement.
Nonextending Investor: Defined in Section 2.1(b)(ii).
Notes: The Variable Funding Notes of the Borrower, issued to (i) the Deal
Agent, in the case of the VFCC Purchaser Group, (ii) JPMorgan, in the case of
the PARCO Purchaser Group and (iii) with respect to each other Purchaser Group,
its Liquidity Agent, in each case, for the benefit of the related Lenders
pursuant to Section 2.1(c) hereof substantially in the form of Exhibit I hereto.
Obligor: With respect to any Loan, Dealer Agreement or Contract, the
Person or Persons obligated to make payments with respect to such Dealer
Agreement, Loan or Contract, respectively, including any guarantor thereof.
Officer's Certificate: A certificate signed by any officer of the Borrower
or the Servicer, as the case may be, and delivered to the Collateral Agent.
Opinion of Counsel: A written opinion of counsel, which opinion and
counsel are reasonably acceptable to the Deal Agent.
Originator: Defined in the preamble of this Agreement.
Outstanding Balance:
(i) With respect to any Contract on any date of determination, all
amounts owing under such Contract (whether considered principal or as finance
charges) on such date of determination. The Outstanding Balance with respect to
a Contract shall be deemed to have been created at the end of the day on the
Date of Processing of such Contract; which shall be greater than or equal to
zero (except in the case of a Contract as to which the final payment on such
Contract is in excess of the amount owed on such Contract on the date of such
final payment); and
(ii) with respect to any Loan on any date of determination, the aggregate
amount advanced under such Loan plus revenue accrued with respect to such Loan
in accordance with Credit Acceptance's accounting policies set forth in its
periodic reports filed with the Securities and Exchange Commission and the
payment of monies to a Dealer under the related Dealer Agreement, less
collections on the related Contracts applied through such date of determination
in accordance with the related Dealer Agreement to the reduction of the balance
of such Loan and write offs of such Loan.
Overconcentration Loan: With respect to any Dealer, the amount by which
the aggregate Net Loan Balance related to such Dealer, calculated on the Funding
Date, exceeds the Dealer Concentration Limit described in clause (i) of the
definition of Dealer Concentration Limit.
PARCO Purchaser Group: PARCO, JPMorgan Chase Bank, N.A., as Liquidity
Agent and JPMorgan Chase Bank, N.A., as an Investor.
00
Xxxx Xxxxxx Receivables Company LLC: as Defined in the Preamble hereto.
Payment Date: The fifteenth (15th) day of each calendar month or, if such
day is not a Business Day, the next succeeding Business Day.
Payment Rate: With respect to any Collection Period, the ratio, expressed
as a percentage, the numerator of which is equal to Collections received during
such Collection Period and the denominator of which is equal to the Aggregate
Outstanding Eligible Loan Net Balance as of the first day of such Collection
Period.
Permitted Investments: Any one or more of the following types of
investments:
(a) marketable obligations of the United States, the full and timely
payment of which are backed by the full faith and credit of the United States of
America and that have a maturity of not more than 270 days from the date of
acquisition;
(b) marketable obligations, the full and timely payment of which are
directly and fully guaranteed by the full faith and credit of the United States
and that have a maturity of not more than 270 days from the date of acquisition;
(c) bankers' acceptances and certificates of deposit and other
interest-bearing obligations (in each case having a maturity of not more than
270 days from the date of acquisition) denominated in dollars and issued by any
bank with capital, surplus and undivided profits aggregating at least
$100,000,000, the short-term obligations of which are rated at least A-1 by S&P
and P-1 by Moody's;
(d) repurchase obligations with a term of not more than ten days for
underlying securities of the types described in clauses (a), (b) and (c) above
entered into with any bank of the type described in clause (c) above;
(e) commercial paper rated at least A-1 by S&P and P-1 by Moody's; and
(f) demand deposits, time deposits or certificates of deposit (having
original maturities of no more than 365 days) of depository institutions or
trust companies incorporated under the laws of the United States of America or
any state thereof (or domestic branches of any foreign bank) and subject to
supervision and examination by federal or state banking or depository
institution authorities; provided, however that at the time such investment, or
the commitment to make such investment, is entered into, the short-term debt
rating of such depository institution or trust company shall be at least A-1 by
S&P and P-1 by Moody's.
Permitted Liens: Liens for state, municipal or other local taxes if such
taxes shall not at the time be due and payable and Liens granted pursuant to by
the Transaction Documents and with respect to the Contracts, the second priority
lien of the related Dealer therein as set forth in the related Dealer Agreement.
Person: An individual, partnership, corporation (including a business
trust), limited liability company, joint stock company, trust, unincorporated
association, sole proprietorship, joint venture, government (or any agency or
political subdivision thereof) or other entity.
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Pool: An identifiable group of Loans related to a particular Dealer
Agreement identified on Schedule V hereto.
Prime Rate: The rate announced by Wachovia from time to time as its prime
rate in the United States, such rate to change as and when such designated rate
changes. The Prime Rate is not intended to be the lowest rate of interest
charged by Wachovia in connection with extensions of credit to debtors.
Proceeds: With respect to any portion of the Collateral, all "proceeds" as
such term is defined in Article 9 of the UCC, including, whatever is receivable
or received when such portion of Collateral is sold, liquidated, foreclosed,
exchanged, or otherwise disposed of, whether such disposition is voluntary or
involuntary, and includes all rights to payment with respect to any insurance
relating thereto.
Program Fee: With respect to each Purchaser Group, as defined in the
applicable Fee Letter related to such Purchaser Group.
Program Fee Rate: With respect to each Purchaser Group, on any day, the
rate set forth in the Fee Letter related to such Purchaser Group as the "Program
Fee Rate."
Purchaser Group: Each CP Conduit, its related Liquidity Agent and the
related Investors, all as identified on the Joinder related to such Purchaser
Group.
Purchaser Group Facility Limit: With respect to each Purchaser Group, the
amount so identified on the Joinder related to such Purchaser Group, with
respect to the VFCC Purchaser Group, $225,000,000 and with respect to the PARCO
Purchaser Group, $100,000,000.
Qualified Institution: Defined in Section 6.7(a).
Rating Agency: Each of S&P, Moody's and any other rating agency that has
been requested to issue a rating with respect to the commercial paper notes
issued by the Issuer.
Records: The Dealer Agreements, Contracts, Contract Files and all other
documents, books, records and other information (including, without limitation,
computer programs, tapes, discs, punch cards, data processing software and
related contracts, records and other media for storage of information)
maintained with respect to the Loans and the Contracts and the related Obligors.
Reference Bank: Any bank that furnishes information for purposes of
determining the Adjusted Eurodollar Rate.
Recoveries: All amounts, if any, received in respect of the Collateral by
the Servicer or Credit Acceptance with respect to Defaulted Contracts.
Register: Defined in Section 13.1(c).
Related Security: With respect to any Loan all of Credit Acceptance's and
the Borrower's interest in:
21
(i) the Dealer Agreements (other than Excluded Dealer Agreement
Rights, but including Credit Acceptance's rights to service the Loans and
the related Contracts and receive the related collection fee and receive
reimbursement of certain repossession and recovery expenses, in accordance
with the terms of the Dealer Agreements) and Contracts securing payment of
such Loan;;
(ii) all security interests or liens purporting to secure payment of
such Loan, whether pursuant to such Loan, the related Dealer Agreement or
otherwise, together with all financing statements signed by the related
Obligor describing any collateral securing such Loan and all other
property obtained upon foreclosure of any security interest securing
payment of such Loan or any related Contract;
(iii) all guarantees, insurance (including insurance insuring the
priority or perfection of any lien) or other agreements or arrangements of
any kind from time to time supporting or securing payment of each Contract
whether pursuant to such Contract or otherwise, including any of the
foregoing relating to any Contract securing payment of such Loan;
(iv) all of the Borrower's interest in all Records, documents and
writing evidencing or related to such Loan;
(v) all rights of recovery of the Borrower against the Originator;
(vi) all Collections (other than Dealer Collections), the Collection
Account, the Reserve Account, and all amounts on deposit therein and
investments thereof;
(vii) all of the Borrower's right, title and interest in and to (but
not its obligations under) any Hedging Agreement and any payment from time
to time due thereunder;
(viii) all of the Borrower's right, title and interest in and to the
Contribution Agreement and the assignment to the Deal Agent of all UCC
financing statements filed by the Borrower against the Originator under or
in connection with the Contribution Agreement; and
(ix) the Proceeds of each of the foregoing.
For the avoidance of doubt, the term "Related Security" with respect to
any Loan includes all rights arising after the end of the Revolving Period
under such Loan which rights are attributable to advances made under such
Loan as the result of Contracts being added after the last date of the
last full Collection Period during the Revolving Period to the
identifiable group of Contracts to which such Loan relates.
Release Date: As defined in Section 4.5(b).
Release Price: As defined in Section 4.5(a).
Released Contract Price: As defined in Section 4.5(c).
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Reliening Expenses: Defined in Section 6.2(d)(ii).
Repossession Expenses: For any Collection Period, any expenses payable
pursuant to the terms of this Agreement, incurred by the Backup Servicer, if it
has become the Successor Servicer, in connection with the liquidation or
repossession of any Financed Vehicle, in an aggregate amount not to exceed the
cash proceeds received by the Backup Servicer, if it has become the Successor
Servicer, from the disposition of the Financed Vehicles.
Required Investors: At a particular time, Investors with Commitments in
excess of 50% of the Facility Limit.
Required Reports: Collectively, the Monthly Report and the quarterly
financial statement of the Servicer required to be delivered to the Deal Agent
and the Liquidity Agents pursuant to Section 6.5 hereof.
Required Reserve Account Amount: With respect to any date of
determination, an amount equal to the product of (i) 1.0% and (ii) the Capital
on such date (after the application of funds pursuant to Section 2.7 on the
related Payment Date plus all amounts required to be maintained by the Borrower
pursuant to Section 6.2(c)(ii) hereof); provided, however, the Required Reserve
Account Amount shall at no time be less than the product of 0.5% and the
Facility Limit and provided, further, that if the Capital is zero, the Required
Reserve Account Amount shall be $200,000.
Reserve Account: The segregated trust account established at the
Collateral Agent for the benefit of the Secured parties, established pursuant to
Section 6.7(a).
Reserve Advance: Defined in Section 2.7(c)(i).
Responsible Officer: As to any Person any officer of such Person with
direct responsibility for the administration of this Agreement and also, with
respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
Retransfer Amount: Defined in Section 4.5(b).
Revolving Period: The period commencing on the Closing Date and ending on
the day immediately preceding the first day of the Amortization Period.
S&P: Standard & Poor's, a division of The McGraw Hill Companies, Inc., and
any successor thereto.
Secured Party: (i) The Deal Agent, each Liquidity Agent and each Lender
and (ii) each Hedge Counterparty that is either a Lender or an Affiliate of a
Lender if that Affiliate is a Hedge Counterparty executes a counterpart of this
Agreement agreeing to be bound by the terms of this Agreement applicable to a
Secured Party.
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Servicer: Credit Acceptance, the Backup Servicer, if it has become the
Successor Servicer or any other Successor Servicer, appointed in accordance with
the terms hereof as the Servicer of the Loans and Contracts.
Servicer Advance: An advance made by the Servicer pursuant to Section
2.7(c)(ii).
Servicer Termination Event: Defined in Section 6.11.
Servicer Termination Notice: Defined in Section 6.11.
Servicer Expenses: Any expenses incurred by the Backup Servicer, if it has
become the Successor Servicer hereunder, other than Repossession Expenses,
Reliening Expenses or Transition Expenses.
Servicing Fee: For each Payment Date, a fee payable to Servicer for
services rendered during the related Collection Period, equal to: (i) so long as
Credit Acceptance is the Servicer, the product of (A) 6.00% and (B) the total
Collections for the related Collection Period (exclusive of amounts received
under any Hedging Agreement) and (ii) if the Backup Servicer is the Servicer,
the sum of (1) the greatest of: (a) the product of 10.0% and the total
Collections for the related Collection Period (exclusive of amounts received
under any Hedging Agreement), (b) the actual costs incurred by the Backup
Servicer as successor Servicer, and (c) the product of (x) $30.00 and (y) the
aggregate number of Contracts serviced by it during the related Collection
Period, plus (2) without duplication, Late Fees and Servicer Expenses; provided,
however, with respect to each Payment Date on which the Backup Servicer is the
Servicer, the Servicing Fee shall be at least equal to $5,000.
Solvent: As to any Person at any time, having a state of affairs such that
all of the following conditions are met: (a) the fair value of the property of
such Person is greater than the amount of such Person's liabilities (including
disputed, contingent and unliquidated liabilities) as such value is established
and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy
Code; (b) the present fair salable value of the property of such Person in an
orderly liquidation of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured; (c) such Person is able to realize upon its
property and pay its debts and other liabilities (including disputed, contingent
and unliquidated liabilities) as they mature in the normal course of business;
(d) such Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature; and (e) such Person is not engaged in business or a
transaction, and is not about to engage in a business or a transaction, for
which such Person's property would constitute unreasonably small capital.
SST: Systems & Services Technologies, Inc., a Delaware corporation.
Structuring Fees: The structuring fee set forth in the Fee Letter related
to the VFCC Purchaser Group and the structuring fee set forth in the Fee Letter
related to the PARCO Purchaser Group.
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Subsidiary: A corporation of which the Originator and/or its Subsidiaries
own, directly or indirectly, such number of outstanding shares as have more than
50% of the ordinary voting power for the election of directors.
Successor Servicer: Defined in Section 6.12(a).
Take-Out: The release of certain Loans and the related contracts from the
Lien of this Agreement and the reduction of the Capital by the lesser of (a) 85%
of currently outstanding Capital or (b) $100,000,000.
Take-Out Release: The release to be executed pursuant to Section 2.16
hereto, substantially in the form of Exhibit G hereto.
Taxes: Any present or future taxes, levies, imposts, duties, charges,
assessments or fees of any nature (including interest, penalties, and additions
thereto) that are imposed by any Governmental Authority.
Termination Date: With respect to each Purchaser Group, the earliest of:
(a) the date that the related Liquidity Agreement shall cease to be in full
force and effect, (b) the date of the declaration of the Termination Date
pursuant to Section 10.1, (c) the related Commitment Termination Date and (d)
the date of termination of the Facility Limit pursuant to Section 2.5.
Termination Event: Defined in Section 10.1.
Total Commitment: On any date of determination, the aggregate Commitments
of all the Investors.
Transaction Documents: This Agreement, the Contribution Agreement, the
Liquidity Agreements, each Hedging Agreement, the Fee Letters, the Backup
Servicing Agreement, each Joinder and any additional document the execution of
which is necessary or incidental to carrying out the terms of the foregoing
documents.
Transition Expenses: If the Backup Servicer has become the Successor
Servicer, the sum of: (i) reasonable costs and expenses incurred by the Backup
Servicer in connection with its assumption of the servicing obligations
hereunder, related to travel, Obligor welcome letters, freight and file shipping
plus (ii) a boarding fee equal to the product of $7.50 and the number of
Contracts to be serviced.
UCC: The Uniform Commercial Code as from time to time in effect in the
applicable jurisdiction or jurisdictions.
United States: The United States of America.
Unmatured Termination Event: Any event that, with the giving of notice or
the lapse of time, or both, would become a Termination Event.
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Unreimbursed Servicer Advances: At any time, the amount of all previous
Servicer Advances (or portions thereof) as to which the Servicer has not been
reimbursed as of such time pursuant to Section 2.7.
Unsatisfactory Audit: The occurrence of any audit exceptions resulting
from any audit, inspection or review pursuant to Section 6.1(c), Section 6.2(e)
or Section 6.9, which, in the reasonable judgment of the Deal Agent, would have
a material adverse effect on the ability of the Servicer to identify and
allocate Collections.
VFCC: Variable Funding Capital Company, LLC.
VFCC Purchaser Group: VFCC, Wachovia Bank, National Association, as
Liquidity Agent and Wachovia Bank, National Association, as Investor.
Weighted Average Performing Advance Rate: With respect to any Collection
Period, the ratio (expressed as a percentage) the numerator of which is equal to
Capital as of the Payment Date immediately following such Collection Period, and
the denominator of which is equal to the aggregate Outstanding Balance of all
Eligible Contracts less the Outstanding Balance of all Defaulted Contracts, as
of the last day of such Collection Period.
Yield: With respect to each Lender and its portion of the Capital, with
respect to any Accrual Period, the sum of the products (for each day during such
Accrual Period) of:
YR x C x 1
---
360
where:
C = the outstanding principal amount of the Advance of such
Lender; and
YR = the Yield Rate for such Lender applicable on such day;
provided, however, that (i) no provision of this Agreement shall require the
payment or permit the collection of Yield in excess of the maximum permitted by
Applicable Law and (ii) Yield shall not be considered paid by any distribution
if at any time such distribution is rescinded or must otherwise be returned for
any reason.
Yield Rate: For any Accrual Period and for the aggregate principal amount
of the Advance allocated to such Accrual Period:
(a) to the extent the relevant Lender funded the Advance through the
issuance of commercial paper, a rate equal to the CP Rate, or
(b) to the extent the relevant Lender did not fund the Advance through the
issuance of commercial paper, a rate equal to the Alternative Rate; or
26
(c) after the occurrence of a Termination Event, with respect to any
Purchaser Group, the rate provided in the applicable Fee Letter.
provided, however, the Yield Rate shall be the Base Rate for any Accrual
Period for any portion of the Advance as to which (1) any CP Conduit has funded
the acquisition or maintenance thereof by the assignment of an interest therein
to any Liquidity Bank under its related Liquidity Agreement on any day other
than the first day of such Accrual Period and without giving such Liquidity
Bank(s) at least two Business Days' prior notice of such assignment or (2) any
Investor has funded the acquisition thereof on any day other than the first day
of such Accrual Period and without such Investor(s) having received at least two
Business Days' prior notice of such funding pursuant to the provisions of
Section 2.1(a).
Section 1.2. Other Terms. All accounting terms used but not specifically
defined herein shall be construed in accordance with GAAP. All terms used in
Article 9 of the UCC in the State of New York, and used but 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 mean "to but excluding."
Section 1.4. Interpretation. In each Transaction Document, unless a
contrary intention appears:
(i) the singular number includes the plural number and
vice versa;
(ii) reference to any Person includes such Person's
successors and assigns but, if applicable, only if such successors and assigns
are permitted by the Transaction Documents;
(iii) reference to any gender includes each other
gender;
(iv) reference to any agreement (including any
Transaction Document), document or instrument means such agreement, document or
instrument as amended, supplemented or modified and in effect from time to time
in accordance with the terms thereof and, if applicable, the terms of the other
Transaction Documents, and reference to any promissory note includes any
promissory note that is an extension or renewal thereof or a substitute or
replacement therefor; and
(v) reference to any Applicable Law means such
Applicable Law as amended, modified, codified, replaced or reenacted, in whole
or in part, and in effect from time to time, including rules and regulations
promulgated thereunder and reference to any section or other provision of any
Applicable Law means that provision of such Applicable Law from time to time in
effect and constituting the substantive amendment, modification, codification,
replacement or reenactment of such section or other provision.
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ARTICLE II
THE LOAN FACILITY
Section 2.1. Funding of the Advance.
(a) (i) On the terms and conditions hereinafter set forth (including,
without limitation, the conditions set forth in Sections 3.1 and 3.2), the
Borrower may, at its option, on the Closing Date and on any Funding Date request
an advance (an "Advance" or a "Funding"). The Deal Agent may act on behalf of
and for the benefit of the VFCC Purchaser Group in this regard and each
Liquidity Agent may act on behalf of and for the benefit of its Purchaser Group.
Each CP Conduit may, in its sole discretion, make such Advance, or if a CP
Conduit shall decline to make such Advance, the Liquidity Agent related to such
CP Conduit shall make the Advance on behalf of the Investors related to such
Purchaser Group, in each case, from time to time requested by the Borrower
during the period from the date hereof to but not including the Termination
Date. Under no circumstances shall any Lender make an Advance if, after giving
effect to such Advance, (A) the aggregate Capital outstanding hereunder would
exceed the lesser of (i) the Facility Limit and (ii) the Borrowing Base or (B)
with respect to each Purchaser Group, the aggregate Capital funded or maintained
by the Lenders in such Purchaser Group would exceed its Purchaser Group Facility
Limit.
(b) (i) The Borrower may, within 60 days, but no later than 45 days, prior
to the then existing Commitment Termination Date, by written notice to the Deal
Agent and each Liquidity Agent, make written request for the CP Conduits and the
Investors to extend the Commitment Termination Date for an additional period of
364 days. Each Liquidity Agent will give prompt notice to its Purchaser Group of
its receipt of such request for extension of the Commitment Termination Date.
Each CP Conduit and each Investor shall make a determination, in their sole
discretion, not less than 15 days prior to the then applicable Commitment
Termination Date as to whether or not it will agree to extend the Commitment
Termination Date; provided, however, that the failure of any CP Conduit or any
Investor to make a timely response to the Borrower's request for extension of
the Commitment Termination Date shall be deemed to constitute a refusal by such
CP Conduit or Investor, as the case may be, to extend the Commitment Termination
Date. With respect to each Purchaser Group, the Commitment Termination Date
shall only be extended upon the consent of (i) the related CP Conduit and (ii)
100% of the related Investors.
(ii) Any Investor which notifies the applicable
Liquidity Agent of its refusal to consent to the extension or which does not
expressly notify such Liquidity Agent that it is willing to consent to an
extension of the Commitment Termination Date during the time period set forth in
clause (b)(i) above shall be deemed to be a (x) Nonextending Investor after the
Commitment Termination Date then in effect and (y) a "Dissenting Investor" from
the date of its refusal notice or the end of the applicable time period set
forth in clause (i) above and such Dissenting Investor's Commitment shall be
zero. If an Investor has agreed to extend its Commitment Termination Date, and,
at the end of the applicable time period set forth in clause (i) above no
Termination Event shall have occurred, the Commitment Termination Date for such
Investor then in effect shall be extended to the date which is 364 days
following the first day of the time period set forth in clause (i) above or, if
such day is not a Business Day, the next preceding Business Day.
28
(iii) Within two Business Days following the end of the
time period set forth in clause (i) above, the Liquidity Agent for each
Purchaser Group shall notify each other Investor in such Purchaser Group, the
Deal Agent, the Borrower and the Servicer of the identity of any Dissenting
Purchaser and the amount of its Commitment, if any. The affected CP Conduit, may
(but shall not be required to) request one or more other Investors in such
Purchaser Group, with the consent of the related Liquidity Agent (which shall
not be unreasonably withheld), or seek another financial institution reasonably
acceptable to such Liquidity Agent and, the affected CP Conduit in its sole
discretion, to acquire all or a portion of the Commitment of the Dissenting
Investor and all amounts payable to it hereunder. Each Dissenting Investor
hereby agrees to assign all or a portion of its Commitment and the amounts
payable to it hereunder to a replacement investor identified by the Liquidity
Agent for its Purchaser Group in accordance with the preceding sentence, subject
to ratable payment of such Dissenting Investor's portion of the Capital,
together with all accrued and unpaid interest thereon, and a ratable portion of
all fees and other amounts due to it hereunder.
(iv) If the Commitment of a Dissenting Investor is not
assigned in accordance with subsection (b)(iii), (A) the Purchaser Group
Facility Limit shall be reduced by the Commitment of the Dissenting Investor
existing on the Commitment Termination Date; and (B) the Facility Limit shall be
reduced by the Commitment of the Dissenting Investor existing on the Commitment
Termination Date. The Capital outstanding on the date such Investor becomes a
Dissenting Investor shall be paid in accordance with Section 2.7(a)(viii).
(c) The Notes.
(i) The Borrower's obligation to pay the principal of
and interest on all amounts advanced by the Lenders pursuant to the Fundings
shall be evidenced by a variable funding note of the Borrower for each Purchaser
Group (each, a "Note") which shall: (1) be dated the Effective Date; (2) be in
the stated principal amount equal to the Commitment Amount for such Purchaser
Group (as reflected from time to time on the grid attached thereto); (3) bear
interest as provided therein; (4) be payable to the order of JPMorgan and
Wachovia for the account of the applicable Lenders, and mature on February 15,
2009; and (5) be substantially in the form of Exhibit I hereto, with blanks
appropriately completed in conformity herewith. The applicable Liquidity Agent
shall, and is hereby authorized to, make a notation on the schedule attached to
each Note of the date and the amount of the Fundings and the date and amount of
the payment of principal thereon, and prior to any transfer of a Note, the
applicable Liquidity Agent shall endorse the outstanding principal amount of
such Note on the schedule attached thereto; provided, however, that failure to
make such notation shall not adversely affect any Lender's rights with respect
to such Note.
(ii) Although the Notes shall be dated the Effective
Date, interest in respect thereof shall be payable only for the periods during
which amounts are outstanding thereunder. In addition, although the stated
principal amount of each Note shall be equal to the Commitment Amount of the
related Purchaser Group, such Note shall be enforceable with respect to the
Borrower's obligation to pay the principal thereof only to the extent of the
unpaid principal amount of the Capital outstanding thereunder at the time such
enforcement shall be sought.
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Section 2.2. Grant of Security Interest; Acceptance by Collateral Agent.
(a) (i) As security for the prompt and complete payment of the Notes and
the performance of all of the Borrower's obligations under the Notes, this
Agreement and the other Transaction Documents, the Borrower hereby grants to the
Collateral Agent, for the benefit of the Secured Parties, without recourse
except as provided herein, a security interest in and continuing Lien on all of
the Borrower's property (whether now owned or hereafter acquired or arising, and
wherever located) including, without limitation, all of its right, title and
interest to: (i) the Loans, and all monies due or to become due in payment
thereupon on and after the related Cut-Off Date; (ii) all Related Security; and
(iii) all income and Proceeds of the foregoing (collectively, the "Collateral").
The foregoing pledge does not constitute an assumption by the Collateral Agent
of any obligations of the Borrower to Obligors or any other Person in connection
with the Collateral or under any agreement or instrument relating to the
Collateral, including, without limitation, any obligation to make future
advances to or on behalf of such Obligors.
(ii) In connection with such grant, the Borrower agrees
to record and file, at its own expense, financing statements with respect to the
Collateral now existing and hereafter created meeting the requirements of
applicable state law in such manner and in such jurisdictions as are necessary
to perfect the first priority security interest of the Collateral Agent for the
benefit of the Secured Parties in the Collateral, and to deliver a file-stamped
copy of such financing statements or other evidence of such filing to the
Collateral Agent, each Liquidity Agent and the Deal Agent on or prior to each
Funding Date. In addition, the Borrower and the Servicer agree to clearly and
unambiguously xxxx their respective general ledgers and all accounting records
and documents and all computer tapes and records to show that the Collateral,
including that portion of the Collateral consisting of the Dealer Agreements
listed on Schedule V hereto (and each addendum thereto), the Loans and the
related Contracts and the rights to payment under the related Dealer Agreements,
has been pledged to the Collateral Agent for the benefit of the Secured Parties
hereunder.
(iii) In connection with such pledge, the Borrower
agrees to deliver to the Collateral Agent on the Closing Date or any Funding
Date on which new Pools are pledged to the Collateral Agent, as the case may be,
one or more computer files containing true and complete lists of all Dealer
Agreements, Pools and Loans securing the payment of the Notes and amounts due
under the Transaction Documents and all of the Borrower's obligations under the
Notes and the Transaction Documents as of the Closing Date or Funding Date, and
all Contracts securing all such Loans, identified by account number, dealer
number, and pool number and Outstanding Balance as of the Funding Date. Such
file shall be marked as Schedule V hereto or as an addendum thereto, shall be
delivered to the Collateral Agent as confidential and proprietary, and such
Schedule V and each addendum thereto are hereby incorporated into and made a
part of this Agreement.
(iv) In connection with such pledge, each of the
Borrower, Credit Acceptance and the Servicer also agrees, within 180 days of the
Closing Date or relevant Funding Date, as the case may be, to clearly xxxx at
least 98% of the Contracts or Contract folders securing a Loan with the
following legend: "THIS AGREEMENT HAS BEEN PLEDGED TO WACHOVIA CAPITAL MARKETS,
LLC AS COLLATERAL AGENT FOR
30
THE BENEFIT OF CERTAIN SECURED PARTIES". Such legend shall be in bold, in type
face at least as large as 12 point and shall be entirely in capital letters.
(b) The Collateral Agent hereby acknowledges its acceptance, on behalf of
the Secured Parties, of the pledge by the Borrower of the Loans and all other
Collateral. The Collateral Agent further acknowledges that, prior to or
simultaneously with the execution and delivery of this Agreement, the Borrower
delivered to the Collateral Agent the computer file or microfiche list
represented by the Borrower to be the computer file or microfiche list described
in Section 2.2(a)(iii).
(c) The Collateral Agent hereby agrees not to disclose to any Person
(including any Secured Party) any of the account numbers or other information
contained in the computer files or microfiche lists delivered to the Collateral
Agent by the Borrower pursuant to Section 2.2(a)(iii), except as is required in
connection with the performance of its duties hereunder or in enforcing the
rights of the Secured Parties or to a Successor Servicer; provided, however,
that notwithstanding anything to the contrary in this Agreement, the Collateral
Agent may reply to a request from any Person for a list of Loans, Dealer
Agreements, Contracts or other information referred to in any financing
statement. The Collateral Agent agrees to take such measures as shall be
necessary or reasonably requested by the Borrower to protect and maintain the
security and confidentiality of such information. The Collateral Agent shall
provide the Borrower with written notice five Business Days prior to any
disclosure pursuant to this subsection 2.2(c).
Section 2.3. Procedures for Funding of Advances. (a) Each Advance
hereunder shall be requested by the Borrower delivering to the Deal Agent and
the Liquidity Agents (with a copy to the Collateral Agent) a duly completed
Funding Notice no later than 5:00 p.m. (Charlotte, North Carolina time) at least
two (2) Business Days prior to the proposed Funding Date. Each Funding Notice
shall: (i) specify the desired amount of such Funding which amount must (a) in
the case of the initial funding hereunder (the "Initial Funding") be in a
minimum amount of $1,000,000, and (b) in the case of any Incremental Funding, be
in an amount equal to $1,000,000 or an integral multiple of $10,000 in excess
thereof, (ii) specify the date of such Funding, and (iii) include a
representation that all conditions precedent for a Funding described in Article
III hereof have been met. Each Funding shall be allocated pro rata among each
Purchaser Group based upon the aggregate Commitments related to each Purchaser
Group as a percentage of the Total Commitment. Each Funding Notice shall be
irrevocable.
(b) Following receipt of such Funding Notice, the Deal Agent, in the case
of the VFCC Purchaser Group, and each Liquidity Agent, in the case of each other
Purchaser Group, will consult with VFCC, or the related CP Conduit, as
applicable, in order to assist VFCC or the CP Conduit, as applicable, in
determining whether or not to make the Advance. If a CP Conduit decides in its
sole discretion that it is unwilling or unable to make a proposed Advance, the
Investors related to such CP Conduit will make such Advance. Each CP Conduit
shall notify its Liquidity Agent by 10:00 am (New York City time) on the
applicable Funding Date whether it has elected to effect the proposed Funding
and each Liquidity Agent will notify the related Investors by 11:00 am (New York
City time) on such Funding Date if the related CP Conduit has elected not to
effect all or a portion of the proposed Funding. On the Funding Date, the CP
Conduit or Investors shall, upon satisfaction of the applicable conditions set
forth in Article III, make available to the Borrower in same day funds, at such
bank or other location reasonably
31
designated by Borrower in its Funding Notice given pursuant to this Section 2.3,
an amount equal to the lesser of (A) the amount requested by the Borrower from
such Purchaser Group for such Advance or (B) the excess of the total Commitments
related to such Purchaser Group over such Purchaser Group's portion of Capital
then outstanding.
(c) In the event that notwithstanding the fulfillment of the applicable
conditions set forth in Article III hereof with respect to a Funding, a CP
Conduit elected to make a Funding on a Funding Date but failed to make such
amount available to the Borrower on such date, such CP Conduit shall be deemed
to have rescinded its election to make such purchase, and neither the Borrower
nor any other party shall have any claim against such CP Conduit by reason of
its failure to timely effect such Funding. In any such case, the Liquidity Agent
for the related Purchaser Group shall give notice of such failure not later than
2:00 p.m. (New York City time) on the Funding Date to each Investor for such CP
Conduit and to the Borrower, which notice shall specify (i) the identity of such
CP Conduit and (ii) the amount of the Funding which it had elected but failed to
make. Subject to receiving such notice, each of such CP Conduit's Investors
shall effect such funding on such Funding Date and otherwise in accordance with
this Agreement.
(d) In no event shall an Investor be required on any date to make any
Funding which would result in its portion of the Capital, determined after
giving effect to such funding, exceeding its Commitment.
(e) On the Effective Date, PARCO shall purchase from VFCC a portion of
VFCC's Capital (the "Purchased Capital") in an amount equal to $32,153,846.15 by
depositing such amount on the Effective Date in immediately available funds to
an account previously designated by VFCC to PARCO. On and after the Effective
Date, the Purchased Capital shall be Capital of the PARCO Purchaser Group and
shall accrue interest at the Yield Rate applicable to the PARCO Purchaser Group.
On the Effective Date, the Capital of VFCC shall be reduced by an amount equal
to the Purchased Capital.
Section 2.4. Determination of Yield. The Deal Agent, with respect to the
VFCC Purchaser Group, and the related Liquidity Agent with respect to each other
Purchaser Group, shall initially determine the applicable Yield Rate and the
Yield (including unpaid Yield, if any, due and payable on a prior Payment Date)
to be paid by the Borrower with respect to the Advance on each Payment Date for
the related Accrual Period and shall advise the Servicer and the Backup Servicer
thereof on the third Business Day prior to such Payment Date. Prior to the next
succeeding Payment Date, the Deal Agent, on behalf of the VFCC Purchaser Group
and each Liquidity Agent, with respect to its Purchaser Group, shall determine
the amount of Yield, if any, payable in connection with Section 2.16(a)(iv) and
not previously paid. The amount owed in respect of the Yield for the next
succeeding Accrual Period, as initially determined by the Deal Agent, or
Liquidity Agent, as applicable shall be increased, if necessary and as
appropriate, to reflect any Yield payable in connection with Section 2.16(a)(iv)
and not previously paid.
Section 2.5. Reduction of the Facility Limit and a Purchaser Group
Facility Limit; Repurchase.
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(a) The Borrower may, upon at least two (2) Business Days' notice to the
Deal Agent and each Liquidity Agent, terminate in whole or reduce in part the
portion of the Facility Limit that exceeds the aggregate Capital. With respect
to any such reduction, (a) the Commitments of the Investors within each
Purchaser Group shall be reduced proportionately based upon the total
Commitments of such Purchaser Group and (b) each Purchaser Group Facility Limit
shall be reduced pro rata based upon the Purchaser Group Facility Limit as a
percentage of the Facility Limit; provided, however, that each partial reduction
of the Facility Limit shall be in an aggregate amount equal to $1,000,000 or an
integral multiple thereof. Each notice of reduction or termination pursuant to
this Section 2.5(a) shall be irrevocable.
(b) In the event that an Investor is a Downgraded Investor, the related CP
Conduit shall have the right to replace such Investor with a replacement
Investor consented to by the Borrower (which consent shall not be withheld
except for a commercially reasonable purpose or reason), which replacement
Investor shall succeed to the rights of such Investor under this Agreement in
respect of its Commitment as an Investor, and such Investor shall assign such
Commitment and its interest in the Capital to such replacement Investor in
accordance with the provisions of this Section 2.5(b); provided, that (A) such
Investor shall not be replaced hereunder with a new investor until such Investor
has been paid in full its outstanding portion of the Capital and all accrued and
unpaid interest thereon by such new investor and all other amounts owed to it
pursuant to this Agreement. For purposes of this subsection, an Investor shall
be a "Downgraded Investor" if and so long as the credit rating assigned to its
short-term obligations by Xxxxx'x or Standard & Poor's on the date on which it
became a party to this Agreement shall have been reduced or withdrawn, or as may
be otherwise agreed among the Borrower, such Investor, the CP Conduit in its
Purchaser Group and the Deal Agent.
Section 2.6. Actions with Respect to Advance. The Deal Agent, with respect
to the VFCC Purchaser Group, and the related Liquidity Agent with respect to
each other Purchaser Group may, with the consent of the Lender that has funded
the Advance, take any of the following actions at any time with respect to the
Advance: (i) divide the Advance funded by such Lender into two or more portions
of having aggregate Capital equal to the Capital of such divided Advance; (ii)
combine one portion of the Advance funded by such Lender with another portion of
the Advance funded by such Lender with an Accrual Period ending on the same day,
creating a new Advance having Capital equal to the Capital of the two portions
of Advances combined or (iii) combine an Advance funded by such Lender with the
Advance to be funded on such day by such Lender, creating a new Advance having
Capital equal to the Capital of the two Advances combined.
Section 2.7. Settlement Procedures. (a) On each Payment Date, the
Collateral Agent shall withdraw Available Funds and any Excess Reserve Amount
and Servicer Advances (to be applied in accordance with Section 2.7(c)) and
investment earnings on amounts on deposit in the Collection Account from the
Collection Account and allocate and distribute such amounts to the applicable
Person in the following order of priority:
(i) FIRST, to the Hedge Counterparty, an amount equal to
any Hedge Costs (exclusive of termination payments) and any such Hedge Costs
(exclusive of termination payments) unpaid from any prior Payment Date.
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(ii) SECOND, to the Servicer, an amount equal to any
Unreimbursed Servicer Advances;
(iii) THIRD, to the Backup Servicer so long as it has
not become the Servicer hereunder, an amount equal to any accrued and unpaid
Backup Servicing Fee due in respect of such Payment Date, any unpaid Backup
Servicing Fee from any prior Payment Date, any reasonable out-of-pocket expenses
incurred in SST's capacity as Backup Servicer, and any accrued and unpaid
Indemnified Amounts owed by the Borrower to SST up to $17,000, monthly;
(iv) FOURTH, (A) to the Servicer, an amount equal to any
accrued and unpaid Servicing Fees due in respect of such Payment Date and any
Servicing Fees unpaid from any prior Payment Date; provided, however, if the
Servicer has been replaced pursuant to Section 6.12 such amount shall not exceed
the Capped Servicing Fee; and (B) to the Backup Servicer, if it has become the
Successor Servicer, any Transition Expenses;
(v) FIFTH, to the Deal Agent for the account of the
Lenders, an amount equal to the sum of any accrued and unpaid (A) Yield and
Breakage Costs, (B) the Program Fee, and (C) the Facility Fee, Increased Costs
and any Additional Amounts due in respect of such Payment Date and any such
amounts unpaid from any prior Payment Date;
(vi) SIXTH, during the Revolving Period, to the Deal
Agent for the account of the Lenders, an amount equal to the Monthly Principal
Payment Amount for such Payment Date;
(vii) SEVENTH, to any Successor Servicer, an amount
equal to Reliening Expenses;
(viii) EIGHTH, (i) during the Revolving Period with
respect to each Dissenting Investor, pro rata, an amount
equal to its outstanding Capital until such Dissenting Investor's Capital has
been reduced to zero and (ii) during the Amortization Period, to the Deal Agent
for the account of the Lenders, pro rata, the Additional Principal Payment
Amount, until Capital has been reduced to zero;
(ix) NINTH, to the Deal Agent for the account of the
Lenders and the Backup Servicer, an amount equal to Increased Costs, any
Additional Amounts and Indemnified Amounts (provided that, with respect to the
Backup Servicer, such Indemnified Amounts shall include only those Indemnified
Amounts not paid pursuant to clause THIRD above) due in respect of such Payment
Date and unpaid from any prior Payment Date;
(x) TENTH, to the Reserve Account, (A) an amount equal
to any outstanding Reserve Advances and (B) the amount necessary to cause the
amount on deposit in the Reserve Account to equal the Required Reserve Account
Amount (after giving effect to any deposits made in subclause (A));
(xi) ELEVENTH, to the Backup Servicer, any Servicing Fee
due in respect of such Payment Date, to the extent not paid pursuant to clause
FOURTH above and any such Servicing Fee unpaid from any prior Payment Date;
34
(xii) TWELFTH, to the Deal Agent for the account of any
other applicable Person, all remaining amounts up to all Aggregate Unpaids
(during the Revolving Period, other than Capital) until paid in full;
(xiii) THIRTEENTH, to the Borrower any remaining
amounts.
(b) One Business Day per calendar month, the date of which is to be chosen
by the Borrower, the Collateral Agent shall, upon two Business Days' prior
written request of the Borrower, withdraw from the Collection Account an amount
not to exceed the amount on deposit therein on the date of such request. The
Collateral Agent shall distribute such amount to the Deal Agent for the account
of the Lenders, to be distributed by the Deal Agent to the Lenders, pro rata, as
a payment in reduction of Capital. Notwithstanding anything in this Section
2.7(b) to the contrary, the Collateral Agent shall not be required to effect any
such withdrawal or the Deal Agent make any such distribution until an Officer of
the Servicer or a representative of the Servicer designated by an Officer of the
Servicer has certified to the Collateral Agent and the Deal Agent in writing
(which shall include electronic transmission) that it reasonably believes that
at the end of the related Collection Period the sum of Available Funds and
Excess Reserve Amount, after giving effect to such payment, will be greater than
the amount needed to make the payments required pursuant to Section 2.7(a)(i)
through (xii).
(c) (i) If on any Payment Date the amount paid pursuant to Section
2.7(a)(v) and (vi) is insufficient to cover all amounts due thereunder on such
Payment Date the Collateral Agent shall withdraw from the Reserve Account an
amount equal to the lesser of such shortfall and the amount of funds on deposit
in the Reserve Account (such withdrawal, a "Reserve Advance") and deposit such
amount to the Collection Account. The Collateral Agent shall pay such amount to
the Deal Agent for payment to the Lenders.
(ii) If on any Payment Date the amount on deposit in the
Reserve Account is insufficient to pay the insufficiency set forth in Section
2.7(c)(i), on or prior to 9:00 a.m. (Charlotte, North Carolina time) the
Servicer shall deposit to the Collection Account an amount equal to such
insufficiency (each, a "Servicer Advance"), and the Collateral Agent shall pay
such amount to the Deal Agent for payment to the Lenders. The Servicer shall not
be required to make any Servicer Advance to the extent it does not reasonably
deem such amount to be recoverable from future collections on the Loans.
(iii) If on any Payment Date during the Amortization
Period, the amount paid pursuant to Section 2.7(a)(viii) is insufficient to
reduce Capital to zero, the Deal Agent, in its sole discretion, may direct the
Collateral Agent to withdraw any or all of the amount on deposit in the Reserve
Account, and pay such amount to the Deal Agent, for payment to the Lenders.
Section 2.8. [Reserved.]
Section 2.9. Collections and Allocations.
(a) Collections. The Servicer shall transfer, or cause to be transferred,
all Collections on deposit in the form of available funds in the Credit
Acceptance Payment Account to the Collection Account by the close of business on
the second Business Day such Collections are
35
received therein. The Servicer shall promptly (but in no event later than the
second Business Day after the receipt thereof) deposit all Collections received
directly by it in the Collection Account. The Servicer shall make such deposits
or payments on the date indicated therein by wire transfer, in immediately
available funds.
(b) Initial Deposits. On the Funding Date, the Servicer will deposit (in
immediately available funds) into the Collection Account all Collections
received on and after the applicable Cut-Off Date and through and including the
day immediately preceding the Funding Date, in respect of the Loans.
(c) Investment of Funds. (i) Until the occurrence of a Termination Event
or Unmatured Termination Event, to the extent there are uninvested amounts on
deposit in the Collection Account and the Reserve Account, all amounts shall be
invested as set forth in Section 6.7(c).
(ii) On the date on which Capital is reduced to zero and
all Aggregate Unpaids have been indefeasibly paid in full and all Collateral is
released from the Lien of this Agreement, any amounts on deposit in the Reserve
Account shall be released to the Borrower.
(d) Allocation of Collections. The Servicer will allocate Collections
monthly in accordance with the actual amount of Collections received. The
Servicer shall determine each month the amount of Collections received during
such month which constitutes amounts which, pursuant to the terms of any Dealer
Agreement, are required to be remitted to the applicable Dealer (such
collections, "Dealer Collections") and shall so notify the Collateral Agent.
Notwithstanding any other provision hereof, the Collateral Agent, at the
direction of the Servicer, shall distribute on each Payment Date: (i) to the
Borrower, an amount equal to the aggregate amount of Dealer Collections received
during or with respect to the prior Collection Period and (ii) to the Backup
Servicer, if it has become the Successor Servicer, an amount equal to any
Repossession Expenses related to the prior Collection Period prior to the
distribution of Available Funds pursuant to Section 2.7.
Section 2.10. Payments, Computations, Etc.
(a) Unless otherwise expressly provided herein, all amounts to be paid or
deposited by the Borrower or the Servicer hereunder shall be paid or deposited
in accordance with the terms hereof no later than 11:00 a.m. (Charlotte, North
Carolina time) on the day when due in lawful money of the United States in
immediately available funds to the Agent's Account and the Deal Agent shall
distribute such amounts actually received by it to the Persons entitled thereto
no later than 2:00 p.m. (Charlotte, North Carolina time). Any amounts received
in the Agent's Account after 11:00 a.m. (Charlotte, North Carolina time) shall
be deemed to be received on the next subsequent Business Day and the Deal Agent
shall distribute such amounts to the Persons entitled thereto no later than 2:00
p.m. (Charlotte, North Carolina time) on such next subsequent Business Day. The
Borrower shall, to the extent permitted by law, pay to the Secured Parties
interest on all amounts not paid or deposited when due hereunder 3.0% per annum
above the Base Rate, payable on demand; provided, however, that such interest
rate shall not at any time exceed the maximum rate permitted by Applicable Law.
All computations of
36
interest and all computations of Yield and other fees hereunder shall be made on
the basis of a year of 360 days for the actual number of days (including the
first but excluding the last day) elapsed.
(b) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of Yield, interest or any fee payable hereunder, as the
case may be.
(c) If the Advance requested by the Borrower for any Funding Date and
approved by a Lender, its Liquidity Agent and the Deal Agent pursuant to Section
2.1 and Section 2.3, is not for any reason made or effectuated, as the case may
be, on the requested Funding Date, the Borrower shall indemnify such Lender
against any reasonable loss, cost or expense incurred by such Lender, including,
without limitation, any loss (including loss of anticipated profits, net of
anticipated profits in the reemployment of such funds in the manner determined
by such Lender), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund or
maintain the Funding.
Section 2.11. [Reserved.]
Section 2.12. Fees.
(a) The Borrower shall pay to the Deal Agent, for the account of each
Purchaser Group from the Collection Account on each Payment Date, monthly in
arrears, the Program Fee for each Purchaser Group agreed to in each Fee Letter.
(b) The Servicer shall be entitled to receive the Servicing Fee, monthly
in arrears in accordance with Section 2.7(a).
(c) The Backup Servicer shall be entitled to receive the Backup Servicing
Fee in accordance with Section 2.7(a).
(d) The Borrower shall pay to JPMorgan, on the Effective Date, the
Structuring Fee and reasonable out-of-pocket expenses in immediately available
funds.
(e) The Borrower shall pay to Dechert LLP, as counsel to the Deal Agent,
and to Xxxxxxxx & Xxxxx LLP, as counsel to JPMorgan, on the Effective Date,
their respective estimated reasonable fees and out-of-pocket expenses in
immediately available funds and shall pay all additional reasonable fees and
out-of-pocket expenses of Dechert LLP or Xxxxxxxx & Xxxxx LLP, as applicable,
within ten (10) Business Days after receiving an invoice for such amounts.
Section 2.13. Increased Costs; Capital Adequacy; Illegality.
(a) If either (i) the introduction of or any change (including, without
limitation, any change by way of imposition or increase of reserve requirements)
in or in the interpretation of any law or regulation or (ii) the compliance by
an Affected Party with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), shall (A)
subject an Affected Party to any Tax (except for Taxes on the overall net income
of
37
such Affected Party), duty or other charge with respect to the Advance made by
it hereunder, or any right to make the Funding hereunder, or on any payment made
hereunder, (B) impose, modify or deem applicable any reserve requirement
(including, without limitation, any reserve requirement imposed by the Board of
Governors of the Federal Reserve System, but excluding any reserve requirement,
if any, included in the determination of Yield), special deposit or similar
requirement against assets of, deposits with or for the amount of, or credit
extended by, any Affected Party or (C) impose any other condition affecting the
Advance made by it hereunder or a Lender's rights hereunder, the result of which
is to increase the cost to any Affected Party or to reduce the amount of any sum
received or receivable by an Affected Party under this Agreement, then within
ten days after demand by such Affected Party (which demand shall be accompanied
by a statement setting forth the basis for such demand), the Borrower shall pay
directly to such Affected Party such additional amount or amounts as will
compensate such Affected Party for such additional or increased cost incurred or
such reduction suffered.
(b) If either (i) the introduction of or any change in or in the
interpretation of any law, guideline, rule, regulation, directive or request or
(ii) compliance by any Affected Party with any law, guideline, rule, regulation,
directive or request from any central bank or other governmental authority or
agency (whether or not having the force of law), including, without limitation,
compliance by an Affected Party with any request or directive regarding capital
adequacy, has or would have the effect of reducing the rate of return on the
capital of any Affected Party as a consequence of its obligations hereunder or
arising in connection herewith to a level below that which any such Affected
Party could have achieved but for such introduction, change or compliance
(taking into consideration the policies of such Affected Party with respect to
capital adequacy) by an amount deemed by such Affected Party to be material,
then from time to time, within ten days after demand by such Affected Party
(which demand shall be accompanied by a statement setting forth the basis for
such demand), the Borrower shall pay directly to such Affected Party such
additional amount or amounts as will compensate such Affected Party for such
reduction. For avoidance of doubt, any interpretation of Accounting Research
Bulletin No. 51 by the Financial Accounting Standards Board shall constitute an
adoption, change, request or directive subject to this subsection 2.13(b).
(c) If as a result of any event or circumstance similar to those described
in clauses (a) or (b) of this section, any Affected Party is required to
compensate a bank or other financial institution providing liquidity support,
credit enhancement or other similar support to such Affected Party in connection
with this Agreement or the funding or maintenance of the Advance hereunder, then
within ten days after demand by such Affected Party, the Borrower shall pay to
such Affected Party such additional amount or amounts as may be necessary to
reimburse such Affected Party for any amounts payable or paid by it.
(d) In determining any amount provided for in this section, the Affected
Party may use any reasonable averaging and attribution methods. Any Affected
Party making a claim under this section shall submit to the Servicer a written
description as to such additional or increased cost or reduction and the
calculation thereof, which written description shall be conclusive absent
demonstrable error.
(e) If a Lender shall notify the Deal Agent that a Eurodollar Disruption
Event as described in clause (a) of the definition of "Eurodollar Disruption
Event" has occurred, the Deal
38
Agent shall in turn so notify the Borrower, whereupon all Capital in respect of
which Yield accrues at the Adjusted Eurodollar Rate shall immediately be
converted into Capital in respect of which Yield accrues at the Base Rate.
Section 2.14. Taxes.
(a) All payments made by an Obligor in respect of each Loan and each
Contract and all payments made by the Borrower or the Servicer under this
Agreement will be made free and clear of and without deduction or withholding
for or on account of any Taxes. If any Taxes are required to be withheld from
any amounts payable to the Deal Agent, the Liquidity Agent or any Secured Party,
then the amount payable to such Person will be increased (such increase, the
"Additional Amount") such that every net payment made under this Agreement after
withholding for or on account of any Taxes (including, without limitation, any
Taxes on such increase) is not less than the amount that would have been paid
had no such deduction or withholding been deducted or withheld. The foregoing
obligation to pay Additional Amounts, however, will not apply with respect to
net income or franchise taxes imposed on a Lender or the Deal Agent,
respectively, with respect to payments required to be made by the Borrower or
Servicer under this Agreement, by a taxing jurisdiction in which such Lender or
Deal Agent is organized, conducts business or is paying taxes as of the
Effective Date (as the case may be).
(b) The Borrower will indemnify each Affected Party for the full amount of
Taxes payable by such Person in respect of Additional Amounts and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. All payments in respect of this indemnification shall be made within
ten days from the date a written invoice therefor is delivered to the Borrower.
(c) The Borrower will notify the Deal Agent and each Liquidity Agent on a
quarterly annual basis of any payments by the Borrower in respect of any Taxes,
not including those Taxes paid by Credit Acceptance on a consolidated basis.
(d) If a Lender is not created or organized under the laws of the United
States or a political subdivision thereof, such Lender shall deliver to the
Borrower, with a copy to the Deal Agent and each Liquidity Agent, (i) within 15
days after the date hereof, or, if such Lender becomes a Lender after the
Closing Date, the date on which such Lender becomes a Lender hereunder, two (or
such other number as may from time to time be prescribed by Applicable Laws)
duly completed copies of IRS Form W-8BEN or Form W-8ECI (or any successor forms
or other certificates or statements that may be required from time to time by
the relevant United States taxing authorities or Applicable Laws), as
appropriate, to permit the Borrower to make payments hereunder for the account
of such Lender, as the case may be, without deduction or withholding of United
States federal income or similar Taxes and (ii) upon the obsolescence of or
after the occurrence of any event requiring a change in, any form or certificate
previously delivered pursuant to this Section 2.14(d), copies (in such numbers
as may from time to time be prescribed by Applicable Laws or regulations) of
such additional, amended or successor forms, certificates or statements as may
be required under Applicable Laws or regulations to permit the Borrower to make
payments hereunder for the account of such Lender, without deduction or
withholding of United States federal income or similar Taxes.
39
(e) If, in connection with an agreement or other document providing
liquidity support, credit enhancement or other similar support to the Lenders in
connection with this Agreement or the funding or maintenance of the Funding
hereunder, the Lenders are required to compensate a bank or other financial
institution in respect of Taxes under circumstances similar to those described
in this section then within 10 days after demand by the Lenders, the Borrower
shall pay to the Lenders such additional amount or amounts as may be necessary
to reimburse the Lenders for any amounts paid by them.
(f) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this section shall survive the termination of this Agreement.
Section 2.15. Assignment of the Contribution Agreement. The Borrower
hereby assigns to the Deal Agent, for the ratable benefit of the Secured Parties
hereunder, all of the Borrower's right, title and interest in and to, but none
of its obligations under, the Contribution Agreement and the Hedging Agreement.
The Borrower confirms that the Deal Agent on behalf of the Secured Parties shall
have the sole right to enforce the Borrower's rights and remedies under the
Contribution Agreement and the Hedging Agreement for the benefit of the Secured
Parties.
Section 2.16. Take-Out.
(a) On any Business Day (the "Take-Out Date"), the Borrower shall have the
right to effect a Take-Out and require the Collateral Agent to release its
security interest and Lien on the related Contracts and Loans, subject to the
following terms and conditions:
(i) The Borrower shall have given the Deal Agent, the
Backup Servicer and each Liquidity Agent and the Servicer at least five (5)
Business Days' prior written notice of its intent to effect the Take-Out, which
notice shall be irrevocable; provided however, failure to effect such Take-Out
on the Take-Out Date shall not result in a Termination Event (except as
specifically set forth in Section 10.1(u)), but the Borrower shall be obligated
to pay any Breakage Costs and any other losses incurred by the Lenders in
connection therewith.
(ii) Unless the Take-Out is to be effected on a Payment
Date (in which case the relevant calculations with respect to such Take-Out
shall be reflected on the applicable Monthly Report), the Servicer shall deliver
to the Deal Agent an Officer's Certificate, together with evidence to the
reasonable satisfaction of the Deal Agent (which evidence may consist solely of
the Officer's Certificate signed by an officer of the Servicer) that the
Borrower shall have sufficient funds on the related Take-Out Date to effect the
contemplated Take-Out in accordance with this Agreement. In effecting the
Take-Out, the Borrower may use the proceeds of sales of the Loans (which sales
must be made in arm's-length transactions.
(iii) After giving effect to the Take-Out and the
release to the Borrower of the Loans and related Contracts on the Take-Out Date,
(x) the representations and warranties contained in Section 4.1 and 4.2 hereof
shall continue to be correct in all material respects, except to the extent
relating to an earlier date and (y) neither an Unmatured Termination Event nor a
Termination Event shall have resulted.
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(iv) On the Take-Out Date, the Collateral Agent shall
have received, for the benefit of the Secured Parties and the Hedge
Counterparties, as applicable, in immediately available funds, an amount equal
to the sum of: (A) the aggregate outstanding Capital being paid plus (B) an
amount equal to the related unpaid Yield (including Yield not yet accrued) to
the end of the Accrual Period plus (C) an aggregate amount equal to the sum of
all other amounts due and owing to the Deal Agent, the Lenders, the Backup
Servicer, the Successor Servicer, the Hedge Counterparties and the other Secured
Parties, as applicable, under this Agreement and the other Transaction
Documents, to the extent accrued to such date and to accrue thereafter
(including, without limitation, Breakage Costs and Hedge Costs) plus (D) any
outstanding Servicer Advances plus (E) all other Aggregate Unpaids. No such
reduction shall be given effect unless the Borrower has complied with the terms
of any Hedging Agreement requiring that any derivative transaction related
thereto be terminated in whole or in part as a result of any such reduction in
the Capital and Borrower has paid all Hedge Costs due to the relevant Hedge
Counterparty for any such termination.
(v) Upon receipt of the amount set forth in Section
2.16(a)(iv), the Collateral Agent shall apply such amounts first to the pro-rata
reduction of the Capital, second to the payment of accrued Yield on the amount
of Capital to be repaid and to the payment of any Breakage Costs, by paying such
amounts to the Lenders, and third to pay any Hedge Costs related to such
reduction of the Capital due to the relevant Hedge Counterparty, and fourth to
pay all other Aggregate Unpaids related to such reduction of the Capital due to
the relevant party.
(vi) The Borrower shall certify in writing to the
Collateral Agent, each Liquidity Agent and the Deal Agent that no adverse
selection was employed in the selection of the Loans and Contracts to be
released.
(b) The Borrower hereby agrees to pay the reasonable legal fees and
expenses of the Deal Agent, the Liquidity Agents and the Lenders in connection
with any Take-Out (including, but not limited to, expenses incurred in
connection with the release of the Lien of the Collateral Agent, the Lenders and
any other party having such an interest in the Loans in connection with such
Take-Out).
(c) In connection with any Take-Out, on the related Take-Out Date, the
Collateral Agent, on behalf of the Lenders, shall, at the expense of the
Borrower: (i) execute such instruments of release with respect to the portion of
the Loans to be released to the Borrower, in favor of the Borrower as the
Borrower may reasonably request; (ii) deliver any portion of the Loans to be
released to the Borrower in its possession to the Borrower; and (iii) otherwise
take such actions, and cause or permit the Collateral Agent to take such
actions, as are necessary and appropriate to release the Lien of the Collateral
Agent on the Loans to be released to the Borrower and deliver to the Borrower
such Loans.
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ARTICLE III
CONDITIONS TO THE CLOSING, EACH FUNDING AND AMENDMENT AND
RESTATEMENT
Section 3.1. Conditions to the Closing and the Initial Funding. The
Closing Date shall not occur and no Lender shall be obligated to make an Advance
hereunder on the occasion of the Initial Funding, nor shall any Lender, the Deal
Agent, the Liquidity Agent, the Backup Servicer or the Collateral Agent be
obligated to take, fulfill or perform any other action hereunder, until (i) in
the case of the Closing Date, the conditions set forth in clauses (a)(i) (other
than with respect to the Hedging Agreements), (d), (e), (f) and (j) and (ii) in
the case of the Initial Funding, all of the following conditions, after giving
effect to the proposed Advance, in each case, have been satisfied, in the sole
discretion of, or waived in writing by, the Deal Agent:
(a) (i) Each Transaction Document shall have been duly executed by, and
delivered to, the parties hereto and thereto and the Deal Agent shall have
received such other documents, instruments, agreements and legal opinions as the
Deal Agent shall request in connection with the transactions contemplated by
this Agreement, including, without limitation, all those specified in the
Schedule of Documents attached hereto as Schedule I, each in form and substance
satisfactory to the Deal Agent, provided, however, that Schedules V, VII and IX
to the Agreement, Schedule I to the Contribution Agreement, the Funding Date
Officer's Certificate regarding the Agreement, the Funding Date Officer's
Certificate regarding the Contribution Agreement, the filed financing statements
on Form UCC-1, the Funding Notice, the UCC-3 termination statements and the
contractual release shall not be required prior to the Initial Funding on the
Initial Funding Date, and (ii) the executed Notes in the aggregate face amount
of $325,000,000 shall have been delivered to the Deal Agent.
(b) The Deal Agent shall have received (i) satisfactory evidence that
the Borrower, the Originator and the Servicer have obtained all required
consents and approvals of all Persons, including all requisite Governmental
Authorities, to the execution, delivery and performance of this Agreement and
the other Transaction Documents to which each is a party and the consummation of
the transactions contemplated hereby or thereby or (ii) an Officer's Certificate
from each of the Borrower, the Originator and the Servicer in form and substance
satisfactory to the Deal Agent affirming that no such consents or approvals are
required; it being understood that the acceptance of such evidence or officer's
certificate shall in no way limit the recourse of the Deal Agent or any Secured
Party against the Borrower, the Originator or Servicer for a breach of its
representation or warranty that all such consents and approvals have, in fact,
been obtained.
(c) The Borrower, the Originator and the Servicer shall each be in
compliance in all material respects with all Applicable Laws and shall have
delivered a Certificate to the Deal Agent as to this and other closing matters.
(d) The Borrower shall have paid all fees required to be paid by it on
the Closing Date, including all fees required hereunder and under the Fee Letter
related to the VFCC Purchaser Group, and shall have reimbursed each Lender, the
Backup Servicer, the Deal Agent and the Collateral Agent for all fees, costs and
expenses of closing the transactions contemplated hereunder and under the other
Transaction Documents, including the attorney fees and any other
42
legal and document preparation costs incurred by any Lender, the Backup
Servicer, the Deal Agent and/or the Collateral Agent.
(e) No Amortization Event, Termination Event or Unmatured Termination
Event shall have occurred.
(f) No Servicer Termination Event or any event that, with the giving of
notice or the lapse of time, or both, would become a Servicer Termination Event
shall have occurred.
(g) No adverse selection procedures were used by the Borrower with
respect to the Loans, Contracts or Dealer Agreements.
(h) The Borrower shall have deposited to the Reserve Account an amount
equal to 1.0% of the Capital after giving effect to the proposed Advance.
(i) The Hedging Agreement shall be in effect.
(j) The Borrower shall have deposited $295,000 to the Reserve Account.
Section 3.2. Conditions Precedent To All Fundings. Each request for a
Funding hereunder (each, a "Transaction") shall be subject to the further
conditions precedent:
(a) With respect to any Advance (including the Initial Funding), the
Borrower shall have delivered to the Deal Agent and the Liquidity Agents, on or
prior to the date of the Advance in form and substance satisfactory to the Deal
Agent, (i) the Funding Notice and (ii) Exhibit A to the Contribution Agreement,
including the Schedule of Loans and Contracts attached thereto, thereto dated
within 5 days prior to the date of the Advance and containing such additional
information as may be reasonably requested by the Deal Agent.
(b) On the date of such Transaction the following statements shall be
true and the Borrower shall be deemed to have certified that, after giving
effect to the proposed Advance and pledge of Additional Loans:
(i) The representations and warranties contained in
Sections 4.1, 4.2 and 4.3 are true and correct on and as of such day as though
made on and as of such day and shall be deemed to have been made on such day;
(ii) On and as of such day, after giving effect to the
proposed Advance, (A) the outstanding Capital does not exceed the lesser of (1)
the Borrowing Base and (2) the Facility Limit and (B) with respect to each
Purchaser Group the aggregate Capital funded or maintained by the Lender in such
Purchaser Group does not exceed the total Commitments of the Investors in such
Purchaser Group or its Purchaser Group Facility Limit;
(iii) On and as of such day, the Borrower, the
Originator and the Servicer each has performed all of the agreements contained
in this Agreement and the other Transaction Documents to which it is a party to
be performed by such person at or prior to such day; and
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(iv) No law or regulation shall prohibit, and no order,
judgment or decree of any federal, state or local court or governmental body,
agency or instrumentality shall prohibit or enjoin, the making of the Funding by
the Lender in accordance with the provisions hereof.
(c) The Borrower shall have delivered to the Collateral Agent the
information described in Section 2.2(a)(iii).
(d) All financing statements necessary to perfect the Collateral Agent's
first priority security interest in the Collateral shall have been filed in the
appropriate filing offices.
(e) Forecasted Collections for the Aggregate Outstanding Eligible Loan
Net Balance (after giving effect to the proposed Advance) shall be greater than
or equal to Capital, after giving effect to the proposed Advance.
(f) (i) All other documents, opinions, certificates and documents listed
on Schedule I hereto shall have been delivered to the Deal Agent, in form and
substance satisfactory to the Deal Agent and its counsel and (ii) all conditions
required to be satisfied in the Contribution Agreement shall have been
satisfied.
(g) No Amortization Event, Termination Event or Unmatured Termination
Event shall have occurred.
(h) No Servicer Termination Event or any event, that with the giving of
notice or the lapse of time, or both, would become a Servicer Termination Event
shall have occurred.
(i) No adverse selection procedures were used by the Borrower with
respect to the Loans, Contracts or Dealer Agreements.
(j) The Borrower shall have deposited to the Reserve Account an amount
equal to 1.0% of the Capital after giving effect to the proposed Advance. In
addition, the amount on deposit in the Reserve Account shall not be less than
the product of (i) 0.50% and (ii) the Facility Limit then in effect.
(k) The Hedging Agreement shall be in effect.
(l) Each CP Conduit shall have received evidence satisfactory to it that
its advance of amounts hereunder will not result in a reduction or downgrade of
the ratings of its Commercial Paper Notes by the Rating Agencies.
(m) The Deal Agent shall have received such other approvals, opinions or
documents as the Deal Agent or its counsel may reasonably require.
Section 3.3 Conditions to Effectiveness of this First Amended and Restated
Loan and Security Agreement. This First Amended and Restated Loan and Security
Agreement shall not become effective until:
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(a) Each document specified in the Schedule of Documents attached hereto
as Schedule X has been duly executed by, and delivered to, the parties hereto
and thereto and the Deal Agent and JPMorgan have received all such executed
documents.
(b) the executed Notes in the face amounts representing the Commitment
Amount of each Purchaser Group have been delivered to each Purchaser Group.
(c) the Borrower has paid the Structuring Fee specified in the Fee
Letter related to the PARCO Purchaser Group.
(d) [Reserved.]
(e) The Deal Agent has received such other approvals, opinions or
documents as the Deal Agent or its counsel may reasonably require.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties of the Borrower. The Borrower
represents and warrants to the Collateral Agent, the Deal Agent, the Backup
Servicer and the Secured Parties on the Closing Date, the Effective Date and
each Funding Date as follows:
(a) Organization and Good Standing. The Borrower has been duly
organized, and is validly existing as a corporation in good standing under the
laws of the State of Nevada, with all requisite power and authority to own or
lease its properties and conduct its business as such business is presently
conducted, and the Borrower had at all relevant times, and now has all necessary
power, authority and legal right to acquire, own and pledge the Collateral and
perform its obligations under this Agreement.
(b) Due Qualification. The Borrower is duly qualified to do business and
is in good standing as a corporation 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 requires such qualification, licenses or approvals.
(c) Power and Authority; Due Authorization. The Borrower: (i) has all
necessary power, authority and legal right to: (A) execute and deliver this
Agreement and the other Transaction Documents to which it is a party, (B) carry
out the terms of the Transaction Documents to which it is a party, and (C)
transfer and assign each Loan, Related Security and all other Collateral on the
terms and conditions herein provided and (ii) has duly authorized by all
necessary action the execution, delivery and performance of this Agreement and
the other Transaction Documents to which it is a party and the transfer and
assignment of the Loans, Related Security and all other Collateral on the terms
and conditions herein provided. This Agreement and each other Transaction
Document to which it is a party have been duly executed and delivered by it.
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(d) Binding Obligation. This Agreement and each other Transaction
Document to which the Borrower is a party constitutes a legal, valid and binding
obligation of the Borrower, each enforceable against the Borrower in accordance
with its terms.
(e) No Violation. The consummation of the transactions contemplated by
this Agreement and the other Transaction Documents to which it is a party and
the fulfillment of the terms hereof and thereof will not (i) conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time or both) a default under, the Borrower's
certificate of incorporation, bylaws or any Contractual Obligation of the
Borrower, (ii) result in the creation or imposition of any Lien upon any of the
Borrower's properties pursuant to the terms of any such Contractual Obligation,
other than this Agreement, or (iii) violate any Applicable Law.
(f) No Proceedings. There is no litigation, proceeding or investigation
pending or, to the best knowledge of the Borrower, threatened against the
Borrower, before any Governmental Authority (i) asserting the invalidity of this
Agreement or any other Transaction Document to which the Borrower is a party,
(ii) seeking to prevent the consummation of any of the transactions contemplated
by this Agreement or any other Transaction Document to which the Borrower is a
party or (iii) seeking any determination or ruling that could reasonably be
expected to have Material Adverse Effect.
(g) All Consents Required. All approvals, authorizations, consents,
orders or other actions of any Person or of any Governmental Authority (if any)
required for the due execution, delivery and performance by the Borrower of this
Agreement and any other Transaction Document to which the Borrower is a party
have been obtained.
(h) Bulk Sales. The execution, delivery and performance of this
Agreement do not require compliance with any "bulk sales" act or similar law by
Borrower.
(i) Solvency. The transactions under this Agreement and any other
Transaction Document to which the Borrower is a party do not and will not render
the Borrower not Solvent and the Borrower shall deliver to the Deal Agent on the
Closing Date and the Effective Date a certification in the form of Exhibit F.
The Originator has confirmed in writing to the Borrower that, so long as the
Borrower is Solvent, the Originator will not cause the Borrower to file a
voluntary petition under the Bankruptcy Code or any other Insolvency Laws.
(j) Selection Procedures. No procedures believed by the Borrower to be
adverse to the interests of the Collateral Agent or the Lenders were utilized by
the Borrower in identifying and/or selecting Loans or Dealer Agreements. In
addition, each Loan shall have been underwritten in accordance with and satisfy
the standards of any Credit Guidelines that has been established by the Borrower
or the Originator and is then in effect.
(k) Taxes. The Borrower has filed or caused to be filed all tax returns
that are required to be filed by it. The Borrower has paid or made adequate
provisions for the payment of all Taxes and all assessments made against it or
any of its property (other than any amount of Tax the validity of which is
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in accordance with GAAP have been provided on the
books
46
of the Borrower), and no tax lien has been filed and, to the Borrower's
knowledge, no claim is being asserted, with respect to any such Tax, fee or
other charge.
(l) Exchange Act Compliance; Regulations T, U and X. None of the
transactions contemplated herein (including, without limitation, the use of the
proceeds from the pledge of the Collateral) will violate or result in a
violation of Section 7 of the Securities Exchange Act, or any regulations issued
pursuant thereto, including, without limitation, Regulations T, U and X of the
Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II. The
Borrower does not own or intend to carry or purchase, and no proceeds from the
pledge of the Collateral will be used to carry or purchase, any "margin stock"
within the meaning of Regulation U or to extend "purchase credit" within the
meaning of Regulation U.
(m) Quality of Title. Each Loan, together with the Related Security
related thereto, shall, at all times, be owned by the Borrower free and clear of
any Lien except as provided in Section 4.2(a)(iii), and upon each Funding, the
Collateral Agent as agent for the Secured Parties shall acquire a valid and
perfected first priority security interest in such Loans, the Related Security
related thereto and all Collections then existing or thereafter arising, free
and clear of any Lien, except as provided in Section 4.2(a)(iii). No effective
financing statement or other instrument similar in effect covering any Loan or
Dealer Agreement shall at any time be on file in any recording office except
such as may be filed (i) in favor of the Borrower in accordance with the
Contribution Agreement or (ii) in favor of the Collateral Agent in accordance
with this Agreement.
(n) Security Interest. The Borrower has granted a security interest (as
defined in the UCC) to the Collateral Agent, as agent for the Secured Parties,
in the Collateral, which is enforceable in accordance with applicable law upon
execution and delivery of this Agreement. Upon the filing of UCC-1 financing
statements naming the Collateral Agent as secured party and the Borrower as
debtor, or upon the Collateral Agent obtaining control, in the case of that
portion of the Collateral which constitutes electronic chattel paper, or
possession, in the case of that portion of the Collateral which constitutes
tangible chattel paper, the Collateral Agent, as agent for the Secured Parties,
shall have a first priority perfected security interest in the Collateral. All
filings (including, without limitation, such UCC filings) as are necessary in
any jurisdiction to perfect the interest of the Collateral Agent, as agent for
the Secured Parties, in the Collateral have been made.
(o) Accuracy of Information. All information heretofore furnished by the
Borrower (including without limitation, the Monthly Report and Credit
Acceptance's financial statements) to the Deal Agent, Collateral Agent, any
Liquidity Agent or any Lender for purposes of or in connection with this
Agreement or any other Transaction Document, or any transaction contemplated
hereby or thereby, will be true, correct, complete and accurate in every
material respect, on the date such information is stated or certified.
(p) Location of Offices. The principal place of business and chief
executive office of the Borrower and the office where the Borrower keeps all the
Records are located at the address of the Borrower referred to in Section 14.2
hereof (or at such other locations as to which the notice and other requirements
specified in Section 5.2(g) shall have been satisfied).
47
(q) Eligibility of Loans. Each Loan classified as an Eligible Loan (or
included in any aggregation of balances of Eligible Loans) by the Borrower or
the Servicer in any document or report delivered hereunder was an Eligible Loan
as of the date so delivered and (ii) each related Contract classified as an
Eligible Contract (or included in any aggregation of balances of Eligible
Contracts) by the Borrower or Servicer in any document or report delivered
hereunder was an Eligible Contract as of the date so delivered.
(r) Tradenames; Place of Business; Correct Legal Name. (i) Except as
described in Schedule III, the Borrower has no trade names, fictitious names,
assumed names or "doing business as" names or other names under which it has
done or is doing business; (ii) the principal place of business and chief
executive office of the Borrower are located at the address of the Borrower set
forth on the signature pages hereto; and (iii) "CAC Warehouse Funding
Corporation II" is the correct legal name of the Borrower indicated on the
public records of the Borrower's jurisdiction of organization.
(s) Contribution Agreement. The Contribution Agreement is the only
agreement pursuant to which the Borrower purchases Loans from the Originator.
(t) Value Given. The Borrower shall have given reasonably equivalent
value to the Originator in consideration for the transfer to the Borrower of the
Loans and Related Security under the Contribution Agreement, no such transfer
shall have been made for or on account of an antecedent debt owed by the
Originator to the Borrower, and no such transfer is or may be voidable or
subject to avoidance under any section of the Bankruptcy Code.
(u) Accounting. The Borrower accounts for the transfers to it from the
Originator of Loans and Related Security under the Contribution Agreement as
sales or contributions to capital of such Loans and Related Security in its
books, records and financial statements, in each case consistent with GAAP and
with the requirements set forth herein.
(v) Special Purpose Entity. The Borrower is in compliance with Section
5.2(o) hereof.
(w) Confirmation from the Originator. The Borrower has received in
writing from the Originator confirmation that, so long as the Borrower is not
"insolvent" within the meaning of the Bankruptcy Code, the Originator will not
cause the Borrower to file a voluntary petition under the Bankruptcy Code or any
other bankruptcy or insolvency laws. Each of the Borrower and the Originator is
aware that in light of the circumstances described in the preceding sentence and
other relevant facts, the filing of a voluntary petition under the Bankruptcy
Code for the purpose of making any Loan or any other assets of the Borrower
available to satisfy claims of the creditors of the Originator would not result
in making such assets available to satisfy such creditors under the Bankruptcy
Code.
(x) Investment Company Act. The Borrower is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
(y) ERISA. The present value of all benefits vested under all "employee
pension benefit plans," as such term is defined in Section 3 of ERISA,
maintained by the Borrower, or in which employees of the Borrower are entitled
to participate, as from time to time in effect
48
(herein called the "Pension Plans"), does not exceed the value of the assets of
the Pension Plan allocable to such vested benefits (based on the value of such
assets as of the last annual violation date). No prohibited transactions,
accumulated funding deficiencies, withdrawals or reportable events have occurred
with respect to any Pension Plans that, in the aggregate, could subject the
Borrower to any material tax, penalty or other liability. No notice of intent to
terminate a Pension Plan has been billed, nor has any Pension Plan been
terminated under Section 4041(f) of ERISA, nor has the Pension Benefit Guaranty
Corporation instituted proceedings to terminate, or appoint a trustee to
administer a Pension Plan and no event has occurred or condition exists that
might constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan.
(z) [Reserved.]
(aa) Representations and Warranties in Contribution Agreement. The
representations and warranties made by the Originator to the Borrower in the
Contribution Agreement are hereby remade by the Borrower on each date to which
they speak in the Contribution Agreement as if such representations and
warranties were set forth herein. For purposes of this Section 4.2(aa), such
representations and warranties are incorporated herein by reference as if made
by the Borrower to the Deal Agent, the Collateral Agent and to each of the
Secured Parties under the terms hereof mutatis mutandis.
(bb) Amount of Loans and Contracts; Computer File. When new Pools are
pledged to the Collateral Agent, the related Funding Notice shall provide (A)
the aggregate Outstanding Balance of the Contracts to be pledged to the
Collateral Agent on the related Funding Date; (B) the Aggregate Outstanding
Eligible Loan Balance; and (C) the Aggregate Outstanding Eligible Loan Net
Balance; each as of the applicable Cut-off Date and as reported in the Loan
Servicing System or as a product of the Loan Loss Reserve analysis. The computer
file or microfiche list delivered pursuant to Section 2.2(a)(iii) hereof is
complete and accurately reflects the information regarding the Loans, Dealer
Agreements and Contracts in all material respects.
(cc) Use of Proceeds. The proceeds of each Funding will be used by the
Borrower to purchase the Loans and related Collateral from the Originator
pursuant to the Contribution Agreement.
(dd) Subsidiaries. The Borrower does not have any Subsidiaries.
(ee) Capital Stock. The Issuer has neither sold nor pledged any of its
common stock to any entity other than Credit Acceptance.
The representations and warranties set forth in this Section 4.1 shall
survive the Borrower's pledge of the Collateral to the Collateral Agent and the
termination and rights and obligations of the Servicer. Upon discovery by the
Borrower, the Servicer, Credit Acceptance or the Collateral Agent of a breach of
any of the representations and warranties set forth herein, the party
discovering such breach shall give prompt written notice to the other parties of
such breach.
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Section 4.2. Representations and Warranties of the Borrower Relating to
the Loans and the Related Contracts.
(a) Eligibility of Loans. The Borrower hereby represents and warrants to
the Deal Agent, the Collateral Agent, the Backup Servicer and the Secured
Parties as of the Closing Date, the Effective Date and each Funding Date with
respect to the Dealer Agreements, Loans, Contracts and Related Security pledged
to the Collateral Agent on such date that:
(i) each Loan classified as an "Eligible Loan" (or
included in any aggregation of balances of "Eligible Loans") by the Borrower or
the Servicer in any document or report delivered hereunder satisfied the
requirements contained in the definition of Eligible Loan on the date so
delivered; each Contract classified as an "Eligible Contract" (or included in
any aggregation of balances of "Eligible Contracts") by the Borrower or the
Servicer in any document or report delivered hereunder satisfied the
requirements contained in the definition of Eligible Contract on the date so
delivered;
(ii) all information with respect to the Dealer
Agreements and the Loans and the Contracts and the other Collateral provided to
the Collateral Agent, any Liquidity Agent or the Deal Agent by the Borrower or
the Servicer was true and correct in all material respects as of the date such
information was provided to the Collateral Agent, such Liquidity Agent or the
Deal Agent, as applicable;
(iii) each Loan and all other Collateral has been
pledged to the Collateral Agent free and clear of any Lien of any Person, (other
than, with respect to the Contracts, the second priority Lien of the related
Dealer therein as set forth in the related Dealer Agreement) and in compliance,
in all material respects, with all Applicable Laws;
(iv) with respect to each Dealer Agreement, Loan,
Contract and all other Collateral, all consents, licenses, approvals or
authorizations of or registrations or declarations with any Governmental
Authority required to be obtained, effected or given by the Borrower, in
connection with the pledge of such Dealer Agreement, Loan, Contract or other
Collateral to the Collateral Agent have been duly obtained, effected or given
and are in full force and effect;
(v) Schedules V and IX to this Agreement (and any
addendums thereto) are and will be accurate and complete listings of all Loans,
Contracts and Dealer Agreements in all material respects on the date each such
Loan, Contract or Dealer Agreement was pledged to the Collateral Agent
hereunder, and the information contained therein is and will be true and correct
in all material respects as of such date; and
(vi) no selection procedure believed by the Borrower to
be adverse to the interests of the Secured Parties has been or will be used in
selecting the Dealer Agreements, Loans or Contracts.
(b) Notice of Breach. The representations and warranties set forth in
this Section 4.2 shall survive the pledge of the Collateral to the Collateral
Agent and the termination of the rights and obligations of the Servicer. Upon
discovery by the Borrower, Credit Acceptance, the Servicer or the Collateral
Agent of a breach of any of the representations and warranties set forth
50
in this Section 4.2, the party discovering such breach shall give prompt written
notice to the other parties of such breach.
Section 4.3. Representations and Warranties of the Servicer. The Servicer
represents and warrants as follows on the Closing Date, the Effective Date and
each Funding Date:
(a) Organization and Good Standing. The Servicer has been duly organized
and is validly existing as a corporation in good standing under the laws of the
State of Michigan, with all requisite corporate power and authority to own or
lease its properties and to conduct its business as such business is presently
conducted and to enter into and perform its obligations pursuant to this
Agreement and the other Transaction Documents to which it is a party.
(b) Due Qualification. The Servicer is duly qualified to do business as
a corporation and is in good standing as a corporation, and has obtained all
necessary licenses and approvals in all jurisdictions in which the ownership or
lease of its property and or the conduct of its business requires such
qualification, licenses or approvals.
(c) Power and Authority; Due Authorization. The Servicer (i) has all
necessary power, authority and legal right to (A) execute and deliver this
Agreement and the other Transaction Documents to which it is a party, (B) carry
out the terms of this Agreement and the other Transaction Documents to which it
is a party, and (ii) has duly authorized by all necessary corporate action the
execution, delivery and performance of this Agreement and the other Transaction
Documents to which it is a party. This Agreement and each other Transaction
Document to which it is a party have been duly executed and delivered by the
Servicer.
(d) Binding Obligation. This Agreement and each other Transaction
Document to which the Servicer is a party constitutes a legal, valid and binding
obligation of the Servicer, each enforceable against the Servicer in accordance
with its terms.
(e) No Violation. The consummation of the transactions contemplated by
this Agreement and the other Transaction Documents to which it is a party and
the fulfillment of the terms hereof and thereof will not (i) conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time or both) a default under, the Servicer's
certificate of incorporation, bylaws or any Contractual Obligation of the
Servicer, (ii) result in the creation or imposition of any Lien upon any of the
Servicer's properties pursuant to the terms of any such Contractual Obligation,
or (iii) violate any Applicable Law.
(f) No Proceedings. There is no litigation, proceeding or investigation
pending or, to the best knowledge of the Servicer, threatened against the
Servicer, before any Governmental Authority (i) asserting the invalidity of this
Agreement or any other Transaction Document to which the Servicer is a party,
(ii) seeking to prevent the consummation of any of the transactions contemplated
by this Agreement or any other Transaction Document to which the Servicer is a
party or (iii) seeking any determination or ruling that could reasonably be
expected to have Material Adverse Effect.
(g) All Consents Required. All approvals, authorizations, consents, orders
or other actions of any Person or of any Governmental Authority (if any)
required for the due execution,
51
delivery and performance by the Servicer of this Agreement and any other
Transaction Document to which the Servicer is a party have been obtained.
(h) Reports Accurate. All Monthly Reports and other written and
electronic information, exhibits, financial statements, documents, books,
records or reports furnished by the Servicer to the Deal Agent, the Backup
Servicer, the Collateral Agent, any Liquidity Agent or a Lender in connection
with this Agreement are accurate, true, complete and correct in all material
respects as of the date delivered.
(i) Servicer's Performance. The Servicer has the knowledge, the
experience and the systems, financial and operational capacity available to
timely perform each of its obligations hereunder and under each Transaction
Document to which it is a party.
(j) Compliance With Credit Guidelines and Collection Guidelines. The
Servicer has, with respect to the Loans and Contracts, complied in all material
respects with the Credit Guidelines and the Collection Guidelines.
Section 4.4. Representations and Warranties of the Backup Servicer. The
Backup Servicer represents and warrants as follows:
(a) Organization and Good Standing. The Backup Servicer has been duly
organized, and is validly existing as a corporation and in good standing under
the laws of Delaware, with all requisite power and authority to own or lease its
properties and to conduct its business as such business is presently conducted
and to enter into and perform its obligations pursuant to this Agreement and
each Transaction Document to which it is a party.
(b) Binding Obligation. This Agreement and each other Transaction
Document to which it is a party constitutes a legal, valid and binding
obligation of the Backup Servicer, each enforceable against the Backup Servicer
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by equitable limitations on the
availability of specific remedies, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(c) Backup Servicing Agreement. The Backup Servicer hereby remakes the
representations and warranties made by it under the Backup Servicing Agreement.
Section 4.5. Breach of Representations and Warranties.
(a) Payment in respect of an Ineligible Loan. If a Loan is an Ineligible
Loan, no later than the earlier of (i) knowledge by the Borrower of such Loan
being an Ineligible Loan and (ii) receipt by the Borrower from the Deal Agent,
the Collateral Agent or the Servicer of written notice thereof the Borrower
shall make a payment to the Collection Account in respect of each such Loan in
an amount equal to the related Release Price. On and after the date of such
payment, the related Loan or Loans shall for all purposes of this Agreement be
deemed to be an Ineligible Loan or Ineligible Loans. The Borrower shall make a
deposit to the Collection Account (for allocation pursuant to Section 2.7) in
immediately available funds an amount (the "Release Price") equal to the sum of
(i): the product of the Net Loan Balance related to such
52
Loan as of the last day of the related Collection Period and the Net Advance
Rate in effect on the date of such payment; (ii) accrued and unpaid Carrying
Costs, Increased Costs, Indemnified Amounts and Additional Amounts related to
such Loan through the date of such deposit; (iii) any related Servicer Advances;
and (iv) and all Hedge Costs due to the relevant Hedge Counterparties for any
termination in whole or in part of one or more transactions related to the
relevant Hedging Agreement, as required by the terms of any Hedging Agreement.
(b) Retransfer of All of the Loans. In the event of a breach of any
representation or warranty set forth in Section 4.2 hereof which breach could
reasonably be expected to have a Material Adverse Effect, by notice then given
in writing to the Borrower, the Deal Agent may direct the Borrower to accept the
release by the Collateral Agent of all of the Loans, in which case the Borrower
shall be obligated to accept the release of such Loans on a Payment Date
specified by the Deal Agent (such date, the "Release Date"); provided, however,
that no such release shall be given effect unless Borrower has complied with the
terms of any Hedging Agreement requiring that any derivative transaction related
thereto be terminated in whole or in part and the Borrower has paid all Hedge
Costs due with respect to such termination. The Borrower shall deposit in the
Collection Account on the Release Date an amount equal to: (A) the Aggregate
Unpaids minus (B) the amount, if any, available in the Collection Account and
Reserve Account on such Payment Date (the "Retransfer Amount") for allocation
and distribution in accordance with Section 2.7. On the Release Date, provided
that the full Retransfer Amount has been deposited into the Collection Account,
the Loans and Related Security related thereto shall be transferred to the
Borrower; and the Collateral Agent as agent for the Secured Parties shall, at
the sole expense of the Servicer, execute and deliver such instruments of
transfer, in each case without recourse, representation or warranty, as shall be
prepared and reasonably requested by the Servicer on behalf of the Borrower to
vest in the Borrower, or its designee or assignee, all right, title and interest
of the Collateral Agent as agent for the Secured Parties in, to and under the
Loans.
(c) [Reserved.]
(d) Remedy for Breach. The parties hereto agree that the sole remedy for
the breach by the Borrower of the representations and warranties set forth in
Section 4.2 hereof with respect to the eligibility of a Loan or Contract shall
be set forth in this Section 4.5 and Section 6.2(c)(ii).
(e) Application. Amounts paid in accordance with Section 4.5(a) and (b)
shall be distributed on the next succeeding Payment Date in accordance with
Section 2.7.
(f) Notwithstanding anything herein to the contrary, during the
Revolving Period, payments required under Section 4.5(a) and (b) shall not be
required if the Capital is equal to or less than the Borrowing Base.
ARTICLE V
GENERAL COVENANTS
Section 5.1. Affirmative Covenants of the Borrower. From the date hereof
until the Collection Date:
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(a) Compliance with Laws. The Borrower will comply in all material
respects with all Applicable Laws, including those with respect to the Loans and
Dealer Agreements.
(b) Preservation of Corporate Existence; Conduct of Business. The Borrower
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. The Borrower will carry on and conduct its business in
substantially the same manner and in substantially the same fields of enterprise
as it is presently conducted and do all things necessary to remain duly
incorporated, validly existing and in good standing as a domestic corporation in
its jurisdiction of incorporation and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted.
(c) Performance and Compliance with Loans, Dealer Agreements and
Contracts. The Borrower will, at its expense, timely and fully perform and
comply (or cause the Originator to perform and comply pursuant to the
Contribution Agreement) with all provisions, covenants and other promises
required to be observed by it under the Loans, Dealer Agreements and Contracts
in and all other agreements related thereto in all material respects.
(d) Keeping of Records and Books of Account. The Borrower will maintain
and implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing Loans 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 Loans.
(e) Originator Assets. With respect to each Loan acquired by the Borrower,
the Borrower will: (i) acquire such Loan pursuant to and in accordance with the
terms of the Contribution Agreement; (ii) take all action necessary to perfect,
protect and more fully evidence the Borrower's ownership of such Loan,
including, without limitation, (A) filing and maintaining, effective financing
statements (Form UCC-1) against the Originator in all necessary or appropriate
filing offices, and filing continuation statements, amendments or assignments
with respect thereto in such filing offices, and (B) executing or causing to be
executed such other instruments or notices as may be necessary or appropriate;
and (iii) take all additional action that the Deal Agent or the Collateral Agent
may reasonably request to perfect, protect and more fully evidence the
respective interests of the parties to this Agreement in the Collateral.
(f) Delivery of Collections. Subject to Section 2.9(d) hereof, the
Borrower will deposit to the Collection Account promptly (but in no event later
than two (2) Business Days after receipt) all Collections received by Borrower
in respect of the Loans or the Contracts.
(g) Separate Corporate Existence. The Borrower shall be in compliance with
the requirements set forth in Section 5.2(o).
(h) Credit Guidelines and Collection Guidelines. The Borrower will comply
in all material respects with the Credit Guidelines and the Collection
Guidelines with respect to each Loan and Contract.
54
(i) Taxes. The Borrower will file and pay any and all Taxes.
(j) Use of Proceeds. The Borrower will use the proceeds of the Funding
only to acquire Loans pursuant to the Contribution Agreement or to make
distributions to Credit Acceptance.
(k) Reporting. The Borrower will maintain for itself a system of
accounting established and administered in accordance with GAAP and furnish or
cause to be furnished to the Deal Agent and each Liquidity Agent the following
information:
(i) [Reserved];
(ii) Annual Reporting. Within 120 days after the close of the
Borrower's and Credit Acceptance's fiscal years, (A) audited financial
statements for Credit Acceptance and all of its Subsidiaries, prepared in
accordance with GAAP on a consolidated basis and (B) unaudited financial
statements for each of (x) Credit Acceptance and all of its Subsidiaries
relating to its business segments, and (y) the Borrower, including, in each
case, balance sheets as of the end of such period, related statements of
operations, shareholder's equity and cash flows, accompanied by an unqualified
audit report certified by independent certified public accountants, acceptable
to the Deal Agent, prepared in accordance with generally accepted auditing
principles and any management letter prepared by said accountants;
(iii) Quarterly Reporting. Within sixty (60) days after the close of
the first three quarterly periods of each of the Borrower's and Credit
Acceptance's fiscal years, for (x) the Borrower and (y) for Credit Acceptance
and its Subsidiaries, in each case, consolidated unaudited balance sheets as at
the close of each such period and consolidated related statements of operations,
shareholder's equity and cash flows for the period from the beginning of such
fiscal year to the end of such quarter, all certified by its chief financial
officer as true, accurate and complete in all material respects;
(iv) Compliance Certificate. Together with the financial statements
required hereunder, a compliance certificate signed by the Borrower's or Credit
Acceptance's, as applicable, chief financial officer stating that (x) the
attached financial statements have been prepared in accordance with GAAP and
accurately reflect the financial condition of the Borrower or Credit Acceptance
as applicable and (y) to the best of such Person's knowledge, no Termination
Event or Unmatured Termination Event exists, or if any Termination Event or
Unmatured Termination Event exists, stating the nature and status thereof;
(v) Shareholders Statements and Reports. Promptly upon the
furnishing thereof to the shareholders of the Borrower or Credit Acceptance,
copies of all financial statements, reports and proxy statements so furnished,
to the extent such information has not been provided pursuant to another clause
of this Section 5.1(k);
(vi) S.E.C. Filings. Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other regular reports
which Credit Acceptance or any subsidiary files with the Securities and Exchange
Commission;
55
(vii) Notice of Termination Events or Unmatured Termination Events.
As soon as possible and in any event within two (2) days after the occurrence of
each Termination Event or each Unmatured Termination Event, a statement of the
chief financial officer or chief accounting officer of the Borrower setting
forth details of such Termination Event or Unmatured Termination Event and the
action which the Borrower proposes to take with respect thereto;
(viii) Change in Collection Guidelines. Prior to the date of the
effectiveness of any material change in or amendment to the Collection
Guidelines (which shall be in accordance with the terms of this Agreement), a
notice describing such change or amendment.
(ix) Collection Guidelines. On the Closing Date, a complete copy of
the Collection Guidelines then in effect;
(x) ERISA. Promptly after the filing or receiving thereof, copies of
all reports and notices with respect to any Reportable Event (as defined in
Article IV of ERISA) which the Borrower, Credit Acceptance or any ERISA
Affiliate of the Borrower or Credit Acceptance files under ERISA with the
Internal Revenue Service, the Pension Benefit Guaranty Corporation or the U.S.
Department of Labor or which the Borrower, Credit Acceptance or any ERISA
Affiliates of the Borrower or Credit Acceptance receives from the Internal
Revenue Service, the Pension Benefit Guaranty Corporation or the U.S. Department
of Labor;
(xi) Proceedings. As soon as possible and in any event within two
(2) Business Days after any executive officer of the Borrower receives notice or
obtains knowledge thereof, any settlement of, material judgment (including a
material judgment with respect to the liability phase of a bifurcated trial) in
or commencement of any labor controversy (of a material nature), litigation,
action, suit or proceeding before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
affecting the Borrower or any of its Affiliates;
(xii) Notice of Material Events. Promptly upon becoming aware
thereof, notice of any other event or circumstances that, in the reasonable
judgment of the Borrower, is likely to have a Material Adverse Effect; and
(xiii) Other Information. Such other information, documents, records
or reports (including non-financial information) as the Deal Agent, each
Liquidity Agent or the Collateral Agent may from time to time reasonably request
with respect to Credit Acceptance, the Borrower, the Servicer or any Subsidiary
of any of the foregoing.
(l) Compliance with Applicable Law. The Borrower shall duly satisfy in all
material respects its obligations under or in connection with each Loan and
Contract, will maintain in effect all material qualifications required under all
Applicable Law, and will comply in all material respects with all other
Applicable Law in connection with each Loan and Contract the failure to comply
with which would have a material adverse effect on the interests of the Secured
Parties in the Collateral.
56
(m) Furnishing of Information and Inspection of Records. The Borrower will
furnish to the Deal Agent, each Liquidity Agent, the Backup Servicer and the
Collateral Agent, from time to time, such information with respect to the Loans
and Contracts as may be reasonably requested, including, without limitation, a
computer file, microfiche list or other list identifying each Loan and Contract
by pool number, account number and dealer number and by the Outstanding Balance
and identifying the Obligor on such Loan or Contract. The Borrower will, at any
time and from time to time during regular business hours, upon reasonable
notice, permit the Deal Agent, each Liquidity Agent, the Backup Servicer and the
Collateral Agent, or its agents or representatives, to examine and make copies
of and abstracts from all Records, to visit the offices and properties of the
Borrower for the purpose of examining such Records, and to discuss matters
relating to the Loans or Contracts or the Borrower's performance hereunder and
under the other Transaction Documents with any of the officers, directors,
employees or independent public accountants of the Borrower having knowledge of
such matters; provided, however, that the Deal Agent, each Liquidity Agent and
the Collateral Agent each acknowledges that in exercising the rights and
privileges conferred in this Section 5.1(m) 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 the Borrower
has a proprietary interest. The Deal Agent, each Liquidity Agent and the
Collateral Agent each 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
Borrower, any such information, practices, books, correspondence and records
furnished to them except that it 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 Deal Agent, any Liquidity Agent, 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 Deal Agent, any Liquidity Agent or the
Collateral Agent on a non-confidential basis prior to its disclosure hereunder;
(iv) to the extent the Deal Agent, any Liquidity Agent or the Collateral Agent
should be (A) required under the Transaction Documents or in connection with any
legal or regulatory proceeding or (B) requested by any bank regulatory authority
to disclose such information; (v) to the Liquidity Agent, any Liquidity Bank, or
any other person providing liquidity to a CP Conduit; or (vi) to any Lender or
prospective assignee or Investor; provided, that the relevant Liquidity Agent
shall notify such assignee of the confidentiality provisions of this Section
5.1(m).
(n) Keeping of Records and Books of Account. The Borrower will maintain
and implement or cause to be maintained and implemented administrative and
operating procedures (including, without limitation, an ability to recreate
records evidencing the Loans and Contracts 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 Loans and Contracts
(including, without limitation, records adequate to permit adjustments to
amounts due under each existing Loan and Contract). The Borrower will give the
Deal Agent and each Liquidity Agent notice of any
57
material change in the administrative and operating procedures of the Borrower
referred to in the previous sentence.
(o) Notice of Liens. The Borrower will advise the Deal Agent, each
Liquidity Agent and the Collateral Agent promptly, in reasonable detail of: (i)
any Lien asserted by a Person against any of the Loans or Contracts or other
Collateral; (ii) any breach by the Borrower, the Originator or the Servicer of
any of its representations, warranties and covenants contained herein or in any
other Transaction Document; and (iii) of the occurrence of any other event which
would have a Material Adverse Effect.
(p) Protection of Interest in Collateral. The Borrower shall file such
continuation statements and any other documents reasonably requested by the
Collateral Agent, the Deal Agent or any Lender or which may be required by law
to fully preserve and protect the interest of the Collateral Agent and the
Secured Parties in and to the Loans, the Contracts and the other Collateral.
(q) Contribution Agreement. The Borrower will at all times enforce the
covenants and agreements of Credit Acceptance in the Contribution Agreement
(including, without limitation, the rights and remedies against the Dealers).
(r) Notice of Delegation of Servicer's Duties. The Borrower promptly shall
notify the Collateral Agent of any delegation by the Servicer of any of the
Servicer's duties under this Agreement which is not in the ordinary course of
business of the Servicer.
(s) Organizational Documents. The Borrower shall only amend, alter, change
or repeal its Certificate of Incorporation with the prior written consent of the
Deal Agent.
Section 5.2. Negative Covenants of the Borrower. From the date hereof
until the Collection Date:
(a) Other Business. Borrower will not: (i) engage in any business other
than the transactions contemplated by the Transaction Documents; (ii) incur any
indebtedness, obligation, liability or contingent obligation of any kind other
than pursuant to the Transaction Documents; or (iii) form any Subsidiary or make
any Investments in any other Person.
(b) Loans Not to be Evidenced by Instruments. The Borrower will take no
action to cause any Loan that is not, as of the Closing Date, evidenced by an
Instrument, to be so evidenced except in connection with the enforcement or
collection of such Loan.
(c) Security Interests. The Borrower will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or suffer to exist
any Lien (other than the Lien described in Section 4.2(a)(iii)) on any Loan,
Contract, Related Security or any other Collateral, whether now existing or
hereafter transferred hereunder, or any interest therein, and the Borrower will
not sell, pledge, assign or suffer to exist any Lien on its interest, if any,
hereunder. The Borrower will promptly notify the Deal Agent of the existence of
any Lien on any Loan, Contract, Related Security or any other Collateral and the
Borrower shall defend the right, title and interest of the Deal Agent as agent
for the Secured Parties in, to and under the Loans, Contracts, Related Security
and other Collateral, against all claims of third parties.
58
(d) Mergers, Acquisitions, Sales, etc. The Borrower will not be a party to
any merger or consolidation, or purchase or otherwise acquire all or
substantially all of the assets or any stock of any class of, or any partnership
or joint venture interest in, any other Person, or, sell, transfer, convey or
lease all or any substantial part of its assets, or sell or assign with or
without recourse any Loan, Contracts, Related Security or other Collateral or
any interest therein (other than pursuant to and in accordance with the
Transaction Documents).
(e) [Reserved.]
(f) Distributions. The Borrower shall not declare or pay, directly or
indirectly, any dividend or make any other distribution (whether in cash or
other property) with respect to the profits, assets or capital of the Borrower
or any Person's interest therein, or purchase, redeem or otherwise acquire for
value any of its capital stock now or hereafter outstanding, except that so long
as no Termination Event or Unmatured Termination Event has occurred and is
continuing or would result therefrom, the Borrower may declare and pay cash or
stock dividends on its capital stock.
(g) Change of Name or Location of Records Files. The Borrower shall not
(x) change its name or state of organization, move the location of its principal
place of business and chief executive office, and the offices where it keeps the
Records from the location referred to in Section 14.2 or (y) move, or consent to
the Custodian or Servicer moving, the Records/Contract Files from the location
thereof on the Closing Date, unless the Borrower has given at least thirty (30)
days' written notice to the Deal Agent and the Collateral Agent and has taken
all actions required under the UCC of each relevant jurisdiction in order to
continue the first priority perfected security interest of the Collateral Agent,
as agent for the Secured Parties, in the Collateral.
(h) Accounting of the Contribution Agreement. The Borrower will not
account for or treat (whether in financial statements or otherwise) the
transaction contemplated by the Contribution Agreement in any manner other than
as a contribution, or absolute assignment, of the Loans and related assets by
the Originator to the Borrower.
(i) ERISA Matters. The Borrower will not: (i) engage or permit any ERISA
Affiliate to engage in any prohibited transaction for which an exemption is not
available or has not previously been obtained from the United States Department
of Labor; (ii) permit to exist any accumulated funding deficiency, as defined in
Section 302(a) of ERISA and Section 412(a) of the Code, or funding deficiency
with respect to any Benefit Plan other than a Multiemployer Plan; (iii) fail to
make any payments to a Multiemployer Plan that the Borrower or any ERISA
Affiliate may be required to make under the agreement relating to such
Multiemployer Plan or any law pertaining thereto; (iv) terminate any Benefit
Plan so as to result in any liability; or (v) permit to exist any occurrence of
any reportable event described in Title IV of ERISA.
(j) Certificate of Incorporation; Contribution Agreement. The Borrower
will not amend, modify, waive or terminate any provision of its Certificate of
Incorporation or the Contribution Agreement. The Borrower will not take any
action under the Contribution Agreement which would have a Material Adverse
Effect.
59
(k) Changes in Payment Instructions to Obligors. The Borrower will not
make any change, or permit Servicer to make any change, in its instructions to
Obligors regarding where payments in respect of Contracts are to be made to
Borrower or Servicer, unless the Deal Agent shall have consented to such change
in writing and has received duly executed copies of all documentation related
thereto.
(l) Extension or Amendment. The Borrower will not, except as otherwise
permitted hereunder or by law, extend, amend or otherwise modify, or permit the
Servicer to extend, amend or otherwise modify, the terms of any Dealer
Agreement, Loan or Contract; provided, however, the Dealer Agreements may be
amended in connection with the closing of or opening of a pool.
(m) Collection Guidelines. The Borrower will not permit the amendment,
modification, restatement or replacement, in whole or in part, of the Collection
Guidelines, which change would materially impair the collectibility of any Loan
or Contract or otherwise adversely affect the interests or the remedies of the
Deal Agent, Collateral Agent or the Secured Parties under this Agreement or any
other Transaction Document, without the prior written consent of the Deal Agent.
(n) No Assignments. The Borrower will not assign or delegate, or grant any
interest in, or permit any Lien to exist upon, any of its rights, obligations or
duties under this Agreement without the prior written consent of the Liquidity
Agents for each of the VFCC Purchaser Group and the PARCO Purchaser Group.
(o) Special Purpose Entity. The Borrower has not and shall not:
(i) engage in any business or activity other than the purchase and
receipt of Loans and related assets from the Originator under the Contribution
Agreement, the pledge of Loans and related assets under the Transaction
Documents and such other activities as are incidental thereto;
(ii) acquire or own any material assets other than (A) the Loans and
related assets from the Originator under the Contribution Agreement and (B)
incidental property as may be necessary for the operation of the Borrower;
(iii) merge into or consolidate with any Person or dissolve,
terminate or liquidate in whole or in part, transfer or otherwise dispose of all
or substantially all of its assets or change its legal structure, without in
each case first obtaining the Deal Agent's consent;
(iv) fail to preserve its existence as an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization or formation, or without the prior written consent of the Deal
Agent, amend, modify, terminate, fail to comply with the provisions of its
Certificate of Incorporation, or fail to observe corporate formalities;
(v) own any subsidiary or make any investment in any Person without
the consent of the Deal Agent;
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(vi) commingle its assets or funds with the assets or funds of any
of its Affiliates, or of any other Person, except for (A) Dealer Collections,
(B) erroneous deposits or (C) prior to the identification and separation of such
funds or assets by the Servicer in accordance with the Servicer's normal and
customary business practices;
(vii) incur any debt, secured or unsecured, direct or contingent
(including guaranteeing any obligation), other than indebtedness to the Lenders
hereunder or in conjunction with a repayment of Aggregate Unpaids owed to the
Lenders except for trade payables in the ordinary course of its business,
provided that such debt is not evidenced by a note and paid when due;
(viii) become insolvent or fail to pay its debts and liabilities
from its assets as the same shall become due;
(ix) fail to maintain its records, books of account and bank
accounts separate and apart from those of its principal and Affiliates, and any
other Person;
(x) enter into any contract or agreement with any of its principals
or Affiliates or any other Person, except upon terms and conditions that are
commercially reasonable and intrinsically fair and substantially similar to
those that would be available on an arms-length basis with third parties other
than any principal or Affiliates;
(xi) seek its dissolution or winding up in whole or in part;
(xii) fail to correct any known misunderstandings regarding the
separate identity of Borrower or Affiliate thereof or any other Person;
(xiii) guarantee, become obligated for, or hold itself out to be
responsible for the debt of another Person;
(xiv) make any loan or advances to any third party, including
Affiliate, or hold evidence of indebtedness issued by any other Person (other
than cash and investment-grade securities);
(xv) fail either to hold itself out to the public as a legal entity
separate and distinct from any other Person or to conduct its business solely in
its own name in order not (A) to mislead others as to the identity with which
such other party is transacting business, or (B) to suggest that it is
responsible for the debts of any third party (including any of its Affiliates);
(xvi) fail to maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations;
(xvii) file or consent to the filing or any petition, either
voluntary or involuntary, to take advantage of any applicable insolvency,
bankruptcy, liquidation or reorganization statute, or make an assignment for the
benefit of creditors;
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(xviii) share any common logo with or hold itself out as or be
considered as a department or division of (A) any of its Affiliates or (B) any
other Person;
(xix) permit any transfer (whether in any one or more transactions)
of more than a 49% direct or indirect ownership interest in the Borrower, unless
the Borrower delivers to the Deal Agent an acceptable non-consolidation opinion;
(xx) fail to maintain separate financial statements, showing its
assets and liabilities separate and apart from those of any other Person, or
have its assets listed on the financial statement of any other Person;
(xxi) fail to pay its own liabilities and expenses only out of its
own funds;
(xxii) fail to pay the salaries of its own employees in light of its
contemplated business operations;
(xxiii) acquire the obligations or securities of its Affiliates or
stockholders;
(xxiv) fail to allocate fairly and reasonably any overhead expenses
that are shared with an Affiliate, including paying for office space and
services performed by any employee of an Affiliate;
(xxv) to the extent it has invoices or checks, fail to use separate
invoices or checks bearing its own name;
(xxvi) pledge its assets for the benefit of any other Person, other
than with respect to payment of the indebtedness to the Lenders hereunder;
(xxvii) fail at any time to have at least two (2) independent
directors (each, an "Independent Director") on its board of directors that is
not and has not been for at least five (5) years a director, officer, employee,
trade creditor or shareholder (or spouse, parent, sibling or child of the
foregoing) of (A) the Servicer, (B) the Borrower, or (C) any Affiliate of the
Servicer or Borrower; provided, however, such Independent Director may be an
independent director or manager of another special purpose entity affiliated
with the Servicer;
(xxviii) fail to provide that the unanimous consent of all directors
(including the consent of the Independent Directors) is required for the
Borrower to (A) dissolve or liquidate, in whole or part, or institute
proceedings to be adjudicated bankrupt or insolvent, (B) institute or consent to
the institution of bankruptcy or insolvency proceedings against it, (C) file a
petition seeking or consent to reorganization or relief under any applicable
federal or state law relating to bankruptcy or insolvency, (D) seek or consent
to the appointment of a receiver, liquidator, assignee, trustee, sequestrator,
custodian or any similar official for the Borrower, (E) make any assignment for
the benefit of the Borrower's creditors, (F) admit in writing its inability to
pay its debts generally as they become due, or (G) take any action in
furtherance of any of the foregoing; and
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(xxix) take or refrain from taking, as applicable, each of the
activities specified in the non-consolidation opinion of Xxxxxx Xxxxxxx,
delivered on the Closing Date, upon which the conclusions expressed therein are
based.
Section 5.3. Covenant of the Borrower Relating to the Hedging Agreement.
At all times during, on and after the Initial Funding until the Collection Date,
a Hedging Agreement shall be in place.
Section 5.4. Affirmative Covenants of the Servicer. From the date hereof
until the Collection Date:
(a) Compliance with Law. The Servicer will comply in all material respects
with all Applicable Laws, including those with respect to the Contracts, the
Loans and the Dealer Agreements or any part thereof.
(b) Preservation of Existence. The Servicer 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.
(c) Obligations and Compliance with Loans and Contracts. The Servicer will
duly fulfill and comply with all obligations on the part of the Borrower to be
fulfilled or complied with under or in connection with each Loan and each
Contract and will do nothing to impair the rights of the Collateral Agent as
agent for the Secured Parties or of the Secured Parties in, to and under the
Collateral.
(d) Keeping of Records and Books of Account. The Servicer will maintain
and implement administrative and operating procedures (including without
limitation, an ability to recreate records evidencing the Loans and 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 Loans.
(e) Preservation of Security Interest. The Servicer 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
protect fully the security interest of the Collateral Agent as agent for the
Secured Parties in, to and under the Collateral. In its capacity as Custodian,
it will maintain possession of the Contract Files and Records, as Custodian for
the Secured Parties, as set forth in Section 6.2(c).
(f) Collection Guidelines. (i) The Servicer will (a) comply in all
material respects with the Collection Guidelines in regard to each Loan and
Contract, and (b) furnish to the Deal Agent quarterly, prompt notice of any
material change in the Collection Guidelines and will deliver a copy of such
changes to the Deal Agent and each Liquidity Agent, quarterly.
(ii) The Servicer will not agree to or otherwise permit to occur any
material change in the Collection Guidelines, which change would impair the
collectibility of any Loan or Contract or otherwise adversely affect the
interests or remedies of the Deal
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Agent, the Collateral Agent or the Secured Parties under this Agreement or any
other Transaction Document, without the prior written consent of the Deal Agent.
(g) Amortization Events and Termination Events. The Servicer will furnish
to the Deal Agent and each Liquidity Agent, as soon as possible and in any event
within two (2) Business Days after the occurrence of each Amortization Event,
each Termination Event and each Unmatured Termination Event, a written statement
of the chief financial officer or chief accounting officer of the Servicer
setting forth the details of such event and the action that the Servicer
purposes to take with respect thereto.
(h) Other. The Servicer will furnish to the Deal Agent, any Liquidity
Agent or the Collateral Agent, as applicable, promptly, from time to time, such
other information, documents, records or reports respecting the Collateral or
the condition or operations, financial or otherwise, of Borrower or the Servicer
as the Deal Agent, any Liquidity Agent or the Collateral Agent may from time to
time reasonably request in order to protect the interests of the Collateral
Agent or the Secured Parties under or as contemplated by this Agreement.
(i) Losses, Etc. In any suit, proceeding or action brought by the Deal
Agent, the Collateral Agent or any Secured Party for any sum owing thereto, the
Servicer shall save, indemnify and keep the Deal Agent, the Collateral Agent and
the Secured Parties harmless from and against all expense, loss or damage
suffered by reason of any defense, setoff, counterclaim, recoupment or reduction
of liability whatsoever of the Obligor under a Loan or Contract, arising out of
a breach by the Servicer of any obligation under the related Loan or Contract or
arising out of any other agreement, indebtedness or liability at any time owing
to or in favor of such Obligor or its successor from the Servicer, and all such
obligations of the Servicer shall be and remain enforceable against and only
against the Servicer and shall not be enforceable against the Deal Agent, the
Collateral Agent or any Secured Party.
(j) Notice of Liens The Servicer shall advise the Collateral Agent, each
Liquidity Agent and the Deal Agent promptly, in reasonable detail of: (i) any
Lien asserted or claim made against any portion of the Collateral; (ii) the
occurrence of any breach by the Servicer of any of its representations,
warranties and covenants contained herein or in any other Transaction Document;
and (iii) the occurrence of any other event which would have a Material Adverse
Effect.
(k) Realization on Loans or Contracts. In the event that the Servicer
realizes upon any Loan or Contract, the methods utilized by the Servicer to
realize upon such Loan or Contract or otherwise enforce any provisions of such
Loan or Contract will not subject the Servicer, the Borrower, any Secured Party,
the Deal Agent or the Collateral Agent to liability under any federal, state or
local law, and that such enforcement by the Servicer will be conducted in
accordance with the provisions of the Credit Guidelines, the Collection
Guidelines, Applicable Law and, in the case of Credit Acceptance, this
Agreement, and in the case of the Backup Servicer if it has become the Servicer,
the Backup Servicing Agreement.
(l) Backup Servicing Agreement. The Servicer shall provide the Backup
Servicer with all information, data and reports as required by the terms of the
Backup Servicing Agreement.
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(m) Change in Accounting Policies or Debt Rating. The Servicer shall
notify the Collateral Agent of any material change in or amendment to the
Servicer's accounting policies within ten (10) days after the date such change
or amendment has been made. Within five (5) days after the date of any change in
the Borrower's or Credit Acceptance's public or private debt ratings, if any, a
written certification of the Borrower's or Credit Acceptance's public and
private debt ratings after giving effect to any such change;
(n) Monthly Reports. Not later than the Determination Date preceding each
Payment Date, the Servicer will furnish to the Deal Agent, each Liquidity Agent
and the Backup Servicer a Monthly Report relating to the immediately preceding
Collection Period
Section 5.5. Negative Covenants of the Servicer. From the date hereof
until the Collection Date.
(a) Mergers, Acquisition, Sales, etc. The Servicer will not consolidate
with or merge into any other Person or convey or transfer its properties and
assets substantially as an entirety to any Person, unless the Servicer is the
surviving entity and unless:
(i) the Servicer has delivered to the Deal Agent and the Backup
Servicer an Officer's Certificate and an Opinion of Counsel each stating that
any consolidation, merger, conveyance or transfer and such supplemental
agreement comply with this Section 5.5 and that all conditions precedent herein
provided for relating to such transaction have been complied with and, in the
case of the Opinion of Counsel, that such supplemental agreement is legal, valid
and binding with respect to the Servicer and such other matters as the Deal
Agent may reasonably request;
(ii) the Servicer shall have delivered notice of such consolidation,
merger, conveyance or transfer to the Deal Agent;
(iii) after giving effect thereto, no Termination Event, Unmatured
Termination Event or Servicer Termination Event or event that with notice or
lapse of time, or both, would constitute a Servicer Termination Event shall have
occurred.
(b) Change of Name or Location of Records. The Servicer shall not (x)
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 Loans from the location referred to in Section 14.2 or
(y) move, or consent to the Custodian moving, the Records from the location
thereof on the Closing Date, unless the Servicer has given at least thirty (30)
days' written notice to the Deal Agent and has taken all actions required under
the UCC of each relevant jurisdiction in order to continue the first priority
perfected security interest of the Collateral Agent as agent for the Secured
Parties in the Collateral.
(c) Change in Payment Instructions to Obligors. The Servicer will not make
any change in its instructions to Obligors regarding where payments in respect
of Contracts are to be made, unless the Deal Agent has consented to such change
and has received duly executed documentation related thereto.
(d) [Reserved].
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(e) No Instruments. The Servicer shall take no action to cause any Loan to
be evidenced by any instrument (as defined in the UCC as in effect in the
Relevant UCC).
(f) No Liens. The Servicer shall not sell, pledge, assign or transfer to
any other Person, or grant, create, incur, assume or suffer to exist any Lien
(other than the Lien described in Section 4.2(a)(iii)) on the Collateral or any
interest therein; the Servicer will notify the Collateral Agent and the Deal
Agent of the existence of any Lien on any portion of the Collateral immediately
upon discovery thereof, and the Servicer shall defend the right, title and
interest of the Collateral Agent on behalf of the Secured Parties in, to and
under the Collateral against all claims of third parties claiming through or
under the Servicer.
(g) Information. The Servicer shall, within two (2) Business Days of its
receipt thereof, respond to reasonable written directions or written requests
for information that the Backup Servicer, the Borrower, the Deal Agent, any
Liquidity Agent or the Collateral Agent might have with respect to the
administration of the Loans.
(h) Consent. The Servicer will promptly advise the Borrower, the Backup
Servicer, the Deal Agent and the Collateral Agent of any inquiry received from
an Obligor which requires the consent of the Borrower, the Deal Agent or the
Collateral Agent.
(i) Credit Guidelines and Collection Guidelines. The Servicer will not
amend, modify, restate or replace in any material way the Credit Guidelines or
the Collection Guidelines, which change would impair the collectibility of any
Loan or Contract or otherwise adversely affect the interests or the remedies of
the Deal Agent, Collateral Agent or the Secured Parties under this Agreement or
any other Transaction Document, without the prior written consent of the
Liquidity Agent for each of the VFCC Purchaser Group and the PARCO Purchaser
Group in the case of the Credit Guidelines or without the prior written consent
of the Deal Agent and each Liquidity Agent with respect to the Collection
Guidelines.
Section 5.6. Negative Covenants of the Backup Servicer. From the date
hereof until the Collection Date.
(a) No Changes in Backup Servicer Fee. The Backup Servicer will not make
any changes to the Backup Servicer Fee without the prior written approval of the
Deal Agent and the Liquidity Agent for the PARCO Purchaser Group.
ARTICLE VI
ADMINISTRATION AND SERVICING OF CONTRACTS
Section 6.1. Servicing. (a) The Borrower, the Deal Agent and the
Collateral Agent hereby appoint Credit Acceptance as servicer hereunder and
Credit Acceptance hereby accepts such appointment and agrees to manage, collect
and administer each of the Loans and Contracts as Servicer. In the event of a
Servicer Termination Event, the Deal Agent shall have the right to terminate
Credit Acceptance as servicer hereunder. Upon termination of Credit Acceptance
as servicer of the Loans pursuant to Section 6.11 hereof, the Deal Agent shall
have the right to appoint a Successor Servicer and enter into a servicing
agreement with such Successor Servicer at such time and exercise all of its
rights under Section 6.3 hereof. Such servicing agreement shall specify the
duties and obligations of such Successor Servicer, and all references herein to
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the Servicer shall be deemed to refer to such Successor Servicer.
Notwithstanding the above, the Deal Agent may appoint any established financial
institution having a net worth of not less than $50,000,000 and whose regular
business includes the servicing of automobile installment sales contracts as the
Successor Servicer hereunder.
(b) The Borrower shall cause the Servicer to deposit all Collections to
the Collection Account no later than two Business Days after receipt. The
Servicer agrees to deposit all Collections to the Collection Account no later
than two (2) Business Days after receipt.
(c) On or before 120 days after the end of each fiscal year of the
Servicer, beginning with the fiscal year ending December 31, 2003, the Servicer
shall cause a firm of independent public accountants (who may also render other
services to the Servicer or the Borrower) to furnish a report to the Collateral
Agent, the Deal Agent and the Secured Parties to the effect that they have (i)
compared the information contained in the Monthly Reports delivered during such
fiscal year, based on a sample size provided by the Collateral Agent, with the
information contained in the Loans, the Contracts and the Servicer's records and
computer systems for such period, and that, on the basis of such agreed upon
procedures, such firm is of the opinion that the information contained in the
Monthly Reports reconciles with the information contained in the Loans and the
Contracts and the Servicer's records and computer system and that the servicing
of the Loans and the Contracts has been conducted in compliance with this
Agreement, (ii) verified the Aggregate Outstanding Eligible Loan Balance as of
the end of each Collection Period during such fiscal year, and (iii) verified
that a sample of Loans and Contracts treated by the Servicer as Eligible Loans
and as Eligible Contracts, as applicable, in fact satisfied the requirements of
the definition thereof contained herein and (iv) conducted a "negative
confirmation" of a sample of the Loans and Contracts and verified that the
Servicer's records and computer system used in servicing the Loans and Contracts
contained correct information with regard to due dates and outstanding balances,
except, in each case for (a) such exceptions as such firm shall believe to be
immaterial (which exceptions need not be enumerated) and (b) such other
exceptions as shall be set forth in such statement.
Section 6.2. Duties of the Servicer and Custodian.
(a) The Servicer shall take or cause to be taken all such action as may be
necessary or advisable to collect all amounts due under the Loans and Contracts
from time to time, all in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, and in accordance with the
Collection Guidelines and Credit Guidelines, it being understood that there
shall be no recourse to the Servicer with regard to the Loans and Contracts
except as otherwise provided herein and in the other Transaction Documents. In
performing its duties as Servicer, the Servicer shall use the same degree of
care and attention it employs with respect to similar contracts and loans which
it services for itself or others. Each of the Borrower, the Deal Agent, the
Collateral Agent and the Secured Parties hereby appoints as its agent the
Servicer, from time to time designated pursuant to Section 6.1 hereof, to
enforce its respective rights and interests in and under the Collateral. The
Servicer shall hold in trust for the Secured Parties all Records and any amounts
it receives in respect of the Collateral. In the event that a Successor Servicer
is appointed, the outgoing Servicer shall deliver to the Successor Servicer and
the Successor Servicer shall hold in trust for the Borrower and the Secured
Parties all records which evidence or relate to all or any part of the
Collateral.
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(b) The Servicer, if other than Credit Acceptance, shall as soon as
practicable upon demand, deliver to the Borrower all records in its possession
which evidence or relate to indebtedness of an Obligor which is not a Loan or a
Contract.
(c) (i) The Borrower, Deal Agent and Collateral Agent hereby revocably
appoint Credit Acceptance as custodian, and Credit Acceptance hereby accepts
such appointment, to hold and maintain physical possession of the Contract Files
and all Records (in such capacity together with its successors in such capacity,
the "Custodian"). The Contract Files and Records are to be delivered to the
Custodian or its designated bailee by or on behalf of the Borrower, the Deal
Agent and Collateral Agent within two (2) Business Days preceding the Funding
Date or within 2 Business Days after each Addition Date, as the case may be,
with respect to each Loan acquired on the Funding Date or Addition Date.
(ii) The Custodian shall within 180 days after the Closing Date or
Funding Date, as applicable, review 100% of the Contract Files to verify the
presence of the original retail installment contract and security agreement
and/or installment loans with respect to each Contract, provided, however, that
the Certificate of Title or other evidence of lien with respect to a Contract
need not be verified. If the number of Contracts for which any of the foregoing
documents have not been delivered to the Custodian within 180 days of the
Closing Date or relevant Funding Date, as the case may be, or corrected (each
such Contract, a "Nonconforming Contract"), exceeds 2% of the aggregate Contract
Files required to be reviewed pursuant to this Section 6.2(c)(ii), the Borrower
shall make a deposit to the Reserve Account only with respect to the excess
number of Nonconforming Contracts, in an amount equal to the related
Nonconforming Contract Payment Amount. Once per month, the amount on deposit in
the Reserve Account in respect of Nonconforming Contracts shall be adjusted to
account for increases or decreases in the excess number of Nonconforming
Contracts and for changes in the Outstanding Balance of such Nonconforming
Contracts. The Borrower shall, in the case of an increase, promptly deposit to
the Reserve Account the amount of any such increase. In the case of a decrease,
the amount of any such decrease shall be deemed to be part of the Excess Reserve
Amount. During the Revolving Period, payments required under this Section
6.2(c)(ii) shall not be required if the Capital is equal to or less than the
Borrowing Base by the amount of the payment that would otherwise be required to
be made by this clause.
(iii) The Custodian agrees to maintain the Contract Files and
Records which are delivered to it at the offices of the Custodian as shall from
time to time be identified to the Deal Agent by written notice. Subject to the
foregoing, Credit Acceptance may temporarily move individual Contract Files or
Records, or any portion thereof without notice as necessary to allow the
Servicer to conduct collection and other servicing activities in accordance with
its customary practices and procedures.
(iv) The Custodian shall have the following powers and perform the
following duties:
(A) hold the Contract Files and Records for the benefit of the
Secured Parties and maintain a current inventory thereof; and
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(B) carry out such policies and procedures in accordance with
its customary actions with respect to the handling and custody of the Contract
Files and Records so that the integrity and physical possession of the Contract
Files and Records will be maintained.
In performing its duties as custodian, the Custodian agrees to act with
reasonable care, using that degree of skill and care that it exercises with
respect to similar Contracts or Loans owned or held by it for its own account or
for any other Person.
(v) Credit Acceptance shall have the obligation (i) to physically
segregate the Contract Files from the other custodial files it is holding for
its own account or on behalf of any other Person and (ii) to physically xxxx the
Contract folders to demonstrate the transfer of Contract Files and the
Collateral Agent's security interest hereunder.
(d) (i) If (A) an Unsatisfactory Audit occurs or (B) a Servicer
Termination Event or potential Servicer Termination Event occurs, the Deal Agent
shall have the right to terminate Credit Acceptance as the Custodian hereunder
and the Deal Agent shall have the right to appoint a successor Custodian
hereunder who shall assume all the rights and obligations of the "Custodian"
hereunder. On the effective date of the termination of Credit Acceptance as
Servicer, Credit Acceptance shall be released of all of its obligations as
Custodian arising on or after such date. The Contract Files and Records shall be
delivered by Credit Acceptance to the successor Custodian, on or before the date
which is two (2) Business Days prior to such date.
(ii) Upon the occurrence of a Servicer Termination Event or
potential Servicer Termination Event, the Servicer and the Borrower shall, at
the request of the Deal Agent, in its sole discretion, take all steps necessary
to cause the Certificate of Title or other evidence of ownership of each
Financed Vehicle to be revised to name the Collateral Agent on behalf of the
Secured Parties as lienholder. Any costs associated with such revision of the
Certificate of Title ("Reliening Expenses") shall be paid by the Servicer and,
and to the extent such costs are not paid by the Servicer such unpaid costs
shall be recovered as described in Section 2.7 hereof. In no event shall the
Collateral Agent be required to expend funds in connection with this Section
6.2(d).
(iii) The Custodian shall provide to the Deal Agent access to the
Contract Files and Records and all other documentation regarding the Contracts,
Dealer Agreement and the Loans and the related Financed Vehicles in such cases
where the Collateral Agent is required in connection with the enforcement of the
rights or interests of the Secured Parties, or by applicable statutes or
regulations to review such documentation, such access being afforded without
charge.
(e) Two times per calendar year, at the expense of the Servicer, the Deal
Agent and any Liquidity Agent may review the Servicer's collection and
administration of the Loans, Dealer Agreements and Contracts in order to assess
compliance by the Servicer with the Servicer's written policies and procedures,
as well as with this Agreement and may conduct an audit of the Loans, Dealer
Agreements and Contracts and Contract Files in conjunction with such a review.
On and after the occurrence of a Termination Event or Servicer Termination
Event, the
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Deal Agent or any Liquidity Agent may conduct such reviews and audits without
limitation, at the Servicer's expense.
Section 6.3. Rights After Designation of Successor Servicer. At any time
following the designation of a Successor Servicer pursuant to Section 6.12(a):
(i) The Collateral Agent may intercept payments made by or on behalf
of Obligors and direct that payment of all amounts payable under any Loan or
Contract be made directly to the Collateral Agent or its designee; provided,
that the Collateral Agent shall pay to any Dealer, to the extent to which such
Dealer is entitled, all related Dealer Collections.
(ii) The Borrower shall, at the Collateral Agent's request and at
the Borrower's expense, give notice of the Collateral Agent's interest in the
Loans and Contracts to each Obligor and direct that payments be made directly to
the Collateral Agent or its designee.
(iii) The Borrower shall, at the Collateral Agent's request, (A)
assemble all of the records relating to the Collateral, including all Records
with respect to the Loans and Contracts, and shall make the same available to
the Collateral Agent at a place selected by the Collateral Agent or its
designee, and (B) segregate all cash, checks and other instruments received by
it from time to time constituting collections of Collateral in a manner
acceptable to the Collateral Agent and shall, promptly upon receipt but in any
event within two (2) Business Days, remit all such cash, checks and instruments,
duly endorsed or with duly executed instruments of transfer, to the Collateral
Agent or its designee.
(iv) The Borrower hereby authorizes the Collateral Agent to take any
and all steps in the Borrower's name and on behalf of the Borrower necessary or
desirable, in the determination of the Collateral Agent, to collect all amounts
due under any and all of the Collateral with respect thereto, including, without
limitation, endorsing the Borrower's name on checks and other instruments
representing Collections and enforcing the Loans and Contracts.
Section 6.4. Responsibilities of the Borrower. Anything herein to the
contrary notwithstanding, the Borrower shall (i) perform all of its obligations
under the Loans and Contracts to the same extent as if a security interest in
such Loans and Contracts had not been granted hereunder and the exercise by the
Collateral Agent of its rights hereunder shall not relieve the Borrower from
such obligations and (ii) pay when due any taxes, including without limitation,
any sales taxes payable in connection with the Loans or Contracts and their
creation and satisfaction. Neither the Collateral Agent, the Deal Agent nor any
Secured Party shall have any obligation or liability with respect to any Loan,
nor shall any of them be obligated to perform any of the obligations of the
Borrower thereunder.
Section 6.5. Reports.
(a) Monthly Report. On each Determination Date, the Servicer shall deliver
to the Deal Agent, each Liquidity Agent and the Collateral Agent a report in
substantially the form of Exhibit C attached hereto (the "Monthly Report") for
the related Collection Period. The Deal Agent shall provide to the Borrower, the
Servicer and the Backup Servicer by the third Business Day prior to each Payment
Date, information relating to the amount of each obligation which
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comprises Carrying Costs, Increased Costs, Indemnified Amounts and Additional
Amounts for such Collection Period. The Monthly Report shall specify whether an
Amortization Event, Termination Event or Unmatured Termination Event has
occurred with respect to the Collection Period preceding such Determination
Date. Upon receipt of the Monthly Report, the Deal Agent and the Collateral
Agent shall rely (and shall be fully protected in so relying) on the information
contained therein for the purposes of making distributions and allocations as
provided for herein. Each Monthly Report shall be certified by a Responsible
Officer of the Servicer.
(b) Credit Agreement. The Servicer shall deliver to the Deal Agent and
each Liquidity Agent all reports or certificates required to be delivered under
Section 7.3 of the Credit Agreement at the times set forth therein.
(c) Financial Statements. The Servicer will submit to the Deal Agent, the
Collateral Agent, each Liquidity Agent and the Backup Servicer, within 60 days
of the end of each of its fiscal quarters, commencing September 30, 2003
unaudited financial statements as of the end of each such fiscal quarter. The
Servicer will submit to the Deal Agent, each Liquidity Agent and the Collateral
Agent, within 120 days of the end of each of its fiscal years, commencing with
the fiscal year ending December 31, 2003 audited financial statements as of the
end of each such fiscal year. The Servicer will submit to the Deal Agent, the
Collateral Agent, each Liquidity Agent and the Backup Servicer an analysis of
the static pool performance of Credit Acceptance for each fiscal quarter.
(d) Annual Statement as to Compliance. The Servicer will provide to the
Deal Agent, each Liquidity Agent and the Collateral Agent, within 120 days
following the end of each fiscal year of the Servicer, commencing with the
fiscal year ending on December 31, 2003, an annual report signed by a
Responsible Officer of the Servicer certifying that (a) a review of the
activities of the Servicer, and the Servicer's performance pursuant to this
Agreement, for the period ending on the last day of such fiscal year has been
made under such Person's supervision and (b) the Servicer has performed or has
caused to be performed in all material respects all of its obligations under
this Agreement throughout such year (or in the case of a Successor Servicer
which has been Servicer for less than one year, for so long as such Successor
Servicer has been Servicer) and no Servicer Termination Event or potential
Servicer Termination Event has occurred and is continuing (or if a Servicer
Termination Event has so occurred and is continuing, specifying each such event,
the nature and status thereof and the steps necessary to remedy such event, and,
if a Servicer Termination Event or potential Servicer Termination Event occurred
during such year and no notice thereof has been given to the Deal Agent and the
Collateral Agent, specifying such Servicer Termination Event or potential
Servicer Termination Event and the steps taken to remedy such event).
Section 6.6. Additional Representations and Warranties of Credit
Acceptance as Servicer. Credit Acceptance, in its capacity as Servicer,
represents and warrants to the Collateral Agent, the Deal Agent and each
Liquidity Agent as of the Closing Date, the Effective Date and the Funding Date,
that the only material servicing computer systems and related software utilized
by the Servicer to service the Loans and Contracts are: (i) provided by Ontario
Systems Corporation under an agreement (and related nonexclusive license) and
related letter agreements dated May 18, 2001 and (ii) the "loan servicing
system" software developed by Credit Acceptance, which is owned by Credit
Acceptance. Should the Servicer or any of its Affiliates
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develop or implement computer software for servicing that is owned by or
exclusively licensed to the Servicer or an Affiliate and utilize such software
in the servicing of the Loans and Contracts, the Collateral Agent shall be
entitled to compel a license or sublicense for the benefit of the Collateral
Agent or its designee of any such rights to the extent the Collateral Agent
deems reasonably necessary and appropriate to assure that it or a duly appointed
Successor Servicer would be able to continue to service the Loans and Contracts
should that be required in accordance with the terms hereof.
Section 6.7. Establishment of the Accounts.
(a) Establishment of the Collection Account and Reserve Account. The
Servicer shall cause to be established, on or before the Closing Date, and
maintained in the name of the Collateral Agent as agent for the Secured Parties,
with an office or branch of a depository institution or trust company (i) a
segregated corporate trust account entitled "Collection Account for WCM, as
agent for the Secured Parties" (the "Collection Account") and (ii) a segregated
corporate trust account entitled "Reserve Account for WCM" as agent for the
Secured Parties (the "Reserve Account"), in each case, over which the Collateral
Agent as agent for the Secured Parties shall have sole dominion and control and
from which neither the Originator, the Servicer nor the Borrower shall have any
right of withdrawal; provided, however, that at all times such depository
institution or trust company shall be a depository institution organized under
the laws of the United States of America or any one of the States thereof or the
District of Columbia (or any domestic branch of a foreign bank), (i) (A) that
has either (1) a long-term unsecured debt rating of AA- or better by S&P and Aa3
or better by Xxxxx'x or (2) a short-term unsecured debt rating or certificate of
deposit rating of A-1 or better by S&P or P-1 or better by Xxxxx'x, (B) the
parent corporation which has either (1) a long-term unsecured debt rating of AA-
or better by S&P and Aa3 or better by Xxxxx'x or (2) a short-term unsecured debt
rating or certificate of deposit rating of A-1 or better by S&P and P-1 or
better by Xxxxx'x or (C) is otherwise acceptable to the Deal Agent and (ii)
whose deposits are insured by the Federal Deposit Insurance Corporation (any
such depository institution or trust company, a "Qualified Institution").
(b) Adjustments. If (i) the Servicer makes a deposit into the Collection
Account in respect of a Collection of a Loan and such Collection was received by
the Servicer in the form of a check that is not honored for any reason or (ii)
the Servicer makes a mistake with respect to the amount of any Collection and
deposits an amount that is less than or more than the actual amount of such
Collection, the Servicer shall appropriately adjust the amount subsequently
deposited into the Collection Account to reflect such dishonored check or
mistake. Any payment in respect of which a dishonored check is received shall be
deemed not to have been paid.
(c) Eligible Investments. Funds on deposit in the Collection Account and
the Reserve Account shall be invested in Eligible Investments by or at the
written direction of the Borrower, provided that if a Termination Event or
Unmatured Termination Event shall have occurred, such investments shall be made
as directed by the Collateral Agent. Any such written directions shall specify
the particular investment to be made and shall certify that such investment is
an Eligible Investment and is permitted to be made under this Agreement. Funds
on deposit in the Collection Account and the Reserve Account shall be invested
in Eligible Investments that will mature so that such funds will be available no
later than the Business Day
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prior to the next Payment Date, except that in the case of funds representing
Collections with respect to a succeeding Collection Period, such Eligible
Investments may mature so that such funds will be available no later than the
Business Day prior to the Payment Date for such Collection Period. No Eligible
Investment may be liquidated or disposed of prior to its maturity. All proceeds
of any Eligible Investment shall be deposited in the Collection Account or the
Reserve Account, as applicable. Investments may be made in either account on any
date (provided such investments mature in accordance herewith), only after
giving effect to deposits to and withdrawals from such account on such date.
Realized losses, if any, on amounts invested in Eligible Investments shall be
charged against investment earnings on amounts on deposit in the Collection
Account or the Reserve Account, as applicable.
Section 6.8. Payment of Certain Expenses by Servicer. The Servicer will be
required to pay all expenses incurred by it in connection with its activities
under this Agreement, including fees and disbursements of independent
accountants, Taxes imposed on the Servicer, expenses incurred in connection with
payments and reports pursuant to this Agreement, and all other fees and expenses
not expressly stated under this Agreement for the account of the Borrower. The
Servicer will be required to pay all reasonable fees and expenses owing to any
bank or trust company in connection with the maintenance of the Collection
Account, the Reserve Account and the Credit Acceptance Payment Account. The
Servicer shall be required to pay such expenses for its own account and shall
not be entitled to any payment therefor other than the Servicing Fee.
Section 6.9. Annual Independent Public Accountant's Servicing Reports. The
Servicer will cause a firm of nationally recognized independent public
accountants (who may also render other services to the Servicer) to furnish to
the Deal Agent and each Liquidity Agent, within 120 days following the end of
each fiscal year of the Servicer, commencing with the fiscal year ending on
December 31, 2003: (i) a report relating to such fiscal year to the effect that
(A) such firm has reviewed certain documents and records relating to the
servicing of the Loans and Contracts included in the Collateral, and (B) based
on such examination, such firm is of the opinion that the Monthly Reports for
such year were prepared in compliance with this Agreement, except for such
exceptions as it believes to be immaterial and such other exceptions as will be
set forth in such firm's report and (ii) a report covering such fiscal year to
the effect that such accountants have applied certain agreed-upon procedures, as
set forth in Section 6.1(c) (which procedures shall have been approved by the
Deal Agent and each Liquidity Agent) to certain documents and records relating
to the Loans under any Transaction Document, compared the information contained
in the Monthly Reports delivered during the period covered by such report which
such documents and records and that no matters came to the attention of such
accountants that caused them to believe that such servicing was not conducted in
compliance with Article VI of this Agreement, except for such exceptions as such
accountants shall believe to be immaterial and such other exception as shall be
set forth in such statement.
Section 6.10. The Servicer Not to Resign. The Servicer shall not resign
from the obligations and duties hereby imposed on it hereunder except upon the
Servicer's determination that (i) the performance of its duties hereunder is or
becomes impermissible under Applicable Law and (ii) there is no reasonable
action that the Servicer could take to make the performance of its duties
hereunder permissible under Applicable Law. Any such determination permitting
the resignation of the Servicer shall be evidenced as to clause (i) above by an
Opinion of Counsel
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to such effect delivered to the Deal Agent, the Collateral Agent and the Backup
Servicer. No such resignation shall become effective until a Successor Servicer
shall have assumed the responsibilities and obligations of the Servicer in
accordance with Section 6.12.
Section 6.11. Servicer Termination Events. If any one of the following
events (a "Servicer Termination Event") shall occur and be continuing:
(a) any failure by the Servicer to make any payment, transfer or deposit
as required by this Agreement or any other Transaction Document, other than any
such failure resulting from an administrative or technical error of the Servicer
in the amount so paid, transferred or deposited; provided that within one (1)
Business Day after the Servicer becomes aware that, as a result of an
administrative or technical error of the Servicer, any amount previously paid,
transferred or deposited by the Servicer was less than the amount required to be
paid, transferred or deposited by the Servicer, the Servicer pays, transfers or
deposits the amount of such shortfall;
(b) any failure by the Servicer to give instructions or notice to the Deal
Agent as required by this Agreement or any other Transaction Document, or to
deliver any required Monthly Report or other required reports hereunder on or
before the date occurring two (2) Business Days after the date such instruction,
notice or report is required to be made or given, as the case may be, under the
terms of this Agreement or the relevant Transaction Document;
(c) any failure on the part of the Servicer duly to observe or perform in
any material respect any other covenants or agreements of the Servicer set forth
in this Agreement or the other Transaction Documents (other than as set forth in
clauses (a) or (b) above) to which the Servicer is a party, which continues
unremedied for a period of 10 days;
(d) any material representation, warranty or certification made by the
Servicer in any Transaction Document or in any certificate delivered pursuant to
any Transaction Document shall prove to have been incorrect when made;
(e) an Insolvency Event shall occur with respect to the Servicer;
(f) any delegation of the Servicer's duties that is not permitted by
Section 7.1;
(g) any financial information related to the Collateral reasonably
requested by the Deal Agent, the Collateral Agent, any Liquidity Agent or any
Lender as provided herein is not reasonably provided as requested;
(h) the rendering against the Servicer of one or more final judgments,
decrees or orders for the payment of money in excess of United States $5,000,000
in the aggregate, and the continuance of such judgment, decree or order
unsatisfied and in effect for any period of more than 60 consecutive days
without a stay of execution;
(i) the Servicer shall fail to pay any principal of or premium or interest
on any indebtedness in an aggregate outstanding principal amount of $5,000,000
or more ("Material Debt"), when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) and
such failure shall continue after the applicable grace period, if any, specified
in the agreement or instrument relating to such Material
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Debt; or any other default under any agreement or instrument relating to any
Material Debt or any other event, shall occur and shall continue after the
applicable grace period, if any, specified in such agreement or instrument if
the effect of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such Material Debt; or any such Material Debt
shall be declared to be due and payable or required to be prepaid (other than by
a regularly scheduled required prepayment) prior to the stated maturity thereof;
(j) any change in the control of the Servicer that takes the form of
either a merger or consolidation in which the Servicer is not the surviving
entity;
(k) a Material Adverse Effect shall have occurred; or
(l) a Termination Event shall have occurred and such Termination Event has
not been waived by the Deal Agent;
then notwithstanding anything herein to the contrary, so long as any such
Servicer Termination Event shall not have been remedied, within any applicable
cure period prior to the date of the Servicer Termination Notice (defined
below), the Deal Agent may, or at the direction of the Required Investors, by
written notice to the Servicer (with a copy to the Backup Servicer) (a "Servicer
Termination Notice"), shall terminate all of the rights and obligations of the
Servicer as Servicer under this Agreement. The Deal Agent may not waive any
Servicer Termination Event without the consent of the Liquidity Agent for the
PARCO Purchaser Group.
Section 6.12. Appointment of Successor Servicer.
(a) On and after the receipt by the Servicer of a Servicer Termination
Notice pursuant to Section 6.11 or Section 10.2, the Servicer shall continue to
perform all servicing functions under this Agreement until the date specified in
the Servicer Termination Notice or otherwise specified by the Deal Agent in
writing or, if no such date is specified in such Servicer Termination Notice or
otherwise specified by the Deal Agent, until a date mutually agreed upon by the
Servicer and the Deal Agent. The Deal Agent may at the time described in the
immediately preceding sentence at the direction of the Required Investors
appoint the Backup Servicer by written notice as the Servicer hereunder, and the
Backup Servicer shall on such date (which date shall be no less than 30 days
after receipt of such written notice) assume all obligations of the Servicer
hereunder (except as specifically set forth herein or in the Backup Servicing
Agreement), and all authority and power of the Servicer under this shall pass to
and be vested in the Backup Servicer. In the event that the Deal Agent does not
so appoint the Backup Servicer, there is no Backup Servicer or the Backup
Servicer is unable to assume such obligations on such date, the Deal Agent shall
as promptly as possible appoint a successor servicer (the "Successor Servicer")
who shall be acceptable to the Required Investors, and such Successor Servicer
shall accept its appointment by a written assumption in a form acceptable to the
Deal Agent. In the event that a Successor Servicer has not accepted its
appointment at the time when the Servicer ceases to act as Servicer, the Deal
Agent shall petition a court of competent jurisdiction to appoint any
established financial institution having a net worth of not less than United
States $50,000,000 and whose regular business includes the servicing of Loans as
the Successor Servicer hereunder.
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(b) Upon its assumption as Successor Servicer, the Backup Servicer (except
as specifically set forth herein or in the Backup Servicing Agreement and
subject to Section 6.12(a)) or any other Successor Servicer, as applicable,
shall be the successor in all respects to the Servicer with respect to servicing
functions under this Agreement and shall be subject to all the responsibilities,
duties and liabilities relating thereto placed on the Servicer by the terms and
provisions hereof, and all references in this Agreement and the other
Transaction Documents to the Servicer shall be deemed to refer to the Backup
Servicer or the Successor Servicer, as applicable. In no event shall the Backup
Servicer be liable for any actions or omissions of any predecessor Servicer.
(c) All authority and power granted to the Servicer under this Agreement
shall automatically cease and terminate upon termination of this Agreement and
shall pass to and be vested in the Borrower and, without limitation, the
Borrower is hereby authorized and empowered to execute and deliver, on behalf of
the Servicer, as attorney-in-fact or otherwise, all documents and other
instruments, and to do and accomplish all other acts or things necessary or
appropriate to effect the purposes of such transfer of servicing rights. The
Servicer agrees to cooperate with the Borrower in effecting the termination of
the responsibilities and rights of the Servicer to conduct servicing on the
Loans and the Contracts.
(d) Within 30 days of receiving notice that the Backup Servicer is
required to serve as the Servicer hereunder pursuant to the foregoing provisions
of this Section 6.12 the Backup Servicer will begin the transition to its role
as Servicer.
Section 6.13. Responsibilities of the Borrower. Anything herein to the
contrary notwithstanding, the Borrower shall (i) perform all of its obligations
under the Loans to the same extent as if a security interest in such Loans had
not been granted hereunder and (ii) pay when due, from funds available to the
Borrower under Section 2.7 hereto, any taxes. Neither the Deal Agent, Collateral
Agent nor any Secured Party shall have any obligation or liability with respect
to any Loan, nor shall any of them be obligated to perform any of the
obligations of the Borrower thereunder.
Section 6.14. Segregated Payment Account. Upon the occurrence of a
Servicer Termination Event, a potential Servicer Termination Event or an
Unsatisfactory Audit, the Deal Agent shall have the right to require the
Borrower and the Servicer (i) to establish a segregated payment trust account in
the name of the Collateral Agent for Collections related to the Collateral and
(ii) to direct all Obligors to make payments into such account.
ARTICLE VII
BACKUP SERVICER
Section 7.1. Designation of the Backup Servicer. The backup servicing role
with respect to the Collateral shall be conducted by the Person designated as
Backup Servicer under the Backup Servicing Agreement, which shall initially be
SST.
Section 7.2. Duties of the Backup Servicer. On or before the Closing Date,
and until its removal pursuant to the Backup Servicing Agreement, the Backup
Servicer shall perform, on
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behalf of the Servicer, the Borrower, the Deal Agent, the Collateral Agent and
the Secured Parties, the duties and obligations set forth in the Backup
Servicing Agreement.
Section 7.3. Backup Servicing Compensation. As compensation for its backup
servicing activities hereunder and under the Backup Servicing Agreement, the
Backup Servicer shall be entitled to receive the Backup Servicing Fee pursuant
to the provisions of Section 2.7(a). The Backup Servicer's entitlement to
receive the Backup Servicing Fee shall cease on the earliest to occur of: (i) it
becoming the Successor Servicer; (ii) its removal as Backup Servicer pursuant to
the terms of the Backup Servicing Agreement; or (iii) the termination of this
Agreement.
ARTICLE VIII
[Reserved]
ARTICLE IX
SECURITY INTEREST
Section 9.1. Security Agreement. (a) The parties hereto intend that this
Agreement constitute a security agreement and the transactions effected hereby
constitute secured loans by the Lender to the Borrower under Applicable Law.
(b) The Borrower hereby 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 and Proceeds thereof without the signature of
the Borrower where permitted by law. A photographic or other reproduction of
this Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by law.
(c) Except as set forth in Section 2.16, Section 4.5 and Section 9.2, the
Deal Agent shall not release its security interest in the Loans or Related
Security without the consent of the Liquidity Agent for the PARCO Purchaser
Group.
Section 9.2. Release of Lien. At the same time as any Loan by its terms
and all amounts in respect thereof has been paid by the related Obligor and
deposited in the Collection Account, the Deal Agent as agent for the Lender
will, to the extent requested by the Servicer, release its interest in such Loan
and Related Security. The Deal Agent as agent for the Lenders will after the
deposit by the Servicer of the proceeds of such sale into the Collection
Account, at the sole expense of the Servicer, execute and deliver to the
Servicer any assignments, termination statements and any other releases and
instruments as the Servicer may reasonably request in order to effect such
release and transfer; provided, that the Deal Agent as agent for the Lenders
will make no representation or warranty, express or implied, with respect to any
such Loan and Related Security in connection with such sale or transfer and
assignment.
Section 9.3. Further Assurances. The provisions of Section 14.12 shall
apply to the security interest granted under Section 2.2(a) as well as to each
Funding hereunder.
Section 9.4. Remedies. Upon the occurrence of a Termination Event, the
Deal Agent, the Collateral Agent and Secured Parties shall have, with respect to
the Collateral granted pursuant to Section 2.2(a), and in addition to all other
rights and remedies available to the Deal
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Agent, the Collateral Agent and Secured Parties under this Agreement or other
Applicable Law, all rights and remedies of a secured party upon default under
the UCC.
Section 9.5. Waiver of Certain Laws. Each of the Borrower and the Servicer
agrees, to the full extent that it may lawfully so agree, that neither it nor
anyone claiming through or under it will set up, claim or seek to take advantage
of any appraisement, valuation, stay, extension or redemption law now or
hereafter in force in any locality where all or any portion of the Collateral
may be situated in order to prevent, hinder or delay the enforcement or
foreclosure of this Agreement, or the absolute sale of all any portion of the
Collateral, or the final and absolute putting into possession thereof,
immediately after such sale, of the purchasers thereof, and each of the Borrower
and the Servicer, for itself and all who may at any time claim through or under
it, hereby waives, to the full extent that it may be lawful so to do, the
benefit of all such laws, and any and all right to have any of the properties or
assets constituting the Collateral marshaled upon any such sale, and agrees that
the Deal Agent, the Collateral Agent or any court having jurisdiction to
foreclosure the security interests granted in this Agreement may sell the
Collateral as an entirety or in such parcels as the Deal Agent, the Collateral
Agent or such court may determine.
Section 9.6. Power of Attorney. The Borrower hereby irrevocably appoints
the Deal Agent and the Servicer and any Successor Servicer as its true and
lawful attorney (with full power of substitution) in its name, place and stead
and at is expense, in connection with the enforcement of the rights and remedies
provided for in this Agreement, including without limitation the following
powers: (a) to give any necessary receipts or acquittance for amounts collected
or received hereunder, (b) to make all necessary transfers of the Collateral in
connection with any such sale or other disposition made pursuant hereto, (c) to
execute and deliver for value all necessary or appropriate bills of sale,
assignments and other instruments in connection with any such sale or other
disposition, the Borrower hereby ratifying and confirming all that such attorney
(or any substitute) shall lawfully do hereunder and pursuant hereto, and (d) to
sign any agreements, orders or other documents in connection with or pursuant to
any Transaction Document or Hedging Agreement. Nevertheless, if so requested by
the Deal Agent, the Servicer or any Successor Servicer, the Collateral Agent or
a purchaser of the Collateral, the Borrower shall ratify and confirm any such
sale or other disposition by executing and delivering to the Deal Agent, the
Collateral Agent or such purchaser all proper bills of sale, assignments,
releases and other instruments as may be designated in any such request.
ARTICLE X
TERMINATION EVENTS
Section 10.1. Termination Events. The following events shall be
termination events ("Termination Events") hereunder:
(a) the Payment Rate averaged for any three (3) consecutive Collection
Periods is less than 4.0%; or
(b) [Reserved.]; or
(c) the Termination Date shall have occurred; or
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(d) the Weighted Average Performing Advance Rate exceeds 50.0%; or
(e) the Net Yield Percentage is less than 6.5%; or
(f) a Servicer Termination Event occurs and is continuing; or
(g) (i) failure on the part of the Borrower or the Originator to make any
payment or deposit required by the terms of any Transaction Document on the day
such payment or deposit is required to be made; or
(ii) failure on the part of the Borrower or the Originator to
observe or perform any of its covenants or agreements set forth in this
Agreement or any Transaction Document and such failure continues unremedied for
more than five (5) Business Days after written notice to the Borrower or the
Originator;
(h) any representation or warranty made or deemed to be made by the
Borrower or the Originator under or in connection with this Agreement, any of
the other Transaction Documents or any information required to be given by the
Borrower or the Originator to the Deal Agent or the Collateral Agent to identify
Loans or Contracts pursuant to any Transaction Document, shall prove to have
been false or incorrect in any material respect when made, deemed made or
delivered; or
(i) the occurrence of an Insolvency Event relating to the Originator, the
Borrower or the Servicer; or
(j) the Borrower shall become an "investment company" within the meaning
of the Investment Company Act of 1940, as amended or the arrangements
contemplated by the Transaction Document shall require registration as an
"investment company" within the meaning of the 40 Act; or
(k) a regulatory, tax or accounting body has ordered that the activities
of the Borrower or any Affiliate of the Borrower, contemplated hereby be
terminated or, as a result of any other event or circumstance, the activities of
the Borrower contemplated hereby may reasonably be expected to cause the
Borrower or any of its respective Affiliates to suffer materially adverse
regulatory, accounting or tax consequences; or
(l) there shall exist any event or occurrence that has a reasonable
possibility of causing a Material Adverse Effect; or
(m) the Borrower, the Servicer or Credit Acceptance shall enter into any
merger, consolidation or conveyance transaction, unless in the case of Credit
Acceptance or the Servicer, the Servicer or Credit Acceptance, as applicable, is
the surviving entity; or
(n) the Internal Revenue Service shall file notice of a lien pursuant to
Section 6323 of the Code with regard to any assets of the Borrower or the
Originator and such lien shall not have been released within five (5) Business
Days, or the Pension Benefit Guaranty Corporation shall file notice of a lien
pursuant to Section 4068 of ERISA with regard to any of the assets of the
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Borrower or the Originator and such lien shall not have been released within
five (5) Business Days; or
(o) the Collateral Agent, as agent for the secured parties, shall fail for
any reason to have a first priority perfected security interest in the
Collateral; or
(p) any Change-in-Control shall occur; or
(q) (i) any Transaction Document, or any lien or security interest granted
thereunder, shall (except in accordance with its terms), in whole or in part,
terminate, cease to be effective or cease to be the legally valid, binding and
enforceable obligation of the Borrower, the Originator, or the Servicer (ii) the
Borrower, the Originator or the Servicer shall, directly or indirectly, contest
in any manner such effectiveness, validity, binding nature or enforceability or
(iii) any security interest securing any obligation under any Transaction
Document shall, in whole or in part, cease to be a perfected first priority
security interest; or
(r) the occurrence of the thirtieth (30th) day after the end of the fiscal
quarter in which a breach of any covenant set forth in Sections 7.4, 7.5, 7.6
and 7.7 of the Credit Agreement shall occur unless prior to such date, such
breach is cured or waived by the Deal Agent in the Deal Agent's sole discretion;
or
(s) Credit Acceptance shall fail to pay any principal of or premium or
interest on any Material Debt, when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) and
such failure shall continue after the applicable grace period, if any, specified
in the agreement or instrument relating to such Material Debt; or any other
default under any agreement or instrument relating to any Material Debt or any
other event, shall occur and shall continue after the applicable grace period,
if any, specified in such agreement or instrument if the effect of such default
or event is to accelerate, or to permit the acceleration of, the maturity of
such Material Debt; or any such Material Debt shall be declared to be due and
payable or required to be prepaid (other than by a regularly scheduled required
prepayment) prior to the stated maturity thereof; or
(t) Collections are less than 65.0% of Forecasted Collections for any
three consecutive Collection Periods; or
(u) a Take-Out has not occurred within 90 days of the Effective Date, or
within 360 days of the most recent Take-Out occurring after the Effective Date.
Section 10.2. Remedies.
(a) Upon the occurrence of a Termination Event (other than a Termination
Event described in Section 10.1(i), the Deal Agent may, or at the direction of
the Required Investors, shall by notice to the Borrower declare the Termination
Date to have occurred.
(b) Upon the occurrence of a Termination Event described in Section
10.1(i), the Termination Date shall automatically occur.
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(c) Upon any Termination Date pursuant to this Section 10.2: (i) if any CP
Conduit is a Lender, each such CP Conduit shall, in the case of VFCC, and may in
the case of any other CP Conduit, assign its interest in the related Note and
the Capital to its related Liquidity Agent for the benefit of the related
Investors and each Liquidity Agent shall, in the case of VFCC, or in the case of
any other CP Conduit, if such CP Conduit exercises its option to assign its
interest in the related Note and the Capital, on behalf of its related
Investors, accept such assignment without any further action; (ii) the
applicable Yield Rate on the Capital outstanding with respect to each Purchaser
Group shall be equal to the rate set forth in the Fee Letter related to such
Purchaser Group; (iii) the Deal Agent may, and shall at the direction of the
Required Investors by delivery of a Servicer Termination Notice, terminate the
Servicer; (iv) the Deal Agent, may, and at the direction of the Required
Investors, shall declare the entire outstanding principal amount of the Notes be
immediately due and payable. The Deal Agent, the Collateral Agent and the
Secured Parties shall have, in addition to all other rights and remedies under
this Agreement or otherwise, all other rights and remedies provided of a secured
party under the UCC of each applicable jurisdiction and other applicable laws,
which rights shall be cumulative.
(d) If the Notes have been declared due and payable pursuant to Section
10.2(c), the Collateral Agent may institute proceedings to collect amounts due,
exercise remedies as a secured party (including foreclosure or sale of the
Collateral) or elect to maintain the Collateral and continue to apply the
proceeds from the Collateral as if there had been no declaration of
acceleration.
(e) Upon the declaration of the Termination Date, the Borrower may not
request and no Lender shall be required to effect any Funding.
(f) The Deal Agent shall not waive any Termination Event without the
consent of the Liquidity Agent for the PARCO Purchaser Group.
ARTICLE XI
INDEMNIFICATION
Section 11.1. Indemnities by the Borrower.
(a) Without limiting any other rights that any such Person may have
hereunder or under Applicable Law, the Borrower hereby agrees to indemnify the
Deal Agent, the Backup Servicer, the Collateral Agent, the Successor Servicer,
the Liquidity Agents, the Secured Parties, 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 or other non-monetary damages of any such Indemnified Party
any of them arising out of or as a result of this Agreement or the financing or
maintenance of the Capital or in respect of any 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 have the effect of recourse for non-payment of the Loans due to
credit problems of the Obligors (except as otherwise specifically provided in
this Agreement). If the Borrower has made any indemnity payment pursuant to this
Section 11.1 and such payment fully indemnified the recipient thereof
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and the recipient thereafter collects any payments from others in respect of
such Indemnified Amounts then, the recipient shall repay to the Borrower an
amount equal to the amount it has collected from others in respect of such
indemnified amounts. Without limiting the foregoing, the Borrower shall
indemnify each Indemnified Party for Indemnified Amounts relating to or
resulting from:
(i) any Contract or Loan treated as or represented by
Credit Acceptance 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 the Borrower 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 the Borrower 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 Loan, Dealer Agreement, any Contract, or the nonconformity of any
Loan, Dealer Agreement or Contract with any such Applicable Law;
(iv) the failure to vest and maintain vested in the
Collateral Agent for the Secured Parties a first priority perfected security
interest in the Collateral, together with all Collections, free and clear of any
Lien whether existing at the time of any Funding or at any time thereafter;
(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
Collateral, whether at the time of the Funding or at any subsequent time;
(vi) any dispute, claim, offset or defense (other than
the discharge in bankruptcy of the Obligor) of the Obligor to the payment of any
Loan or Contract (including, without limitation, a defense based on such Loan or
Contract not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms);
(vii) any failure of the Borrower to perform its duties
or obligations in accordance with the provisions of this Agreement or any
failure by the Borrower to perform its respective duties under the Loans;
(viii) the failure by Borrower to pay when due any Taxes
for which the Borrower is liable, including without limitation, sales, excise or
personal property taxes payable in connection with the Collateral;
(ix) any repayment by the Deal Agent, any Liquidity
Agent or a Secured Party of any amount previously distributed in reduction of
Capital or payment of Yield or any other amount due hereunder or under any
Hedging Agreement, in each case which amount
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the Deal Agent, any Liquidity Agent or a Secured Party believes in good faith is
required to be repaid;
(x) the commingling of Collections of the Collateral at
any time with other funds;
(xi) any investigation, litigation or proceeding related
to this Agreement or the use of proceeds of the Funding or the funding of or
maintenance of Capital or in respect of any Loan or Contract;
(xii) any failure by the Borrower to give reasonably
equivalent value to the Originator in consideration for the transfer by the
Originator to the Borrower of the Loans, Related Security or any portion thereof
or any attempt by any Person to void or otherwise avoid any such transfer under
any statutory provision or common law or equitable action, including, without
limitation, any provision of the Bankruptcy Code;
(xiii) the use of the Proceeds of the Funding in a
manner other than as provided in this Agreement and the Contribution Agreement;
or
(xiv) the failure of the Borrower or any of its agents
or representatives to remit to the Servicer, the Deal Agent, the Collateral
Agent or any other Secured Party, any Collections of the Collateral remitted to
the Borrower or any such agent or representative.
(b) Any amounts subject to the indemnification provisions of this Section
11.1 shall be paid by the Borrower to the relevant Indemnified Party on the next
Payment Date.
(c) The obligations of the Borrower under this Section 11.1 shall survive
the resignation or removal of the Deal Agent, the Collateral Agent, the
Successor Servicer, any Liquidity Agent, any Lender or the Backup Servicer or
the termination of this Agreement.
Section 11.2. Indemnities by the Servicer.
(a) Without limiting any other rights that any such Person may have
hereunder or under Applicable Law, the Servicer hereby agrees to indemnify each
Indemnified Party, forthwith on demand, from and against any and all Indemnified
Amounts awarded against or incurred by any such Indemnified Party by reason of
any acts, omissions or alleged acts or omissions of the Servicer, including, but
not limited to: (i) any representation or warranty made by the Servicer under or
in connection with any Transaction Document, any Monthly Report or any other
information or report delivered by or on behalf of the Servicer pursuant hereto,
which shall have been false, incorrect or misleading in any material respect
when made or deemed made; (ii) the failure by the Servicer to comply with any
Applicable Law; (iii) the failure of the Servicer to comply with its duties or
obligations in accordance with the Agreement or any other Transaction Document
to which it is a party; (iv) any litigation, proceedings or investigation
against the Servicer; (v) the commingling of Collections at any time with other
funds; or (vi) the failure of the Servicer or any of its agents or
representatives to remit to the Collection Account, Deal Agent or Collateral
Agent any Collections or Proceeds of the Collateral. The provisions of
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this indemnity shall run directly to and be enforceable by an Indemnified Party
subject to the limitations hereof.
(b) Any amounts subject to the indemnification provisions of this Section
11.2 shall be paid by the Servicer to the relevant Indemnified Party within five
(5) Business Days following such Person's demand therefor.
(c) The Servicer shall have no liability for making indemnification
hereunder to the extent any such indemnification constitutes recourse for
uncollectible Contracts.
(d) The obligations of the Servicer under this Section 11.2 shall survive
the resignation or removal of the Deal Agent, the Collateral Agent, the
Successor Servicer, any Liquidity Agent, any Lender or the Backup Servicer and
the termination of this Agreement.
(e) Any indemnification pursuant to this Section 11.2 shall not be payable
from the Collateral.
Section 11.3. After-Tax Basis. Indemnification under Sections 11.1 and
11.2 shall be in an amount necessary to make the Indemnified Party whole after
taking into account any tax consequences to the Indemnified Party of the receipt
of the indemnity provided hereunder, including the effect of such tax or refund
on the amount of tax measured by net income or profits that is or was payable by
the Indemnified Party.
ARTICLE XII
THE DEAL AGENT AND THE LIQUIDITY AGENTS
Section 12.1. Authorization and Action.
(a) Each Secured Party hereby designates and appoints WCM as Deal Agent
hereunder, and authorizes the Deal Agent to take such actions as agent on its
behalf and to exercise such powers as are delegated to the Deal Agent by the
terms of this Agreement together with such powers as are reasonably incidental
thereto. The Deal Agent shall not have any duties or responsibilities, except
those expressly set forth herein, or any fiduciary relationship with any Secured
Party, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities on the part of the Deal Agent shall be read into this
Agreement or otherwise exist for the Deal Agent. In performing its functions and
duties hereunder, the Deal Agent shall act solely as agent for the Secured
Parties and does not assume nor shall be deemed to have assumed any obligation
or relationship of trust or agency with or for the Borrower or any of its
successors or assigns. The Deal Agent shall not be required to take any action
that exposes the Deal Agent to personal liability or that is contrary to this
Agreement or Applicable Law. The appointment and authority of the Deal Agent
hereunder shall terminate upon the indefeasible payment in full of the Aggregate
Unpaids.
(b) Each VFCC Investor hereby designates and appoints Wachovia Bank as
Liquidity Agent hereunder, and authorizes such Liquidity Agent to take such
actions as agent on its behalf and to exercise such powers as are delegated to
the Liquidity Agent by the terms of this Agreement together with such powers as
are reasonably incidental thereto. The Liquidity Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any
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fiduciary relationship with any Investor, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of the
Liquidity Agent shall be read into this Agreement or otherwise exist for the
Liquidity Agent. In performing its functions and duties hereunder, Wachovia Bank
shall act solely as agent for the VFCC Investors and does not assume nor shall
be deemed to have assumed any obligation or relationship of trust or agency with
or for the Borrower or any of its successors or assigns. The Liquidity Agent
shall not be required to take any action that exposes the Liquidity Agent to
personal liability or that is contrary to this Agreement or Applicable Law. The
appointment and authority of the Liquidity Agent hereunder shall terminate upon
the indefeasible payment in full of the Aggregate Unpaids.
(c) Each PARCO Investor hereby designates and appoints JPMorgan as
Liquidity Agent hereunder, and authorizes such Liquidity Agent to take such
actions as agent on its behalf and to exercise such powers as are delegated to
the Liquidity Agent by the terms of this Agreement together with such powers as
are reasonably incidental thereto. The Liquidity Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Investor, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of the
Liquidity Agent shall be read into this Agreement or otherwise exist for the
Liquidity Agent. In performing its functions and duties hereunder, JPMorgan
shall act solely as agent for the PARCO Investors and does not assume nor shall
be deemed to have assumed any obligation or relationship of trust or agency with
or for the Borrower or any of its successors or assigns. The Liquidity Agent
shall not be required to take any action that exposes the Liquidity Agent to
personal liability or that is contrary to this Agreement or Applicable Law. The
appointment and authority of the Liquidity Agent hereunder shall terminate upon
the indefeasible payment in full of the Aggregate Unpaids.
(d) Each Secured Party hereby designates and appoints WCM as Collateral
Agent hereunder, and authorizes the Collateral Agent to take such actions as
agent on its behalf and to exercise such powers as are delegated to the
Collateral Agent by the terms of this Agreement together with such powers as are
reasonably incidental thereto. The Collateral Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Secured Party, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of the
Collateral Agent shall be read into this Agreement or otherwise exist for the
Collateral Agent. In performing its functions and duties hereunder, the
Collateral Agent shall act solely as agent for the Secured Parties and does not
assume nor shall be deemed to have assumed any obligation or relationship of
trust or agency with or for the Borrower or any of its successors or assigns.
The Collateral Agent shall not be required to take any action that exposes the
Collateral Agent to personal liability or that is contrary to this Agreement or
Applicable Law. The appointment and authority of the Collateral Agent hereunder
shall terminate upon the indefeasible payment in full of the Aggregate Unpaids.
Section 12.2. Delegation of Duties.
(a) The Deal Agent may execute any of its duties under this Agreement by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Deal Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
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(b) Each Liquidity Agent may execute any of its duties under this
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. No Liquidity
Agent shall be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
(c) The Collateral Agent may execute any of its duties under this
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Collateral Agent shall not be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected by it with reasonable care.
Section 12.3. Exculpatory Provisions.
(a) Neither the Deal Agent nor any of its directors, officers,
agents or employees shall be (i) liable for any action lawfully taken or omitted
to be taken by it or them under or in connection with this Agreement (except for
its, their or such Person's own gross negligence or willful misconduct or, in
the case of the Deal Agent, the breach of its obligations expressly set forth in
this Agreement), or (ii) responsible in any manner to any of the Secured Parties
for any recitals, statements, representations or warranties made by the Borrower
contained in this Agreement or in any certificate, report, statement or other
document referred to or provided for in, or received under or in connection
with, this Agreement for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other document furnished
in connection herewith, or for any failure of the Borrower to perform its
obligations hereunder, or for the satisfaction of any condition specified in
Article III. The Deal Agent shall not be under any obligation to any Secured
Party to ascertain or to inquire as to the observance or performance of any of
the agreements or covenants contained in, or conditions of, this Agreement, or
to inspect the properties, books or records of the Borrower. The Deal Agent
shall not be deemed to have knowledge of any Amortization Event, Unmatured
Termination Event, Termination Event or Servicer Termination Event unless the
Deal Agent has received notice from the Borrower or a Secured Party.
(b) No Liquidity Agent nor any of its directors, officers, agents
or employees shall be (i) liable for any action lawfully taken or omitted to be
taken by it or them under or in connection with this Agreement (except for its,
their or such Person's own gross negligence or willful misconduct or, in the
case of a Liquidity Agent, the breach of its obligations expressly set forth in
this Agreement), or (ii) responsible in any manner to the Deal Agent or any of
the Secured Parties for any recitals, statements, representations or warranties
made by the Borrower contained in this Agreement or in any certificate, report,
statement or other document referred to or provided for in, or received under or
in connection with, this Agreement or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
document furnished in connection herewith, or for any failure of the Borrower to
perform its obligations hereunder, or for the satisfaction of any condition
specified in Article III. No Liquidity Agent shall be under any obligation to
the Deal Agent or any Secured Party to ascertain or to inquire as to the
observance or performance of any of the agreements or covenants contained in, or
conditions of, this Agreement, or to inspect the properties, books or records of
the Borrower. No Liquidity Agent shall be deemed to have knowledge of any
Amortization Event, Unmatured Termination Event, Termination Event unless such
Liquidity Agent has received notice from the Borrower, the Deal Agent or a
Secured Party.
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(c) Neither the Collateral Agent nor any of its directors,
officers, agents or employees shall be (i) liable for any action lawfully taken
or omitted to be taken by it or them under or in connection with this Agreement
(except for its, their or such Person's own gross negligence or willful
misconduct or, in the case of the Collateral Agent, the breach of its
obligations expressly set forth in this Agreement), or (ii) responsible in any
manner to any of the Secured Parties for any recitals, statements,
representations or warranties made by the Borrower contained in this Agreement
or in any certificate, report, statement or other document referred to or
provided for in, or received under or in connection with, this Agreement for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other document furnished in connection herewith, or for
any failure of the Borrower to perform its obligations hereunder, or for the
satisfaction of any condition specified in Article III. The Collateral Agent
shall not be under any obligation to any Secured Party to ascertain or to
inquire as to the observance or performance of any of the agreements or
covenants contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrower. The Collateral Agent shall not be
deemed to have knowledge of any Amortization Event, Unmatured Termination Event,
Termination Event or Servicer Termination Event unless the Collateral Agent has
received notice from the Borrower or a Secured Party.
Section 12.4. Reliance.
(a) The Deal Agent shall in all cases be entitled to rely, and
shall be fully protected in relying, upon any document or conversation believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Deal Agent. The Deal Agent shall
in all cases be fully justified in failing or refusing to take any action under
this Agreement or any other document furnished in connection herewith unless it
shall first receive such advice or concurrence of VFCC or the Required Investors
or all of the Secured Parties, as applicable, as it deems appropriate or it
shall first be indemnified to its satisfaction by the Secured Parties, provided
that unless and until the Deal Agent shall have received such advice, the Deal
Agent may take or refrain from taking any action, as the Deal Agent shall deem
advisable and in the best interests of the Secured Parties. The Deal Agent shall
in all cases be fully protected in acting, or in refraining from acting, in
accordance with a request of VFCC or the Required Investors or all of the
Secured Parties, as applicable, and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Secured Parties.
(b) Each Liquidity Agent shall in all cases be entitled to rely,
and shall be fully protected in relying, upon any document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by such Liquidity Agent. Each Liquidity
Agent shall in all cases be fully justified in failing or refusing to take any
action under this Agreement or any other document furnished in connection
herewith unless it shall first receive such advice or concurrence of its related
Investors as it deems appropriate or it shall first be indemnified to its
satisfaction by its related Investors, provided that unless and until such
Liquidity Agent shall have received such advice, such Liquidity Agent may take
or refrain from taking any action, as such Liquidity Agent shall deem advisable
and in the best interests of its related Investors. Each
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Liquidity Agent shall in all cases be fully protected in acting, or in
refraining from acting, in accordance with a request of its related Investors
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the related Investors.
(c) The Collateral Agent shall in all cases be entitled to rely,
and shall be fully protected in relying, upon any document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Collateral Agent. The Collateral
Agent shall in all cases be fully justified in failing or refusing to take any
action under this Agreement or any other document furnished in connection
herewith unless it shall first receive such advice or concurrence of the
Required Investors or all of the Secured Parties, as applicable, as it deems
appropriate or it shall first be indemnified to its satisfaction by the Secured
Parties, provided that unless and until the Collateral Agent shall have received
such advice, the Collateral Agent may take or refrain from taking any action, as
the Collateral Agent shall deem advisable and in the best interests of the
Secured Parties. The Collateral Agent shall in all cases be fully protected in
acting, or in refraining from acting, in accordance with a request of the
Required Investors or all of the Secured Parties, as applicable, and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Secured Parties.
Section 12.5. Non-Reliance on Deal Agent, Liquidity Agents, Collateral
Agent and Other Lenders. Each Secured Party expressly acknowledges that neither
the Deal Agent, any Liquidity Agent, the Collateral Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to it and that no act by
the Deal Agent, any Liquidity Agent or the Collateral Agent hereafter taken,
including, without limitation, any review of the affairs of the Borrower, shall
be deemed to constitute any representation or warranty by the Deal Agent, any
Liquidity Agent or the Collateral Agent. Each Secured Party represents and
warrants to the Deal Agent, each Liquidity Agent and the Collateral Agent that
it has and will, independently and without reliance upon the Deal Agent, any
Liquidity Agent, the Collateral Agent or any other Secured Party and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of the Borrower
and made its own decision to enter into this Agreement or Hedging Agreement, as
the case may be.
Section 12.6. Reimbursement and Indemnification. The Investors agree to
reimburse and indemnify the Deal Agent, the related Liquidity Agent, the
Collateral Agent and each of their respective officers, directors, employees,
representatives and agents ratably according to their pro rata shares, to the
extent not paid or reimbursed by the Borrower (i) for any amounts for which a
Liquidity Agent, acting in its capacity as Liquidity Agent for its related
Investors, the Deal Agent, acting in its capacity as Deal Agent, or the
Collateral Agent, acting in its capacity as Collateral Agent is entitled to
reimbursement by the Borrower hereunder and (ii) for any other expenses incurred
by a Liquidity Agent, acting in its capacity as Liquidity Agent for its related
Investors, the Deal Agent, in its capacity as Deal Agent or the Collateral
Agent, acting in its capacity as Collateral Agent and acting on behalf of the
Secured Parties, in connection with the administration and enforcement of this
Agreement.
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Section 12.7. Deal Agent, Liquidity Agents and Collateral Agent in
their Individual Capacities. The Deal Agent, the Liquidity Agents, the
Collateral Agent and each of their respective Affiliates may make loans to,
accept deposits from and generally engage in any kind of business with the
Borrower or any Affiliate of the Borrower as though the Deal Agent, the
Liquidity Agents or the Collateral Agent, as the case may be, were not the Deal
Agent, a Liquidity Agent or the Collateral Agent, as the case may be, hereunder.
With respect to each Funding pursuant to this Agreement, the Deal Agent, the
Liquidity Agents, the Collateral Agent and each of their respective Affiliates
shall have the same rights and powers under this Agreement as any Lender and may
exercise the same as though it were not the Deal Agent, a Liquidity Agent or the
Collateral Agent, as the case may be, and the terms "Investor," "Lender,"
"Investors" and "Lenders" shall include the Deal Agent, the Collateral Agent or
the Liquidity Agents, as the case may be, each in its individual capacity.
Section 12.8. Successor Deal Agent, Liquidity Agents or Collateral
Agent.
(a) The Deal Agent may, upon 5 days' notice to the Borrower and
the Secured Parties, and the Deal Agent will, upon the direction of VFCC resign
as Deal Agent. If the Deal Agent shall resign, then VFCC during such 5-day
period shall appoint a successor agent. If for any reason no successor Deal
Agent is appointed by VFCC during such 5-day period, then effective upon the
expiration of such 5-day period, the Secured Parties shall perform all of the
duties of the Deal Agent hereunder and the Borrower shall make all payments in
respect of the Aggregate Unpaids or under any fee letter delivered in connection
herewith directly to the applicable Secured Party and for all purposes shall
deal directly with each Secured Party. After any retiring Deal Agent's
resignation hereunder as Deal Agent, the provisions of Article XI and Article
XII shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Deal Agent under this Agreement.
(b) Each Liquidity Agent may, upon 5 days' notice to the Borrower,
the Deal Agent and its related Investors, and a Liquidity Agent will, upon the
direction of all of the related Investors (other than such Liquidity Agent, in
its individual capacity) resign as Liquidity Agent for such Investors. If a
Liquidity Agent shall resign, then the related Investors during such 5-day
period shall appoint from among such Investors a successor Liquidity Agent. If
for any reason no successor Liquidity Agent is appointed by the related
Investors during such 5-day period, then effective upon the expiration of such
5-day period, the related Investors shall perform all of such duties of such
Liquidity Agent hereunder and all payments in respect of the Aggregate Unpaids.
After any retiring Liquidity Agent's resignation hereunder as a Liquidity Agent,
the provisions of Article XI and Article XII shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was a Liquidity Agent
under this Agreement.
(c) The Collateral Agent may, upon 5 days' notice to the Borrower
and the Secured Parties, and the Collateral Agent will, upon the direction of
all of the Secured Parties resign as Collateral Agent. If the Collateral Agent
shall resign, then the Secured Parties, during such 5-day period shall appoint a
successor agent. If for any reason no successor Collateral Agent is appointed by
the Secured Parties during such 5-day period, then effective upon the expiration
of such 5-day period, the Secured Parties shall perform all of the duties of the
Collateral Agent hereunder and the Borrower shall make all payments in respect
of the Aggregate Unpaids or under any fee letter delivered in connection
herewith directly to the applicable Secured Party and
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for all purposes shall deal directly with each Secured Party. After any retiring
Collateral Agent's resignation hereunder as Collateral Agent, the provisions of
Article XI and Article XII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Collateral Agent under this Agreement.
ARTICLE XIII
ASSIGNMENTS; PARTICIPATIONS
Section 13.1. Assignments and Participations.
(a) Each Investor may upon at least 30 days notice to its related
CP Conduit, the Deal Agent, the Collateral Agent, the related Liquidity Agent
and S&P and Xxxxx'x, assign to one or more banks or other entities all or a
portion of its rights and obligations under this Agreement; provided, however,
that (i) each such assignment shall be of a constant, and not a varying
percentage of all of the assigning Investor's rights and obligations under this
Agreement; (ii) the amount of the Commitment of the assigning Investor being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than the lesser of (A) $15,000,000 or an integral multiple of $1,000,000 in
excess of that amount and (B) the full amount of the assigning Investor's
Commitment; (iii) each such assignment shall be to an Eligible Assignee; (iv)
the parties to each such assignment shall execute and deliver to the Deal Agent,
for its acceptance and recording in the Register, an Assignment and Acceptance,
together with a processing and recordation fee of $3,500 or such lesser amount
as shall be approved by the Deal Agent; (v) the parties to each such assignment
shall have agreed to reimburse the Deal Agent, the Liquidity Agents, the
Collateral Agent and the CP Conduits for all fees, costs and expenses
(including, without limitation, the reasonable fees and out-of-pocket expenses
of counsel for each of the Deal Agent, the Liquidity Agents and the CP Conduits)
incurred by the Deal Agent, the Liquidity Agents, the Collateral Agent and the
CP Conduits, respectively, in connection with such assignment; and (vi) there
shall be no increased costs, expenses or taxes incurred by the Deal Agent, the
Liquidity Agents, the Collateral Agent or the CP Conduits upon such assignment
or participation, and provided further that upon the effective date of such
assignment the provisions of Section 3.03(f) of the Administration Agreement
shall be satisfied. Upon such execution, delivery and acceptance by the Deal
Agent, the Collateral Agent and the Liquidity Agents and the recording by the
Deal Agent, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be the date of acceptance thereof by the
Deal Agent, the Collateral Agent and the Liquidity Agents, unless a later date
is specified therein, (i) the assignee thereunder shall be a party hereto and,
to the extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, have the rights and obligations of
an Investor hereunder and (ii) the Investor assignor thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Investor's
rights and obligations under this Agreement, such Investor shall cease to be a
party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Investor assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning
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Investor makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto; (ii) such assigning Investor
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of its related CP Conduit or any other CP Conduit or
the performance or observance by its related CP Conduit or any other CP Conduit
of any of its obligations under this Agreement or any other instrument or
document furnished pursuant hereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of such financial
statements and other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance upon the
Deal Agent, the Collateral Agent or the Liquidity Agents, such assigning
Investor or any other Investor and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assigning Investor
and such assignee confirm that such assignee is an Eligible Assignee; (vi) such
assignee appoints and authorizes each of the Deal Agent, the Collateral Agent
and the Liquidity Agents to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to such agent by the
terms hereof, together with such powers as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement are required
to be performed by it as an Investor.
(c) The Deal Agent shall maintain at its address referred to
herein a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Investors
and the Commitment of, and the Capital of the Funding (the "Register"). The
entries in the Register shall be conclusive and binding for all purposes, absent
manifest error, and each CP Conduit, the Borrower and the Investors may treat
each Person whose name is recorded in the Register as an Investor hereunder for
all purposes of this Agreement. The Register shall be available for inspection
by each CP Conduit, the Liquidity Agents or any Investor at any reasonable time
and from time to time upon reasonable prior notice.
(d) Subject to the provisions of Section 13.1(a), upon its receipt
of an Assignment and Acceptance executed by an assigning Investor and an
assignee, the Deal Agent, the Collateral Agent and the Liquidity Agents shall
each, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit D hereto, accept such Assignment and
Acceptance, and the Deal Agent shall then (i) record the information contained
therein in the Register and (ii) give prompt notice thereof to each CP Conduit.
(e) Each Investor may sell participations to one or more banks or
other entities in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitment and its portion of the Funding and related Collateral); provided,
however, that (i) such Investor's obligations under this Agreement (including,
without limitation, its Commitment hereunder) shall remain unchanged; (ii) such
Investor shall remain solely responsible to the other parties hereto for the
performance of such obligations; and (iii) the Deal Agent and the other
Investors shall continue to deal solely and directly with such Investor in
connection with such Investor's rights and obligations under this
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Agreement; and, provided, further, that the Deal Agent shall have confirmed that
upon the effective date of such participation the provisions of Section 3.03(f)
of the Administration Agreement shall be satisfied. Notwithstanding anything
herein to the contrary, each participant shall have the rights of an Investor
(including any right to receive payment) under Sections 2.13 and 2.14; provided,
however, that no participant shall be entitled to receive payment under either
such Section in excess of the amount that would have been payable under such
Section by the Borrower to the Investor granting its participation had such
participation not been granted, and no Investor granting a participation shall
be entitled to receive payment under either such Section in an amount that
exceeds the sum of (i) the amount to which such Investor is entitled under such
Section with respect to any portion of the Capital that is not subject to any
participation plus (ii) the aggregate amount to which its participants are
entitled under such Sections with respect to the amounts of their respective
participations. With respect to any participation described in this Section
13.1, the participant's rights as set forth in the agreement between such
participant and the applicable Investor to agree to or to restrict such
Investor's ability to agree to any modification, waiver or release of any of the
terms of this Agreement or to exercise or refrain from exercising any powers or
rights that such Investor may have under or in respect of this Agreement shall
be limited to the right to consent to any of the matters set forth in Section
14.1 of this Agreement.
(f) Each Investor may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
13.1, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower or its related CP Conduit
furnished to such Investor by or on behalf of the Borrower or its related CP
Conduit.
(g) In the event (i) an Investor ceases to qualify as an Eligible
Assignee, or (ii) an Investor makes demand for compensation pursuant to Section
2.13 or Section 2.14, the related CP Conduit may, and, upon the direction of the
Borrower and prior to the occurrence of a Termination Event, shall, in any such
case, notwithstanding any provision to the contrary herein, replace such
Investor with an Eligible Assignee by giving three (3) Business Days prior
written notice to such Investor. In the event of the replacement of an Investor,
such Investor agrees (i) to assign all of its rights and obligations hereunder
to an Eligible Assignee selected by the related CP Conduit upon payment to such
Investor of the amount of such Investor's Capital together with any accrued and
unpaid Yield thereon, all accrued and unpaid commitment fees owing to such
Investor and all other amounts owing to such Investor hereunder and (ii) to
execute and deliver an Assignment and Acceptance and such other documents
evidencing such assignment as shall be necessary or reasonably requested by the
related CP Conduit or the Deal Agent. In the event that any Investor ceases to
qualify as an Eligible Assignee, such affected Investor agrees (1) to give the
Deal Agent, the Borrower and the related CP Conduit prompt written notice
thereof and (2) subject to the following proviso, to reimburse the Deal Agent,
the related Liquidity Agent, the Borrower, the related CP Conduit and the
relevant assignee for all fees, costs and expenses (including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for each
of the Deal Agent, the Liquidity Agents, the Collateral Agent, the Borrower and
the related CP Conduit and such assignee) incurred by the Deal Agent, the
related Liquidity Agent, the Collateral Agent, the Borrower, the related CP
Conduit and such assignee, respectively, in connection with any assignment made
pursuant to this Section 13.1(g) by such affected Investor; provided, however,
that such affected Investor's liability for such costs, fees
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and expenses shall be limited to the amount of any up-front fees paid to such
affected Investor at the time that it became a party to this Agreement.
(h) Nothing herein shall prohibit any Investor from pledging or
assigning as collateral any of its rights under this Agreement to any Federal
Reserve Bank in accordance with Applicable Law and any such pledge or collateral
assignment may be made without compliance with Section 13.1(a) or Section
13.1(b).
(i) In the event any Investor causes increased costs, expenses or
taxes to be incurred by the Deal Agent, Liquidity Agents, the Collateral Agent
or the CP Conduits in connection with the assignment or participation of such
Investor's rights and obligations under this Agreement to an Eligible Assignee,
then such Investor agrees that it will make reasonable efforts to assign such
increased costs, expenses or taxes to such Eligible Assignee in accordance with
the provisions of this Agreement.
(j) VFCC or PARCO, as applicable, may at any time assign, or grant
a security interest in or sell a participation interest in the Capital and the
Collateral (or portion thereof) to any Person. The parties to any such
assignment, grant or sale of participation interest, shall execute and deliver
to the related Liquidity Agent, for its acceptance and recording in its books
and records, such agreement or document as may be satisfactory to such parties
and the related Liquidity Agent.
ARTICLE XIV
MISCELLANEOUS
Section 14.1. Amendments and Waivers.
(a) Except as provided in this Section 14.1, no amendment, waiver
or other modification of any provision of this Agreement shall be effective
without the written agreement of the Borrower, the Deal Agent, the Collateral
Agent and the Required Investors; provided, however, that no such amendment,
waiver or modification shall affect the rights or obligations of any Hedge
Counterparty or the Backup Servicer without the written agreement of such
Person. Any waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.
(b) No amendment, waiver or other modification of this Agreement
shall:
(i) without the consent of each affected Lender, (A) extend
the Commitment Termination Date or the date of any payment or deposit of
Collections by the Borrower or the Servicer, (B) reduce the rate or extend the
time of payment of Yield (or any component thereof), (C) reduce any fee payable
to the Deal Agent for the benefit of the Lenders, (D) except pursuant to Article
XIII hereof, change the amount of the Capital of any Lender, an Investor's pro
rata share or an Investor's Commitment, (E) amend, modify or waive any provision
of the definition of Required Investors or this Section 14.1(b), (F) consent to
or permit the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement or (G) amend or modify any defined term (or any
defined term used directly or indirectly in such defined term) used in clauses
(A) through (F) above in a manner that would circumvent the intention of the
restrictions set forth in such clauses;
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(ii) without the written consent of the Deal Agent or the
Collateral Agent, as applicable, amend, modify or waive any provision of this
Agreement if the effect thereof is to affect the rights or duties of the Deal
Agent or the Collateral Agent, as applicable; or
(iii) without the consent of the Deal Agent and the Liquidity
Agent for the PARCO Purchaser Group, amend or modify (A) Section 10.1, (B) the
definitions of "Amortization Event," "Eligible Dealer Agreement," "Hedging
Agreement," "Net Advance Rate," "Initial Facility Limit," "Termination Date" and
"Required Reserve Account Amount" as set forth in Section 1.1, (C) Section
2.7(a) or (D) Section 5.3.
(c) Notwithstanding the foregoing provisions of this Section 14.1,
without the consent of the Investors, the Deal Agent may, with the consent of
the Borrower amend this Agreement solely to add additional Persons as Investors
hereunder. Any modification or waiver shall apply to each of the Lenders equally
and shall be binding upon the Borrower, the Lenders, the Collateral Agent and
the Deal Agent.
Section 14.2. Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including telex communication and communication by facsimile copy) and mailed,
telexed, transmitted or delivered, as to each party hereto, at its address set
forth under its name on the signature pages hereof, in the Joinder related to
such party or specified in such party's Assignment and Acceptance, as the case
may be, or at such other address as shall be designated by such party in a
written notice to the other parties hereto. All such notices and communications
shall be effective, upon receipt, or in the case of (a) notice by mail, five
days after being deposited in the United States mail, first class postage
prepaid, (b) notice by telex, when telexed against receipt of answer back, or
(c) notice by facsimile copy, when verbal communication of receipt is obtained,
except that notices and communications pursuant to Article XIV shall not be
effective until received with respect to any notice sent by mail or telex.
Section 14.3. Ratable Payments. If any Secured Party, whether by setoff
or otherwise, has payment made to it with respect to any portion of the
Aggregate Unpaids owing to such Secured Party (other than payments received
pursuant to Section 11.1 in a greater proportion than that received by any other
Secured Party), such Secured Party agrees, promptly upon demand, to purchase for
cash without recourse or warranty a portion of the Aggregate Unpaids held by the
other Secured Parties so that after such purchase each Secured Party will hold
its ratable proportion of the Aggregate Unpaids; provided, however, that if all
or any portion of such excess amount is thereafter recovered from such Secured
Party, such purchase shall be rescinded and the purchase price restored to the
extent of such recovery, but without interest.
Section 14.4. No Waiver; Remedies. No failure on the part of the Deal
Agent, the Collateral Agent, the Backup Servicer or a Secured Party to exercise,
and no delay in exercising, any right or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right. The rights and remedies herein provided are cumulative and not
exclusive of any rights and remedies provided by law.
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Section 14.5. Binding Effect; Benefit of Agreement. This Agreement
shall be binding upon and inure to the benefit of the Borrower, the Deal Agent,
the Backup Servicer, the Collateral Agent, the Secured Parties and their
respective successors and permitted assigns and, in addition, the provisions of
2.7(a)(i) and 2.7(a)(xi) shall inure to the benefit of each Hedge Counterparty,
whether or not that Hedge Counterparty is a Secured Party.
Section 14.6. Term of this Agreement. This Agreement, including,
without limitation, the Borrower's representations, warranties and covenants set
forth in Articles IV and V, and the Servicer's representations, warranties and
covenants set forth in Articles V and VI hereof, create and constitute the
continuing obligation of the parties hereto in accordance with its terms, and
shall remain in full force and effect until the Collection Date; provided,
however, that the rights and remedies with respect to any breach of any
representation and warranty made or deemed made by the Borrower or Servicer
pursuant to Articles III and IV and the indemnification and payment provisions
of Article XI and Article XII and the provisions of Section 14.10 and Section
14.11 shall be continuing and shall survive any termination of this Agreement.
Section 14.7. Governing Law; Consent to Jurisdiction; Waiver of
Objection to Venue. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO
AND EACH HEDGE COUNTERPARTY HEREBY AGREES TO THE NON-EXCLUSIVE JURISDICTION OF
ANY FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK. EACH OF THE PARTIES
HERETO AND EACH SECURED PARTY HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON
CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY
OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
Section 14.8. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HERETO AND EACH HEDGE COUNTERPARTY HEREBY
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE PARTIES HERETO ARISING OUT
OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP BETWEEN ANY OF
THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
INSTEAD, ANY SUCH DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL
WITHOUT A JURY.
Section 14.9. Costs, Expenses and Taxes.
(a) In addition to the rights of indemnification granted to the
Deal Agent, the Liquidity Agents, the Backup Servicer, the Collateral Agent, the
Secured Parties and its or their Affiliates and officers, directors, employees
and agents thereof under Article XI hereof, the Borrower agrees to pay on demand
all costs and expenses of the Deal Agent, the Liquidity Agents, the Backup
Servicer, the Collateral Agent and the Secured Parties incurred in connection
with the preparation, execution, delivery, administration (including periodic
auditing), amendment or modification of, or any waiver or consent issued in
connection with, this Agreement, the other Transaction Documents and the other
documents to be delivered hereunder
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or thereunder, or in connection herewith or therewith (excluding any Hedging
Agreement), including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for the Deal Agent, the Liquidity Agents, the Backup
Servicer, the Collateral Agent and the Secured Parties with respect thereto and
with respect to advising the Deal Agent, the Liquidity Agents, the Backup
Servicer, the Collateral Agent and the Secured Parties as to their respective
rights and remedies under this Agreement, the other Transaction Documents and
the other documents to be delivered hereunder or thereunder, or in connection
herewith or therewith (excluding any Hedging Agreement), and all costs and
expenses, if any (including reasonable counsel fees and expenses), incurred by
the Deal Agent, the Liquidity Agents, the Backup Servicer, the Collateral Agent
or the Secured Parties in connection with the enforcement of this Agreement, the
other Transaction Documents and the other documents to be delivered hereunder or
thereunder, or in connection herewith or therewith (including any Hedging
Agreement).
(b) The Borrower shall pay on demand any and all stamp, sales,
excise and other taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing and recording of this Agreement,
the other Transaction Documents, the other documents to be delivered hereunder
or any agreement or other document providing liquidity support, credit
enhancement or other similar support to the Lender in connection with this
Agreement or the funding or maintenance of any Funding hereunder.
(c) The Borrower shall pay on demand all other costs, expenses and
Taxes (excluding income taxes) incurred by any Issuer or any shareholder of such
Issuer ("Other Costs"), including, without limitation, all costs and expenses
incurred by the Deal Agent in connection with periodic audits of the Borrower's
or the Servicer's books and records and the cost of rating such Issuer's
commercial paper with respect to financing any Advance hereunder by independent
financial rating agencies.
Section 14.10. No Proceedings.
(a) Each of the parties hereto (other than each CP Conduit, as to
itself only) and each Hedge Counterparty (by accepting the benefits of this
Agreement) hereby agrees that it will not institute against, or join any other
Person in instituting against any CP Conduit (other than itself) any Insolvency
Proceeding so long as any commercial paper issued by such CP Conduit shall be
outstanding and there shall not have elapsed one year and one day since the last
day on which any such commercial paper shall have been outstanding.
(b) Each of the parties hereto (other than the Deal Agent and each
CP Conduit) hereby agrees that it will not institute against, or join any other
Person in instituting against the Borrower any Insolvency Proceeding so long as
there shall not have elapsed one year and one day since the Collection Date.
Section 14.11. Recourse Against Certain Parties.
(a) No recourse under or with respect to any obligation, covenant
or agreement (including, without limitation, the payment of any fees or any
other obligations) of any Secured Party as contained in this Agreement or any
other agreement, instrument or document entered into by it pursuant hereto or in
connection herewith shall be had against any administrator of
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such Secured Party or any incorporator, affiliate, stockholder, officer,
employee or director of such Secured Party or of any such administrator, as
such, by the enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any statute or otherwise; it being expressly agreed and
understood that the agreements of such Secured Party contained in this Agreement
and all of the other agreements, instruments and documents entered into by it
pursuant hereto or in connection herewith are, in each case, solely the
corporate obligations of such Secured Party, and that no personal liability
whatsoever shall attach to or be incurred by any administrator of such Secured
Party or any incorporator, stockholder, affiliate, officer, employee or director
of such Secured Party or of any such administrator, as such, or any other of
them, under or by reason of any of the obligations, covenants or agreements of
such Secured Party contained in this Agreement or in any other such instruments,
documents or agreements, or that are implied therefrom, and that any and all
personal liability of every such administrator of such Secured Party and each
incorporator, stockholder, affiliate, officer, employee or director of such
Secured Party or of any such administrator, or any of them, for breaches by such
Secured Party of any such obligations, covenants or agreements, which liability
may arise either at common law or at equity, by statute or constitution, or
otherwise, is hereby expressly waived as a condition of and in consideration for
the execution of this Agreement. The provisions of this Section 14.11 shall
survive the termination of this Agreement.
(b) Notwithstanding anything in this Agreement to the contrary, no
CP Conduit shall have any obligation to pay any amount required to be paid by it
hereunder in excess of any amount available to such CP Conduit after paying or
making provision for the payment of its Commercial Paper Notes. All payment
obligations of each CP Conduit hereunder are contingent on the availability of
funds in excess of the amounts necessary to pay its Commercial Paper Notes; and
each of the other parties hereto agrees that it will not have a claim under
Section 101(5) of the Bankruptcy Code if and to the extent that any such payment
obligation owed to it by any CP Conduit exceeds the amount available to such CP
Conduit to pay such amount after paying or making provision for the payment of
its Commercial Paper Notes.
Section 14.12. Protection of Right, Title and Interest in Assets;
Further Action Evidencing the Funding.
(a) Each of the Borrower and the Servicer shall cause this
Agreement, all amendments hereto and/or all financing statements and
continuation statements and any other necessary documents covering the right,
title and interest of the Deal Agent as agent for the Secured Parties and of the
Secured Parties to the Assets to be promptly recorded, registered and filed, and
at all times to be kept recorded, registered and filed, all in such manner and
in such places as may be required by law fully to preserve and protect the
right, title and interest of the Deal Agent as agent for the Secured Parties
hereunder to all property comprising the Assets. Each of the Borrower and the
Servicer shall deliver to the Deal Agent file-stamped copies of, or filing
receipts for, any document recorded, registered or filed as provided above, as
soon as available following such recording, registration or filing. The Borrower
shall cooperate fully with the Servicer in connection with the obligations set
forth above and will execute any and all documents reasonably required to
fulfill the intent of this Section 14.12(a).
(b) Each of the Borrower and the Servicer agrees that from time to
time, at its expense, it will promptly execute and deliver all instruments and
documents, and take all actions,
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that the Deal Agent may reasonably request in order to perfect, protect or more
fully evidence the Funding hereunder, or to enable the Deal Agent or the Secured
Parties to exercise and enforce their rights and remedies hereunder or under any
Transaction Document.
(c) If the Borrower or the Servicer fails to perform any of its
obligations hereunder, the Deal Agent or any Secured Party may (but shall not be
required to) perform, or cause performance of, such obligation; and the Deal
Agent's or such Secured Party's costs and expenses incurred in connection
therewith shall be payable by the Borrower (if the Servicer that fails to so
perform is the Borrower or an Affiliate thereof) as provided in Article XI, as
applicable. The Borrower irrevocably authorizes the Deal Agent and appoints the
Deal Agent as its attorney-in-fact to act on behalf of the Borrower (i) to
execute on behalf of the Borrower as debtor and to file financing statements
necessary or desirable in the Deal Agent's sole discretion to perfect and to
maintain the perfection and priority of the interest of the Secured Parties in
the Assets and (ii) to file a carbon, photographic or other reproduction of this
Agreement or any financing statement with respect to the Assets as a financing
statement in such offices as the Deal Agent in its sole discretion deems
necessary or desirable to perfect and to maintain the perfection and priority of
the interests of the Secured Parties in the Assets. This appointment is coupled
with an interest and is irrevocable.
(d) Without limiting the generality of the foregoing, Borrower
will, not earlier than six (6) months and not later than three (3) months prior
to the fifth anniversary of the date of filing of the financing statement
referred to in Section 3.1 or any other financing statement filed pursuant to
this Agreement or in connection with the Funding hereunder, unless the
Collection Date shall have occurred:
(i) execute and deliver and file or cause to be filed an
appropriate continuation statement with respect to such financing statement; and
(ii) deliver or cause to be delivered to the Deal Agent an
opinion of the counsel for Borrower, in form and substance reasonably
satisfactory to the Deal Agent, confirming and updating the opinion delivered
pursuant to Section 3.1 with respect to perfection and priority and otherwise to
the effect that the grant of the security interest in the Collateral hereunder
continues to be an enforceable and perfected first priority security interest,
subject to no other Liens of record except as provided herein or otherwise
permitted hereunder, which opinion may contain usual and customary assumptions,
limitations and exceptions.
Section 14.13. Confidentiality; Tax Treatment Disclosure.
(a) Each of the Deal Agent, the Secured Parties, the Liquidity
Agents, the Servicer, the Collateral Agent, the Backup Servicer and the Borrower
shall maintain and shall cause each of its employees and officers to maintain
the confidentiality of the Agreement and all information with respect to the
other parties, including all information regarding the business of the Borrower
and the Servicer hereto and their respective businesses obtained by it or them
in connection with the structuring, negotiating and execution of the
transactions contemplated herein, except that each such party and its officers
and employees may (i) disclose such information to its external accountants,
attorneys, investors, potential investors and the agents of such Persons
("Excepted Persons"), provided, however, that each Excepted Person shall, as a
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condition to any such disclosure, agree for the benefit of the Deal Agent, the
Secured Parties, the Liquidity Agents, the Servicer, the Collateral Agent, the
Backup Servicer and the Borrower that such information shall be used solely in
connection with such Excepted Person's evaluation of, or relationship with, the
Borrower and its affiliates, (ii) disclose the existence of the Agreement, but
not the financial terms thereof, (iii) disclose such information as is required
by the Transaction Documents or Applicable Law and (iv) disclose the Agreement
and such information in any suit, action, proceeding or investigation (whether
in law or in equity or pursuant to arbitration) involving any of the Transaction
Documents or any Hedging Agreement for the purpose of defending itself, reducing
its liability, or protecting or exercising any of its claims, rights, remedies,
or interests under or in connection with any of the Transaction Documents or any
Hedging Agreement. It is understood that the financial terms that may not be
disclosed except in compliance with this Section 14.13(a) include, without
limitation, all fees and other pricing terms, and all Termination Events,
Servicer Termination Events, and priority of payment provisions.
(b) Anything herein to the contrary notwithstanding, each of the
Borrower and the Servicer hereby consents to the disclosure of any nonpublic
information with respect to it (i) to the Deal Agent, the Liquidity Agents, the
Collateral Agent, the Backup Servicer or the Secured Parties by each other, (ii)
by the Deal Agent or the Lender to any prospective or actual assignee or
participant of any of them or (iii) by the Deal Agent, the Collateral Agent, any
Liquidity Agent or a Lender to any Rating Agency, commercial paper dealer or
provider of a surety, guaranty or credit or liquidity enhancement to a Lender
and to any officers, directors, employees, outside accountants and attorneys of
any of the foregoing, provided each such Person is informed of the confidential
nature of such information. In addition, the Secured Parties, the Liquidity
Agents, the Backup Servicer and the Deal Agent may disclose any such nonpublic
information as required pursuant to any law, rule, regulation, direction,
request or order of any judicial, administrative or regulatory authority or
proceedings (whether or not having the force or effect of law).
(c) Notwithstanding anything herein to the contrary, the foregoing
shall not be construed to prohibit (i) disclosure of any and all information
that is or becomes publicly known, (ii) disclosure of any and all information
(A) if required to do so by any applicable statute, law, rule or regulation, (B)
to any government agency or regulatory body having or claiming authority to
regulate or oversee any respects of the Collateral Agent's or Backup Servicer's
business or that of their affiliates, (C) pursuant to any subpoena, civil
investigative demand or similar demand or request of any court, regulatory
authority, arbitrator or arbitration to which the Collateral Agent or Backup
Servicer or an affiliate or an officer, director, employer or shareholder
thereof is a party, (D) in any preliminary or final offering circular,
registration statement or contract or other document pertaining to the
transactions contemplated herein approved in advance by the Borrower or Servicer
or (E) to any affiliate, independent or internal auditor, agent, employee or
attorney of the Collateral Agent or Backup Servicer having a need to know the
same, provided that the Collateral Agent or Backup Servicer advises such
recipient of the confidential nature of the information being disclosed, or
(iii) any other disclosure authorized by the Transaction Documents or the
Borrower or Servicer.
(d) Notwithstanding anything herein to the contrary, any party to
this Agreement (and any employee, representative or other agent of any party to
this Agreement) may disclose to any
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and all persons, without limitation of any kind, the tax treatment and tax
structure of the transactions contemplated by this Agreement and all materials
of any kind (including opinions or other tax analyses) that are provided to it
relating to such tax treatment and tax structure; provided, however, that such
disclosure may not be made to the extent required to be kept confidential to
comply with any applicable federal or state securities laws; and provided
further that (to the extent not inconsistent with the foregoing) such disclosure
shall be made without disclosing the names or other identifying information of
any party.
Section 14.14. Execution in Counterparts; Severability; Integration.
This Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which when taken together shall constitute
one and the same agreement. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby. This Agreement and any
agreements or letters (including fee letters) executed in connection herewith
contains the final and complete integration of all prior expressions by the
parties hereto with respect to the subject matter hereof and shall constitute
the entire agreement among the parties hereto with respect to the subject matter
hereof, superseding all prior oral or written understandings other than any fee
letter delivered by the Originator to the Deal Agent and the Lenders.
Section 14.15. Waiver of Setoff. Each of the parties thereto (other
than each CP Conduit, as to itself) hereby waives any right of setoff it may
have or to which it may be entitled under this Agreement from time to time
against any CP Conduit or its assets.
[Remainder of Page Intentionally Left Blank.]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective officers thereunto duly authorized, as of the date first above
written.
THE BORROWER: CAC WAREHOUSE FUNDING CORPORATION II
By: /s/ Xxxxxxx X. Xxxx
-------------------------------
Name: Xxxxxxx X. Xxxx
-----------------------------
Title: Treasurer
----------------------------
CAC Warehouse Funding Corporation II
Silver Triangle Building
00000 Xxxx Xxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx
Facsimile No. 000-000-0000
Confirmation No.: 248-353-2700 (ext. 4217)
THE SERVICER: CREDIT ACCEPTANCE CORPORATION
By: /s/ Xxxxxxx X. Xxxx
-------------------------------
Name: Xxxxxxx X. Xxxx
-----------------------------
Title: Treasurer
----------------------------
CAC Warehouse Funding Corporation II
Silver Triangle Building
00000 Xxxx Xxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx
Facsimile No. 000-000-0000
Confirmation No.: 248-353-2700 (ext. 4217)
[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]
101
THE INVESTOR WACHOVIA BANK, NATIONAL
FOR THE VFCC ASSOCIATION
PURCHASER GROUP:
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
-----------------------------
Title: Vice President
----------------------------
Wachovia Bank, National Association
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Investment Management
Facsimile No.: (000) 000-0000
Confirmation No: (000) 000-0000
VFCC: VARIABLE FUNDING CAPITAL
COMPANY, LLC
By: Wachovia Capital Markets, LLC,
as attorney-in-fact
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
-------------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
-----------------------------
Title: Vice President
----------------------------
Variable Funding Capital Company, LLC
c/o Wachovia Capital Markets, LLC
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Conduit Administration
Facsimile No.: (000) 000-0000
Confirmation No.: (000) 000-0000
With respect to notices required pursuant to Section 14.2, a copy of notices
sent to VFCC shall be sent to:
Lord Securities Corp.
0 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Vice President
Facsimile No.: (000) 000-0000
Confirmation No.: (000) 000-0000
[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]
102
THE DEAL AGENT: WACHOVIA CAPITAL MARKETS, LLC
By: /s/ Xxxx Xxxxx
-----------------------------
Name: Xxxx Xxxxx
-----------------------------
Title: Director
-----------------------------
Wachovia Capital Markets, LLC
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Conduit Administration
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
THE LIQUIDITY AGENT WACHOVIA BANK, NATIONAL
FOR THE VFCC ASSOCIATION
PURCHASER GROUP:
By: /s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx Xxxxxx
-----------------------------
Title: Vice President
-----------------------------
Wachovia Bank, National Association
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Conduit Administration
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]
103
THE INVESTOR JPMORGAN CHASE BANK, N.A.
FOR THE PARCO
PURCHASER GROUP:
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Name: Xxxxxx X. Xxxxxx
--------------------
Title: Vice President
--------------------
Xxxxx Xxxxx
00 X. Xxxxxxxx Xxxxxx
13th Floor, IL1-0612
Xxxxxxx, Xxxxxxxx 00000
Attention: Transaction Management
Facsimile No.: 000-000-0000
Confirmation No: 000-000-0000
PARCO: PARK AVENUE RECEIVABLES COMPANY
LLC
By: JPMorgan Chase Bank, N.A.,
its attorney-in-fact
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Name: Xxxxxx X. Xxxxxx
--------------------
Title: Vice President
--------------------
Xxxxx Xxxxx
00 X. Xxxxxxxx Xxxxxx
13th Floor, IL1-0612
Xxxxxxx, Xxxxxxxx 00000
Attention: Transaction Management
Facsimile No.: 000-000-0000
Confirmation No.: 000-000-0000
[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]
104
THE LIQUIDITY AGENT JPMORGAN CHASE BANK, N.A.
FOR THE PARCO
PURCHASER GROUP:
By: /s/ Xxxxxx X. Xxxxxx
------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
Chase Tower
00 X. Xxxxxxxx Xxxxxx
00xx Xxxxx, XX0-0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Conduit Administration
Facsimile No.: 000-000-0000
Telephone No.: 000-000-0000
[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]
105
THE COLLATERAL AGENT: WACHOVIA CAPITAL MARKETS, LLC, as
Collateral Agent
By: /s/ Xxxx Xxxxx
--------------------------
Title: Director
--------------------------
Wachovia Capital Markets, LLC
Xxx Xxxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Conduit Administration
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
THE BACKUP SERVICER: SYSTEMS & SERVICES TECHNOLOGIES, INC.
as Backup Servicer
By: /s/ Xxxxxx Xxxx
--------------------------
Title: EVP/Secretary
--------------------------
Systems & Services Technologies, Inc.
0000 Xxxxxxx Xxxx
Xx. Xxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx, President,
Xxxxxx Xxxx, EVP/General Counsel
Facsimile: (000) 000-0000
Telephone: (000) 000-0000; (000) 000-0000
106
Exhibit A
FORM OF FUNDING NOTICE
Reference is made to the First Amended and Restated Loan and Security Agreement,
dated as of February 15, 2006 (as amended, supplemented or otherwise modified
and in effect from time to time, the "Agreement"), by and among CAC Warehouse
Funding Corporation II, as borrower (in such capacity, the "Borrower"), Credit
Acceptance Corporation, as servicer (in such capacity, the "Servicer"), Variable
Funding Capital Company, LLC ("VFCC") and Park Avenue Receivables Company LLC
("PARCO"), as Lenders, the Investors named therein, Wachovia Bank, National
Association and JPMorgan Chase Bank, N.A., as Liquidity Agents, Wachovia Capital
Markets, LLC, as Deal Agent and Collateral Agent, Systems & Services
Technologies, Inc., as the Backup Servicer and each other CP Conduit, Investor
and Liquidity Agent party thereto. Terms defined in the Agreement, or
incorporated therein by reference, are used herein as therein defined.
(A) Funding Request. The Borrower hereby requests the
Funding pursuant to Section 2.1 and Section 2.3 of the Loan Agreement.
(B) Funding Information. The Funding shall (a) take
place on [__________] and (b) shall be in an amount equal to $[_______]. Each
Purchaser Group's pro rata share of the Funding shall be: [(i) ______________;
and (ii) ______________.]
(C) Representations. The Borrower hereby represents
and warrants that (i) all conditions precedent to the Funding described in
Article III of the Agreement have been satisfied and (ii) no Termination Event
or Unmatured Termination Event shall have occurred. This Funding Notice has been
made in accordance with the provisions of Section 2.1(a) of the Agreement.
(D) Irrevocable. This Funding Notice shall be
irrevocable.
(E) Governing Law. This Funding Notice shall be
governed by, and construed in accordance with, the laws of the State of New
York.
IN WITNESS WHEREOF, the undersigned has caused this Funding Notice to be
duly executed and delivered by its duly authorized officer as of the date first
above written.
CAC Warehouse Funding Corporation II
By
----------------------------------
Name:
Title:
A-1
Exhibit B
FORM OF ASSIGNMENT AND ACCEPTANCE
B-1
Exhibit B
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated __________, 20__
Reference is made to the First Amended and Restated Loan and Security
Agreement dated as of February 15, 2006 (as amended or modified from time to
time, the "Agreement") among CAC Warehouse Funding Corporation II, as borrower
(the "Borrower"), Credit Acceptance Corporation, as servicer (the "Servicer"),
the investors named therein, Variable Funding Capital Company, LLC, as a lender,
Park Avenue Receivables Company LLC, as a lender, Wachovia Capital Markets, LLC,
as deal agent and as collateral agent (the "Deal Agent" and the "Collateral
Agent"), Systems & Services Technologies, Inc., as backup servicer, Wachovia
Bank, National Association, a national banking association, as a liquidity agent
("Wachovia" and a "Liquidity Agent"), JPMorgan Chase Bank, N.A., as a liquidity
agent ("JPMorgan,," a "Liquidity Agent," and collectively with Wachovia and any
other Liquidity Agent, the "Liquidity Agents") and each other CP Conduit,
Investor and Liquidity Agent party thereto. Terms defined in the Agreement are
used herein with the same meaning.
__________________ (the "Assignor") and ___________________ (the
"Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, that interest in and to all of
the Assignor's rights and obligations under the Agreement as of the date hereof
which represents the percentage interest specified in Section 1 of Schedule 1 of
all outstanding rights and obligations of the Assignor under the Agreement,
including, without limitation, such interest in the Investor's Commitment of the
Assignor and the Advance made by the Assignor. After giving effect to such sale
and assignment, the Investor's Commitment and the amount of the Capital made by
the Assignee will be as set forth in Section 2 of Schedule 1.
2. The Assignor: (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any Adverse Claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Agreement or any other instrument or document furnished pursuant thereto;
(iii) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of [its related CP Conduit] or the
performance or observance by [its related CP Conduit] of any of its obligations
under the Agreement or any other instrument or document furnished pursuant
thereto; and (iv) confirms that the Assignee is an Eligible Assignee.
3. The Assignee: (i) confirms that it has received a copy of the
Agreement, together with copies of such financial statements and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (ii) agrees
that it will, independently and without reliance upon the Deal Agent,
B-2
the Liquidity Agents, the Collateral Agent, the Assignor or any other Investor
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Deal Agent, the Collateral Agent and the related
Liquidity Agent each to take such action as agent on its behalf and to exercise
such powers under the Agreement as are delegated to the Deal Agent and the
related Liquidity Agent, respectively, by the terms thereof, together with such
powers as are reasonably incidental thereto; (v) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Agreement are required to be performed by it as an Investor; and (vi) agrees and
acknowledges that the Assignee, as Investor and Secured Party is bound by the
confidentiality provisions of Section 14.13 of the Agreement.
4. Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to each of the Deal Agent, the
Collateral Agent and the related Liquidity Agent for acceptance and recording by
the Deal Agent. The effective date of this Assignment and Acceptance (the
"Assignment Date") shall be the date of acceptance thereof by the Deal Agent and
the related Liquidity Agent, unless a later date is specified in Section 3 of
Schedule 1.
5. Upon such acceptance by the Deal Agent, the Collateral Agent and the
related Liquidity Agent and upon such recording by the Deal Agent, as of the
Assignment Date, (i) the Assignee shall be a party to the Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of an Investor thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Agreement.
6. Upon such acceptance by the related Liquidity Agent and upon such
recording by the Deal Agent, from and after the Assignment Date, the Deal Agent,
the Collateral Agent and the related Liquidity Agent shall make, or cause to be
made, all payments under the Agreement in respect of the interest assigned
hereby (including, without limitation, all payments of principal, interest and
Facility Fee with respect thereto) to the Assignee. The Assignor and Assignee
shall make all appropriate adjustments in payments under the Agreement for
periods prior to the Assignment Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.
B-3
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made on
Schedule 1 hereto.
[ASSIGNOR]
By:
-----------------------------------
Name:
Title:
Address for notices
[Address]
[ASSIGNEE]
By:
-----------------------------------
Name:
Title:
Address for notices
[Address]
Acknowledged and accepted this ___ day of
___________, ____
[______________________________],
as Liquidity Agent for the [___________] Purchaser Group
By:
---------------------------------
Name:
Title:
Acknowledged and accepted this ___ day of
___________, ____
WACHOVIA CAPITAL MARKETS, LLC,
as Deal Agent and Collateral Agent
By:
---------------------------------
Name:
Title:
B-4
Schedule 1
to
Assignment and Acceptance
Dated _________, 200_
Section 1.
Percentage Interest: ________%
Section 2.
Assignee's Commitment: $___________
Aggregate Outstanding Advance owing to the
Assignee: $___________
Section 3.
Assignment Date: _____________, 200_
B-5
Exhibit C
Form of Monthly Report
C-1
Exhibit D
Form of Joinder
JOINDER
JOINDER, dated as of _______________, 20__ (this "Joinder"), among the
commercial paper conduit identified in Item 2 of Schedule I hereto (the
"Proposed Conduit"), the Liquidity Agent for the Proposed Conduit named in Item
3 of Schedule I hereto (a "Liquidity Agent"), its related investors
("Investors"), CAC Warehouse Funding Corporation II (the "Borrower"), Credit
Acceptance Corporation , as originator and servicer ("Credit Acceptance"), and
Wachovia Capital Markets, LLC, as deal agent (the "Deal Agent").
W I T N E S S E T H:
WHEREAS, this Joinder is being executed and delivered under the First
Amended and Restated Loan and Security Agreement, dated as of February 15, 2006
among the Borrower, Credit Acceptance, Wachovia Bank, National Association, as
an investor for the VFCC Purchaser Group (an "Investor"), JPMorgan Chase Bank,
N.A., as an investor for the PARCO Purchaser Group (an "Investor") and the other
Investors from time to time party thereto, Variable Funding Capital Company, LLC
(a "CP Conduit"), Park Avenue Receivables Company LLC (a "CP Conduit") and the
other CP Conduits from time to time party thereto, the Deal Agent, Wachovia
Bank, National Association, as Liquidity Agent for the VFCC Purchaser Group,
JPMorgan Chase Bank, N.A., as Liquidity Agent for the PARCO Purchaser Group and
the other Liquidity Agents from time to time party thereto, Systems & Services
Technologies, Inc. (the "Backup Servicer") and Wachovia Capital Markets, LLC, as
collateral agent (the "Collateral Agent") (as from time to time amended,
supplemented or otherwise modified in accordance with the terms thereof, the
"Loan Agreement" and
WHEREAS, the Proposed Conduit wishes to become an Additional Conduit
designated as a CP Conduit party to the Loan Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
(a) Upon receipt by the Deal Agent of an executed counterpart of this
Joinder, to which is attached a fully completed Schedule I and Schedule II, each
of which has been executed by the Proposed Conduit, its related Investors, its
related Liquidity Agent, the Borrower, Credit Acceptance and the Deal Agent, the
Deal Agent will transmit to the Proposed Conduit, its related Investors and its
related Liquidity Agent, a Joinder Effective Notice, substantially in the form
of Schedule III to this Joinder (a "Joinder Effective Notice"). Such Joinder
Effective Notice shall be executed by the Deal Agent and shall set forth, inter
alia, the date on which the joinder effected by this Joinder shall become
effective (the "Joinder Effective Date"). From and after the Joinder Effective
Date, the Proposed Conduit shall be an Additional Conduit designated as a CP
Conduit party to the Loan Agreement for all purposes thereof.
(b) Each of the parties to this Joinder agrees and acknowledges that at
any time and from time to time upon the written request of any other party, it
will execute and deliver such
D-1
further documents and do such further acts and things as such other party may
reasonably request in order to effect the purposes of this Joinder.
(c) By executing and delivering this Joinder, the Proposed Conduit
confirms to and agrees with the Deal Agent, the Liquidity Agents, the Borrower,
Credit Acceptance and the CP Conduits as follows: (i) none of the Deal Agent,
the Liquidity Agents or the CP Conduits makes any representation or warranty or
assumes any responsibility with respect to any statements, warranties or
representations made in or in connection with the Loan Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Loan Agreement or any other instrument or document furnished pursuant
thereto, or with respect to the Note issued to the Deal Agent pursuant to
Section 2.1(c) the Loan Agreement, or the Collateral or the financial condition
of the Borrower or Credit Acceptance, or the performance or observance by the
Borrower or Credit Acceptance of any of their respective obligations under the
Loan Agreement, any other Transaction Document or any other instrument or
document furnished pursuant thereto; (ii) the Proposed Conduit confirms that it
has received a copy of such documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Joinder; (iii) the Proposed Conduit will, independently and without reliance
upon the Deal Agent, any Liquidity Agent or any other CP Conduit and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Loan Agreement; (iv) the Proposed Conduit appoints and authorizes its
Liquidity Agent to take such action as agent on its behalf and to exercise such
powers under the Loan Agreement as are delegated to the Liquidity Agent by the
terms thereof, together with such powers as are reasonably incidental thereto,
all in accordance with Article 12 of the Loan Agreement; (v) the Proposed
Conduit appoints and authorizes the Deal Agent to take such action as agent on
its behalf and to exercise such powers under the Loan Agreement as are delegated
to the Deal Agent by the terms thereof, together with such powers as are
reasonably incidental thereto, all in accordance with Article 12 of the Loan
Agreement; (vi) the Proposed Conduit agrees (for the benefit of the parties
hereto and the other CP Conduits) that it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Agreement are
required to be performed by it as an Additional Conduit designated as a CP
Conduit; (vii) the Proposed Conduit agrees that its related Liquidity Agent
shall not have any duties or responsibilities, except those expressly set forth
in the Loan Agreement, or any fiduciary relationship with any Investor, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of its related Liquidity Agent shall be read into this
Joinder or otherwise exist for its related Liquidity Agent; (viii) the Proposed
Conduit agrees that its related Liquidity Agent, in performing its functions and
duties under the Loan Agreement, shall act solely as agent for its related
Investors and does not assume nor shall be deemed to have assumed any obligation
or relationship of trust or agency with or for the Borrower or any of its
successors or assigns; (ix) the Proposed Conduit agrees that its related
Liquidity Agent shall not be required to take any action that exposes such
Liquidity Agent to personal liability or that is contrary to the Loan Agreement
or Applicable Law; and (x) the Proposed Conduit agrees that the appointment and
authority of its related Liquidity Agent hereunder shall terminate upon the
indefeasible payment in full of the Aggregate Unpaids.
(d) Schedule II hereto sets forth administrative information with respect
to the Proposed Conduit.
D-2
(e) This Joinder shall be governed by, and construed in accordance with,
the laws of the State of New York.
(f) Capitalized terms used herein and not defined herein have the meanings
given such terms in the Loan Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Joinder to be
executed by their respective duly authorized officers on Schedule I hereto as of
the date set forth in Item 1 of Schedule I hereto.
D-3
SCHEDULE I TO
JOINDER
COMPLETION OF INFORMATION AND
SIGNATURES FOR JOINDER
Re: First Amended and Restated Loan and Security Agreement, dated as of
February 15, 2006, among CAC Warehouse Funding Corporation II, as
borrower, Credit Acceptance Corporation, as servicer and custodian,
Wachovia Bank, National Association, as an investor for the VFCC Purchaser
Group (an "Investor"), JPMorgan Chase Bank, N.A., as an investor for the
PARCO Purchaser Group (an "Investor") and the other Investors from time to
time party hereto, Variable Funding Capital Company, LLC (a "CP Conduit"),
Park Avenue Receivables Company LLC (a "CP Conduit") and the other CP
Conduits from time to time party hereto, Wachovia Capital Markets, LLC, as
deal agent, Wachovia Bank, National Association, as liquidity agent for
the VFCC Purchaser Group (a "Liquidity Agent"), JPMorgan Chase Bank, N.A.,
as liquidity agent for the PARCO Purchaser Group (a "Liquidity Agent") and
the other Liquidity Agents from time to time party hereto, Systems &
Services Technologies, Inc., as backup servicer and Wachovia Capital
Markets, LLC, as collateral agent.
Item 1: Date of Joinder: ___________________________
Item 2: Proposed Conduit: ___________________________
Item 3: Name of Liquidity Agent: ___________________________
Item 4: Name of Purchaser Group: ___________________________
Item 5: Name(s) of Investor(s) and Commitment: ___________________________
___________________________
___________________________
Item 6: Proposed Conduit's Commitment (if any): ___________________________
Item 7: Purchaser Group Facility Limit: ___________________________
Item 8: Purchaser Group CP Rate: ___________________________
Item 9: Purchaser Group Yield Rate upon the
Termination Date: ___________________________
Item 10: Signatures of Parties to Joinder:
D-4
PROPOSED CONDUIT: [NAME OF PROPOSED CONDUIT]
By:
--------------------------------
Name:
Title:
NEW PURCHASER GROUP'S [NAME OF LIQUIDITY AGENT]
LIQUIDITY AGENT:
By:
--------------------------------
Name:
Title:
DEAL AGENT: WACHOVIA CAPITAL MARKETS, LLC
By:
--------------------------------
Name:
Title:
ADDITIONAL INVESTOR: [NAME OF NEW INVESTOR]
By:
--------------------------------
Name:
Title:
BORROWER: CAC WAREHOUSE FUNDING CORPORATION II
By:
--------------------------------
Name:
Title:
ORIGINATOR AND SERVICER: CREDIT ACCEPTANCE CORPORATION
By:
--------------------------------
Name:
Title:
D-5
SCHEDULE II TO
JOINDER
LIST OF INVESTING OFFICES, ADDRESS
FOR NOTICES AND WIRE INSTRUCTIONS
Address for Notices: ________________________
________________________
________________________
Investing Office: ________________________
Wire Instructions: ________________________
D-6
SCHEDULE III TO
JOINDER
FORM OF
JOINDER EFFECTIVE NOTICE
To: [Name and address of the Borrower, the Liquidity Agent and Proposed
Conduit]
The undersigned, as Deal Agent under the First Amended and Restated Loan
and Security Agreement, dated as of February 15, 2006, among the Borrower,
Credit Acceptance, the Investors, the CP Conduits, the Deal Agent, the Liquidity
Agents, the Backup Servicer and the Collateral Agent (as from time to time
amended, supplemented or otherwise modified in accordance with the terms
thereof) acknowledges receipt of an executed counterpart of a completed Joinder.
[Note: attach copies of Schedules I and II from such Loan Agreement.] Terms
defined in such Joinder are used herein as therein defined.
Pursuant to such Joinder, you are advised that the Joinder Effective Date
for [Name of Proposed Conduit] will be _____________ and such Proposed Conduit
will be an Additional Conduit designated as a CP Conduit.
Very truly yours,
WACHOVIA CAPITAL MARKETS,
LLC, as Deal Agent
By:
--------------------------------
Name:
Title:
D-7
SCHEDULE IV TO
JOINDER
PURCHASER GROUP FEE LETTER
D-8
SCHEDULE V TO
JOINDER
PURCHASER GROUP LIQUIDITY AGREEMENT
D-9
Exhibit E
Form of Hedging Agreement
E-1
Exhibit F
Form of Officer's Certificate
as to Solvency
F-1
Exhibit G
FORM OF TAKE-OUT RELEASE
Reference is hereby made to the First Amended and Restated Loan and
Security Agreement dated as of February 15, 2006 among CAC Warehouse Funding
Corporation II, as the Borrower, Credit Acceptance Corporation, as the Servicer,
the Investors named therein, Variable Funding Capital Company, LLC, as a Lender,
Park Avenue Receivables Company LLC, as a Lender, Wachovia Capital Markets, LLC,
as the Deal Agent and Collateral Agent, Wachovia Bank, National Association, as
a Liquidity Agent, JPMorgan Chase Bank, N.A., as a Liquidity Agent, Systems &
Services Technologies, Inc., as the Backup Servicer, and each other CP Conduit,
Liquidity Agent and Investor party thereto as it may from time to time be
amended, supplemented or otherwise modified in accordance with the terms thereof
(the "Agreement").
Capitalized terms not defined herein shall have the meaning given such
terms in the Agreement.
Pursuant to Section 2.16(a) of the Agreement, the Borrower requests the
Collateral Agent to release all of its right, title and interest, including any
security interest and Lien, in and to the Loans and Related Security identified
on Schedule 1 hereto (the "Released Loans and the Related Security"). The
Take-Out Date is as of [_____________________].
Pursuant to Section 2.16(a)(ii) of the Agreement, the Servicer and the
Borrower hereby certify that the Borrower will have sufficient funds on the
Take-Out Date to effect the Take-Out in accordance with the Security Agreement.
Pursuant to Section 2.16(a)(iii) of the Security Agreement, the Servicer
and Borrower hereby certify that after giving effect to the Take-Out and the
release to the Borrower of the Loans and Related Security on the Take-Out Date,
(x) the representations and warranties contained in Article IV of the Agreement
shall continue to be correct in all material respects, except to the extent
relating to an earlier date, and (y) neither an Unmatured Termination Event nor
a Termination Event has occurred.
Upon deposit in the Collection Account of $[___________] in immediately
available funds, the Collateral Agent hereby releases all of its right, title
and interest, including any security interest and Lien, in and to the Loans and
the Related Security:
(i) the Released Loans and the Related Security related thereto,
all monies due or to become due with respect thereto, whether
accounts, chattel paper, general intangibles or other
property, all monies or remittances on deposit in the Credit
Acceptance Payment Account which constitute proceeds of such
Loans and the Loans;
(ii) the security interests in the Contracts granted by Obligors
pursuant to the related Loan and all security related thereto;
(iii) all of the Borrower's rights under the Contribution Agreement
and each Dealer Agreement with respect to such Loans and the
Related Security;
(iv) the proceeds of any and all of the foregoing.
G-1
[REMAINDER OF PAGE BLANK. SIGNATURE PAGE FOLLOWS.]
G-2
Executed as of .
-------------
Credit Acceptance Corporation, as the Servicer
By:
------------------------------------------
Name:
Title:
CAC Warehouse Funding Corporation II, as the
Borrower
By:
------------------------------------------
Name:
Title:
Wachovia Capital Markets, LLC, as the Deal Agent
and Collateral Agent
By:
------------------------------------------
Name:
Title:
Signature Page
Exhibit H
Form of Contribution Agreement
H-1
Exhibit I
FORM OF VARIABLE FUNDING NOTE
New York, New York
February 15, 2006
FOR VALUE RECEIVED, the undersigned, CAC WAREHOUSE FUNDING CORPORATION II,
a Nevada corporation (the "Borrower"), promises to pay to the order of Wachovia
Capital Markets, LLC, as Deal Agent, on behalf of [the Lender], on the date
specified in Section 2.1(c) of the First Amended and Restated Loan and Security
Agreement (as hereinafter defined), at Xxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000, in lawful money of the United States of America and in
immediately available funds, the principal amount of [ ] ($[ ]), or, if less,
the aggregate unpaid principal amount of the all Advances made by the Lenders to
the Borrower pursuant to the First Amended and Restated Loan and Security
Agreement, and to pay interest at such office, in like money, from the date
hereof on the unpaid principal amount of the Advance from time to time
outstanding at the rates and on the dates specified in the First Amended and
Restated Loan and Security Agreement.
The Deal Agent is authorized to record, on the schedules annexed hereto
and made a part hereof or on other appropriate records of the Deal Agent, the
date and the amount of the Advance made by the Lenders, each continuation
thereof, the funding period for such Advance and the date and amount of each
payment or prepayment of principal thereof. Any such recordation shall
constitute prima facie evidence of the accuracy of the information so recorded;
provided that the failure of the Deal Agent to make any such recordation (or any
error in such recordation) shall not affect the obligations of the Borrower
hereunder, under the First Amended and Restated Loan and Security Agreement in
respect of the Advance.
This Variable Funding Note is one of the Notes referred to in the First
Amended and Restated Loan and Security Agreement, dated as of February 15, 2006
(as amended, supplemented, or otherwise modified and in effect from time to
time, the "Loan and Security Agreement"), among CAC Warehouse Funding
Corporation II (the "Borrower"); Credit Acceptance Corporation (the "Servicer");
the financial institutions listed on the signature pages thereto under the
heading "The Investors" (the "Investors"); Variable Funding Capital Company, LLC
("VFCC"); Park Avenue Receivables Company LLC ("PARCO"); Wachovia Capital
Markets, LLC, as deal agent (the "Deal Agent"); Wachovia Bank, National
Association, a national banking association, as liquidity agent (a "Liquidity
Agent"); JPMorgan Chase Bank, N.A., a national banking association, as liquidity
agent (a "Liquidity Agent"); Systems & Services Technologies, Inc. (the "Backup
Servicer"); Wachovia Capital Markets, LLC, as the Collateral Agent (the
"Collateral Agent"), and each other CP Conduit, Liquidity Agent and Investor
party thereto, and is entitled to the benefits thereof. Capitalized terms used
herein and defined herein have the meanings given them in the Loan and Security
Agreement.
This Variable Funding Note is subject to optional and mandatory prepayment
as provided in the Loan and Security Agreement.
I-1
Upon the occurrence of a Termination Event, the Secured Parties shall have
all of the remedies specified in the Loan and Security Agreement. The Borrower
hereby waives presentment, demand, protest, and all notices of any kind.
THIS VARIABLE FUNDING NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
CAC WAREHOUSE FUNDING CORPORATION
II,
as Borrower
By:
--------------------------------
Name:
Title:
I-2
Schedule 1 to
VARIABLE FUNDING NOTE
Principal of the Yield on the Prepayment Notation by
Advances Advances of the Advances Date
-------- -------- --------------- ----
I-3
Exhibit J-1
Form 1 of Dealer Agreement
J-1-1
Exhibit J-2
Form 2 of Dealer Agreement
J-2-1
Exhibit J-3
Form 3 of Dealer Agreement
J-3-1
Exhibit J-4
Form 4 of Dealer Agreement
J-4-1
Exhibit K
[Reserved]
K-1
Exhibit L
Forms of Contracts
L-1
Exhibit M
[Reserved]
M-1
Exhibit N
[Reserved]
N-1
Exhibit O
Form of Backup Servicing Agreement
O-1
SCHEDULE I
CONDITION PRECEDENT DOCUMENTS
CONDITION PRECEDENT DOCUMENTS RESPONSIBLE PARTY
----------------------------- -----------------
I. TRANSACTION DOCUMENTS Dechert
A. LOAN AND SECURITY AGREEMENT
EXHIBITS TO LOAN AND SECURITY AGREEMENT
Exhibit A Form of Funding Notice WCM
Exhibit B Form of Assignment and Acceptance Dechert
Exhibit C Form of Monthly Report WCM
Exhibit D Form of Joinder Dechert
Exhibit E Form of Hedging Agreement (including WCM
Schedule and Confirmation)
Exhibit F Form of Officer's Certificate as to Borrower
Solvency
Exhibit G Form of Take-Out Release Dechert
Exhibit H Form of Contribution Agreement Dykema
Exhibit I Form of Variable Funding Note Dechert
Exhibit J-1 Form 1 of Dealer Agreement Credit Acceptance
Exhibit J-2 Form 2 of Dealer Agreement Credit Acceptance
Exhibit K [Reserved]
Exhibit L Form of Contracts Credit Acceptance
Exhibit M [Reserved]
Exhibit N [Reserved]
Exhibit O Form of Backup Servicing Agreement Dechert
SCHEDULES TO LOAN AND SECURITY AGREEMENT
Schedule I Condition Precedent Documents Dechert
Schedule II Credit Guidelines Dykema
Schedule III Tradenames, Fictitious Names and Credit Acceptance
"Doing Business As" Names
Schedule IV Location of Records and Contract Files Credit Acceptance
Schedule V Loan, Pool and Contract List Credit Acceptance
Schedule VI Collection Guidelines Credit Acceptance
Schedule VII Forecasted Collections Credit Acceptance
Schedule VIII Commitment Amount of Each Investor Dechert
Schedule IX List of Dealer Agreements and Pools Credit Acceptance
B. Contribution Agreement Dykema
Sch. I-1
Exhibit A List of Loans Credit Acceptance
II. DOCUMENTS RELATING TO THE BORROWER
A. Secretary's Certificate with the following items Borrower/Dykema
attached:
- Resolutions of the Board of Directors of the
Borrower
- Certificate of Incorporation of the Borrower
- Bylaws of the Borrower
- Incumbency
B. On the Closing Date, an Officer's Certificate of Borrower/Dykema
the Borrower certifying the matters set forth in
Section 3.1 of the Loan and Security Agreement
and the Solvency Certificate described in
Section 4.1(i) of the Loan and Security Agreement
On the Funding Date, an Officer's Certificate of Borrower/Dykema
the Borrower certifying the matters set forth in
Section 3.1 of the Loan and Security Agreement
C. Certificate of Incorporation of the Borrower Borrower/Dykema
certified by the Secretary of State of Nevada
D. Good Standing Certificate issued by the Borrower/Dykema
Secretary of State of the State of Nevada with
respect Borrower
E. Copies of filed financing statement on Form Borrower/Dykema
UCC-1 naming the Borrower as debtor and the
Collateral Agent, for the benefit of the Secured
Parties, as secured party
III. DOCUMENTS RELATING TO Credit Acceptance
A. Secretary's Certificate with the following items
attached:
- Resolutions of the Board of Directors of Credit
Credit Acceptance Acceptance/Dykema
- Certificate of Incorporation of Credit
Acceptance
- Bylaws of Credit Acceptance
- Incumbency
B. On the Closing Date, an Officer's Certificate of Credit
Credit Acceptance certifying the matters set Acceptance/Dykema
forth in Section 3.1 of the Loan and Security
Agreement
On the Funding Date, an Officer's Certificate of Credit
Credit Acceptance certifying that no Unmatured Acceptance/Dykema
Termination Event, Termination Event, Servicer
Termination Event or potential Servicer
Termination Event shall have occurred
Sch. I-2
C. Certificate of Incorporation certified by the Credit
Secretary of State of the State of Michigan Acceptance/Dykema
D. Good Standing Certificate issued by the Credit
Secretary of State of the State of Michigan with Acceptance/Dykema
respect to Credit Acceptance
E. Copies of filed financing statement on Form Credit
UCC-1 naming the Originator as the Acceptance/Dykema
debtor/seller, the Borrower as the secured
party/purchaser, and the Collateral Agent as
Assignee
IV. OPINIONS OF COUNSEL
A. Opinion of Dykema as to true sale matters Dykema
B. Opinion of Dykema covering non-consolidation Dykema
matters
C. Opinion of Dykema as to certain corporate, and Dykema
perfection and priority matters
D. Opinion of counsel to the Backup Servicer as to S&K
certain corporate and enforceability matters
V. ADDITIONAL CLOSING DOCUMENTS/ACTIONS
A. A certificate of an officer of the Borrower Borrower/Dykema
certifying that all of the conditions to funding
set forth in Sections 3.1 and 3.2 of the
Contribution Agreement have been satisfied
B. Funding Notice Borrower
C. UCC-3 Termination Statements, terminating all Credit
security interests in the Collateral pledged to Acceptance/Dykema
the Collateral Agent under the Loan and Security
Agreement and the related Contractual Release
D. UCC search results (i) for the Borrower in Dykema
Nevada and (ii) for Credit Acceptance in Michigan
E. Evidence that the Collection Account and the Credit Acceptance
Reserve Account have been established
F. Evidence that the Structuring Fee and any other Borrower
fees or amounts due and payable on the Closing
Date in accordance with the Fee Letter have been
paid in full
Sch. I-3
G. Evidence that the Reserve Account has been funded Borrower
Key:
Wachovia Capital Markets, LLC WCM, the Deal Agent or
the Collateral Agent
Wachovia Bank, National Association WB
Credit Acceptance Corporation Credit Acceptance
CAC Warehouse Funding Corporation II Borrower
Dechert Dechert
Dykema Xxxxxx Xxxxxxx
Systems & Services Technologies, Inc. Backup Servicer
Xxxxxx & Xxxxxx LLP S&K
Sch. I-4
Schedule II
Credit Guidelines
[On File with Servicer and Deal Agent]
Sch. II-1
Schedule III
Tradenames, Fictitious Names and "Doing Business As" Name
None
Sch. III-1
Schedule IV
Location of Records and Contract Files
Sch. IV-1
Schedule V
Loan and Contract List
[Disc on File with Deal Agent]
Sch. V-1
Schedule VI
Collection Guidelines
[On File with Servicer]
Sch. VI-1
Schedule VII
Forecasted Collections
Sch. VII-1
Schedule VIII
Commitment Amount of Each Investor
Purchaser Group Investor Commitment Amount
--------------- -------- -----------------
VFCC Purchaser Group Wachovia Bank, National Association $225,000,000
PARCO Purchaser Group JPMorgan Chase Bank, N.A. $100,000,000
Sch. VIII-1
Schedule IX
List of Dealer Agreements and Pools
Sch. IX-1
Schedule X
Condition Precedent Documents Relating to Amendment and Restatement
I. TRANSACTION DOCUMENTS
A. FIRST AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT Dechert
EXHIBITS TO LOAN AND SECURITY AGREEMENT
Exhibit A Form of Funding Notice WCM
Exhibit B Form of Assignment and Acceptance Dechert
Exhibit C Form of Monthly Report WCM
Exhibit D Form of Joinder Dechert
Exhibit E Form of Hedging Agreement (including Schedule and Confirmation) WCM
Exhibit F Form of Officer's Certificate as to Solvency Borrower
Exhibit G Form of Take-Out Release Dechert
Exhibit H Form of Contribution Agreement Dykema
Exhibit I Form of Variable Funding Note Dechert
Exhibit J-1 Form 1 of Dealer Agreement Credit Acceptance
Exhibit J-2 Form 2 of Dealer Agreement Credit Acceptance
Exhibit J-3 Form 3 of Dealer Agreement Credit Acceptance
Exhibit J-4 Form 4 of Dealer Agreement Credit Acceptance
Exhibit K [Reserved]
Exhibit L Form of Contracts Credit Acceptance
Exhibit M [Reserved]
Exhibit N [Reserved]
Exhibit O Form of Backup Servicing Agreement Dechert
SCHEDULES TO LOAN AND SECURITY AGREEMENT
Schedule I Condition Precedent Documents Dechert
Schedule II Credit Guidelines Dykema
Schedule III Tradenames, Fictitious Names and "Doing Business As" Names Credit Acceptance
Schedule IV Location of Records and Contract Files Credit Acceptance
Schedule V Loan, Pool and Contract List Credit Acceptance
Schedule VI Collection Guidelines Credit Acceptance
Schedule VII Forecasted Collections Credit Acceptance
Schedule VIII Commitment Amount of Each Investor Dechert
Schedule IX List of Dealer Agreements and Pools Credit Acceptance
Sch. X-1
Schedule X Condition Precedent Documents Relating to Amendment and Dechert
Restatement
B. NOTES Dechert
II. DOCUMENTS RELATING TO THE BORROWER
A. Secretary's Certificate with the following items attached: Borrower/Dykema
- Resolutions of the Board of Directors of the Borrower
- Certificate of Incorporation of the Borrower
- Bylaws of the Borrower
- Incumbency
B. On the Effective Date, an Officer's Certificate of the Borrower Borrower/Dykema
certifying the matters set forth in Section 3.1 of the Loan and
Security Agreement and the Solvency Certificate described in Section
4.1(i) of the Loan and Security Agreement
On the Funding Date, an Officer's Certificate of the Borrower Borrower/Dykema
certifying the matters set forth in Section 3.1 of the Loan and
Security Agreement
C. Certificate of Incorporation of the Borrower certified by the Borrower/Dykema
Secretary of State of Nevada
D. Good Standing Certificate issued by the Secretary of State of the Borrower/Dykema
State of Nevada with respect Borrower
III. DOCUMENTS RELATING TO Credit Acceptance
A. Secretary's Certificate with the following items attached:
- Resolutions of the Board of Directors of Credit Acceptance Credit Acceptance/Dykema
- Certificate of Incorporation of Credit Acceptance
- Bylaws of Credit Acceptance
- Incumbency
B. On the Effective Date, an Officer's Certificate of Credit Acceptance Credit Acceptance/Dykema
certifying the matters set forth in Section 3.1 of the Loan and
Security Agreement
On the Funding Date, an Officer's Certificate of Credit Acceptance Credit Acceptance/Dykema
certifying that no Unmatured Termination Event, Termination Event,
Servicer Termination Event or potential Servicer Termination Event
shall have occurred
C. Certificate of Incorporation certified by the Secretary of State of Credit Acceptance/Dykema
the State of Michigan
Sch. X-2
D. Good Standing Certificate issued by the Secretary of State of the Credit Acceptance/Dykema
State of Michigan with respect to Credit Acceptance
IV. OPINIONS OF COUNSEL
A. Opinion of Dykema as to certain corporate and enforceability matters Dykema
B. Bringdowns addressed to the Lenders relating to the following opinions: Dykema
- Opinion of Dykema as to true sale matters
- Opinion of Dykema covering non-consolidation matters
C. Opinion of counsel to the Backup Servicer as to certain
corporate and enforceability matters
V. ADDITIONAL DOCUMENTS
A. JPMorgan Fee Letter JPMorgan/K&E
B. VFCC Amended & Restated Fee Letter Dechert
C. Conduit Funds Transfer Agreement JPMorgan/K&E
D. Borrowing Base Certificate Credit Acceptance
E. Amended and Restated Xxxx Waiver Dykema
Key:
Wachovia Capital Markets, LLC WCM, the Deal Agent or the
Collateral Agent
Wachovia Bank, National Association WB
JPMorgan Chase Bank, N.A. JPMorgan
Credit Acceptance Corporation Credit Acceptance
CAC Warehouse Funding Corporation II Borrower
Dechert Dechert
Dykema Xxxxxx Xxxxxxx
Systems & Services Technologies, Inc. Backup Servicer
Xxxxxx & Xxxxxx LLP S&K
Xxxxxxxx & Xxxxx LLP K&E
Sch. X-3
