EXHIBIT 4(b)(2)
SECOND AMENDMENT TO NOTE PURCHASE AGREEMENT
RE:
CREDIT ACCEPTANCE CORPORATION
7.99% SENIOR NOTES DUE JULY 1, 2001
Dated as of July 1, 1998
To the Noteholders listed on Annex I hereto
Ladies and Gentlemen:
Credit Acceptance Corporation, a Michigan corporation (together with its
successors and assigns, the "Company"), hereby agrees with you as follows:
SECTION 1. INTRODUCTORY MATTERS.
1.1 DESCRIPTION OF OUTSTANDING NOTES. The Company currently has
outstanding $44,800,000 in aggregate unpaid principal amount of its 7.99% Senior
Notes due July 1, 2001 (collectively, as in effect immediately prior to the
effective date of this Second Amendment, the "Original Notes", and as amended
hereby, the "First Amended and Restated Notes") which it issued pursuant to the
separate Note Purchase Agreements, each dated as of August 1, 1996
(collectively, as amended by the First Amendment to Note Purchase Agreement
dated as of December 12, 1997, the "Agreement"), entered into by the Company
with each of the original holders of the Notes listed on Annex 1 thereto,
respectively. Terms used herein but not otherwise defined herein shall have the
meanings assigned thereto in the Agreement, as amended hereby.
1.2 PURPOSE OF AMENDMENT. The Company and you desire to amend the
Agreement and the Original Notes as set forth in Section 2 hereof.
SECTION 2. AMENDMENT TO THE AGREEMENT AND NOTES.
Pursuant to Section 10.5 of the Agreement, the Company hereby agrees with
you that the Agreement and the Original Notes shall be amended by this Second
Amendment to Note Purchase Agreement (the "Second Amendment") in the following
respects:
2.1 SECTION 1.1
Section 1.1 is amended and restated in its entirety as follows:
"1.1 AUTHORIZATION OF NOTES.
(a) On August 29, 1996, the Company issued Seventy
Million Dollars ($70,000,000) in aggregate principal amount of
its 7.99% Senior Notes due July 1, 2001 (the "Original Notes,"
such term to include each Original Note delivered from time to
time prior to the effectiveness of the
Second Amendment in accordance with any of the Note Purchase
Agreements), each:
(i) bearing interest (computed on the basis of a
360-day year of twelve 30-day months) on the unpaid
principal balance thereof from the date of such Original
Note at the rate of seven and ninety-nine one-hundredths
percent (7.99%) PER ANNUM, payable semi-annually on the
first (1st) day of January and the first (1st) day of
July in each year commencing on the later of January 1,
1997 or the payment date next succeeding the date of
such Original Note;
(ii) bearing interest, payable on demand, on any
overdue principal (including any overdue prepayment of
principal) and Make-Whole Amount, if any, and (to the
extent permitted by applicable law) on any overdue
installment of interest, at a rate equal to the lesser
of
(A) the highest rate allowed by applicable
law, or
(B) nine and ninety-nine one-hundredths
percent (9.99%) PER ANNUM;
(iii) maturing on July 1, 2001; and
(iv) in the form of the Original Note set out in
Exhibit A, as in effect on the Closing Date.
(b) Pursuant to the Second Amendment, the Company and
the holders of the Original Notes have agreed to amend and
restate in full the Original Notes substantially in the form
attached to the Second Amendment as Attachment 1 thereto (the
"First Amended and Restated Notes," such term to include each
Original Note, as amended and restated pursuant to the Second
Amendment, and each First Amended and Restated Note delivered
from time to time on or after the effectiveness of the Second
Amendment in accordance with any of the Note Purchase
Agreements). Each First Amended and Restated Note will:
(i) be designated a "First Amended and Restated
8.24% Senior Note Due July 1, 2001";
(ii) bear interest (computed on the basis of a
360-day year of twelve 30-day months) on the unpaid
principal balance thereof from the date of such Note at
the rate of seven and ninety-nine one-
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hundredths percent (7.99%) PER ANNUM through (but not
including) July 1, 1998, and at the rate of eight and
twenty-four one-hundredths percent (8.24%) PER ANNUM from
and after July 1, 1998 to and including the date of
maturity thereof, payable semi-annually on the first (1st)
day of January and the first (1st) day of July in each year
commencing on the payment date next succeeding the date of
such First Amended and Restated Note;
(iii) bear interest, payable on demand, on any
overdue principal (including any overdue prepayment of
principal) and Make-Whole Amount, if any, and (to the
extent permitted by applicable law) on any overdue
installment of interest, at a rate equal to the lesser
of
(A) the highest rate allowed by applicable
law, or
(B) (I) nine and ninety-nine one-hundredths
percent (9.99%) PER ANNUM if such time is prior to
July 1, 1998, or (II) ten and twenty-four
one-hundredths percent (10.24%) PER ANNUM if such
time is on or after July 1, 1998;
(iv) mature on July 1, 2001; and
(v) be in the form of the First Amended and
Restated Note set out in Exhibit A (as in effect upon
the effectiveness of the Second Amendment).
(c) The Original Notes and the First Amended and
Restated Notes are referred to herein, collectively, as the
"Notes". The term "Notes" as used herein shall include each
Note delivered pursuant to the Note Purchase Agreements and
each Note delivered in substitution or exchange for any such
Note pursuant to Section 5.2 or Section 5.3, and shall be
deemed (i) when reference is made to a date prior to the
effective date of the Second Amendment, to be a reference to
the Original Notes, and (ii) when reference is made to a date
on or after the effective date of the Second Amendment, to be
a reference to the First Amended and Restated Notes."
2.2 SECTION 6.1
(a) Paragraph (a) of Section 6.1 is hereby amended and restated in
its entirety as follows:
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"(a) TOTAL DEBT. The Company will not at any time
permit Consolidated Total Debt to exceed any of the following:
(i)(A) two hundred seventy-five percent (275%) of
Consolidated Tangible Net Worth prior to the effective date of
the Second Amendment, and (B) two hundred percent (200%) of
Consolidated Tangible Net Worth from the effective date of the
Second Amendment until such time (but in no event prior to
December 31, 1998) as the Company has maintained a ratio of
(A) Consolidated Income Available for Fixed Charges for the
four consecutive fiscal quarters of the Company most recently
ended at such time to (B) Consolidated Fixed Charges for such
period of not less than 2.25 to 1.0 for two consecutive fiscal
quarters, then two hundred seventy-five percent (275%) of
Consolidated Tangible Net Worth, provided however, that for
the purposes of this test, Consolidated Total Debt shall be
calculated by including all Debt incurred by a Special Purpose
Subsidiary, whether or not included therein under GAAP;
(ii) eighty-five percent (85%) of Advances; and
(iii) sixty percent (60%) of Gross Current
Installment Contract Receivables.".
(b) Section 6.1 is further amended by amending and restating
paragraph (f) as follows:
"(f) GROSS ADVANCES. The Company will not at any time
permit Gross Advances to exceed seventy percent (70%) of Net
Installment Contract Receivables; provided, however, that at
any time at which the Credit Agreement (as from time to time
amended, restated, refinanced, replaced or supplemented) does
not permit the amount of Gross Advances to exceed 65% of Net
Installment Contract Receivables, the Company shall not permit
Gross Advances to exceed sixty-five percent (65%) of Net
Installment Contract Receivables.".
2.3 SECTION 6.2 Section 6.2 is hereby amended by deleting clause (v)
thereof and the word "and" immediately preceding such clause and adding the
following:
"(v) 2.0 to 1.0 for the four fiscal quarters ended September
30, 1998 and (vi) 2.25 to 1.0 for any four fiscal quarters
ended on or after December 31, 1998."
2.4 SECTION 6.3 Section 6.3 is amended to change the reference to "One
Hundred Fifty Million Dollars ($150,000,000)" in clause (a) thereof to "Two
Hundred Million Dollars
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($200,000,000)" and to change the reference to "January 1, 1996" in clause
(b) thereof to "January 1, 1998".
2.5 SECTION 6.6
Clause (a)(i) of Section 6.6 is amended by adding, at the end of
said clause prior to the semicolon the following:
"and any Lien encumbering Securitization Property which is the
subject of a Transfer pursuant to a Permitted Securitization".
2.6 SECTION 6.7
Paragraph (b) of Section 6.7 is amended by replacing the "." at the
end of clause (ii) thereof with "; or" and adding a new clause (iii) which reads
as follows:
"(iii) the Transfer of Securitization Property to
any Special Purpose Subsidiary in connection with a Permitted
Securitization."
2.7 SECTION 6.8
(a) Paragraph (a) of Section 6.8 is amended by adding at the end
of clause (ii) before the period the following:
";
(iii) Transfers of Securitization Property to a
Restricted Subsidiary or a Special Purpose Subsidiary pursuant
to a Permitted Securitization; and
(iv) Transfers of the capital stock of a Special
Purpose Subsidiary to the Company or a Restricted Subsidiary."
(b) Paragraph (c) of Section 6.8 is amended by adding "except in
connection with a Permitted Securitization," before the word "neither" in the
second line thereof.
2.8 SECTION 6.10 Section 6.10 is amended by adding, after the word
"except" in the third line thereof, the words "(a) a Permitted Securitization or
(b)".
2.9 SECTION 6.19 New Section 6.19 is added, as follows:
"6.19 AMENDMENT OF SECURITIZATION DOCUMENTS. Once
executed and delivered pursuant to a Permitted Securitization,
the Company covenants that it will not permit the "pertinent
terms, conditions or provisions" of the
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Securitization Documents to be waived, amended, modified or
otherwise altered in any material respect adverse to the Company
or any Restricted Subsidiary or Special Purpose Subsidiary
without the prior written approval of the Required Holders. For
purposes of the Securitization Documents, the "pertinent terms,
conditions or provisions" thereof shall be deemed solely those
terms, conditions or provisions with respect to servicer fees,
servicer expenses, defaults, events of default, recourse to the
Company or any Restricted Subsidiary, Cleanup Calls or
conditions contained therein which are required under or
necessary for compliance with this Agreement."
2.10 SECTION 6.20 New Section 6.20 is added, as follows:
" 6.20 RESTRICTED PAYMENTS.
(a) The Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, declare,
make, set apart any funds or other property for, or incur any
liability to make any Restricted Payment unless, at the time
of such action, at least two of the following four
organizations shall have assigned an Investment Grade Rating
to the Company, the Notes or any other senior unsecured debt
obligation of the Company: ▇▇▇▇▇'▇ Investors Service, Inc.,
Standard & Poor's Ratings Group, the National Association of
Insurance Commissioners (the "NAIC"), or Fitch Investors
Services, Inc."
(b) The parties hereto specifically acknowledge that
the NAIC is not in any way a rating agency with functions such
as those performed by ▇▇▇▇▇'▇ Investors Service, Inc.,
Standard & Poor's Ratings Group, or Fitch Investors Services,
Inc. Further, the parties hereto specifically acknowledge
that any rating given to the Notes by the NAIC is not to be
interpreted as an expression by the NAIC with respect to the
suitability of an investment in the Notes or the likelihood of
any payment in respect thereof. In addition, the signatories
hereto specifically affirm that the holders of the Notes will
not obtain any benefit from satisfaction of the requirement
set forth in Section 6.20(a).
(c) If the NAIC makes specific reference to Section
6.20(a) and states that it will withdraw any rating or
designation of the Notes, or will take any other action
adverse to any one or more of the holders of the Notes, as a
result of the agreement set forth in Section 6.20(a), the
parties hereto hereby agree that:
(i) Section 6.20(a) shall, in lieu of the
requirement set forth therein, be deemed to require an
Investment Grade Rating from
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at least two of the following three organizations: ▇▇▇▇▇'▇
Investors Service, Inc., Standard & Poor's Ratings Group,
or Fitch Investors Services, Inc.; and
(ii) Clause (iii) of the definition of
"Investment Grade Rating" shall be deemed to have been
deleted.
Such changes shall take effect upon delivery of written notice
to the Company by the Required Holders referring to such
proposed withdrawal or other action and stating that the
condition set forth in this Section 6.20(c) has occurred."
2.11 SECTION 6.21 New Section 6.21 is added, as follows:
" 6.21 NO SECURITIZATIONS OTHER THAN PERMITTED
SECURITIZATIONS. The Company will not, and will not permit any
Restricted Subsidiary to, engage in any Securitization
Transaction other than a Permitted Securitization. For
purposes of this Section, a "Securitization Transaction" means
a Transfer of, or grant of a Lien on, Advances, Installment
Contracts, accounts receivable and/or other financial assets
by the Company or any Restricted Subsidiary to a Special
Purpose Subsidiary or other special purpose or limited purpose
entity and the issuance (whether by such Special Purpose
Subsidiary or other special purpose or limited purpose entity
or any other Person) of Debt or of any Securities secured
directly or indirectly by interests in, or of trust
certificates or other Securities directly or indirectly
evidencing interests in, such Advances, Installment Contracts,
accounts receivable and/or other financial assets.
2.12 SECTION 7.1 Section 7.1 is amended to add at the end thereof
(following subparagraph (j) thereof), a new paragraph, as follows:
"In addition to the foregoing, the Company will also deliver
to each holder of Notes:
(1) as soon as available, and in any event within
sixty (60) days of the end of each fiscal quarter, (A) a
"static pool analysis" substantially in the form of Exhibit F
attached hereto and in any event satisfactory in form and
substance to the Required Holders, which analyzes the
performance
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of the Company's and each Restricted Subsidiary's Installment
Contracts on a quarterly basis, certified by an authorized
officer of the Company as to consistency with prior such
analyses, accuracy and fairness of presentation, and (B) a
comparable "static pool analysis" which analyzes the performance
of any installment contracts related to any Advances transferred
or encumbered pursuant to a Permitted Securitization; and
(2) within five (5) Business Days after the execution
and delivery thereof, a copy of any amendment to, or waiver of
any provisions of, the Credit Agreement or Securitization
Documents (in each case, as from time to time amended,
restated, refinanced, replaced or supplemented)."
2.13 [RESERVED]
2.14 SECTION 8.1(c) Section 8.1(c) is amended to add, immediately after
the phrase "Section 6.18" appearing therein, the following: "through Section
6.21, inclusive"
2.15 SECTION 8.1(k) A new clause (k) shall be added to Section 8.1 by
deleting the word "or" at the end of clause (i) and adding immediately prior to
the period at the end of clause (j) the following:
"; or
(k) with respect to the Securitization Documents, the
occurrence (beyond any applicable period of grace or cure) of any
"servicer event of default" thereunder or the occurrence of any
other default (beyond any applicable period of grace or cure) by the
Company or any of its Subsidiaries, including any Special Purpose
Subsidiary, under the Securitization Documents which can be
reasonably expected to result in recourse liability against the
Company or any of its Restricted Subsidiaries in an aggregate amount
exceeding $2,000,000"
2.16 SECTION 9.1
(a) The definition of "Advances" in Section 9.1 of the Agreement
is hereby amended by deleting the second proviso and replacing the first proviso
with the following:
"PROVIDED that Advances shall not include (a) any such
advances (and the related Installment Contracts) transferred
or encumbered pursuant to a Permitted Securitization and not
held by the Company or a Restricted Subsidiary, (b) Excess New
Dealer Advances or (c) Charged-Off Advances to the extent that
such Charged-Off Advances exceed the portion of the Company's
allowance for credit losses related to reserves against
advances not expected to be recovered, as such allowance would
appear in the footnotes to the financial statements of the
Company and the Restricted Subsidiaries prepared in accordance
with GAAP."
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(b) The definition of "Charged-Off Advances" in Section 9.1 of the
Agreement is hereby amended and restated in its entirety as follows:
"CHARGED-OFF ADVANCES -- means those Advances which the
Company or any of its Restricted Subsidiaries has determined,
based on the application of a static pool analysis or
otherwise, are completely or partially impaired, to the extent
of such impairment."
(c) The definition of "Consolidated Income Available for Fixed
Charges" is amended to add, in the first line of paragraph (b) of such
definition after the word "amortization", the phrase "(including the
amortization of any excess servicing asset)".
(d) The definition of "Consolidated Net Income" is amended to add
to the end of paragraph (c) of such definition (before the semicolon) the
following clause:
"(including, without limitation, any gain on sale generated by
a Permitted Securitization, except to the extent the Company
has received a cash benefit therefrom in the applicable
reporting period) and any interest income generated by a
Permitted Securitization, except to the extent the Company has
received a cash benefit therefrom in the applicable reporting
period".
(e) The definition of "Consolidated Tangible Net Worth" in Section
9.1 of the Agreement is hereby amended by adding the following immediately after
the end of clause (c):
" MINUS
(d) without duplication, any capitalized gain on sales
of Advances pursuant to a Permitted
Securitization, the equity interest in any Special
Purpose Subsidiary, any interest income generated
by a Permitted Securitization and any excess
servicing asset (except to the extent the Company
has received a cash benefit therefrom prior to
such date),"
(f) The definition of "Consolidated Total Assets" is amended to
add to the end of such definition the following clause:
(but excluding from the determination thereof, without
duplication, any capitalized gain on sales of Advances
pursuant to a Permitted Securitization, the equity
interest in any Special Purpose Subsidiary, any interest
income generated by a Permitted Securitization and any
excess servicing asset, except to the extent the Company
has received a cash benefit therefrom in the applicable
reporting period)".
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(g) The definition of "Credit Agreement" in Section 9.1 of the
Agreement is amended by adding the words ", refinanced, replaced, supplemented"
after the word "restated" in the second line thereof.
(h) The definition of "Debt" in Section 9.1 of the Agreement is
amended by amending and restating the last sentence thereof to read as follows:
"Except as provided in Section 6.1(a)(i), neither Debt
of any Special Purpose Subsidiary which is an
Unrestricted Subsidiary pursuant to a Permitted
Securitization nor Dealer holdbacks shall be considered
Debt of the Company."
(i) The definition of "Restricted Investment" in Section 9.1 of
the Agreement is amended by deleting the word "and" from the end of clause (k),
changing the reference to "clause (k)" in clause (l) to "clause (l)", changing
clause (l) to clause (m) and adding a new clause (l) as follows:
(l) Investments by the Company or any Restricted
Subsidiary in the Company, any Restricted Subsidiary or any
Special Purpose Subsidiary from and after the effective date
of the Second Amendment, consisting of (i) dispositions of
specific Advances (and the Company's or such Restricted
Subsidiary's interest in the Installment Contracts related
thereto) made pursuant to a Permitted Securitization and any
resultant Debt issued by a Special Purpose Subsidiary to
another Subsidiary as part of a Permitted Securitization, in
each case to the extent constituting Investments, (ii)
advances by the Company, as servicer of the Installment
Contracts covered by a Permitted Securitization, in an
aggregate amount not to exceed $750,000 outstanding at any
time, to cover the interest component of obligations issued as
part of a Permitted Securitization and payable from
collections on such Installment Contracts (such advances to be
repayable to the Company on a priority basis from such
collections), (iii) the repurchase or replacement from and
after the date of the effectiveness of the Second Amendment of
an aggregate amount not to exceed $2,000,000 in Advances (and
the Installment Contracts relating thereto) subsequently
determined not to satisfy the eligibility standards contained
in the applicable Securitization Documents relating to a
Permitted Securitization, so long as (x) such replacement is
accompanied by the repurchase of or release of encumbrances on
Advances previously transferred or encumbered pursuant to such
securitization and in the amount thereof, (y) any replacement
Advances (and the related Installment Contracts) are selected
by the Company according to the requirements set forth in
clause (a) of the definition of Permitted Securitization and
(z) such replacements are made at a time when (both before and
after giving effect thereto) no Default or Event of Default
exists
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or would exist, (iv) amounts required to fund any Cleanup Call
under the terms of such Permitted Securitization, exercised at a
time when (both before and after giving effect thereto) no
Default or Event of Default exists or would exist, and (v) the
disposition of the capital stock of a Special Purpose Subsidiary;
and
(j) The definitions of "Established Dealer" and "Trailing Twelve
Months Payments" are deleted from Section 9.1 of the Agreement.
(k) The following definitions are added to Section 9.1:
"CLEANUP CALL(S) means (a) in the case of an optional
cleanup call, a cleanup call to be exercised at the option of
the Company or a Special Purpose Subsidiary under the terms of
the applicable Permitted Securitization, in an amount not in
excess of Five Percent (5%) of the initial proceeds received
by the Company or the Special Purpose Subsidiary from the
applicable Permitted Securitization, and (b) in the case of a
mandatory cleanup call, a mandatory cleanup call to be
exercised at the option of the investors under the terms of
the applicable Permitted Securitization, in an amount not in
excess of Two and One-Half Percent (2 1/2%) of the initial
proceeds received by the Company or the Special Purpose
Subsidiary from the applicable Permitted Securitization, in
either case, such Cleanup Call to be exercisable only at such
time as (both before and after giving effect thereto) no
Default or Event of Default exists or would exist hereunder
and being accompanied by the repurchase or release of
encumbrances on Advances previously transferred or encumbered
pursuant to such Permitted Securitization in the amount of
such cleanup call."
"DEALER -- means a Person engaged in the business of the
retail sale of used motor vehicles, including businesses
exclusively selling used motor vehicles and businesses
principally selling new motor vehicles, but having a used
vehicle department, including any such Person which
constitutes an Affiliate of the Company."
"DEALER AGREEMENTS -- means the servicing agreements
between the Company or its Subsidiaries and a participating
Dealer which sets forth the terms and conditions under which
the Company or its Subsidiaries accepts, as nominee for such
Dealer, the assignment of Installment Contracts for purposes
of administration, servicing and collection and under which
the Company or its Subsidiary may make Advances to such
Dealers, as such agreements may be in effect from time to
time."
"FIRST AMENDED AND RESTATED NOTES -- Section 1.1(b)."
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"INSTALLMENT CONTRACTS -- means retail installment
contracts for the sale of used motor vehicles assigned by
Dealers to the Company or a Subsidiary of the Company, as
nominee for the Dealer, for administration, servicing and
collection pursuant to an applicable Dealer Agreement."
"ORIGINAL NOTES -- Section 1.1(a)."
"PERMITTED SECURITIZATION(S) -- means each transfer or
encumbrance (each a "disposition") of specific Advances (and
any interest in or lien on the Installment Contracts or other
rights relating thereto) by the Company or one or more
Restricted Subsidiaries to a Special Purpose Subsidiary
conducted in accordance with the following requirements:
(a) Each disposition shall identify with reasonable
certainty the specific Advances covered by such
disposition; and the Advances (and Installment Contracts
or other rights relating thereto) shall have performance
and other characteristics so that the quality of such
Advances and related Installment Contracts is comparable
to, but not materially better than, the overall quality
of the Company's Advances (and related Installment
Contracts) as a whole, as determined in good faith by
the Company in its reasonable discretion;
(b) (i) The aggregate principal amount of all Debt incurred,
and (without duplication) of Securities issued (other
than subordinated Securities issued to and held by the
Company or a Subsidiary), by any Special Purpose
Subsidiary pursuant to any Permitted Securitization,
together with the aggregate principal amount of all
other Debt incurred, and (without duplication)
Securities issued (other than subordinated Securities
issued to and held by the Company or a Subsidiary), by
such Special Purpose Subsidiary and/or any one or more
other Special Purpose Subsidiaries, pursuant to such
Permitted Securitization and/or any one or more other
Permitted Securitizations, from and after the effective
date of the Second Amendment, cumulatively shall not
exceed $75,000,000 (which amount shall not be readvanced
or reborrowed); (ii) the aggregate value of all Advances
disposed of by the Company and/or any one or more
Restricted Subsidiaries to such Special Purpose
Subsidiary pursuant to such Permitted Securitization,
together with the aggregate value of all other Advances
disposed of by the Company and/or any one or more
Restricted Subsidiaries to such Special Purpose
Subsidiary and/or any one or more other Special Purpose
Subsidiaries, from and after the effective date of the
Second Amendment, cumulatively (but without duplication)
shall not exceed $88,236,000; and (iii) the
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Company or the Restricted Subsidiary disposing of such
Advances shall itself actually receive (substantially
contemporaneously with such disposition) cash from each
disposition of such Advances in connection with any such
securitization transaction in an amount not less than
Eighty-Five Percent (85%) of the value of such Advances;
(c) Each such disposition shall be without recourse (except
to the extent of normal and customary representations
and warranties given as of the date of each such
disposition, and not as continuing representations and
warranties) and otherwise on normal and customary terms
and conditions for comparable asset-based securitization
transactions, which may include, without limitation,
Cleanup Call provisions;
(d) Concurrently with each such disposition, the Company
shall permanently reduce the "aggregate commitment" then
in effect under the Credit Agreement (as from time to
time amended, restated, refinanced, replaced or
supplemented) by an amount not less than eighty percent
(80%) of the proceeds of each such disposition (net of
reasonable and customary third party expenses incurred
by the Company in connection therewith), reducing the
"line of credit maximum amount" and the "revolving
credit maximum amount" on a PRO RATA basis (based on the
"aggregate commitment" then in effect) to the extent
both such facilities are in effect, each such reduction
in the "aggregate commitment" to be accompanied by the
prepayments of principal and other sums required under
the Credit Agreement and otherwise in compliance with
the Credit Agreement (terms in quotation marks in this
clause (d) are defined in the Credit Agreement); and
(e) Both immediately before and after giving effect to such
disposition, no Default or Event of Default (whether or
not related to such disposition) exists or would exist.
In connection with each Permitted Securitization, not less
than ten (10) Business Days prior to the date of consummation
thereof, the Company shall provide to each holder of a Note
(i) a schedule in the form attached hereto as Exhibit E
identifying the specific Advances (and providing collection
information regarding the related Installment Contracts)
proposed to be covered by such transactions (with evidence
supporting its determination under subparagraph (a) of this
definition) and (ii) proposed drafts of the material
Securitization Documents covering the applicable
securitization (and the term sheet or commitment relating
thereto); provided that with respect to
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the securitization transaction to be consummated
contemporaneously with the execution of this Second Amendment,
such schedule and proposed drafts shall have been delivered at
least five (5) Business Days prior to the date of consummation
thereof. Within five (5) Business Days following the consummation
thereof, the Company shall have provided to each holder of a Note
copies of the material Securitization Documents, as executed,
including an updated schedule, substantially in the form of the
schedule delivered under clause (i) above, identifying the
Advances actually covered by such transaction."
"SECOND AMENDMENT -- means the Second Amendment, dated
as of July 1, 1998, to the Agreement."
"SECURITIZATION DOCUMENTS -- means any note purchase
agreement (and any notes issued thereunder), transfer or
security documents, master trust or other trust agreements,
servicing agreement, indenture, pooling agreement,
contribution or sale agreement or other documents, instruments
and certificates executed and delivered, subject to the terms
of this Agreement, to evidence or secure (or otherwise
relating to) a Permitted Securitization, as the same may be
amended from time to time (subject to the terms hereof) and
any and all other documents executed in connection therewith
or replacement or renewal thereof."
"SECURITIZATION PROPERTY -- (i) amounts advanced by the
Company or a Restricted Subsidiary 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 charged
to customers and all monies due or to become due, and all
monies received, with respect thereto ("Loans"); (ii) all
proceeds (including "proceeds" as defined in the Uniform
Commercial Code) thereof; (iii) all of the Company's or a
Restricted Subsidiary's interest in the Dealer Agreements and
Installment Contracts securing payment of Loans, all security
interests or liens purporting to secure payment of Loans and
all other property obtained upon foreclosure of any security
interest securing payment of Loans or any related Installment
Contract and 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 such Installment Contract
whether pursuant to such Installment Contract or otherwise;
(iv) all records with respect to Loans, (v) the Company's or a
Restricted Subsidiary's right, title and interest in and to
business interruption insurance, and (vi) all payments
received by the Company in respect of Transferred Loans in the
form of cash, checks, wire transfers or other form of payment.
14
"SPECIAL PURPOSE SUBSIDIARY -- shall mean any
Unrestricted Subsidiary of the Company, all of the capital
stock of which is owned by the Company or a Restricted
Subsidiary, which Unrestricted Subsidiary is formed for the
sole purpose of conducting one or more Permitted
Securitizations and is operated for such purpose in accordance
with customary industry practices."
2.17 AMENDMENT AND RESTATEMENT OF EXHIBIT A. The form of 7.99% Senior
Note Due July 1, 2001 set forth as Exhibit A to the Agreement is hereby amended
and restated, in its entirety, to be in the form of Attachment 1 attached to
this Second Amendment. All references to "Exhibit A" in the Note Purchase
Agreements shall, if in reference to a date on or after the effective date of
the Second Amendment, refer to the form of 7.99% Senior Note Due July 1, 2001,
as amended and restated hereby.
2.18 AMENDMENT OF ORIGINAL NOTES. The forms of the respective Original
Notes are hereby amended in their entirety to conform to the form of First
Amended and Restated 8.24% Senior Note Due July 1, 2001 attached to this Second
Amendment as Attachment 1. On the effective date of this Second Amendment, each
of the terms of each outstanding Original Note shall be deemed to be amended to
conform with such form, without any further action on the part of the Company or
any holder of any Original Note (including, without limitation, any requirement
that any holder surrender its outstanding Original Notes to the Company). Upon
surrender of any outstanding Original Note, the Company shall deliver to the
registered holder thereof a First Amended and Restated Note in the form attached
hereto as Attachment 1, dated the date of the last interest payment on such
surrendered Original Note and in an aggregate principal amount equal to the
unpaid principal amount of such surrendered Original Note, all in accordance
with the provisions of Section 5.2 of the Agreement. Without limitation of the
foregoing, the amendment and restatement of the Original Notes provided for
herein, including, without limitation, the increase in the interest rate
applicable to the Notes, shall be effective with respect to any and all of the
Notes irrespective of whether any such Notes are surrendered to the Company for
reissuance in the form attached to this Second Amendment as Attachment 1.
2.19 ADDITIONAL EXHIBITS. The Agreement is hereby amended to add thereto
additional exhibits, designated Exhibit E (Advances/Permitted Securitizations)
and Exhibit F (Form of Static Pool Analysis), to read in their entirety as set
forth on Attachment 2 and Attachment 3, respectively, hereto.
SECTION 3. MISCELLANEOUS
3.1 COUNTERPARTS. This Second Amendment may be executed in any
number of counterparts, each executed counterpart constituting an original, but
all together only one Second Amendment.
15
3.2 HEADINGS. The headings of the sections of this Second Amendment
are for purposes of convenience only and shall not be construed to affect the
meaning or construction of any of the provisions hereof.
3.3 GOVERNING LAW. This Second Amendment shall be governed by and
construed in accordance with the internal laws of the State of Connecticut.
3.4 EFFECT OF AMENDMENT. Except as expressly provided herein (a) no
other terms and provisions of the Agreement or the Notes shall be modified or
changed by this Second Amendment and (b) the terms and provisions of the
Agreement and the Notes, as amended by this Second Amendment, shall continue in
full force and effect. The Company hereby acknowledges and reaffirms all of its
obligations and duties under each of the Agreement and the Notes as modified by
this Second Amendment.
3.5 REFERENCES TO THE AGREEMENT. Any and all notices, requests,
certificates and other instruments executed and delivered concurrently with or
after the execution of the Second Amendment may refer to the Agreement without
making specific reference to this Second Amendment but nevertheless all such
references shall be deemed to include, to the extent applicable, this Second
Amendment unless the context shall otherwise require.
3.6 COMPLIANCE. The Company certifies that immediately before and after
giving effect to this Second Amendment, no Default or Event of Default exists or
would exist after giving effect hereto.
3.7 FULL DISCLOSURE. The Company warrants and represents to you that,
as of the effective date hereof, none of the written statements, documents or
other written materials furnished by, or on behalf of, the Company to you in
connection with the negotiation, execution and delivery of this Second Amendment
contain any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein or herein not misleading in
light of the circumstances in which they were made. There is no fact of which
any of the Company's executive officers has actual knowledge which the Company
has not disclosed to you which materially affects adversely or, so far as the
Company can now foresee, will materially affect adversely the business,
prospects, profits, Properties or condition (financial or otherwise) of the
Company and the Subsidiaries, taken as a whole, or the ability of the Company to
perform its obligations set forth in the Agreement (after giving effect to this
Second Amendment) and the Notes.
3.8 EFFECTIVENESS OF AMENDMENTS.
The amendments to the Agreement and the Original Notes contemplated by
Section 2 hereof shall (in accordance with Section 10.5(a) of the Agreement)
become effective, if at all, at such time as all of the holders of the Original
Notes shall have indicated their written consent to such amendments by executing
and delivering the applicable counterparts of this Second Amendment.
16
It is understood that any holder of Notes may withhold its consent for any
reason, including, without limitation, any failure of the Company to satisfy
all of the following conditions:
(a) This Second Amendment shall have been executed and delivered
by the Company and each of the holders of the Original Notes.
(b) The execution, delivery and effectiveness of an agreement,
signed by the Company and the requisite holders of the Company's 8.87%
Senior Notes due November 1, 2001 issued under Note Purchase Agreements
dated as of October 1, 1994, containing amendments to such Note Purchase
Agreements and such Notes identical in substance to the amendments set
forth in Section 2 hereof.
(c) The execution, delivery and effectiveness of an agreement,
signed by the Company and the requisite holders of the Company's 7.77%
Senior Notes due October 1, 2001 issued under Note Purchase Agreements
dated as of March 25, 1997, containing amendments to such Note Purchase
Agreements and such Notes identical in substance to the amendments set
forth in Section 2 hereof.
(d) The holders of Notes shall have received from the Company a
certificate of a Senior Officer, dated the effective date of this Second
Amendment, certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and
delivery of this Second Amendment and the transactions contemplated
hereby.
(e) The Company's legal counsel shall have delivered an opinion,
dated the effective date of this Second Amendment, substantially in the
form attached as Attachment 4 hereto.
(f) The Company shall have paid the statement for reasonable fees
and disbursements of ▇▇▇▇ & ▇▇▇▇▇▇, your special counsel, and ▇▇▇▇▇▇ &
▇▇▇▇▇▇, special counsel solely to The Guardian Life Insurance Company of
America, presented to the Company on or prior to the effective date of
this Second Amendment.
3.9 AMENDMENT TO CREDIT AGREEMENT. The Company represents that the
Third Amendment to the Credit Agreement, as in effect on the date of the
effectiveness of this Second Amendment, is in the form attached as Attachment 5
hereto.
[Remainder of page intentionally blank. Next page is signature page.]
17
If this Second Amendment is satisfactory to you, please sign the form of
acceptance on the enclosed counterpart of this letter and return the same to the
Company, whereupon this Second Amendment shall become binding between us in
accordance with its terms.
Very truly yours,
CREDIT ACCEPTANCE CORPORATION
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: CFO
18
ACCEPTED: ASSET ALLOCATION & MANAGEMENT
COMPANY AS AGENT FOR CENTRAL
STATES HEALTH & LIFE COMPANY OF
OMAHA
By: /S/ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: AUTHORIZED SIGNATORY
ASSET ALLOCATION & MANAGEMENT
COMPANY AS AGENT FOR THE ▇▇▇▇▇▇▇
▇▇▇▇▇▇ TRUST COMPANY FBO
GUARANTY INCOME LIFE INSURANCE
COMPANY
By: /S/ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: AUTHORIZED SIGNATORY
ASSET ALLOCATION & MANAGEMENT
COMPANY AS AGENT FOR AMERICAN
COMMUNITY MUTUAL INSURANCE
By: /S/ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: AUTHORIZED SIGNATORY
ASSET ALLOCATION & MANAGEMENT
COMPANY AS AGENT FOR CENTRAL RE
CORP. & PHOENIX
By: /S/ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: AUTHORIZED SIGNATORY
19
ASSET ALLOCATION & MANAGEMENT
COMPANY AS AGENT FOR LONE STAR
LIFE INSURANCE COMPANY
By: /S/ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: AUTHORIZED SIGNATORY
ASSET ALLOCATION & MANAGEMENT
COMPANY AS AGENT FOR OZARK
NATIONAL LIFE INSURANCE COMPANY
By: /S/ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: AUTHORIZED SIGNATORY
ASSET ALLOCATION & MANAGEMENT
COMPANY AS AGENT FOR CSA
FRATERNAL LIFE
By: /S/ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: AUTHORIZED SIGNATORY
ASSET ALLOCATION & MANAGEMENT
COMPANY AS AGENT FOR KANAWHA
INSURANCE COMPANY
By: /S/ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: AUTHORIZED SIGNATORY
ASSET ALLOCATION & MANAGEMENT
COMPANY AS AGENT FOR OLD GUARD
MUTUAL INSURANCE COMPANY
By: /S/ ▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: AUTHORIZED SIGNATORY
20
COMBINED INSURANCE COMPANY OF
AMERICA
BY: AON ADVISORS, INC.
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: SENIOR PORTFOLIO MANAGER
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
BY: CIGNA INVESTMENTS, INC.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Managing Director
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY,
ON BEHALF OF ONE OR MORE SEPARATE ACCOUNTS
BY CIGNA INVESTMENTS, INC.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇
Title: Managing Director
CM LIFE INSURANCE COMPANY
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇
Title: Investment Officer
NATIONWIDE LIFE INSURANCE COMPANY
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Investment Officer
21
PAN AMERICAN LIFE INSURANCE
COMPANY
By: /S/ ▇. ▇▇▇▇▇▇▇▇ STONE
--------------------------------
Name: ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President Corporate
Securities
PHOENIX HOME LIFE MUTUAL
INSURANCE COMPANY
BY: PHOENIX INVESTMENT COUNSEL, INC.
By: /S/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
SECURITY BENEFIT LIFE INSURANCE
COMPANY
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Second Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, LLC
BY ▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, LLC
ATTORNEY-IN-FACT
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Principal, Manager
22
ATTACHMENT 1
EXHIBIT A
[FORM OF NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). ANY RESALE OR TRANSFER OF THIS NOTE WITHOUT
REGISTRATION UNDER THE SECURITIES ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
CREDIT ACCEPTANCE CORPORATION
FIRST AMENDED AND RESTATED 8.24% SENIOR NOTE DUE JULY 1, 2001
NO. R-___
$____________
PPN: 225310 A@ 0 [DATE]
CREDIT ACCEPTANCE CORPORATION, a Michigan corporation (the "Company"),
for value received, hereby promises to pay to ____________ or registered
assigns the principal sum of ____________ DOLLARS ($____________) on July 1,
2001 and to pay interest (computed on the basis of a 360-day year of twelve
30-day months) on the unpaid principal balance thereof from the date of this
Note (i) at the rate of seven and ninety-nine one-hundredths percent (7.99%)
PER ANNUM through (but not including) July 1, 1998, and (ii) at the rate of
eight and twenty-four one-hundredths percent (8.24%) PER ANNUM from and after
July 1, 1998, payable semi-annually on the first (1st) day of January and
July in each year, commencing on the payment date next succeeding the date
hereof, until the principal amount hereof shall become due and payable; and
to pay on demand interest on any overdue principal (including any overdue
prepayment of principal) and Make-Whole Amount, if any, and (to the extent
permitted by applicable law) on any overdue installment of interest, at a
rate equal to the LESSER of (a) the highest rate allowed by applicable law or
(b) nine and ninety-nine one-hundredths percent (9.99%) PER ANNUM if such
time is prior to July 1, 1998, and ten and twenty-four one-hundredths percent
(10.24%) PER ANNUM if such time is on or after July 1, 1998.
Payments of principal, Make-Whole Amount, if any, and interest shall be
made in such coin or currency of the United States of America as at the time of
payment is legal tender for the payment of public and private debts to the
registered holder hereof at the address shown in the register maintained by the
Company for such purpose, in the manner provided in the Note Purchase Agreement
(defined below).
This Note is one of an issue of Notes of the Company issued in an
aggregate principal amount limited to Seventy Million Dollars ($70,000,000)
pursuant to the Company's separate Note Purchase Agreements, each dated as of
August 1, 1996 (collectively, as may be amended from time to time, the "Note
Purchase Agreement"), with the purchasers listed on Annex 1 thereto. This Note
is entitled to the benefits of the Note Purchase Agreement and the terms thereof
are incorporated herein by reference. Capitalized terms used herein and not
otherwise defined herein have the meanings specified in the Note Purchase
Agreement. As provided in the Note Purchase Agreement, this Note is subject to
prepayment, in whole or in part, in certain cases without a Make-Whole Amount
and in other cases with a Make-Whole Amount. The Company agrees to make
required prepayments on account of such Notes in accordance with the provisions
of the Note Purchase Agreement.
This Note is a registered Note and is transferable only by surrender
hereof at the principal office of the Company as specified in the Note Purchase
Agreement, duly endorsed or accompanied by a written instrument of transfer duly
executed by the registered holder of this Note or its attorney duly authorized
in writing.
Under certain circumstances, as specified in the Note Purchase
Agreement, the principal of this Note (in certain cases together with any
applicable Make-Whole Amount) may be declared due and payable in the manner
and with the effect provided in the Note Purchase Agreement.
The Company's First Amended and Restated 8.24% Senior Notes due July 1,
2001 (the "First Amended and Restated Notes") amend and restate the Company's
7.99% Senior Notes due July 1, 2001 (the "Original Notes"). The obligations
formerly evidenced by the Original Notes are continuing obligations which are
evidenced by the First Amended and Restated Notes and nothing contained in the
First Amended and Restated Notes shall be deemed to constitute payment,
settlement or a novation of such obligations.
THIS NOTE AND THE NOTE PURCHASE AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, INTERNAL CONNECTICUT LAW.
CREDIT ACCEPTANCE CORPORATION
By
------------------------------
Name:
Title:
ATTACHMENT 4
[FORM OF COMPANY COUNSEL LEGAL OPINION]
July __, 1998
To each of the Persons
listed on Annex 1 hereto
Re: Credit Acceptance Corporation, a Michigan
corporation (the "Company")
------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to the Company and have provided this
opinion pursuant to the Second Amendment, to Note Purchase Agreement, dated as
of July 1, 1998 (the "Second Amendment") among the Company and the Persons
listed on Annex 1 thereto (the "Holders"), in respect of the separate Note
Purchase Agreements, each dated as of August 1 (collectively, as amended by the
First Amendment to Note Purchase Agreement dated as of December 12, 1997, the
"Existing Note Agreement", and as further amended by the Second Amendment, the
"Amended Note Agreement"), between the Company and each of the Persons listed on
Annex 1 thereto (the "Purchasers"), pursuant to which the Company sold to the
Purchasers its 7.99% Senior Notes due July 1, 2001 (the "Original Notes"), in
the aggregate principal amount of Seventy Million Dollars ($70,000,000). The
capitalized terms used herein and not defined herein have the meanings specified
in the Amended Note Agreement.
The law covered by the opinions expressed herein is limited to the federal
law of the United States and the laws of the State of Michigan. In rendering
the opinion in paragraph (2) below, we have assumed that the laws of the State
of Connecticut as to the enforceability of the Amended Note Agreement and the
Notes are not different from the State of Michigan (excluding the choice of law
rules).
In our examination, we have assumed the genuineness of all signatures
(other than signatures of officers of the Company), the legal capacity of
natural persons, the authenticity of all documents submitted to us as originals
or copies, the conformity with originals of all documents submitted to us as
copies and, as to documents executed by the Holders and Persons other than the
Company, that each such Person executing documents had the power to enter into
and perform its obligations under such documents, and that such documents have
been duly authorized, executed and delivered by, and are binding upon and
enforceable against, such Persons.
In rendering our opinion, we have relied, without further investigation or
analysis, upon certificates of officers of the Company attached hereto;
warranties and representations as to certain
factual matters made by the Company and by the Holders in the Amended Note
Agreement and in the certificate delivered to the Holders pursuant to the
Second Amendment.
In acting as such counsel, we have examined (a) the Existing Note
Agreement, (b) the Second Amendment, including the form of the Company's First
Amended and Restated 8.24% Senior Note due July 1, 2001 attached to the Second
Amendment as Attachment 1, (c) the bylaws of the Company, (d) the records of
proceedings of the board of directors of the Company, (e) a certified copy of
the articles of incorporation of the Company, as in effect on the date hereof,
and (f) originals, or copies certified or otherwise identified to our
satisfaction, of such other documents, records, instruments and certificates of
public officials as we have deemed necessary or appropriate to enable us to
render this opinion. The Original Notes held by the Holders, as amended and
restated pursuant to the Second Amendment, are referred to herein as the
"Notes".
Based upon and subject to the foregoing and to the additional assumptions,
qualifications and limitations set forth herein, we are of the opinion that:
1. The Second Amendment has been duly authorized by all necessary
corporate action on the part of the Company and has been executed and delivered
by a duly authorized officer of the Company.
2. Each of the Amended Note Agreement and the Notes constitute a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as (a) the enforceability thereof
may be limited by or subject to bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws now or hereafter affecting creditors'
rights generally, and (b) rights or remedies (including, without limitation,
acceleration, specific performance and injunctive relief) may be limited by
equitable principles of general applicability (including, without limitation,
standards of materiality, good faith, fair dealing and reasonableness) whether
such principles are considered in a proceeding in equity or at law, and may be
subject to the discretion of the court before which any proceedings therefor may
be brought.
3. All consents, approvals and authorizations of Governmental
Authorities required on the part of the Company have been obtained in connection
with the execution and delivery of the Second Amendment.
4. The execution and delivery of the Amended Note Agreement in
accordance with, and subject to the terms and conditions of, the Amended Note
Agreement, by the Company and the performance by the Company of its obligations
thereunder and under the Notes do not violate any applicable statute, rule or
regulation to which the Company is subject.
5. Under existing law, the amendment of the Original Notes under the
circumstances contemplated by the Second Amendment is an exempt transaction
under the Securities Act and neither the registration of the Notes under the
Securities Act, nor the qualification of an indenture
with respect thereto under the Trust Indenture Act of 1939, as amended, is
required in connection with such transaction.
In rendering this opinion, we assume no obligation to revise or supplement
this opinion should any law now in effect be changed by legislative action,
judicial decision or otherwise.
We acknowledge that this opinion is being issued at the request of the
Company pursuant to the Second Amendment and we agree that the parties listed on
Annex 1 hereto are relying hereon. Future holders of the Notes may rely on this
opinion as if it were addressed to them. Except as otherwise provided in this
paragraph, no one is entitled to rely on this opinion.
This opinion is solely for the information of the addressees hereof, and
is not to be quoted in whole or in part or otherwise referred to, nor is it to
be filed with any governmental agency or other person without our prior written
consent (except that you may furnish a copy hereof (i) to any one or more of
your employees, officers, directors, agents, attorneys, accountants or
professional consultants, (ii) to any state or federal authority or independent
insurance board or body having regulatory jurisdiction over any holder of a
Note, (iii) pursuant to order or legal process of any court or governmental
agency, (iv) in connection with any legal action in which you are a party
arising out of or in respect of the transactions contemplated under the Amended
Note Agreement, and (v) for informational and due diligence purposes only, to
prospective transferees of the Notes).
Very truly yours,
ATTACHMENT 2
EXHIBIT E
[FORM OF ADVANCES/PERMITTED SECURITIZATIONS SCHEDULE]
ATTACHMENT 3
EXHIBIT F
[FORM OF STATIC POOL ANALYSIS]
ATTACHMENT 5
[THIRD AMENDMENT TO CREDIT AGREEMENT]