Exhibit 4.2
AMENDMENT NUMBER 1 TO
SECURITY AGREEMENT
AMENDMENT NUMBER 1 TO SECURITY AGREEMENT (this "Amendment"), dated as of
September 30, 2001 by and among UNION ACCEPTANCE FUNDING CORPORATION, an Indiana
corporation, as seller (in such capacity, the "Seller"), UAFC-2 CORPORATION, a
Delaware corporation, as debtor (in such capacity, the "Debtor"), UNION
ACCEPTANCE CORPORATION, an Indiana corporation ("UAC"), individually and in its
capacity as collection agent (in such capacity, the "Collection Agent"),
VARIABLE FUNDING CAPITAL CORPORATION, a Delaware corporation (the "Company"),
FIRST UNION SECURITIES, INC. ("FUSI"), individually and as collateral agent and
deal agent (in such capacities, the "Collateral Agent" and the "Deal Agent",
respectively) and FIRST UNION NATIONAL BANK ("First Union"), as paying agent (in
such capacity, the "Paying Agent") amending that certain Security Agreement
dated as of August 31, 2001 (the "Security Agreement").
WHEREAS, the parties hereto mutually desire to make certain amendments to
the Security Agreement as hereinafter set forth.
NOW, THEREFORE, the parties hereby agree as follows:
SECTION 1. Defined Terms. As used in this Amendment, and except as
otherwise provided in this Section 1, capitalized terms shall have the same
meanings assigned thereto in the Security Agreement.
Exhibit C of the Security Agreement is hereby amended by deleting
subsection (a) and replacing it with the following (solely for convenience
changed language is italicized):
"(a) permit its Tangible Net Worth to be less than, at any time, the sum of
(x) $160,000,000, plus (y) one hundred percent (100%) of the net
proceeds of any equity offering by the Collection Agent (whether
public or private) which occurs subsequent to September 30, 2001, plus
(z) eighty percent (80%) of Net Income for the period from October 1,
2001 through the date of determination; provided that for purposes of
calculating the Collection Agent's Tangible Net Worth, in no event
shall the Collection Agent's Net Income be less than zero."
SECTION 2. Representations and Warranties. Each of the Debtor and the
Collection Agent, represent and warrant that all of its respective
representations and warranties described in Sections 3.1 and 3.2 of the Security
Agreement are true and correct as of the date hereof as if such representations
and warranties were recited herein in their entirety.
SECTION 3. Payment of Expenses. The Debtor agrees to pay any reasonable
attorney's fees and expenses of the Deal Agent, the Collateral Agent, the Paying
Agent and the Company in connection with the preparation, execution and delivery
of this Amendment.
SECTION 4. Limited Scope. This amendment is specific to the circumstances
described above and does not imply any future amendment or waiver of rights
allocated to the Debtor, the Collection Agent, the Deal Agent, the Paying Agent
or the Collateral Agent under the Security Agreement.
SECTION 5. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. Severability; Counterparts. This Amendment 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
instrument. Any provisions of this Amendment which are prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 7. Ratification. Except as expressly affected by the provisions
hereof, the Security Agreement as amended shall remain in full force and effect
in accordance with its terms and ratified and confirmed by the parties hereto.
On and after the date hereof, each reference in the Security Agreement to "this
Agreement", "hereunder", "herein" or words of like import shall mean and be a
reference to the Security Agreement as amended by this Amendment.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment Number 1 as of the date first written above.
VARIABLE FUNDING CAPITAL CORPORATION, as Company
by First Union Securities, Inc. as
attorney-in-fact
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Vice President:
UAFC-2 CORPORATION, as Debtor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
President
UNION ACCEPTANCE FUNDING CORPORATION, as Seller
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇
Title:
UNION ACCEPTANCE CORPORATION,
individually and as Collection Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title:
FIRST UNION SECURITIES, INC.,
individually and as Collateral Agent and
Deal Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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Director
FIRST UNION NATIONAL BANK, as Paying Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President