Exhibit 4(f)(77)
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U.S. $50,000,000
CERTIFICATE FUNDING AGREEMENT
Dated as of September 20, 2006
Among
CREDIT ACCEPTANCE RESIDUAL FUNDING LLC
as the Borrower
CREDIT ACCEPTANCE CORPORATION
as the Administrator
WACHOVIA BANK, NATIONAL ASSOCIATION
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 and the other CP Conduits
from time to time party hereto
WACHOVIA CAPITAL MARKETS, LLC
as the Deal Agent and the Collateral Agent
and
WACHOVIA BANK, NATIONAL ASSOCIATION
as the Liquidity Agent for the VFCC Purchaser Group
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS................................................. 1
Section 1.1. Certain Defined Terms.................................. 1
Section 1.2. Other Terms............................................ 17
Section 1.3. Computation of Time Periods............................ 17
Section 1.4. Interpretation......................................... 17
ARTICLE II THE LOAN FACILITY........................................... 17
Section 2.1. Funding of the Advances................................ 17
Section 2.2. Grant of Security Interest; Acceptance by Collateral
Agent.................................................. 19
Section 2.3. Procedures for Funding of Advances..................... 20
Section 2.4. Determination of Yield................................. 21
Section 2.5. Reduction of the Facility Limit and a Purchaser Group
Facility Limit......................................... 21
Section 2.6. Actions with Respect to Advance........................ 22
Section 2.7. Settlement Procedures.................................. 22
Section 2.8. [Reserved.]............................................ 23
Section 2.9. Collections and Allocations............................ 23
Section 2.10. Payments, Computations, Etc............................ 24
Section 2.11. [Reserved.]............................................ 24
Section 2.12. Fees................................................... 24
Section 2.13. Increased Costs; Capital Adequacy; Illegality.......... 25
Section 2.14. Taxes.................................................. 26
Section 2.15. Assignment of the Certificate Purchase Agreement....... 27
Section 2.16. Take-Out............................................... 27
ARTICLE III CONDITIONS TO THE CLOSING, EACH FUNDING AND AMENDMENT AND
RESTATEMENT................................................. 29
Section 3.1. Conditions to the Closing.............................. 29
Section 3.2. Conditions Precedent To All Fundings................... 30
ARTICLE IV REPRESENTATIONS AND WARRANTIES.............................. 32
Section 4.1. Representations and Warranties of the Borrower......... 32
Section 4.2. Representations and Warranties of the Borrower Relating
to the Certificates.................................... 37
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Section 4.3. Representations and Warranties of the Administrator.... 37
ARTICLE V GENERAL COVENANTS........................................... 39
Section 5.1. Affirmative Covenants of the Borrower.................. 39
Section 5.2. Negative Covenants of the Borrower..................... 44
Section 5.3. [Reserved]............................................. 48
Section 5.4. Affirmative Covenants of the Administrator............. 48
Section 5.5. Negative Covenants of the Administrator................ 50
ARTICLE VI REPORTS AND ACCOUNTS........................................ 51
Section 6.1. Reports................................................ 51
Section 6.2. Establishment of the Accounts.......................... 51
Section 6.3. Payment of Certain Expenses by Administrator........... 52
Section 6.4. Annual Independent Public Accountant's Reports......... 53
Section 6.5. The Administrator Not to Resign........................ 53
ARTICLE VII [Reserved].................................................. 53
ARTICLE VIII [Reserved].................................................. 53
ARTICLE IX SECURITY INTEREST........................................... 53
Section 9.1. Security Agreement..................................... 53
Section 9.3. Further Assurances..................................... 54
Section 9.4. Remedies............................................... 54
Section 9.5. Waiver of Certain Laws................................. 54
Section 9.6. Power of Attorney...................................... 54
ARTICLE X TERMINATION EVENTS.......................................... 54
Section 10.1. Termination Events..................................... 55
Section 10.2. Remedies............................................... 57
ARTICLE XI INDEMNIFICATION............................................. 57
Section 11.1. Indemnities by the Borrower............................ 57
Section 11.2. Indemnities by the Administrator....................... 59
Section 11.3. After-Tax Basis........................................ 60
ARTICLE XII THE DEAL AGENT AND THE LIQUIDITY AGENTS..................... 60
Section 12.1. Authorization and Action............................... 60
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Section 12.2. Delegation of Duties................................... 61
Section 12.3. Exculpatory Provisions................................. 61
Section 12.4. Reliance............................................... 63
Section 12.5. Non-Reliance on Deal Agent, Liquidity Agents,
Collateral Agent and Other Lenders..................... 64
Section 12.6. Reimbursement and Indemnification...................... 64
Section 12.7. Deal Agent, Liquidity Agents and Collateral Agent in
their Individual Capacities............................ 64
Section 12.8. Successor Deal Agent, Liquidity Agents or Collateral
Agent.................................................. 64
ARTICLE XIII ASSIGNMENTS; PARTICIPATIONS................................. 65
Section 13.1. Assignments and Participations......................... 65
ARTICLE XIV MISCELLANEOUS............................................... 69
Section 14.1. Amendments and Waivers................................. 69
Section 14.2. Notices, Etc........................................... 69
Section 14.3. Ratable Payments....................................... 70
Section 14.4. No Waiver; Remedies.................................... 70
Section 14.5. Binding Effect; Benefit of Agreement................... 70
Section 14.6. Term of this Agreement................................. 70
Section 14.7. Governing Law; Consent to Jurisdiction; Waiver of
Objection to Venue..................................... 70
Section 14.8. Waiver of Jury Trial................................... 71
Section 14.9. Costs, Expenses and Taxes.............................. 71
Section 14.10. No Proceedings......................................... 72
Section 14.11. Recourse Against Certain Parties....................... 72
Section 14.12. Protection of Right, Title and Interest in Collateral;
Further Action Evidencing the Funding.................. 73
Section 14.13. Confidentiality; Tax Treatment Disclosure.............. 74
Section 14.14. Execution in Counterparts; Severability; Integration... 75
Section 14.15. Waiver of Setoff....................................... 75
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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 Certificate Supplement
EXHIBIT F Form of Assignment and Servicing Agreement
EXHIBIT G Form of Take-Out Release
EXHIBIT H Form of Certificate Purchase Agreement
EXHIBIT I Form of Variable Funding Note
SCHEDULES
SCHEDULE I Condition Precedent Documents
SCHEDULE II [Reserved]
SCHEDULE III Tradenames, Fictitious Names and "Doing Business As" Names
SCHEDULE IV Location of Records and Contract Files
SCHEDULE V Commitment Amount of Each Investor
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THIS CERTIFICATE FUNDING AGREEMENT (the "Agreement") is made as of
September 20, 2006, among:
(1) CREDIT ACCEPTANCE RESIDUAL FUNDING LLC, a Delaware limited liability
company, (the "Borrower");
(2) CREDIT ACCEPTANCE CORPORATION, a Michigan corporation, ("Credit
Acceptance" or the "Administrator");
(3) WACHOVIA BANK, NATIONAL ASSOCIATION, as an investor for the VFCC
Purchaser Group (an "Investor") and the other Investors from time to time party
hereto;
(4) VARIABLE FUNDING CAPITAL COMPANY LLC, a Delaware limited liability
company ("VFCC", a "CP Conduit" or a "Lender") and the other CP Conduits from
time to time party hereto;
(5) WACHOVIA CAPITAL MARKETS, LLC, a Delaware limited liability company
("WCM"), as deal agent (the "Deal Agent");
(6) 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") and the other
Liquidity Agents from time to time party hereto; and
(7) WACHOVIA CAPITAL MARKETS, LLC, a Delaware corporation (the "Collateral
Agent").
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.
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.
Adjusted Eurodollar Rate: For any Accrual Period, an interest rate per
annum equal to the sum of 1.00% 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.
Administration Agreement: That certain Third Amended and Restated
Administration Agreement, dated as of April 10, 2006, executed between VFCC and
WCM, as the same may be amended, supplemented, or otherwise modified from time
to time.
Administrator's Fee: For each Payment Date, a monthly fee payable to the
Administrator for services rendered during the related Collection Period equal
to $85.
Advance: As defined in Section 2.1.
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 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 Unpaids: At any time, an amount equal to the sum of all accrued
and unpaid Capital, Yield, Breakage Costs and all other amounts owed by the
Borrower hereunder, 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).
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 Period: With respect to each Purchaser Group, the period
beginning on the day after the end of the Revolving Period, and ending on the
Collection Date.
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.
Assignment and Servicing Agreement: With respect to each Certificate, the
Assignment and Servicing Agreement, dated as of the date such Certificate is
pledged hereunder, substantially in the form of Exhibit F hereto, between Credit
Acceptance and the Borrower, as the same may be amended, restated, supplemented
or otherwise modified from time to time.
Available Funds: With respect to any Payment Date: (i) all amounts
deposited in the Collection Account during the Collection Period 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); and
(iii) amounts paid by the Borrower pursuant to Section 2.16 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 1.50%.
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: Credit Acceptance Residual Funding LLC, a Delaware limited
liability company.
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.
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 or Detroit, Michigan 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 and amounts paid
pursuant to Section 2.16(a)(v); 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 Facility Collateral
Amount.
Carrying Costs: With respect to any Payment Date, the sum of amounts
payable under Section 2.7(a)(ii)(A)-(C).
Certificate: A certificate of beneficial interest representing the entire
residual interest in a Securitization Trust transferred by a Seller to the
Borrower under a Certificate Purchase Agreement and registered in the name of
the Borrower.
Certificate Purchase Agreement: With respect to each Certificate, the
Certificate Purchase Agreement, dated as of the date such Certificate is pledged
hereunder, substantially in the form of Exhibit H hereto, between each Seller
and the Borrower, as the same may be amended, restated, supplemented or
otherwise modified from time to time.
Certificate Supplement: A supplement entered into by the Deal Agent, the
Administrator and the Borrower relating to a Certificate pledged hereunder
substantially in the form of Exhibit E.
Change-in-Control: Any of the following:
(a) the creation or imposition of any Lien on any shares of membership
interests in the Borrower; or
(b) the failure by Credit Acceptance to own all of the membership interests
in the Borrower.
Class A Note Balance: For any Securitization Transaction on any date of
determination, the principal balance of the notes issued pursuant to such
Securitization Transaction.
Closing Date: September 20, 2006.
Code: The Internal Revenue Code of 1986, as amended from time to time.
Collateral: Defined in Section 2.2(a)(i).
Collateral Agent: Wachovia Capital Markets, LLC.
Collateral Amount: For any Securitization Transaction and on any
distribution date related to such Securitization Transaction, an amount equal to
the "Aggregate Outstanding Net Eligible Loan Balance" (less the aggregate of the
"Overconcentration Loan Amounts" and the aggregate of the "Dealer Loan Excess
Advance Amounts," if any), after giving effect to all purchases of Dealer Loans
relating to such Securitization Transaction on such date. Each of the terms
"Aggregate Outstanding Net Eligible Loan Balance," "Overconcentration Loan
Amounts" and "Dealer Loan Excess Advance Amounts" will have the meanings given
such terms in the
Securitization Documents relating to the Securitization Transaction. Solely for
purposes of calculating the "Collateral Amount" in any Securitization
Transaction, the determination of whether a Dealer Loan relating to such
Securitization Transaction is an "Eligible Loan" shall be made in accordance
with the procedures set forth in the Securitization Documents relating to such
Securitization Transaction.
Collection Account: Defined in Section 6.2(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 Period: Each calendar month, except in the case of the first
Collection Period, the period beginning on the initial Funding Date to and
including the last day of the calendar month in which the initial Funding Date
occurs.
Collections: All distributions received by the Administrator or the
Borrower in respect of a Certificate on or after the pledge of such Certificate
hereunder, whether in the form of cash, checks, wire transfers or other form of
payment, and all "Collections" (as defined in the related Securitization
Documents) received by the Administrator or the Borrower on or after the date of
the exercise of an Optional Purchase under such Securitization Documents and
prior to the date of the exercise of a Take-Out of the related Collateral.
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 V 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,
September 19, 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).
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, 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 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 ▇▇▇▇▇▇ 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 Administrator, which rates shall reflect and
give effect to (A) 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 (B)
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; and (b) 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 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 Agreement is amended or terminated
after the Closing Date, references to the Credit Agreement shall refer to the
Credit Agreement on the Closing Date unless otherwise consented to by the Deal
Agent.
Deal Agent: Defined in the preamble of the Agreement.
Dealer Loans: Dealer loans originated by Credit Acceptance and sold to any
Seller pursuant to a Securitization Transaction.
Determination Date: The fifth (5th) 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).
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 ▇▇▇▇▇'▇, 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 ▇▇▇▇▇'▇, 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.
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.
Excepted Persons: Defined in Section 14.13(a).
Excess Collateral Amount: As of any date of determination, the aggregate of
the positive difference between the Collateral Amount for each Securitization
Transaction and the Minimum Collateral Amount for such Securitization
Transaction as of the most recent Funding Date that occurs on or prior to such
date of determination.
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.
Facility Collateral Amount: On any date of determination, an amount equal
to the product of (a) the Maximum Facility Advance Rate and (b) the Excess
Collateral Amount.
Facility Fee: With respect to each Purchaser Group, the meaning given such
term in the Fee Letter related to such Purchaser Group.
Facility 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
"Facility Fee Rate."
Facility Limit: $50,000,000; 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, or in the case of
any other Purchaser Group, the date of the Joinder related to such Purchaser
Group, among the Borrower, the Administrator and the Deal Agent, in the case of
VFCC, among the Borrower, the Administrator and the related Liquidity Agent, and
in the case of any other Purchaser Group, as any such letter may be amended,
modified, supplemented, restated or replaced from time to time.
Funding: An Advance by a Lender pursuant to Section 2.1 or Section 2.3
hereof.
Funding Date: In the case of any 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.
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.
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).
Indemnified Amounts: Defined in Section 11.1(a).
Indemnified Parties: Defined in Section 11.1(a).
Initial Facility Limit: $50,000,000.
Initial Funding: The initial funding made pursuant to this Agreement.
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.
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.
Investors: With respect to the VFCC Purchaser Group, Wachovia Bank,
National Association, 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 Certificate Purchase Agreement and
excluding commission, travel and similar advances to officers, employees and
directors made in the ordinary course of business.
Issuer: VFCC, 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.
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.
Lenders: Collectively, VFCC 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 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 Certificate, 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, 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 and (b) 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 and (ii) 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.
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 Administrator 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 Collateral, (c) the rights and remedies of the Deal Agent,
the Collateral Agent or Secured Parties, (d) the ability of the Borrower or the
Administrator 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: Indebtedness in an aggregate outstanding principal amount of
$5,000,000 or more.
Maximum Class A Advance Rate: On any date of determination and for any
Securitization Transaction, the corresponding "Maximum Advance Rate" (as such
term is defined in the related Securitization Documents) relating to such
Securitization Transaction.
Maximum Facility Advance Rate: 65.0%.
Minimum Collateral Amount: For any Securitization Transaction and on any
distribution date relating to such Securitization Transaction, an amount equal
to the Class A Note Balance divided by the Maximum Class A Advance Rate.
Monthly Report: Defined in Section 6.1(a).
Moody's: ▇▇▇▇▇'▇ 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.
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 and (ii) 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.
Officer's Certificate: A certificate signed by any officer of the Borrower
or the Administrator, 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.
Optional Purchase: With respect to any Securitization Transaction, the
purchase of all of the property of the related Securitization Trust (except for
the "Trust Accounts," as such term is defined in the related Securitization
Documents) after the note balance relating to such
Securitization Transaction has decreased to an amount that is less than or equal
to 15% of the initial note balance of such Securitization Transaction.
Payment Date: The nineteenth (19th) day of each calendar month or, if such
day is not a Business Day, the next succeeding Business Day.
Payment Acknowledgment: With respect to each Certificate pledged hereunder,
an acknowledgment from the indenture trustee of the related Securitization
Transaction, whereby such indenture trustee agrees to make all distributions
required to be made on the related Certificate to the Collection Account.
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.
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.
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 and with
respect to the VFCC Purchaser Group, $50,000,000.
Qualified Institution: Defined in Section 6.2(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: All 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 Certificates.
Reference Bank: Any bank that furnishes information for purposes of
determining the Adjusted Eurodollar Rate.
Register: Defined in Section 13.1(c).
Related Security: With respect to any Certificate, all of every Seller's
right, title and interest in (i) all Certificate Purchase Agreements; (ii) all
rights of recovery of the Borrower against any Seller pursuant to such
Certificate Purchase Agreements; (iii) the assignment to the Deal Agent of all
UCC financing statements filed by the Borrower against any Seller under or in
connection with the related Certificate Purchase Agreement; (iv) all Records;
(v) all rights under each Assignment and Servicing Agreement; and (vi) all
Proceeds of the foregoing.
Required Investors: At a particular time, Investors with Commitments in
excess of two-thirds of the Facility Limit.
Required Reports: Collectively, (i) the Monthly Report, (ii) the quarterly
financial statement of the Administrator and (iii) copies of each report and
certificate and any financial information delivered to the applicable indenture
trustee pursuant to the Securitization Documents relating to any Securitization
Transaction, the Certificate relating to which is pledged hereunder.
Required Reserve Account Amount: (i) On the Closing Date and each Payment
Date, an amount equal to the amount necessary to pay the Facility Fee for the
period commencing on such date and ending on the Commitment Termination Date
then in effect; and (ii) on each Payment Date and each Funding Date, for each
Securitization Transaction, an amount equal to Borrower's good faith estimate,
as confirmed by the Deal Agent prior to such date, of the amount necessary to
pay interest at the CP Rate plus the Program Fee Rate plus 1.00% on the Capital
for the period beginning on such date and ending on the date which is Borrower's
good faith estimate, as confirmed by the Deal Agent, prior to such date, of the
date on which the related Class A Note Balance will be reduced to zero and all
other required payments under such Securitization Transaction will be paid in
full.
Reserve Account: Defined in Section 6.2.
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.
Revolving Period: The period commencing on the Closing Date and ending on
the date that is the earlier of: (i) 364 days after the Closing Date unless such
date is extended by the Deal Agent in its sole discretion and (ii) the
occurrence or declaration of a Termination Event.
S&P: Standard & Poor's, a division of The McGraw Hill Companies, Inc., and
any successor thereto.
Secured Party: The Deal Agent, each Liquidity Agent and each Lender.
Securitization Document: Any document to which any Seller or any
Securitization Trust is a party.
Securitization Transaction: Any securitization transaction in which: (i) a
Credit Acceptance sponsored Securitization Trust issues securities or notes
backed by Dealer Loans; (ii) and the Certificate relating to such transaction
has been sold by the related Seller to the Borrower pursuant to the applicable
Certificate Purchase Agreement; and (iii) the Borrower has pledged such
Certificate to the Collateral Agent pursuant to this Agreement.
Securitization Trust: Any Delaware statutory trust created for the purpose
of owning the Dealer Loans and related collateral and issuing notes secured
thereby.
Seller: Any special purpose entity created for the purposes of purchasing
Dealer Loans and related security, selling property to a Securitization Trust
and holding the related Certificate.
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.
Subsidiary: A corporation of which Credit Acceptance 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.
Take-Out: The release of any Collateral from the Lien of this Agreement
pursuant to Section 2.16.
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, each Certificate Purchase Agreement,
the Notes, the Liquidity Agreements, each Certificate, the Fee Letters, each
Joinder, the Payment Acknowledgements, each Assignment and Servicing Agreement
and any additional document the execution of which is necessary or incidental to
carrying out the terms of the foregoing documents.
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.
Upfront Fee: The upfront fee set forth in the Fee Letter related to the
VFCC Purchaser Group.
VFCC: Variable Funding Capital Company LLC.
VFCC Purchaser Group: VFCC, Wachovia Bank, National Association, as
Liquidity Agent and Wachovia Bank, National Association, as Investor.
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:
1
YR x C x ---
360
where:
C = the outstanding principal amount of the Advances 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 Advances allocated to such Accrual Period:
(a) to the extent the relevant Lender funded the Advances 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 Advances through the
issuance of commercial paper, a rate equal to the Alternative Rate; or
(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 Advances 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.
ARTICLE II
THE LOAN FACILITY
Section 2.1. Funding of the Advances.
(a) 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 Facility Collateral Amount 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 (A) the related CP Conduit and (B) 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 (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.
(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 Administrator 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 clause (iii) above, (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)(iii).
(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 Closing 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 the related Liquidity Agent for the account of the applicable
Lenders, and mature on September 20, 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 Closing 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.
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) each Certificate, and all amounts distributed or to become
distributable with respect thereto on and after the pledge of each such
Certificate hereunder; (ii) all Related Security; (iii) all Dealer Loans, all
collateral securing such Dealer Loans and all related rights, (iv) all accounts,
general intangibles (including without limitation payment intangibles), chattel
paper, goods (including without limitation vehicles), instruments, documents,
deposit accounts and investment property; and (v) 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 relating to the Dealer Loans or the dealer agreements or
contracts related thereto 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 agrees to
deliver to the Collateral Agent, for the benefit of the Secured Parties,
each Certificate, indorsed in blank.
(b) The Collateral Agent hereby acknowledges its acceptance, on behalf of
the Secured Parties, of the pledge by the Borrower of the Certificates and all
other Collateral.
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 be in a minimum
amount of $250,000, (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 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.
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 Advances on each Payment Date for
the related Accrual Period and shall advise the Administrator 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.
(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 ▇▇▇▇▇'▇ 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
Advances, take any of the following actions at any time with respect to the
Advances: (i) divide the Advances funded by such Lender into two or more
portions of having aggregate Capital equal to the Capital of such divided
Advances; (ii) combine one portion of the Advances funded by such Lender with
another portion of the Advances 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 Advances
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 Advances to be
combined.
Section 2.7. Settlement Procedures. (a) On each Payment Date, the
Collateral Agent shall withdraw Available Funds and any Excess Reserve Amount
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 Administrator, the Administrator's Fee plus, on and
after the date of the exercise of an Optional Purchase by the Borrower with
respect to any Securitization Transaction so long as the Administrator is
no longer receiving a servicing fee pursuant to the underlying
Securitization Documents, an amount equal to the product of (A) 6.00% and
(B) the total "Collections" (as such term is defined in the related
Securitization Documents) in respect of such Securitization Transaction for
the related Collection Period;
(ii) SECOND, 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) all Program Fees, and (C) all Facility Fees, due in respect of
such Payment Date and any such amounts unpaid from any prior Payment Date;
(iii) THIRD, 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));
(iv) FOURTH, to the Deal Agent for the account of the Lenders, pro
rata, an amount necessary to reduce such Lender's Capital to zero;
(v) FIFTH, to the Deal Agent for the account of the Lenders, an amount
equal to Increased Costs, any Additional Amounts and Indemnified Amounts
due in respect of such Payment Date and unpaid from any prior Payment Date;
and to the Deal Agent for the account of any other applicable Person, all
remaining amounts up to all Aggregate Unpaids until paid in full; and
(vi) SIXTH, to the Borrower any remaining amounts.
(b) [Reserved.]
(c) (i) If on any Payment Date the amounts allocable pursuant to Sections
2.7(a)(i) and (ii) are 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 Administrator or to the Deal Agent for payment to the Lenders, as
applicable.
(ii) If on any Payment Date during the Amortization Period, the amount
paid pursuant to Section 2.7(a)(iii) is insufficient to reduce Aggregate
Unpaids 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) Distributions on a Certificate. With respect to each Certificate
pledged hereunder, all distributions made on such Certificate shall be made to
the Collection Account. To the extent the Administrator receives any amounts in
respect of a Certificate pledged hereunder, it shall promptly (but in no event
later than the second Business Day after knowledge of the receipt
thereof) deposit all such amounts to the Collection Account by wire transfer, in
immediately available funds.
(b) Other Collections. With respect to each Securitization Transaction, the
Administrator shall deposit to the Collection Account all "Collections" (as such
term is defined in the related Securitization Documents) received by it on and
after the date of an Optional Purchase and prior to the date of a Take-Out of
the related Collateral.
(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 6.2(b).
(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.
Section 2.10. Payments, Computations, Etc.
(a) Unless otherwise expressly provided herein, all amounts to be paid or
deposited by the Borrower or the Administrator 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 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 Facility Fee for each Purchaser Group agreed to in each Fee Letter.
(b) The Borrower shall pay to Wachovia, on the Closing Date, the Upfront
Fee and reasonable out-of-pocket expenses in immediately available funds.
(c) The Borrower shall pay to Dechert LLP, as counsel to the Deal Agent on
the Closing Date, its 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 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 such Affected Party), duty or other charge with respect to the Advances 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
Advances 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
Section 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 Advances 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 Administrator 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 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 distributions made in respect of each Certificate and all payments
made by the Borrower or the Administrator 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 Administrator 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 Closing 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 and 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.
(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 Certificate Purchase Agreement and
Assignment and Servicing 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, each Certificate Purchase Agreement, each Assignment and Servicing
Agreement and each Securitization Document, if any. 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 each Certificate Purchase
Agreement, each Assignment and Servicing Agreement and each Securitization
Document 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 any related Collateral, subject to the following
terms and conditions:
(i) The Borrower shall have given the Deal Agent and each Liquidity
Agent and the Administrator 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 Administrator 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
Administrator) 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
a sale of the Collateral (which sale must be made in an arm's-length
transaction).
(iii) After giving effect to the Take-Out and the release to the
Borrower of the applicable Collateral 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.
(iv) On the Take-Out Date, the Collateral Agent shall have received,
for the benefit of the Secured Parties, in immediately available funds, for
each Certificate, or Collateral attributable to a purchase of assets from a
Securitization Trust that issued any Certificate, being released from the
Lien of this Agreement an amount equal to the sum of: (A) the aggregate
outstanding balance of Advances made with respect to such Certificate or
Collateral to be released plus (B) an amount equal to the related unpaid
Yield (including Yield not yet accrued) to the end of the Accrual Period
relating to any Certificates or Collateral being released from the Lien of
this Agreement plus (C) an aggregate amount equal to the sum of all other
amounts due and owing to the Deal Agent, the Lenders 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) relating to any
Certificates or Collateral being released from the Lien of this Agreement
plus (D) all other Aggregate Unpaids relating to any Certificates or
Collateral being released from the Lien of this Agreement.
(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
all other Aggregate Unpaids related to such reduction of the Capital due to
the relevant party.
(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 Certificate subject to 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 any
Certificates or Collateral to be released to the Borrower, in favor of the
Borrower as the Borrower may reasonably request; (ii) deliver the Certificates
or Collateral 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 Certificates and Collateral to be released to the
Borrower and deliver to the Borrower such Certificates and other Collateral in
its possession.
ARTICLE III
CONDITIONS TO THE CLOSING, EACH FUNDING AND AMENDMENT AND RESTATEMENT
Section 3.1. Conditions to the Closing. The Closing Date shall not occur
and no Lender shall be obligated to make an Advance hereunder on the occasion of
any Funding, nor shall any Lender, the Deal Agent, the Liquidity Agent or the
Collateral Agent be obligated to take, fulfill or perform any other action
hereunder, until the conditions set forth below have been satisfied, in the sole
discretion of, or waived in writing by, the Deal Agent:
(a) (i) Each Transaction Document (other than the Certificates, the
Certificate Purchase Agreements, each Assignment and Servicing Agreement and the
Payment Acknowledgements) 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 and (ii) the executed Note in the aggregate face amount of
$50,000,000 shall have been delivered to each Purchaser Group.
(b) The Deal Agent shall have received (i) satisfactory evidence that the
Borrower and the Administrator 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 and the Administrator 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 or Administrator for a breach of its
representation or warranty that all such consents and approvals have, in fact,
been obtained.
(c) The Borrower and the Administrator shall each be in compliance in all
material respects with all Applicable Laws and shall have delivered an Officer's
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
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 legal and document
preparation costs incurred by any Lender, the Deal Agent and/or the Collateral
Agent.
(e) No Termination Event or Unmatured Termination Event shall have
occurred.
(f) [Reserved]
(g) With respect to any Securitization Transaction, no "Indenture Event of
Default," "Servicer Default" or event that, with the giving of notice or the
lapse of time, or both, would constitute an "Indenture Event of Default" or
"Servicer Default" (as each such term is defined in the Securitization Documents
relating to such Securitization Transaction), shall have occurred.
(h) The Borrower shall have deposited to the Reserve Account the Required
Reserve Account Amount.
(i) The Borrower has paid the Upfront Fee specified in the Fee Letter
related to the VFCC Purchaser Group.
(j) All UCC-1 financing statements necessary to perfect the security
interest of the Collateral Agent, for the benefit of the Secured Parties, in the
Collateral to be pledged by the Borrower hereunder shall have been filed in the
appropriate filing offices by the Borrower or the Administrator.
(k) The Deal Agent has received lien searches relating to the Borrower in
all appropriate jurisdictions evidencing the absence of any liens on the
Borrower.
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, 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 applicable Certificate
Purchase Agreement and (ii) the Funding Notice, dated within 5 days prior to the
date of the proposed 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 Certificates:
(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
Facility Collateral Amount 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 and the Administrator 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
(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 Securitization Transaction relating to the Certificate pledged
hereunder and securing the Transaction has entered its "Amortization Period" (as
such term is defined in the related Securitization Documents).
(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) The Deal Agent shall, in its sole discretion, have previously consented
in writing to the pledge of the applicable Certificate pursuant to this
Agreement.
(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 applicable Certificate Purchase Agreement shall
have been satisfied.
(g) No Termination Event or Unmatured Termination Event shall have occurred
and be continuing.
(h) An executed Assignment and Servicing Agreement has been delivered to
the Deal Agent.
(i) With respect to any Securitization Transaction, no "Servicer Default,"
"Indenture Event of Default" or any event that, with the giving of notice or the
lapse of time, or both, would
constitute a "Servicer Default" or an "Indenture Event of Default" (as each such
term is defined in the Securitization Documents relating to such Securitization
Transaction), shall have occurred.
(j) The Borrower shall have deposited to the Reserve Account, from the
proceeds of the Funding, the Required Reserve Account Amount.
(k) An executed Payment Acknowledgment relating to the Certificate has been
delivered to the Deal Agent.
(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, including
without limitation, (A) lien searches relating to the applicable Seller and
Securitization Trust in all appropriate jurisdictions evidencing the absence of
any liens on the Seller except those liens relating to the applicable
Securitization Documents; (B) a UCC-1 financing statement filed against the
applicable Seller in favor of the Borrower; (C) resolutions of each of the
applicable Seller and the Borrower authorizing the sale, in the case of such
Seller, and the pledge, in the case of the Borrower, of the related Certificate
and the Related Security; (D) a good standing certificate relating to the
applicable Seller from the Seller's state of formation; (E) an opinion of
counsel relating to certain corporate and enforceability matters with respect to
the applicable Seller's execution and delivery of the related Certificate
Purchase Agreement; (F) an opinion of counsel relating to certain absolute
transfer issues with respect to the sale of the Certificate from the applicable
Seller to the Borrower; and (G) an opinion of counsel relating to certain
non-consolidation issues in respect of the related Seller and Credit Acceptance.
(n) The applicable Certificate, indorsed in blank, is delivered to the
Collateral Agent in accordance with Section 2.2(a)(ii).
(o) The Borrower shall have delivered to the Deal Agent an executed
Certificate Supplement in the form attached hereto as Exhibit E, executed by the
applicable Seller and the Administrator, and acknowledged and accepted by the
Deal Agent, in its sole discretion.
(p) The applicable Seller's sale of the Certificate to the Borrower
pursuant to the applicable Certificate Purchase Agreement and the Borrower's
pledge of the Certificate to the Collateral Agent, for the benefit of the
Secured Parties, hereunder shall comply with all restrictions relating to such
transfer and pledge, as applicable, set forth in the related Securitization
Transactions and all consents and conditions relating to such transfer and
pledge, as applicable, shall have been obtained.
(q) All of the applicable Seller's representations and warranties set forth
in the Certificate Purchase Agreement shall be true and correct.
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 and the Secured
Parties on the Closing Date and each Funding Date as follows:
(a) Organization and Good Standing. The Borrower has been duly organized,
and is validly existing as a limited liability company in good standing under
the laws of the State of Delaware, 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 and the other Transaction Documents
to which it is a party.
(b) Due Qualification. The Borrower is duly qualified to do business and is
in good standing as a limited liability company 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 Certificate 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 Certificates, 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.
(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 a certification stating such fact. The Administrator has confirmed
in writing to the Borrower that, so long as the Borrower is Solvent, the
Administrator will not cause the Borrower to file a voluntary petition under the
Bankruptcy Code or any other Insolvency Laws.
(j) [Reserved.]
(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 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 Certificate, together with the Related Security
related thereto, shall, at all times, be owned by the Borrower free and clear of
any Lien, except for the Lien of this Agreement, and upon each pledge of a
Certificate by the Borrower hereunder, the Collateral Agent as agent for the
Secured Parties shall acquire a valid and perfected first priority security
interest in such Certificate, the Related Security related thereto and all
distributions thereon, free and clear of any Lien. No effective financing
statement or other instrument similar in effect covering the Collateral 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 each Certificate
Purchase 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, and upon the Collateral Agent obtaining control after delivery of each
Certificate to it indorsed in blank by an effective indorsement, in the case of
that portion of the Collateral which constitutes investment property, 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).
(q) [Reserved.]
(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) "Credit Acceptance Residual
Funding LLC" is the correct legal name of the Borrower indicated on the public
records of the Borrower's jurisdiction of organization.
(s) Certificate Purchase Agreement. The only agreement pursuant to which
the Borrower purchases Certificates from a Seller is the applicable Certificate
Purchase Agreement in the form of Exhibit H attached hereto.
(t) Value Given. The Borrower shall have given reasonably equivalent value
to the applicable Seller in consideration for the transfer to the Borrower of
the Certificates and Related Security under each Certificate Purchase Agreement,
no such transfer shall have been made for or on account of an antecedent debt
owed by the applicable Seller 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, or will account, for the transfers
to it from each applicable Seller of Certificates and Related Security under
each Certificate Purchase Agreement as sales or contributions to capital of such
Certificates 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 Credit Acceptance. The Borrower has received in
writing from Credit Acceptance confirmation that, so long as the Borrower is not
"insolvent" within the meaning of the Bankruptcy Code, Credit Acceptance 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 Credit
Acceptance 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 Credit
Acceptance 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 (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 each Certificate Purchase Agreement.
The representations and warranties made by each Seller to the Borrower in each
Certificate Purchase Agreement are hereby remade by the Borrower on each date to
which they speak in each Certificate Purchase 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) [Reserved.]
(cc) Use of Proceeds. The proceeds of each Funding will be used by the
Borrower to purchase the Certificate and related Collateral from the applicable
Seller pursuant to the related Certificate Purchase Agreement or to make
distributions to Credit Acceptance.
(dd) Subsidiaries. The Borrower does not have any Subsidiaries.
(ee) Membership Interests. The Borrower has neither sold nor pledged any of
its membership interests 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 Administrator. Upon discovery by
the Borrower, the Administrator 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.
Section 4.2. Representations and Warranties of the Borrower Relating to the
Certificates.
(a) Certificates. With respect to each Certificate and Related Security
pledged to the Collateral Agent, the Borrower hereby represents and warrants to
the Deal Agent, the Collateral Agent and the Secured Parties as of the date such
Certificate and Related Security are pledged hereunder (except with respect to
clause (i)(A) below) and as of each related Funding Date:
(i) (A) the Securitization Transaction relating to any Certificate to
be pledged hereunder has entered its "Amortization Period" (as such term is
defined in the Securitization Documents relating to such Securitization
Transaction) and (B) no "Indenture Event of Default" or "Servicer Default"
(as each such term is defined in the Securitization Documents relating to
such Securitization Transaction) or event that with notice or lapse of
time, or both, would result in an "Indenture Event of Default" or "Servicer
Default" has occurred with respect to such Securitization Transaction;
(ii) all information with respect to the Certificates and the other
Collateral provided to the Collateral Agent, any Liquidity Agent or the
Deal Agent by the Borrower or the Administrator 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 Certificate and all other Collateral has been pledged to
the Collateral Agent free and clear of any Lien of any Person and in
compliance, in all material respects, with all Applicable Laws, including
without limitation all state and federal securities laws applicable to the
transfer of securities, and the related Securitization Documents;
(iv) with respect to each Certificate 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 Certificate or other Collateral to the
Collateral Agent have been duly obtained, effected or given and are in full
force and effect; and
(v) all transfer restrictions in the Certificate and the
Securitization Documents relating to such Certificate have been complied
with.
(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 Administrator. Upon
discovery by the Borrower, the Administrator or the Collateral Agent of a breach
of any of the representations and warranties set forth 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 Administrator. The
Administrator represents and warrants as follows on the Closing Date and each
Funding Date:
(a) Organization and Good Standing. The Administrator 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 Administrator 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 Administrator (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
Administrator.
(d) Binding Obligation. This Agreement and each other Transaction Document
to which the Administrator is a party constitutes a legal, valid and binding
obligation of the Administrator, each enforceable against the Administrator 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 Administrator's
certificate of incorporation, bylaws or any Contractual Obligation of the
Administrator, (ii) result in the creation or imposition of any Lien upon any of
the Administrator'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 Administrator, threatened against the
Administrator, before any Governmental Authority (i) asserting the invalidity of
this Agreement or any other Transaction Document to which the Administrator 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
Administrator is a party or (iii) seeking any determination or ruling that could
reasonably be expected to have a 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 Administrator of
this Agreement and any other Transaction Document to which the Administrator 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 Administrator to the Deal Agent, 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) Administrator's Performance. The Administrator 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.
ARTICLE V
GENERAL COVENANTS
Section 5.1. Affirmative Covenants of the Borrower. From the date hereof
until the Collection Date:
(a) Compliance with Laws. The Borrower will comply in all material respects
with all Applicable Laws, including those with respect to the Certificates.
(b) Preservation of Limited Liability Company 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 limited liability company 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 formed, validly existing and in good standing as a
domestic limited liability company in its jurisdiction of formation and maintain
all requisite authority to conduct its business in each jurisdiction in which
its business is conducted.
(c) Performance and Compliance with Certificates and Securitization
Documents. The Borrower will, at its expense, timely and fully perform and
comply (or cause the applicable Seller to perform and comply pursuant to each
Certificate Purchase Agreement) with all provisions, covenants and other
promises required to be observed by it under the Securitization
Documents relating to any Certificate pledged hereunder 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 Certificates in the event
of the destruction of the originals thereof).
(e) Seller Assets. With respect to each Certificate acquired by the
Borrower, the Borrower will: (i) acquire such Certificate pursuant to and in
accordance with the terms of the Certificate Purchase Agreement; (ii) take all
action necessary to perfect, protect and more fully evidence the Borrower's
ownership of such Certificate, including, without limitation, (A) filing and
maintaining, effective financing statements (Form UCC-1) against the applicable
Seller 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) Payment Acknowledgments; Collections. To the extent the Borrower
receives any Collections, it will deposit such amounts to the Collection Account
promptly (but in no event later than two (2) Business Days after knowledge of
receipt). The Borrower will not change the instructions given to the applicable
indenture trustee pursuant to any Payment Acknowledgment unless the Deal Agent
has consented to such change in writing and has received duly executed
documentation related thereto.
(g) Separate Existence. The Borrower shall be in compliance with the
requirements set forth in Section 5.2(o).
(h) [Reserved.]
(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 a Certificate pursuant to the applicable Certificate Purchase
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) 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;
(ii) 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;
(iii) 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 or treasurer
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; (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; and (z) to the best of such Person's
knowledge, no "Indenture Event of Default" or any event that, with the
giving of notice or the lapse of time, or both, would constitute an
"Indenture Event of Default" (as each such term is defined in the
Securitization Documents relating to any Certificates pledged hereunder)
exists, or if any "Indenture Event of Default" or any event that, with the
giving of notice or the lapse of time, or both, would constitute an
"Indenture Event of Default" exists, stating the nature and status thereof;
(iv) 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);
(v) 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;
(vi) Notice of Termination Events or Unmatured Termination Events. (A)
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 treasurer 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; and (B) as soon as possible and in any event within two (2) days
after the occurrence of each "Indenture Event of Default" or any event
that, with the giving of notice or the lapse of time, or both, would
constitute an "Indenture Event of Default" (as each such term is defined in
the Securitization Documents relating to any Certificates pledged
hereunder), a statement of the chief financial officer or treasurer of
the Borrower setting forth details of such event and the action which the
Borrower proposes to take with respect thereto;
(vii) 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.
(viii) Reports and Notices Received under Securitization Documents.
Promptly after the receipt thereof, copies of all reports and notices
received by any Seller relating to the Securitization Transaction to which
the Certificate relates;
(ix) 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;
(x) 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;
(xi) 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
(xii) 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 Administrator
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 Certificate,
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 Certificate the failure to comply with
which would have a material adverse effect on the interests of the Secured
Parties in the Collateral.
(m) Furnishing of Information and Inspection of Records. The Borrower will
furnish to the Deal Agent, each Liquidity Agent and the Collateral Agent, from
time to time, such information with respect to the Certificates as may be
reasonably requested, including, without
limitation, underlying information relating to the amount of payments and
distributions made by each Securitization Trust. 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 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 Certificates 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 Certificates in the event of the destruction of the originals
thereof). The Borrower will give the Deal Agent and each Liquidity Agent notice
of any 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 Certificates or other
Collateral; (ii) any breach by the Borrower or the Administrator 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 Certificates and the other Collateral.
(q) The Certificate Purchase Agreements. The Borrower will at all times
enforce the covenants and agreements of each Seller in each Certificate Purchase
Agreement.
(r) Notice of Delegation of Administrator's Duties. The Borrower promptly
shall notify the Collateral Agent of any delegation by the Administrator of any
of the Administrator's duties under this Agreement which is not in the ordinary
course of business of the Administrator.
(s) Organizational Documents. The Borrower shall only amend, alter, change
or repeal its Certificate of Formation or limited liability company agreement
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) [Reserved].
(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 on any Certificate, 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 Certificates, 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 Certificates,
Related Security and other Collateral, against all claims of third parties.
(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 Certificates, 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 make distributions to its members.
(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 Administrator moving, the Records 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 each Certificate Purchase Agreement. The Borrower will
not account for or treat (whether in financial statements or otherwise) the
transaction contemplated by each Certificate Purchase Agreement in any manner
other than as an absolute sale of the Certificates and related assets by the
applicable Seller 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) Amendment of Certificate Purchase Agreements. The Borrower will not
amend, modify, waive or terminate any Certificate Purchase Agreement. The
Borrower will not take any action under the Certificate Purchase Agreement which
would have a Material Adverse Effect.
(k) Changes in Payment Acknowledgements. The Borrower will not make any
change, or permit Administrator to make any change, in its instructions to the
applicable indenture trustee set forth in any Payment Acknowledgment, unless the
Deal Agent shall consented to such change in writing and has received duly
executed copies of all documentation related thereto.
(l) [Reserved.]
(m) [Reserved.].
(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
Agent for each of the VFCC 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 Certificates and related assets from the each Seller under each
Certificate Purchase Agreement, the pledge of Certificates and related
assets under this Agreement and such other activities as are incidental
thereto;
(ii) acquire or own any material assets other than (A) the
Certificates and related assets from each Seller under each Certificate
Purchase 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 formation or limited liability company agreement, or
fail to observe limited liability company formalities;
(v) own any subsidiary or make any investment in any Person without
the consent of the Deal Agent;
(vi) commingle its assets or funds with the assets or funds of any of
its Affiliates, or of any other Person, except for erroneous deposits or,
after the exercise by the Borrower of a "Clean-up Call" (as such term is
defined in the applicable Assignment and Servicing Agreement), Dealer
Collections or 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;
(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 Administrator, (B) the Borrower, or (C)
any Affiliate of the Administrator or Borrower; provided, however, such
Independent Director may be an independent director or manager of another
special purpose entity affiliated with the Administrator; and
(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.
Section 5.3. [Reserved].
Section 5.4. Affirmative Covenants of the Administrator. From the date
hereof until the Collection Date:
(a) Compliance with Law. The Administrator will comply in all material
respects with all Applicable Laws, including those with respect to the
Certificates and any Related Security.
(b) Preservation of Existence. The Administrator 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) Delivery of Notices from Securitization Transactions. The Administrator
will deliver all information, reports and notices it receives or delivers under
any Securitization Documents relating to a Certificate pledged hereunder to the
Borrower, the Deal Agent promptly and in any event within two (2) Business Days
after knowledge of receipt.
(d) Keeping of Records and Books of Account. The Administrator will
maintain and implement administrative and operating procedures (including
without limitation, an ability to recreate records evidencing the Certificates
in the event of the destruction of the originals thereof).
(e) Preservation of Security Interest. The Administrator 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.
(f) [Reserved].
(g) Termination Events. (A) The Administrator 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 Termination Event and each
Unmatured Termination Event, a written statement of the chief financial officer
or treasurer of the Administrator setting forth the details of such event and
the action that the Administrator purposes to take with respect thereto; and (B)
the Administrator 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 any "Indenture Event of Default" or any event that, with the
giving of notice or the lapse of time, or both, would constitute an "Indenture
Event of Default" (as each such term is defined in the Securitization Documents
relating to any Certificates pledged hereunder), a written statement of the
chief financial officer or treasurer of the Administrator setting forth the
details of such event and the action which the Administrator proposes to take
with respect thereto.
(h) Other. The Administrator 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
Administrator 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
Administrator 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 arising out of its activities pursuant to any
Securitization Document to which it is a party.
(j) Notice of Liens The Administrator 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 Administrator 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) [Reserved].
(l) [Reserved].
(m) Change in Accounting Policies or Debt Rating. The Administrator shall
notify the Collateral Agent of any material change in or amendment to the
Administrator'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 Administrator will furnish to the Deal Agent and, and each
Liquidity Agent a Monthly Report relating to the immediately preceding
Collection Period.
(o) Appraisal. If, in connection with an Optional Purchase of all property
of a Securitization Trust, there is an appraisal of such property in accordance
with the related Securitization Documents, the appraiser shall be subject to the
prior written approval of the Deal Agent.
Section 5.5. Negative Covenants of the Administrator. From the date hereof
until the Collection Date.
(a) Mergers, Acquisition, Sales, etc. The Administrator 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
Administrator is the surviving entity and unless:
(i) the Administrator has delivered to the Deal Agent, 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 Administrator and such other matters as the
Deal Agent may reasonably request;
(ii) the Administrator shall have delivered notice of such
consolidation, merger, conveyance or transfer to the Deal Agent;
(iii) after giving effect thereto, no Termination Event or Unmatured
Termination Event shall have occurred.
(b) Change of Name or Location of Records. The Administrator shall not (x)
change its name or its state of organization, move the location of its principal
place of business and chief executive office from the location referred to in
Section 14.2 or (y) move the Records from the location thereof on the Closing
Date, unless the Administrator 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) Payment Acknowledgments; Collections. The Administrator will not change
the instructions given to the applicable indenture trustee pursuant to any
Payment Acknowledgment unless the Deal Agent has consented to such change and
has received duly executed documentation related thereto. The Administrator will
deposit to the Collection Account promptly (but in no event later than two (2)
Business Days after knowledge of receipt) all Collections received by the
Administrator to the Collection Account.
(d) No Liens. The Administrator shall not sell, pledge, assign or transfer
to any other Person, or grant, create, incur, assume or suffer to exist any Lien
on the Collateral or any interest therein; the Administrator 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 Administrator
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 Administrator.
(e) Information. The Administrator shall, within two (2) Business Days of
its receipt thereof, respond to reasonable written directions or written
requests for information that the Borrower, the Deal Agent, any Liquidity Agent
or the Collateral Agent might have with respect to the Certificates.
ARTICLE VI
REPORTS AND ACCOUNTS
Section 6.1. Reports.
(a) Monthly Report. On each Determination Date, the Administrator 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 and the Administrator by the third Business Day prior to each Payment
Date, information relating to the amount of each obligation which comprises
Carrying Costs, Increased Costs, Indemnified Amounts and Additional Amounts for
such Collection Period. The Monthly Report shall specify whether a 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 Administrator.
(b) Credit Agreement. The Administrator 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 Administrator will submit to the Deal Agent,
the Collateral Agent and each Liquidity Agent within 60 days of the end of each
of its fiscal quarters, commencing June 30, 2006 unaudited financial statements
as of the end of each such fiscal quarter. The Administrator 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, 2006 audited financial statements as of the end of each such fiscal
year. The Administrator will submit to the Deal Agent, the Collateral Agent and
each Liquidity Agent an analysis of the static pool performance of Credit
Acceptance for each fiscal quarter.
(d) Annual Statement as to Compliance. The Administrator 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 Administrator, commencing with the fiscal year ending on
December 31, 2006, an annual report signed by a Responsible Officer of the
Administrator certifying that (a) a review of the activities of the
Administrator, and the Administrator'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 Administrator has performed or has caused
to be performed in all material respects all of its obligations under this
Agreement throughout such year.
Section 6.2. Establishment of the Accounts.
(a) Establishment of the Collection Account and Reserve Account. The
Administrator 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 Administrator 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 ▇▇▇▇▇'▇ 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 ▇▇▇▇▇'▇, (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 ▇▇▇▇▇'▇ 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 ▇▇▇▇▇'▇ 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) 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 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 6.3. Payment of Certain Expenses by Administrator. The
Administrator 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 Administrator, 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 Administrator 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 and the Reserve Account. The
Administrator shall be required to pay such expenses for its own account and
shall not be entitled to any payment therefore other than the Administrator's
Fee.
Section 6.4. Annual Independent Public Accountant's Reports. The
Administrator will cause a firm of nationally recognized independent public
accountants (who may also render other services to the Administrator) to furnish
to the Deal Agent and each Liquidity Agent, within 120 days following the end of
each fiscal year of the Administrator, commencing with the fiscal year ending on
December 31, 2006: (i) a report relating to such fiscal year to the effect that
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 (which procedures shall
have been approved by the Deal Agent and each Liquidity Agent) to certain
documents and records relating to the 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
administrative activities were 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 6.5. The Administrator Not to Resign. The Administrator shall not
resign from the obligations and duties hereby imposed on it hereunder.
ARTICLE VII
[RESERVED]
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. 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.
Section 9.2. Release of Lien. On any Take-Out Date, so long as the
conditions of Section 2.16 have been met, the Deal Agent as agent for the Lender
will, to the extent requested by the Administrator, release its interest in the
applicable Certificate and Related Security. The Deal Agent as agent for the
Lenders will, at the sole expense of the Administrator, execute and deliver to
the Administrator any assignments, termination statements and any other releases
and instruments as the Administrator 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 Certificate 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 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
Administrator 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 Administrator, 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 Administrator 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. Nevertheless, if so
requested by the Deal Agent, the Administrator, 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) a "Servicer Default" or "Indenture Event of Default" (as each such term
is defined in the Securitization Documents relating to any Certificate pledged
hereunder) occurs in any Securitization Transaction; or
(b) [Reserved]; or
(c) [Reserved]; or
(d) the servicer or backup servicer relating to any Securitization
Transaction shall cease, at any time while the Certificate relating to such
Securitization Transaction is pledged hereunder, to be the servicer or backup
servicer, as applicable, under such Securitization Transaction and, in the case
of any backup servicer (so long as Credit Acceptance is the servicer), has not
been timely replaced by an entity acceptable to the Deal Agent; or
(e) [Reserved]; or
(f) for any Securitization Transaction, "Cumulative Collections" (as such
term is defined in the Securitization Documents relating to any Certificate
pledged hereunder) through the end of the related Collection Period expressed as
a percentage of "cumulative Forecasted Collections" (as calculated in accordance
with the related Securitization Documents) is less than 90.0% for any two
consecutive "Collection Periods" (as such term is defined in the related
Securitization Documents); or
(g) (i) failure on the part of the Borrower or the Administrator 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 Administrator 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 Administrator; or
(h) any representation or warranty made or deemed to be made by the
Borrower under or in connection with this Agreement, any of the other
Transaction Documents or any information required to be given by the Borrower or
a Seller to the Deal Agent or the Collateral Agent 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 any Seller, any
Securitization Trust, the Borrower or the Administrator; 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 Investment Company Act of 1940, as amended ;
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 or Credit Acceptance shall enter into any merger,
consolidation or conveyance transaction, unless in the case of Credit
Acceptance, Credit Acceptance 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, any Seller
or Credit Acceptance 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
Borrower, any Seller or Credit Acceptance 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, any Seller or the Administrator. (ii)
the Borrower, any Seller or the Administrator 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 sixtieth (60th) 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) at any time, the Capital exceeds the lesser of (i) Facility Collateral
Amount and (ii) the Facility Limit; or
(u) a Take-Out has not occurred with respect to any Securitization
Transaction within 120 days of the date on which an Optional Purchase of all
property of the related Securitization Trust has been exercised.
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.
(c) Upon any Termination Date: (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, terminate the
Administrator; (iv) the Deal Agent, may, and at the direction of the Required
Investors, shall declare the entire outstanding principal amount of the Notes to
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.
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 Collateral Agent, 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
Certificate, 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 Dealer Loans due to credit problems of obligors on the Dealer
Loans (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 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) [Reserved];
(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 Certificate, or the nonconformity of any Certificate 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) [Reserved];
(vii) any failure of the Borrower to perform its duties or obligations
in accordance with the provisions of this Agreement;
(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, which amount the Deal
Agent, any Liquidity Agent or a Secured Party believes in good faith is
required to be repaid;
(x) the commingling of Collections 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 Certificate;
(xii) any failure by the Borrower to give reasonably equivalent value
to the any Seller in consideration for the transfer by such Seller to the
Borrower of the Certificates, 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 each Certificate Purchase Agreement; or
(xiv) the failure of the Borrower or any of its agents or
representatives to remit to the Administrator, the Deal Agent, the
Collateral Agent or any other Secured Party, any Collections 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, any
Liquidity Agent or any Lender or the termination of this Agreement.
Section 11.2. Indemnities by the Administrator.
(a) Without limiting any other rights that any such Person may have
hereunder or under Applicable Law, the Administrator 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 Administrator,
including, but not limited to: (i) any representation or warranty made by the
Administrator under or in connection with any Transaction Document, any Monthly
Report or any other information or report delivered by or on behalf of the
Administrator pursuant hereto, which shall have been false, incorrect or
misleading in any material respect when made or deemed made; (ii) the failure by
the Administrator to comply with any Applicable Law; (iii) the failure of the
Administrator 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 Administrator; (v) the
commingling of Collections at any time with other funds; or (vi) the failure of
the Administrator 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 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 Administrator to the relevant Indemnified Party within
five (5) Business Days following such Person's demand therefor.
(c) The obligations of the Administrator under this Section 11.2 shall
survive the resignation or removal of the Deal Agent, the Collateral Agent, any
Liquidity Agent or any Lender and the termination of this Agreement.
(d) 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 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) [Reserved].
(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.
(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 Unmatured Termination Event or
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
Unmatured Termination Event, Termination Event unless such Liquidity Agent has
received notice from the Borrower, the Deal Agent or a Secured Party.
(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
Unmatured Termination Event or 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 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.
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.
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 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 ▇▇▇▇▇'▇, 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 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 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 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 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. 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 Administrator, (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;
(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, amend or modify (A)
Section 10.1, (B) the definitions of "Maximum Facility 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 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.
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
Collateral Agent, the Secured Parties and their respective successors and
permitted assigns.
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
Administrator'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 Administrator 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 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 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 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 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 or thereunder, or in
connection herewith or therewith, including, without limitation, the reasonable
fees and out-of-pocket expenses of counsel for the Deal Agent, the Liquidity
Agents, the Collateral Agent and the Secured Parties with respect thereto and
with respect to advising the Deal Agent, the Liquidity Agents, 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, and
all costs and expenses, if any (including reasonable counsel fees and expenses),
incurred by the Deal Agent, the Liquidity Agents, 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.
(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 Administrator'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) (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 Securitization Trust or any
Seller 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 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 Collateral;
Further Action Evidencing the Funding.
(a) Each of the Borrower and the Administrator 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 Collateral 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
Administrator 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 Administrator 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 Administrator agrees that from time to
time, at its expense, it will promptly execute and deliver all instruments and
documents, and take all actions, 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 Administrator 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 Administrator 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 Collateral and (ii) to file a carbon, photographic or other reproduction of
this Agreement or any financing statement with respect to the Collateral 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 Collateral. 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 a 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 Lenders, the CP Conduits, the Investors,
the Secured Parties, the Liquidity Agent, the Administrator, the Collateral
Agent 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 Administrator 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 directors, officers and employees may (i) disclose such
information to its external accountants, attorneys, investors, potential
investors, credit enhancers to the CP Conduits (including the directors,
officers, external accountants, and attorneys of such credit enhancers) and the
agents or advisors of such Persons ("Excepted Persons") who have a need to know
such information, provided that each Excepted Person shall be advised by the
party disclosing such information of the confidential nature of the information
being disclosed, (ii) disclose the existence of the Agreement, but not the
financial terms thereof, (iii) disclose such information as is required by
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 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, provided that the Persons permitted to make
such disclosures under clause (iii) above and this clause (iv) shall also
include credit enhancers to CP Conduits. 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 and priority of payment provisions.
(b) Anything herein to the contrary notwithstanding, the Borrower and the
Administrator each hereby consents to the disclosure of any nonpublic
information with respect to it (i) to the Deal Agent, the Liquidity Agent, the
CP Conduits, the Collateral Agent, the Lenders, the Investors or the Secured
Parties by each other, (ii) by the Deal Agent or the CP Conduits to any
prospective or actual assignee or participant of any of them or (iii) by the
Deal Agent, the Liquidity Agent, an Investor, a Lender or a CP Conduit to any
Rating Agency, commercial paper dealer or provider of a surety, guaranty or
credit or liquidity enhancement to a CP Conduit and to any officers, directors,
employees, outside accountants, advisors, 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 Agent, the Lenders,
the Investors, the CP Conduits (and any credit enhancers to such CP Conduits)
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 business or that of its
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 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 the
Administrator or (E) to any affiliate, independent or internal auditor, agent,
employee or attorney of the Collateral Agent having a need to know the same,
provided that the Collateral Agent advises such recipient of the confidential
nature of the information being disclosed, or (iii) any other disclosure
authorized by the Borrower or Administrator.
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 Credit Acceptance 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.]
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: CREDIT ACCEPTANCE RESIDUAL
FUNDING LLC
By:
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Name:
------------------------------------
Title:
-----------------------------------
Credit Acceptance Residual Funding LLC
Silver Triangle Building
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Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇
Confirmation No.: 248-353-2700 (ext. 4217)
THE ADMINISTRATOR: CREDIT ACCEPTANCE CORPORATION
By:
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Name:
------------------------------------
Title:
-----------------------------------
Credit Acceptance Residual Funding LLC
Silver Triangle Building
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Facsimile No. ▇▇▇-▇▇▇-▇▇▇▇
Confirmation No.: 248-353-2700 (ext. 4217)
[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]
THE INVESTOR WACHOVIA BANK, NATIONAL
FOR THE VFCC ASSOCIATION
PURCHASER GROUP:
By:
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Name:
------------------------------------
Title:
-----------------------------------
Wachovia Bank, National Association
One Wachovia Center
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Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No: (▇▇▇) ▇▇▇-▇▇▇▇
VFCC: VARIABLE FUNDING CAPITAL
COMPANY LLC
By: Wachovia Capital Markets, LLC,
as attorney-in-fact
By:
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Name:
------------------------------------
Title:
-----------------------------------
Variable Funding Capital Company LLC
c/o Wachovia Capital Markets, LLC
One Wachovia Center
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Attention: Conduit Administration
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]
THE DEAL AGENT: WACHOVIA CAPITAL MARKETS, LLC
By:
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Name:
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Title:
-----------------------------------
Wachovia Capital Markets, LLC
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Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
THE LIQUIDITY AGENT WACHOVIA BANK, NATIONAL
FOR THE VFCC ASSOCIATION
PURCHASER GROUP:
By:
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Name:
------------------------------------
Title:
-----------------------------------
Wachovia Bank, National Association
One Wachovia Center
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Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]
THE COLLATERAL AGENT: WACHOVIA CAPITAL MARKETS, LLC, as
Collateral Agent
By:
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Title:
-----------------------------------
Wachovia Capital Markets, LLC
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Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Conduit Administration
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Exhibit A
FORM OF FUNDING NOTICE
Reference is made to the Certificate Funding Agreement, dated as of September
20, 2006 (as amended, supplemented or otherwise modified and in effect from time
to time, the "Agreement"), by and among Credit Acceptance Residual Funding LLC,
as borrower (in such capacity, the "Borrower"), Credit Acceptance Corporation,
as administrator (in such capacity, the "Administrator") and Variable Funding
Capital Company LLC ("VFCC"), as Lender, the Investors named therein, Wachovia
Bank, National Association, as Liquidity Agent, Wachovia Capital Markets, LLC,
as Deal Agent and Collateral Agent 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 a Funding pursuant to
Section 2.1 and Section 2.3 of the 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.
Credit Acceptance Residual Funding LLC
By
-------------------------------------
Name:
----------------------------------
Title:
---------------------------------
A-1
Exhibit B
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated __________, 20__
Reference is made to the Certificate Funding Agreement dated as of
September 20, 2006 (as amended or modified from time to time, the "Agreement")
among Credit Acceptance Residual Funding LLC, as borrower (the "Borrower"),
Credit Acceptance Corporation, as administrator (the "Administrator"), the
investors named therein, Variable Funding Capital Company LLC, as a lender,
Wachovia Capital Markets, LLC, as deal agent and as collateral agent (the "Deal
Agent" and the "Collateral Agent"), Wachovia Bank, National Association, a
national banking association, as a liquidity agent ("Wachovia" and a "Liquidity
Agent") 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 Advances 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, 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
B-1
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-2
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-3
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-4
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"), Credit Acceptance Residual Funding LLC (the "Borrower"), Credit
Acceptance Corporation , as administrator ("Credit Acceptance"), and Wachovia
Capital Markets, LLC, as deal agent (the "Deal Agent").
WITNESSETH:
WHEREAS, this Joinder is being executed and delivered under the Certificate
Funding Agreement, dated as of September 20, 2006 among the Borrower, Credit
Acceptance, Wachovia Bank, National Association, as an investor for the VFCC
Purchaser Group (an "Investor"), and the other Investors from time to time party
thereto, Variable Funding Capital 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 and the
other Liquidity Agents from time to time party thereto, 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 "Agreement" and
WHEREAS, the Proposed Conduit wishes to become an Additional Conduit
designated as a CP Conduit party to the 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 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 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.
D-1
(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 Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
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) of
the 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 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 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 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
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
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 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 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 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 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 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.
(e) This Joinder shall be governed by, and construed in accordance with,
the laws of the State of New York.
D-2
(f) Capitalized terms used herein and not defined herein have the meanings
given such terms in the 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: Certificate Funding Agreement, dated as of September 20, 2006, among Credit
Acceptance Residual Funding LLC, as borrower, Credit Acceptance Corporation,
as administrator, Wachovia Bank, National Association, as an investor for
the VFCC Purchaser Group (an "Investor") and the other Investors from time
to time party hereto, Variable Funding Capital 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") and the
other Liquidity Agents from time to time party hereto 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: CREDIT ACCEPTANCE RESIDUAL FUNDING LLC
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ADMINISTRATOR: 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 Certificate Funding Agreement,
dated as of September 20, 2006, among the Borrower, Credit Acceptance, the
Investors, the CP Conduits, the Deal Agent, the Liquidity Agent 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 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 Certificate Supplement
Supplemental Terms and Conditions with respect to the Certificate
identified below
1. The Certificate relating to the Credit Acceptance Auto Dealer Loan Trust
[_______] Securitization
2. Principal Balance of Notes issued
pursuant to Securitization Transaction $[____________]
3. Closing Date of Securitization Transaction [____________]
4. Name of Issuer Credit Acceptance Auto
of Certificate Dealer Loan Trust [___]
5. Name of Seller of Certificate Credit Acceptance
Funding LLC [________]
6. Name and contact information of Indenture Trustee [____________]
7. Amount to be deposited to the Reserve Account $[____________]
8. Date of Certificate Purchase Agreement [____________]
Capitalized terms used herein shall have the meanings given such terms in
the Certificate Funding Agreement, dated as of September 20, 2006, among Credit
Acceptance Residual Funding LLC, as borrower, Credit Acceptance Corporation, as
administrator, Wachovia Bank, National Association, as an investor for the VFCC
Purchaser Group (an "Investor") and the other Investors from time to time party
hereto, Variable Funding Capital 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") and the other Liquidity Agents from time
to time party hereto and Wachovia Capital Markets, LLC, as collateral agent.
Dated: [___________], 20[__]
[Signature page follows]
E-1
Accepted and Acknowledged:
WACHOVIA CAPITAL MARKETS, LLC,
as Deal Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
CREDIT ACCEPTANCE CORPORATION,
as Administrator
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
CREDIT ACCEPTANCE RESIDUAL FUNDING LLC,
as Borrower
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
E-2
Exhibit F
Form of
Assignment and Servicing Agreement
F-1
Exhibit G
FORM OF TAKE-OUT RELEASE
Reference is hereby made to the Certificate Funding Agreement dated as of
September 20, 2006 among Credit Acceptance Residual Funding LLC, as the
Borrower, Credit Acceptance Corporation, as the Administrator, the Investors
named therein, Variable Funding Capital Company LLC, as a Lender, Wachovia
Capital Markets, LLC, as the Deal Agent and Collateral Agent, Wachovia Bank,
National Association, as a Liquidity Agent, 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 Certificate or other collateral
identified on Schedule 1 hereto (the "Released Collateral"). The Take-Out Date
is as of [_____________________].
Pursuant to Section 2.16(a)(ii) of the Agreement, the Administrator 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 Agreement.
Pursuant to Section 2.16(a)(iii) of the Agreement, the Administrator and
Borrower hereby certify that after giving effect to the Take-Out and the release
to the Borrower of the Released Collateral 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 Released
Collateral.
[REMAINDER OF PAGE BLANK. SIGNATURE PAGE FOLLOWS.]
G-1
Executed as of _____________.
Credit Acceptance Corporation,
as the Administrator
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Credit Acceptance Residual Funding LLC,
as the Borrower
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Wachovia Capital Markets, LLC, as the
Deal Agent and Collateral Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
G-2
Exhibit H
Form of Certificate Purchase Agreement
H-1
Exhibit I
FORM OF VARIABLE FUNDING NOTE
New York, New York
September 20, 2006
FOR VALUE RECEIVED, the undersigned, CREDIT ACCEPTANCE RESIDUAL FUNDING
LLC, a Delaware limited liability company (the "Borrower"), promises to pay to
the order of Wachovia Capital Markets, LLC, as Deal Agent, on behalf of the VFCC
Purchaser Group, on September 20, 2009, at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in lawful money of the United States of America and in
immediately available funds, the principal amount of Fifty Million Dollars
($50,000,000), or, if less, the aggregate unpaid principal amount of all
Advances made by the Lenders to the Borrower pursuant to the Certificate Funding
Agreement, and to pay interest at such office, in like money, from the date
hereof on the unpaid principal amount of the Advances from time to time
outstanding at the rates and on the dates specified in the Certificate Funding
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 Advances made by the Lenders, each continuation thereof,
the funding period for such Advances 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 Certificate Funding Agreement in respect of the Advances.
This Variable Funding Note is one of the Notes referred to in the
Certificate Funding Agreement, dated as of September 20, 2006 (as amended,
supplemented, or otherwise modified and in effect from time to time, the
"Certificate Funding Agreement"), among Credit Acceptance Residual Funding LLC
(the "Borrower"); Credit Acceptance Corporation (the "Administrator"); the
financial institutions listed on the signature pages thereto under the heading
"The Investors" (the "Investors"); Variable Funding Capital Company LLC
("VFCC"); Wachovia Capital Markets, LLC, as deal agent (the "Deal Agent");
Wachovia Bank, National Association, a national banking association, as
liquidity agent (a "Liquidity Agent"); 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 Certificate Funding Agreement.
This Variable Funding Note is subject to optional and mandatory prepayment
as provided in the Certificate Funding Agreement.
Upon the occurrence of a Termination Event, the Secured Parties shall have
all of the remedies specified in the Certificate Funding Agreement. The Borrower
hereby waives presentment, demand, protest, and all notices of any kind.
I-1
THIS VARIABLE FUNDING NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
CREDIT ACCEPTANCE RESIDUAL FUNDING LLC,
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
SCHEDULE I
CONDITION PRECEDENT DOCUMENTS
CONDITION PRECEDENT DOCUMENTS RESPONSIBLE PARTY
----------------------------- -----------------
I. TRANSACTION DOCUMENTS Dechert
A. CERTIFICATE FUNDING AGREEMENT
EXHIBITS TO CERTIFICATE FUNDING 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 Certificate Supplement Dechert
Exhibit F Form of Assignment and Servicing Agreement Borrower
Exhibit G Form of Take-Out Release Dechert
Exhibit H Form of Certificate Purchase Agreement Dykema
Exhibit I Form of Variable Funding Note Dechert
SCHEDULES TO CERTIFICATE FUNDING AGREEMENT
Schedule I Condition Precedent Documents Dechert
Schedule II [Reserved]
Schedule III Tradenames, Fictitious Names and "Doing Business As" Names Credit Acceptance
Schedule IV Location of Records and Contract Files Credit Acceptance
Schedule V Commitment Amount of Each Investor Dechert
B. CERTIFICATE PURCHASE AGREEMENT (ON THE DATE EACH CERTIFICATE IS PLEDGED) Dykema
C. CERTIFICATE SUPPLEMENT (ON THE DATE EACH CERTIFICATE IS PLEDGED) Credit Acceptance
D. PAYMENT ACKNOWLEDGMENT (ON THE DATE EACH CERTIFICATE IS PLEDGED) Credit Acceptance
E. ASSIGNMENT AND SERVICING AGREEMENT (ON THE DATE EACH CERTIFICATE IS Credit Acceptance
PLEDGED)
II. DOCUMENTS RELATING TO THE BORROWER
A. On the Closing Date, a Secretary's Certificate with the following Borrower/Dykema
items attached:
- Resolutions of the Board of Directors of the Borrower
- Certificate of Formation of the Borrower
- Limited Liability Company Agreement of the Borrower
- Incumbency
B. On the Closing Date, an Officer's Certificate of the Borrower Borrower/Dykema
certifying the matters set forth in Section 3.1 and Section 4.1 of
the Certificate Funding Agreement and the Solvency Certificate
described in Section 4.1(i) of the Certificate Funding Agreement
On each Funding Date, an Officer's Certificate of the Borrower Borrower/Dykema
certifying the matters set forth in Section 3.1 of the Certificate
Funding Agreement
C. On the Closing Date, a Certificate of Formation of the Borrower Borrower/Dykema
certified by the Secretary of State of Delaware
D. On the Closing Date, a Good Standing Certificate issued by the Borrower/Dykema
Secretary of State of the State of Delaware with respect to the Borrower
E. On the Closing Date, 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. On the Closing Date, 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 Closing Date, an Officer's Certificate of Credit Acceptance Credit Acceptance/Dykema
certifying the matters set forth in Section 3.1 of the Certificate
Funding Agreement
On each Funding Date, an Officer's Certificate of Credit Acceptance Credit Acceptance/Dykema
certifying that no (i) Unmatured Termination Event or Termination
Event shall have occurred and (ii) with respect to a Securitization
Transaction, no "Indenture Event of Default" and "Servicer Default"
or event that, with the giving of notice or the lapse of time, or
both, would constitute an "Indenture Event of Default"
Sch. I-2
and "Servicer Default" shall have occurred
C. On the Closing Date, a Certificate of Incorporation certified by the Credit Acceptance/Dykema
Secretary of State of the State of Michigan
D. On the Closing Date, a Good Standing Certificate issued by the Credit Acceptance/Dykema
Secretary of State of the State of Michigan with respect to Credit
Acceptance
IV. OPINIONS OF COUNSEL
A. On the Closing Date, an Opinion of Dykema as to certain corporate, Dykema
enforceability, perfection and priority matters
B. On the Closing Date, an Opinion of Dykema covering non-consolidation Dykema
matters with respect to Credit Acceptance and the Borrower
C. On the date each Certificate is pledged, an Opinion of Dykema as to Dykema
true sale matters
D. On the date each Certificate is pledged, an Opinion of Dykema Dykema
covering non-consolidation matters with respect to Credit Acceptance
and the related Seller
E. On the date each Certificate is pledged, an Opinion of Dykema Dykema
covering corporate, enforceability, perfection and priority matters
relating to the applicable Seller, the Borrower and the applicable
Certificate Purchase Agreement
V. ADDITIONAL DOCUMENTS/ACTIONS
A. On each Funding Date, 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 Certificate Purchase Agreement have been
satisfied
B. On the Closing Date, UCC search results for the Borrower in the state Dykema
of Delaware
C. On the date each Certificate is pledged, UCC search results for the Dykema
applicable Seller the state of and the Borrower in Delaware
D. On the date each Certificate is pledged, a UCC-1 Dykema
Sch. I-3
financing statement filed against the applicable Seller
E. On the Closing Date, evidence that the Collection Account and the Wachovia Bank,
Reserve Account have been established National Association
F. On the Closing Date evidence that the Upfront Fee and any other fees Borrower
or amounts due and payable in accordance with the Fee Letter have
been paid in full
G. On the Closing Date and each Funding Date, evidence that the Reserve Wachovia Bank,
Account has been funded National Association
H. On the date each Certificate is pledged, delivery to the Deal Agent
of such Certificate, in the name of the Borrower, endorsed in blank
I. Deposit by the Borrower, if required by the Deal Agent, of amounts to
the Reserve Account, so that the amount on deposit therein is equal
to the Required Reserve Account Amount
Key:
Wachovia Capital Markets, LLC WCM, the Deal Agent or
the Collateral Agent
Wachovia Bank, National Association WB
Credit Acceptance Corporation Credit Acceptance
Credit Acceptance Residual Funding LLC Borrower
Dechert Dechert LLC
Dykema ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PLLC
Sch. I-4
Schedule II
[Reserved]
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
Commitment Amount of Each Investor
Purchaser Group Investor Commitment Amount
--------------- -------- -----------------
VFCC Purchaser Group Wachovia Bank, National Association $50,000,000
Sch. VIII-1