Exhibit 4(f)(129)
EXECUTION
COPY
CREDIT ACCEPTANCE CORPORATION,
as Issuer,
the GUARANTORS named herein,
as Guarantors,
and
U.S. Bank National Association,
as Trustee
INDENTURE
Dated as of February 1, 2010
9.125% First Priority Senior Secured Notes due 2017
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Incorporation by Reference
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SECTION 1.01. Definitions
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1
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SECTION 1.02. Other Definitions
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32
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SECTION 1.03. Incorporation by Reference of Trust Indenture Act
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33
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SECTION 1.04. Rules of Construction
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34
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ARTICLE II
The Notes
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SECTION 2.01. Form and Dating
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35
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SECTION 2.02. Execution and Authentication
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35
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SECTION 2.03. Registrar and Paying Agent
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35
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SECTION 2.04. Paying Agent To Hold Money in Trust
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36
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SECTION 2.05. Holder Lists
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36
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SECTION 2.06. Transfer and Exchange
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36
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SECTION 2.07. Replacement Notes
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37
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SECTION 2.08. Outstanding Notes
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37
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SECTION 2.09. Temporary Notes
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37
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SECTION 2.10. Cancellation
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37
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SECTION 2.11. Registered Holders
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38
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SECTION 2.12. CUSIP Numbers, ISINs, etc
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38
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SECTION 2.13. Issuance of Additional Notes
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38
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SECTION 2.14. Defaulted Interest
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38
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ARTICLE III
Redemption
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SECTION 3.01. Notices to Trustee
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39
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SECTION 3.02. Selection of Notes to Be Redeemed
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39
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SECTION 3.03. Notice of Redemption
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39
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SECTION 3.04. Effect of Notice of Redemption
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39
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SECTION 3.05. Deposit of Redemption Price
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40
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SECTION 3.06. Notes Redeemed in Part
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40
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SECTION 3.07. Optional Redemption
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40
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i
ARTICLE IV
Covenants
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SECTION 4.01. Payment of Notes
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41
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SECTION 4.02. SEC Reports
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41
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SECTION 4.03. Limitation on Indebtedness
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43
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SECTION 4.04. Limitation on Restricted Payments
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46
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SECTION 4.05. Dividend and Other Payment Restrictions Affecting Subsidiaries
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51
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SECTION 4.06. Limitation on Asset Sales
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53
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SECTION 4.07. Limitation on Affiliate Transactions
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57
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SECTION 4.08. Limitation on Line of Business
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59
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SECTION 4.09. Change of Control
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59
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SECTION 4.10. Limitation on Liens
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60
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SECTION 4.11. Additional Guarantors
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61
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SECTION 4.12. Impairment of Security Interest
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61
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SECTION 4.13. Limitation on Investment Company Status
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62
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SECTION 4.14. Maintenance of Financial Ratios
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63
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SECTION 4.15. Further Instruments and Acts
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63
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ARTICLE V
Successor Company
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SECTION 5.01. When Company May Merge or Transfer Assets
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63
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ARTICLE VI
Defaults and Remedies
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SECTION 6.01. Events of Default
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66
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SECTION 6.02. Acceleration
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68
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SECTION 6.03. Waiver of Past Defaults
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69
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SECTION 6.04. Other Remedies
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69
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SECTION 6.05. Compliance Certificate
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69
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SECTION 6.06. Control by Majority
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70
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SECTION 6.07. Limitation on Suits
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70
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SECTION 6.08. Rights of Holders to Receive Payment
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71
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SECTION 6.09. Collection Suit by Trustee
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71
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SECTION 6.10. Trustee May File Proofs of Claim
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71
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SECTION 6.11. Priorities
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71
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SECTION 6.12. Undertaking for Costs
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72
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SECTION 6.13. Waiver of Stay or Extension Laws
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72
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ii
ARTICLE VII
Trustee
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SECTION 7.01. Duties of Trustee
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72
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SECTION 7.02. Rights of Trustee
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73
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SECTION 7.03. Individual Rights of Trustee
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74
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SECTION 7.04. Trustees Disclaimer
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74
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SECTION 7.05. Notice of Defaults
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75
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SECTION 7.06. Reports by Trustee to Holders
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75
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SECTION 7.07. Compensation and Indemnity
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75
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SECTION 7.08. Replacement of Trustee
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76
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SECTION 7.09. Successor Trustee by Merger
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76
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SECTION 7.10. Eligibility; Disqualification
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77
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SECTION 7.11. Preferential Collection of Claims Against Company
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77
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ARTICLE VIII
Discharge of Indenture; Defeasance
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SECTION 8.01. Satisfaction and Discharge
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77
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SECTION 8.02. Legal Defeasance and Covenant Defeasance
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78
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SECTION 8.03. Conditions to Defeasance
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79
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SECTION 8.04. Application of Trust Money
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80
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SECTION 8.05. Repayment to Company
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80
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SECTION 8.06. Indemnity for Government Securities
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80
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SECTION 8.07. Reinstatement
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81
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ARTICLE IX
Amendments
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SECTION 9.01. Without Consent of Holders
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81
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SECTION 9.02. With Consent of Holders
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SECTION 9.03. Notice of Amendments
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83
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SECTION 9.04. Compliance with Trust Indenture Act
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83
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SECTION 9.05. Revocation and Effect of Consents and Waivers
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84
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SECTION 9.06. Notation on or Exchange of Notes
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84
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SECTION 9.07. Trustee To Sign Amendments
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84
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SECTION 9.08. Payment for Consent
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84
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ARTICLE X
Guarantees
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SECTION 10.01. Guarantees
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85
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SECTION 10.02. Limitation on Liability
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86
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iii
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SECTION 10.03. Successors and Assigns
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87
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SECTION 10.04. No Waiver
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87
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SECTION 10.05. Modification
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87
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SECTION 10.06. Release of Guarantor
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87
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SECTION 10.07. Contribution
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88
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SECTION 10.08. Non-Impairment
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88
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ARTICLE XI
Security Documents
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SECTION 11.01. Collateral and Security Documents
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88
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SECTION 11.02. Release of Collateral
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89
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SECTION 11.03. Certificates and Opinions
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90
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SECTION 11.04. Use of Trust Monies
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91
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ARTICLE XII
Miscellaneous
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SECTION 12.01. Trust Indenture Act Controls
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SECTION 12.02. Notices
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91
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SECTION 12.03. Communication by Holders with Other Holders
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93
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SECTION 12.04. Certificate and Opinion as to Conditions Precedent
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93
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SECTION 12.05. Statements Required in Certificate or Opinion
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93
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SECTION 12.06. When Notes Disregarded
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93
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SECTION 12.07. Rules by Trustee, Paying Agent and Registrar
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94
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SECTION 12.08. Legal Holidays
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94
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SECTION 12.09. Governing Law
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94
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SECTION 12.10. No Recourse Against Others
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94
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SECTION 12.11. Successors
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94
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SECTION 12.12. Multiple Originals
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94
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SECTION 12.13. Table of Contents; Headings
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SECTION 12.14. Severability
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SECTION 12.15. No Adverse Interpretation of Other Agreements
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Rule 144A/Regulation S Appendix
Exhibit I Form of Initial Note
Exhibit II Form of Exchange Note or Private Exchange Note
Exhibit III Form of Transferee Letter of Representations
iv
INDENTURE dated as of February 1, 2010, among CREDIT ACCEPTANCE
CORPORATION, a Michigan corporation (together with its successors or
assigns, the
Company
), the Guarantors (as defined below) listed
on the signature pages hereto and U.S. BANK NATIONAL ASSOCIATION, a
national banking association, as trustee.
Each party agrees as follows for the benefit of the other parties and for the equal and
ratable benefit of the Holders:
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01.
Definitions.
Acquired Indebtedness
means, with respect to any specified Person, (i) Indebtedness
of any other Person existing at the time such other Person is merged with or into or became a
Subsidiary of such specified Person, including Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a Subsidiary of such specified
Person, and (ii) Indebtedness secured by a Lien encumbering any asset acquired by such specified
Person.
Additional Notes
means Notes issued under this Indenture after the Issue Date and in
compliance with Sections 2.13 and 4.03, it being understood that any Notes issued in exchange for
or replacement of any Initial Note issued on the Issue Date shall not be an Additional Note,
including any such Notes issued pursuant to a Registration Rights Agreement (as defined in the
Appendix).
Affiliate
of any Person means (i) any other Person which directly, or indirectly
through one or more intermediaries, controls such Person or (ii) any other Person which directly,
or indirectly through one or more intermediaries, is controlled by or is under common control with
such Person. As used herein, the term
control
means possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
Applicable Premium
means, with respect to any Note on any Redemption Date, the
greater of:
(i) 1.0% of the principal amount of such Note; and
(ii) the excess, if any, of (1) the present value at such Redemption Date of (x) the
redemption price of such Note on February 1, 2014 (such redemption price as set forth in
Section 3.07(b)),
plus
(y) all required remaining interest payments due on such Note
through February 1, 2014 (but excluding accrued but unpaid interest to such Redemption
Date), computed using a discount rate equal to the
Treasury Rate as of such Redemption Date
plus
50 basis points; over (2) the principal amount of such Note.
Asset Sale
means
(i) the sale, lease, conveyance or other disposition of any assets or rights
(including by way of a sale and leaseback) by the Company or any Restricted Subsidiary to
any Person other than the Company or any Restricted Subsidiary other than in the ordinary
course of business (provided that the sale, lease, conveyance or other disposition of all
or substantially all of the assets of the Company and the Restricted Subsidiaries, taken as
a whole, shall be governed by the provisions set forth in Sections 4.09 or 5.01 and not by
Section 4.06);
(ii) the issue or sale by the Company or any Restricted Subsidiaries to any Person
(other than the Company or any Restricted Subsidiaries) of Equity Interests of any of the
Companys Subsidiaries, and
(iii) the issue or sale by the Company or any Restricted Subsidiaries to any Person
(other than the Company or any Restricted Subsidiaries) of Equity Interests of any
Guarantor;
in the case of either clause (i) or (ii), whether in a single transaction or a series of related
transactions that have a Fair Market Value in excess of $10,000,000 or for net proceeds in excess
of $10,000,000.
Notwithstanding the foregoing, the term
Asset Sale
shall not include:
(i) a disposition that constitutes a Restricted Payment (or would constitute a
Restricted Payment but for the exclusions from the definition thereof) and that is not
prohibited by Section 4.04;
(ii) the transfer of Dealer Loans or Purchased Contracts or trust certificates issued
to evidence the residual interest in Dealer Loan Pools or Purchased Contracts, and the
participation therein, and related rights and assets in connection with any Permitted
Securitization;
(iii) the disposition of cash or Cash Equivalents;
(iv) terminations of Hedging Obligations;
(v) any financing transaction with respect to assets or rights of the Company or any
Restricted Subsidiary, including any sale and leaseback of assets or rights not prohibited
by Sections 4.03 or 4.10;
(vi) any surrender or waiver of contract rights or a settlement, release or surrender
of contract, tort or other claims of any kind; and
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(vii) the grant of any Lien not prohibited by this Indenture and any foreclosure or
exercise in respect thereof.
Attributable Debt
in respect of a Sale/Leaseback Transaction means, as at the time
of determination, the present value (discounted at the interest rate borne by the Notes, compounded
annually) of the total obligations of the lessee for rental payments during the remaining term of
the lease included in such Sale/Leaseback Transaction (including any period for which such lease
has been extended);
provided
,
however
, that if such Sale/Leaseback Transaction
results in a Capital Lease Obligation, the amount of Indebtedness represented thereby shall be
determined in accordance with the definition of Capital Lease Obligation.
Average Life
means, as of the date of determination, with respect to any
Indebtedness, the quotient obtained by dividing:
(i) the sum of the products of the number of years from the date of determination to
the date of each successive scheduled principal payment of or redemption or similar payment
with respect to such Indebtedness multiplied by the amount of such payment by
(ii) the sum of all such payments.
Banking Product Obligations
means any obligations of the Company or any Restricted
Subsidiary owed to any Person in respect of treasury management services (including services in
connection with operating, collections, payroll, trust or other depository or disbursement
accounts, including automated clearinghouse, e-payable, electronic funds transfer, wire transfer,
controlled disbursement, overdraft, depositary, information reporting, lock-box and stop payment
services), commercial credit card and merchant card services, stored valued card services, other
cash management services, lock-box leases and other banking products or services related to any of
the foregoing.
Board of Directors
means the Board of Directors of the Company or any committee
thereof duly authorized to act on behalf of such board.
Business Day
means each day that is not a Saturday, Sunday or other day on which
banking institutions in New York, New York are authorized or required by law to close.
Capital Lease Obligation
means, at the time any determination thereof is to be made,
the amount of the liability in respect of a capital lease that would at such time be required to be
capitalized on a balance sheet in accordance with GAAP.
Capital Stock
means (i) in the case of a corporation, corporate stock, (ii) in the
case of an association or business entity, any and all shares, interests, participations, rights or
other equivalents (however designated) of corporate stock, (iii) in the case of a partnership or
limited liability company, partnership or membership interests (whether general or limited) and
(iv) any other interest or participation that
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confers on a Person the right to receive a share of
the profits and losses of, or distributions of assets of, the issuing Person.
Cash Equivalents
means:
(i) obligations (1) issued or directly and unconditionally guaranteed as to interest
and principal by the United States government or (2) issued by any agency of the United
States government the obligations of which are backed by the full faith and credit of the
United States, in each case maturing within 12 months after acquisition thereof, or
certificates representing an ownership interest in any such obligations;
(ii) securities issued or fully guaranteed by any state of the United States or any
political subdivision of any such state or any public instrumentality thereof, in each case
maturing within one year after acquisition thereof and having, at the time of acquisition,
a rating of at least A-1 from S&P or at least P-1 from Moodys;
(iii) demand and time deposit accounts, certificates of deposit and money market
deposits maturing within one year of the date of acquisition thereof issued by a bank or
trust company which is organized under the laws of the United States of America, any state
thereof or any foreign country recognized by the United States of America, and which bank
or trust company has capital, surplus and undivided profits aggregating in excess of
$50,000,000 (or the foreign currency equivalent thereof) and has outstanding debt which is
rated A (or such similar equivalent rating) or higher by at least one of Moodys or S&P
or any money market fund sponsored by a registered broker dealer or mutual fund
distributor;
(iv) repurchase obligations for underlying securities of the type described in clauses
(ii) and (iii) of this definition entered into with any financial institution meeting the
qualifications specified in such clause (iii);
(v) commercial paper, maturing not more than one year after the date of acquisition,
issued by a corporation (other than an Affiliate of the Company) organized and in existence
under the laws of the United States of America or any foreign country recognized by the
United States of America with a rating at the time at which any investment therein is made
of P-1 (or higher) according to Moodys or A-1 (or higher) according to S&P; and
(vi) interests in any investment company or money market fund that invests
substantially all of its assets in instruments of the types described in clauses (i)
through (v) of this definition.
Change of Control
means the occurrence of any of the following:
(i) the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
4
substantially all of the assets of the Company and the Restricted Subsidiaries taken as a
whole to any person (as such term is used in Section 13(d)(3) of the Exchange Act) other
than in the ordinary course of business;
(ii) the adoption of a plan relating to the liquidation or dissolution of the Company;
(iii) any person (as defined above), other than one or more Permitted Holders, is or
becomes the beneficial owner (as such term is defined in Rule 13d-3 and Rule 13d-5 under
the Exchange Act, except that a person shall be deemed to have beneficial ownership of
all securities that such person has the right to acquire, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent condition), directly
or indirectly, of more than 50.0% of the Voting Stock of the Company (measured by voting
power rather than number of shares); or
(iv) the Company consolidates with, or merges with or into, any Person (other than a
Permitted Holder), or any Person (other than a Permitted Holder) consolidates with, or
merges with or into, the Company, in any such event pursuant to a transaction in which any
of the outstanding Voting Stock of the Company is converted into or exchanged for cash,
securities or other property, other than any such transaction where the Voting Stock of the
Company outstanding immediately prior to such transaction is converted into or exchanged
for Voting Stock (other than Disqualified Stock) of the surviving or transferee Person
constituting a majority of the outstanding shares of such Voting Stock of such surviving or
transferee Person (immediately after giving effect to such issuance).
Code
means the Internal Revenue Code of 1986, as amended.
Collateral
means all the collateral described in the Security Documents.
Collateral Agent
means the Collateral Agent, from time to time, under the
Intercreditor Agreement, which initially is Comerica Bank.
Collateral Coverage Ratio
means, as of any date of determination, the ratio of (i)
the sum of (x) the book value of all Dealer Loans Receivable with respect to Dealer Loans of the
Company and the Restricted Subsidiaries then constituting Collateral securing the Notes, and (y)(A)
the balance owing in respect of Purchased Contracts then
constituting Collateral securing the Notes,
minus
(B) unearned income with respect to such
Purchased Contracts and the allowance for credit losses with respect to such Purchased Contracts,
in each case as such amount would be included in the financial statements and related footnotes of
the Company and the Restricted Subsidiaries prepared in accordance with GAAP, and if such amount is
not shown net of such items, then net of any reserves established by the Company as an allowance
for credit losses related to such Purchased Contracts to (ii) the difference of (x) the total
principal amount of Indebtedness (excluding Hedging Obligations) then outstanding consisting of
Credit
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Facility Obligations, Notes Obligations and Permitted Future Secured Indebtedness,
minus
(y)
the book value of all cash and Cash Equivalents then constituting Collateral securing the Notes and
held by the Collateral Agent.
Consolidated Funded Debt
has the meaning ascribed thereto in the Credit Agreement as
in effect on the Issue Date.
Consolidated Interest Expense
means, for any period, the total interest expense of
the Company and the Restricted Subsidiaries computed on a consolidated basis under GAAP (other than
non-cash interest expense attributable to convertible indebtedness under Accounting Practices
Bulletin 14-1 or any successor provision), plus, to the extent not included in such total interest
expense, and to the extent incurred by the Company or any Restricted Subsidiaries, without
duplication:
(i) interest expense attributable to Capital Lease Obligations, the interest portion
of rent expense associated with Attributable Debt in respect of the relevant lease giving
rise thereto, determined as if such lease were a capitalized lease in accordance with GAAP,
and the interest component of any deferred payment obligations;
(ii) amortization of debt discount (including the amortization of original issue
discount resulting from the issuance of Indebtedness at less than par) and debt issuance
cost;
provided
,
however
, that any amortization of bond premium shall be credited to reduce
Consolidated Interest Expense unless, pursuant to GAAP, such amortization of bond premium
has otherwise reduced Consolidated Interest Expense;
(iii) capitalized interest;
(iv) non-cash interest expense;
provided
,
however
, that any non-cash interest expense
or income attributable to the movement in the mark to mark valuation of Hedging Obligations
or other derivative instruments pursuant to GAAP shall be excluded from the calculation of
Consolidated Interest Expense;
(v) commissions, discounts and other fees and charges owed with respect to letters of
credit and bankers acceptance financing;
(vi) net payments pursuant to Hedging Obligations;
(vii) the product of (1) all dividends accrued in respect of all Disqualified Stock of
the Company and all Preferred Stock of any Restricted Subsidiary, in each case, held by
Persons other than the Company or a Restricted Subsidiary (other than dividends payable
solely in Capital Stock (other than Disqualified Stock) of the Company), times (2) a
fraction of the numerator of which is one and the denominator of which is one minus the
effective combined tax rate of the issuer of such Preferred Stock (expressed as a decimal)
for such period (as estimated by the chief financial officer of the Company in good faith);
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(viii) interest incurred in connection with Investments in discontinued operations;
and
(ix) interest accruing on any Indebtedness of any other Person to the extent such
Indebtedness is Guaranteed by (or secured by a Lien on the assets of) the Company or any
Restricted Subsidiary.
Consolidated Net Income
means, for any period, net earnings (or loss) after income
taxes of the Company and the Restricted Subsidiaries, determined on a consolidated basis for such
Persons, in accordance with GAAP, but excluding:
(i) net earnings (or loss) of any Restricted Subsidiary accrued prior to the date it
became a Restricted Subsidiary;
(ii) any gain or loss (net of tax effects applicable thereto) resulting from the sale,
conversion or other disposition of any assets other than intangible assets (so classified
in accordance with GAAP), inventories, accounts receivable and Investments in and
securities of any other person other than in the ordinary course of business;
(iii) any extraordinary or non-recurring gains or losses (including any gain on sale
generated by a Permitted Securitization, except to the extent the Company or a Guarantor
has received a cash benefit therefrom in the applicable reporting period); and any interest
income generated by a Permitted Securitization, except to the extent the Company or a
Guarantor has received a cash benefit therefrom in the applicable reporting period;
(iv) any gain (net of tax effects attributable thereto) arising from any reappraisal
or write-up of assets and any gain or loss (net of tax effects attributable thereto)
arising from the non-cash effect of equity compensation expense;
(v) any portion of the net earnings of any Restricted Subsidiary other than a
Guarantor that for any reason is unavailable for payment of dividends to the Company or any
other Restricted Subsidiary;
provided
,
however
, that for purpose of computing the Fixed
Charge Coverage Ratio, net earnings of a Special Purpose Subsidiary shall not be excluded
solely due to restrictions on the payment of dividends contained in Nonrecourse Indebtedness or the constituent documents of such
Special Purpose Subsidiary;
(vi) any gain or loss (net of tax effects applicable thereto) during such period
resulting from the receipt of any proceeds of any insurance policy; except as set forth
herein, any earnings of any Person acquired by the Company or any Restricted Subsidiary
through the purchase, merger or consolidation or otherwise, or earnings of any Person
substantially all of the assets of which have been acquired by the Company or any
Restricted Subsidiary, for any period prior to the date of acquisition;
7
(vii) net earnings of any Person (other than a Restricted Subsidiary) in which the
Company or any Restricted Subsidiary shall have an ownership interest unless such net
earnings shall actually have been received by the Company or such Restricted Subsidiary in
the form of cash distributions; and
(viii) any restoration during such period to income of any contingency reserve (other
than any contingency reserve for taxes), except to the extent that provision for such
reserve was made either (1) during such period out of income accrued during such period, or
(2) in connection with the Companys program of financing Installment Contracts (x) to
provide for warranty claims for which the Company may be responsible, or (y) to cover
credit losses in connection with Dealer Loans Receivable or Purchased Contracts.
Consolidated Tangible Net Worth
has the meaning ascribed thereto in the Credit
Agreement as in effect on the Issue Date.
Consolidated Total Assets
means, as of any date of determination, the total assets
reflected on the consolidated balance sheet of the Company and the Restricted Subsidiaries as of
the end of the most recently ended fiscal quarter of the Company for which an internal balance
sheet is available, on a consolidated basis determined in accordance with GAAP (and, in the case of
any determination relating to any incurrence of Indebtedness, any Lien or any Investment, on a
pro
forma
basis including any property or assets being acquired in connection therewith).
Credit Agreement
means the Fourth Amended and Restated Credit Agreement, dated
February 7, 2006, among the Company, the Lenders listed therein and Comerica Bank, as
administrative agent and collateral agent, as amended as of the Issue Date.
Credit Facility
means the Credit Agreement and one or more additional credit
agreements, including any related notes, guarantees, collateral documents, instruments and
agreement executed in connection therewith, and, in each case, as amended, restated, replaced
(whether upon or after termination or otherwise), Refinanced, supplemented, modified or otherwise
changed (in whole or in part, and without limitation as to amount, terms, conditions, covenants and
other provisions) from time to time.
Credit Facility Guarantor
means each of the Companys Subsidiaries that guarantees
the Companys obligations under the Credit Facility.
Credit Facility Obligations
means the obligations of the Company and the Guarantors
under the Credit Facility.
Credit Facility Security Documents
means
(i) the Security Agreement; and
8
(ii) all security agreements, mortgages, deeds of trust, deeds to secure debt,
pledges, collateral assignments and other agreements or instruments evidencing or creating
any security interest or Lien in favor of the Collateral Agent in any or all of the
Collateral, in each case as such documents may be amended and restated in connection with
this offering, and thereafter as amended, modified, replaced or supplemented from time to
time in accordance with their terms and the Intercreditor Agreement.
Dealer
means a Person engaged in the business of the retail sale of new or used
motor vehicles, including both businesses exclusively selling used motor vehicles and businesses
principally selling new motor vehicles, but having a used vehicle department, including any such
Person which constitutes an Affiliate of the Company.
Dealer Agreement
means the sales or servicing agreement between the Company or one
or more Restricted Subsidiaries and a participating Dealer which sets forth the terms and
conditions under which the Company or one or more Restricted Subsidiaries (i) accepts, as nominee
for such Dealer, the assignment of Installment Contracts for purposes of administration, servicing
and collection and under which the Company or one or more Restricted Subsidiaries may make loans or
advances to such Dealers included in Dealer Loans Receivable and (ii) accepts outright assignments
of Installment Contracts from Dealers or funds Installment Contracts originated by such Dealer in
the name of the Company or any Restricted Subsidiaries, in each case as such agreements may be in
effect from time to time.
Dealer Loan Pool
means a grouping on the books and records of the Company or any
Restricted Subsidiaries of Dealer Loans and bearing the same pool identification number assigned by
the Companys computer system, and to which Dealer Loans and the related Installment Contracts were
assigned in the ordinary course of the Companys business in the order such Dealer Loans were made
by the Company and such Installment Contracts were originated by such Dealer without the exercise
of discretion by the Company.
Dealer Loans
means the advances of cash made by the Company or any of its
Subsidiaries to a Dealer at the time an Installment Contract is approved, accepted by and assigned
to the Company or any of its Subsidiaries under a Dealer Agreement described in clause (i) of the
definition of Dealer Agreement, against anticipated future
collections on Installment Contracts serviced for such Dealer, as outstanding from time to
time.
Dealer Loans Receivable
means the Loans receivable, net that would appear in the
consolidated financial statements of the Company and the Restricted Subsidiaries prepared in
accordance with GAAP.
Default
means any event that is or, with the passage of time or the giving of notice
or both, would be an Event of Default.
9
Disqualified Stock
means, with respect to any Person, any Capital Stock which by its
terms (or by the terms of any security into which it is convertible or for which it is exchangeable
at the option of the holder) or upon the happening of any event:
(i) matures or is mandatorily redeemable (other than redeemable only for Capital Stock
of such Person which is not itself Disqualified Stock) pursuant to a sinking fund
obligation or otherwise;
(ii) is convertible or exchangeable at the option of the holder for Indebtedness or
Disqualified Stock; or
(iii) is mandatorily redeemable or must be purchased upon the occurrence of certain
events or otherwise, in whole or in part;
in each case on or prior to 91 days after the Stated Maturity of the Notes;
provided
,
however
, that
any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving
holders thereof the right to require such Person to purchase or redeem such Capital Stock upon the
occurrence of an asset sale or change of control occurring prior to 91 days after the Stated
Maturity of the Notes shall not constitute Disqualified Stock if:
(i) the asset sale or change of control provisions applicable to such Capital
Stock are not more favorable to the holders of such Capital Stock than the terms applicable
to the Notes and set forth in Sections 4.06 and 4.09, respectively; and
(ii) any such requirement only becomes operative after compliance with such terms
applicable to the Notes, including the purchase of any Notes tendered pursuant thereto.
The amount of any Disqualified Stock that does not have a fixed redemption, repayment or
repurchase price shall be calculated in accordance with the terms of such Disqualified Stock as if
such Disqualified Stock were redeemed, repaid or repurchased on any date on which the amount of
such Disqualified Stock is to be determined pursuant to this Indenture;
provided
,
however
, that if
such Disqualified Stock could not be required to be redeemed, repaid or repurchased at the time of
such determination, the redemption, repayment or repurchase price shall be the book value of
such Disqualified Stock as reflected in the most recent financial statements of such Person.
EBITDA
for any period means the sum of Consolidated Net Income, plus the following
to the extent deducted in calculating such Consolidated Net Income:
(i) all income tax expense of the Company and the Restricted Subsidiaries for such
period;
(ii) Consolidated Interest Expense for such period; and
10
(iii) depreciation and amortization (including amortization or impairment write-offs
of goodwill and other intangibles) of the Company and the Restricted Subsidiaries for such
period to the extent that such depreciation and amortization were deducted in computing
such Consolidated Net Income,
in each case for such period. Notwithstanding the foregoing, the provision for taxes based on the
income or profits of, and the depreciation and amortization of, a Restricted Subsidiary shall be
added to Consolidated Net Income to compute EBITDA only to the extent (and in the same proportion,
including by reason of minority interests) that the net income or loss of such Restricted
Subsidiary was included in calculating Consolidated Net Income and only if a corresponding amount
would be permitted at the date of determination to be dividended to the Company (directly or
indirectly) by such Restricted Subsidiary without prior approval (that has not been obtained),
pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to such Restricted Subsidiary or its
stockholders.
Equity Interests
means Capital Stock and all warrants, options or other rights to
acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable
for, Capital Stock).
Exchange Act
means the U.S. Notes Exchange Act of 1934, as amended.
Excluded Property
shall include, among other things, the following:
(i) rights under or with respect to any general intangible, license, permit or
authorization to the extent any such general intangible, license, permit or authorization,
by its terms or by law, prohibits the assignment of, or the granting of a security interest
in the rights of the Company or a Guarantor thereunder or which would be invalid or
enforceable upon any such assignment or grant (the
Restricted Assets
);
provided
,
however
, that (A) the proceeds (as such term is defined in Article or Chapter 9 of the UCC
(as defined in the Security Agreement)) of any Restricted Asset shall continue to be deemed
to be Collateral and (B) this provision shall not limit the grant of any Lien on or
assignment of any Restricted Asset to the extent that the UCC (as defined in the Security
Agreement) or any other applicable law provides that such grant of Lien
or assignment is effective irrespective of any prohibitions to such grant provided in
any Restricted Asset (or the underlying documents related thereto);
(ii) Dealer Loans, Installment Contracts, leases, rights or interests under Dealer
Agreements and related financial assets transferred by the Company or the applicable
Guarantor prior to the Issue Date pursuant to certain permitted securitizations;
(iii) any equity interests in foreign subsidiaries and domestic subsidiaries other
than the Guarantors and VSC Re Company; and
11
(iv) any applications for trademarks filed in the United States Patent and Trademark
Office on the basis of an intent to use such mark pursuant to 15 U.S.C. § 1051 Section 1(b)
and for which a form evidencing use of the mark in interstate commerce has not yet been
filed with the United States Patent and Trademark Office pursuant to 15 U.S.C. § 1051
Section 1(c) and (1)(d), to the extent that granting a security interest in such trademark
application prior to such filing would adversely affect the enforceability or validity of
such trademark application.
Fair Market Value
means, with respect to any asset or property, the price which
could be negotiated in an arms length, free market transaction, for cash, between a willing seller
and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the
transaction. Fair Market Value of the property or assets in question shall be determined in good
faith by an appropriate financial officer of the Company unless such Fair Market Value (excluding
the Fair Market Value of any portion of such asset or property consisting of cash or Cash
Equivalents) is determined to be in excess of $15,000,000, in which case it shall be determined in
good faith by the Board of Directors, whose determination shall be conclusive and, in the case of
any determination made by the Board of Directors, evidenced by a resolution of the Board of
Directors; provided, however, that if the Fair Market Value of the property or assets in question
(excluding any portion of such property or assets consisting of cash or Cash Equivalents) is so
determined to be in excess of $30,000,000 in the case of any determination of Fair Market Value
required by Section 4.04(a)(3)(B) or $20,000,000 in the case of any determination of Fair Market
Value required by any other provisions set forth in Section 4.04, such determination must be
confirmed by an Independent Qualified Party.
Fixed Charge Coverage Ratio
as of any date of determination means the ratio of (x)
the aggregate amount of EBITDA for the period of the most recent four consecutive fiscal quarters
for which financial statements of the Company are available to (y) Consolidated Interest Expense
for such four fiscal quarters;
provided
,
however
, that:
(i) if the Company or any Restricted Subsidiary has Incurred any Indebtedness since
the beginning of such period that remains outstanding or if the transaction giving rise to
the need to calculate the Fixed Charge Coverage Ratio is an incurrence of Indebtedness, or
both, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving effect on a
pro forma
basis
to such Indebtedness as if such Indebtedness had been incurred on the first day of such
period;
(ii) if the Company or any Restricted Subsidiary has repaid, repurchased, defeased or
otherwise discharged any Indebtedness since the beginning of such period or if any
Indebtedness is to be repaid, repurchased, defeased or otherwise discharged (in each case
other than Indebtedness incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) on the date of the
transaction giving rise to the need to calculate
12
the Fixed Charge Consolidated Coverage
Ratio, EBITDA and Consolidated Interest Expense for such period shall be calculated on a
pro forma
basis as if such discharge had occurred on the first day of such period and as if
the Company or such Restricted Subsidiary had not earned the interest income actually
earned during such period in respect of cash or Cash Equivalents used to repay, repurchase,
defease or otherwise discharge such Indebtedness;
(iii) if since the beginning of such period the Company or any Restricted Subsidiary
shall have made any Asset Sale, EBITDA for such period shall be reduced by an amount equal
to EBITDA (if positive) directly attributable to the assets which are the subject of such
Asset Sale for such period, or increased by an amount equal to EBITDA (if negative),
directly attributable thereto for such period and Consolidated Interest Expense for such
period shall be reduced by an amount equal to the Consolidated Interest Expense directly
attributable to any Indebtedness of the Company or any Restricted Subsidiary repaid,
repurchased, defeased or otherwise discharged with respect to the Company and its
continuing Restricted Subsidiaries in connection with such Asset Sale for such period (or,
if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated Interest
Expense for such period directly attributable to the Indebtedness of such Restricted
Subsidiary to the extent the Company and its continuing Restricted Subsidiaries are no
longer liable for such Indebtedness after such sale);
(iv) if since the beginning of such period the Company or any Restricted Subsidiary
(by merger or otherwise) shall have made an Investment in any Restricted Subsidiary (or any
Person which becomes a Restricted Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction requiring a calculation to
be made hereunder, which constitutes all or substantially all of an operating unit of a
business, EBITDA and Consolidated Interest Expense for such period shall be calculated
after giving
pro forma
effect thereto (including the incurrence of any Indebtedness) as if
such Investment or acquisition had occurred on the first day of such period; and
(v) if since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary
since the beginning of such period) shall have made any Asset Sale, any Investment or
acquisition of assets that would have required an
adjustment pursuant to clause (3) or (4) above if made by the Company or a Restricted
Subsidiary during such period, EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving
pro forma
effect thereto as if such Asset Sale, Investment
or acquisition had occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given to an acquisition of
assets, the amount of income or earnings relating thereto and the amount of Consolidated Interest
Expense associated with any Indebtedness incurred in connection therewith, the pro forma
calculations shall be determined in good faith by a
13
responsible financial or accounting Officer of
the Company. If any Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the date
of determination had been the applicable rate for the entire period (taking into account any
interest rate hedging agreement applicable to such Indebtedness if such agreement has a remaining
term in excess of 12 months). If any Indebtedness is incurred under a revolving credit facility
and is being given pro forma effect, the interest on such Indebtedness shall be calculated based on
the average daily balance of such Indebtedness for the four fiscal quarters subject to the pro
forma calculation to the extent that such Indebtedness was incurred solely for working capital
purposes.
Founder Group
means (i) Donald A. Foss and any current or former spouse of Donald A.
Foss; (ii) a lawful lineal descendant of Donald A. Foss or the spouse of any such descendant; (iii)
an estate, trust (including a revocable trust, declaration of trust or a voting trust),
guardianship or custodianship for the primary benefit of one or more individuals described in
clause (i) or (ii) of this definition; (iv) any foundation established by one or more individuals
described in clause (i) or (ii) of this definition; and (v) a Person controlled directly or
indirectly by one or more individuals or entities described in clause (i), (ii), (iii) or (iv) of
this definition.
Funded Debt Ratio
means, as of any date of determination, on a consolidated basis,
the ratio of (i) Consolidated Funded Debt as of such date to (ii) Consolidated Tangible Net Worth
as of such date.
GAAP
means generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as have been approved by a significant segment of the
accounting profession, which are in effect on the Issue Date and consistently applied.
Government Securities
means securities that are direct obligations (or certificates
representing an ownership interest in such obligations) of, or obligations guaranteed by, the
United States of America (including any agency or instrumentality thereof) for the payment of which
the full faith and credit of the United States of America is pledged and which are not callable at
the issuers option.
Guarantee
means a guarantee (other than by endorsement of negotiable instruments for
collection in the ordinary course of business), direct or indirect, in any manner (including
letters of credit and reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
Guarantor
means
(i) each of Buyers Vehicle Protection Plan, Inc., a Michigan corporation, and Vehicle
Remarketing Services, Inc., a Michigan corporation; and
14
(ii) any other Subsidiary that executes a Notes Guarantee in accordance with the
provisions of this Indenture, and their respective successors and assigns,
in each case until such Person is released from its Notes Guarantee in accordance with this
Indenture.
Hedging Obligations
means, with respect to any Person, the obligations of such
Person under (i) interest rate swap agreements, interest rate cap agreements and interest rate
collar agreements and (ii) other agreements or arrangements designed to protect such Person against
fluctuations in interest or currency exchange rates.
Holder
means any registered holder, from time to time, of the Notes.
Indebtedness
means, with respect to any Person on any date of determination (without
duplication):
(i) the principal in respect of (1) indebtedness of such Person for money borrowed and
(2) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the
payment of which such Person is responsible or liable, including, in each case, any premium
on such indebtedness to the extent such premium has become due and payable;
(ii) all Capital Lease Obligations of such Person and all Attributable Debt in respect
of Sale/Leaseback Transactions entered into by such Person;
(iii) all obligations of such Person issued or assumed as the deferred purchase price
of property, all conditional sale obligations of such Person and all obligations of such
Person under any title retention agreement (but excluding any accounts payable or other
liability to trade creditors arising in the ordinary course of business);
(iv) all obligations of such Person for the reimbursement of any obligor on any letter
of credit, bankers acceptance or similar credit transaction (other than obligations with
respect to letters of credit securing obligations (other than obligations set forth in
clauses (i) through (iii) above) entered into in the ordinary course of business of such
Person to the extent such letters of credit are not drawn
upon or, if and to the extent drawn upon, such drawing is reimbursed no later than the
tenth Business Day following payment on the letter of credit);
(v) the amount of all obligations of such Person with respect to the redemption,
repayment or other repurchase of any Disqualified Stock of such Person or, with respect to
any Preferred Stock of any Subsidiary of such Person, the principal amount of such
Preferred Stock to be determined in accordance with this Indenture (but excluding, in each
case, any accrued dividends);
(vi) all Guarantees by such Person of obligations of the type referred to in clauses
(i) through (v) or dividends of other Persons;
15
(vii) all obligations of the type referred to in clauses (i) through (vi) of other
Persons secured by any Lien on any property or asset of such Person (whether or not such
obligation is assumed by such Person), the amount of such obligation being deemed to be the
lesser of the Fair Market Value of such property or assets and the amount of the obligation
so secured; and
(viii) to the extent not otherwise included in this definition, Hedging Obligations of
such Person.
Indebtedness of a Person includes Acquired Indebtedness of such Person.
Notwithstanding the foregoing, the term Indebtedness shall exclude (i) in connection with
the purchase by the Company or any Restricted Subsidiary of any business, post-closing payment
adjustments to which the seller may become entitled to the extent such payment is determined by a
final closing balance sheet or such payment depends on the performance of such business after the
closing;
provided
,
however
, that, at the time of closing, the amount of any such payment is not
determinable and, to the extent such payment thereafter becomes fixed and determined, the amount is
paid within 30 days thereafter and (ii) obligations of the Company and the Restricted Subsidiaries
under Standard Securitization Undertakings.
The amount of Indebtedness of any Person at any date shall be the outstanding balance at such
date of all obligations as set forth above; provided, however, that in the case of Indebtedness
sold at a discount, the amount of such Indebtedness at any time shall be the accreted value thereof
at such time.
Indenture
means this Indenture as amended or supplemented from time to time.
Independent Qualified Party
means an investment banking firm, accounting firm or
appraisal firm of national standing;
provided
,
however
, that such firm is not an Affiliate of the
Company.
Initial Purchasers
means Credit Suisse Securities (USA) LLC, BMO Capital Markets
Corp., Comerica Securities, Inc., Fifth Third Securities, Inc. and RBS Securities Inc.
Installment Contract
means a retail installment contract for the sale of new or used
motor vehicles purchased outright from Dealers by the Company or a Restricted Subsidiary or written
by Dealers in the name of the Company or a Restricted Subsidiary (and funded by the Company or such
Restricted Subsidiary) or assigned by Dealers to the Company or a Restricted Subsidiary, as nominee
for the Dealer, for administration, servicing, and collection, in each case pursuant to an
applicable Dealer Agreement.
Intercreditor Agreement
means that certain Amended and Restated Intercreditor
Agreement, dated as of the Issue Date, among the Company, the other
16
Grantors (as defined therein),
Comerica Bank, in the capacities specified therein, U.S. Bank National Association, in the capacity
specified therein, and each Additional Authorized Representative (as defined therein) from time to
time party thereto, as amended, restated or otherwise modified from time to time in accordance with
its terms and this Indenture.
Investment
in any Person means any direct or indirect advance, loan (other than
advances to customers in the ordinary course of business that are recorded as accounts receivable
on the balance sheet of the lender) or other extensions of credit (including by way of Guarantee or
similar arrangement) or capital contribution to (by means of any transfer of cash or other property
to others or any payment for property or services for the account or use of others), or any
purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by such
Person. If the Company or any Restricted Subsidiary issues, sells or otherwise disposes of any
Capital Stock of a Person that is a Restricted Subsidiary such that, after giving effect thereto,
such Person is no longer a Restricted Subsidiary, any Investment by the Company or any Restricted
Subsidiary in such Person remaining after giving effect thereto shall be deemed to be a new
Investment at such time. The acquisition by the Company or any Restricted Subsidiary of a Person
that holds an Investment in a third Person shall be deemed to be an Investment by the Company or
such Restricted Subsidiary in such third Person at such time. Except as otherwise provided for
herein, the amount of an Investment shall be its Fair Market Value at the time the Investment is
made and without giving effect to subsequent changes in value.
For purposes of the definition of Unrestricted Subsidiary and Section 4.04:
(i) Investment shall include the portion (proportionate to the Companys equity
interest in such Subsidiary) of the Fair Market Value of the net assets of any Subsidiary
of the Company at the time that such Subsidiary is designated an Unrestricted Subsidiary;
provided
,
however
, that upon a redesignation of such Subsidiary as a Restricted Subsidiary,
the Company shall be
deemed to continue to have a permanent Investment in an Unrestricted Subsidiary
equal to an amount (if positive) equal to (1) the Companys Investment in such Subsidiary
at the time of such redesignation less (2) the portion (proportionate to the Companys
equity interest in such Subsidiary) of the Fair Market Value of the net assets of such
Subsidiary at the time of such redesignation; and
(ii) any property transferred to or from an Unrestricted Subsidiary shall be valued at
its Fair Market Value at the time of such transfer.
Issue Date
means February 1, 2010.
Legal Holiday
means a Saturday, a Sunday or a day on which banking institutions are
not required to be open in the State of New York.
17
Lenders
means the lenders and letter of credit issuing bank under the Credit
Facility from time to time.
Lien
means, with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or
otherwise perfected under applicable law (including any conditional sale or other title retention
agreement or any lease in the nature thereof);
provided
,
however
, that in no event shall an
operating lease be deemed to constitute a Lien. The term Lien does not include negative pledge
clauses in agreements relating to the borrowing of money or the obligation of the Company or any
Subsidiary (a) to remit monies held by it in connection with dealer holdbacks, claims or refunds
under insurance policies, or claims or refunds under service contracts or (b) to make deposits in
trust or otherwise as required under reinsurance agreements or pursuant to state regulatory
requirements, unless the Company or such Subsidiary has encumbered its interest in such monies or
deposits or in other property of the Company or such Subsidiary to secure such obligations.
Moodys
means Moodys Investors Service, Inc., or any successor thereto.
Net Cash Proceeds
means (i) with respect to any issuance or sale of Capital Stock or
Indebtedness, the cash proceeds of such issuance or sale net of attorneys fees, accountants fees,
underwriters or placement agents fees, discounts or commissions and brokerage, consultant and
other fees actually incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof and (ii) with respect to an Asset Sale, the payments received in the
form of cash or the value of Cash Equivalents therefrom (including any such payments received by
way of deferred payment of principal pursuant to a note or installment receivable or otherwise and
proceeds from the sale or other disposition of any securities received as consideration, but only
as and when received, but excluding any other consideration received in the form of assumption by
the acquiring Person of Indebtedness or other obligations relating to such properties or assets or
received in any other non-cash form), in each case net of:
(1) all legal, accounting and investment banking fees, title and recording tax
expenses, commissions and other fees and expenses incurred, and all federal, state,
provincial, foreign and local taxes required to be accrued as a liability under GAAP, as a
consequence of such Asset Sale;
(2) all payments made on any Indebtedness which is secured by any assets subject to
such Asset Sale, in accordance with the terms of any Lien upon or other security agreement
of any kind with respect to such assets, or which must by its terms, or in order to obtain
a necessary consent to such Asset Sale, or by applicable law, be repaid out of the proceeds
from such Asset Sale;
(3) all distributions and other payments required to be made to minority interest
holders in Restricted Subsidiaries as a result of such Asset Sale;
18
(4) the deduction of appropriate amounts provided by the seller as a reserve, in
accordance with GAAP, against any liabilities associated with the property or other assets
disposed in such Asset Sale and retained by the Company or any Restricted Subsidiary after
such Asset Sale; and
(5) any portion of the purchase price from an Asset Sale placed in escrow, whether as
a reserve for adjustment of the purchase price, for satisfaction of indemnities in respect
of such Asset Sale or otherwise in connection with that Asset Disposition;
provided
,
however
, that upon the termination of that escrow, Net Cash Proceeds shall be increased by
any portion of funds in the escrow that are released to the Company or any Restricted
Subsidiary.
Nonrecourse Indebtedness
means, with respect to any Special Purpose Subsidiary,
Indebtedness of such Special Purpose Subsidiary as to which neither the Company nor any Restricted
Subsidiary (other than such Special Purpose Subsidiary) is directly or indirectly liable (by virtue
of the Company or any such Restricted Subsidiary being the primary obligor on, guarantor of, or
otherwise liable in any respect for, such Indebtedness except for a Lien on the Capital Stock of
such Special Purpose Subsidiary to the creditors thereof which is not recourse to any other assets
of the Company or any other Restricted Subsidiary and except for Standard Securitization
Undertakings).
Notes
means all the 9.125% First Priority Senior Secured Notes due 2017 issued under
this Indenture, treated as a single class.
Notes Guarantee
means the Guarantee on the terms set forth in this Indenture by a
Guarantor of the Companys obligations under the Notes.
Notes Obligations
means the Obligations of the Company and the Guarantors under the
Indenture and the Notes.
Notes Secured Creditors
means the Trustee and the Holders, together.
Obligations
means any principal, interest, penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation governing any
Indebtedness.
Offering Circular
means the offering circular dated January 25, 2010 pursuant to
which the Initial Notes were offered to investors.
Officer
means the Chairman of the Board, the President, any Vice President, the
Treasurer or the Secretary of the Company.
Officers Certificate
of the Company means a certificate signed on behalf of the
Company by two Persons, one of which shall be any of the following: the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief Legal Officer, the
Chief Financial Officer, the Chief Accounting Officer, the Treasurer or any Executive Vice
President (or any such other officer that
19
performs similar duties) of the Company, and the other
one shall be any of the following: the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, the Chief Legal Officer, the Chief Financial Officer, the
Chief Accounting Officer, the Treasurer, the Assistant Treasurer, Controller, the Secretary, any
Assistant Secretary or any Executive Vice President (or any such other officer that performs
similar duties) of the Company.
Opinion of Counsel
means a written opinion from legal counsel who is acceptable to
the Trustee. The counsel may be an employee of or counsel to the Company or the Trustee.
Outright Dealer Agreement
means a Dealer Agreement referred to in clause (ii) of the
definition of Dealer Agreements.
Permitted Collateral Liens
means
(a) (i) any Lien on the Collateral to secure:
(1) any Credit Facility Indebtedness;
(2) the Notes (or any Guarantees thereof) incurred as Permitted Indebtedness
pursuant to Section 4.03(b)(ii);
(3) any other Indebtedness incurred pursuant to Section 4.03; provided,
however, that (x) no Default shall have occurred and be continuing at the time of
the incurrence of such Indebtedness or after giving effect thereto and (y) the
Collateral Coverage Ratio of the Company, calculated on a
pro forma
basis after
giving effect to the incurrence of such Indebtedness, would have been at least 1.25
to 1.0;
(4) any Refinancing Indebtedness of Indebtedness set forth in the foregoing
clause (2) or (3) or this clause (4); or
(5) Banking Product Obligations to the extent that the provider of such
Banking Product Obligations has agreed to be bound by the terms of the
Intercreditor Agreement or such providers interest in the Collateral is subject to
the terms of the Intercreditor Agreement,
in each case which are subject to the terms of the Intercreditor Agreement;
(ii) in addition to any Liens set forth in the immediately preceding clause (a)(i),
any Liens on the Collateral to secure Hedging Obligations in an aggregate amount not in
excess of $2,500,000 at any time outstanding; or
20
(iii) any Lien on the Collateral that is a statutory Lien arising by operation of law;
provided
,
however
, that such Lien either ranks:
(1) equal to all other Liens on such Collateral securing unsubordinated
Indebtedness of the Company or the relevant Restricted Subsidiary, if the Lien
secures unsubordinated Indebtedness; or
(2) junior to the Liens securing the Notes, and
(b) any Permitted Lien set forth in clauses (i), (iii), (iv), (v), (vi), (vii), (viii), (ix), (x),
(xii), (xiv), (xv), (xvi), (xvii), (xviii), (xix), (xx) and (xxi) of the definition of Permitted
Lien; provided, however, that (A) such Permitted Lien (other than any Lien set forth in clauses
(iii), (ix), (xiv), (xv), (xvi) and (xvii) of such definition) is not a Lien on any of the
Receivables and (B) such Permitted Lien (other than any Lien set forth in clauses (iii), (vii) and
(ix) of such definition) is not a Lien on any cash or Cash Equivalents constituting Collateral and
held by the Collateral Agent.
Permitted Future Secured Creditors
means the holders or lenders (and their
representatives and trustees), as the case may be, of Permitted Future Secured Indebtedness.
Permitted Future Secured Indebtedness
means Secured Indebtedness (other than any
Secured Indebtedness under the Credit Agreement or with respect to the Notes issued on the Issue
Date, any Notes issued in exchange therefor pursuant to the Registration Rights Agreement or any
Replacement Notes) incurred after the Issue Date in compliance with this Indenture, to the extent
that the holders or lenders thereof or their representatives and trustees, as the case may be, are
permitted to be Secured Parties under (and as defined in) the Intercreditor Agreement.
Permitted Holder
means (i) any member of the Founder Group; and (ii) any Person
acting in the capacity of an underwriter (solely to the extent that and for so long as such Person
is acting in such capacity) in connection with a public or private offering of Capital Stock of the
Company. In addition, any person (as such term is used in Section 13(d)(3) of the Exchange Act)
whose status as a beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act)
constitutes or results in a Change of Control in respect of which a Change of Control Offer is made
in accordance
with the requirements of this Indenture, together with its Affiliates, shall thereafter
constitute Permitted Holders.
Permitted Investments
means:
(i) any Investment in the Company or in a Wholly-Owned Restricted Subsidiary of the
Company; provided, however, that if such Wholly-Owned Restricted Subsidiary is a Special
Purpose Subsidiary, at the time of and after giving effect to such Investment the
Collateral Coverage Ratio must equal or exceed 1.25 to 1.0 and no Default shall have
occurred and be continuing;
21
(ii) any Investment in cash or Cash Equivalents;
(iii) any Investment by the Company or any Subsidiary of the Company in a Person, if
as a result of such Investment (1) such Person becomes a Wholly-Owned Restricted Subsidiary
of the Company and a Guarantor that is engaged in a Related Business or (2) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys substantially all
of its assets to, or is liquidated into, the Company or a Wholly-Owned Restricted
Subsidiary of the Company that is a Guarantor and that is engaged in a Related Business;
(iv) any Investment made as a result of the receipt of non-cash consideration from an
Asset Sale that was made pursuant to and in compliance with Section 4.06;
(v) any acquisition of assets solely in exchange for the issuance of Equity Interests
(other than Disqualified Stock) of the Company;
(vi) any Investment consisting of purchases or other acquisitions of Dealer Loans,
Installment Contracts and leases securing or otherwise relating to Dealer Loans and related
financial assets;
(vii) any Investment existing on the Issue Date;
(viii) loans and advances to officers, directors and employees for payroll,
business-related travel, moving expenses and similar purposes to, and Guarantees issued to
support the obligations of officers, directors and employees, in each case in the ordinary
course of business;
(ix) Hedging Obligations otherwise permitted under this Indenture;
(x) receivables owing to the Company or any Restricted Subsidiary if created or
acquired in the ordinary course of business; cash management investments or liquid or
portfolio securities pledged as collateral in accordance with Section 4.10; and
endorsements for collection or deposit in the ordinary course of business;
(xi) any Investment acquired by the Company or any Restricted Subsidiary (A) in
exchange for any other Investment held by the Company or any Restricted Subsidiary in
connection with or as a result of a bankruptcy, workout, reorganization or recapitalization
of the issuer of such other Investment, (B) as a result of a foreclosure by the Company or
any Restricted Subsidiary with respect to any secured Investment or other transfer of title
with respect to any secured Investment in default or (C) in satisfaction of claims or
judgments; and
(xii) other Investments by the Company or any of its Subsidiaries in any Person (other
than an Affiliate of the Company that is not also a Subsidiary of the Company) that do not
exceed $25,000,000 in the aggregate at any one time
22
outstanding (measured as of the date
made and without giving effect to subsequent changes in value).
Permitted Liens
means:
(i) Liens existing on the Issue Date;
(ii) Liens on Dealer Loans or Purchased Contracts or trust certificates issued to
evidence the residual interest in Dealer Loan Pools or Purchased Contracts, and the
participation therein, and related rights and assets and the proceeds thereof incurred in
connection with Permitted Securitizations;
(iii) Liens for taxes, assessments, charges or other governmental levies not yet due
or as to which the period of grace, if any, related thereto has not expired or which are
being contested in good faith by appropriate proceedings;
provided
,
however
, that, in the
case of contested taxes, adequate reserves with respect thereto are maintained on the books
of the applicable Person in conformity with GAAP;
(iv) statutory Liens such as carriers, warehousemens, mechanics, materialmens,
landlords, repairmens or other like Liens arising in the ordinary course of business that
are not overdue for a period of more than 30 days or which are being contested in good
faith by appropriate proceedings;
(v) pledges or deposits in connection with workers compensation, unemployment
insurance and other social security or welfare legislation and deposits securing liability
to insurance carriers under insurance or self-insurance arrangements;
(vi) easements, rights of way, restrictions, covenants and other similar encumbrances
affecting real property and minor imperfections of title that would not in any case
reasonably be expected to have a material adverse effect on the present or future use of
the property to which it relates or a material adverse effect on the sale or lease of such
property;
(vii) rights of setoff or bankers liens upon deposits of cash in favor of banks or
other depository institutions, including Liens of a collection bank arising under Section
4-210 of the Uniform Commercial Code on items in the course of collection in favor of
banking institutions arising as a matter of law encumbering deposits (including the right
of set-off) within general parameters customary in the banking industry;
(viii) Liens incurred on deposits to secure (1) the performance of tenders, bids,
trade contracts, licenses and leases, fee and expense arrangements with trustees and fiscal
agents, statutory obligations, and other obligations of a like nature incurred in the
ordinary course of business and not in connection with the
23
borrowing of money, or (2)
indemnification obligations entered into in the ordinary course of business relating to any
disposition permitted hereunder;
(ix) Liens securing judgments, awards or orders for the payment of money that do not
constitute an Event of Default pursuant to clause (viii) of the definition thereof;
(x) leases, subleases and other occupancy agreements with respect to real property
owned or leased by the Company or any Restricted Subsidiary not interfering in any material
respect with the business of the Company or any Restricted Subsidiary;
(xi) Permitted Collateral Liens, including Liens created under the Security Documents;
(xii) non-exclusive licenses of patents, trademarks, copyrights, and other
intellectual property rights in the ordinary course of business;
(xiii) Liens in favor of the Company or any Restricted Subsidiary (other than a
Special Purpose Subsidiary);
(xiv) Liens securing any Refinancing Indebtedness which is incurred to Refinance any
Indebtedness that has been secured by a Lien permitted under this Indenture and that has
been incurred in accordance with the provisions of this Indenture;
provided
,
however
, that
such Liens do not extend to or cover any property or assets of the Company or any
Restricted Subsidiary that would not have secured the Indebtedness so Refinanced had such
Indebtedness not been Refinanced;
(xv) Liens securing Acquired Indebtedness incurred in accordance with Section 4.03;
provided
,
however
, that:
(1) such Liens secured such Acquired Indebtedness at the time of and prior to
the incurrence of such Acquired Indebtedness by the Company or a Restricted
Subsidiary and were not granted in connection
with, or in anticipation of, the incurrence of such Acquired Indebtedness by
the Company or a Restricted Subsidiary; and
(2) such Liens do not extend to or cover any property or assets of the Company
or of any Restricted Subsidiary other than the property or assets that secured the
Acquired Indebtedness prior to the time such Indebtedness became Acquired
Indebtedness of the Company or a Restricted Subsidiary and are no more favorable to
the lienholders than those securing the Acquired Indebtedness prior to the
incurrence of such Acquired Indebtedness by the Company or a Restricted Subsidiary
as determined by the management of the Company in their reasonable and good faith
judgment;
24
(xvi) Liens securing performance, bid, appeal, surety and similar bonds and completion
guarantees provided by the Company or any Restricted Subsidiary in the ordinary course of
business;
(xvii) Liens securing Capital Lease Obligations, mortgage financings or purchase money
obligations securing Indebtedness set forth in Section 4.03(b)(xiii);
provided
,
however
,
that any such Lien (A) covers only the assets acquired, constructed or improved with such
Indebtedness and (B) is created within 180 days of such acquisition, construction or
improvement;
(xviii) Liens on property existing at the time of acquisition thereof by the Company
or any Restricted Subsidiary;
provided
,
however
, that such Liens were in existence prior
to, and were not incurred in connection with or in contemplation of, such acquisition and
do not extend to any property other than the property so acquired by the Company or the
Restricted Subsidiary;
(xix) deposits made in the ordinary course of business to secure liability to
insurance carriers;
(xx) Liens on cash or cash equivalents securing permitted Hedging Obligations; or
(xxi) Liens other than any of the foregoing incurred by the Company or any Restricted
Subsidiary with respect to Indebtedness or other obligations that do not, in the aggregate,
exceed the greater of (x) $10,000,000 and (y) 1.0% of Consolidated Total Assets at any one
time outstanding.
Permitted Securitization
means each transfer or encumbrance (each a
disposition
) of (A) specific Dealer Loan Pools (and any interest in and Lien on the
Installment Contracts, motor vehicles, and other rights and financial assets relating thereto) or
specific Purchased Contracts (and any interest in and Lien on motor vehicles and other rights and
financial assets relating thereto), or (B) the trust certificate issued to evidence the residual
interest in Dealer Loan Pools or Purchased Contracts and other financial assets transferred or
encumbered pursuant to a prior Permitted Securitization, in
each case by the Company or one or more Restricted Subsidiaries to one or more Special Purpose
Subsidiaries or by one Special Purpose Subsidiary to another Special Purpose Subsidiary, conducted
in accordance with the following requirements:
(i) each disposition in clause (A) shall identify with reasonable certainty the
specific Dealer Loan Pools or Purchased Contracts, as applicable, covered by such
disposition and (x) such Dealer Loan Pools or Purchased Contracts shall have performance
and other characteristics so that the quality of such Dealer Loan Pools or Purchased
Contracts, as the case may be, is comparable to, but not materially better than, the
overall quality of the Companys Dealer Loan Pools or Purchased Contracts, as applicable,
as determined in good faith by the Company in its reasonable discretion or (y) with respect
to any such assets assigned to an uncapped Dealer Loan Pool subsequent to such Dealer Loan
Pool becoming a
25
securitized pool, the assets covered by such disposition shall have been assigned
to such Dealer Loan Pool in the order in which such assets were originated and without the
exercise of any discretion by the Company;
(ii) the only Indebtedness of the Company or any Restricted Subsidiary resulting from
such disposition shall be Nonrecourse Indebtedness of one or more Special Purpose
Subsidiaries;
(iii) both immediately before and after such disposition, no Default has occurred and
is continuing; and
(iv) at the time of such disposition and after giving
pro forma
effect thereto, the
Collateral Coverage Ratio equals or exceeds 1.25 to 1.0.
Person
means an individual, partnership, corporation, limited liability company,
unincorporated organization, trust, joint venture, or government or any agency or political
subdivision thereof or any other entity.
Preferred Stock
, as applied to the Capital Stock of any Person, means Capital Stock
of any class or classes (however designated) which is preferred as to the payment of dividends or
distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of such Person.
Purchased Contracts
means Installment Contracts purchased by the Company or any of
its Subsidiaries under Outright Dealer Agreements.
Qualified Capital Stock
of a Person means Capital Stock of such Person other than
Disqualified Stock;
provided
,
however
, that such Capital Stock shall not be deemed Qualified
Capital Stock to the extent sold to a Subsidiary of such Person or financed, directly or
indirectly, using funds (i) borrowed from such Person, any Subsidiary of such Person or an employee
stock ownership or benefit plan of such Person or (ii) contributed, extended, guaranteed or
advanced by such Person, any Subsidiary of such Person or an employee stock ownership or benefit
plan of such Person. Unless otherwise specified, Qualified Capital stock refers to Qualified
Capital Stock of the Company.
Receivables
means, without duplication, Dealer Loans Receivable and Purchased
Contracts, excluding any Dealer Loans Receivable or Purchased Contracts encumbered pursuant to a
Permitted Securitization.
Redemption Date
means any date on which some or all of the Notes are to be redeemed
in accordance with Section 3.07.
Refinance
means, in respect of any Indebtedness, to refinance, restructure, extend,
renew, refund, pay, repay, prepay, redeem, defease, discharge or retire, or to issue a security or
Indebtedness in exchange or replacement for, such
26
Indebtedness in whole or in part.
Refinanced
and
Refinancing
shall have
correlative meanings.
Refinancing Indebtedness
means Indebtedness that Refinances any Indebtedness of the
Company or any Restricted Subsidiary existing on the Issue Date or incurred in compliance with this
Indenture, including Indebtedness that Refinances Refinancing Indebtedness;
provided
,
however
,
that:
(i) such Refinancing Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being Refinanced;
(ii) such Refinancing Indebtedness has an Average Life at the time such Refinancing
Indebtedness is Incurred that is equal to or greater than the Average Life of the
Indebtedness being Refinanced;
(iii) such Refinancing Indebtedness has an aggregate principal amount (or if incurred
with original issue discount, an aggregate issue price) that is equal to or less than the
aggregate principal amount (or if incurred with original issue discount, the aggregate
accreted value) then outstanding (plus fees and expenses, including any premium and
defeasance costs) under the Indebtedness being Refinanced; and
(iv) if the Indebtedness being Refinanced is subordinated in right of payment to the
Notes, such Refinancing Indebtedness is subordinated in right of payment to the Notes at
least to the same extent as the Indebtedness being Refinanced;
provided further
,
however
, that Refinancing Indebtedness shall not include (x)
Indebtedness of a Subsidiary that Refinances Indebtedness of the Company or (y) Indebtedness of the
Company or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary.
Registration Rights Agreement
means the Registration Rights Agreement, dated as of
the Issue Date, among the Company, the Guarantors and Credit Suisse Securities (USA) LLC, as
representative of the Initial Purchasers.
Related Business
means any business in which the Company or any of the Restricted
Subsidiaries was engaged on the Issue Date and any business related, ancillary or complementary to
such business.
Replacement Assets
means, in connection with an Asset Sale, properties and assets
that replace the properties and assets that were the subject of such Asset Sale, or properties and
assets that will be used in the business of the Company and the Restricted Subsidiaries as existing
on the Issue Date or in a Related Business, including Capital Stock of a Person primarily engaged
in a Related Business that becomes a Restricted Subsidiary.
27
Restricted Subsidiary
means, at any time, any direct or indirect Subsidiary of the
Company that is not then an Unrestricted Subsidiary;
provided
,
however
, that, upon an Unrestricted
Subsidiary ceasing to be an Unrestricted Subsidiary, such Subsidiary shall, to the extent that it
remains a Subsidiary of the Company at such time, be a Restricted Subsidiary.
S&P
means Standard & Poors, a division of The McGraw-Hill Companies, Inc., and any
successor thereto.
Sale/Leaseback Transaction
means an arrangement relating to property owned by the
Company or a Restricted Subsidiary on the Issue Date or thereafter acquired by the Company or a
Restricted Subsidiary whereby the Company or a Restricted Subsidiary transfers such property to a
Person and the Company or a Restricted Subsidiary substantially concurrently leases it from such
Person.
SEC
means the Securities and Exchange Commission and any successor agency.
Secured Creditors
has the meaning ascribed to Secured Parties in the Intercreditor
Agreement.
Secured Indebtedness
means any Indebtedness secured by a Lien.
Securities Act
means the Securities Act of 1933, as amended.
Securitization
means a public or private transfer of Dealer Loans or Purchased
Contracts in the ordinary course of business and by which the Company or any of the Restricted
Subsidiaries directly or indirectly securitizes a pool of specified Dealer Loans or Purchased
Contracts including any such transaction involving the sale of specified Dealer Loans or Purchased
Contracts to a Special Purpose Subsidiary.
Security Agreement
means the Fourth Amended and Restated Security Agreement, dated
as of the Issue Date, among the Company, the Guarantors and Comerica Bank, as collateral agent, as
amended, restated or otherwise modified from time to time in accordance with its terms and this
Indenture.
Security Documents
means, (i) each Credit Facility Security Document and (ii) all
other agreements or instruments evidencing or creating any security interest or Lien in favor of
the Collateral Agent or Trustee, for the benefit of the Holders, in any or all of the Collateral,
in each case, as amended from time to time in accordance with their respective terms.
Significant Subsidiary
means any Subsidiary that would be a significant subsidiary
as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act,
as such Regulation is in effect from time to time.
28
Special Purpose Subsidiary
means any wholly-owned direct or indirect Subsidiary of
the Company established for the sole purpose of conducting one or more Permitted Securitizations
and otherwise established and operated in accordance with customary industry practices.
Standard Securitization Undertakings
means representations, warranties, covenants,
indemnities and guarantees of performance entered into by the Company or any Subsidiary of the
Company that the Company has determined in good faith to be customary in a Securitization,
including those relating to the servicing of the assets of a Special Purpose Subsidiary.
Stated Maturity
means, with respect to any installment of interest or principal on
any series of Indebtedness, the date on which such payment of interest or principal was scheduled
to be paid in the original documentation governing such Indebtedness, including any date upon which
a repurchase at the option of holders of such Indebtedness is required to be consummated, but
excluding any contingent obligations to repay, redeem or repurchase any such interest or principal
prior to the date originally scheduled for the payment thereof so long as such obligations remain
contingent.
Subordinated Obligation
means, with respect to a Person, any Indebtedness of such
Person (whether outstanding on the Issue Date or thereafter incurred) which is subordinate or
junior in right of payment to the Notes or a Guarantee of such Person, as the case may be, pursuant
to a written agreement to that effect.
Subsidiary
means, with respect to any Person, (i) any corporation, association or
other business entity of which more than 50.0% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly,
by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof)
and (ii) any partnership (1) the sole general partner or the managing general partner of which is
such Person or a Subsidiary of such Person or (2) the only general partners of which are such
Person or one or more Subsidiaries of such Person (or any combination thereof). Unless otherwise
qualified, all references to a Subsidiary or to Subsidiaries in this Indenture shall refer to a
Subsidiary or Subsidiaries of the Company.
TIA
means the Trust Indenture Act of 1939, as amended (15
U.S.C.
§§
77aaa-77bbbb) as in effect on the date of this Indenture.
Treasury Rate
means, as of any Redemption Date, the yield to maturity as of such
Redemption Date of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15 (519) that has become
publicly available at least two Business Days prior to such Redemption Date (or, if such
Statistical Release is no longer published, any publicly available source of similar market data))
most nearly equal to the period from such Redemption Date to February 1, 2014;
provided
,
however
,
that if the period from such
29
Redemption Date to February 1, 2014 is less than one year, the weekly average yield on
actually traded United States Treasury securities adjusted to a constant maturity of one year shall
be used.
Trust Monies
means all cash and Cash Equivalents received by the Trustee (i) upon
the release of Collateral, whether pursuant to an Asset Sale or otherwise; (ii) as compensation for
or proceeds of the sale of all or any part of the Collateral taken by eminent domain or purchased
by or sold pursuant to any order of a governmental authority or otherwise disposed of; (iii) as net
insurance proceeds; and (iv) pursuant to the Security Documents and the Intercreditor Agreement.
Trust Officer
means, when used with respect to the Trustee, any officer within the
corporate trust department of the Trustee, including any vice president, assistant vice president,
assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who
customarily performs functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred because of such
persons knowledge of and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Indenture.
Trustee
means U.S. Bank National Association, a national banking association, as
trustee under this Indenture, until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving as trustee under this
Indenture.
Uniform Commercial Code
means the New York Uniform Commercial Code as in effect from
time to time.
Unrestricted Subsidiary
means (i) any Subsidiary of the Company which at the time of
determination is an Unrestricted Subsidiary (as designated by the Company, as provided below) and
(ii) any Subsidiary of an Unrestricted Subsidiary.
The Company may designate any Restricted Subsidiary (including any newly acquired or newly
formed Subsidiary) of the Company to be an Unrestricted Subsidiary unless such Subsidiary owns any
of the Capital Stock of the Company or any Restricted Subsidiary or owns or holds any Indebtedness
of or Lien on any property of the Company or any Restricted Subsidiary;
provided
,
however
, that
(i) any Guarantee or other credit support by the Company or any Restricted Subsidiary
of any Indebtedness of the Subsidiary being so designated shall be deemed an incurrence of
such Indebtedness and an Investment by the Company or such Restricted Subsidiary at the
time of such designation;
(ii) either (1) the Restricted Subsidiary to be so designated has total assets of
$1,000 or less or (2) if such Subsidiary has assets greater than $1,000, such designation
would be permitted under Section 4.04; and
30
(iii) after giving
pro forma
effect to the incurrence of Indebtedness and the
Investment referred to in clause (i) of this proviso, (1) such Indebtedness would be
permitted to be incurred as Ratio Indebtedness, (2) such Investment would be in compliance
with Section 4.04 and (3) no Default shall have occurred and be continuing.
The Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided
,
however
, that
(i) no Default shall have occurred and be continuing at the time of or after giving
effect to such designation; and
(ii) all Liens and Indebtedness of such Unrestricted Subsidiary outstanding
immediately after such designation would, if incurred at such time, have been permitted to
be incurred (and shall be deemed to have been incurred) for all purposes of this Indenture.
Any such designation by the Company shall be evidenced to the Trustee by promptly filing with
the Trustee an Officers Certificate certifying that such designation complied with the foregoing
provisions.
U.S. Dollar Equivalent
means with respect to any monetary amount in a currency other
than U.S. dollars, at any time for determination thereof, the amount of U.S. dollars obtained by
converting such foreign currency involved in such computation into U.S. dollars at the spot rate
for the purchase of U.S. dollars with the applicable foreign currency as published in
The Wall
Street Journal
in the Exchange Rates column under the heading Currency Trading on the date
two (2) Business Days prior to such determination.
Voting Stock
of any Person as of any date means the Capital Stock of such Person
that (i) if such Person is a corporation, is at the time entitled to vote in the election of such
corporations board of directors or any committee thereof duly authorized to act on behalf of such
board or (ii) if such Person is an entity other than a corporation, is at the time entitled to vote
in the election of the group or individual exercising the authority with respect to such Person
generally vested in a board of directors of a corporation.
Wholly-Owned Restricted Subsidiary
of any Person means a Restricted Subsidiary of
such Person all of the outstanding Capital Stock or other ownership interests of which (other than
directors qualifying shares) shall at the time be owned by such Person or by one or more
Wholly-Owned Restricted Subsidiaries of such Person.
31
SECTION 1.02.
Other Definitions.
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Defined in
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Term
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Section
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Affiliate Transaction
|
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4.07(a)
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Appendix
|
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2.01
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Arms Length Terms
|
|
4.07(a)(i)
|
|
|
|
Asset Sale Offer
|
|
4.06(b)
|
|
|
|
Asset Sale Offer Trigger Date.
|
|
4.06(b)
|
|
|
|
Bankruptcy Law
|
|
6.01(c)
|
|
|
|
Change of Control Offer
|
|
4.09(a)
|
|
|
|
Change of Control Payment
|
|
4.09(a)
|
|
|
|
Change of Control Payment Date
|
|
4.09(a)
|
|
|
|
Company
|
|
Preamble
|
|
|
|
Covenant Defeasance
|
|
8.02(a)
|
|
|
|
Credit Facility Indebtedness
|
|
4.03(b)(i)
|
|
|
|
Custodian
|
|
6.01(c)
|
|
|
|
Definitive Note
|
|
Appendix
|
|
|
|
Event of Default
|
|
6.01(a)
|
|
|
|
Excess Proceeds
|
|
4.06(b)
|
|
|
|
Exchange Notes
|
|
Appendix
|
|
|
|
Guaranteed Obligations
|
|
10.01
|
|
|
|
incur
|
|
4.03(a)
|
|
|
|
Initial Notes
|
|
Appendix
|
|
|
|
Legal Defeasance
|
|
8.02(a)
|
|
|
|
Paying Agent
|
|
2.03
|
32
|
|
|
|
|
Defined in
|
Term
|
|
Section
|
Permitted Indebtedness
|
|
4.03(b)
|
|
|
|
Private Exchange Notes
|
|
Appendix
|
|
|
|
Ratio Indebtedness
|
|
4.03(a)
|
|
|
|
Redemption Date
|
|
3.07(a)
|
|
|
|
Replacement Notes
|
|
Appendix
|
|
|
|
Restricted Payments
|
|
4.04(a)
|
|
|
|
Registrar
|
|
2.03
|
|
|
|
Rule 3-16
|
|
4.12(b)
|
SECTION 1.03.
Incorporation by Reference of Trust Indenture Act.
This Indenture is
subject to the provisions of the TIA, other than TIA §314(d) and TIA §314(b) (which shall not be
applicable to this Indenture unless it is qualified under the TIA), that, pursuant to TIA § 318(c),
govern indentures qualified under the TIA, which provisions (other than TIA §314(d) and TIA
§314(b), which shall not be applicable to this Indenture unless it is qualified under the TIA) are
incorporated by reference in and made a part of this Indenture. The following TIA terms have the
following meanings:
Commission
means the SEC;
indenture securities
means the Notes and the Guarantees;
indenture security holder
means a Holder;
indenture to be qualified
means this Indenture;
indenture trustee
or
institutional trustee
means the Trustee; and
obligor
on the indenture securities means the Company, each Guarantor and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by SEC rule have the meanings assigned to them by such
definitions.
33
SECTION 1.04.
Rules of Construction.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;
(iii) or is not exclusive;
(iv) including means including without limitation;
(v) words in the singular include the plural and words in the plural include
the singular;
(vi) unsecured Indebtedness shall not be deemed to be subordinate or junior to
secured Indebtedness merely by virtue of its nature as unsecured Indebtedness;
(vii) secured Indebtedness shall not be deemed to be subordinate or junior to
any other secured Indebtedness merely because it has a junior priority with respect
to the same collateral;
(viii) the principal amount of any non-interest bearing or other discount
security at any date shall be the principal amount thereof that would be shown on a
balance sheet of the Company dated such date prepared in accordance with GAAP;
(ix) all references to the date the Notes were originally issued shall refer
to the Issue Date;
(x) herein, hereof and other words of similar import refer to this
Indenture as a whole and not to any particular Section, Article or other
subdivision;
(xi) all references to Sections or Articles are to Sections or Articles of or
to this Indenture unless otherwise indicated;
(xii) references to sections of or rules under the Securities Act, the
Exchange Act or the TIA shall be deemed to include substitute, replacement or
successor sections or rules as in effect from time to time; and
(xiii) all references in this Indenture, in any context, to any interest or
other amount payable on or with respect to any Notes shall be deemed to include any
additional interest pursuant to the Applicable Registration Rights Agreement, if
any (as defined in such Notes).
34
ARTICLE II
The Notes
SECTION 2.01.
Form and Dating.
Provisions relating to the Initial Notes and the
Exchange Notes are set forth in the Rule 144A/Regulation S Appendix attached hereto (the
Appendix
) which is hereby incorporated in, and expressly made part of, this Indenture.
The Initial Notes and the Trustees certificate of authentication with respect thereto shall be
substantially in the form of Exhibit I to the Appendix, which Exhibit I is hereby incorporated in,
and expressly made a part of, this Indenture. The Exchange Notes (if any), the Private Exchange
Notes (if any) and any other Notes other than the Initial Notes and the Trustees certificate of
authentication with respect to any such Exchange Notes, Private Exchange Notes or other Notes shall
be substantially in the form of Exhibit II to the Appendix, which is hereby incorporated in and
expressly made a part of this Indenture. The Notes may have notations, legends or endorsements
required by law, stock exchange rule, policies or procedures of any applicable depositary,
agreements to which the Company or any Guarantor is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Company). Each Note shall be
dated the date of its authentication. The terms of the Notes set forth in the Appendix and Exhibit
A are part of the terms of this Indenture.
SECTION 2.02.
Execution and Authentication.
One Officer shall sign the Notes for the
Company by manual or facsimile signature. Notes shall be authenticated by the Trustee in
accordance with Section 2.2 of the Appendix.
If an Officer whose signature is on a Note no longer holds that office at the time the Trustee
authenticates the Note, the Note shall be valid nevertheless.
A Note shall not be valid until an authorized signatory of the Trustee manually signs the
certificate of authentication on the Note. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
The Trustee may appoint an authenticating agent reasonably acceptable to the Company to
authenticate the Notes. Unless limited by the terms of such appointment, an authenticating agent
may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An authenticating agent has
the same rights as any Registrar, Paying Agent or agent for service of notices and demands.
SECTION 2.03.
Registrar and Paying Agent.
The Company shall maintain an office or
agency where Notes may be presented for registration of transfer or for exchange (the
Registrar
) and an office or agency where Notes may be presented for payment (the
Paying Agent
). The Registrar shall keep a register of the Notes and of their transfer
and exchange. The Company may have one or more co-registrars and one or more additional paying
agents. The term Registrar includes any co-registrar, and the term Paying Agent includes any
additional paying agent. The Company may appoint and change any Paying Agent or Registrar without
notice.
35
The Company shall enter into an appropriate agency agreement with any Registrar or Paying
Agent not a party to this Indenture, which shall incorporate the terms of the TIA to the extent
such terms are incorporated in this Indenture. The agreement shall implement the provisions of
this Indenture that relate to such agent. The Company shall notify the Trustee of the name and
address of any such agent. If the Company fails to maintain a Registrar or Paying Agent, the
Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to
Section 7.07. The Company or any Wholly-Owned Restricted Subsidiary of the Company incorporated or
organized within the United States of America may act as Paying Agent or Registrar.
The Company initially appoints the Trustee as Registrar and Paying Agent in connection with
the Notes.
SECTION 2.04.
Paying Agent To Hold Money in Trust.
By no later than 10:00 a.m. (New
York City time) on the date on which any principal, premium, if any, or interest on any Note is due
and payable, the Company shall deposit with the Paying Agent a sum sufficient to pay such
principal, premium, if any, and interest when so becoming due. The Company shall require each
Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust
for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of
principal of or premium, if any, or interest on the Notes and shall notify the Trustee of any
default by the Company in making any such payment. If the Company or a Subsidiary acts as Paying
Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust
fund. The Company at any time may require a Paying Agent to pay all money held by it to the
Trustee and to account for any funds disbursed by the Paying Agent. Upon complying with this
Section, the Paying Agent shall have no further liability for the money delivered to the Trustee.
SECTION 2.05.
Holder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and addresses of Holders.
If the Trustee is not the Registrar, the Company shall furnish to the Trustee, in writing at least
five Business Days before each interest payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the Trustee may reasonably require
of the names and addresses of Holders.
SECTION 2.06.
Transfer and Exchange.
The Notes shall be issued in registered form and
shall be transferable only upon the surrender of a Note for registration of transfer. When a Note
is presented to the Registrar with a request to register a transfer, the Registrar shall register
the transfer as requested if the requirements of this Indenture and Section 8-401(1) of the Uniform
Commercial Code are met. When Notes are presented to the Registrar with a request to exchange them
for an equal principal amount of Notes of other denominations, the Registrar shall make the
exchange as requested if the same requirements are met. The Company is not required to transfer or
exchange any Note selected for redemption (except, in the case of a Note to be redeemed in part,
the portion of the Note not to be redeemed) or any Note for a period of
36
15 days before a selection of Notes to be redeemed or 15 days before an interest payment date.
SECTION 2.07.
Replacement Notes.
If a mutilated Note is surrendered to the Registrar
or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Note in replacement thereof if
the requirements of Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or the Company, such
Holder shall furnish an indemnity bond sufficient in the judgment of the Company and the Trustee to
protect the Company, the Trustee, the Paying Agent and the Registrar from any loss which any of
them may suffer if a Note is replaced. The Company and the Trustee may charge the Holder for their
expenses in replacing a Note.
Every such replacement Note is an additional Obligation of the Company.
SECTION 2.08.
Outstanding Notes.
Notes outstanding at any time are all Notes
authenticated by the Trustee except for those canceled by it, those delivered to it for
cancellation and those described in this Section as not outstanding. A Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee
and the Company receive proof satisfactory to them that the replaced Note is held by a protected
purchaser (as defined in Section 8-303 of the Uniform Commercial Code).
If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a
Redemption Date or maturity date money sufficient to pay all principal, premium, if any, and
interest payable on that date with respect to the Notes (or portions thereof) to be redeemed or
maturing, as the case may be, then on and after that date such Notes (or portions thereof) cease to
be outstanding and interest on them ceases to accrue.
SECTION 2.09.
Temporary Notes.
Until definitive Notes are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the Company considers
appropriate for temporary Notes. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Notes and deliver them in exchange for temporary Notes.
SECTION 2.10.
Cancellation.
The Company at any time may deliver Notes to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else
shall cancel and destroy (subject to the record retention requirements of the Exchange Act) all
Notes surrendered for registration of transfer, exchange, payment or cancellation and deliver a
certificate of such destruction to the Company unless the Company directs the Trustee to deliver
canceled Notes to the
37
Company. The Company may not issue new Notes to replace Notes it has redeemed, paid or
delivered to the Trustee for cancellation.
SECTION 2.11.
Registered Holders.
Notwithstanding anything to the contrary in this
Indenture, the registered Holder of a Note shall be treated as the owner thereof for all purposes,
and no transfer of a Note shall be effective unless entered in the register kept by the Registrar
pursuant to Section 2.03.
SECTION 2.12.
CUSIP Numbers, ISINs, etc.
The Company in issuing the Notes may use
CUSIP numbers, ISINs and Common Code numbers (in each case if then generally in use) and, if so,
the Trustee shall use CUSIP numbers, ISINs and Common Code numbers in notices of redemption as a
convenience to Holders;
provided
,
however
, that any such notice may state that no
representation is made as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not be affected by any
defect in or omission of such numbers. The Company shall advise the Trustee in writing of any
change in any CUSIP numbers, ISINs or Common Code numbers applicable to the Notes.
SECTION 2.13.
Issuance of Additional Notes.
After the Issue Date, the Company shall
be entitled, subject to its compliance with Section 4.03 and Section 4.10, to issue Additional
Notes under this Indenture, which Notes shall have identical terms as the Initial Notes issued on
the Issue Date, other than with respect to the date of issuance and issue price. All the Notes
issued under this Indenture shall be treated as a single class for all purposes of this Indenture,
including waivers, amendments, redemptions and offers to purchase.
With respect to any Additional Notes, the Company shall set forth in a resolution of the Board
of Directors and an Officers Certificate, a copy of each which shall be delivered to the Trustee,
the following information:
(a) the aggregate principal amount of such Additional Notes to be authenticated and delivered
pursuant to this Indenture and the provision of Section 4.03 that the Company is relying on to
issue such Additional Notes; and
(b) the issue price, the issue date and the CUSIP number of such Additional Notes;
provided
,
however
, that no Additional Notes may be issued at a price that would
cause such Additional Notes to not be fungible for U.S. federal income tax purposes with any other
Notes issued under this Indenture.
SECTION 2.14.
Defaulted Interest.
If the Company defaults in a payment of interest on
the Notes, the Company shall pay defaulted interest (plus interest on such defaulted interest to
the extent lawful) in any lawful manner. The Company may pay the defaulted interest to the persons
who are Holders on a subsequent special record date. The Company shall fix or cause to be fixed
any such special record date and payment date to the reasonable satisfaction of the Trustee and
shall promptly mail to each
38
Holder a notice that states the special record date, the payment date and the amount of
defaulted interest to be paid.
ARTICLE III
Redemption
SECTION 3.01.
Notices to Trustee.
If the Company elects to redeem Notes pursuant to
Section 3.07, it shall notify the Trustee in writing of the applicable Redemption Date, the
principal amount of Notes to be redeemed and the paragraph of Section 3.07 pursuant to which the
redemption will occur.
The Company shall give each notice to the Trustee provided for in this Section at least 30
days before the applicable Redemption Date unless the Trustee consents to a shorter period. Such
notice shall be accompanied by an Officers Certificate to the effect that such redemption shall
comply with the conditions herein.
SECTION 3.02.
Selection of Notes to Be Redeemed.
If less than all of the Notes are to
be redeemed at any time, selection of Notes for redemption shall be made by the Trustee in
compliance with the requirements of the principal national securities exchange, if any, on which
the Notes are listed, or, if the Notes are not so listed, on a pro rata basis, by lot or by such
method as the Trustee shall deem fair and appropriate (in any case subject to the rules and
procedures of the applicable depositary);
provided
,
however
, that no Notes of $2,000 or less shall
be redeemed in part. Notes in denominations larger than $2,000 principal amount may be redeemed in
part, but only in whole multiples of $1,000.
SECTION 3.03.
Notice of Redemption.
Notices of redemption shall be mailed by
first-class mail at least 30 but not more than 60 days before the applicable Redemption Date to
each Holder of Notes to be redeemed at its registered address. The Company may provide in such
notice that payment of the redemption price and performance of the Companys obligations with
respect thereto may be performed by another Person. Notices of redemption may not be conditional;
provided
,
however
, that notice of any redemption in connection with a redemption pursuant to
Section 3.07(c) may be given prior to the completion of the related public offering, and any such
redemption or notice may, at the Companys discretion, be subject to one or more conditions
precedent, including completion of the related public offering.
SECTION 3.04.
Effect of Notice of Redemption.
Once notice of redemption is mailed,
Notes called for redemption become due and payable on the Redemption Date and at the redemption
price stated in the notice. Upon surrender to the Paying Agent, such Notes shall be paid at the
redemption price stated in the notice, plus accrued interest to but excluding the applicable
Redemption Date (subject to the right of Holders of record on the relevant record date to receive
interest due on the related interest payment date), and such Notes shall be canceled by the
Trustee. Failure to give notice or any defect in the notice to any Holder shall not affect the
validity of the notice to any other Holder.
39
SECTION 3.05.
Deposit of Redemption Price.
By no later than 10:00 a.m. (New York City
time) on the applicable Redemption Date, the Company shall deposit with the Paying Agent (or, if
the Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest on all Notes to be redeemed on that
date other than Notes or portions of Notes called for redemption which have been delivered by the
Company to the Trustee for cancellation.
SECTION 3.06.
Notes Redeemed in Part.
If any Note is to be redeemed in part only, the
notice of redemption that relates to such Note shall state the portion of the principal amount
thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion thereof
shall be issued in the name of the Holder thereof upon cancellation of the original Note. Notes
called for redemption become due on the applicable Redemption Date. On and after the applicable
Redemption Date, interest ceases to accrue on Notes or portions of them called for redemption.
SECTION 3.07.
Optional Redemption.
(a) At any time and from time to time prior to
February 1, 2014, the Notes may be redeemed at the Companys option, in whole or in part, at a
redemption price equal to 100.0% of the principal amount of the Notes redeemed, plus accrued and
unpaid interest thereon, if any, to but excluding the applicable Redemption Date, subject to the
rights of Holders of Notes on the relevant record date to receive interest due on the relevant
interest payment date, plus the Applicable Premium as of the applicable Redemption Date.
(b) On and after February 1, 2014, the Notes may be redeemed, at the Companys option, in
whole or in part, at any time and from time to time, at the redemption prices set forth below. The
Notes shall be redeemable at the redemption prices (expressed as percentages of principal amount of
the Notes to be redeemed) set forth below plus accrued and unpaid interest thereon, if any, to but
excluding the applicable Redemption Date, subject to the right of Holders of Notes on the relevant
record date to receive interest due on the relevant interest payment date, if redeemed during the
12-month period beginning on February 1 of each of the years indicated below:
|
|
|
|
|
Year
|
|
Percentage
|
|
2014
|
|
|
104.563
|
%
|
2015
|
|
|
102.281
|
%
|
2016 and thereafter
|
|
|
100.000
|
%
|
(c) At any time on or prior to February 1, 2013, the Company may on any one or more occasions
redeem up to an aggregate of 35.0% of the aggregate principal amount of the Notes at a redemption
price of 109.125% of the principal amount of the Notes redeemed, plus accrued and unpaid interest
thereon, if any, to but excluding the
40
applicable Redemption Date, subject to the rights of Holders of Notes on the relevant record
date to receive interest due on the relevant interest payment date, with the Net Cash Proceeds of a
public offering of common stock of the Company;
provided
,
however
, that at least 65.0% in aggregate
principal amount of the Notes remains outstanding immediately after the occurrence of such
redemption and that such redemption shall occur within 90 days of the date of the closing of such
public offering.
(d) If the Redemption Date with respect to a Note to be redeemed is on or after an interest
record date and on or before the related interest payment date, any accrued and unpaid interest on
that Note shall be payable to the Person that was, at the close of business on such record date,
the Holder of that Note, and no additional interest for the period to which that interest record
date relates shall be payable with respect to that Note.
ARTICLE IV
Covenants
SECTION 4.01.
Payment of Notes.
The Company shall promptly pay the principal of and
premium, if any, and interest on the Notes on the dates and in the manner provided in the Notes and
in this Indenture. Principal, premium, if any, and interest shall be considered paid on the date
due if on such date the Trustee or the Paying Agent holds in accordance with this Indenture money
sufficient to pay all principal, premium, if any, and interest then due.
SECTION 4.02.
SEC Reports.
(a) Whether or not the Company is subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company shall file with the
SEC (subject to the next sentence) and provide the Trustee and Holders with such annual and other
reports as are specified in Sections 13 and 15(d) of the Exchange Act and applicable to a U.S.
corporation subject to such Sections, such reports to be so filed and provided at the times
specified for the filings of such reports under such Sections and containing all the information,
audit reports and exhibits required for such reports. If, at any time, the Company is not subject
to the periodic reporting requirements of the Exchange Act for any reason, the Company shall
provide the Trustee and Holders with such reports within the time periods specified in such
Exchange Act sections for a registrant that is not an accelerated filer or a large accelerated
filer;
provided
,
however
, that
(i) no certifications or attestations concerning the financial statements or
disclosure controls and procedures or internal controls that would otherwise be
required pursuant to the Sarbanes-Oxley Act of 2002 shall be required (
provided
further
, however, that nothing contained in the terms herein shall otherwise
require the Company to comply with the terms of the Sarbanes-Oxley Act of 2002 at
any time when it would not otherwise be subject to such statute);
41
(ii) the financial statements required of acquired businesses shall be limited
to the financial statements (in whatever form) that the Company receives in
connection with the applicable acquisition, whether or not audited;
(iii) no financial statements of unconsolidated entities shall be required;
(iv) no financial schedules specified in Regulation S-X under the Securities
Act shall be required;
(v) the Company may limit the information disclosed in such reports in respect
of Item 402 of Regulation S-K under the Securities Act to the information
identified in Item 402 that is included other than through incorporation by
reference in this offering circular (which disclosure regarding such types of
information shall be presented in a manner consistent in all material respects with
the disclosure so contained in this offering circular);
(vi) compliance with the requirements of Item 10(e) of Regulation S-K and
Regulation G under the Securities Act shall not be required (but the Company shall
provide a reconciliation to any non-GAAP financial measures as defined in
Regulation G under the Securities Act);
(vii) information specified in Rules 3-10 and 3-16 of Regulation S-X under the
Securities Act with respect to Subsidiaries and affiliates shall not be required;
and
(viii) no exhibits pursuant to Item 601 of Regulation S-K under the Securities
Act (other than in respect of instruments defining the rights of security holders
to the extent such instruments would be required to be filed by paragraph (b)(4) of
such Item 601 and material contracts to the extent such contracts would be required
to be filed by paragraph (b)(10) of such Item 601) shall be required;
provided
,
however
, that contracts required to be filed only by either or both of paragraph
(b)(10)(ii)(A) and paragraph (b)(10)(iii) of such Item 601 shall not be required.
(b) For so long as any Notes remain outstanding, the Company and the Guarantors shall furnish
to the Holders and to prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(c) For so long as the Company files the foregoing reports and other information with the SEC,
the Company shall be deemed to have provided to the Trustee and Holders all of the foregoing
reports and other information if the Company has filed or furnished such reports and other
information with the SEC via the EDGAR filing system or any successor electronic filing system and
such reports are publicly available.
42
For the administrative convenience of the Trustee, the Company shall send an electronic copy
of each such filing to the Trustee at such e-mail address as the Trustee may specify from time to
time in accordance with the notice provisions of the Indenture;
provided
,
however
, that failure to
send any such electronic copies will not constitute a Default.
SECTION 4.03.
Limitation on Indebtedness.
(a) The Company shall not and shall not
permit any Restricted Subsidiary to, directly or indirectly, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with
respect to (collectively,
incur
) any Indebtedness unless, on the date of such incurrence
and after giving effect thereto on a
pro forma
basis, the Fixed Charge Coverage Ratio exceeds 2.0
to 1.0 (any Indebtedness incurred pursuant to this Section 4.03(a) being herein referred to as
Ratio Indebtedness
).
(b) Section 4.03(a) shall not apply to the incurrence of any of the following items of
Indebtedness (collectively,
Permitted Indebtedness
):
(i) Indebtedness incurred pursuant to any Credit Facility, including the
Guarantees thereof by the Guarantors, in an aggregate amount outstanding at any
time not to exceed $200,000,000 (any Indebtedness incurred pursuant to the
provisions set forth in this clause (i) being herein referred to as
Credit
Facility Indebtedness
);
(ii) Indebtedness represented by the Notes issued on the Issue Date and the
related Notes Guarantees;
(iii) Nonrecourse Indebtedness incurred by a Special Purpose Subsidiary under
a Permitted Securitization and any Refinancing Indebtedness with respect thereto
that is Nonrecourse Indebtedness;
(iv) Indebtedness of the Company or any Restricted Subsidiary existing on the
Issue Date (other than Indebtedness set forth in clauses (i), (ii) and (iii) of
this Section 4.03(b));
(v) Refinancing Indebtedness incurred by the Company or any Restricted
Subsidiaries to Refinance any Indebtedness that was incurred as Ratio Indebtedness
or as Permitted Indebtedness pursuant to clause (ii), (iv), (v) or (xiv) of this
Section 4.03(b);
(vi) Indebtedness owing to and held by the Company or any Restricted
Subsidiaries;
provided
,
however
, that (A) if the Company or the Guarantor is the
obligor on such Indebtedness, such Indebtedness is expressly subordinated to the
prior payment in full in cash of all Notes Obligations and (B)(1) any subsequent
issuance or transfer of Equity Interests that results in any such Indebtedness
being owed to or held by a Person other than the Company or a Restricted Subsidiary
and (2) any sale or other transfer of any such Indebtedness to a Person that is
neither the Company nor a Restricted Subsidiary shall be deemed, in each case, to
43
constitute an incurrence of such Indebtedness by the Company or such
Restricted Subsidiary, as the case may be, that was not permitted by the provisions
set forth in this clause (vi);
(vii) Hedging Obligations incurred in the ordinary course of business and not
for speculative purposes;
(viii) Guarantees of the Notes and Guarantees of Indebtedness that was
incurred as Ratio Indebtedness or as Permitted Indebtedness pursuant to clause (v)
(to the extent the Refinanced Indebtedness was so guaranteed), (vii), (ix), (x),
(xi), (xiii), (xv) or (xvi) of this Section 4.03(b);
provided
,
however
, that if the
Indebtedness being Guaranteed is subordinated in right of payment to the Notes or a
Notes Guarantee, then such Guarantee shall be subordinated in right of payment to
the Notes or such Notes Guarantee to the same extent as the Indebtedness
guaranteed;
(ix) Indebtedness constituting reimbursement obligations with respect to
letters of credit issued in the ordinary course of business, including letters of
credit in respect of workers compensation claims, health, disability or other
employee benefits or property, casualty or liability insurance or self-insurance,
or other Indebtedness with respect to obligations in the nature of reimbursement
obligations regarding workers compensation claims;
(x) Indebtedness arising from agreements of the Company or any Restricted
Subsidiary providing for indemnification, adjustment of purchase price or similar
obligations, in each case incurred in connection with the disposition of any
business, assets or a Subsidiary;
(xi) obligations in respect of performance, bid, appeal, surety and similar
bonds and completion guarantees provided by the Company or any Restricted
Subsidiary in the ordinary course of business;
(xii) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business;
provided
,
however
, that such Indebtedness
is extinguished within five Business Days of its incurrence;
(xiii) Indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations, in each case incurred for the purpose of
financing all or any part of the purchase price or cost of construction or
improvement of property, plant or equipment used or useful in a Related Business
(where, in the case of a purchase, such purchase may be effected either directly or
through the purchase of the Capital Stock of the Person owning such property, plant
or equipment),
44
and any Indebtedness incurred to Refinance such Indebtedness, in an aggregate
amount at any time outstanding not in excess of $10,000,000;
(xiv) Acquired Indebtedness;
provided
,
however
, that, after giving effect to
the merger or acquisition giving rise to the incurrence thereof, immediately after
such merger or acquisition either (x) the Company would be permitted to incur at
least $1.00 of additional Ratio Indebtedness pursuant to Section 4.03(a) or (y) the
Fixed Charge Coverage Ratio would be greater than the Fixed Charge Coverage Ratio
immediately prior to such acquisition or merger;
(xv) Indebtedness to the extent the net proceeds thereof are promptly used to
purchase Notes tendered pursuant to a Change of Control Offer made as a result of a
Change of Control; and
(xvi) additional Indebtedness of the Company or any Restricted Subsidiaries in
an aggregate amount at any time outstanding not in excess of the greater of (x)
$25,000,000 and (y) 2.5% of Consolidated Total Assets.
(c) The Company shall not, and shall not permit any Guarantor to, incur any Indebtedness that
is contractually subordinated to any Indebtedness of the Company or such Guarantor unless such
Indebtedness is also contractually subordinated to the Notes or the Notes Guarantee of such
Guarantor (as applicable) on substantially identical terms;
provided
,
however
, that no Indebtedness
shall be deemed to be contractually subordinated to any other Indebtedness solely by virtue of
being unsecured or having a junior security interest in shared collateral.
(d) For purposes of determining compliance with this Section 4.03,
(i) in the event that an item of Indebtedness meets the criteria of more than
one of the categories of Permitted Indebtedness set forth in Section 4.03(b) or is
entitled to be incurred as Ratio Indebtedness, the Company shall, in its sole
discretion, classify such item of Indebtedness (or any portion thereof) in any
manner that complies with this Section 4.03, and such item of Indebtedness (or any
portion thereof) shall be treated as having been incurred pursuant to the
provisions set forth in only one of such clauses or pursuant to Section 4.03(a);
provided
,
however
, that all Indebtedness outstanding under the Credit Agreement on
the Issue Date shall be deemed to have been incurred as Permitted Indebtedness
pursuant to Section 4.03(b)(i) and the Notes issued on the Issue Date shall be
deemed to have been incurred as Permitted Indebtedness pursuant to Section
4.03(b)(ii);
(ii) the Company shall be entitled to divide and classify an item of
Indebtedness in more than one of the types of Indebtedness set forth above; and
45
(iii) any Permitted Indebtedness originally classified as incurred pursuant to
the provisions set forth in one of the clauses of Section 4.03(b) (other than
pursuant to clause (i), (ii) or (iii) of Section 4.03(b)) may later be reclassified
by the Company such that it shall be deemed to have been incurred as Ratio
Indebtedness pursuant to Section 4.03(a) or as Permitted Indebtedness pursuant to
another clause of Section 4.03(b), as applicable, to the extent that such
reclassified Indebtedness could be incurred pursuant to such paragraph or clause at
the time of such reclassification.
(e) Accrual of interest, the accretion of accreted value, the payment of interest or dividends
in the form of additional Indebtedness of the same instrument, accretion of original issue discount
or liquidation preference and increases in the amount of Indebtedness outstanding solely as a
result of fluctuations in interest rates or in the exchange rate of currencies shall not be deemed
to be an incurrence of Indebtedness for purposes of this Indenture. Guarantees of, or obligations
in respect of letters of credit relating to, Indebtedness that is otherwise included in the
determination of a particular amount of Indebtedness shall not be included in the determination of
such amount of Indebtedness;
provided
,
however
, that the incurrence of the Indebtedness underlying
such Guarantee or letter of credit, as the case may be, was subject to and in compliance with this
Section 4.03.
(f) For purposes of determining compliance with any U.S. dollar restriction on the incurrence
of Indebtedness where the Indebtedness incurred is denominated in a different currency, the amount
of such Indebtedness shall be the U.S. Dollar Equivalent determined on the date of the incurrence
of such Indebtedness;
provided
,
however
, that if any such Indebtedness denominated in a different
currency is subject to a currency agreement with respect to U.S. dollars covering all principal,
premium, if any, and interest payable on such Indebtedness, the amount of such Indebtedness
expressed in U.S. dollars shall be as provided in such currency agreement. The maximum amount of
Indebtedness that the Company and the Restricted Subsidiaries may incur pursuant to this Section
4.03 shall not be deemed to be exceeded, with respect to any outstanding Indebtedness, solely as a
result of fluctuations in interest rates or the exchange rate of currencies.
SECTION 4.04.
Limitation on Restricted Payments.
(a) The Company shall not, and
shall not permit any Restricted Subsidiary to, directly or indirectly,
(i) declare or pay any dividends or make any other distributions of any sort
in respect of its Capital Stock (including any payment in connection with any
merger or consolidation involving such Person) or similar payment to the direct or
indirect holders of its Capital Stock (other than (A) dividends or distributions
payable solely in its Capital Stock (other than Disqualified Stock), (B) dividends
or distributions payable solely to the Company or a Restricted Subsidiary and (C)
pro
rata
dividends or other distributions made by a Subsidiary that
is not a Wholly-Owned Restricted Subsidiary to minority stockholders (or owners of
46
minority interests in the case of a Subsidiary that is an entity other than a
corporation));
(ii) purchase, repurchase, redeem, defease or make any other acquisition or
retirement for value of any Capital Stock of the Company held by any Person (other
than by a Restricted Subsidiary) or of any Capital Stock of a Restricted Subsidiary
held by any Affiliate of the Company (other than by a Restricted Subsidiary),
including in connection with any merger or consolidation and including the exercise
of any option to exchange any Capital Stock (other than into Capital Stock of the
Company that is not Disqualified Stock);
(iii) purchase, repurchase, redeem, defease or make any other acquisition or
retirement for value, prior to scheduled maturity, scheduled repayment, principal
installment or scheduled sinking fund payment of any Subordinated Obligations of
the Company or any Guarantor (other than (A) from the Company or a Restricted
Subsidiary or (B) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement of Subordinated Obligations purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity, in
each case due within one year of the date of such purchase, repurchase, redemption,
defeasance or other acquisition or retirement); or
(iv) make any Investment (other than a Permitted Investment) in any Person,
(all such payments and other actions set forth in clauses (i) through (iv) of this Section 4.04(a)
being collectively referred to as
Restricted Payments
) unless, at the time of and after
giving effect to such Restricted Payment:
(1) no Default shall have occurred and be continuing (or would result
therefrom);
(2) the Company is entitled to Incur an additional $1.00 of Ratio
Indebtedness pursuant to Section 4.03(a); and
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments since the Issue Date would not exceed the sum of
(without duplication):
(A) 100.0% of the Consolidated Net Income accrued during the
period (treated as one accounting period) from October 1, 2009 to
the end of the most recent fiscal quarter ending immediately prior
to the date of such Restricted Payment (or, in case such
Consolidated Net Income shall be a deficit, minus 100.0% of such
deficit);
plus
47
(B) 100.0% of the aggregate Net Cash Proceeds or Fair Market
Value of any asset (other than cash) received by the Company
either (x) from the issuance or sale of its Qualified Capital
Stock subsequent to the Issue Date or (y) as a contribution in
respect of its Qualified Capital Stock from its shareholders
subsequent to the Issue Date, but excluding in each case any Net
Cash Proceeds that are used to redeem Notes in accordance with
Section 3.07(c);
plus
(C) the amount by which the principal amount of Indebtedness
of the Company (other than Indebtedness owing to a Subsidiary) is
reduced upon the conversion or exchange subsequent to the Issue
Date of any Indebtedness of the Company converted or exchanged for
Qualified Capital Stock of the Company (less the amount of any
cash, or the fair value of any other property, distributed by the
Company upon such conversion or exchange);
provided
,
however
, that
the foregoing amount shall not exceed the gross proceeds (prior to
fees and transaction expenses) received by the Company or any
Restricted Subsidiary from the sale of such Indebtedness
(excluding such gross proceeds from sales to a Subsidiary of the
Company or to an employee stock ownership or benefit plan of the
Company or any of its Subsidiaries);
plus
(D) an amount equal to the sum of (x) the aggregate amount of
cash and the Fair Market Value of any asset (other than cash)
received by the Company or any Restricted Subsidiary subsequent to
the Issue Date with respect to Investments (other than Permitted
Investments) made by the Company or any Restricted Subsidiary in
any Person subsequent to the Issue Date and resulting from
repurchases, repayments, liquidations or redemptions of such
Investments by such Person, proceeds realized on the sale of such
Investment and proceeds representing the return of capital, and
(y) in the event that the Company redesignates an Unrestricted
Subsidiary to be a Restricted Subsidiary, the portion
(proportionate to the Companys equity interest in such
Subsidiary) of the Fair Market Value of the net assets of such
Unrestricted Subsidiary at the time such Unrestricted Subsidiary
is designated a Restricted Subsidiary;
provided
,
however
, that the foregoing sum shall not exceed, in the
case of any such Person or Unrestricted Subsidiary, the amount of
Investments (excluding Permitted Investments) previously made by
the Company
48
or any Restricted Subsidiary in such Person or Unrestricted
Subsidiary.
(b) The foregoing provisions shall not prohibit:
(i) any Restricted Payment made out of the Net Cash Proceeds of the
substantially concurrent sale of, or made in exchange for, Qualified Capital Stock
of the Company or a substantially concurrent cash capital contribution received by
the Company from its shareholders with respect to its Qualified Capital Stock;
provided
,
however
, that (A) such Restricted Payment shall be excluded in the
calculation of the amount of Restricted Payments and (B) the Net Cash Proceeds from
such sale or such cash capital contribution (to the extent so used for such
Restricted Payment) shall be excluded from the calculation of amounts under Section
4.04(a)(3)(B);
(ii) any purchase, repurchase, redemption, defeasance or other acquisition or
retirement for value of Subordinated Obligations of the Company or of a Guarantor
made in exchange for, or out of the proceeds of the substantially concurrent
incurrence of, Indebtedness of such Person which is permitted to be incurred
pursuant to Section 4.03;
provided
,
however
, that such purchase, repurchase,
redemption, defeasance or other acquisition or retirement for value shall be
excluded in the calculation of the amount of Restricted Payments;
(iii) the payment of any dividend, distribution or redemption of any Capital
Stock or Subordinated Indebtedness within 60 days after the date of declaration
thereof or call for redemption if, at such date of declaration or call for
redemption, such payment or redemption was permitted by Section 4.04(a) (the
declaration of such payment shall be deemed a Restricted Payment under Section
4.04(a) as of the date of declaration and the payment itself shall be deemed to
have been paid on such date of declaration and shall not also be deemed a
Restricted Payment under Section 4.04(a));
provided
,
however
, that any Restricted
Payment made in reliance on the provisions set forth in this clause (iii) shall
reduce the amount available for Restricted Payments pursuant to Section 4.04(a)(3)
only once;
(iv) so long as no Default has occurred and is continuing, the purchase,
redemption or other acquisition of shares of Capital Stock of the Company or any of
its Subsidiaries from officers, former officers, employees, former employees,
directors or former directors of the Company or any of its Subsidiaries (or
permitted transferees of such officers, former officers, employees, former
employees, directors or former directors), pursuant to the terms of agreements
(including employment agreements) or plans (or amendments thereto) approved by
49
the Board of Directors under which such individuals purchase or sell or are
granted, or are granted the option to purchase or sell, shares of such Capital
Stock;
provided
,
however
, that the aggregate amount of such Restricted Payments
(excluding amounts representing cancellation of Indebtedness) shall not exceed
$5,000,000 in any calendar year (with unused amounts in any calendar year being
carried over to the succeeding calendar years subject to a maximum of $10,000,000
in any calendar year);
provided further
,
however
, that such
Restricted Payments shall be excluded in the calculation of the amount of
Restricted Payments;
(v) the declaration and payments of dividends on Disqualified Stock issued
pursuant to Section 4.03;
provided
,
however
, that such dividends shall be excluded
in the calculation of the amount of Restricted Payments;
(vi) repurchases of Capital Stock deemed to occur upon exercise of stock
options if such Capital Stock represents a portion of the exercise price of such
options; p
rovided
,
however
, that such Restricted Payments shall be excluded in the
calculation of the amount of Restricted Payments;
(vii) cash payments in lieu of the issuance of fractional shares in connection
with the exercise of warrants, options or other securities convertible into or
exchangeable for Capital Stock of the Company;
provided
,
however
, that any such
cash payment shall not be for the purpose of evading the limitation of this Section
4.04 (as determined in good faith by the Board of Directors);
provided
further
,
however
, that such payments shall be excluded in the
calculation of the amount of Restricted Payments;
(viii) in the event of a Change of Control, and if no Default shall have
occurred and be continuing, the payment, purchase, redemption, defeasance,
discharge, cash-collateralization or other acquisition or retirement of
Subordinated Obligations of the Company or any Guarantor, in each case, at a
purchase price not greater than 101.0% of the principal amount of such Subordinated
Obligations, plus any accrued and unpaid interest thereon;
provided
,
however
, that
prior to such payment, purchase, redemption, defeasance, discharge,
cash-collateralization or other acquisition or retirement, the Company (or a third
party to the extent permitted by this Indenture) has made a Change of Control Offer
with respect to the Notes as a result of such Change of Control and has repurchased
(or deposited with the Trustee funds sufficient to repurchase) all Notes validly
tendered and not withdrawn in connection with such Change of Control Offer;
provided further
,
however
, that such payments, purchases,
redemptions, defeasances, discharges, cash-collateralizations or other acquisitions
or retirements shall be included in the calculation of the amount of Restricted
Payments;
50
(ix) payments of intercompany subordinated Permitted Indebtedness, the
incurrence of which was permitted by Section 4.03(b)(vi);
provided
,
however
, with
respect to payments other than to the Company or a Guarantor, that no Default has
occurred and is continuing or would otherwise result therefrom;
provided
further
,
however
, that such payments shall be excluded in the
calculation of the amount of Restricted Payment; or
(x) other Restricted Payments in an amount which, when taken together with all
other Restricted Payments made pursuant to this clause (x), does not exceed
$225,000,000;
provided
,
however
, that such Restricted Payment shall be excluded in
the calculation of the amount of Restricted Payments.
(c) The amount of all Restricted Payments (other than cash) shall be the Fair Market Value on
the date of the Restricted Payment of the assets (other than cash) proposed to be transferred. In
the event that a Restricted Payment meets the criteria of more than one of the exceptions set forth
in clauses (i) through (x) of Section 4.04(b) or is permitted to be made by Section 4.04(a), the
Company, in its sole discretion, may divide and classify such Restricted Payment in any manner that
complies with this Section 4.04.
SECTION 4.05.
Dividend and Other Payment Restrictions Affecting Subsidiaries.
The
Company shall not, and shall not permit any Restricted Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on
the ability of any Restricted Subsidiary to:
(i) (A) pay dividends or make any other distributions to the Company or any
Restricted Subsidiaries on its Capital Stock or with respect to any other interest
or participation in, or measured by, its profits, or (B) pay any Indebtedness owed
to the Company or any Restricted Subsidiaries,
(ii) make loans or advances to the Company or any Restricted Subsidiaries, or
(iii) transfer any of its properties or assets to the Company or any
Restricted Subsidiaries,
except, in each case, for such encumbrances or restrictions existing under or by reason of:
(1) this Indenture, the Notes and the Security Documents;
(2) agreements existing on the Issue Date to the extent and in the
manner such agreements are in effect on the Issue Date, including the
Credit Agreement;
(3) applicable law;
51
(4) any instrument governing Acquired Indebtedness or Capital Stock
of a Person acquired by the Company or any Restricted Subsidiary as in
effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person,
or the property or assets of the Person, so acquired;
provided
,
however
,
that, in the case of an instrument governing Acquired Indebtedness, such
Indebtedness was permitted by the terms of this Indenture to be incurred;
(5) customary non-assignment provisions in leases entered into in the
ordinary course of business and consistent with past practices;
(6) purchase money obligations for property or assets acquired in the
ordinary course of business that impose restrictions of the nature set
forth in clause (iii) of this Section 4.05 on the property or assets so
acquired;
(7) any encumbrance or restriction in an agreement effecting a
Refinancing of Indebtedness incurred pursuant to an agreement referred to
in clause (1), (2) or (4) of this Section 4.05 or this clause (7) or
contained in any amendment to an agreement enumerated in such clause (1),
(2) or (4) or this clause (7);
provided
,
however
, that the encumbrances
and restrictions contained in any such refinancing agreement or amendment
are not materially less favorable to the Company (as determined by the
Board of Directors in its reasonable and good faith judgment) than
encumbrances and restrictions contained in such predecessor agreements;
(8) the requirements of any Permitted Securitization that are
exclusively applicable to any bankruptcy remote Special Purpose Subsidiary
formed in connection therewith;
(9) the requirements of any Standard Securitization Undertakings;
(10) in the case of clause (iii) of this Section 4.05, restrictions
contained in security agreements or mortgages securing Indebtedness of a
Restricted Subsidiary to the extent such restrictions restrict the
transfer of the property subject to the Liens created thereby, or to the
extent not constituting Collateral, the Capital Stock of the Person whose
assets consist, directly or indirectly, primarily of the real property
securing such
52
Indebtedness;
provided
,
however
, that such Liens were otherwise
permitted to be incurred under this Indenture;
(11) restrictions with respect to any Investment imposed in
connection with the making of such Investment;
(12) any restriction with respect to a Restricted Subsidiary imposed
pursuant to an agreement entered into for the sale or disposition of all
or substantially all of the Capital Stock or assets of such Restricted
Subsidiary pending the closing of such sale or disposition; or
(13) assignment provisions and provisions with respect to the
distribution of assets or property or joint venture or partnership
interests in joint venture or partnership agreements and other similar
agreements entered into in the ordinary course of business that are
customary for such agreements;
provided
,
however
, that such provisions in
the aggregate, in the opinion of the management of the Company, do not
materially and adversely affect the ability of the Company to make
principal or interest payments on the Notes.
SECTION 4.06.
Limitation on Asset Sales.
(a) The Company shall not, and shall not
permit any Restricted Subsidiary to, consummate an Asset Sale unless:
(i) the Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the Fair Market
Value of the assets or Equity Interests issued or sold or otherwise disposed of;
(ii) at least 75.0% of the consideration therefor received by the Company or
such Restricted Subsidiary is in the form of cash or Cash Equivalents;
provided
,
however
, that, for purposes of the provisions set forth in this clause (ii) and for
no other purpose, the amount of (1) any liabilities (as shown on the Companys or
such Restricted Subsidiarys most recent balance sheet) of the Company or any
Restricted Subsidiary (other than contingent liabilities and liabilities that are
by their terms subordinated to the Notes or any Guarantee thereof) that are (x)
secured by such assets on a basis that is prior to or ratable with the Notes or (y)
that are unsecured so long as the subject assets do not constitute Collateral, that
are, in either case, assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Company or such Restricted
Subsidiary from further liability, (2) any securities, notes or other obligations
received by the Company or any such Restricted Subsidiary from such transferee that
are converted by the Company or any Restricted Subsidiary into cash or Cash
Equivalents within 180 days of receipt, to the extent of the cash or Cash
Equivalents received and (3) the
53
Fair Market Value of any property or assets received (including any Capital
Stock of any Person that shall be a Restricted Subsidiary following receipt
thereof) that are used or useful in any Related Business (
provided
,
however
, that,
except for Excluded Property, to the extent that the assets or rights disposed of
in such Asset Sale constituted Collateral, such property or assets are pledged as
Collateral under the Security Documents substantially contemporaneously with such
receipt) shall be deemed to be cash;
(iii) to the extent of any Net Cash Proceeds received by the Company or any
Restricted Subsidiary from an Asset Sale:
(1) the Company or any Restricted Subsidiary may use such Net Cash
Proceeds (A) to prepay or otherwise pay or repay, purchase, redeem,
defease, discharge, cash-collateralize or otherwise acquire or retire any
Credit Facility Indebtedness and Permitted Future Secured Indebtedness
then outstanding or any other Indebtedness secured by a Permitted
Collateral Lien or (B) to acquire property or assets that, upon
acquisition thereof, constitute Collateral;
(2) any of such Net Cash Proceeds not required to be delivered to the
Trustee pursuant to Section 4.06(a)(iii)(3) and not already used as
permitted by Section 4.06(a)(iii)(1) may be applied by the Company or any
Restricted Subsidiary within 365 days of receipt thereof as follows:
(x) to prepay or otherwise pay or repay, purchase, redeem,
defease, discharge, cash-collateralize or otherwise acquire or
retire any Credit Facility Indebtedness or prepay or otherwise pay
or repay, purchase, redeem, defease, discharge, cash-collateralize
or otherwise acquire or retire other Indebtedness of the Company
or any of the Restricted Subsidiaries;
(y) to make an investment in Replacement Assets; or
(z) to make a combination of prepayment or other payment or
repayment, purchase, redemption, defeasance, discharge,
cash-collateralization or other acquisition or retirement and
investment permitted by the provisions set forth in the foregoing
clauses (x) and (y); and
(3) if such Asset Sale resulted in the receipt of Net Cash Proceeds
from a disposition of Collateral (x) such Net Cash Proceeds shall, to the
extent of the amount, if any, thereof in
54
excess of the aggregate amount of Net Cash Proceeds from such Asset
Sale applied as set forth in the immediately-preceding clauses (1) and
(2), be delivered promptly to the Trustee for application in accordance
with the provisions set forth in the immediately-succeeding clause (y) and
(y) an Asset Sale Offer Trigger Date shall be deemed to have occurred and
the Company shall be required to make an Asset Sale Offer with such Net
Cash Proceeds delivered to the Trustee in accordance with this Section
4.06; and
(iv) if such Asset Sale involves a disposition of Collateral by the Company or
a Guarantor, at the time of such Asset Sale and after giving
pro forma
effect
thereto, the Collateral Coverage Ratio would equal or exceed 1.25 to 1.0.
(b) On (i) in the case of Net Cash Proceeds to which Section 4.06(a)(iii)(2) applies, the
366th day after receipt thereof or (ii) in the case of Net Cash Proceeds to which Section
4.06(a)(iii)(3) applies, the date on which an Asset Sale Offer Trigger Date is deemed to have
occurred (each, an
Asset Sale Offer Trigger Date
), such aggregate amount of Net Cash
Proceeds which have not been applied on or before such Asset Sale Offer Trigger Date as permitted
or as required by Section 4.06(a) (such amount being
Excess Proceeds
), shall be applied
by the Company or one or more Restricted Subsidiaries to make an offer to purchase (the
Asset
Sale Offer
) to all Holders on a date not less than 30 nor more than 60 days following the
applicable Asset Sale Offer Trigger Date, from all Holders on a pro rata basis, that amount of
Notes equal to the applicable Excess Proceeds (minus any federal, state, provincial, foreign and
local taxes payable as a result of the transfer or deemed transfer of funds from the entity that
made the Asset Sale to the entity that is making such Asset Sale Offer) at a price equal to 100.0%
of the principal amount of the Notes to be purchased, plus accrued and unpaid interest thereon, if
any, to but excluding the date of purchase;
provided
,
however
, that if at any time any non-cash
consideration received by the Company or any Restricted Subsidiary, as the case may be, in
connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other
than interest received with respect to any such non-cash consideration), then, solely for purposes
of the definition of Net Cash Proceeds, such conversion or disposition shall be deemed to
constitute an Asset Sale, and the Net Cash Proceeds thereof shall be applied in accordance with the
provisions of this Section 4.06 governing the application of the Net Cash Proceeds from an Asset
Sale. If Holders do not tender Notes in an aggregate principal amount at least equal to the
applicable Excess Proceeds for purchase in connection with any Asset Sale Offer, the Company and
the Restricted Subsidiaries may use the portion of the Excess Proceeds not used to purchase Notes
for any purpose not prohibited by this Indenture. Upon completion of each Asset Sale Offer, the
Excess Proceeds shall be reduced by the amount of the Asset Sale Offer. Notwithstanding the
occurrence of an Asset Sale Offer Trigger Date, the Company and the Restricted Subsidiaries may
defer the Asset Sale Offer until there is an aggregate unutilized Excess Proceeds of at least
$25,000,000 resulting from one or more Asset Sales (at which time, the entire unutilized Excess
Proceeds, and not
55
just the amount in excess of $25,000,000, shall be applied as required pursuant to this
Section 4.06).
If the date on which a Note is purchased pursuant to an Asset Sale Offer is on or after an
interest record date and on or before the related interest payment date, any accrued and unpaid
interest on that Note shall be paid to the Person that was, at the close of business on such record
date, the Holder of that Note, and no additional interest for the period to which that interest
record date relates shall be payable, with respect to that Note, to the Person who tendered that
Note pursuant to the Asset Sale Offer.
(c) In the event of the transfer of substantially all (but not all) of the property and assets
of the Company and the Restricted Subsidiaries as an entirety in a transaction permitted under
Section 5.01 to a Person who assumes all the obligations of the Company under the Notes and this
Indenture in accordance with Section 5.01(a)(ii), which transaction does not constitute a Change of
Control, such Person shall be deemed to have consummated an Asset Sale of the properties and assets
of the Company and the Restricted Subsidiaries not so transferred for an amount of cash equal to
the Fair Market Value of such properties and assets and such Person shall be deemed to have
received Net Cash Proceeds therefrom in an amount equal to such Fair Market Value and shall be
required to apply cash in such amount in accordance with the provisions of this Section 4.06
governing the application of the Net Cash Proceeds from an Asset Sale as if such cash constituted
Net Cash Proceeds from an Asset Sale;
provided
,
however
, that such Person shall not be deemed to
have consummated an Asset Sale with respect to (A) any Hedging Obligations not so transferred and
(B) any properties and assets as to which such deemed Asset Sale would consist of an actual or
deemed surrender or waiver of contract rights or a settlement, release or surrender of contract,
tort or other claims of any kind;
provided further
,
however
, that such Person shall
not be deemed to have consummated an Asset Sale except to the extent that the properties and assets
of the Company and the Restricted Subsidiaries not so transferred, excluding properties and assets
set forth in the immediately-preceding clauses (A) and (B), exceed $10,000,000 in Fair Market
Value.
(d) Each Asset Sale Offer shall be mailed to the record Holders as shown on the register of
Holders within 30 days following the Asset Sale Offer Trigger Date, with a copy to the Trustee, and
shall comply with the procedures set forth in this Indenture. Upon receiving notice of the Asset
Sale Offer, Holders may elect to tender their Notes in whole or in part in integral multiples of
$1,000 in exchange for cash. To the extent Holders properly tender Notes in an amount exceeding
the Excess Proceeds, the tendered Notes shall be purchased on a pro rata basis based on the amount
of Notes tendered. An Asset Sale Offer shall remain open for a period of 20 business days or such
longer period as may be required by law.
The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or
56
regulations conflict with the requirements of this Section 4.06, the Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under such covenant by virtue thereof.
(e) The Company shall not, and shall not permit any Guarantor to, sell, convey, transfer,
lease, assign or otherwise transfer any of the Collateral other than in accordance with the
Security Documents.
SECTION 4.07.
Limitation on Affiliate Transactions.
(a) The Company shall not, and
shall not permit any Restricted Subsidiary to, enter into, or be a party to, any transaction or
series of related transactions with any Affiliate of the Company or such Restricted Subsidiary
(other than the Company or a Restricted Subsidiary) (each, an
Affiliate Transaction
),
except for Affiliate Transactions:
(i) pursuant to terms that, taken as a whole, are not materially less
favorable to the Company or such Restricted Subsidiary than would be obtained in a
comparable arms length transaction with a Person that is not an Affiliate
(
Arms Length Terms
); or
(ii) (1) involving aggregate consideration less than or equal to $15,000,000
and on Arms Length Terms,
(2) involving aggregate consideration in an amount less than or equal
to $30,000,000 and determined by the disinterested members of the Board of
Directors to be on Arms Length Terms, or
(3) where the Board of Directors has received a written opinion from
an Independent Qualified Party to the effect that the terms of such
Affiliate Transaction are fair, from a financial point
of view, to the Company or such Restricted Subsidiary or constitute
Arms Length Terms.
(b) Section 4.07(a) shall not apply to the following:
(A) any employment, consulting, service, indemnification, termination
or severance agreement or compensation plan or arrangement entered into by
the Company or any Restricted Subsidiary, and the transactions customarily
provided for by any such agreement, plan or arrangement;
(B) reasonable compensation (including bonuses) and other benefits
(including retirement, health, stock option and other benefit plans and
transactions contemplated thereby) for directors, officers, employees and
consultants of the Company and its Subsidiaries;
57
(C) transactions between or among the Company and/or any Restricted
Subsidiaries;
(D) any transaction with any non-Affiliate that becomes an Affiliate
as a result of such transaction;
(E) (x) any agreement existing on the Issue Date, as in effect on the
Issue Date, or as modified, amended, amended and restated, supplemented or
replaced so long as the terms of such agreement as modified, amended,
amended and restated, supplemented or replaced, taken as a whole, are not
materially more disadvantageous to the Company and the Restricted
Subsidiaries, taken as a whole, than the terms of such agreement as in
effect on the Issue Date, as determined in good faith by the Board of
Directors, and (y) any transaction contemplated by any such agreement;
(F) loans or advances to employees or consultants in the ordinary
course of business or approved by the Board of Directors, but in any event
not to exceed $2,000,000 in the aggregate outstanding at any one time, and
cancellation or forgiveness or modification of the terms of such loans or
advances;
(G) the issuance or sale of any Equity Interests (other than
Disqualified Stock) of the Company;
(H) (x) the making of dealer loans, and the effecting of transactions
with respect to such dealer loans, in the ordinary course of business and
on substantially the same basis as that on which the Company and its
Subsidiaries make dealer loans to non-Affiliate dealer-partners and engage in transactions with respect to
such dealer loans, and (y) other transactions with customers, clients,
joint-venture partners, suppliers or purchasers or sellers of goods or
services, in each case in the ordinary course of business, which are fair
to the Company and the Restricted Subsidiaries in the reasonable
determination of the Company or are on terms not materially less
favorable, taken as a whole, to the Company and the Restricted
Subsidiaries than might reasonably have been obtained from a
non-Affiliate;
(I) transactions with a Person that is an Affiliate of the Company or
a Restricted Subsidiary solely because the Company directly or indirectly
owns Equity Interests in, or controls, such Affiliate, other than
transactions with Unrestricted Subsidiaries;
(J) the transfer of Dealer Loans or Purchased Contracts and trust
certificates issued to evidence the residual interest in Dealer
58
Loan Pools or Purchased Contracts or outright purchases of Installment Contracts, and
the participation therein, and related rights and assets in connection
with any Permitted Securitization, and any other transaction effected in
the ordinary course as part of a Permitted Securitization;
(K) the making of any Restricted Payment permitted pursuant to
Section 4.04;
(L) the provision of management, financial and operational services
by the Company or any Restricted Subsidiary to Unrestricted Subsidiaries
or joint ventures on terms that are determined by the Board of Directors
to be fair to the Company or such Restricted Subsidiary;
(M) any transaction with an Affiliate where the only consideration
paid by the Company or any Restricted Subsidiary consists of Equity
Interests (other than Disqualified Stock) of the Company; and
(N) any transaction between a Special Purpose Subsidiary and any
Person that is an Affiliate of such Special Purpose Subsidiary solely
because such Special Purpose Subsidiary directly or indirectly owns Equity
Interests in, or controls, such Affiliate.
SECTION 4.08.
Limitation on Line of Business.
The Company shall not, and shall not
permit any Restricted Subsidiary to, engage in any business other than Related Businesses, except
to such extent as would not be material to the Company and its Subsidiaries taken as a whole.
SECTION 4.09.
Change of Control.
(a) Upon the occurrence of a Change of Control,
each Holder of Notes shall have the right to require the Company to repurchase all or any part
(equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holders Notes
pursuant to the offer set forth below (the
Change of Control Offer
) at an offer price
equal to 101.0% of the aggregate principal amount of such Holders Notes to be purchased plus
accrued and unpaid interest thereon, if any, to but excluding the date of purchase (the
Change
of Control Payment
). Within 30 days following any Change of Control, the Company shall mail a
notice to each Holder and to the Trustee (for the purposes of notice) describing the transaction or
transactions that constitute the Change of Control and offering to repurchase Notes on the date
specified in such notice, which date shall be no earlier than 30 days and no later than 60 days
from the date such notice is mailed (the
Change of Control Payment Date
), pursuant to the
procedures required by this Indenture and set forth in such notice. If the Change of Control
Payment Date with respect to a Note is on or after an interest record date and on or before the
related interest payment date, any accrued and unpaid interest on that Note shall be paid to the
Person that was, at the close of business on such record date, the Holder of that Note, and the
Change of Control Payment with respect to that Note for the
59
period to which that interest record date relates shall not include accrued and unpaid interest thereon. The Company shall comply with
the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection with the repurchase
of the Notes as a result of a Change of Control.
(b) On the Change of Control Payment Date, the Company shall, to the extent lawful, (i) accept
for payment all Notes or portions thereof properly tendered pursuant to the Change of Control
Offer, (ii) deposit with the Paying Agent an amount equal to the Change of Control Payment in
respect of all Notes or portions thereof so tendered and (iii) deliver or cause to be delivered to
the Trustee the Notes so accepted together with an Officers Certificate stating the aggregate
principal amount of Notes or portions thereof being purchased by the Company. The Paying Agent
shall promptly mail to each Holder of Notes so tendered the Change of Control Payment for such
Notes, and the Trustee shall promptly authenticate and mail (or cause to be transferred by book
entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any;
provided
,
however
, that each such new Note shall be in a principal amount of
$2,000 or an integral multiple of $1,000 in excess thereof. The Company shall publicly announce
the results of the Change of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
(c) The Company shall not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the times and
otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of
Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under
such Change of Control Offer.
SECTION 4.10.
Limitation on Liens.
The Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, create, incur, assume or
otherwise cause or suffer to exist or become effective any Lien of any kind upon any of their
assets, now owned or hereafter acquired, other than:
(i) in the case of any asset that does not constitute Collateral, Permitted
Liens;
provided
,
however
, that any Lien on such asset shall be permitted
notwithstanding that it is not a Permitted Lien if all payments due under this
Indenture and the Notes are secured on an equal and ratable basis with the
obligations so secured until such time as such obligations are no longer secured by
a Lien; and
(ii) in the case of any asset that constitutes Collateral, Permitted
Collateral Liens.
In the case of the proviso in clause (i) of this Section 4.10, if the obligations so secured
are expressly subordinated by their terms to the Notes, the Lien securing such obligations shall
also be so subordinated by its terms at least to the same extent.
60
SECTION 4.11.
Additional Guarantors.
If any of the Companys Restricted Subsidiaries
that is not a Guarantor issues a Guarantee of, or grants a security interest in any of its assets
to secure, any Obligations secured by the Collateral, then the Company shall cause such Restricted
Subsidiary to:
(i) execute and deliver a supplemental indenture providing for such Restricted
Subsidiarys Notes Guarantee on the terms set forth in Article X and execute and
deliver such documentation
mutatis mutandis
with respect to collateral as shall be
necessary to provide for Liens on such Restricted Subsidiarys assets constituting
Collateral to secure such Notes Guarantee on the terms set forth in the Security
Documents and Article X; and
(ii) deliver to the Trustee an opinion of counsel that such Notes Guarantee
has been duly authorized, executed and delivered by such Restricted Subsidiary and
constitutes a legal, valid, binding and enforceable obligation of such Restricted
Subsidiary, in each case subject to customary qualifications.
Thereafter, such Restricted Subsidiary shall be a Guarantor for all purposes of this Indenture
until released from its Notes Guarantee in accordance with this Indenture.
SECTION 4.12.
Impairment of Security Interest.
(a) The Company shall not, and shall
not permit any Restricted Subsidiary to, take, or knowingly omit to take, any action, which action
or omission would have the effect of causing a Lien to be created in favor of any of the Secured
Creditors other than the Notes Secured Creditors on any property or assets of the type that would
constitute Collateral unless a Lien exists or is created in favor of the Collateral Agent for the
benefit of the Notes Secured Creditors with respect to such property or assets. Such Lien in favor of the Collateral Agent
for the benefit of the Notes Secured Creditors shall at all times be in accordance with any
applicable provisions of this Indenture and the Security Documents.
(b) Notwithstanding Section 4.12(a),
(i) the Capital Stock and other securities of any Subsidiary of the Company
that are owned by the Company or any Guarantor and that otherwise constitute
Collateral shall constitute Collateral for the benefit of the Notes Secured
Creditors only to the extent that such Capital Stock and other securities can
secure the Notes without Rule 3-16 of Regulation S-X under the Securities Act (or
any other law, rule or regulation) (
Rule 3-16
) requiring separate
financial statements of such Subsidiary to be filed with the SEC (or any other
governmental agency);
(ii) in the event that Rule 3-16 requires or is amended, modified or
interpreted by the SEC to require (or is replaced with another rule or regulation,
or any other law, rule or regulation is adopted, which would
61
require) the filing with the SEC (or any other governmental agency) of separate financial statements of
any Subsidiary of the Company due to the fact that such Subsidiarys Capital Stock
and other securities secure the Notes, the performance of the Notes Obligations or
any Notes Guarantee, then the Capital Stock and other securities of such Subsidiary
shall automatically be deemed not to be part of the Collateral for the benefit of
the Notes Secured Creditors, but only to the extent necessary to not be subject to
such requirement (and, in such event, the Security Documents may be amended or
modified, without the consent of any Holder of the Notes, to the extent necessary
to release the first-priority security interests in the shares of Capital Stock and
other securities that are so deemed to no longer constitute part of the
Collateral); and
(iii) in the event that Rule 3-16 is amended, modified or interpreted by the
SEC to permit (or is replaced with another rule or regulation, or any other law,
rule or regulation is adopted, which would permit) such Subsidiarys Capital Stock
and other securities to secure the Notes in excess of the amount then pledged
without the filing with the SEC (or any other governmental agency) of separate
financial statements of such Subsidiary, then the Capital Stock and other
securities of such Subsidiary shall automatically be deemed to be a part of the
Collateral for the benefit of the Notes Secured Creditors but only to the extent
necessary to not be subject to any such financial statement requirement (and, in
such event, the Security Documents may be amended or modified, without the consent
of any Holder of the Notes, to the extent necessary to subject to the Liens under
the Security Documents such additional Capital Stock and other securities).
(c) The Company shall not, and shall not permit any Restricted Subsidiary to, take, or
knowingly omit to take, any action that would have the result of materially impairing the security
interest with respect to the Collateral (it being understood that Permitted Securitizations,
Restricted Payments permitted under Section 4.04, Asset Sales permitted under Section 4.06, other
dispositions of assets in the ordinary course of business and the incurrence of Permitted
Collateral Liens will be deemed not to materially impair the security with respect to the Collateral) for the benefit of the Notes
Secured Creditors, and the Company shall not, and shall not permit any Restricted Subsidiary to,
grant to any person other than the Collateral Agent, for the benefit of the Secured Creditors, any
interest whatsoever in any of the Collateral, except that the Company and any Restricted Subsidiary
may incur Permitted Collateral Liens, and the Collateral and the Liens thereon may be discharged
and released in accordance with this Indenture, the Security Documents and the Intercreditor
Agreement.
SECTION 4.13.
Limitation on Investment Company Status.
The Company and its
Subsidiaries shall not take any action, or otherwise permit to exist any circumstances, that would
require the Company to register as an investment company under the Investment Company Act of
1940, as amended.
62
SECTION 4.14.
Maintenance of Financial Ratios.
The Company shall:
(i) maintain, as of the end of each fiscal quarter, a Funded Debt Ratio that
does not exceed 3.25 to 1.0;
(ii) maintain, at all times, a Collateral Coverage Ratio that equals or
exceeds 1.25 to 1.0; and
(iii) (x) provide to the Trustee, within (A) 45 days after and as of the end
of each fiscal quarter, excluding the last quarter, of each fiscal year and (B)
within 90 days after and as of the end of each fiscal year, an Officers
Certificate substantially similar in detail to that which is required to be
provided to the lenders under the Credit Agreement attesting to compliance with the
maintenance requirements described in clauses (i) and (ii) above at the end of or
during such fiscal quarter or fiscal year, as applicable, and (y) either make such
certificate publicly available on the Companys website or publicly file such
certificate with the SEC via the EDGAR filing system or any successor electronic
filing system.
SECTION 4.15.
Further Instruments and Acts.
Upon request of the Trustee, the Company
shall execute and deliver such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this Indenture.
ARTICLE V
Successor Company
SECTION 5.01.
When Company May Merge or Transfer Assets.
(a) The Company shall not
consolidate or merge with or into (whether or not the Company is the surviving corporation), or
sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions to, another Person unless:
(i) the Company is the surviving corporation or the Person formed by or
surviving any such consolidation or merger (if other than the Company) or to which
such sale, assignment, transfer, lease, conveyance or other disposition shall have
been made is organized or existing under the laws of the United States, any state
thereof or the District of Columbia;
(ii) the Person formed by or surviving any such consolidation or merger (if
other than the Company) or the Person to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made assumes all the
obligations of the Company under the Notes and this Indenture pursuant to a
supplemental indenture in a form reasonably satisfactory to the Trustee;
63
(iii) except in the case of a merger or consolidation of the Company with or
into a Wholly-Owned Restricted Subsidiary of the Company, immediately before and
after such transaction no Default has occurred and is continuing; and
(iv) except in the case of a merger or consolidation of the Company with or
into a Wholly-Owned Restricted Subsidiary of the Company, the Company or the Person
formed by or surviving any such consolidation or merger (if other than the
Company), or to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made shall, at the time of such transaction and after
giving
pro forma
effect thereto as if such transaction had occurred at the end of
the applicable fiscal quarter, either (A) be permitted to incur at least $1.00 of
additional Ratio Indebtedness pursuant to Section 4.03(a) or (B) have a Fixed
Charge Coverage Ratio no less than that of the Company at such time without giving
such
pro forma
effect thereto.
Upon the consummation of any transaction effected in accordance with this Section 5.01(a), if the
Company is not the continuing Person, the resulting, surviving or transferee Person shall succeed
to, and be substituted for, and may exercise every right and power of, the Company under this
Indenture and the Notes with the same effect as if such successor Person had been named as the
Company in this Indenture. Upon such substitution the Company, except in the case of a lease,
shall be released from its obligations under this Indenture, the Notes and the Security Documents.
(b) Each Guarantor (other than any Guarantor whose Notes Guarantee is to be released in
accordance with the terms of the Notes Guarantee and this Indenture in connection with any
transaction complying with Section 4.06) shall not, and the Company shall not cause or permit any
such Guarantor to, consolidate with or merge with or into any Person other than the Company or
another Guarantor unless:
(i) the Person formed by or surviving any such consolidation or merger or to
which such sale, assignment, transfer, lease, conveyance or other disposition shall have been made is organized and existing under the
laws of the United States, any State thereof or the District of Columbia;
(ii) the Person formed by or surviving any such consolidation or merger or to
which such sale, assignment, transfer, lease, conveyance or other disposition shall
have been made assumes all of the obligations of the applicable Guarantor under its
Notes Guarantee;
(iii) immediately before and after giving effect to such transaction, no
Default has occurred and is continuing; and
(iv) except in the case of a merger or consolidation of a Guarantor with or
into a Wholly-Owned Restricted Subsidiary of the Company, immediately after giving
effect to such transaction and the use of any net
64
proceeds therefrom on a
pro forma
basis, the Company could satisfy Section 5.01(a)(iv).
(c) The following additional conditions shall apply to each transaction set forth in Sections
5.01(a) and 5.01(b):
(i) the Company, the Guarantor or the relevant surviving entity, as
applicable, shall cause such amendments or other instruments to be filed and
recorded in such jurisdictions as may be required by applicable law to preserve and
protect the Lien of the Security Documents on the Collateral owned by or
transferred to such Person, together with such financing statements as may be
required to perfect any security interests in such Collateral which may be
perfected by the filing of a financing statement under the Uniform Commercial Code
of the relevant states;
(ii) the Collateral owned by or transferred to the Company, the Guarantor or
the relevant surviving entity, as applicable, shall
(1) continue to constitute Collateral under the Security Documents
and this Indenture;
(2) be subject to the Lien in favor of the Collateral Agent for the
benefit of Secured Creditors (to the extent that such Lien is not
prohibited by any related Acquired Indebtedness that is secured by such
assets); and
(3) not be subject to any Lien other than Liens permitted by the
Security Documents and this Indenture;
(iii) the assets of the Person which is merged or consolidated with or into
the relevant surviving entity, to the extent that they are assets of the types
which would constitute Collateral under the Security Documents and which would be
required to be pledged thereunder, shall be treated as after acquired property and such surviving entity shall take such action as may be
reasonably necessary to cause such assets to be made subject to the Lien of the
Security Documents in the manner and to the extent required in the Security
Documents and this Indenture; and
(iv) the Company shall have delivered to the Trustee an Officers Certificate
and an Opinion of Counsel, each stating that such transaction and, if a
supplemental indenture is required in connection with such transaction, such
supplemental indenture comply with the applicable provisions of this Indenture and,
with respect to the Officers Certificate only, that all conditions precedent in
this Indenture relating to such transaction have been satisfied and, with respect
to the Opinion of Counsel only, that such supplemental indenture and Security
Documents are enforceable, subject to customary qualifications;
65
provided
,
however
, that clauses (iii) and (iv) of each of Sections 5.01(a) and 5.01(b) shall not be
applicable to the Company or a Restricted Subsidiary merging with an Affiliate of the Company
solely for the purpose of reincorporating the Company or such Restricted Subsidiary in another
permitted jurisdiction.
ARTICLE VI
Defaults and Remedies
SECTION 6.01.
Events of Default.
(a) Each of the following constitutes an
Event
of Default
:
(i) default in the payment when due of interest on the Notes, which default
continues for 30 consecutive days;
(ii) default in payment of the principal of or premium, if any, on the Notes
when due, at Stated Maturity, upon optional redemption, upon required repurchase or
otherwise;
(iii) default by the Company in the performance of its obligations under
Section 5.01(a);
(iv) default by the Company in the performance of its obligations under
Section 4.14 that continues for 60 consecutive days after the Company first becomes
aware of such default;
(v) the Company defaults in the performance of or breaches any other covenant
or agreement of the Company in this Indenture, the Security Documents or any other
collateral agreement or under the Notes (other than a default specified in clause
(i), (ii), (iii) or (iv) above), and such default or breach continues for a period
of 60 consecutive days after written notice by the Trustee to the Company or by the
holders of 25.0% or more in aggregate principal amount of the Notes to the Company (with a copy
to the Trustee);
(vi) (A) failure by the Company or any Restricted Subsidiary (other than a
Special Purpose Subsidiary with respect to Nonrecourse Indebtedness) to make a
principal payment on any Indebtedness at or prior to the expiration of the
applicable grace period after the final (but not any interim) fixed maturity of
such Indebtedness, where the amount of such unpaid principal exceeds $25,000,000 or
(B) acceleration of Indebtedness of the Company or any Restricted Subsidiary (other
than Nonrecourse Indebtedness of a Special Purpose Subsidiary) because of a default
thereunder, where the total amount of such Indebtedness accelerated exceeds
$25,000,000;
66
(vii) one or more judgments, orders, decrees or arbitration awards are
entered against the Company or any Restricted Subsidiaries involving in the
aggregate a liability (to the extent not paid when due or covered by insurance) of
$25,000,000 or more and all such judgments, orders, decrees or arbitration awards
have not been paid and satisfied, vacated, discharged, stayed or fully bonded
pending appeal within 90 days from the entry thereof;
(viii) except as permitted by this Indenture, any Notes Guarantee of a
Significant Subsidiary of the Company, or the Notes Guarantees of a group of
Guarantors that, taken together, would constitute a Significant Subsidiary of the
Company, is held in a judicial proceeding to be unenforceable or invalid or ceases
for any reason to be in full force and effect or any Guarantor, or any Person
acting on behalf of any Guarantor, denies or disaffirms its obligations under its
Notes Guarantee;
(ix) the Company or any of its Significant Subsidiaries or any group of
Subsidiaries of the Company that, taken together, would constitute a Significant
Subsidiary of the Company pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an
involuntary case;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property and assets; or
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to insolvency;
(x) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(A) is for relief against the Company or any of its Significant
Subsidiaries or any group of Subsidiaries of the
Company that, taken together, would constitute a Significant
Subsidiary of the Company in an involuntary case;
(B) appoints a Custodian of the Company or any of its Significant
Subsidiaries or any group of Subsidiaries of the Company that, taken
together, would constitute a Significant Subsidiary of the Company or for
any substantial part of the
67
property and assets of the Company, any of its
Significant Subsidiaries or any group of Subsidiaries of the Company that,
taken together, would constitute a Significant Subsidiary of the Company;
or
(C) orders the winding up or liquidation of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries of the Company that,
taken together, would constitute a Significant Subsidiary of the Company;
and the order or decree remains unstayed and in effect for 60 consecutive days or
any similar relief is granted under any foreign laws and the order or decree
remains unstayed and in effect for 60 consecutive days; and
(xi) (1) default by the Company in the performance of the Security Documents
which adversely affects the enforceability, validity, perfection or priority of the
Collateral Agents Lien on the Collateral in any material respect, (2) repudiation
or disaffirmation by the Company or any Restricted Subsidiary of its obligations
under the Security Documents or (3) the determination in a judicial proceeding that
the Security Documents are unenforceable or invalid against the Company or any
Restricted Subsidiary that is (or any group of Restricted Subsidiaries that would
constitute) a Significant Subsidiary of the Company for any reason except to the
extent any such unenforceability or invalidity caused by the failure of the
Collateral Agent to make filings, renewals and continuations (or other equivalent
filings) which the Company has indicated in the perfection certificate delivered to
the Collateral Agent are required to be made or the failure of the Collateral Agent
to maintain possession of certificates actually delivered to it representing
securities pledged under the Security Documents.
(b) The foregoing will constitute Events of Default whatever the reason for any such Event of
Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body.
(c) The term
Bankruptcy Law
means Title 11 of the United States Code, or any
similar federal or state law for the relief of debtors. The term
Custodian
means any
receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.
SECTION 6.02.
Acceleration
. If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25.0% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately. Notwithstanding the foregoing, in the
case of an Event of Default arising under clauses (ix) and (x) of Section 6.01(a), all outstanding
Notes shall become due and payable without further action or notice. Holders of the Notes may not
enforce this Indenture or
68
the Notes except as provided in this Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes
notice of any continuing Default (except a Default relating to the payment of principal, premium,
if any, or interest) if it determines that withholding notice is in their interest.
In the event of a declaration of acceleration because an Event of Default set forth in clause
(vi) of Section 6.01(a) has occurred and is continuing, such declaration of acceleration shall be
automatically rescinded and annulled if the event of default triggering such Event of Default
pursuant to such clause (vi) shall be remedied or cured by the Company or the relevant Restricted
Subsidiary or waived by the holders of the relevant Indebtedness within 30 days after the
declaration of acceleration with respect thereto.
SECTION 6.03.
Waiver of Past Defaults.
The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the
Holders of all of the Notes waive any existing Default and its consequences under this Indenture
except (i) a continuing Default in the payment of interest or premium, if any, on or the principal
of, the Notes or (ii) a Default in respect of a provision that under Section 9.02(b) cannot be
amended or waived without consent of the Holders of at least 66
2
/
3
% in aggregate principal amount of
Notes then outstanding.
SECTION 6.04.
Other Remedies.
If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy to collect the payment of principal of or premium, if any,
or interest on the Notes or to enforce the performance of any provision of the Notes or this
Indenture.
The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not
produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in
exercising any right or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive
of any other remedy. All available remedies are cumulative.
SECTION 6.05.
Compliance Certificate.
(a) The Company shall deliver to the Trustee
within 120 days after the end of each fiscal year of the Company an Officers Certificate (for
which one of the certifying Officers shall be the Companys principal executive officer, principal
financial officer or principal accounting officer) stating that in the course of the performance by
the signers of their duties as Officers of the Company they would normally have knowledge of any
Default and whether or not the
signers know of any Default that occurred during such period. If they do, the certificate
shall describe the Default, its status and what action the Company is taking or proposes to take
with respect thereto.
(b) The Company shall deliver to the Trustee, within 30 days after the occurrence thereof,
written notice in the form of an Officers Certificate of any Event of Default under clause (iii),
(vi), (vii), (viii) or (xi) of Section 6.01(a) and any event which
69
with the giving of notice or the
lapse of time would become an Event of Default under clause (v) of Section 6.01(a), its status and
what action the Company is taking or proposes to take with respect thereto.
(c) The Company shall deliver to the Trustee, within 30 days after an Officer becomes aware
of the occurrence thereof, written notice in the form of an Officers Certificate of any event
which with the lapse of time would become an Event of Default under clause (iv) of Section 6.01(a),
its status and what action the Company is taking or proposes to take with respect thereto.
SECTION 6.06.
Control by Majority.
The Holders of a majority in principal amount of
the Notes may direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to the rights of other
Holders or would involve the Trustee in personal liability;
provided
,
however
, that
the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with
such direction. Prior to taking any action hereunder, the Trustee shall be entitled to
indemnification satisfactory to it in its sole discretion against all losses and expenses caused by
taking or not taking such action.
SECTION 6.07.
Limitation on Suits.
Except to enforce the right to receive payment of
principal, premium, if any, or interest when due, no Holder may pursue any remedy with respect to
this Indenture or the Notes unless:
(a) the Holder gives to the Trustee written notice stating that an Event of Default
is continuing;
(b) the Holders of at least 25.0% in principal amount of the Notes make a written
request to the Trustee to pursue the remedy;
(c) such Holder or Holders offer to the Trustee security or indemnity satisfactory to
the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after receipt of the
request and the offer of security or indemnity; and
(e) the Holders of a majority in principal amount of the Notes do not give the
Trustee a direction inconsistent with the request during such 60-day period.
A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a
preference or priority over another Holder. In the event that Definitive Notes are not issued to
any owner of a beneficial interest in a Global Note at a time at which such beneficial owner has a
right to receive such Definitive Notes pursuant to this Indenture, the Company expressly agrees and
acknowledges that (1) such beneficial owner shall have standing to pursue a remedy pursuant to this
Indenture to
70
compel the issuance of such Definitive Notes to such beneficial owner and to compel
the registration of such Definitive Notes in the name of such beneficial owner in the register
maintained by the Registrar with respect to the Notes and (2) such beneficial owner shall be
entitled, pending such issuance and registration, to sue for payment (which payment shall only be
made following such issuance and registration) of the monetary obligation to be represented by such
Definitive Notes. The Company agrees that specific performance is an appropriate form for the
remedy referenced in clause (1) of the immediately-preceding sentence and shall not object to such
form of such remedy.
SECTION 6.08.
Rights of Holders to Receive Payment.
Notwithstanding any other
provision of this Indenture, the right of any Holder to receive payment of principal of or premium,
if any, or interest on the Notes held by such Holder, on or after the respective due dates
expressed in the Notes, or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.09.
Collection Suit by Trustee.
If an Event of Default specified in
clauses (i) or (ii) of Section 6.01(a) occurs and is continuing, the Trustee may recover judgment
in its own name and as trustee of an express trust against the Company for the whole amount then
due and owing (together with interest on any unpaid interest to the extent lawful) and the amounts
provided for in Section 7.07.
SECTION 6.10.
Trustee May File Proofs of Claim.
The Trustee may file such proofs of
claim and other papers or documents as may be necessary or advisable in order to have the claims of
the Trustee and the Holders allowed in any judicial proceedings relative to the Company or any
Guarantor, its creditors or its property and, unless prohibited by law or applicable regulations,
may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person
performing similar functions, and any Custodian in any such judicial proceeding is hereby
authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the Trustee any amount
due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its
agents and its counsel, and any other amounts due to the Trustee under Section 7.07.
SECTION 6.11.
Priorities.
If the Trustee collects any money or property pursuant to
this Article VI, it shall pay out the money or property in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to the Holders for amounts due and unpaid on the Notes for principal,
premium, if any, and interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Notes for principal,
premium, if any, and interest, respectively; and
THIRD: to the Company or, to the extent the Trustee collects any amount for any
Guarantor, to such Guarantor.
71
The Trustee may fix a record date and payment date for any payment to the Holders pursuant to
this Section 6.11. At least 15 days before such record date, the Trustee shall mail to each Holder
and the Company a notice that states the record date, the payment date and amount to be paid.
SECTION 6.12.
Undertaking for Costs.
In any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party litigant in the suit
of an undertaking to pay the costs of the suit, and the court in its discretion may assess
reasonable costs, including reasonable attorneys fees, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to
Section 6.08 or a suit by Holders of more than 10.0% in aggregate principal amount of the Notes.
SECTION 6.13.
Waiver of Stay or Extension Laws.
The Company (to the extent it may
lawfully do so) shall not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this Indenture; and the
Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage
of any such law, and shall not hinder, delay or impede the execution of any power herein granted to
the Trustee, but shall suffer and permit the execution of every such power as though no such law
had been enacted.
ARTICLE VII
Trustee
SECTION 7.01.
Duties of Trustee.
(a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use
the same degree of care and skill in their exercise as a prudent man would exercise or use under
the circumstances in the conduct his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, the Trustee shall
examine the certificates and opinions to
72
determine whether or not they conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this Section;
(ii) the Trustee shall not be liable for any error of judgment made in good
faith by a Trust Officer unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by it pursuant
to Section 6.06.
(d) Every provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received by it except as the
Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from other funds except to the
extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(h) Every provision of this Indenture relating to the conduct or affecting the liability of
or affording protection to the Trustee shall be subject to the provisions of this Section and to
the provisions of the TIA.
SECTION 7.02.
Rights of Trustee.
(a) The Trustee may rely on any document believed
by it to be genuine and to have been signed or presented by the proper person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an Officers Certificate
or an Opinion of Counsel. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on the Officers Certificate or
Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for the misconduct or
negligence of any agent appointed with due care.
73
(d) The Trustee shall not be liable for any action it takes or omits to take in good faith
which it believes to be authorized or within its rights or powers;
provided
,
however
, that the Trustees conduct does not constitute willful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion of counsel with respect
to legal matters relating to this Indenture and the Notes shall be full and complete authorization
and protection from liability in respect to any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.
(f) The Trustee shall be under no obligation to exercise any of its rights or powers under
this Indenture at the request of any Holder of Notes, unless such Holder shall have offered to the
Trustee security and indemnity satisfactory to it against any loss, liability or expense.
(g) The Trustee shall not be deemed to have knowledge of any Default or Event of Default
except (i) during any period it is serving as Registrar and Paying Agent for the Notes, any Event
of Default occurring pursuant to Sections 6.1(a)(i) and 6.1(a)(ii), or (ii) any Default or Event of
Default of which a Trust Officer shall have (x) received written notification at the office of the
Trustee specified in Section 12.02 and such notice references the Notes and this Indenture or (y)
obtained actual knowledge. Actual knowledge shall mean the actual fact or statement of knowing
by a Trust Officer without independent investigation with respect thereto.
(h) In no event shall the Trustee be responsible or liable for special, indirect, or
consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit)
irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and
regardless of the form of action.
(i) The Trustee may request that the Company deliver a certificate setting forth the names of
individuals and/or titles of officers authorized at such time to take specified actions pursuant to
this Indenture.
SECTION 7.03.
Individual Rights of Trustee.
(a) The Trustee in its individual or
any other capacity may become the owner or pledgee of Notes and may become a creditor of, or
otherwise deal with, the Company or its Affiliates with the same rights it would have if it were
not Trustee. The Paying Agent or Registrar may do the same with like rights. However, the Trustee
must comply with Sections 7.10 and 7.11.
(b) Notwithstanding Section 7.03(a), if the Trustee acquires any conflicting interest as
described in the TIA, it must eliminate such conflict within 90
days; if this Indenture has been qualified under the TIA, apply to the SEC for permission to
continue as trustee under this Indenture; or resign.
SECTION 7.04.
Trustees Disclaimer.
The Trustee shall not be responsible for and
makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not
be accountable for the Companys use of the proceeds
74
from the Notes, and it shall not be
responsible for any statement of the Company in this Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Trustees certificate of
authentication.
SECTION 7.05.
Notice of Defaults.
If a Default occurs, is continuing and is known to
the Trustee, the Trustee shall mail to each Holder notice of the Default within 90 days after it
occurs. Except in the case of a Default in the payment of principal of or premium, if any, or
interest on any Note, the Trustee may withhold the notice if and so long as a committee of its
Trust Officers in good faith determines that withholding the notice is not opposed to the interests
of the Holders.
SECTION 7.06.
Reports by Trustee to Holders.
As promptly as practicable after each
February 1 beginning with the February 1 following the date of this Indenture, and in any event
prior to April 1 in each year, the Trustee shall mail to each Holder a brief report dated as of
February 1 that complies with TIA § 313(a). The Trustee also shall comply with TIA § 313(b).
A copy of each report at the time of its mailing to Holders shall be filed with the SEC and
each stock exchange (if any) on which the Notes are listed. The Company agrees to notify promptly
the Trustee whenever the Notes become listed on any stock exchange and of any delisting thereof.
SECTION 7.07.
Compensation and Indemnity.
The Company shall pay to the Trustee from
time to time reasonable compensation for its services. The Trustees compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company shall reimburse
the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses, disbursements and advances of the Trustees
agents, counsel, accountants and experts. The Company shall indemnify the Trustee against any and
all loss, liability or expense (including reasonable attorneys fees) incurred by it in connection
with the administration of this trust and the performance of its duties hereunder. The Trustee
shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The
Company shall defend the claim and the Trustee may have separate counsel and the Company shall pay
the fees and expenses of such counsel. The Company need not reimburse any expense or indemnify
against any loss, liability or expense incurred by the Trustee through the Trustees own willful
misconduct, negligence or bad faith.
To secure the Companys payment obligations in this Section, the Trustee shall have a lien
prior to the Notes on all money or property held or collected by the Trustee other than money or
property held in trust to pay principal of and premium, if any, or interest on particular Notes.
The Companys payment obligations pursuant to this Section shall survive the discharge of this
Indenture. When the Trustee incurs expenses after the occurrence of
75
a Default specified in
Section 6.01(a)(ix) or (x) with respect to the Company, the expenses are intended to constitute
expenses of administration under the Bankruptcy Law.
SECTION 7.08.
Replacement of Trustee.
The Trustee may resign at any time by so
notifying the Company. The Holders of a majority in principal amount of the Notes may remove the
Trustee by so notifying the Trustee and may appoint a successor Trustee. The Company shall remove
the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Trustee or its property; or
(d) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of a majority in principal
amount of the Notes and such Holders do not reasonably promptly appoint a successor Trustee, or if
a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to
Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after the retiring Trustee resigns
or is removed, the retiring Trustee or the Holders of 10.0% in principal amount of the Notes may
petition any court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this Section, the Companys
obligations under Section 7.07 shall continue for the benefit of the retiring Trustee.
SECTION 7.09.
Successor Trustee by Merger.
If the Trustee consolidates with, merges
or converts into, or transfers all or substantially all its corporate trust
76
business or assets to,
another corporation or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion or consolidation to the
Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to the Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the full force which
it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall
have.
SECTION 7.10.
Eligibility; Disqualification.
The Trustee shall at all times satisfy
the requirements of TIA § 310(a). The Trustee shall have a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published annual report of condition. The
Trustee shall comply with TIA § 310(b);
provided
,
however
, that there shall be
excluded from the operation of TIA § 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA § 310(b)(1) are met.
SECTION 7.11.
Preferential Collection of Claims Against Company.
The Trustee shall
comply with TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). A Trustee
who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated.
ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.01.
Satisfaction and Discharge.
This Indenture shall be discharged and
shall cease to be of further effect (except as to surviving rights and immunities of the Trustee
and rights of registration or transfer or exchange of the Notes, as expressly provided for in this
Indenture) as to all outstanding Notes and Notes Guarantees when:
(i) either:
(1) all the Notes theretofore authenticated and delivered (except
lost, stolen or destroyed Notes that have been replaced or
paid and Notes for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust) have been delivered
to the Trustee for cancellation; or
77
(2) all Notes not theretofore delivered to the Trustee for
cancellation (a) have become due and payable, (b) shall become due and
payable at their stated maturity within one year or (c) if redeemable at
the option of the Company, are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company,
and the Company has irrevocably deposited or caused to be deposited with
the Trustee funds in an amount sufficient or Government Securities, the
principal of and interest on which shall be sufficient, or a combination
thereof sufficient, to pay and discharge the entire Indebtedness on the
Notes not theretofore delivered to the Trustee for cancellation, for
principal of, premium, if any, and interest on the Notes to the date of
deposit together with irrevocable instructions from the Company directing
the Trustee to apply such funds to the payment thereof at maturity or
redemption, as the case may be;
(ii) the Company has paid all other sums payable under this Indenture by the
Company; and
(iii) the Company has delivered to the Trustee an Officers Certificate and an
Opinion of Counsel stating that all conditions precedent under this Indenture
relating to the satisfaction and discharge of this Indenture have been complied
with.
SECTION 8.02.
Legal Defeasance and Covenant Defeasance.
(a) Subject to Sections
8.02(b) and 8.03, the Company at any time may terminate (1) all its obligations under the Notes and
this Indenture (
Legal Defeasance
) or (2) its obligations under Sections 4.02, 4.03, 4.04,
4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14 and 6.05 and the operation of Sections
6.01(a)(iv), 6.01(a)(v), 6.01(a)(vi), 6.01(a)(vii), 6.01(a)(viii), 6.01(a)(ix), 6.01(a)(x) and
6.01(a)(xi) (but, in the case of Sections 6.01(a)(ix) and 6.01(a)(x), with respect only to
Significant Subsidiaries or any group of Subsidiaries of the Company that, taken together, would
constitute a Significant Subsidiary) and the limitations contained in Section 5.01(a)(iv)
(
Covenant Defeasance
). The Company may exercise a Legal Defeasance notwithstanding its
prior exercise of Covenant Defeasance.
If the Company exercises a Legal Defeasance, payment of the Securities may not be accelerated
because of an Event of Default. If the Company exercises a Covenant Defeasance, payment of the
Securities may not be accelerated because of an
Event of Default specified in Section 6.01(a)(iv), 6.01(a)(v), 6.01(a)(vi), 6.01(a)(vii),
6.01(a)(viii), 6.01(a)(ix), 6.01(a)(x) or 6.01(a)(xi) (but, in the case of Sections 6.01(a)(ix) and
6.01(a)(x), with respect only to Significant Subsidiaries or any group of Subsidiaries of the
Company that, taken together, would constitute a Significant Subsidiary) or because of the failure
of the Company to comply with Section 5.01(a)(iv). If the
78
Company exercises a Legal Defeasance or
a Covenant Defeasance, each Guarantor, if any, shall be simultaneously released from all its
obligations with respect to its Notes Guarantee and the Security Documents.
Upon satisfaction of the conditions set forth herein and upon request of the Company, the
Trustee shall acknowledge in writing the discharge of those obligations that the Company
terminates.
(b) Notwithstanding Sections 8.01 and 8.02(a), the Companys obligations in Sections 2.03,
2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 7.07 and 7.08 and in this Article VIII shall survive until the
Notes have been paid in full. Thereafter, the Companys obligations in Sections 7.07, 8.06 and
8.07 shall survive.
SECTION 8.03.
Conditions to Defeasance.
In order to exercise either Legal Defeasance
or Covenant Defeasance:
(i) the Company must irrevocably deposit with the Trustee, in trust, for the
benefit of the Holders of the Notes, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient, in the
opinion of a nationally recognized firm of independent public accountants, to pay
the principal of, premium, if any, and interest due on the outstanding Notes on the
stated maturity date or on the applicable Redemption Date, as the case may be, and
the Company must specify whether the Notes are being defeased to maturity or to a
particular Redemption Date;
(ii) in the case of Legal Defeasance, the Company shall have delivered to the
Trustee an opinion of counsel in the United States reasonably acceptable to the
Trustee confirming that, subject to customary assumptions and exclusions, (1) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling or (2) since the Issue Date, there has been a change in the
applicable U.S. federal income tax law, in either case to the effect that, and
based thereon such opinion of counsel shall confirm that, the Holders will not
recognize income, gain or loss for U.S. federal income tax purposes as a result of
such Legal Defeasance and will be subject to U.S. federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Legal Defeasance had not occurred;
(iii) in the case of Covenant Defeasance, the Company shall have delivered to
the Trustee an opinion of counsel in the United States reasonably acceptable to the
Trustee confirming that, subject to customary
assumptions and exclusions, the Holders will not recognize income, gain or
loss for U.S. federal income tax purposes as a result of such Covenant Defeasance
and will be subject to U.S. federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
79
(iv) no Default shall have occurred and be continuing on the date of such
deposit (other than a Default resulting from the borrowing of funds to be applied
to such deposit);
(v) such Legal Defeasance or Covenant Defeasance will not result in a breach
or violation of, or constitute a default under any material agreement or instrument
(other than this Indenture) to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is bound;
(vi) the Company shall have delivered to the Trustee an Officers Certificate
stating that the deposit was not made by the Company with the intent of preferring
the Holders of Notes over the other creditors of the Company or the Guarantors with
the intent of defeating, hindering, delaying or defrauding creditors of the Company
or any Guarantor or others; and
(vii) the Company shall have delivered to the Trustee an Officers Certificate
and an Opinion of Counsel (which opinion may be subject to customary assumptions
and exclusions), each stating that all conditions precedent provided for relating
to the Legal Defeasance or the Covenant Defeasance, as the case may be, have been
complied with.
Before or after a deposit, the Company may make arrangements satisfactory to the Trustee for
the redemption of Notes at a future date in accordance with Article III.
SECTION 8.04.
Application of Trust Money.
The Trustee shall hold in trust money
or Government Securities deposited with it pursuant to this Article VIII. It shall apply the
deposited money and the money from Government Securities through the Paying Agent and in accordance
with this Indenture to the payment of principal of and premium, if any, and interest on the Notes.
SECTION 8.05.
Repayment to Company.
The Trustee and the Paying Agent shall promptly
turn over to the Company upon request any excess money or securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay
to the Company upon request any money held by them for the payment of principal, premium, if any,
or interest that remains unclaimed for two years,
and, thereafter, Holders entitled to the money must look to the Company for payment as general
creditors.
SECTION 8.06.
Indemnity for Government Securities.
The Company shall pay and shall
indemnify the Trustee against any tax, fee or other charge imposed on or assessed on the Trustee in
its capacity as such against deposited Government Securities or the principal and interest received
on such Government Securities.
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SECTION 8.07.
Reinstatement.
If the Trustee or Paying Agent is unable to apply any
money or Government Securities in accordance with this Article VIII by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Companys and each Guarantors
obligations under this Indenture, each Guarantee and the Notes shall be revived and reinstated as
though no deposit had occurred pursuant to this Article VIII until such time as the Trustee or
Paying Agent is permitted to apply all such money or Government Securities in accordance with this
Article VIII;
provided
,
however
, that, if the Company has made any payment of
premium, if any, or interest on or principal of any Notes because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive
such payment from the money or Government Securities held by the Trustee or Paying Agent.
ARTICLE IX
Amendments
SECTION 9.01.
Without Consent of Holders.
Notwithstanding Section 9.02, without the
consent of any Holder of Notes, the Company, the Guarantors and the Trustee may amend or supplement
this Indenture, the Notes, any Security Document or the Intercreditor Agreement:
(i) to cure any ambiguity, omission, defect or inconsistency;
(ii) to provide for uncertificated Notes in addition to or in place of
certificated Notes (provided that the uncertificated Notes are issued in registered
form for purposes of Section 163(f) of the Code);
(iii) to provide for the assumption by a successor corporation of the
obligations of the Company or a Guarantor to Holders under this Indenture in the
case of a merger or consolidation;
(iv) to make any change that would provide any additional rights or benefits
to the Holders of Notes or that does not adversely affect the legal rights under
this Indenture of any such Holder;
(v) to comply with requirements of the SEC in order to effect or maintain the
qualification of this Indenture under the Trust Indenture Act;
(vi) to evidence and provide for the acceptance of appointment under this
Indenture of a successor trustee;
(vii) to add one or more Guarantors under this Indenture;
(viii) to add any additional assets to the Collateral;
81
(ix) to release Collateral from the Lien of the Security Documents when
permitted or required by this Indenture and the Security Documents;
(x) to conform the text of this Indenture, the Notes or any Guarantee to any
provision of the section of the Offering Circular entitled Description of Notes
to the extent that such provision in the section of the Offering Circular entitled
Description of Notes was intended to be a verbatim recitation of a provision of
this Indenture, the Notes or such Guarantee;
(xi) as necessary to conform this Indenture to any exemptive orders under the
Trust Indenture Act received by the Company or any Guarantor; or
(xii) to make any amendment to the provisions of this Indenture relating to
the transfer and legending of Notes; provided, however, that (1) compliance with
this Indenture as so amended would not result in Notes being transferred in
violation of the Securities Act or any other applicable securities law and (2) such
amendment does not materially and adversely affect the rights of Holders to
transfer Notes.
SECTION 9.02.
With Consent of Holders.
(a) Except as otherwise provided in this
Article IX or Section 6.03, this Indenture, the Security Documents, the Intercreditor Agreement and
the Notes may be amended or supplemented (or a waiver may be granted with respect to any default or
noncompliance with any provision thereof) with the written consent of the Holders of a majority in
principal amount of the Notes then outstanding. Without the consent of each Holder affected
thereby, an amendment or waiver may not, among other things:
(i) reduce the principal amount of Notes whose Holders must consent to an
amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity of any Note;
(iii) reduce the rate of or change the time for payment of interest on any
Note;
(iv) waive a Default in the payment of, principal of or premium, if any, or
interest on the Notes (except a rescission of acceleration of the
Notes by the Holders of at least a majority in aggregate principal amount of
the Notes and a waiver of the payment default that resulted from such
acceleration);
(v) (1) release any Guarantor from any of its obligations under its Notes
Guarantee other than in accordance with the terms of this Indenture or
(2) adversely change any Notes Guarantee or the priority of the Liens in
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the
Collateral or release all or substantially all of the Collateral from the Liens
created by the Security Documents, except in each case as specially provided for in
this Indenture and the Security Documents;
(vi) make any Note payable in money other than that stated in the Notes;
(vii) make any change in the provisions of this Indenture relating to waivers
of past Defaults or the rights of Holders of Notes to receive payments of principal
of or premium, if any, or interest on the Notes or to institute suit for the
enforcement of any such payment;
(viii) make any change to the provisions applicable to the redemption of any
Note as set forth in Section 3.07;
(ix) make any change in the ranking or priority of any Note that would
adversely affect the Holders; or
(x) make any change in the amendment and waiver provisions.
(b) Without the consent of the Holders of at least 66
2
/
3
% in aggregate principal amount of
Notes then outstanding, an amendment or waiver may not (with respect to any Notes held by a
non-consenting Holder):
(i)modify any Security Document or the provisions of this Indenture dealing
with the Security Documents or application of trust moneys, or otherwise release
any Collateral from the Lien of the Security Documents, in any manner adverse to
such Holder other than in accordance with this Indenture, the Security Documents
and the Intercreditor Agreement; or
(ii) modify the Intercreditor Agreement in any manner adverse to such Holder
other than in accordance with this Indenture, the Security Documents and the
Intercreditor Agreement.
(c) The consent of the Holders is not necessary under this Indenture to approve the
particular form of any proposed amendment. It is sufficient if such consent approves the substance
of the proposed amendment.
SECTION 9.03.
Notice of Amendments.
After an amendment under this Indenture becomes
effective, the Company shall mail to the Holders a notice briefly describing such amendment.
However, the failure to give such notice to all Holders, or any defect therein, shall not impair or
affect the validity of the amendment.
SECTION 9.04.
Compliance with Trust Indenture Act.
Every amendment to this Indenture
or the Notes shall comply with the TIA, other than, to the
83
extent this Indenture has not been
qualified under the TIA, TIA § 314(d) and TIA § 314(b) or any successor provisions thereto, as then
in effect.
SECTION 9.05.
Revocation and Effect of Consents and Waivers.
(a) A consent to an
amendment or a waiver by a Holder of a Note shall bind the Holder and every subsequent Holder of
that Note or portion of the Note that evidences the same debt as the consenting Holders Note, even
if notation of the consent or waiver is not made on the Note. However, any such Holder or
subsequent Holder may revoke the consent or waiver as to such Holders Note or portion of the Note
if the Trustee receives the notice of revocation before the date the amendment or waiver becomes
effective. After an amendment or waiver becomes effective, it shall bind every Holder. An
amendment or waiver becomes effective upon the execution of such amendment or waiver by the
Trustee.
(b) The Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to give their consent or take any other action set forth above or
required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately-preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be entitled to give such
consent or to revoke any consent previously given or to take any such action, whether or not such
Persons continue to be Holders after such record date. No such consent shall be valid or effective
for more than 120 days after such record date.
SECTION 9.06.
Notation on or Exchange of Notes.
If an amendment changes the terms of
a Note, the Trustee may require the Holder of the Note to deliver it to the Trustee. The Trustee
may place an appropriate notation on the Note regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for
the Note shall issue and the Trustee shall authenticate a new Note that reflects the changed terms.
Failure to make the appropriate notation or to issue a new Note shall not affect the validity of
such amendment.
SECTION 9.07.
Trustee To Sign Amendments.
The Trustee shall sign any amendment
authorized pursuant to this Article IX if the amendment does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign
it. In signing such amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 7.01) shall be fully protected in
relying upon, an Officers Certificate and an
Opinion of Counsel stating that such amendment is authorized or permitted by this Indenture.
SECTION 9.08.
Payment for Consent.
Neither the Company nor any Affiliate of the
Company shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Notes unless such
consideration is offered to all Holders and is paid to
84
all Holders that so consent, waive or agree
to amend in the time frame set forth in solicitation documents relating to such consent, waiver or
agreement.
ARTICLE X
Guarantees
SECTION 10.01.
Guarantees.
Each Guarantor hereby unconditionally and irrevocably
guarantees, jointly and severally, to each Holder and to the Trustee and its successors and assigns
(a) the full and punctual payment of principal of and premium, if any, and interest on the Notes
when due, whether at maturity, by acceleration, by redemption or otherwise, and all other monetary
obligations of the Company under this Indenture and the Notes and (b) the full and punctual
performance within applicable grace periods of all other obligations of the Company under this
Indenture and the Notes (all the foregoing being hereinafter collectively called the
"
Guaranteed Obligations
). Each Guarantor further agrees that the Guaranteed Obligations
may be extended or renewed, in whole or in part, without notice or further assent from such
Guarantor and that such Guarantor will remain bound under this Article X notwithstanding any
extension or renewal of any Guaranteed Obligation.
Each Guarantor waives presentation to, demand of, payment from and protest to the Company of
any of the Guaranteed Obligations and also waives notice of protest for nonpayment. Each Guarantor
waives notice of any default under the Notes or the Guaranteed Obligations. The obligations of
each Guarantor hereunder shall not be affected by (1) the failure of any Holder or the Trustee to
assert any claim or demand or to enforce any right or remedy against the Company or any other
Person (including any Guarantor) under this Indenture, the Notes or any other agreement or
otherwise; (2) any extension or renewal of this Indenture, the Notes or any other agreement;
(3) any rescission, waiver, amendment or modification of any of the terms or provisions of this
Indenture, the Notes or any other agreement; (4) the release of any security held by any Holder or
the Trustee for the Guaranteed Obligations or any of them; (5) the failure of any Holder or the
Trustee to exercise any right or remedy against any other guarantor of the Guaranteed Obligations;
or (6) except as set forth in Section 10.06, any change in the ownership of such Guarantor.
Each Guarantor further agrees that its Guarantee herein constitutes a guarantee of payment,
performance and compliance when due (and not a guarantee of
collection) and waives any right to require that any resort be had by any Holder or the
Trustee to any security held for payment of the Guaranteed Obligations.
Except as expressly set forth in Sections 8.01, 10.02 and 10.06, the obligations of each
Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination
for any reason, including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever
or by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or
otherwise. Without
85
limiting the generality of the foregoing, the obligations of each Guarantor
herein shall not be discharged or impaired or otherwise affected by the failure of any Holder or
the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, the Notes
or any other agreement, by any waiver or modification of any thereof, by any default, failure or
delay, willful or otherwise, in the performance of the obligations, or by any other act or thing or
omission or delay to do any other act or thing which may or might in any manner or to any extent
vary the risk of such Guarantor or would otherwise operate as a discharge of such Guarantor as a
matter of law or equity.
Each Guarantor further agrees that its Guarantee herein shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or
premium, if any, or interest on any Guaranteed Obligation is rescinded or must otherwise be
restored by any Holder or the Trustee upon the bankruptcy or reorganization of the Company or
otherwise.
In furtherance of the foregoing and not in limitation of any other right which any Holder or
the Trustee has at law or in equity against any Guarantor by virtue hereof, upon the failure of the
Company to pay the principal of or premium, if any, or interest on any Guaranteed Obligation when
and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise,
or to perform or comply with any other Guaranteed Obligation, each Guarantor hereby promises to and
shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash,
to the Holders or the Trustee an amount equal to the sum (without duplication) of (A) the unpaid
principal amount, including any premium thereon to the extent such premium has become due and
payable, of such Guaranteed Obligations, (B) accrued and unpaid interest on such Guaranteed
Obligations (but only to the extent not prohibited by law) and (C) all other monetary Guaranteed
Obligations of the Company to the Holders and the Trustee.
Each Guarantor further agrees that, as between it, on the one hand, and the Holders and the
Trustee, on the other hand, (i) the maturity of the Guaranteed Obligations hereby may be
accelerated as provided in Article VI for the purposes of such Guarantors Guarantee herein,
notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect
of the Guaranteed Obligations guaranteed hereby, and (ii) in the event of any declaration of
acceleration of such Guaranteed Obligations as provided in Article VI, such Guaranteed Obligations
(whether or not due and payable) shall forthwith become due and payable by such Guarantor for the
purposes of this Section.
Each Guarantor also agrees to pay any and all costs and expenses (including counsel fees and
expenses) properly incurred by the Trustee or the Holders in enforcing any rights under this
Section.
SECTION 10.02.
Limitation on Liability.
Each Guarantor and, by its acceptance of
Notes, each Holder hereby confirms that it is the intention of all such parties that the Notes
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of
Bankruptcy Law, the Uniform Fraudulent Conveyance Act,
86
the Uniform Fraudulent Transfer Act or any
similar federal, state, provincial, foreign or local law to the extent applicable to any Note
Guarantee and the such Guarantors Notes Guarantee otherwise be limited to the maximum amount that
can be guaranteed under applicable laws. Accordingly, notwithstanding anything to the contrary in
this Indenture, the obligations of each Guarantor under its Notes Guarantee shall be limited to the
maximum amount that can be guaranteed under applicable laws, including Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal, state,
provincial, foreign or local law, after giving effect to such maximum amount and all other
contingent and fixed liabilities of such Guarantor that are relevant under such laws. The Notes
Guarantees shall provide that, in the event of default in the payment of principal of or premium,
if any, and interest in respect of the Notes (including any obligation to repurchase the Notes),
the Trustee may, subject, in the case of enforcing against any Collateral, to the Intercreditor
Agreement, institute legal proceedings directly against the relevant Guarantor without first
proceeding against the Company.
SECTION 10.03.
Successors and Assigns.
This Article X shall be binding upon each
Guarantor and its successors and assigns and shall inure to the benefit of the successors and
assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by
any Holder or the Trustee, the rights and privileges conferred upon that party in this Indenture
and in the Notes shall automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions of this Indenture.
SECTION 10.04.
No Waiver.
Neither a failure nor a delay on the part of either the
Trustee or the Holders in exercising any right, power or privilege under this Article X shall
operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or
further exercise of any right, power or privilege. The rights, remedies and benefits of the
Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article X at law, in equity, by
statute or otherwise.
SECTION 10.05.
Modification.
No modification, amendment or waiver of any provision
of this Article X, nor the consent to any departure by any Guarantor therefrom, shall in any event
be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for which given. No
notice to or demand on any Guarantor
in any case shall entitle such Guarantor to any other or further notice or demand in the same,
similar or other circumstances.
SECTION 10.06.
Release of Guarantor.
A Guarantors Notes Guarantee shall terminate
and be of no further force and effect and such Guarantor shall be deemed to be released from all
obligations under this Article X:
(a) upon the sale (including any sale pursuant to any exercise of remedies by a
holder of Indebtedness of the Company or of such Guarantor) or other
87
disposition of such
Guarantor (including by way of merger, consolidation or sale of its Capital Stock),
(b) upon the sale or disposition of all or substantially all of the assets of such
Guarantor (other than by lease),
(c) upon the designation of such Guarantor as an Unrestricted Subsidiary in
accordance with the terms of this Indenture,
(d) at such time as such Guarantor does not have any Indebtedness outstanding that
would have required such Guarantor to enter into a Notes Guarantee pursuant to Section 4.11
and the Company provides an Officers Certificate to the Trustee certifying that no such
Indebtedness is outstanding and that the Company elects to have such Guarantor released
from its obligations under this Article X, or
(e) upon exercise by the Company of its option to elect Covenant Defeasance or Legal
Defeasance pursuant to Article VIII, or
(f) upon the discharge of the Companys obligations under this Indenture;
provided
,
however
, that in the case of clauses (a) and (b) of this
Section 10.06, (i) such sale or other disposition is made to a Person other than the
Company, a Restricted Subsidiary or any of their Affiliates and (ii) such sale or
disposition is otherwise permitted by this Indenture.
At the request of the Company, the Trustee shall execute and deliver an appropriate instrument
evidencing such release.
SECTION 10.07.
Contribution.
Each Guarantor that makes a payment under its Notes
Guarantee shall be entitled upon payment in full of all Guaranteed Obligations under this Indenture
to a contribution from each other Guarantor in an amount equal to such other Guarantors
pro
rata
portion of such payment based on the respective net assets of all the
Subsidiary Guarantors at the time of such payment determined in accordance with GAAP.
SECTION 10.08.
Non-Impairment.
The failure to endorse a Notes Guarantee on any Note
shall not affect or impair the validity of such Notes Guarantee.
ARTICLE XI
Security Documents
SECTION 11.01.
Collateral and Security Documents.
(a) To secure the due and
punctual payment of the obligations of the Company and the Guarantors under this Indenture and the
Notes and the Notes Guarantees, the Company, the Guarantors, the Collateral Agent and the Trustee
have entered into the Security Documents providing for
88
the creation of specified security interests
and related matters. The Trustee and the Company hereby acknowledge and agree that the Collateral
Agent holds the Collateral in trust for the benefit of the Holders and the Trustee and the other
parties entitled to the benefit of the security provided under the Security Documents pursuant to
the terms of the Security Documents and the Intercreditor Agreement. Notwithstanding anything to
the contrary in this Indenture, no security interest or Lien is granted by the provisions of this
Indenture, the Notes or the Notes Guarantees.
(b) Each Holder, by accepting a Note, agrees to all of the terms and provisions of the
Security Documents and the Intercreditor Agreement, as the same may be amended from time to time
pursuant to the provisions of the Security Documents, the Intercreditor Agreement and this
Indenture, and authorizes and directs the Trustee and the Collateral Agent to perform their
respective obligations and exercise their respective rights under the Security Documents and the
Intercreditor Agreement in accordance therewith;
provided
,
however
, that if any
provisions of the Security Documents or the Intercreditor Agreement limit, qualify or conflict with
the duties imposed by the provisions of the TIA (other than TIA § 314(d) and TIA § 314(b), which
shall not be applicable to this Indenture unless it is qualified under the TIA), the TIA (other
than TIA § 314(d) and TIA § 314(b), which shall not be applicable to this Indenture unless it is
qualified under the TIA) will control.
(c) As among the Holders, the Collateral shall be held for the equal and ratable benefit of
the Holders without preference, priority or distinction of any thereof over any other.
SECTION 11.02.
Release of Collateral.
The Liens created by the Security Documents on
the Collateral shall be automatically released, without the need for any further action by any
Person, and will no longer secure the Notes or the Notes Guarantees or any other Obligations under
this Indenture, and the right of the Holders and holders of such other Obligations to the benefits
and proceeds of such Liens will terminate and be discharged:
(a) upon the release of any Person that is a Guarantor from its obligations under
Article X, as to the Collateral owned by such Person;
(b) as to all property and assets subject to such Liens, upon satisfaction of all of
the conditions set forth in Section 8.01;
(c) as to all property and assets subject to such Liens, upon the occurrence of a
Legal Defeasance or a Covenant Defeasance in accordance with Article VIII;
(d) as to any property or assets that are the subject of an Asset Sale or other
disposition (to a Person other than the Company or any Guarantor) not prohibited by
Section 4.06, at the time of such disposition;
(e) as to any property or assets that are or become Excluded Property;
89
(f) as to any property or assets that are subject to a Permitted Collateral Lien to
the extent that applicable law or the terms of such Permitted Collateral Lien (or the terms
of the Indebtedness secured thereby) do not permit such property or assets to be subject to
the Liens created under the Security Documents;
provided
,
however
, that (i)
the proceeds (as such term is defined in Article or Section 9 of the UCC (as defined in the
Security Agreement)) of any such property or assets shall continue to be deemed to be
Collateral and (ii) this provision shall not require the release of any Lien on or
assignment of any such property or asset to the extent that the UCC (as defined in the
Security Agreement) or any other applicable law provides that such grant of Lien or
assignment is effective irrespective of any prohibitions to such grant provided in any
applicable law or the terms of such Permitted Collateral Lien (or the terms of the
Indebtedness secured thereby);
provided further
,
however
, that, unless the
senior notes secured parties (as defined in the Intercreditor Agreement) are the only
Secured Parties (as defined in the Intercreditor Agreement), the Lien on such property or
assets shall only be released to the extent it is released from the Lien created under the
Security Documents in favor of each of the other Secured Parties (as defined in the
Intercreditor Agreement) in their capacity as such;
(g) as to any property or assets that are the subject of a disposition in connection
with a Permitted Securitization, at the time of such disposition; and
(h) in whole or in part as to the property and assets subject to such Liens, with the
consent of the Holders of the requisite percentage of the aggregate principal amount of
Notes in accordance with Article IX.
In addition, Collateral may be released from the Liens created by the Security Documents at any
time or from time to time in accordance with the provisions of the Security Documents and the
Intercreditor Agreement. At the request of the Company (which request shall be set forth in an
Officers Certificate) for a confirmation, acknowledgement or other documentation requested by the
Company to evidence the release of Liens or Collateral in accordance with this Section 11.02, at
the Companys and Guarantors expense, the Trustee shall promptly take all necessary actions to
execute and/or deliver such confirmation, acknowledgement or other documentation so requested by
the Company. The release of any Collateral from the Lien of the Security Documents or the release,
in whole or in part, of the Liens created by the Security Documents, shall not be deemed to impair
the Lien on the Collateral in contravention of the provisions of this Indenture if and to the
extent the Collateral or Liens are released in accordance with the terms of the applicable Security
Documents, the Intercreditor Agreement and this Article XI.
SECTION 11.03.
Certificates and Opinions.
On or before February 1 of each year, the
Company shall deliver to the Trustee an Officers Certificate either stating that such action has
been taken with respect to the recording, filing, re-recording and re-filing of this Indenture and
the Security Documents (including financing statements or other instruments) as is necessary to
maintain the security interest intended to be created
90
thereby for the benefit of the Holders, and reciting the details of such action, or stating
that no such action is necessary to maintain such Lien. To the extent that this Indenture is
qualified under the TIA, any certificate or opinion required by TIA § 314(d) may be made by an
Officer of the Company except in cases where TIA § 314(d) requires that such certificate or opinion
be made by an independent Person, which Person shall be an independent engineer, appraiser or other
expert selected or reasonably satisfactory to the Trustee;
provided
,
however
, that,
notwithstanding anything to the contrary in this Indenture, the Security Documents or the
Intercreditor Agreement, the Company and the Guarantors shall not be required to comply with all or
any portion of TIA § 314(d) if they determine, in good faith, that, under the terms of TIA § 314(d)
and/or any interpretation or guidance as to the meaning thereof by the SEC and its staff, including
no action letters or exemptive orders, all or any portion of TIA § 314(d) is inapplicable to the
released Collateral.
SECTION 11.04.
Use of Trust Monies.
To the extent received by the Trustee pursuant to
the provisions of the Intercreditor Agreement, the Indenture, the Security Documents or otherwise,
all Trust Monies shall be held by the Trustee as a part of the Collateral securing the Notes and,
so long as no Event of Default has occurred and is continuing, shall either (i) be released as
contemplated by Section 4.06 if such Trust Monies represent Net Cash Proceeds or (ii) to the extent
not required to be applied pursuant to such covenant, at the direction of the Company be applied by
the Trustee from time to time to the payment of the principal of, premium, if any, and interest on
any Notes at maturity or upon redemption or retirement, or to the purchase of Notes upon tender or
in the open market or otherwise, in each case in compliance with the Indenture. The Company or any
Restricted Subsidiary may also withdraw Trust Monies constituting net insurance proceeds to repair
or replace the relevant Collateral in accordance with the provisions of the Indenture. The Trustee
shall be entitled to apply any Trust Monies to cure any Event of Default. Trust Monies deposited
with the Trustee shall be invested in Cash Equivalents pursuant to the direction of the Company
and, so long as no Default has occurred and is continuing, the Company shall be entitled to any
interest or dividends accrued, earned or paid on such Cash Equivalents.
ARTICLE XII
Miscellaneous
SECTION 12.01.
Trust Indenture Act Controls.
If any provision of this Indenture
limits, qualifies or conflicts with another provision which is required to be included in this
Indenture by the TIA, other than TIA § 314(d) or TIA § 314(b), the required provision shall
control.
SECTION 12.02.
Notices.
Any notice or communication by the Company or any Guarantor,
on the one hand, or the Trustee, on the other hand, to the other shall be in writing and delivered
in person, mailed by first-class mail (registered or certified, return receipt requested),
transmitted via facsimile or sent by overnight air courier guaranteeing next-day delivery,
addressed as follows:
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if to the Company or any Guarantor:
Credit Acceptance Corporation
25505 W. Twelve Mile Road
Southfield, Michigan 48034
Facsimile: (248) 827-8513
Attention: Treasurer
if to the Trustee:
U.S. Bank National Association
Corporate Trust Services
EP-MN-WS3C
60 Livingston Avenue
St. Paul, Minnesota 55107-1419
Attention: Credit Acceptance Corporate Administrator
Facsimile: (651) 495-8097
Email: jennifer.edwards2@usbank.com
The Company, any Guarantor or the Trustee by notice to the others may designate additional or
different addresses and/or facsimile numbers for subsequent notices or communications.
Any notice or communication to a Holder shall be mailed by first-class mail (registered or
certified, return receipt requested) or sent by overnight air courier guaranteeing next-day
delivery to such Holder at such Holders address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed or sent within the time prescribed. All
notices or communications shall be deemed to have been duly given at the time delivered in person,
if so delivered; three Business Days after being deposited in the mail, postage prepaid, if mailed;
upon acknowledgment of receipt, if transmitted via facsimile; and the next Business Day after
timely delivery to the courier if sent by overnight air courier guaranteeing next-day delivery.
Failure to mail or send a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders. If a notice or communication is delivered,
mailed, transmitted or sent in the manner provided above within the time prescribed, it is duly
given, whether or not the addressee receives it.
Where this Indenture provides for notice in any manner, such notice may be waived in writing
by the Person entitled to receive such notice, either before or after the event, and such waiver
shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of any action taken in
reliance on such waiver.
In case it shall be impracticable to give notice in the manner provided above, including by
reason of a suspension of regular mail service, then such notification
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as shall be made with the approval of the Trustee shall constitute a sufficient notification
for every purpose hereunder.
SECTION 12.03.
Communication by Holders with Other Holders.
Holders may communicate
pursuant to TIA § 312(b) with other Holders with respect to their rights under this Indenture or
the Notes. The Company, any Guarantor, the Trustee, the Registrar and anyone else shall have the
protection of TIA § 312(c).
SECTION 12.04.
Certificate and Opinion as to Conditions Precedent.
Upon any request
or application by the Company to the Trustee to take or refrain from taking any action under this
Indenture, the Company shall furnish to the Trustee:
(a) an Officers Certificate in form and substance reasonably satisfactory to the
Trustee stating that, in the opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
stating that, in the opinion of such counsel (who may rely upon an Officers Certificate as
to matters of fact), all such conditions precedent have been complied with.
SECTION 12.05.
Statements Required in Certificate or Opinion.
Each certificate or
opinion with respect to compliance with a covenant or condition provided for in this Indenture
(other than pursuant to Section 6.05) shall include:
(a) a statement that the individual making such certificate or opinion has read such
covenant or condition;
(b) a brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such individual, he has made such examination
or investigation as is necessary to enable him to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(d) a statement as to whether or not, in the opinion of such individual, such covenant
or condition has been complied with.
SECTION 12.06.
When Notes Disregarded.
In determining whether the Holders of the
required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company or by any Person directly or indirectly controlling or controlled by or under direct
or indirect common control with the Company shall be disregarded and deemed not to be outstanding,
except that, for the purpose of determining whether the Trustee shall be protected in relying on
any such
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direction, waiver or consent, only Notes which the Trustee knows are so owned shall be so
disregarded. Subject to the foregoing, only Notes outstanding at the time shall be considered in
any such determination.
SECTION 12.07.
Rules by Trustee, Paying Agent and Registrar.
The Trustee may make
reasonable rules for action by or a meeting of Holders. The Registrar and the Paying Agent may
make reasonable rules for their functions.
SECTION 12.08.
Legal Holidays.
If a payment date is a Legal Holiday, payment shall be
made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period on any amount that would otherwise have been payable on such payment date if it
were not a Legal Holiday. If a regular record date is a Legal Holiday, the record date shall not
be affected.
SECTION 12.09.
Governing Law.
This Indenture and the Notes shall be governed by, and
construed in accordance with, the laws of the State of New York, without giving effect to
applicable principles of conflicts of law to the extent that the application of the law of another
jurisdiction would be required thereby.
SECTION 12.10.
No Recourse Against Others.
No director, officer, employee,
incorporator or shareholder of the Company, and no director, trustee, officer, employee,
incorporator or shareholder (other than the Company or a Restricted Subsidiary) of any Subsidiary
of the Company, as such, shall have any liability for any obligations of the Company or any
Guarantor under the Notes, this Indenture, any Notes Guarantee, any Registration Rights Agreement
(as defined in the Appendix) or the Security Documents or for any claim based on, in respect of or
by reason of such obligations or their creation. By accepting a Note, each Holder shall waive and
release all such liability. This waiver and release shall be part of the consideration for the
issue of the Notes.
SECTION 12.11.
Successors.
All agreements of the Company in this Indenture and the
Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 12.12.
Multiple Originals.
The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Indenture.
SECTION 12.13.
Table of Contents; Headings.
The table of contents, cross-reference
sheet and headings of the Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not intended to be considered a part of this Indenture and shall
not modify or restrict any of the terms or provisions of this Indenture.
SECTION 12.14.
Severability.
In case any provision in this Indenture or the Notes
shall be invalid, illegal or unenforceable, the validity, legality and
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enforceability of the remaining provisions shall not in any way be affected or impaired
thereby, and such provision shall be ineffective only to the extent of such invalidity, illegality
or unenforceability.
SECTION 12.15.
No Adverse Interpretation of Other Agreements.
This Indenture may not
be used to interpret any other indenture, loan or debt agreement of the Company or any of its
Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date
first written above.
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Credit Acceptance Corporation
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By:
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/s/ Douglas W. Busk
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Name:
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Douglas W. Busk
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Title:
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Senior Vice President and Treasurer
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Buyers Vehicle Protection Plan, Inc.
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By:
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/s/ Douglas W. Busk
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Name:
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Douglas W. Busk
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Title:
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Treasurer
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Vehicle Remarketing Services, Inc.
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By:
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/s/ Douglas W. Busk
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Name:
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Douglas W. Busk
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Title:
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Treasurer
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[Signature Page to Indenture]
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date
first written above.
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U.S. Bank National Association
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By:
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/s/ Raymond S. Haverstock
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Name:
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Raymond S. Haverstock
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Title:
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Vice President
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[Signature Page to Indenture]
RULE 144A/REGULATION S APPENDIX
to the Indenture, dated as of February 1, 2010,
among Credit Acceptance Corporation, a Michigan
corporation, the Guarantors (as defined therein) listed
on the signature pages thereto and U.S. Bank National Association,
a national banking association, as trustee (the Indenture).
PROVISIONS RELATING TO INITIAL NOTES,
PRIVATE EXCHANGE NOTES,
EXCHANGE NOTES AND
REPLACEMENT NOTES
1.
Definitions
1.1
Definitions.
For the purposes of this Rule 144A/Regulation S Appendix (this
Appendix
), the following terms shall have the meanings indicated below (and other
capitalized terms used but not defined in this Appendix shall have the meanings given to them in
the Indenture, except as the context requires otherwise):
Applicable Procedures
means, with respect to any transfer or transaction involving a
Temporary Regulation S Global Note or beneficial interest therein, the rules and procedures of the
Depository for such a Temporary Regulation S Global Note, to the extent applicable to such
transaction and as in effect from time to time.
Definitive Note
means a certificated Note, other than a Global Note, bearing, if
required, the appropriate Restrictive Legends set forth in Section 2.3(e) of this Appendix.
Depository
means The Depository Trust Company, its nominees and their respective
successors.
Distribution Compliance Period
, with respect to any Notes, means the period of 40
consecutive days beginning on and including the later of (i) the day on which such Notes are first
offered to Persons other than distributors (as defined in Regulation S under the Securities Act) in
reliance on Regulation S and (ii) the issue date with respect to such Notes.
Exchange Notes
means (1) the 9.125% First Priority Senior Secured Notes due 2017
issued pursuant to the Indenture in connection with the Registered Exchange Offer pursuant to the
Registration Rights Agreement, dated as of the Issue Date, among the Company, the Guarantors and
Credit Suisse Securities (USA) LLC, as representative of the Initial Purchasers and (2) Additional
Notes, if any, issued pursuant to a registration statement filed with the SEC under the Securities
Act.
Initial Notes
means (1) $225,000,000 aggregate principal amount of 9.125% First
Priority Senior Secured Notes due 2017 issued on the Issue Date and (2)
Additional Notes, if any, issued in a transaction exempt from the registration requirements of
the Securities Act.
Initial Purchasers
means (1) with respect to the Initial Notes issued on the Issue
Date, Credit Suisse Securities (USA) LLC, BMO Capital Markets Corp., Comerica Securities, Inc.,
Fifth Third Securities, Inc. and RBS Securities Inc and (2) with respect to each issuance of
Additional Notes, the Persons purchasing such Additional Notes under the related Purchase
Agreement.
Notes
means all the 9.125% First Priority Senior Secured Notes due 2017 issued under
the Indenture, treated as a single class.
Notes Custodian
means the custodian with respect to a Global Note (as appointed by
the Depository), or any successor Person thereto and shall initially be the Trustee.
Private Exchange
means the offer by the Company, pursuant to the Registration Rights
Agreement, to the Initial Purchasers to issue and deliver to each Initial Purchaser, in exchange
for the Initial Notes held by the Initial Purchaser as part of its initial distribution, a like
aggregate principal amount of Private Exchange Notes.
Private Exchange Notes
means any 9.125% First Priority Senior Secured Notes due 2017
issued in connection with a Private Exchange.
Purchase Agreement
means (1) with respect to the Initial Notes issued on the Issue
Date, the Purchase Agreement dated January 25, 2010, among the Company and the Initial Purchasers,
and (2) with respect to each issuance of Additional Notes, the purchase agreement or underwriting
agreement among the Company and the Persons purchasing such Additional Notes.
QIB
means a qualified institutional buyer as defined in Rule 144A.
Registered Exchange Offer
means the offer by the Company, pursuant to the
Registration Rights Agreement, to certain Holders of Initial Notes, to issue and deliver to such
Holders, in exchange for the Initial Notes, a like aggregate principal amount of Exchange Notes
registered under the Securities Act.
Registration Rights Agreement
means, as applicable, (1) the Registration Rights
Agreement, dated as of the Issue Date, among the Company, the Guarantors and Credit Suisse
Securities (USA) LLC, as representative of the Initial Purchasers and (2) with respect to each
issuance of Additional Notes issued in a transaction exempt from the registration requirements of
the Securities Act, the registration rights agreement, if any, among the Company and the Persons
purchasing such Additional Notes under the related Purchase Agreement.
Restrictive Legends
means the Restricted Note Legend, the Regulation S Legend, the
Regulation S Global Note Legend and the Temporary Regulation S Global Note Legend.
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Rule 144A Notes
means all Notes offered and sold to QIBs in reliance on Rule 144A.
Securities Act
means the Securities Act of 1933.
Shelf Registration Statement
means the registration statement issued by the Company
in connection with the offer and sale of Initial Notes or Private Exchange Notes pursuant to a
Registration Rights Agreement.
Transfer Restricted Notes
means each Note until (i) the date on which such Transfer
Restricted Note has been exchanged by a person other than a broker-dealer for a freely transferable
Exchange Note in the Registered Exchange Offer, (ii) following the exchange by a broker-dealer in
the Registered Exchange Offer of a Note for an Exchange Note, the date on which such Exchange Note
is sold to a purchaser who receives from such broker-dealer on or prior to the date of such sale a
copy of the prospectus contained in the Exchange Offer Registration Statement, (iii) the date on
which such Note has been effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement or (iv) the date on which such Note (A) may be
sold to the public in accordance with Rule 144 under the Securities Act by a person that is not an
affiliate (as defined in Rule 144 under the Securities Act) of the Company where no conditions of
Rule 144 are then applicable (other than the holding period requirement in paragraph (d) of Rule
144 so long as such holding period requirement is satisfied at such time of determination) and (B)
either (x) does not bear any restrictive legends relating to the Securities Act or (y) does not
bear a restricted CUSIP number.
1.2
Other Definitions
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Section of this Appendix in
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Which Definition
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Term
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Appears:
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Agent Members
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2.1(b)
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Definitive Note Legend
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2.3(e)
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Global Note Legend
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2.3(e)
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Global Notes
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2.1(a)
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OID Legend
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2.3(e)
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Permanent Regulation S Global Notes
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2.1(a)
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Regulation S
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2.1(a)
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Section of this Appendix in
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Which Definition
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Term
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Appears:
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Regulation S Global Note Legend
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2.3(e)
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Regulation S Global Notes
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2.1(a)
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Regulation S Legend
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2.3(e)
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Replacement Notes
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2.2
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Restricted Global Notes
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2.1(a)
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Restricted Note Legend
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2.3(e)
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Rule 144A
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2.1(a)
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Rule 144A Global Notes
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2.1(a)
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Temporary Regulation S Global Note Legend
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2.3(e)
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Temporary Regulation S Global Notes
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2.1(a)
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Unrestricted Global Notes
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2.1(a)
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2.
The Notes.
2.1 (a)
Form and Dating.
The Initial Notes will be offered and sold by the Company
pursuant to a Purchase Agreement. The Initial Notes will be resold initially only to (i) QIBs in
reliance on Rule 144A under the Securities Act (
Rule 144A
) and (ii) Persons other than
U.S. Persons (as defined in Regulation S) in reliance on Regulation S under the Securities Act
(
Regulation S
). Initial Notes may thereafter be transferred to, among others and QIBs
and purchasers in reliance on Regulation S, subject to the restrictions on transfer set forth
herein. Initial Notes initially resold pursuant to Rule 144A shall be issued initially in the form
of one or more permanent global Notes in definitive, fully registered form (
Rule 144A Global
Notes
); and Initial Notes initially resold pursuant to Regulation S shall be issued initially
in the form of one or more temporary global securities in fully registered form (
Temporary
Regulation S Global Notes
), in each case without interest coupons and with the global
securities legend and the applicable Restrictive Legends, which shall be deposited on behalf of the
purchasers of the Initial Notes represented thereby with the Notes Custodian and registered in the
name of the Depository or a nominee of the Depository, duly executed by the Company and
authenticated by the Trustee as provided in the Indenture. Except as set forth in this Section
2.1(a), beneficial ownership interests in a Temporary Regulation S Global Note will not be
exchangeable for interests in Rule 144A Global Notes, permanent Regulation S global Notes
(
Permanent Regulation S Global Notes
and, together with Temporary Regulation S Global
Notes,
Regulation S Global Notes
) or any other Note prior to the expiration of the
Distribution Compliance Period and then, after the expiration of the Distribution Compliance
Period, may be exchanged for
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interests in a Rule 144A Global Note or a Permanent Regulation S Global Note only upon certification in form reasonably
satisfactory to the Trustee that beneficial ownership interests in such Temporary Regulation S
Global Note are owned either by non-U.S. persons or U.S. persons who purchased such interests in a
transaction that did not require registration under the Securities Act.
Beneficial interests in a Temporary Regulation S Global Note may be exchanged for interests in
Rule 144A Global Notes if (1) such exchange occurs in connection with a transfer of Notes in
compliance with Rule 144A and (2) the transferor of the beneficial interest in the Temporary
Regulation S Global Note first delivers to the Trustee a written certificate (substantially in the
form of Exhibit III) to the effect that the beneficial interest in the Temporary Regulation S
Global Note is being transferred to a Person (a) who the transferor reasonably believes to be a
QIB, (b) purchasing for its own account or the account of a QIB in a transaction meeting the
requirements of Rule 144A, and (c) in accordance with all applicable securities laws of the States
of the United States and other jurisdictions.
Beneficial interests in a Rule 144A Global Note may be transferred to a Person who takes
delivery in the form of an interest in a Regulation S Global Note, whether before or after the
expiration of the Distribution Compliance Period, only if the transferor first delivers to the
Trustee a written certificate (in the form provided in the Indenture) to the effect that such
transfer is being made in accordance with Rule 903 or 904 of Regulation S or Rule 144 (if
applicable).
Rule 144A Global Notes, Temporary Regulation S Global Notes and Permanent Regulation S Global
Notes are collectively referred to herein as
Restricted Global Notes.
Any other Notes in
global form, without Restrictive Legends, are collectively referred to herein as
Unrestricted
Global Notes
(together with Restricted Global Notes,
Global Notes
). The aggregate
principal amount of the Global Notes may from time to time be increased or decreased by adjustments
made on the records of the Trustee and the Depository or its nominee as hereinafter provided.
(b)
Book-Entry Provisions.
This Section 2.1(b) shall apply only to a Global Note
deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with this Section 2.1(b),
authenticate and deliver initially one or more Global Notes that (a) shall be registered in the
name of the Depository for such Global Note or Global Notes or the nominee of such Depository and
(b) shall be delivered by the Trustee to such Depository or pursuant to such Depositorys
instructions or held by the Trustee as custodian for the Depository.
Members of, or participants in, the Depository (
Agent Members
) shall have no rights
under the Indenture with respect to any Global Note held on their behalf by the Depository or by
the Trustee as the custodian of the Depository or under such Global Note, and the Company, the
Trustee and any agent of the Company or the Trustee shall be entitled to treat the Depository as
the absolute owner of such Global Note for all
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purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company,
the Trustee or any agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depository or impair, as between the
Depository and its Agent Members, the operation of customary practices of such Depository governing
the exercise of the rights of a holder of a beneficial interest in any Global Note.
(c)
Definitive Notes.
Except as provided in this Section 2.1 of this Appendix or
Section 2.3 or 2.4 of this Appendix, owners of beneficial interests in Global Notes shall not be
entitled to receive physical delivery of Definitive Notes.
2.2
Authentication.
The Trustee shall authenticate and deliver (1) on the Issue Date,
an aggregate principal amount of $225,000,000 9.125% First Priority Senior Secured Notes due 2017,
(2) any Additional Notes for an original issue in an aggregate principal amount specified in the
written order of the Company pursuant to this Section 2.2, (3) Exchange Notes or Private Exchange
Notes for issue only in a Registered Exchange Offer or a Private Exchange, respectively, pursuant
to a Registration Rights Agreement, for a like principal amount of Initial Notes and (4) any other
Notes issued after the Issue Date in replacement of or exchange for any Note in like principal
amount (any such Notes,
Replacement Notes
), in each case upon a written order of the
Company signed by an Officer. Such order shall specify the amount of the Notes to be authenticated
and the date on which the original issue of Notes is to be authenticated and, in the case of any
issuance of Additional Notes pursuant to Section 2.13 of the Indenture, shall certify that such
issuance is in compliance with Section 4.03 of the Indenture.
2.3
Transfer and Exchange.
(a)
Transfer and Exchange of Definitive Notes
.
When Definitive Notes are presented to the Registrar with a request:
(x) to register the transfer of such Definitive Notes; or
(y) to exchange such Definitive Notes for an equal principal amount of
Definitive Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if its reasonable
requirements for such transaction are met;
provided
,
however
, that the Definitive
Notes surrendered for transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instrument of transfer in form
reasonably satisfactory to the Company and the Registrar, duly executed by the Holder
thereof or its attorney duly authorized in writing; and
(ii) if such Definitive Notes are required to bear a restricted securities legend,
they are being transferred or exchanged pursuant to an effective registration statement
under the Securities Act, pursuant to Section 2.3(b) of this Appendix or pursuant to clause
(A), (B) or (C) below, and are accompanied by the following additional information and
documents, as applicable:
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(A) if such Definitive Notes are being delivered to the Registrar by a Holder
for registration in the name of such Holder, without transfer, a certification from
such Holder to that effect; or
(B) if such Definitive Notes are being transferred to the Company, a
certification to that effect; or
(C) if such Definitive Notes are being transferred (x) pursuant to an
exemption from registration in accordance with Rule 144A, Regulation S or Rule 144
under the Securities Act; or (y) in reliance upon another exemption from the
requirements of the Securities Act: (i) a certification to that effect (in the form
set forth on the reverse of the Note) and (ii) if the Company so requests, an
opinion of counsel or other evidence reasonably satisfactory to it as to the
compliance with the restrictions set forth in the legend set forth in Section
2.3(e)(i) of this Appendix.
(b)
Restrictions on Transfer of a Definitive Note for a Beneficial Interest in a
Restricted Global Note.
A Definitive Note may not be exchanged for a beneficial interest in a
Rule 144A Global Note or a Permanent Regulation S Global Note except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive Note, duly endorsed or
accompanied by appropriate instruments of transfer, in form satisfactory to the Trustee, together
with:
(i) certification, in the form set forth on the reverse of the Note, that such
Definitive Note is either (A) being transferred to a QIB in accordance with Rule
144A or (B) being transferred after expiration of the Distribution Compliance
Period by a Person who initially purchased such Note in reliance on Regulation S to
a buyer who elects to hold its interest in such Note in the form of a beneficial
interest in the Permanent Regulation S Global Note; and
(ii) written instructions directing the Trustee to make, or to direct the
Notes Custodian to make, an adjustment on its books and records with respect to
such Rule 144A Global Note (in the case of a transfer pursuant to clause (b)(i)(A)
of this Section 2.3) or Permanent Regulation S Global Note (in the case of a
transfer pursuant to clause (b)(i)(B) of this Section 2.3) to reflect an increase
in the aggregate principal amount of the Notes represented by the Rule 144A Global
Note or Permanent Regulation S Global Note, as applicable, such instructions to
contain information regarding the Depository account to be credited with such
increase,
then the Trustee shall cancel such Definitive Note and cause, or direct the Notes Custodian to
cause, in accordance with the standing instructions and procedures existing between the Depository
and the Notes Custodian, the aggregate principal amount of Notes represented by the Rule 144A
Global Note or Permanent Regulation S Global Note, as applicable, to be increased by the aggregate
principal amount of the Definitive Note to be exchanged and shall credit or cause to be credited to
the account of the Person
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specified in such instructions a beneficial interest in the Rule 144A Global Note or Permanent
Regulation S Global Note, as applicable, equal to the principal amount of the Definitive Note so
canceled. If no Rule 144A Global Notes or Permanent Regulation S Global Notes, as applicable, are
then outstanding, the Company shall issue and the Trustee shall authenticate, upon written order of
the Company in the form of an Officers Certificate of the Company, a new Rule 144A Global Note or
Permanent Regulation S Global Note, as applicable, in the appropriate principal amount.
(c)
Transfer and Exchange of Global Notes.
(i) The transfer and exchange of Global Notes or beneficial interests therein
shall be effected through the Depository, in accordance with the Indenture
(including applicable restrictions on transfer set forth herein, if any) and the
procedures of the Depository therefor. A transferor of a beneficial interest in a
Global Note shall deliver to the Registrar a written order given in accordance with
the Depositorys procedures containing information regarding the participant
account of the Depository to be credited with a beneficial interest in the Global
Note. The Registrar shall, in accordance with such instructions instruct the
Depository to credit to the account of the Person specified in such instructions a
beneficial interest in the Global Note and to debit the account of the Person
making the transfer of the beneficial interest in the Global Note being
transferred.
(ii) If the proposed transfer is a transfer of a beneficial interest in one
Global Note to a beneficial interest in another Global Note, the Registrar shall
reflect on its books and records the date and an increase in the principal amount
of the Global Note to which such interest is being transferred in an amount equal
to the principal amount of the interest to be so transferred, and the Registrar
shall reflect on its books and records the date and a corresponding decrease in the
principal amount of the Global Note from which such interest is being transferred.
Upon such transfer, the beneficial interest in such first-referenced Global Note
shall cease to be an interest in such Global Note and shall become an interest in
such other Global Note.
(iii) Notwithstanding any other provisions of this Appendix (other than the
provisions set forth in Section 2.4 of this Appendix), a Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository or
by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or a
nominee of such successor Depository.
(iv) In the event that a beneficial interest in a Restricted Global Note is
exchanged for Definitive Notes under Section 2.4 of this Appendix, prior to the
consummation of a Registered Exchange Offer or the effectiveness
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of a Shelf Registration Statement with respect to such Notes, such Notes may
be exchanged only in accordance with such procedures as are substantially
consistent with the provisions of this Section 2.3 (including the certification
requirements set forth on the reverse of the Initial Notes intended to ensure that
such transfers comply with Rule 144A, Regulation S or another applicable exemption
under the Securities Act, as the case may be) and such other procedures as may from
time to time be adopted by the Company.
(d)
Restrictions on Transfer of Temporary Regulation S Global Notes.
During the
Distribution Compliance Period, beneficial ownership interests in Temporary Regulation S Global
Notes may only be sold, pledged or transferred in accordance with the Applicable Procedures and
only (i) to the Company, (ii) in an offshore transaction in accordance with Regulation S (other
than a transaction resulting in an exchange for an interest in a Permanent Regulation S Global
Note), (iii) pursuant to an effective registration statement under the Securities Act, in each case
in accordance with any applicable securities laws of any State of the United States.
(e)
Legend.
In each case unless the Company determines otherwise in compliance with
applicable law:
(i) Except as permitted by the following paragraphs (ii), (iii), (iv) and (v),
each Note certificate evidencing Restricted Global Notes (and all Notes issued in
exchange therefor or in substitution thereof), in the case of Notes offered
otherwise than in reliance on Regulation S, shall bear a legend in substantially
the following form (the
Restricted Note Legend
):
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933 (THE SECURITIES ACT), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (I) TO THE ISSUER OR ANY OF ITS WHOLLY-OWNED SUBSIDIARIES,
A-9
(II)IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (III) OUTSIDE THE UNITED STATES IN A TRANSACTION COMPLYING WITH
THE PROVISIONS OF RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 THEREUNDER (IF AVAILABLE), (V) TO AN INSTITUTIONAL
ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1), (2), (3)
OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING NOTES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF SUCH NOTES OF
$250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER
OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (VI) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (VI) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES, AND IN EACH OF CASES (III), (IV) AND (V) SUBJECT TO THE
ISSUERS AND THE TRUSTEES RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION, AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THE
ISSUER AND THE TRUSTEE AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF
THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
Each certificate evidencing a Note offered in reliance on Regulation S shall,
in addition to the foregoing, bear a legend in substantially the following form
(the
Regulation S Legend
):
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE SECURITIES ACT),
A-10
AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS
USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE
SECURITIES ACT.
Each Global Note shall also bear the following additional legend (and/or such
other legend as may be required by the Depository) (the
Global Note
Legend
):
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (DTC), NEW
YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSORS NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
Each Regulation S Global Note shall also bear a legend substantially in the
following form (the
Regulation S Global Note Legend
):
UNTIL 40 DAYS AFTER THE LATER OF COMMENCEMENT OR COMPLETION OF THE
OFFERING, AN OFFER OR SALE OF SECURITIES
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WITHIN THE UNITED STATES BY A
DEALER (AS DEFINED IN THE SECURITIES ACT) MAY VIOLATE THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR SALE IS MADE
OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.
Each Temporary Regulation S Global Note shall also bear a legend substantially
in the following form (the
Temporary Regulation S Global Note Legend
):
EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN THIS
TEMPORARY REGULATION S GLOBAL NOTE WILL NOT BE EXCHANGEABLE FOR
INTERESTS IN THE PERMANENT REGULATION S GLOBAL NOTE OR ANY OTHER
SECURITY REPRESENTING AN INTEREST IN THE SECURITIES REPRESENTED HEREBY
WHICH DO NOT CONTAIN A LEGEND CONTAINING RESTRICTIONS ON TRANSFER,
UNTIL THE EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD
(WITHIN THE MEANING OF RULE 903(b)(2) OF REGULATION S UNDER THE
SECURITIES ACT) AND THEN ONLY UPON CERTIFICATION IN FORM REASONABLY
SATISFACTORY TO THE TRUSTEE THAT SUCH BENEFICIAL INTERESTS ARE OWNED
EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO PURCHASED SUCH
INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION UNDER THE
SECURITIES ACT. DURING SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD,
BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL
NOTE MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED (I) TO THE COMPANY, (II)
OUTSIDE THE UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904
OF REGULATION S UNDER THE SECURITIES ACT, OR (III) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES. HOLDERS OF INTERESTS IN THIS
TEMPORARY REGULATION S GLOBAL NOTE WILL NOTIFY ANY PURCHASER OF THIS
SECURITY
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OF THE RESALE RESTRICTIONS REFERRED TO ABOVE, IF THEN
APPLICABLE.
AFTER THE EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD BENEFICIAL
INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL NOTE MAY BE EXCHANGED
FOR INTERESTS IN A RULE 144A GLOBAL NOTE ONLY IF (1) SUCH EXCHANGE
OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN COMPLIANCE
WITH RULE 144A AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL NOTE
FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM
ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION S
GLOBAL NOTE IS BEING TRANSFERRED (A) TO A PERSON WHO THE TRANSFEROR
REASONABLY BELIEVES TO BE A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A, (B) TO A PERSON WHO IS PURCHASING FOR ITS OWN
ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, AND (C) IN
ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE
UNITED STATES AND OTHER JURISDICTIONS.
BENEFICIAL INTERESTS IN A RULE 144A GLOBAL NOTE MAY BE TRANSFERRED TO
A PERSON WHO TAKES DELIVERY IN THE FORM OF AN INTEREST IN THE
REGULATION S GLOBAL NOTE, WHETHER BEFORE OR AFTER THE EXPIRATION OF
THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR
FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM
ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT SUCH TRANSFER IS
BEING MADE IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S OR RULE
144 (IF AVAILABLE).
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Each Definitive Note shall also bear the following additional legend (the
Definitive Note Legend
):
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR SUCH CERTIFICATES AND OTHER INFORMATION AS THE REGISTRAR MAY
REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS.
Each Note that has more than a
de
minimis
amount of original
issue discount for U.S. federal income tax purposes, as determined by the Company,
shall bear a legend substantially in the following form on the face of such Note
(with any amendments thereto necessary to reflect changes in U.S. federal income
tax laws occurring after the Issue Date) (the
OID Legend
):
FOR THE PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, THIS NOTE IS BEING ISSUED WITH
ORIGINAL ISSUE DISCOUNT. YOU MAY CONTACT THE ISSUER AT 25505 W. TWELVE
MILE ROAD, SOUTHFIELD, MICHIGAN 48034, ATTENTION: INVESTOR RELATIONS,
AND THE ISSUER WILL PROVIDE YOU WITH THE ISSUE PRICE, THE AMOUNT OF
ORIGINAL ISSUE DISCOUNT, THE ISSUE DATE AND THE YIELD TO MATURITY OF
THIS NOTE.
(ii) Upon any sale or transfer of a Transfer Restricted Note that is a
Definitive Note pursuant to Rule 144 under the Securities Act, the Registrar shall
permit the transferee thereof to exchange such Transfer Restricted Note for a
certificated Note that does not bear the legend set forth above and rescind any
restriction on the transfer of such Transfer Restricted Note, if the transferor
thereof certifies in writing to the Registrar that such sale or transfer was made
in reliance on Rule 144 (such certification to be in the form set forth on the
reverse of the Note).
(iii) After a transfer of any Initial Notes or Private Exchange Notes
pursuant to and during the period of the effectiveness of a Shelf Registration
Statement with respect to such Initial Notes or Private Exchange Notes, as the case
may be, all requirements pertaining to legends on such Initial Note or such Private
Exchange Note will cease to apply, the requirements requiring any such Initial Note
or such Private Exchange Note issued to certain Holders be issued in global form
will cease to apply, and a certificated Initial Note or Private Exchange Note or an
Initial Note or Private Exchange Note in the form of an Unrestricted
A-14
Global Note, in each case without Restrictive Legends, will be available to
the transferee of the Holder of such Initial Notes or Private Exchange Notes upon
exchange of such transferring Holders certificated Initial Note or Private
Exchange Note or directions to transfer such Holders interest in the Global Note,
as applicable.
(iv) Upon the consummation of a Registered Exchange Offer with respect to the
Initial Notes, all requirements pertaining to such Initial Notes that Initial Notes
issued to certain Holders be issued in global form will still apply with respect to
Holders of such Initial Notes that do not exchange their Initial Notes, and
Exchange Notes in certificated form or in the form of an Unrestricted Global Note,
in each case without the Restrictive Legends, will be available to Holders that
exchange such Initial Notes in such Registered Exchange Offer.
(v) At the option of the Company and upon compliance with the following
procedures, the beneficial interests in a Restricted Global Note shall be exchanged
for beneficial interests in an Unrestricted Global Note, without the Restrictive
Legends. In order to effect such exchange, the Company shall provide written notice
to the Trustee instructing the Trustee to (i) direct the Depository to transfer the
specified amount of the outstanding beneficial interests in a particular Restricted
Global Note to an Unrestricted Global Note and provide the Depository with all such
information as is necessary for the Depository to appropriately credit and debit
the relevant Holder accounts and (ii) provide prior written notice to all Holders
of such exchange through the Depository or its nominee, which notice must include
the date such exchange is proposed to occur, the CUSIP number of the relevant
Restricted Global Note and the CUSIP number of the Unrestricted Global Note into
which such Holders beneficial interests will be exchanged. As a condition to any
such exchange pursuant to this Section 2.3(e)(v), the Trustee shall be entitled to
receive from the Company, and rely conclusively without any liability, upon an
Officers Certificate and an Opinion of Counsel to the effect that such transfer of
beneficial interests to the Unrestricted Global Note shall be effected in
compliance with the Securities Act. The Company may request from Holders, and
Holders shall promptly provide, such information the Company reasonably determines
is required in order to be able to deliver such Officers Certificate and Opinion
of Counsel. Upon such exchange of beneficial interests pursuant to this Section
2.3(e)(v), the Registrar shall endorse the schedule of increases and decreases in
global note to the relevant Global Notes and reflect on its books and records the
date of such transfer and a decrease and increase, respectively, in the principal
amount of the applicable Restricted Global Note(s) and Unrestricted Global Notes,
respectively, equal to the principal amount of beneficial interests transferred.
Following any such transfer pursuant to
A-15
this Section 2.3(e)(v) of all of the beneficial interests in a Restricted
Global Note, such Restricted Global Note shall be cancelled.
(vi) Upon the consummation of a Private Exchange with respect to the Initial
Notes, all requirements pertaining to such Initial Notes that Initial Notes issued
to certain Holders be issued in global form will still apply with respect to
Holders of such Initial Notes that do not exchange their Initial Notes, and Private
Exchange Notes in global form with the applicable Restrictive Legends and other
applicable legends set forth in Section 2.3(e)(i) of this Appendix will be
available to Holders that exchange such Initial Notes in such Private Exchange.
(f)
Cancellation or Adjustment of Global Note.
At such time as all beneficial
interests in a Global Note have either been exchanged for Definitive Notes, redeemed, purchased or
canceled, such Global Note shall be returned to the Depository for cancellation or retained and
canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a
Global Note is exchanged for certificated Notes, redeemed, purchased or canceled, the principal
amount of Notes represented by such Global Note shall be reduced and an adjustment shall be made on
the books and records of the Trustee (if it is then the Notes Custodian for such Global Note) with
respect to such Global Note, by the Trustee or the Notes Custodian, to reflect such reduction.
(g)
No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to any beneficial
owner of a Global Note, a member of, or a participant in the Depository or other
Person with respect to the accuracy of the records of the Depository or its nominee
or of any participant or member thereof, with respect to any ownership interest in
the Notes or with respect to the delivery to any participant, member, beneficial
owner or other Person (other than the Depository) of any notice (including any
notice of redemption) or the payment of any amount, under or with respect to such
Notes. All notices and communications to be given to the Holders and all payments
to be made to Holders under the Notes shall be given or made only to or upon the
order of the registered Holders (which shall be the Depository or its nominee in
the case of a Global Note). The rights of beneficial owners in any Global Note
shall be exercised only through the Depository subject to the applicable rules and
procedures of the Depository. The Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to its members,
participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under the
Indenture or under applicable law with respect to any transfer of
A-16
any interest in any Note (including any transfers between or among Depository
participants, members or beneficial owners in any Global Note) other than to
require delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the terms of
the Indenture, and to examine the same to determine substantial compliance as to
form with the express requirements of the Indenture.
2.4
Definitive Notes.
(a) A Global Note deposited with the Depository or with the
Trustee as Notes Custodian for the Depository pursuant to Section 2.1 of this Appendix shall be
transferred to the beneficial owners thereof in the form of Definitive Notes in an aggregate
principal amount equal to the principal amount of such Global Note, in exchange for such Global
Note, only if such transfer complies with Section 2.3 of this Appendix and (i) the Depository
notifies the Company that it is unwilling or unable to continue as Depository for such Global Note
and the Depository fails to appoint a successor depository or if at any time such Depository ceases
to be a clearing agency registered under the Exchange Act, in either case, and a successor
depository is not appointed by the Company within 120 days of such notice, or (ii) the Depository
so requests and an Event of Default has occurred and is continuing or (iii) the Company, in its
sole discretion, notifies the Trustee in writing that it elects to cause the issuance of Definitive
Notes under the Indenture.
(b) Any Global Note that is transferable to the beneficial owners thereof pursuant to this
Section 2.4 shall be surrendered by the Depository to the Trustee located at its principal
corporate trust office in the Borough of Manhattan, The City of New York, to be so transferred, in
whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver,
upon such transfer of each portion of such Global Note, an equal aggregate principal amount of
Definitive Notes of authorized denominations. Any portion of a Global Note transferred pursuant to
this Section 2.4 shall be executed, authenticated and delivered only in denominations of $2,000
principal amount and any integral multiple of $1,000 in excess thereof and registered in such names
as the Depository shall direct. Any Definitive Note delivered in exchange for an interest in the
Transfer Restricted Note shall, except as otherwise provided by Section 2.3(e) of this Appendix,
bear the applicable Restrictive Legends and the Definitive Note Legend, unless the Company
determines otherwise in compliance with applicable law.
(c) Subject to the provisions of Section 2.4(b) of this Appendix, the registered Holder of a
Global Note shall be entitled to grant proxies and otherwise authorize any Person, including Agent
Members and Persons that may hold interests through Agent Members, to take any action which a
Holder is entitled to take under this Indenture or the Notes.
(d) In the event of the occurrence of one of the events specified in Section 2.4(a) of this
Appendix, the Company shall promptly make available to the Trustee a reasonable supply of
Definitive Notes in definitive, fully registered form
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without interest coupons. In the event that
Definitive Notes are not issued to any owner of a beneficial
interest in a Global Note at a time at which such beneficial owner has a right to receive such
Definitive Notes pursuant to the Indenture, the Company expressly agrees and acknowledges that (1)
such beneficial owner shall have standing to pursue a remedy pursuant to the Indenture to compel
the issuance of such Definitive Notes to such beneficial owner and to compel the registration of
such Definitive Notes in the name of such beneficial owner in the register maintained by the
Registrar with respect to the Notes and (2) such beneficial owner shall be entitled, pending such
issuance and registration, to sue for payment (which payment shall only be made following such
issuance and registration) of the monetary obligation to be represented by such Definitive Notes.
The Company agrees that specific performance is an appropriate form for the remedy referenced in
clause (1) of the immediately-preceding sentence and shall not object to such form of such remedy.
A-18
EXHIBIT I
to
RULE 144A/REGULATION S APPENDIX
to the Indenture, dated as of February 1, 2010,
among Credit Acceptance Corporation, a Michigan
corporation, the Guarantors (as defined therein) listed
on the signature pages thereto and U.S. Bank National Association,
a national banking association, as trustee
[FORM OF FACE OF INITIAL NOTE]
FOR THE PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
THIS NOTE IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT. YOU MAY CONTACT THE ISSUER AT 25505 W.
TWELVE MILE ROAD, SOUTHFIELD, MICHIGAN 48034, ATTENTION: INVESTOR RELATIONS, AND THE ISSUER WILL
PROVIDE YOU WITH THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE ISSUE DATE AND THE
YIELD TO MATURITY OF THIS NOTE.
[Insert the Global Note Legend, if applicable]
[Insert the Regulation S Global Note Legend, if applicable]
[Insert the Restricted Note Legend, if applicable]
[Insert the Regulation S Legend, if applicable]
[Insert the Temporary Regulation S Global Note Legend, if applicable]
[Insert the Definitive Note Legend, if applicable]
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CUSIP No.
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ISIN
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No.___
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$___
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9.125% First Priority Senior Secured Notes due 2017
Credit Acceptance Corporation, a Michigan corporation, promises to pay to
, or registered assigns, the principal sum of
Dollars (as such
sum may be increased or decreased as reflected on the Schedule of Increases and Decreases in Global
Note attached hereto) on February 1, 2017.
Interest Payment Dates: February 1 and August 1.
Record Dates: January 15 and July 15.
Additional provisions of this Note are set forth on the other side of this Note.
I-2
Dated:
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CREDIT ACCEPTANCE CORPORATION
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by
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Name:
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Title:
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I-3
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TRUSTEES CERTIFICATE OF
AUTHENTICATION
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U.S. BANK NATIONAL ASSOCIATION,
as Trustee, certifies that this is one of
the Notes referred to in the Indenture.
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by
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Authorized Signatory
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I-4
[FORM OF REVERSE SIDE OF INITIAL NOTE]
9.125% First Priority Senior Secured Note due 2017
1.
Interest
Credit Acceptance Corporation, a Michigan corporation (such corporation, and its successors
and assigns under the Indenture hereinafter referred to, being herein called the
"
Company
), promises to pay interest on the principal amount of this Note at the rate per
annum shown above[;
provided
,
however
, that if a Registration Default (as defined
in the Applicable Registration Rights Agreement (as defined in paragraph 20 of this Note)) occurs,
additional interest will accrue on this Note at a rate of 0.25% per annum (increasing by an
additional 0.25% per annum after each consecutive 90-day period that occurs after the date on which
such Registration Default occurs up to a maximum additional interest rate of 1.00%) from and
including the date on which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured. Within a reasonable amount of time following the
occurrence of a Registration Default, the Company will provide notice to the Trustee of such
Registration Default]
1
. The Company will pay interest on the Notes semiannually in
arrears on February 1 and August 1 of each year, commencing August 1, 2010. Interest on the Notes
will accrue from the most recent date to which interest has been paid or, if no interest has been
paid, from the February 1 or August 1 (whichever is more recent) next preceding the interest
payment date (or, in the case of any Additional Notes as to which no interest has been paid, from
the date of issuance of such Additional Notes). Interest will be computed on the basis of a
360-day year of twelve 30-day months. The Company will pay interest on overdue principal at the
rate borne by this Note, and it will pay interest on overdue installments of interest at the same
rate to the extent lawful.
2.
Method of Payment
The Company will pay interest on the Notes (except defaulted interest) to the Persons who are
registered holders of Notes at the close of business on the January 15 or August 15 next preceding
the interest payment date even if Notes are canceled after the record date and on or before the
interest payment date. Holders must surrender Notes to a Paying Agent to collect principal
payments. The Company will pay principal, premium, if any, and interest on the Notes in money of
the United States that at the time of payment is legal tender for payment of public and private
debts. Principal, premium, if any, and interest on the Notes will be payable at the office or
agency of the Company maintained for such purpose within the City and State of New York or, at the
option of
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1
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To be included only if there is a Registration
Rights Agreement (as defined in the Appendix) applicable to this Note and
subject to modification as necessary to reflect the terms of such Registration
Rights Agreement, if any.
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I-5
the Company, payment of interest may be made by check mailed to the Holders of the Notes at
their respective addresses set forth in the register of Holders of Notes;
provided
,
however
, that all payments of principal, premium and interest with respect to Notes the
Holders of which have given wire transfer instructions to the Company will be required to be made
by wire transfer of immediately available funds to the accounts specified by the Holders thereof.
Until otherwise designated by the Company, the Companys office or agency in the City and State of
New York will be the office of the Trustee maintained for such purpose, which shall initially be
100 Wall Street, Suite 1600, New York, NY 10005, Attention: Corporate Trust Department. Payments
in respect of the Notes represented by a Global Note (including principal, premium, if any, and
interest) will be made by wire transfer of immediately available funds to the accounts specified by
the Depository. The Company will make all payments in respect of a certificated Note (including
principal, premium and interest) by mailing a check to the registered address of each Holder
thereof;
provided
,
however
, that payments on a certificated Note will be made by
wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if
such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying
Agent to such effect designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept in its discretion).
3.
Paying Agent and Registrar
Initially, the Trustee shall act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent or Registrar without notice. The Company or any Wholly-Owned Restricted
Subsidiary of the Company incorporated or organized within the United States of America may act as
Paying Agent or Registrar.
4.
Indenture, Security Documents and Intercreditor Agreement
The Company issued the Notes under an Indenture dated as of February 1, 2010 (the
"
Indenture
), among the Company, the Guarantors and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (15
U.S.C.
§§ 77aaa-77bbbb) (the
Act
). Terms defined
in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The
Notes are subject to all such terms, and Holders are referred to the Indenture and the Act for a
statement of those terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture (including those made part of the Indenture by reference to the Act, if
any), the provisions of the Indenture shall govern and be controlling.
The Company shall be entitled, subject to its compliance with Sections 4.03 and 4.10 of the
Indenture, to issue Additional Notes pursuant to Section 2.13 of the Indenture. The Initial Notes
issued on the Issue Date and any Additional Notes, Exchange Notes, Private Exchange Notes and
Replacement Notes will be treated as a single class for all purposes under the Indenture. The
Indenture contains covenants (i) that impose certain limitations on the ability of the Company and
the Restricted Subsidiaries to, among other
I-6
things, incur or guarantee additional indebtedness; pay dividends or distributions on, or
redeem or repurchase, capital stock; make investments; engage in transactions with Affiliates;
create liens on assets; transfer or sell assets; guarantee indebtedness; and restrict dividends or
other payments of subsidiaries; (ii) that impose certain limitations on the ability of the Company
and each Guarantor to consolidate, merge or transfer all or substantially all of its assets; and
(iii) that require the Company to maintain certain financial ratios. These covenants are subject
to important exceptions and qualifications.
To secure the due and punctual payment of the obligations of the Company and the Guarantors
under this Indenture and the Notes and the Notes Guarantees, the Company, the Guarantors, the
Collateral Agent and the Trustee have entered into the Security Documents providing for the
creation of specified security interests and related matters. Each Holder, by accepting a Note,
agrees to all of the terms and provisions of the Security Documents and the Intercreditor
Agreement, as the same may be amended from time to time pursuant to the provisions of the Security
Documents, the Intercreditor Agreement and the Indenture, and authorizes and directs the Trustee
and the Collateral Agent to perform their respective obligations and exercise their respective
rights under the Security Documents and the Intercreditor Agreement in accordance therewith;
provided
,
however
, that if any provisions of the Security Documents or the
Intercreditor Agreement limit, qualify or conflict with the duties imposed by the provisions of the
TIA, the TIA (other than TIA § 314(d) and TIA § 314(b) (which shall not be applicable to this
Indenture unless it is qualified under the TIA)) will control. Notwithstanding anything to the
contrary in the Indenture, no security interest or Lien is granted by the provisions of the
Indenture, the Notes or the Notes Guarantees.
5.
Optional Redemption
At any time and from time to time prior to February 1, 2014, the Notes may be redeemed at the
Companys option, in whole or in part, at a redemption price equal to 100.0% of the principal
amount of the Notes redeemed, plus accrued and unpaid interest thereon, if any, to but excluding
the applicable Redemption Date, subject to the rights of Holders of Notes on the relevant record
date to receive interest due on the relevant interest payment date, plus the Applicable Premium as
of the applicable Redemption Date.
On and after February 1, 2014, the Notes may be redeemed, at the Companys option, in whole or
in part, at any time and from time to time, at the redemption prices set forth below. The Notes
shall be redeemable at the redemption prices (expressed as percentages of principal amount of the
Notes to be redeemed) set forth below plus accrued and unpaid interest thereon, if any, to but
excluding the applicable Redemption Date, subject to the right of Holders of Notes on the relevant
record date to receive interest due on the relevant interest payment date, if redeemed during the
12-month period beginning on February 1 of each of the years indicated below:
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Year
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Percentage
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2014
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104.563
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%
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2015
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102.281
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%
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2016 and thereafter
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100.000
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%
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In addition, at any time on or prior to February 1, 2013, the Company may on any one or more
occasions redeem up to an aggregate of 35.0% of the aggregate principal amount of the Notes at a
redemption price of 109.125% of the principal amount of the Notes redeemed, plus accrued and unpaid
interest thereon, if any, to but excluding the applicable Redemption Date, subject to the rights of
Holders of Notes on the relevant record date to receive interest due on the relevant interest
payment date, with the Net Cash Proceeds of a public offering of common stock of the Company;
provided, however, that at least 65.0% in aggregate principal amount of the Notes remains
outstanding immediately after the occurrence of such redemption and that such redemption shall
occur within 90 days of the date of the closing of such public offering.
If the Redemption Date with respect to a Note to be redeemed is on or after an interest record
date and on or before the related interest payment date, any accrued and unpaid interest on that
Note shall be payable to the Person that was, at the close of business on such record date, the
Holder of that Note, and no additional interest for the period to which that interest record date
relates shall be payable with respect to that Note.
6.
Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more than 60 days before the
applicable Redemption Date to each Holder of Notes to be redeemed at his registered address. No
Notes of $2,000 or less shall be redeemed in part. Notes in denominations larger than $2,000
principal amount may be redeemed in part, but only in whole multiples of $1,000. Notes called for
redemption become due on the applicable Redemption Date. On and after the applicable Redemption
Date, interest ceases to accrue on Notes or portions of them called for redemption.
7.
Repurchase of Notes at the Option of the Holders upon Change of Control and Asset
Sales
Upon a Change of Control, any Holder of Notes will have the right to cause the Company to
repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of
the Notes of such Holder at a repurchase price equal to 101.0% of the principal amount of the Notes
to be repurchased plus accrued and unpaid interest to but excluding the date of repurchase (subject
to the right of holders of record on the relevant record date to receive interest due on the
related interest payment date) as provided in, and subject to the terms of, the Indenture.
I-8
In accordance with Section 4.06 of the Indenture, the Company will be required to offer to
purchase Notes upon the occurrence of certain events.
8.
Guarantee
The payment by the Company of the principal of, and premium and interest on, the Notes is
fully and unconditionally guaranteed on a joint and several senior secured basis by each of the
Guarantors to the extent set forth in the Indenture.
9.
Denominations; Transfer; Exchange
The Notes are in registered form without coupons in denominations of $2,000 principal amount
and whole multiples of $1,000 in excess thereof. A Holder may transfer or exchange Notes in
accordance with the Indenture. The Registrar may require a Holder to, among other things, furnish
appropriate endorsements or transfer documents and to pay any taxes and fees required by law or
permitted by the Indenture. The Company shall not be required to transfer or exchange, and the
Registrar need not register the transfer or exchange, of any Note selected for redemption (except,
in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or any
Note for a period of 15 days before a selection of Notes to be redeemed or 15 days before an
interest payment date.
10.
Persons Deemed Owners
The registered Holder of this Note shall be treated as the owner of it for all purposes.
11.
Unclaimed Money
If money for the payment of principal or interest remains unclaimed for two years, the Trustee
or Paying Agent shall pay the money back to the Company at its request unless an abandoned property
law designates another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
12.
Discharge and Defeasance
Subject to certain conditions, the Company at any time shall be entitled to terminate some or
all of its obligations under the Notes and the Indenture if the Company deposits with the Trustee
money or Government Securities for the payment of principal and interest on the Notes to redemption
or maturity, as the case may be.
13.
Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (a) the Indenture, the Security
Documents, the Intercreditor Agreement and the Notes may be amended or supplemented (and waivers
granted with respect to any provisions thereof) with the
I-9
written consent of the Holders of a majority in principal amount of the Notes then outstanding
and (b) any default or noncompliance with any provision thereof may be waived with the written
consent of the Holders of a majority in principal amount of the Notes then outstanding. Subject to
certain exceptions set forth in the Indenture, without the consent of any Holder, the Company, the
Guarantors and the Trustee may amend or supplement the Indenture, the Notes, any Security Document
or the Intercreditor Agreement to cure any ambiguity, omission, defect or inconsistency; to provide
for uncertificated Notes in addition to or in place of certificated Notes (provided that the
uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code); to
provide for the assumption by a successor corporation of the obligations of the Company or a
Guarantor to Holders under the Indenture in the case of a merger or consolidation; to make any
change that would provide any additional rights or benefits to the Holders of Notes or that does
not adversely affect the legal rights under the Indenture of any such Holder; to comply with
requirements of the SEC in order to effect or maintain the qualification of this Indenture under
the Trust Indenture Act; to evidence and provide for the acceptance of appointment under the
Indenture of a successor trustee; to add one or more Guarantors under this Indenture; to add any
additional assets to the Collateral; to release Collateral from the Lien of the Security Documents
when permitted or required by this Indenture and the Security Documents; to conform the text of
this Indenture, the Notes or any Guarantee to any provision of the section of the Offering Circular
entitled Description of Notes to the extent that such provision in the section of the Offering
Circular entitled Description of Notes was intended to be a verbatim recitation of a provision of
the Indenture, the Notes or such Guarantee; as necessary to conform the Indenture to any exemptive
orders under the Trust Indenture Act received by the Company or any Guarantor; or to make any
amendment to the provisions of the Indenture relating to the transfer and legending of Notes;
provided, however, that (1) compliance with the Indenture as so amended would not result in Notes
being transferred in violation of the Securities Act or any other applicable securities law and (2)
such amendment does not materially and adversely affect the rights of Holders to transfer Notes.
14.
Defaults and Remedies
Under the Indenture and subject to the terms of the Indenture, Events of Default include: (i)
default in the payment when due of interest on the Notes, which default continues for 30
consecutive days; (ii) default in payment of the principal of or premium, if any, on the Notes when
due, at Stated Maturity, upon optional redemption, upon required repurchase or otherwise; (iii)
failure by the Company to comply with other agreements in the Indenture or the Notes, in certain
cases subject to notice or lapse of time; (iv) certain accelerations (including failure to pay
within any grace period after final maturity) of other Indebtedness of the Company if the amount
accelerated (or so unpaid) exceeds $25 million; (v) certain judgments or decrees for the payment of
money in excess of $25 million; (vi) certain defaults with respect to the Notes Guarantees; (vii)
certain events of bankruptcy or insolvency with respect to the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that, taken together, would constitute a Significant
Subsidiary and (viii) certain defaults relating to the Collateral
I-10
under the Security Documents. If an Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in principal amount of the Notes may declare all the Notes to be due
and payable immediately. Certain events of bankruptcy or insolvency are Events of Default which
will result in the Notes being due and payable immediately upon the occurrence of such Events of
Default.
Holders may not enforce the Indenture or the Notes except as provided in the Indenture. The
Trustee may refuse to enforce the Indenture or the Notes unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in principal amount of
the Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders notice of any continuing Default (except a Default in payment of principal or
interest) if it determines that withholding notice is in the interest of the Holders.
15.
Trustee Dealings with the Company
Subject to certain limitations imposed by the Act and the Indenture, the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Notes and may become a
creditor of, or otherwise deal with, the Company or its Affiliates with the same rights it would
have if it were not Trustee.
16.
No Recourse Against Others
No director, officer, employee, incorporator or shareholder of the Company, and no director,
trustee, officer, employee, incorporator or shareholder (other than the Company or a Restricted
Subsidiary) of any Subsidiary of the Company, as such, shall have any liability for any obligations
of the Company or any Guarantor under the Notes, the Indenture, any Notes Guarantee [, the
Applicable Registration Rights Agreement (as defined in paragraph 20 of this Note)]
2
or
the Security Documents or for any claim based on, in respect of or by reason of such obligations or
their creation. By accepting a Note, each Holder shall waive and release all such liability. This
waiver and release shall be part of the consideration for the issue of the Notes.
17.
Authentication
This Note shall not be valid until an authorized signatory of the Trustee (or an
authenticating agent) manually signs the certificate of authentication on the other side of this
Note.
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2
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To be included only if there is a Registration
Rights Agreement (as defined in the Appendix) applicable to this Note.
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I-11
18.
Abbreviations
Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM
(=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of
survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19.
CUSIP Numbers, ISINs etc.
The Company has caused [CUSIP numbers and ISINs [and Common Code numbers]] to be printed on
the Notes, and the Trustee may use [CUSIP numbers and ISINs [and Common Code numbers]] in notices
of redemption as a convenience to Holders. No representation is made as to the accuracy of such
numbers, either as printed on the Notes or as contained in any notice of redemption, and reliance
may be placed only on the other identification numbers placed thereon.
20. [
Holders Compliance with Registration Rights Agreement.
Each Holder of a Note, by acceptance hereof, acknowledges and agrees to the provisions of the
[Registration Rights Agreement]
3
(the
Applicable Registration Rights
Agreement
), including the obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.]
4
21.
Governing Law.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
The Company will furnish to any Holder upon written request and without charge to the Holder a
copy of the Indenture which has in it the text of this Note in larger type. Requests may be made
to:
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3
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Specify the applicable Registration Rights
Agreement, including parties thereto and date thereof.
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4
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To be included only if there is a Registration
Rights Agreement (as defined in the Appendix) applicable to this Note. If no
Registration Rights Agreement applies, replace with [RESERVED.].
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I-12
Credit Acceptance Corporation
25505 W. Twelve Mile Road
Southfield, Michigan 48034
Attention: Treasurer
I-13
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignees name, address and zip code)
(Insert assignees soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on the books of the Company. The agent
may substitute another to act for him.
Sign exactly as your name appears on the other side of this Note.
In connection with any transfer of any of the Notes evidenced by this certificate occurring prior
to the expiration of the applicable period referred to in Rule 144(d) under the Securities Act
after the later of the date of original issuance of such Notes and the last date, if any, on which
such Notes were owned by the Company or any Affiliate of the Company, the undersigned confirms that
such Notes are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
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(1)
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o
pursuant to an effective registration statement under the Securities
Act of 1933; or
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(2)
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o
inside the United States to a qualified institutional buyer (as
defined in Rule 144A under the Securities Act of 1933) that purchases for its own
account or for the account of a qualified institutional buyer to whom notice is given
that such transfer is being made in reliance on Rule 144A, in each case pursuant to
and in compliance with Rule 144A under the Securities Act of 1933; or
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(3)
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o
outside the United States in an offshore transaction within the
meaning of Regulation S under the Securities Act in compliance with Rule 904 under the
Securities Act of 1933; or
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(4)
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o
pursuant to the exemption from registration provided by Rule 144
under the Securities Act of 1933; or
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I-14
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(5)
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o
to an institutional accredited investor (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that has furnished to the
Trustee a signed letter containing certain representations and agreements.
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Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes
evidenced by this certificate in the name of any person other than the registered holder
thereof;
provided
,
however
, that if box (4) is checked, the Trustee shall
be entitled to require, prior to registering any such transfer of the Notes, such legal
opinions, certifications and other information as the Company has reasonably requested to
confirm that such transfer is being made pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act of 1933, such as the
exemption provided by Rule 144 under such Act.
Signature
Signature Guarantee:
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Signature must be guaranteed Signature
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Signature
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Signatures must be guaranteed by an eligible guarantor institution meeting the requirements
of the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (STAMP) or such other signature guarantee program as may be determined
by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Notes
Exchange Act of 1934, as amended.
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for its own account or
an account with respect to which it exercises sole investment discretion and that it and any such
account is a qualified institutional buyer within the meaning of Rule 144A under the Securities
Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request such information and that it is
aware that the transferor is relying upon the undersigneds foregoing representations in order to
claim the exemption from registration provided by Rule 144A.
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Dated:
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Notice:
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To be executed by
an executive officer
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I-15
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE
OF INCREASES AND DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been made:
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Date of
exchange
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Amount of decrease
in
principal amount
of this
Global Note
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Amount of increase
in
principal amount
of this
Global Note
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Principal amount of
this
Global Note
following such
decrease or
increase
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Signature of
authorized
officer
of Trustee or Notes
Custodian
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I-16
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to Section 4.06 or
4.09 of the Indenture, check the box:
o
If you want to elect to have only part of this Note purchased by the Company pursuant to
Section 4.06 or 4.09 of the Indenture, state the amount in principal amount: $
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Dated:
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Your Signature:
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(Sign exactly as your name appears
on the other side of this Note.)
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Signature Guarantee:
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(Signature must be guaranteed)
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Signatures must be guaranteed by an eligible guarantor institution meeting the
requirements of the Registrar, which requirements include membership or participation in the
Security Transfer Agent Medallion Program (STAMP) or such other signature guarantee program as
may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Notes Exchange Act of 1934, as amended.
I-17
EXHIBIT II
to
RULE 144A/REGULATION S APPENDIX
to the Indenture, dated as of February 1, 2010,
among Credit Acceptance Corporation, a Michigan
corporation, the Guarantors (as defined therein) listed
on the signature pages thereto and U.S. Bank National Association,
a national banking association, as trustee (the
Indenture
)
[FORM OF FACE OF [EXCHANGE] NOTE
[OR PRIVATE EXCHANGE NOTE][OR REPLACEMENT NOTE]]*
FOR THE PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
THIS NOTE IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT. YOU MAY CONTACT THE ISSUER AT 25505 W.
TWELVE MILE ROAD, SOUTHFIELD, MICHIGAN 48034, ATTENTION: INVESTOR RELATIONS, AND THE ISSUER WILL
PROVIDE YOU WITH THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE ISSUE DATE AND THE
YIELD TO MATURITY OF THIS NOTE.
*
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[If the Note is to be issued in global form, insert the Global Note Legend and include
the attachment from Exhibit I to the Appendix (as defined in the Indenture) captioned [TO BE
ATTACHED TO GLOBAL NOTES SCHEDULE OF INCREASES AND DECREASES IN GLOBAL NOTE]. If the Note
is a Private Exchange Note issued in a Private Exchange to an Initial Purchaser holding an
unsold portion of its initial allotment, insert the applicable Restrictive Legends and replace
the Assignment Form included in this Exhibit II with the Assignment Form included in such
Exhibit I.]
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CUSIP No.
ISIN
9.125% First Priority Senior Secured Notes due 2017
Credit Acceptance Corporation, a Michigan corporation, promises to pay to
, or registered assigns, the principal sum of
Dollars (as such
sum may be increased or decreased as reflected on the Schedule of Increases and Decreases in Global
Note attached hereto) on February 1, 2017.
Interest Payment Dates: February 1 and August 1.
Record Dates: January 15 and July 15.
Additional provisions of this Note are set forth on the other side of this
Note.
II-2
Dated:
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CREDIT ACCEPTANCE CORPORATION
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by
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Name:
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Title:
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II-3
TRUSTEES CERTIFICATE OF
AUTHENTICATION
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U.S. BANK NATIONAL ASSOCIATION,
as Trustee, certifies that this is one of the Notes
referred to in the Indenture.
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by
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Authorized Signatory
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II-4
[FORM OF REVERSE SIDE OF [EXCHANGE] NOTE
[OR PRIVATE EXCHANGE NOTE]]
9.125% First Priority Senior Secured Note due 2017
1.
Interest
Credit Acceptance Corporation, a Michigan corporation (such corporation, and its successors
and assigns under the Indenture hereinafter referred to, being herein called the
Company
), promises to pay interest on the principal amount of this Note at the rate per
annum shown above[;
provided
,
however
, that if a Registration Default (as defined
in the Applicable Registration Rights Agreement (as defined in paragraph 20 of this Note)) occurs,
additional interest will accrue on this Note at a rate of 0.25% per annum (increasing by an
additional 0.25% per annum after each consecutive 90-day period that occurs after the date on which
such Registration Default occurs up to a maximum additional interest rate of 1.00%) from and
including the date on which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured. Within a reasonable amount of time following the
occurrence of a Registration Default, the Company will provide notice to the Trustee of such
Registration Default]
5
. The Company will pay interest on the Notes semiannually in
arrears on February 1 and August 1 of each year, commencing August 1, 2010. Interest on the Notes
will accrue from the most recent date to which interest has been paid or, if no interest has been
paid, from the February 1 or August 1 (whichever is more recent) next preceding the interest
payment date (or, in the case of any Additional Notes as to which no interest has been paid, from
the date of issuance of such Additional Notes). Interest will be computed on the basis of a
360-day year of twelve 30-day months. The Company will pay interest on overdue principal at the
rate borne by this Note, and it will pay interest on overdue installments of interest at the same
rate to the extent lawful.
2.
Method of Payment
The Company will pay interest on the Notes (except defaulted interest) to the Persons who are
registered holders of Notes at the close of business on the January 15 or August 15 next preceding
the interest payment date even if Notes are canceled after the record date and on or before the
interest payment date. Holders must surrender Notes to a Paying Agent to collect principal
payments. The Company will pay principal, premium, if any, and interest on the Notes in money of
the United States that at the time of payment is legal tender for payment of public and private
debts. Principal, premium, if
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5
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To be included only if there is a Registration
Rights Agreement (as defined in the Appendix) applicable to this Note and
subject to modification as necessary to reflect the terms of such Registration
Rights Agreement, if any.
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II-5
any, and interest on the Notes will be payable at the office or agency of the Company
maintained for such purpose within the City and State of New York or, at the option of the Company,
payment of interest may be made by check mailed to the Holders of the Notes at their respective
addresses set forth in the register of Holders of Notes;
provided
,
however
, that
all payments of principal, premium and interest with respect to Notes the Holders of which have
given wire transfer instructions to the Company will be required to be made by wire transfer of
immediately available funds to the accounts specified by the Holders thereof. Until otherwise
designated by the Company, the Companys office or agency in the City and State of New York will be
the office of the Trustee maintained for such purpose, which shall initially be 100 Wall Street,
Suite 1600, New York, NY 10005, Attention: Corporate Trust Department. Payments in respect of the
Notes represented by a Global Note (including principal, premium, if any, and interest) will be
made by wire transfer of immediately available funds to the accounts specified by the Depository.
The Company will make all payments in respect of a certificated Note (including principal, premium
and interest) by mailing a check to the registered address of each Holder thereof;
provided
,
however
, that payments on a certificated Note will be made by wire
transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent
to such effect designating such account no later than 30 days immediately preceding the relevant
due date for payment (or such other date as the Trustee may accept in its discretion).
3.
Paying Agent and Registrar
Initially, the Trustee shall act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent or Registrar without notice. The Company or any Wholly-Owned Restricted
Subsidiary of the Company incorporated or organized within the United States of America may act as
Paying Agent or Registrar.
4.
Indenture, Security Documents and Intercreditor Agreement
The Company issued the Notes under an Indenture dated as of February 1, 2010 (the
Indenture
), among the Company, the Guarantors and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (15
U.S.C.
§§ 77aaa-77bbbb) (the
Act
). Terms defined
in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The
Notes are subject to all such terms, and Holders are referred to the Indenture and the Act for a
statement of those terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture (including those made part of the Indenture by reference to the Act, if
any), the provisions of the Indenture shall govern and be controlling.
The Company shall be entitled, subject to its compliance with Sections 4.03 and 4.10 of the
Indenture, to issue Additional Notes pursuant to Section 2.13 of the Indenture. The Initial Notes
issued on the Issue Date and any Additional Notes, Exchange Notes,
II-6
Private Exchange Notes and Replacement Notes will be treated as a single class for all
purposes under the Indenture. The Indenture contains covenants (i) that impose certain limitations
on the ability of the Company and the Restricted Subsidiaries to, among other things, incur or
guarantee additional indebtedness; pay dividends or distributions on, or redeem or repurchase,
capital stock; make investments; engage in transactions with Affiliates; create liens on assets;
transfer or sell assets; guarantee indebtedness; and restrict dividends or other payments of
subsidiaries; (ii) that impose certain limitations on the ability of the Company and each Guarantor
to consolidate, merge or transfer all or substantially all of its assets; and (iii) that require
the Company to maintain certain financial ratios. These covenants are subject to important
exceptions and qualifications.
To secure the due and punctual payment of the obligations of the Company and the Guarantors
under this Indenture and the Notes and the Notes Guarantees, the Company, the Guarantors, the
Collateral Agent and the Trustee have entered into the Security Documents providing for the
creation of specified security interests and related matters. Each Holder, by accepting a Note,
agrees to all of the terms and provisions of the Security Documents and the Intercreditor
Agreement, as the same may be amended from time to time pursuant to the provisions of the Security
Documents, the Intercreditor Agreement and the Indenture, and authorizes and directs the Trustee
and the Collateral Agent to perform their respective obligations and exercise their respective
rights under the Security Documents and the Intercreditor Agreement in accordance therewith;
provided
,
however
, that if any provisions of the Security Documents or the
Intercreditor Agreement limit, qualify or conflict with the duties imposed by the provisions of the
TIA, the TIA (other than TIA § 314(d) and TIA § 314(b) (which shall not be applicable to this
Indenture unless it is qualified under the TIA)) will control. Notwithstanding anything to the
contrary in the Indenture, no security interest or Lien is granted by the provisions of the
Indenture, the Notes or the Notes Guarantees.
5.
Optional Redemption
At any time and from time to time prior to February 1, 2014, the Notes may be redeemed at the
Companys option, in whole or in part, at a redemption price equal to 100.0% of the principal
amount of the Notes redeemed, plus accrued and unpaid interest thereon, if any, to but excluding
the applicable Redemption Date, subject to the rights of Holders of Notes on the relevant record
date to receive interest due on the relevant interest payment date, plus the Applicable Premium as
of the applicable Redemption Date.
On and after February 1, 2014, the Notes may be redeemed, at the Companys option, in whole or
in part, at any time and from time to time, at the redemption prices set forth below. The Notes
shall be redeemable at the redemption prices (expressed as percentages of principal amount of the
Notes to be redeemed) set forth below plus accrued and unpaid interest thereon, if any, to but
excluding the applicable Redemption Date, subject to the right of Holders of Notes on the relevant
record date to receive
II-7
interest due on the relevant interest payment date, if redeemed during the 12-month period
beginning on February 1 of each of the years indicated below:
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Year
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Percentage
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2014
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104.563
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%
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2015
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102.281
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%
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2016 and thereafter
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100.000
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%
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In addition, at any time on or prior to February 1, 2013, the Company may on any one or more
occasions redeem up to an aggregate of 35.0% of the aggregate principal amount of the Notes at a
redemption price of 109.125% of the principal amount of the Notes redeemed, plus accrued and unpaid
interest thereon, if any, to but excluding the applicable Redemption Date, subject to the rights of
Holders of Notes on the relevant record date to receive interest due on the relevant interest
payment date, with the Net Cash Proceeds of a public offering of common stock of the Company;
provided
,
however
, that at least 65.0% in aggregate principal amount of the Notes remains
outstanding immediately after the occurrence of such redemption and that such redemption shall
occur within 90 days of the date of the closing of such public offering.
If the Redemption Date with respect to a Note to be redeemed is on or after an interest record
date and on or before the related interest payment date, any accrued and unpaid interest on that
Note shall be payable to the Person that was, at the close of business on such record date, the
Holder of that Note, and no additional interest for the period to which that interest record date
relates shall be payable with respect to that Note.
6.
Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more than 60 days before the
applicable Redemption Date to each Holder of Notes to be redeemed at his registered address. No
Notes of $2,000 or less shall be redeemed in part. Notes in denominations larger than $2,000
principal amount may be redeemed in part, but only in whole multiples of $1,000. Notes called for
redemption become due on the applicable Redemption Date. On and after the applicable Redemption
Date, interest ceases to accrue on Notes or portions of them called for redemption.
7.
Repurchase of Notes at the Option of the Holders upon Change of Control and Asset
Sales
Upon a Change of Control, any Holder of Notes will have the right to cause the Company to
repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of
the Notes of such Holder at a repurchase price equal to 101.0% of the principal amount of the Notes
to be repurchased plus accrued and unpaid interest to but excluding the date of repurchase (subject
to the right of holders of record on the
II-8
relevant record date to receive interest due on the related interest payment date) as provided
in, and subject to the terms of, the Indenture.
In accordance with Section 4.06 of the Indenture, the Company will be required to offer to
purchase Notes upon the occurrence of certain events.
8.
Guarantee
The payment by the Company of the principal of, and premium and interest on, the Notes is
fully and unconditionally guaranteed on a joint and several senior secured basis by each of the
Guarantors to the extent set forth in the Indenture.
9.
Denominations; Transfer; Exchange
The Notes are in registered form without coupons in denominations of $2,000 principal amount
and whole multiples of $1,000 in excess thereof. A Holder may transfer or exchange Notes in
accordance with the Indenture. The Registrar may require a Holder to, among other things, furnish
appropriate endorsements or transfer documents and to pay any taxes and fees required by law or
permitted by the Indenture. The Company shall not be required to transfer or exchange, and the
Registrar need not register the transfer or exchange, of any Note selected for redemption (except,
in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or any
Note for a period of 15 days before a selection of Notes to be redeemed or 15 days before an
interest payment date.
10.
Persons Deemed Owners
The registered Holder of this Note shall be treated as the owner of it for all purposes.
11.
Unclaimed Money
If money for the payment of principal or interest remains unclaimed for two years, the Trustee
or Paying Agent shall pay the money back to the Company at its request unless an abandoned property
law designates another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
12.
Discharge and Defeasance
Subject to certain conditions, the Company at any time shall be entitled to terminate some or
all of its obligations under the Notes and the Indenture if the Company deposits with the Trustee
money or Government Securities for the payment of principal and interest on the Notes to redemption
or maturity, as the case may be.
II-9
13.
Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (a) the Indenture, the Security
Documents, the Intercreditor Agreement and the Notes may be amended or supplemented (and waivers
granted with respect to any provisions thereof) with the written consent of the Holders of a
majority in principal amount of the Notes then outstanding and (b) any default or noncompliance
with any provision thereof may be waived with the written consent of the Holders of a majority in
principal amount of the Notes then outstanding. Subject to certain exceptions set forth in the
Indenture, without the consent of any Holder, the Company, the Guarantors and the Trustee may amend
or supplement the Indenture, the Notes, any Security Document or the Intercreditor Agreement to
cure any ambiguity, omission, defect or inconsistency; to provide for uncertificated Notes in
addition to or in place of certificated Notes (provided that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code); to provide for the assumption by a
successor corporation of the obligations of the Company or a Guarantor to Holders under the
Indenture in the case of a merger or consolidation; to make any change that would provide any
additional rights or benefits to the Holders of Notes or that does not adversely affect the legal
rights under the Indenture of any such Holder; to comply with requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the Trust Indenture Act; to evidence
and provide for the acceptance of appointment under the Indenture of a successor trustee; to add
one or more Guarantors under this Indenture; to add any additional assets to the Collateral; to
release Collateral from the Lien of the Security Documents when permitted or required by this
Indenture and the Security Documents; to conform the text of this Indenture, the Notes or any
Guarantee to any provision of the section of the Offering Circular entitled Description of Notes
to the extent that such provision in the section of the Offering Circular entitled Description of
Notes was intended to be a verbatim recitation of a provision of the Indenture, the Notes or such
Guarantee; as necessary to conform the Indenture to any exemptive orders under the Trust Indenture
Act received by the Company or any Guarantor; or to make any amendment to the provisions of the
Indenture relating to the transfer and legending of Notes;
provided
,
however
, that (1) compliance
with the Indenture as so amended would not result in Notes being transferred in violation of the
Securities Act or any other applicable securities law and (2) such amendment does not materially
and adversely affect the rights of Holders to transfer Notes.
14.
Defaults and Remedies
Under the Indenture and subject to the terms of the Indenture, Events of Default include: (i)
default in the payment when due of interest on the Notes, which default continues for 30
consecutive days; (ii) default in payment of the principal of or premium, if any, on the Notes when
due, at Stated Maturity, upon optional redemption, upon required repurchase or otherwise; (iii)
failure by the Company to comply with other agreements in the Indenture or the Notes, in certain
cases subject to notice or lapse of time; (iv) certain accelerations (including failure to pay
within any grace period after
II-10
final maturity) of other Indebtedness of the Company if the amount accelerated (or so unpaid)
exceeds $25 million; (v) certain judgments or decrees for the payment of money in excess of $25
million; (vi) certain defaults with respect to the Notes Guarantees; (vii) certain events of
bankruptcy or insolvency with respect to the Company or any of its Significant Subsidiaries or any
group of Subsidiaries that, taken together, would constitute a Significant Subsidiary and (viii)
certain defaults relating to the Collateral under the Security Documents. If an Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the
Notes may declare all the Notes to be due and payable immediately. Certain events of bankruptcy or
insolvency are Events of Default which will result in the Notes being due and payable immediately
upon the occurrence of such Events of Default.
Holders may not enforce the Indenture or the Notes except as provided in the Indenture. The
Trustee may refuse to enforce the Indenture or the Notes unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in principal amount of
the Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders notice of any continuing Default (except a Default in payment of principal or
interest) if it determines that withholding notice is in the interest of the Holders.
15.
Trustee Dealings with the Company
Subject to certain limitations imposed by the Act and the Indenture, the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Notes and may become a
creditor of, or otherwise deal with, the Company or its Affiliates with the same rights it would
have if it were not Trustee.
16.
No Recourse Against Others
No director, officer, employee, incorporator or shareholder of the Company, and no director,
trustee, officer, employee, incorporator or shareholder (other than the Company or a Restricted
Subsidiary) of any Subsidiary of the Company, as such, shall have any liability for any obligations
of the Company or any Guarantor under the Notes, the Indenture, any Notes Guarantee [, the
Applicable Registration Rights Agreement (as defined in paragraph 20 of this Note)]
6
or
the Security Documents or for any claim based on, in respect of or by reason of such obligations or
their creation. By accepting a Note, each Holder shall waive and release all such liability. This
waiver and release shall be part of the consideration for the issue of the Notes.
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6
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To be included only if there is a Registration
Rights Agreement (as defined in the Appendix) applicable to this Note.
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II-11
17.
Authentication
This Note shall not be valid until an authorized signatory of the Trustee (or an
authenticating agent) manually signs the certificate of authentication on the other side of this
Note.
18.
Abbreviations
Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM
(=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of
survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19.
CUSIP Numbers, ISINs etc.
The Company has caused [CUSIP numbers and ISINs [and Common Code numbers]] to be printed on
the Notes, and the Trustee may use [CUSIP numbers and ISINs [and Common Code numbers]] in notices
of redemption as a convenience to Holders. No representation is made as to the accuracy of such
numbers, either as printed on the Notes or as contained in any notice of redemption, and reliance
may be placed only on the other identification numbers placed thereon.
20.
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[
Holders Compliance with Registration Rights Agreement.
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Each Holder of a Note, by acceptance hereof, acknowledges and agrees to the provisions of the
[Registration Rights Agreement]
7
(the
Applicable Registration Rights
Agreement
), including the obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.]
8
21.
Governing Law.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS
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7
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Specify the applicable Registration Rights
Agreement, including parties thereto and date thereof.
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8
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To be included only if there is a Registration
Rights Agreement (as defined in the Appendix) applicable to this Note. If no
Registration Rights Agreement applies, replace with [RESERVED.].
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II-12
OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
The Company will furnish to any Holder upon written request and without charge to the Holder a
copy of the Indenture which has in it the text of this Note in larger type. Requests may be made
to:
Credit Acceptance Corporation
25505 W. Twelve Mile Road
Southfield, Michigan 48034
Attention: Treasurer
II-13
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignees name, address and zip code)
(Insert assignees soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on the books of the Company. The agent
may substitute another to act for him.
Sign exactly as your name appears on the other side of this Note.
II-14
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to Section 4.06 or
4.09 of the Indenture, check the box:
o
If you want to elect to have only part of this Note purchased by the Company pursuant to
Section 4.06 or 4.09 of the Indenture, state the amount in principal amount: $
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Dated:
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Your Signature:
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(Sign exactly as your name appears on the other side of this
Note.)
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Signature Guarantee:
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(Signature must be guaranteed)
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Signatures must be guaranteed by an eligible guarantor institution meeting the requirements
of the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (STAMP) or such other signature guarantee program as may be determined
by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Notes
Exchange Act of 1934, as amended.
II-15
EXHIBIT III
to
RULE 144A/REGULATION S APPENDIX
to the Indenture, dated as of February 1, 2010,
among Credit Acceptance Corporation, a Michigan
corporation, the Guarantors (as defined therein) listed
on the signature pages thereto and U.S. Bank National
Association,a national banking association, as trustee
Form of
Transferee Letter of Representation
Credit Acceptance Corporation
In care of
U.S. Bank National Association
Corporate Trust Services
EP-MN-WS3C
60 Livingston Avenue
St. Paul, Minnesota 55107
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $[ ] principal amount of the
9.125% First Priority Senior Secured Notes due 2017 (the
Notes
) of Credit Acceptance
Corporation (the
Company
).
Upon transfer, the Notes would be registered in the name of the new beneficial owner as
follows:
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Name:
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Address:
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Taxpayer ID Number:
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The undersigned represents and warrants to you that:
1. We are an institutional accredited investor (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act of 1933, as amended (the
Securities Act
)), purchasing for
our own account or for the account of such an institutional accredited investor at least $250,000
principal amount of the Notes, and we are acquiring the Notes not with a view to, or for offer or
sale in connection with, any distribution in violation of the Securities Act. We have such
knowledge and experience in financial and business matters as to be capable of evaluating the
merits and risks of our investment in the Notes, and we invest in or purchase securities similar to
the Notes in the normal course of our
business. We, and any accounts for which we are acting, are each able to bear the economic
risk of our or its investment.
2. We understand that the Notes have not been registered under the Securities Act and, unless
so registered, may not be sold except as permitted in the following sentence. We agree on our own
behalf and on behalf of any investor account for which we are purchasing Notes to offer, sell or
otherwise transfer such Notes prior to the date that is two years after the later of the date of
original issue and the last date on which the Company or any affiliate of the Company was the owner
of such Notes (or any predecessor thereto) (the
Resale Restriction Termination Date
) only
(i) to the Company, (ii) in the United States to a person whom the seller reasonably believes is a
qualified institutional buyer in a transaction meeting the requirements of Rule 144A, (iii) to an
institutional accredited investor within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is an institutional accredited investor purchasing for its own account or for
the account of an institutional accredited investor, in each case in a minimum principal amount of
the Notes of $250,000, (iv) outside the United States in a transaction complying with the
provisions of Rule 904 under the Securities Act, (v) pursuant to an exemption from registration
under the Securities Act provided by Rule 144 (if available) or (vi) pursuant to an effective
registration statement under the Securities Act, in each of cases (i) through (vi) subject to any
requirement of law that the disposition of our property or the property of such investor account or
accounts be at all times within our or their control and in compliance with any applicable state
securities laws. The foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. If any resale or other transfer of the Notes is proposed to be made
pursuant to clause (iii) above prior to the Resale Restriction Termination Date, the transferor
shall deliver a letter from the transferee substantially in the form of this letter to the Company
and the Trustee, which shall provide, among other things, that the transferee is an institutional
accredited investor within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities
Act and that it is acquiring such Notes for investment purposes and not for distribution in
violation of the Securities Act. Each purchaser acknowledges that the Company and the Trustee
reserve the right prior to the offer, sale or other transfer prior to the Resale Restriction
Termination Date of the Notes pursuant to clause (iii), (iv) or (v) above to require the delivery
of an opinion of counsel, certifications or other information satisfactory to the Company and the
Trustee.
TRANSFEREE:
,
by:
III-2
Exhibit 4(f)(132)
Execution Version
FOURTH AMENDED AND RESTATED SECURITY AGREEMENT
THIS FOURTH AMENDED AND RESTATED SECURITY AGREEMENT (the Agreement), dated as of February 1,
2010, is entered into by and among Credit Acceptance Corporation, a Michigan corporation (the
Company
), the Subsidiaries of the Company from time to time parties hereto (collectively,
with the Company, and either or any of them, the
Debtors
and, each individually a
Debtor
) and Comerica Bank, a Texas banking association (
Comerica
), as
collateral agent for the benefit of the Credit Agreement Secured Parties, the Senior Notes Secured
Parties and the Additional Secured Parties (each as referred to below) (in such capacity, together
with its successors in such capacity under the Intercreditor Agreement referred to below, the
Collateral Agent
). The addresses for the Debtors and Collateral Agent are set forth on
the signature pages.
RECITALS
A. Comerica, in its capacities as Collateral Agent and as Authorized Representative for the
Credit Agreement Secured Parties, has entered into that certain Amended and Restated Intercreditor
Agreement dated as of February 1, 2010 (as amended, restated or otherwise modified from time to
time, the Intercreditor Agreement) with the Company, the other Debtors and U.S. Bank National
Association, as the Senior Notes Authorized Representative (referred to in the Intercreditor
Agreement) to define the rights, duties, authority and responsibilities of the Collateral Agent,
acting on behalf of such parties (and the Additional Secured Parties, as referred to therein)
regarding the Collateral (as defined below), and the relationship among the parties regarding their
equal and ratable interest in the Collateral.
B. Pursuant to the Credit Agreement Documents and the Senior Notes First Lien Documents (each
as defined in the Intercreditor Agreement), the Company and the other Debtors are required to grant
to the Collateral Agent, for the benefit of the Credit Agreement Secured Parties, the Senior Notes
Secured Parties and the Additional Secured Parties (each as defined in the Intercreditor Agreement)
a pledge, security interest and lien over each Debtors rights in the Collateral.
C. The Company and the other Debtors have directly and indirectly benefited and will directly
and indirectly benefit from the transactions evidenced by and contemplated in the Credit Agreement
Documents, the Senior Notes First Lien Documents and the Additional First Lien Documents (each as
defined in the Intercreditor Agreement) and have consented to execution and delivery of this
Agreement and the Intercreditor Agreement.
NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the adequacy, receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:
1
ARTICLE I
Definitions
Section 1.1
Definitions
. As used in this Agreement (including the recitals), capitalized terms
not otherwise defined herein or expressly referenced herein as being defined in the Credit
Agreement shall have the meanings provided for such terms in the Intercreditor Agreement.
References to Sections, subsections, Exhibits and Schedules shall be to Sections,
subsections, Exhibits and Schedules, respectively, of this Agreement unless otherwise specifically
provided. All references to statutes and regulations shall include any amendments of the same and
any successor statutes and regulations. References to particular sections of the UCC should be read
to refer also to parallel sections of the Uniform Commercial Code as enacted in each state or other
jurisdiction where any portion of the Collateral is or may be located.
The following terms have the meanings indicated below, all such definitions to be equally
applicable to the singular and plural forms of the terms defined:
Account
means any account, as such term is defined in Article or Chapter 9 of the
UCC, now owned or hereafter acquired by an applicable Debtor, and, in any event, shall include,
without limitation, each of the following, whether now owned or hereafter acquired by such Debtor:
(a) all rights of such Debtor to payment for goods sold or leased or services rendered, whether or
not earned by performance, (b) all accounts receivable of such Debtor, (c) all rights of such
Debtor to receive any payment of money or other form of consideration with respect to the
foregoing, (d) all security pledged, assigned or granted to or held by such Debtor to secure any of
the foregoing, (e) all guaranties of, or indemnifications with respect to, any of the foregoing,
and (f) all rights of such Debtor as an unpaid seller of goods or services, including, but not
limited to, all rights of stoppage in transit, replevin, reclamation and resale.
Benefited Parties
means the Secured Parties, as defined in the Intercreditor
Agreement.
Chattel Paper
means any chattel paper, as such term is defined in Article or
Chapter 9 of the UCC, now owned or hereafter acquired by an applicable Debtor.
Collateral
has the meaning specified in
Section 2.1
of this Agreement.
Computer Records
has the meaning specified in
Subsection 2.1(h)
of this
Agreement.
Dealer(s)
shall mean a Person engaged in the business of the retail sale or lease of
motor vehicles, whether new or used, including any such Person which constitutes an Affiliate of
Debtor.
Dealer Agreements
shall mean the sales and/or servicing agreements between an
applicable Debtor and a participating Dealer which sets forth the terms and conditions under which
such Debtor (i) accepts, as nominee for such Dealer, the assignment of Installment Contracts for
purposes of administration, servicing and collection and under which the Company or its Subsidiary
may make loans or advances to such Dealers included in Dealer Loans and (ii) accepts outright
assignments of Installments Contracts from Dealers or funds Installments
2
Contracts originated by such Dealer in the name of such Debtor, in each case as such
agreements may be in effect from time to time.
Dealer Loan(s)
shall mean the advances of cash made by an applicable Debtor to a
Dealer at the time an Installment Contract is approved, accepted by and assigned to such Debtor
under a Dealer Agreement described in clause (i) of the definition of Dealer Agreements, against
anticipated future collections on Installment Contracts serviced for such Dealer, as outstanding
from time to time.
Document
means any document, as such term is defined in Article or Chapter 9 of
the UCC, now owned or hereafter acquired by an applicable Debtor, including, without limitation,
all documents of title and all receipts covering, evidencing or representing goods now owned or
hereafter acquired by the Debtor.
Election
is defined in
Section 6.4
of this Agreement.
Equipment
means any equipment, as such term is defined in Article or Chapter 9 of
the UCC, now owned or hereafter acquired by an applicable the Debtor and, in any event, shall
include, without limitation, all machinery, equipment, furniture, trade fixtures, tractors,
trailers, rolling stock, vessels, aircraft and vehicles now owned or hereafter acquired by such
Debtor and any and all additions, substitutions and replacements of any of the foregoing, wherever
located, together with all attachments, components, parts, equipment and accessories installed
thereon or affixed thereto.
Equity Interests
is defined in Section 2.1(i) of this Agreement.
Event of Default
has the meaning specified in the Intercreditor Agreement.
First Lien Obligations
has the meaning specified in the Intercreditor Agreement.
Foreign Subsidiary
means any Subsidiary not incorporated under the laws of the
United States of America, or any state thereof or any political subdivision thereof,
provided
that the US LLC shall be considered a Foreign Subsidiary so long as it is a
Subsidiary of another Foreign Subsidiary.
General Intangibles
means any general intangibles, as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by an applicable Debtor and, in
any event, shall include, without limitation, each of the following, whether now owned or hereafter
acquired by such Debtor: (a) all of such Debtors service marks, trade names, trade secrets,
registrations, goodwill, franchises, licenses, permits, proprietary information, customer lists,
designs and inventions; (b) all of such Debtors books, records, data, plans, manuals, computer
software, computer tapes, computer disks, computer programs, source codes, object codes and all
rights of such Debtor to retrieve data and other information from third parties; (c) all of such
Debtors commercial tort claims, contract rights, partnership interests, membership interests,
joint venture interests, securities and other investment property, deposit accounts, investment
accounts and certificates of deposit; (d) all rights of such Debtor to payment under letters of
credit and similar agreements; (e) all tax refunds and tax refund claims of such Debtor; (f) all
choses in action and causes of action of such Debtor (whether arising in contract, tort or
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otherwise and whether or not currently in litigation) and all judgments in favor of such
Debtor; (g) all rights and claims of such Debtor under warranties and indemnities; and (h) all
rights of such Debtor under any insurance, surety or similar contract or arrangement.
Initial Pledged Subsidiaries
means the collective reference to (i) Buyers Vehicle
Protection Plan, Inc., a Michigan corporation, (ii) Vehicle Remarketing Services, Inc., a Michigan
corporation, and (iii) VSC Re Company, a District of Columbia corporation.
Installment Contract(s)
shall mean retail installment contracts for the sale of new
or used motor vehicles assigned outright by Dealers to an applicable Debtor or written by Dealers
in the name of such Debtor (and funded by Debtor or such Subsidiary) or assigned by Dealers to
Debtor, as nominee for the Dealer, for administration, servicing, and collection and/or for
collateral purposes to secure Dealer Loans, in each case pursuant to an applicable Dealer
Agreement; provided, however, that to the extent such Debtor transfers or encumbers its interest in
any Installment Contracts (or any Dealer Loans related thereto) pursuant to a Permitted
Securitization, such Installment Contracts shall, from and after the date of such transfer or
encumbrance, cease to be considered Installment Contracts under this Agreement (reducing the
aggregate amount of Dealer Loans by the outstanding amount of such loans, if any, attributable to
such Installment Contracts) unless and until such Installment Contracts are reassigned to such
Debtor or such encumbrances are discharged.
Instrument
means any instrument, as such term is defined in Article or Chapter 9
of the UCC, now owned or hereafter acquired by an applicable Debtor, and, in any event, shall
include all promissory notes, drafts, bills of exchange and trade acceptances of such Debtor,
whether now owned or hereafter acquired.
Intellectual Property Security Agreements
shall mean the Copyright Security
Agreement, the Patent Security Agreement and Trademark Security Agreement substantially in the form
of Exhibit D, Exhibit E, and Exhibit F hereto, respectively.
Intercompany Notes
shall mean any promissory notes issued or to be issued by a
Debtor or any Subsidiary to evidence any loan or advance in the nature of a loan by a Debtor to any
other Debtor, or by a Debtor to any other Subsidiary.
Inventory
means any inventory, as such term is defined in Article or Chapter 9 of
the UCC, now owned or hereafter acquired by an applicable Debtor, and, in any event, shall include,
without limitation, each of the following, whether now owned or hereafter acquired by such Debtor:
(a) all goods and other personal property of such Debtor that are held for sale or lease or to be
furnished under any contract of service; (b) all raw materials, work-in-process, finished goods,
supplies and materials of such Debtor; (c) all wrapping, packaging, advertising and shipping
materials of such Debtor; (d) all goods that have been returned to, repossessed by or stopped in
transit by such Debtor; and (e) all Documents evidencing any of the foregoing.
Investment Property
means any investment property, as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by an applicable Debtor, including
the Pledged Shares.
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Leases
shall mean all retail agreements for the lease of motor vehicles in which a
Debtor has an interest, whether as assignee, lessor, pledgee, servicer or otherwise.
Lock Box
has the meaning specified in Section 6.3 of this Agreement.
Material Adverse Effect
means a material adverse effect on (a) the business or
financial condition of the Company and its Subsidiaries, taken as a whole or (b) the ability of
each of the Company and its Subsidiaries to perform their material obligations under any of the
First Lien Credit Documents.
Permitted Liens
has the meaning specified in
Section 3.1
of this Agreement.
Permitted Securitization
shall mean a Permitted Securitization under each Class of
First Lien Obligations.
Pledged Shares
means all shares of stock, and all partnership, membership and other
equity interests constituting ownership interests (or evidence thereof) or other equity securities
of the Pledged Subsidiaries from time to time owned or acquired by a Debtor, as identified on
Schedule
D hereto, as revised from time to time hereunder.
Pledged Subsidiaries
shall mean (i) the Initial Pledged Subsidiaries and (ii) any
Subsidiary of a Debtor that (a) becomes a Significant Domestic Subsidiary after the date hereof or
(b) that, at the time acquired by the Company or any Debtor after the date hereof, constitutes a
Significant Domestic Subsidiary.
Prior Security Agreements
has the meaning specified in
Section 7.16
of this
Agreement.
Proceeds
means any proceeds, as such term is defined in Article or Chapter 9 of
the UCC and, in any event, shall include, but not be limited to, (a) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to an applicable Debtor from time to time with
respect to any of the Collateral, (b) any and all payments (in any form whatsoever) made or due and
payable to such Debtor from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental
authority (or any Person acting, or purporting to act, for or on behalf of any governmental
authority), and (c) any and all other amounts from time to time paid or payable under or in
connection with any of the Collateral.
Records
has the meaning specified in
Section 4.9
of this Agreement.
Requisite Benefited Parties
means, with respect to any direction given to the
Collateral Agent hereunder, the requisite Benefited Parties of any Class, in accordance with the
applicable First Lien Credit Documents, or the Authorized Representative for such Benefited
Parties, acting with their authority, direction or approval,
provided
that, in the event of
a conflict between or among the directions given by two or more Classes, the direction given by the
Applicable Authorized Representative shall control.
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Significant Domestic Subsidiary
shall mean any Significant Subsidiary under the
Credit Agreement or any other First Lien Credit Documents, as in effect from time to time, other
than any Foreign Subsidiary.
Software
has the meaning specified in
Subsection 2.1(h)
of this Agreement.
Special Account
has the meaning specified in
Section 6.3
of this Agreement.
Subsidiary
shall mean any Subsidiary under the Credit Agreement or under any other
First Lien Credit Document, as in effect from time to time.
UCC
means the Uniform Commercial Code as in effect in the State of Michigan;
provided
, that if, by applicable law, the perfection or effect of perfection or
non-perfection of the security interest created hereunder in any Collateral is governed by the
Uniform Commercial Code as in effect on or after the date hereof in any other jurisdiction, UCC
means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or the effect of perfection or non-perfection.
US LLC
has the meaning specified in the Credit Agreement.
ARTICLE II
Security Interest
Section 2.1
Security Interest
. As collateral security for the prompt payment and performance in
full when due of the First Lien Obligations (whether at stated maturity, by acceleration or
otherwise), each Debtor hereby pledges and assigns (as collateral) to the Collateral Agent for the
benefit of the Benefited Parties, and grants the Collateral Agent for the benefit of the Benefited
Parties a continuing lien on and security interest in, all of such Debtors right, title and
interest in and to the following, whether now owned or hereafter arising or acquired and wherever
located (collectively, the
Collateral
):
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(a)
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all Accounts;
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(b)
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all Chattel Paper, Documents and Instruments;
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(c)
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all Leases;
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(d)
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all General Intangibles;
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(e)
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all Equipment;
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(f)
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all Inventory;
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(g)
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all Dealer Loans, Dealer Agreements (and any amounts advanced
to or liens granted by Dealers thereunder), and the Installment Contracts or
Leases securing the repayment of such Dealer Loans, (and other
indebtedness of Dealers to such Debtor) and related financial assets (the
security interest granted hereby in such Dealer Agreements, Dealer Loans,
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Installment Contracts and Leases, and the Accounts, Chattel Paper, General
Intangibles and proceeds therefrom relating to such Dealer Agreements,
Dealer Loans, Installment Contracts and Leases being subject to the rights
of Dealers under Dealer Agreements);
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(h)
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all trademarks, trade names, patents, copyrights and other
intellectual property, including without limitation, any such property
identified on
Schedule F
hereto, and all computer records
(
Computer Records
) and software (
Software
), whether
relating to the foregoing Collateral or otherwise, but in the case of such
Software, subject to the rights of any non-affiliated licensee of software;
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(i)
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Investment Property, but expressly excluding therefrom, any and
all shares of stock, and any and all partnership, membership and other equity
interests constituting ownership interests (or evidence thereof) (collectively,
Equity Interests) or other securities, of any Subsidiary of a Debtor from
time to time owned or acquired by such Debtor in any manner, other than Equity
Interests in the Pledged Subsidiaries and any certificates at any time
evidencing such Investment Property, and all dividends, cash, instruments,
rights and other property from time to time received, receivable or otherwise
distributed or distributable in respect of or in exchange for any or all of
such Investment Property;
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(j)
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all Intercompany Notes issued in favor of such Debtor; (and the
intercompany loans or advances in the nature of loans evidenced thereby) and
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(k)
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the Proceeds, in cash or otherwise, of any of the property
described in the foregoing clauses (a) through (j) and all liens, security,
rights, remedies and claims of such Debtor with respect thereto, including,
without limitation, any such Proceeds deposited from time to time in the
Special Account or in any other cash collateral account maintained by a Debtor
with the Collateral Agent under, or in connection with, this Agreement or any
of the First Lien Credit Documents and all such Debtors rights in each such
account;
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provided
,
however
, that
Collateral
shall not include rights under or with
respect to any General Intangible, license, permit or authorization to the extent any such General
Intangible, license, permit or authorization, by its terms or by law, prohibits the assignment of,
or the granting of a security interest in, the rights of a Debtor thereunder or which would be
invalid or enforceable upon any such assignment or grant (the
Restricted
Assets
);
provided
further
that (A) the Proceeds of any Restricted Asset shall continue to be
deemed to be Collateral, and (B) this provision shall not limit the grant of any Lien on or
assignment of any Restricted Asset to the extent that the UCC or any other applicable law provides
that such grant of Lien or assignment is effective irrespective of any prohibitions to such grant
provided in any Restricted Asset (or the
underlying documents related thereto). Concurrently with any such Restricted Asset being entered
into or arising after the date hereof, the applicable Debtor shall be obligated to obtain any
7
waiver or consent (in form and substance acceptable to the Collateral Agent) necessary to allow
such Restricted Asset to constitute Collateral hereunder if the failure of such Debtor to have such
Restricted Asset would have a Material Adverse Effect; and
provided further
that
"
Collateral
shall not include any (i) Dealer Loans, Installment Contracts, Leases, rights
or interests under Dealer Agreements and related financial assets transferred by an applicable
Debtor prior to the date hereof pursuant to a Permitted Securitization, except to the extent any
such property is re-transferred to such Debtor according to the terms of such Permitted
Securitization (unless such assets are transferred by a Debtor to an uncapped Securitized Pool in
compliance with the applicable requirements for a Permitted Securitization or are transferred from
a Prior Securitization to a New Securitization Transaction (each as such term is defined in the
Original Credit Agreement) or by one Special Purpose Subsidiary to another pursuant to a Bridge
Securitization (as defined in the Original Credit Agreement) in the event that such transfers are
made through a Debtor), (ii) any equity interests in Foreign Subsidiaries, or (iii) any
applications for trademarks filed in the United States Patent and Trademark Office on the basis of
an intent to use such mark pursuant to 15 U.S.C. § 1051 Section 1(b) and for which a form
evidencing use of the mark in interstate commerce has not yet been filed with the United States
Patent and Trademark Office pursuant to 15 U.S.C. § 1051 Section 1(c) and (1)(d), to the extent
that granting a security interest in such trademark application prior to such filing would
adversely affect the enforceability or validity of such trademark application.
Section 2.2
Debtors Remains Liable
. Notwithstanding anything to the contrary contained herein,
(a) each Debtor shall remain liable under the contracts, agreements, documents and instruments
included in the Collateral (including without limitation Dealer Agreements, Dealer Loans,
Installment Contracts and Leases) to the extent set forth therein to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been executed and pay when
due any taxes, including without limitation, any sales taxes payable in connection with the Dealer
Agreements, Dealer Loans, Installment Contracts or Leases and their creation and satisfaction, (b)
the exercise by the Collateral Agent or any of the Benefited Parties of any of their respective
rights or remedies hereunder shall not release any Debtor from any of its duties or obligations
under the contracts, agreements, documents and instruments included in the Collateral, and (c)
subject to the rights of Dealers under Dealer Agreements to the extent of collections on
Installment Contracts or Leases for the account of such Dealers received by the Collateral Agent or
any Benefited Party, neither the Collateral Agent nor any of the Benefited Parties shall have any
indebtedness, liability or obligation (by assumption or otherwise) under any of the contracts,
agreements, documents and instruments included in the Collateral (including without limitation any
Dealer Agreement, Installment Contract or Lease) by reason of this Agreement, and none of such
parties shall be obligated to perform any of the obligations or duties of any Debtor thereunder
(including without limitation any obligation to make future advances to or on behalf of any Dealer
or other obligor) or to take any action to collect or enforce any claim for payment assigned
hereunder.
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Section 2.3
Delivery of Collateral
. (a) All certificates or other instruments representing or
evidencing the Pledged Shares, promptly upon an applicable Debtor gaining any rights therein, shall
be delivered to and held by or on behalf of the Collateral Agent pursuant hereto in suitable form
for transfer by delivery, or accompanied by duly executed stock powers or instruments of transfer
or assignments in blank, all in form and substance reasonably satisfactory to the Collateral Agent.
(b) Each of the Intercompany Notes, promptly upon an applicable Debtor gaining any rights
therein, shall be delivered to and held by or on behalf of the Collateral Agent pursuant hereto,
endorsed to the Collateral Agent without representation, warranty or recourse (except as provided
herein) for security purposes, or accompanied by separate assignments to Collateral Agent (on
comparable terms), all in form and substance reasonably satisfactory to the Collateral Agent.
Section 2.4
Marking Computer Files
. In connection with the security interest and lien established
hereby, each Debtor hereby agrees, at its sole expense, to indicate clearly and unambiguously in
its computer files with respect to the Dealer Agreements, Dealer Loans, Installment Contracts and
Leases encumbered hereby, that such Debtors rights to payment under such Dealer Agreements, Dealer
Loans, Installment Contracts and Leases have been pledged to the Collateral Agent pursuant to this
Agreement for the benefit of the Benefited Parties.
ARTICLE III
Representations and Warranties
To induce the Collateral Agent to enter into this Agreement and the Intercreditor Agreement,
and to induce the Benefited Parties to enter into the applicable First Lien Credit Documents, each
of the Debtors represents and warrants to the Collateral Agent and to each Benefited Party that as
of the date hereof:
Section 3.1
Title
. The applicable Debtor is, and with respect to Collateral acquired after the
date hereof such Debtor will be, the legal and beneficial owner of the Collateral free and clear of
any Lien or other encumbrance, except for (a) Liens which are not prohibited by the terms of the
other First Lien Credit Documents then in effect (hereinafter, Permitted Liens), provided that,
other than the Lien established hereby, no Lien on the Collateral described in clauses (i) or (j)
of
Section 2.1
hereof (other than Liens described in subclause (b) and, to the extent
subject and subordinate to the Lien established by this Agreement, subclauses (b), g(i) and g(iii)
of the definition of Permitted Liens contained in the Credit Agreement as in effect on the date
hereof) shall constitute a Permitted Lien, (b) with respect to Dealer Agreements and Dealer Loans,
and the Installment Contracts, Accounts, Chattel Paper, Leases and General Intangibles (and
proceeds therefrom) relating to such Dealer Agreements and Dealer Loans, the rights of Dealers
under such Dealer Agreements and (c) with respect to Installment Contracts or Leases (other than
those owned outright by Debtor), Dealers interests in financed vehicles and in the proceeds of
such Installment Contracts or Leases and Dealers interests, and the security interest and lien
granted
by Dealers to Debtor to secure repayment of Dealer Loans (and all other indebtedness of
Dealers to Debtor) pursuant to the applicable Dealer Agreement.
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Section 3.2
Financing Statements
. No financing statement, security agreement or other Lien
instrument covering all or any part of the Collateral is on file in any public office with respect
to any outstanding obligation of the Debtors except (i) as may have been filed in favor of the
Collateral Agent pursuant to this Agreement, (ii) financing statements filed to perfect Permitted
Liens, and (iii) Liens described in
Subsection 3.1(c)
hereof. As of the date hereof, and to
the best of the applicable Debtors knowledge, except as otherwise disclosed on
Schedule E
hereto, such Debtor does not do business and has not done business within the past five (5) years
under a trade name or any name other than its legal name set forth at the beginning of this
Agreement.
Section 3.3
Principal Place of Business
. The principal place of business and chief executive
office of the applicable Debtor, and the office where such Debtor keeps its books and records, is
located at the address of such Debtor shown on
Schedule A
hereto.
Section 3.4
Location of Collateral
. All Inventory (except vehicles and Inventory in transit) and
Equipment (other than vehicles) of the applicable Debtor in the possession of such Debtor are
located at the places specified on
Schedule A
hereto. If any such location is leased by
such Debtor as of the date hereof, the name and address of the landlord leasing such location is
identified on
Schedule A
hereto. None of the Inventory or Equipment of such Debtor (other
than trailers, rolling stock, vessels, aircraft and vehicles) is evidenced by a Document
(including, without limitation, a negotiable document of title). All certificates or other
instruments owned by such Debtor representing Equity Interests of any Significant Domestic
Subsidiary (including, without limitation, the Pledged Shares) will be delivered to the Collateral
Agent, accompanied by duly executed stock powers or instruments of transfer or assignments in blank
with respect thereto.
Section 3.5
Perfection
. Upon (a) the filing of UCC financing statements in the jurisdictions
listed on
Schedule B
hereto, (b) the recording of the Patent Security Agreement and the
Trademark Security Agreement in the United States Patent and Trademark Office and the recording of
the Copyright Security Agreement in the United States Copyright Office; and (c) upon the Collateral
Agents obtaining possession of the certificates evidencing the Pledged Shares, accompanied by duly
executed stock powers or instruments of transfer or assignments in blank and of the Intercompany
Notes (duly endorsed, as aforesaid), the security interest in favor of the Collateral Agent created
herein will constitute a valid and perfected Lien upon and security interest in the Collateral
which may be created and perfected under the UCC by filing financing statements, the recording of
the Patent Security Agreement and the Trademark Security Agreement in the United States Patent and
Trademark Office and the recording of the Copyright Security Agreement in the United States
Copyright Office, or obtaining possession of the Collateral, subject to no junior, equal or prior
Liens except for those (if any) which constitute Permitted Liens.
Section 3.6
Primary Computer Systems and Software; Computer Records and Intellectual Property
.
The only material service and computer systems and related Software utilized by the applicable
Debtor to service Dealer Agreements, Dealer Loans, Installment Contracts and Leases (whether or not
encumbered hereby) are (a) the Application and Contract System which is used from the time an
approval is downloaded from the Credit Approval Processing System until the relevant Installment
Contract or Lease is received and funded, (b) the Loan Servicing System which contains all payment
information and is the primary source for management information reporting, and (c) the Collection
System which is used by such Debtors collections personnel to track and service all active
customer accounts. Such computer systems and software are defined (and described in greater detail)
on
Schedule C
, hereto.
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Section 3.7
Pledged Shares.
(a) The Pledged Shares that are shares of a corporation have been duly authorized and validly
issued and are fully paid and non-assessable, and the Pledged Shares which are membership,
partnership or other similar ownership interests have been validly granted, under the laws of the
jurisdiction of organization of the issuers thereof, and, to the extent applicable, are fully paid
and nonassessable.
(b) The applicable Debtor is the legal and beneficial owner of the Pledged Shares, free and
clear of any Lien (other than the Liens created by this Agreement and the Permitted Liens) and no
issuer of Pledged Shares is a party to any agreement granting control (as defined in Section
8-106 of the UCC) of such Debtors Pledged Shares to any third party. All such shares are held by
each Debtor directly and not through any securities intermediary.
(c) The Pledged Shares constitute the percentage of the issued and outstanding shares of
stock, partnership units or membership or other ownership interests of the Issuers thereof
indicated on
Schedule D
hereto, if applicable, and such schedule contains a description of
all shares of capital stock, partnership units, membership interests and other ownership interests
of or in the Pledged Subsidiaries owned by the applicable Debtor (as such
Schedule D
may
from time to time be supplemented, amended or modified in accordance with the terms of this
Agreement).
Section 3.8
Intellectual Property.
Each Debtor owns the United States registered copyrights, letters patent and trademarks and
intellectual property license agreements set forth on
Schedule F
hereto, together with the
applications for registration of copyrights, trademarks or patents, and such mask works set forth
on the attached
Schedule F
hereto, together with such additional intellectual property as
such Debtor may disclose to the Collateral Agent from time to time, and all such property rights
are valid, subsisting and enforceable, except where the failure to be so could not reasonably be
expected to have a Material Adverse Effect. Each Debtor has made all necessary filings and
recordations to protect and maintain its interest in the foregoing trademarks, patents and
copyrights set forth on
Schedule F
hereto (as the same may be amended from time to time),
including, without limitation, all necessary filings and recordings, and payments of all
maintenance fees, in the United States Patent and Trademark Office and United States Copyright
Office to the extent such trademarks, patents and copyrights are material to such Debtors
business.
Section 3.9
Timing of Representations and Warranties
. The representations and warranties
contained in this Article III are given as of the date of this Agreement.
ARTICLE IV
Covenants
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Each of the Debtors covenants and agrees with the Collateral Agent that until the First Lien
Obligations are paid and performed in full and all commitments to lend or provide other credit
accommodations under the First Lien Credit Documents have been terminated:
Section 4.1
Encumbrances
. The applicable Debtor shall not create, permit or suffer to exist, and
shall defend the Collateral against, any Lien or other encumbrance (other than the Liens created by
this Agreement and the Permitted Liens) or any restriction upon the pledge or other transfer
thereof (other than as provided or permitted in the First Lien Credit Documents), and shall,
subject to the Permitted Liens, defend such Debtors title to and other rights in the Collateral
and the Collateral Agents pledge and collateral assignment of and security interest in the
Collateral against the claims and demands of all Persons. Except to the extent permitted by the
First Lien Credit Documents or in connection with any release of Collateral under
Section
7.13
hereof (but only to the extent of any Collateral so released), such Debtor shall do
nothing to impair the rights of the Collateral Agent in the Collateral.
Section 4.2
Collection of Accounts and Contracts; No Commingling
. The applicable Debtor shall, in
accordance with its usual business practices, endeavor to collect or cause to be collected from
each account debtor under its Accounts, as and when due, any and all amounts owing under such
Accounts and from any Dealer or from any obligor under an Installment Contract or Lease, as the
case may be, any Dealer Loans or other amounts owing under a Dealer Agreement, Installment Contract
or Lease, as applicable. The applicable Debtor shall take the steps required under the documents
relating to Permitted Securitizations to segregate any Collateral transferred, encumbered or
otherwise affected by a Permitted Securitization from the Collateral encumbered under this
Agreement and all proceeds or other sums received in respect thereof (provided that Dealer
Agreements which cover Dealer Loans which have been transferred pursuant to a Permitted
Securitization, but which also cover Dealer Loans encumbered hereby, may contain the legend affixed
in connection with the applicable Permitted Securitization).
Section 4.3
Disposition of Collateral
. To the extent prohibited by the terms of the First Lien
Credit Documents, the applicable Debtor shall not enter into or consummate any transfer or other
disposition of assets without the
prior written consent of the applicable Benefited Parties, according to the terms of the
applicable First Lien Credit Documents.
Section 4.4
Further Assurances
. At any time and from time to time, upon the request of the
Collateral Agent, and at the sole expense of the Debtors, the applicable Debtor shall promptly
execute and deliver all such further agreements, documents and instruments and take such further
action as the Collateral Agent may reasonably deem necessary or appropriate to preserve and perfect
its security interest in, and pledge and collateral assignment of, the Collateral and carry out the
provisions and purposes of this Agreement or to enable the Collateral Agent to exercise and enforce
its rights and remedies hereunder with respect to any of the Collateral;
provided
,
however
, that nothing contained in this
Section 4.4
shall require such Debtor to
affix legends to the Dealer Agreements, Installment Contracts or Leases (or folders containing the
same) prior to the times set forth in
Section 6.4
. Except as otherwise expressly permitted
by the terms of the First Lien Credit Documents relating to disposition of assets, including,
without limitation, any Permitted Securitization and except for Permitted Liens, the applicable
Debtor agrees to maintain and preserve the Collateral Agents security interest in, and
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pledge and
collateral assignment of, the Collateral hereunder. Without limiting the generality of the
foregoing, the applicable Debtor shall (a) deliver to the Collateral Agent such financing
statements as the Collateral Agent may from time to time require; and (b) execute and deliver to
the Collateral Agent, or cause to be so executed and delivered, such other agreements,
acknowledgments, documents and instruments, including without limitation, stock powers, as the
Collateral Agent may require to perfect and maintain the validity, effectiveness and priority of
the Liens intended to be created by the First Lien Security Documents. The applicable Debtor
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 without the signature of such
Debtor unless otherwise prohibited by law.
Section 4.5
Insurance
. The applicable Debtor shall maintain, with financially sound and reputable
insurers, insurance with respect to its material property and business against such casualties and
contingencies, of such types (including, without limitation, insurance with respect to losses
arising out of such property loss or damage, public liability, business interruption, larceny,
workers compensation, embezzlement or other criminal misappropriation) and in such amounts as is
customary in the case of corporations of established reputations engaged in the same or similar
business and similarly situated and shall cause the Collateral Agent to be named as lender loss
payee thereunder to the full extent required to perfect and/or protect the Lien established
hereby, provided that such insurance is commercially available, it being understood that the
Company and its Subsidiaries may self-insure against hazards and risks with respect to which, and
in such amounts as, the Company in good faith determines to be prudent and consistent with sound
financial and business practice. Recoveries under any such policy of insurance shall be paid as
provided in the First Lien Credit Documents, subject to the Intercreditor Agreement.
Section 4.6
Bailees
. If any of the Collateral is at any time in the possession or control of any
warehouseman, bailee or any of the applicable Debtors agents or processors, the applicable Debtor
shall, at the request of the Collateral Agent (as directed by the Applicable Authorized
Representative), notify such warehouseman, bailee, agent or processor of the security interest
created hereunder and shall instruct such Person to hold such Collateral for the Collateral Agents
account subject to the Collateral Agents instructions, and shall obtain such acknowledgments
and/or undertakings from such Persons as reasonably requested by Collateral Agent (as directed by
the Applicable Authorized Representative).
Section 4.7
Furnishing of Information and Inspection Rights
. (a) Pursuant to the Prior Security
Agreements, the applicable Debtors thereunder delivered to the Collateral Agent, on a confidential
and proprietary basis, one or more computer files or microfiche lists containing true and complete
(and updated to the most recent month end) lists of all Dealer Agreements and Dealer Loans, and all
Installment Contracts or Leases, as applicable, securing all such Dealer Loans or owned outright by
such Debtor, identified by account number, dealer number (if not owned outright by such Debtor),
and pool number.
(b) From and after the date of this Agreement,
(i) so long as no Event of Default has occurred and is continuing, upon the
written request of the Collateral Agent (as directed by the Requisite
13
Benefited
Parties), each applicable Debtor shall be obligated, but not more frequently than
monthly; and
(ii) upon the occurrence and during the continuance of an Event of Default,
each applicable Debtor shall be obligated, on a monthly basis whether or not the
Collateral Agent shall so request, and more frequently upon the written request of
the Collateral Agent (as directed by the Applicable Authorized Representative);
to furnish to the Collateral Agent, a computer file, microfiche list or other list identifying each
of the Dealer Agreements, Dealer Loans, Installment Contracts and Leases encumbered hereby by pool
number, account number and dealer number (if not owned outright by such Debtor) identifying the
relevant Installment Contract or Lease, and such Debtor shall also furnish to the Collateral Agent
from time to time such other information with respect to Dealer Agreements, Dealer Loans,
Installment Contracts and Leases encumbered hereby as the Collateral Agent may reasonably request.
Without impairing the rights of any Benefited Party to obtain information from such Debtor under
any of the other First Lien Credit Documents, as applicable, the Collateral Agent shall furnish
copies of the foregoing to any Authorized Representative that has entered into a confidentiality
agreement in form and substance reasonably satisfactory to the Company upon such Authorized
Representatives request following the occurrence and during the continuance of any Default or
Event of Default, and each Debtor hereby authorizes and approves such release. Each Debtor will, at
any time and from time to time during regular business hours, upon 5 days prior notice (except if
any Event of Default has occurred and is
continuing, when no prior notice shall be required), permit 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 such Debtor for the purpose of examining such Records, and to discuss matters
relating to the Dealer Loans, Installment Contracts, Leases or such Debtors performance hereunder
and under the other First Lien Credit Documents with any of the officers, directors, employees or
independent public accountants of such Debtor having knowledge of such matters;
provided
,
however
, that the Collateral Agent acknowledges that, in exercising the rights and
privileges conferred in this
Section 4.7
, 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 such Debtor has a proprietary interest. The Collateral Agent
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 applicable Debtor, any such information,
practices, books, correspondence and records furnished to them except that the Collateral Agent 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 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 Collateral Agent on a
nonconfidential basis prior to its disclosure to the Collateral Agent hereunder, (iv) to the extent
the Collateral Agent is (A) required in connection with any legal or regulatory proceeding or (B)
requested by any bank or other regulatory authority, to disclose such
14
information, (v) to any
prospective assignee of any Credit Agreement Obligation;
provided
, that the Collateral
Agent shall notify such assignee of the confidentiality provisions of this
Section 4.7
and
such assignee shall agree to be bound thereby, or (vi) to any Credit Agreement Secured Party,
subject to the confidentiality provisions contained in this Agreement and any of the other First
Lien Credit Documents to which it is a party, upon the request of such party following the
occurrence and during the continuance of such Default or Event of Default (but with no obligation
on the part of any such Credit Agreement Secured Party hereunder to return such information to
Collateral Agent or the applicable Debtor if any such Default or Event of Default is subsequently
cured or waived), or (vii) at any time to any Authorized Representative, subject to the
confidentiality provisions contained in this Agreement and any of the other First Lien Credit
Documents to which it is a party. Notwithstanding anything to the contrary in this Agreement, the
Collateral Agent may reply to a request from any Person for a list of Dealer Loans, Dealer
Agreements, Installment Contracts, Leases or other information related to any Collateral referred
to in any financing statement filed or acknowledgment obtained to perfect the security interest and
liens established hereby, to the extent necessary to maintain the perfection or priority of such
security interests or liens, or otherwise required under applicable law. The Collateral Agent
agrees (at the Debtors sole cost and expense) to take such measures as shall be reasonably
requested by the Debtors to protect and maintain the security and confidentiality of such
information. The Collateral Agent shall exercise good faith and make diligent efforts to provide
the Debtors with written notice at least five (5) Business Days prior to any disclosure pursuant
to this
Subsection 4.7(b)
.
(c) Furthermore, each Debtor shall permit the Collateral Agent and its representatives to
examine, inspect and audit the Collateral and to examine, inspect and audit such Debtors books and
Records as otherwise provided under the First Lien Credit Documents.
Section 4.8
Corporate Changes
. None of the Debtors shall change its name, identity or corporate
structure in any manner that might make any financing statement filed in connection with this
Agreement seriously misleading within the meaning of Section 9-506 of the UCC unless such Debtor
shall have given the Collateral Agent thirty (30) days prior written notice thereof and shall have
taken all action deemed necessary or desirable by the Collateral Agent to protect its Liens and the
perfection and priority thereof. None of the Debtors shall change its principal place of business,
chief executive office or the place where it keeps its books and records unless it shall have given
the Collateral Agent thirty (30) days prior written notice thereof and shall have taken all action
deemed necessary or desirable by the Collateral Agent to cause its security interest in the
Collateral to be perfected with the priority required by this Agreement.
Section 4.9
Books and Records; Information
. Each Debtor shall keep accurate and complete books
and records (the
Records
) of the Collateral and such Debtors business and financial
condition in accordance with the First Lien Credit Documents. Subject to
Section 4.7
, each
Debtor shall from time to time at the request of the Collateral Agent deliver to the Collateral
Agent such information regarding the Collateral and such Debtor as the Collateral Agent may
reasonably request, including, without limitation, lists and descriptions of the Collateral and
evidence of the identity and existence of the Collateral. Each Debtor shall mark its books and
records to reflect the security interest of the Collateral Agent under this Agreement;
15
provided
,
however
, that with respect to its computer files, such Debtors
compliance with
Section 2.4
hereof shall be deemed to satisfy its obligations under this
sentence.
Section 4.10
Administrative and Operating Procedures
. Each Debtor will maintain and implement
administrative and operating procedures (including without limitation an ability to recreate
records relating to the Dealer Agreements, Dealer Loans, Installment Contracts and Leases
encumbered hereby in the event of the destruction of the originals thereof), and keep and maintain,
or obtain, as and when required, all documents, books, records and other information reasonably
necessary or advisable for the collection of all amounts due under the Dealer Agreements, Dealer
Loans, Installment Contracts and Leases encumbered hereby (including without limitation records
adequate to permit adjustments to amounts due under each of such Dealer Agreements, Dealer Loans,
Installment Contracts and Leases). Each Debtor will give the Collateral Agent notice of any
material change in the administrative and operating procedures of such Debtor referred to in the
previous sentence. Notwithstanding the foregoing, the Debtors shall not be required to make or
retain duplicate copies of Installment Contracts or Leases.
Section 4.11
Equipment and Inventory.
(a) Each Debtor shall keep the Equipment (other than vehicles) and Inventory (other than
vehicles and Inventory in transit) which is in such Debtors possession at any of the locations
specified on
Schedule A
hereto or, upon thirty (30) days prior written notice to the
Collateral Agent, at such other places within the United States of America or Canada where all
action required to perfect the Collateral Agents security interest in the Equipment and Inventory
with the priority required by this Agreement shall have been taken.
(b) Each Debtor shall maintain the Equipment and Inventory in accordance with the terms of the
First Lien Credit Documents.
Section 4.12
Notification
. Each Debtor shall promptly notify the Collateral Agent in writing of
any Lien, encumbrance or claim (other than a Permitted Lien) that has attached to or been made or
asserted against any of the Collateral upon becoming aware of the existence of such Lien,
encumbrance or claim.
Section 4.13
Collection of Accounts
. So long as no Event of Default has occurred and is continuing
and except as otherwise provided in this
Section 4.13
and in
Section 5.1
, the
applicable Debtor shall have the right to collect and receive payments on the Accounts, Dealer
Agreements, Dealer Loans, Installment Contracts, Leases and other financial assets and to use and
expend the same in its operations, in each case in compliance with the terms of each of the First
Lien Credit Documents. In connection with such collections, the applicable Debtor may take (and, at
the Collateral Agents direction following the occurrence and during the continuance of an Event of
Default, shall take) such actions as such Debtor or the Collateral Agent may deem necessary or
advisable to enforce collection of the Accounts, Dealer Agreements, Dealer Loans, Installment
Contracts and other financial assets.
Section 4.14
Voting Rights; Distributions, Etc.
16
(a) So long as no Event of Default shall have occurred and be continuing (both before and
after giving effect to any of the actions or other matters described in clauses (i) or (ii) of this
subparagraph):
(i) Each Debtor shall be entitled to exercise any and all voting and other
consensual rights (including, without limitation, the right to give consents,
waivers and ratifications) pertaining to any of the Pledged Shares or any part
thereof;
provided, however
, that no vote shall be cast or consent, waiver or
ratification given or action taken without the prior written consent of the
Collateral Agent which would violate any provision of this Agreement or any of the
other First Lien Credit Documents; and
(ii) Except as otherwise provided in this Agreement or any of the other First
Lien Credit Documents, each Debtor shall be entitled to receive and retain
any and all dividends, distributions and interest paid in respect to any of the
Pledged Shares.
(b) Upon the occurrence and during the continuance of an Event of Default:
(i) The Collateral Agent may, at the direction or with the concurrence of the
Applicable Authorized Representative as required under the Intercreditor Agreement,
(without notice to the Debtors), transfer or register in the name of the Collateral
Agent or any of its nominees, for the equal and ratable benefit of the Benefited
Parties, any or all of the Pledged Shares and the Proceeds thereof (in cash or
otherwise) held by the Collateral Agent hereunder, and the Collateral Agent or its
nominee may thereafter, at the direction or with the concurrence of the Applicable
Authorized Representative as required under the Intercreditor Agreement, after
delivery of notice to the applicable Debtor, exercise all voting and corporate or
similar rights at any meeting of any corporation or other entity issuing any of the
Pledged Shares, and any and all rights of conversion, exchange, subscription,
distribution or any other rights, privileges or options pertaining to any of the
Pledged Shares as if the Collateral Agent were the absolute owner thereof,
including, without limitation, the right to exchange, at its discretion, any and all
of the Pledged Shares upon the merger, consolidation, reorganization,
recapitalization or other readjustment of any corporation or other entity issuing
any of such Pledged Shares or upon the exercise by any such issuer or the Collateral
Agent of any right, privilege or option pertaining to any of the Pledged Shares and,
in connection therewith, to deposit and deliver any and all of the Pledged Shares
with any committee, depositary, transfer agent, registrar or other designated agency
upon such terms and conditions as the Collateral Agent may determine, all without
liability except to account for property actually received by it, but the Collateral
Agent shall have no duty to exercise any of the aforesaid rights, privileges or
options, and the Collateral Agent shall not be responsible for any failure to do so
or delay in so doing.
(ii) All rights of the Debtors to exercise the voting and other consensual
rights which it would otherwise be entitled to exercise pursuant to
17
Subsection 4.14(a)(i)
and to receive the dividends, interest and other distributions which
it would otherwise be authorized to receive and retain pursuant to
Subsection
4.14(a)(ii)
shall be suspended until such Event of Default shall no longer
exist, and all such rights shall, until such Event of Default shall no longer exist,
thereupon become vested in the Collateral Agent which shall thereupon have the sole
right, at the direction or with the concurrence of the Applicable Authorized
Representative as required under the Intercreditor Agreement, to exercise such
voting and other consensual rights and to receive, hold and dispose of as Pledged
Shares, as the case may be, such dividends, interest and other distributions.
(iii) All dividends, interest and other distributions which are received by the
Debtors contrary to the provisions of this
Subsection 4.14(b)
shall be
received in trust for the benefit of the Collateral Agent, shall be segregated from
other funds and property of the Debtors and shall be forthwith paid over to the
Collateral Agent as Collateral in the same form as so received (with any necessary
endorsement).
(iv) The Debtors shall execute and deliver (or cause to be executed and
delivered) to the Collateral Agent all such proxies and other instruments as the
Collateral Agent may reasonably request for the purpose of enabling the Collateral
Agent to exercise the voting and other rights which it is entitled to exercise
pursuant to this
Subsection 4.14(b)
and to receive the dividends, interest
and other distributions which it is entitled to receive and retain pursuant to this
Subsection 4.14(b)
. The foregoing shall not in any way limit the Collateral
Agents power and authority granted pursuant to
Section 5.1
.
Section 4.15
Transfers and Other Liens; Additional Investments
. Each Debtor agrees that (a) except
with the written consent of the Collateral Agent, it will not permit any Pledged Subsidiary to
issue to it or any of its other Subsidiaries any shares of stock, membership interests, partnership
units, notes or other securities or instruments in addition to or in substitution for any of the
Pledged Shares, unless, concurrently with each issuance thereof, any and all such shares of stock,
membership interests, partnership units, notes or instruments are encumbered in favor of the
Collateral Agent under this Agreement or otherwise (it being understood and agreed that all such
shares of stock, membership interests, partnership units, notes or instruments issued to such
Debtor shall, without further action by such Debtor or Collateral Agent, be automatically
encumbered by this Agreement as Pledged Shares) and (b) it will promptly upon the written request
of the Collateral Agent following the issuance thereof (and in any event within three Business Days
following such request) deliver to the Collateral Agent (i) an amendment, duly executed by the
applicable Debtor, in substantially the form of
Exhibit A
hereto (an
Amendment
),
in respect of such shares of stock, membership interests, partnership units, notes or instruments
issued to such Debtor or (ii) a new stock pledge, duly executed by the applicable Subsidiary, in
substantially the form of this Agreement (a
New Pledge
), in respect of such shares of
stock, membership interests, partnership units, notes or instruments issued to any Subsidiary
granting to the Collateral Agent, for the benefit of the Benefited Parties, a first priority
security interest, pledge and lien thereon, together in each case with all certificates, notes or
other instruments representing or evidencing the same, and the
18
acknowledgment of any issuer
necessary or appropriate to perfect such pledge, security interest and lien on any membership or
similar ownership interest. Each Debtor hereby (x) authorizes the Collateral Agent to attach each
Amendment to this Agreement, (y) agrees that all such shares of stock, membership interests,
partnership units, notes or instruments listed in any Amendment delivered to the Collateral Agent
shall for all purposes hereunder constitute Pledged Shares, and (z) is deemed to have made, upon
the delivery of each such Amendment, the representations and warranties contained in
Sections
3.1, 3.2, 3.4, 3.5 and 3.7
of this Agreement with respect to the Collateral covered thereby.
Section 4.16
Possession; Reasonable Care
. Regardless of whether an Event of Default has occurred
or is continuing, the Collateral Agent shall have the right to hold in its possession all Pledged
Shares pledged, assigned or
transferred hereunder and from time to time constituting a portion of the Collateral. The
Collateral Agent may appoint one or more agents (which in no case shall be a Debtor or an affiliate
of a Debtor) to hold physical custody, for the account of the Collateral Agent, of any or all of
the Collateral. The Collateral Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which the Collateral Agent accords its own property, it being
understood that the Collateral Agent shall not have any responsibility for (a) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities, tenders, distribution or
other matters relative to any Collateral, whether or not the Collateral Agent has or is deemed to
have knowledge of such matters, or (b) taking any necessary steps to preserve rights against any
parties with respect to any Collateral, except, subject to the terms hereof, upon the written
instructions of the Requisite Benefited Parties, if no Event of Default has occurred and is
continuing, and of the Applicable Authorized Representative, following the occurrence and during
the continuance of an Event of Default. Following the occurrence and continuance (beyond any
applicable grace or cure period) of an Event of Default, the Collateral Agent shall be entitled to
take possession of the Collateral in accordance with the UCC.
Section 4.17
Future Significant Domestic Subsidiaries
. (a) With respect to each Person which
becomes a Significant Domestic Subsidiary subsequent to the date hereof, on the date such Person is
created, acquired or otherwise becomes a Significant Domestic Subsidiary (whichever first occurs),
the Company shall cause such Subsidiary to execute and deliver, to the Collateral Agent a joinder
agreement, substantially in the form of
Exhibit B
hereto, by which such Subsidiary shall
become obligated as Debtor hereunder, as fully as though an original signatory hereto.
(b) The Company shall complete and deliver to the Collateral Agent
Schedule D
hereto,
listing all then-existing Subsidiaries which are Significant Domestic Subsidiaries and providing
such information regarding its direct or indirect ownership interests in such Subsidiaries as
Collateral Agent may require.
(c) Furthermore, promptly following the effective date of each acquisition or creation of a
Significant Domestic Subsidiary after the delivery of the initial
Schedule D
hereto, the
Company from time to time shall revise
Schedule D
hereto and deliver a copy thereto to the
Collateral Agent, adding to
Schedule D
the name of each such Significant Domestic
Subsidiary so acquired or created (and supplying the other information required on such schedule
including
19
ownership information), and, upon such revision, the Company and/or the applicable Debtor
shall be deemed to have pledged 100% of the capital stock, partnership interests, membership
interests or other ownership interests (to the extent owned by the Company and/or such Debtor) of
each such Significant Domestic Subsidiary so acquired or created to Collateral Agent, for and on
behalf of the Benefited Parties.
Section 4.18
Preservation of Intellectual Property.
(a) Each Debtor agrees to take all necessary steps, including, without limitation, in the
United States Copyright Office or the United States Patent and Trademark Office or in any court, to
defend, enforce and preserve the validity and ownership of the intellectual property
identified on
Schedule F
hereto and all such additional registered intellectual
property as may be acquired or held by each Debtor except, in each case, in which the Debtors have
determined, using their commercially reasonable judgment, that any of the foregoing is not of
material economic value to them.
(b) Each Debtor shall not abandon any registered intellectual property registrations or
applications therefor without the written consent of the Collateral Agent, unless the Debtors shall
have previously determined, using their commercially reasonable judgment, that such use or pursuit
or maintenance of such intellectual property registrations or applications, is not of material
economic value to them.
(c) In the event that a Debtor becomes aware that any item of the intellectual property which
such Debtor has determined, using its commercially reasonable judgment, to be material to its
business (either singly or when taken as a whole together with other such intellectual property
rights then being infringed against or misappropriated) is infringed or misappropriated by a third
party, such Debtor shall notify the Collateral Agent promptly and in writing, in reasonable detail,
and shall take such actions as such Debtor or the Collateral Agent deems necessary or appropriate
(using its reasonable commercial judgment) including, without limitation, suing for infringement or
misappropriation and for an injunction against such infringement or misappropriation. Any expense
incurred in connection with such activities shall be borne by the Debtors. Each Debtor will advise
the Collateral Agent promptly and in writing and in reasonable detail, of any adverse determination
or the institution of any proceeding (including, without limitation, the institution of any
proceeding in the United States Patent and Trademark Office, the United States Copyright Office or
any court) regarding any material item of the intellectual property collateral.
(d) Promptly following application for registration, registration or acquisition by a Debtor
of any trademark, patent or copyright, such Debtor shall provide notice to the Collateral Agent of
such application, registration or acquisition so that the Collateral Agent may make such filings as
it may deem necessary or desirable to perfect its interest in such intellectual property, and such
Debtor shall execute an amendment to the Security Agreement in substantially the form of
Exhibit C
hereto in order to for the Collateral Agent to perfect its interests in any
intellectual property held by such Debtor.
ARTICLE V
Rights of the Collateral Agent
20
Section 5.1
Power of Attorney
. Each Debtor hereby irrevocably constitutes and appoints the
Collateral Agent and any officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the name of such Debtor or in
its own name, to take, after the occurrence and during the continuance of an Event of Default, any
and all actions, and to execute any and all documents and instruments which the Collateral Agent at
any time and from time to time deems necessary or desirable, to accomplish the purposes of this
Agreement, and, without limiting the generality of the foregoing, each Debtor hereby gives the
Collateral Agent the power and right on behalf of such Debtor and in its own name to do any of the
following after the occurrence and during the continuance of an Event of Default, without
notice to or the consent of the Debtors:
(i) to demand, sue for, collect or receive, in the name of the Debtors or in
its own name, any money or property at any time payable or receivable on account of
or in exchange for any of the Collateral and, in connection therewith, endorse
checks, notes, drafts, acceptances, money orders, documents of title or any other
instruments for the payment of money under the Collateral or any policy of
insurance;
(ii) to pay or discharge taxes, Liens or other encumbrances levied or placed on
or threatened against the Collateral;
(iii) (A) to direct account debtors, Dealers, any obligors under Installment
Contracts or Leases, as applicable, and any other parties liable for any payment
under any of the Collateral to make payment of any and all monies due and to become
due thereunder directly to the Collateral Agent or as the Collateral Agent shall
direct; (B) to receive payment of and receipt for any and all monies, claims and
other amounts due and to become due at any time in respect of or arising out of any
Collateral; (c) to sign and endorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors, assignments, proxies,
stock powers, verifications and notices in connection with accounts and other
documents relating to the Collateral; (D) to commence and prosecute any suit, action
or proceeding at law or in equity in any court of competent jurisdiction to collect
the Collateral or any part thereof and to enforce any other right in respect of any
Collateral; (E) to defend any suit, action or proceeding brought against the Debtors
with respect to any Collateral; (F) to settle, compromise or adjust any suit, action
or proceeding described above and, in connection therewith, to give such discharges
or releases as the Collateral Agent may deem appropriate; (G) to exchange any of the
Collateral for other property upon any merger, consolidation, reorganization,
recapitalization or other readjustment of the issuer thereof and, in connection
therewith, deposit any of the Collateral with any committee, depositary, transfer
agent, registrar or other designated agency upon such terms as the Collateral Agent
may determine; (H) to add or release any guarantor, indorser, surety or other party
to any of the Collateral; (i) to renew, extend or otherwise change the terms and
conditions of any of the Collateral; (J) to make, settle, compromise or adjust any
claim under or pertaining to any of the Collateral (including claims under any
policy of insurance); and (K) to sell, transfer, pledge, convey, make any agreement
with
21
respect to, or otherwise deal with, any of the Collateral as fully and
completely as though the Collateral Agent were the absolute owner thereof for all
purposes, and to do, at the Collateral Agents option and the Debtors sole expense,
at any time, or from time to time, all acts and things which the Collateral Agent
deems necessary to protect, preserve, maintain, or realize upon the Collateral and
the Collateral Agents security interest therein.
This power of attorney is a power coupled with an interest and shall be irrevocable. The
Collateral Agent shall be under no duty to exercise or withhold the exercise of any of the rights,
powers, privileges and options expressly or implicitly granted to the Collateral Agent in this
Agreement, and shall not be liable for any failure to do so or any delay in doing so. This power of
attorney is conferred on the Collateral Agent solely to protect, preserve, maintain and realize
upon its security interest in the Collateral. The Collateral Agent shall not be responsible for any
decline in the value of the Collateral and shall not be required to take any steps to preserve
rights against prior parties or to protect, preserve or maintain any Lien given to secure the
Collateral.
Section 5.2
Setoff
. In addition to and not in limitation of any rights of any Benefited Party
under applicable law, the Collateral Agent and each Benefited Party shall, upon acceleration of any
First Lien Obligation owing to such party under the First Lien Credit Documents, as the case may
be, or when and to the extent any such First Lien Obligation shall otherwise be due and payable,
and without notice or demand of any kind, have the right to appropriate and apply to the payment of
the First Lien Obligations owing to it (whether or not then due) any and all balances, credits,
deposits, accounts or moneys of the Debtors then or thereafter on deposit with such Benefited
Party;
provided
,
however
, that any such amount so applied by any Benefited Party on
any of the First Lien Obligations owing to it shall be subject to the provisions of Article II of
the Intercreditor Agreement.
Section 5.3
Assignment by the Collateral Agent
. The Collateral Agent may at any time assign or
otherwise transfer all or any portion of its rights and obligations as Collateral Agent under this
Agreement and the other First Lien Security Documents (including, without limitation, the First
Lien Obligations) to any other Person, to the extent permitted by, and upon the conditions
contained in, the Intercreditor Agreement and the other First Lien Credit Documents, as applicable,
and such Person shall thereupon become vested with all the benefits and obligations thereof granted
to the Collateral Agent herein or otherwise.
Section 5.4
Performance by the Collateral Agent
. If any Debtor shall fail to perform any covenant
or agreement contained in this Agreement, the Collateral Agent may perform or attempt to perform
such covenant or agreement on behalf of such Debtor, in which case Collateral Agent shall exercise
good faith and make diligent efforts to give Debtors prompt prior written notice of such
performance or attempted performance. In such event, the Debtors shall, at the request of the
Collateral Agent, promptly pay any reasonable amount expended by the Collateral Agent in connection
with such performance or attempted performance to the Collateral Agent, together with interest
thereon at the interest rate set forth in the Credit Agreement (or if the Credit Agreement is not
then in effect, the highest non-default interest rate contained in the other First Lien Credit
Documents then in effect), from and including the date of such expenditure to but excluding the
date such expenditure is paid in full. Notwithstanding the
22
foregoing, it is expressly agreed that
the Collateral Agent shall not have any liability or responsibility for the performance of any
obligation of the Debtors under this Agreement.
Section 5.5
Restrictions under Dealer Agreements; Non-petition Covenant
. In exercising the rights
and remedies set forth in this Agreement, the Collateral Agent shall take no action with regard to
any Dealer which is expressly prohibited by the related Dealer Agreement.
Section 5.6
Certain Costs and Expenses
. The Debtors shall pay or reimburse the Collateral Agent
within five (5) Business Days after demand for all reasonable costs and expenses (including
reasonable attorneys and paralegal fees and expenses supported by an itemized billing statement)
incurred by it in connection with the enforcement, attempted enforcement or preservation of any
rights or remedies under this Agreement or any other First Lien Security Document during the
existence of an Event of Default or after acceleration of any of the First Lien Obligations,
(including in connection with any workout or restructuring regarding the First Lien Obligations,
and including in any insolvency proceeding or appellate proceeding);
provided
,
however
, that the Debtors shall only be required to pay or reimburse the Collateral Agent
in connection with the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Agreement or any other First Lien Security Document for the fees and expenses
of one law firm in each jurisdiction governing the establishment, perfection or priority of any
security interest or lien established hereby or governing any dispute, claim or other matter
arising hereunder, at any given time, engaged on behalf of the Collateral Agent. The agreements in
this
Section 5.6
shall survive the payment in full of the First Lien Obligations.
Notwithstanding the foregoing, the reimbursement of any fees and expenses incurred by the Benefited
Parties shall be governed by the terms and conditions of the applicable First Lien Credit
Documents.
Section 5.7
Indemnification
. The Debtors shall indemnify, defend and hold the Collateral Agent,
each Credit Agreement Secured Party and each Authorized Representative, and each of their
respective officers, directors, employees, counsel, agents and attorneys-in-fact (each, an
"
Indemnified Person
) harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, charges, expenses and disbursements
(including reasonable attorneys and paralegals fees and expenses supported by an itemized billing
statement) of any kind or nature whatsoever which may at any time (including at any time following
repayment of the First Lien Obligations and the termination, resignation or replacement of the
Collateral Agent or replacement of any Benefited Party) be imposed on, incurred by or asserted
against any such Indemnified Person in any way relating to or arising out of this Agreement or any
other First Lien Security Document or any document contemplated by or referred to herein or
therein, or the transactions contemplated hereby, or any action taken or omitted by any such
Indemnified Person under or in connection with any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any
Bankruptcy Case
(as defined in the
Intercreditor Agreement) or appellate proceeding) related to or arising out of this Agreement or
the First Lien Obligations or the use of the proceeds thereof, whether or not any Indemnified
Person is a party thereto (all the foregoing, collectively, the
Indemnified Liabilities
);
provided
, that the Debtors shall have no obligation under this
Section 5.7
to any
Indemnified Person (a) with respect to Indemnified Liabilities to the extent resulting from the
gross negligence or willful
misconduct of such Indemnified Person or (b) if, in the case of an action solely among the
Collateral Agent and/or the Benefited Parties (or any of them), neither
23
any Debtor nor any of its
Affiliates or employees or agents is (or has been) finally determined, in a court of competent
jurisdiction, to have engaged in any wrongful conduct or in any breach of this Agreement or any of
the First Lien Credit Documents or (c) if, in the case of an action solely as between or among the
Collateral Agent and/or the Benefited Parties (or any of them) on the one hand and a Debtor, on the
other hand, (i) such Debtor has obtained a final, non-appealable judgment from a court of competent
jurisdiction that neither it nor any of its Affiliates, employees or agents has engaged in any
wrongful conduct or in any breach of this Agreement or any of the other First Lien Credit Documents
or (ii) such Debtor by non-appealable judgment is the prevailing party. The agreements in this
Section 5.7
shall survive payment of all other First Lien Obligations.
ARTICLE VI
Default
Section 6.1
Rights and Remedies
. If an Event of Default shall have occurred and be continuing,
the Collateral Agent shall have the following rights and remedies, subject to the direction and/or
consent of the Applicable Authorized Representative as required under the Intercreditor Agreement:
(i) In addition to all other rights and remedies granted to the Collateral
Agent in this Agreement, the Intercreditor Agreement or in any of the other First
Lien Credit Documents or by applicable law, the Collateral Agent shall have all of
the rights and remedies of a secured party under the UCC (whether or not the UCC
applies to the affected Collateral), and the Collateral Agent may also, without
notice except as specified below or in the Intercreditor Agreement, sell the
Collateral or any part thereof in one or more parcels at public or private sale, at
any exchange, brokers board or at any of the Collateral Agents offices or
elsewhere, for cash, on credit or for future delivery, and upon such other terms as
the Collateral Agent may, in its reasonable discretion, deem commercially reasonable
or otherwise as may be permitted by law. Without limiting the generality of the
foregoing, the Collateral Agent may (A) without demand or notice to the Debtors
(except as required under the First Lien Credit Documents or applicable law),
collect, receive or take possession of the Collateral or any part thereof and for
that purpose the Collateral Agent (and/or its agents, servicers or other independent
contractors) may enter upon any premises on which the Collateral is located and
remove the Collateral therefrom or render it inoperable and/or (B) sell, lease or
otherwise dispose of the Collateral, or any part thereof, in one or more parcels at
public or private sale or sales, at the Collateral Agents offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as the Collateral
Agent may, in its reasonable discretion, deem commercially reasonable or otherwise
as may be permitted by law. The Collateral Agent and, subject to the terms of the
Intercreditor Agreement, each of the Benefited Parties shall have the right at any
public sale or sales, and, to the extent permitted by applicable law, at any private
sale or sales, to bid (which bid may be, in whole or in part, in the form of
cancellation of indebtedness) and become a
purchaser of the Collateral or any part thereof free of any right of redemption
on the part of the Debtors, which right of redemption is hereby expressly waived and
24
released by the Debtors to the extent permitted by applicable law. Upon the request
of the Collateral Agent, the applicable Debtor shall assemble the Collateral and
make it available to the Collateral Agent at any place designated by the Collateral
Agent that is reasonably convenient to such Debtor and the Collateral Agent. The
Debtors agree that the Collateral Agent shall not be obligated to give more than ten
(10) days prior written notice of the time and place of any public sale or of the
time after which any private sale may take place and that such notice shall
constitute reasonable notice of such matters. The Collateral Agent shall not be
obligated to make any sale of Collateral if, in the exercise of its reasonable
discretion, it shall determine not to do so, regardless of the fact that notice of
sale of Collateral may have been given. The Collateral Agent may, without notice or
publication (except as required by applicable law), adjourn any public or private
sale or cause the same to be adjourned from time to time by announcement at the time
and place fixed for sale, and such sale may, without further notice, be made at the
time and place to which the same was so adjourned. The Debtors shall be liable for
all reasonable expenses of retaking, holding, preparing for sale or the like and all
reasonable attorneys fees, legal expenses and other costs and expenses incurred by
the Collateral Agent in connection with the collection of the First Lien Obligations
and the enforcement of the Collateral Agents rights under this Agreement and the
Intercreditor Agreement. The Debtors shall, to the extent permitted by applicable
law, remain liable for any deficiency if the Proceeds of any such sale or other
disposition of the Collateral (conducted in conformity with this clause (i) and
applicable law) applied to the First Lien Obligations are insufficient to pay First
Lien Obligations in full. The Collateral Agent shall apply the proceeds from the
sale of the Collateral hereunder against the First Lien Obligations in such order
and manner as is provided in the Intercreditor Agreement.
(ii) The Collateral Agent may cause any or all of the Collateral held by it to
be transferred into the name of the Collateral Agent or the name or names of the
Collateral Agents nominee or nominees.
(iii) The Collateral Agent may exercise any and all rights and remedies of the
Debtors under or in respect of the Collateral, including, without limitation, any
and all rights of the Debtors to demand or otherwise require payment of any amount
under, or performance of any provision of any of the Collateral and any and all
voting rights and corporate powers in respect of the Collateral.
(iv) On any sale of the Collateral, the Collateral Agent is hereby authorized
to comply with any limitation or restriction with which compliance is necessary
(based on a reasoned opinion of the Collateral Agents counsel) in order to avoid
any violation of applicable law or in order to obtain any required approval of the
purchaser or purchasers by any applicable Governmental Authority.
(v) For purposes of enabling the Collateral Agent to exercise its rights and
remedies under this
Section 6.1
and enabling the Collateral Agent and its
25
successors and assigns to enjoy the full benefits of the Collateral, each Debtor
hereby grants to the Collateral Agent an irrevocable, nonexclusive license
(exercisable without payment of royalty or other compensation to such Debtor) to
use, assign, license or sublicense any of the Computer Records or Software
(including in such license reasonable access to all media in which any of the
licensed items may be recorded or stored and all computer programs used for the
completion or printout thereof), exercisable upon the occurrence and during the
continuance of an Event of Default (and thereafter if the Collateral Agent succeeds
to any of the Collateral pursuant to an enforcement proceeding or voluntary
arrangement such Debtor) except as may be prohibited by any licensing agreement
relating to such Computer Records or Software. This license shall also inure to the
benefit of all successors, assigns, transferees of and purchasers from the
Collateral Agent.
(vi) The following shall be the basis for any finder of facts determination of
the value of any Collateral which is the subject matter of a disposition giving rise
to a calculation of any surplus or deficiency under Section 9.615 (f) of the UCC:
(a) the Collateral which is the subject matter of the disposition shall be valued
in an as is condition as of the date of the disposition, without any assumption or
expectation that such Collateral will be repaired or improved in any manner; (b) the
valuation shall be based upon an assumption that the transferee of such Collateral
desires a resale of the Collateral for cash promptly (but no later than 30 days)
following the disposition; (c) all reasonable closing costs customarily borne by the
seller in commercial sales transactions relating to property similar to such
Collateral shall be deducted including, without limitation, brokerage commissions,
tax prorations, attorneys fees, whether inside or outside counsel is used, and
marketing costs; (d) the value of the Collateral which is the subject matter of the
disposition shall be further discounted to account for any estimated holding costs
associated with maintaining such Collateral pending sale (to the extent not
accounted for in (c) above), and other maintenance, operational and ownership
expenses; and (e) any expert opinion testimony given or considered in connection
with a determination of the value of such Collateral must be given by Persons having
at least 5 years experience in appraising property similar to the Collateral and who
have conducted and prepared a complete written appraisal of such Collateral taking
into consideration the factors set forth above. The value of any such Collateral
shall be a factor in determining the amount of proceeds which would have been
realized in a disposition to a transferee other than a secured party, a Person
related to a secured party or a secondary obligor under Section 9-615(f).
Section 6.2
Private Sales.
(a) In view of the fact that applicable securities laws may impose certain restrictions on the
method by which a sale of the Pledged Shares may be effected after an Event of Default, each Debtor
agrees that upon the occurrence and during the continuance of an Event of Default,
Collateral Agent may from time to time attempt to sell all or any part of the Pledged Shares
by a private sale in the nature of a private placement, restricting the bidders and prospective
26
purchasers to those who will represent and agree that they are accredited investors within the
meaning of Regulation D promulgated pursuant to the Securities Act of 1933, as amended (the
"
Securities Act
), and are purchasing for investment only and not for distribution. In so
doing, the Collateral Agent may solicit offers for the Pledged Shares, or any part thereof, from a
limited number of investors who might be interested in purchasing the Pledged Shares. Without
limiting the methods or manner of disposition which could be determined to be commercially
reasonable, if the Collateral Agent hires a firm of regional or national reputation that is engaged
in the business of rendering investment banking and brokerage services to solicit such offers and
facilitate the sale of the Pledged Shares, then the Collateral Agents acceptance of the highest
offer (including its own offer, or the offer of any of the Benefited Parties at any such sale)
obtained through such efforts of such firm shall be deemed to be a commercially reasonable method
of disposition of such Pledged Shares. The Collateral Agent shall not be under any obligation to
delay a sale of any of the Pledged Shares (to the extent applicable) for the period of time
necessary to permit the issuer of such securities to register such securities under the laws of any
jurisdiction outside the United States, under the Securities Act or under any applicable state
securities laws, even if such issuer would agree to do so.
(b) Each Debtor further agrees to do or cause to be done, to the extent that such Debtor may
do so under applicable law, all such other reasonable acts and things as may be necessary to make
such sales or resales of any portion or all of the Collateral valid and binding and in compliance
with any and all applicable laws, regulations, orders, writs, injunctions, decrees or awards of any
and all courts, arbitrators or governmental instrumentalities, domestic or foreign, having
jurisdiction over any such sale or sales, all at the Debtors sole expense.
Section 6.3
Establishment of Special Account; and Lock Box
. Upon the occurrence and during the
continuance of any Event of Default, if so directed by the Applicable Authorized Representative,
there shall be established by the Debtors with Collateral Agent, for the benefit of the Benefited
Parties in the name of the Collateral Agent, a segregated non-interest bearing cash collateral
account (
Special Account
) bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Collateral Agent and the Benefited Parties;
provided
,
however
, that the Special Account may be an interest-bearing account with
a commercial bank (including Comerica or any other Benefited Party which is a commercial bank) if
so directed by the Applicable Authorized Representative and determined by the Collateral Agent, in
its reasonable discretion, to be practicable, invested by Collateral Agent in its sole discretion,
but without any liability for losses or the failure to achieve any particular rate of return.
Subject to the terms hereof and to the rights of Dealers under applicable Dealer Agreements and to
the rights of the applicable creditor in respect of Permitted Securitizations, the Collateral
Agent shall possess all right, title and interest in and to all funds deposited from time to time
in such account. Furthermore, upon the occurrence and during the continuance of any Event of
Default, the Debtors agree, upon the written election of the Applicable Authorized Representative,
to establish and maintain at Debtors sole expense a United States Post Office lock box (the
"
Lock Box
), to which the Collateral Agent shall have exclusive access and control. Each
Debtor expressly authorizes the Collateral Agent, from time to time, to remove the contents from
the Lock Box for disposition in accordance with this
Agreement. Upon the occurrence and during the continuance of an Event of Default, the
applicable Debtor shall, upon the Applicable Authorized Representatives request, notify all
account debtors, all Dealers under Dealer Agreements encumbered hereby and all obligors under
Installment Contracts or Leases
27
encumbered hereby that all payments made to such Debtor (a) other
than by electronic funds transfer, shall be remitted, to the Lock Box , and each Debtor shall
include a like statement on all invoices, with the items removed from the Lock Box to be deposited
as the Applicable Authorized Representative may direct, in (i) a Debtor deposit account that is
subject to a deposit account control agreement in favor of the Collateral Agent or otherwise under
the control of the Collateral Agent or (ii) the Special Account and (b) by electronic funds
transfer, shall be remitted as the Applicable Authorized Representative may direct, to (i) a Debtor
deposit account that is subject to a deposit account control agreement in favor of the Collateral
Agent or otherwise under the control of the Collateral Agent or (ii) the Special Account, and each
Debtor shall include a like statement on all invoices. The Debtors shall execute all documents and
authorizations as reasonably required by the Collateral Agent, as directed by the Applicable
Authorized Representative, to establish and maintain the Lock Box and the Special Account. It is
acknowledged by the parties hereto that any lockbox presently maintained or subsequently
established by the Debtors with Collateral Agent may be used, subject to the terms hereof, to
satisfy the requirements set forth in the first sentence of this
Section 6.3
.
Section 6.4
Legending Installment Contracts and Leases on Default
. Upon the occurrence and during
the continuance of any Event of Default, the Applicable Authorized Representative may elect (the
Election), by directing the Collateral Agent to notify the Debtors of such election, to affix to
each Installment Contract and Lease encumbered by this Agreement or securing Dealer Loans or
otherwise related to a Dealer Agreement encumbered hereby (or, at the Debtors option, to the file
folders containing such Installment Contracts or Leases) the following legend: THIS AGREEMENT HAS
BEEN PLEDGED TO COMERICA BANK, AS COLLATERAL AGENT FOR THE BENEFIT OF CERTAIN BENEFITED PARTIES;
provided that, in the event that the Credit Agreement is no longer extant or Comerica shall cease
to be the Collateral Agent, a substantially similar legend shall be used. The Election, once made
by the Applicable Authorized Representative, as aforesaid, shall remain in effect, and the Debtors
shall remain obligated to comply with such Election, notwithstanding any subsequent waiver or cure
of the applicable Event of Default giving rise to such election, unless the Election is withdrawn
by the Applicable Authorized Representative.
ARTICLE VII
Miscellaneous
Section 7.1
No Waiver; Cumulative Remedies
. No failure on the part of the Collateral Agent to
exercise and no delay in exercising, and no course of dealing with respect to, any right, power or
privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege under this Agreement preclude any other or further
exercise thereof or the exercise of
any other right, power, or privilege. The rights and remedies provided for in this Agreement
are cumulative and not exclusive of any rights and remedies provided by law.
Section 7.2
Successors and Assigns
. This Agreement shall be binding upon and inure to the benefit
of the Debtors and the Collateral Agent and their respective heirs, successors and assigns, except
that no Debtor may assign any of its rights or obligations under this Agreement without the prior
written consent of the Collateral Agent.
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Section 7.3
AMENDMENT; ENTIRE AGREEMENT
. THIS AGREEMENT, (ALONG WITH THE INTERCREDITOR AGREEMENT,
AND THE FIRST LIEN CREDIT DOCUMENTS REFERRED TO HEREIN) EMBODIES THE FINAL, ENTIRE AGREEMENT AMONG
THE PARTIES HERETO AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR
DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO.
The provisions of this Agreement may be amended or waived only by an instrument in writing signed
by the parties hereto.
Section 7.4
Notices
. All notices, requests, consents, approvals, waivers and other communications
hereunder shall be in writing (including, by facsimile transmission) and mailed, faxed or delivered
to the address or facsimile number specified for notices on signature pages hereto; or, as directed
to the Debtors or the Collateral Agent, to such other address or number as shall be designated by
such party in a written notice to the other. All such notices, requests and communications shall,
when sent by overnight delivery, or faxed, be effective when delivered for overnight (next business
day) delivery, or transmitted in legible form by facsimile machine, respectively, or if mailed,
upon the third
Business Day
(as defined in the Credit Agreement) after the date deposited
into the U.S. mail, or if otherwise delivered, upon delivery; except that notices to the Collateral
Agent shall not be effective until actually received by the Collateral Agent.
Section 7.5
GOVERNING LAW; SUBMISSION TO JURISDICTION; SERVICE OF PROCESS
. (a) THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF MICHIGAN.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER FIRST LIEN
SECURITY DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF MICHIGAN OR OF THE UNITED STATES OF
AMERICA FOR THE EASTERN DISTRICT OF MICHIGAN, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH
OF THE DEBTORS AND THE COLLATERAL AGENT CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE DEBTORS AND THE
COLLATERAL AGENT IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS
, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY FIRST
LIEN SECURITY DOCUMENT.
Section 7.6
Headings
. The headings, captions, and arrangements used in this Agreement are for
convenience only and shall not affect the interpretation of this Agreement.
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Section 7.7
Survival of Representations and Warranties
. All representations and warranties made
in this Agreement or in any certificate delivered pursuant hereto shall survive the execution and
delivery of this Agreement, and no investigation by the Collateral Agent shall affect the
representations and warranties or the right of the Collateral Agent or any of the Benefited Parties
to rely upon them.
Section 7.8
Counterparts
. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.
Section 7.9
Waiver of Bond
. In the event the Collateral Agent seeks to take possession of any or
all of the Collateral by judicial process, each Debtor hereby irrevocably waives any bonds and any
surety or security relating thereto that may be required by applicable law as an incident to such
possession, and waives any demand for possession prior to the commencement of any such suit or
action.
Section 7.10
Severability
. Any provision of this Agreement which is determined by a court of
competent jurisdiction to be prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
Section 7.11
Construction
. Each Debtor and the Collateral Agent acknowledge that each of them has
had the benefit of legal counsel of its own choice and has been afforded an opportunity to review
this Agreement with its legal counsel and that this Agreement shall be construed as if jointly
drafted by the Debtors and the Collateral Agent.
Section 7.12
Termination
. If all of the First Lien Obligations (other than contingent liabilities
pursuant to any indemnity, including without limitation
Sections 5.6 and 5.7
hereof, for
claims which have not been asserted, or which have not yet accrued) shall have been paid and
performed in full and all commitments to extend credit or other credit accommodations under the
First Lien Credit Documents have been terminated, the Collateral Agent shall, upon the written
request of the Debtors, execute and deliver to the Debtors a proper instrument or instruments
acknowledging the release and termination of the security interests created by this Agreement, and
shall duly assign and deliver to the Debtors (without recourse and without any representation or
warranty) such of the Collateral as may be in the possession of the Collateral Agent and has not
previously been sold or otherwise applied pursuant to this Agreement.
Section 7.13
Release of Collateral
. The Collateral Agent shall, upon the written request of the
applicable Debtor, execute and deliver to such Debtor a proper instrument or instruments
acknowledging or confirming the release of the security interest and liens established hereby (or
confirming the authority of the Debtor to execute such releases) (a) on any Collateral (i) which is
permitted to be sold or disposed of by a Debtor or any other grantor in connection with a Permitted
Securitization or (ii) the sale or other disposition of which is not otherwise prohibited under the
terms of any of the other First Lien Credit Documents (or in the event any of the First Lien Credit
Documents prohibits such sale or disposition, the Requisite Benefited
30
Parties under such First Lien
Credit Documents shall have consented to such sale or disposition in accordance with the terms
thereof) or (b) if such release is provided for, or permitted or required under, or has been
approved by the requisite parties in accordance with the applicable terms and conditions of, the
First Lien Credit Documents of each Class or the Intercreditor Agreement.
Section 7.14
WAIVER OF JURY TRIAL
. EACH OF THE DEBTORS AND THE COLLATERAL AGENT WAIVES ITS RIGHTS
TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER FIRST LIEN SECURITY DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY EITHER SUCH PARTY
AGAINST THE OTHER, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE DEBTOR
AND THE COLLATERAL AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, EACH SUCH PARTY FURTHER AGREES THAT ITS
RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER FIRST LIEN SECURITY DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT.
Section 7.15
Consistent Application
. The rights and duties created by this Agreement shall, in all
cases, be interpreted consistently with, and shall be in addition to (and not in lieu of), the
rights and duties created by the First Lien Credit Documents. In the event that any provision of
this Agreement shall be inconsistent with any provision of any of the other First Lien Credit
Documents, such provision of this Agreement shall govern.
Section 7.16
Amendment and Restatement; Reaffirmation
. This Agreement shall be deemed to amend,
restate, renew and replace, in its entirety the prior amended and restated security agreement
executed and delivered by the parties as of February 7, 2006, which amended and restated the
earlier security agreements referred to therein (all such prior security agreements referred to
herein as the Prior Security Agreements). The Debtors further reaffirm their respective
obligations under the Intercreditor Agreement to the extent and on the terms set forth therein.
* * * *
31
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and
year first written above.
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DEBTORS:
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CREDIT ACCEPTANCE CORPORATION
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By:
Name:
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/s/ Douglas W. Busk
Douglas W. Busk
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Title:
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Treasurer
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Address for Notices:
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Credit Acceptance Corporation
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25505 W. 12 Mile Road, Suite 3000
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Southfield, Michigan 48034
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Fax No.: 248-827-8542
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Telephone No.: 248-353-2700
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Attention: Doug Busk
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BUYERS VEHICLE PROTECTION PLAN, INC.
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VEHICLE REMARKETING SERVICES, INC.
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By:
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/s/ Douglas W. Busk
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Name:
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Douglas W. Busk
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Title:
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Treasurer
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Address for Notices:
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c/o Credit Acceptance Corporation
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25505 W. 12 Mile Road, Suite 3000
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Southfield, Michigan 48034
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Fax No.: 248-827-8542
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Telephone No.: 248-353-2700
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Attention: Doug Busk
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COLLATERAL AGENT:
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COMERICA BANK
as Collateral Agent
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By:
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/s/ Michael P. Stapleton
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Name:
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Michael P. Stapleton
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Title:
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Vice President
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Address for Notices:
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Comerica Bank
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One Detroit Center, 6th Floor
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500 Woodward Avenue
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Detroit, Michigan 48226
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Fax No.: (313) 222-5636
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Telephone No.: (313) 222-2863
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|
Attention: Michael P. Stapleton
|
|
|
33
SCHEDULE A
Principal Place of Business, Locations of Equipment and Inventory
(including leased locations) in the Possession of Debtors
Credit Acceptance Corporation
25505 West Twelve Mile Road
Southfield, Michigan 48034
20700 Civic Center Drive
Suite 300
Southfield, MI 48034
Civic Center Drive, Southfield, Michigan Landlord Contact Info:
Farbman Group
28400 Northwestern Highway, Suite 400
Southfield, MI 48034
Attention: Andy Gutman, Chief Financial Officer
2460 Paseo Verde Parkway,
Suite 110
Henderson, NV 89074
Henderson, Nevada Landlord Contact Info:
American Nevada Company, LLC
901 N. Green Valley Parkway, Suite 200
Henderson, NV 89074-7105
Attn: Charles W. Van Geel, Vice President, Commercial Leasing Operations
Buyers Vehicle Protection Plan, Inc.
25505 West Twelve Mile Road
Southfield, Michigan 48034
Vehicle Remarketing Services, Inc.
25505 West Twelve Mile Road
Southfield, Michigan 48304
SCHEDULE B
TO
SECURITY AGREEMENT
Jurisdictions for Filing
UCC-1 Financing Statements
Credit Acceptance Corporation
Michigan
Buyers Vehicle Protection Plan, Inc.
Michigan
Vehicle Remarketing Services, Inc.
Michigan
SCHEDULE C
TO
SECURITY AGREEMENT
Primary Computer Systems and Software
The loan origination systems (CAPS and the Companys Application and Contract System) are
custom-written software applications that run on Sun (Solaris operating system) along with database
software from Oracle. The system is maintained by in-house personnel.
The loan servicing system (LSS) is a custom-written software application that runs on HP
(HP/UX operating system) along with database software from Oracle. The system is maintained by
in-house personnel.
The collection system (CTV) is a licensed software package from Ontario Systems that runs on
HP (HP/UX operating system). The system is maintained by in-house personnel and Ontario Systems.
All systems are protected from failure by redundancy in the hardware and networks, backup
generators for power, and at a secondary site for disaster recovery at Sunguard.
SCHEDULE D
TO
SECURITY AGREEMENT
Pledged Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pledged Shares as %
|
|
|
|
|
|
|
|
|
|
|
|
|
No. of
|
|
of Total Shares
|
|
Total Shares
|
|
|
|
|
|
|
Certificate
|
|
Pledged
|
|
Issued and
|
|
Issued and
|
Issuer
|
|
Owner
|
|
No.
|
|
Shares
|
|
Outstanding
|
|
Outstanding
|
Buyers Vehicle
Protection Plan,
Inc.
|
|
Company
|
|
|
1
|
|
|
|
1,000
|
|
|
|
100
|
%
|
|
|
1,000
|
|
Vehicle Remarketing
Services, Inc.
|
|
Company
|
|
|
1
|
|
|
|
10
|
|
|
|
100
|
%
|
|
|
10
|
|
VSC Re Company
|
|
Company
|
|
|
1
|
|
|
|
10,000
|
|
|
|
100
|
%
|
|
|
10,000
|
|
SCHEDULE E
TO
SECURITY AGREEMENT
Trade and Other Names
Credit Acceptance Corporation
|
|
|
STATES
|
|
|
AL Alabama
|
|
None
|
AK Alaska
|
|
None
|
AZ Arizona
|
|
None
|
AR Arkansas
|
|
AutoNet Finance.com, CAC Auto Leasing
|
CA California
|
|
Los Angelos County ONLY AutoNet Finance.com, CAC Auto Leasing
|
CO Colorado
|
|
AutoNet Finance.com, CAC Auto Leasing
|
CT Connecticut
|
|
None
|
DE Delaware
|
|
None
|
DC Dist. Of Col.
|
|
None
|
FL Florida
|
|
None
|
GA Georgia
|
|
None
|
HI Hawaii
|
|
AutoNet Finance.com
|
ID Idaho
|
|
AutoNet Finance.com, CAC Auto Leasing
|
IL Illinois
|
|
None
|
IN Indiana
|
|
AutoNet Finance.com, CAC Auto Leasing
|
IA Iowa
|
|
AutoNet Finance.com, CAC Auto Leasing
|
KS Kansas
|
|
None
|
KY Kentucky
|
|
AutoNet Finance.com
|
LA Louisiana
|
|
None
|
ME Maine
|
|
AutoNet Finance.com, CAC Auto Leasing
|
MD Maryland
|
|
None
|
MA Mass.
|
|
None
|
MI Michigan
|
|
None
|
MN Minnesota
|
|
AutoNet Finance.com, CAC Auto Leasing
|
MS Mississippi
|
|
None
|
MO Missouri
|
|
None
|
MT Montana
|
|
None
|
NE Nebraska
|
|
None
|
NV Nevada
|
|
None
|
NH New Hamp.
|
|
None
|
NJ New Jersey
|
|
None
|
NM New Mexico
|
|
None
|
NY New York
|
|
None
|
NC North Car.
|
|
Autonet Finance Company.com, Inc., CAC Leasing, Inc.
|
ND North Dak.
|
|
None
|
OH Ohio
|
|
None
|
OK Oklahoma
|
|
AutoNet Finance.com, CAC Auto Leasing
|
OR Oregon
|
|
None
|
PA Penn.
|
|
AutoNet Finance.com, CAC Auto Leasing, Credit Acceptance Financial Services, Inc.
|
RI Rhode Island
|
|
None
|
SC South Car.
|
|
Richand County ONLY AutoNet Finance.com
|
SD South Dak.
|
|
None
|
|
|
|
TN
Tennessee
|
|
None
|
TX Texas
|
|
AutoNet Finance.com, CAC Auto Leasing
|
UT Utah
|
|
None
|
VT Vermont
|
|
None
|
VA Virginia
|
|
City of Virginia Beach ONLY -AutoNet Finance.com, CAC Auto Leasing
|
WA Washington
|
|
AutoNet Finance.com, CAC Auto Leasing
|
WV West Vir.
|
|
None
|
WI Wisconsin
|
|
None
|
WY Wyoming
|
|
None
|
Buyers Vehicle Protection Plan, Inc.
None
Vehicle Remarketing Services, Inc.
Oklahoma Vehicle Remarketing Services of Michigan, Inc.
6
SCHEDULE F
TO
SECURITY AGREEMENT
Copyright Schedule
Credit Acceptance Corporation
|
|
|
COPYRIGHT
|
|
REG. NO.
|
CAC program review: 18 minutes that can change the profitability
of your dealership : ser. 100
|
|
TX3449287
|
CAC program review: 18 minutes that can change the profitability
of your dealership : ser. 200
|
|
TX3449289
|
CAC Sales and management video seminar
|
|
TX3377499
|
CAC sales and management video seminar
|
|
TX3395660
|
CAC Sales and management video seminar : owners manual
|
|
TX3395659
|
Century Club stock option plan for dealers
|
|
TX3724334
|
Century Club stock option plan for dealers
|
|
TX3770159
|
Credit Acceptance Corporation dealership procedures
|
|
TX3467195
|
Credit Acceptance Corporation dealership procedures
|
|
TX3572818
|
Credit Acceptance Corporation management conference
|
|
TX3305783
|
Credit Acceptance Corporation management conference
|
|
TX3439695
|
Credit Acceptance Corporation management conference manual. By
Credit Acceptance Corporation
|
|
TX4348146
|
Credit Acceptance Corporation servicing agreement instructions
|
|
TX3436544
|
Credit Acceptance Corporation: servicing agreement instructions
|
|
TX3577877
|
Credit acceptance corporations 100% plus plan
|
|
TX4160147
|
Credit Acceptance corporations value advance program (VAP)
|
|
TX4160146
|
Don Foss/Credit Acceptance Corporation sales training tapes
|
|
PA565492
|
Don Foss Credit Acceptance Corporation seminar
|
|
TX3349797
|
Don Foss Credit Acceptance Corporation seminar
|
|
TX3349798
|
Don Foss Credit Acceptance Corporation seminar; sales training
manual. By Credit Acceptance Corporation
|
|
TX4379522
|
Get started videoeasy steps to successful CAC selling
|
|
TX3449288
|
Get started videoeasy steps to successful CAC selling : ser. 200
|
|
TX3449286
|
Giving car dealers new avenues for profits : brochure series 100
|
|
TX3432531
|
Giving car dealers new avenues for profits, brochure series 100.
By Credit Acceptance Corporation
|
|
TX4348147
|
Giving car dealers new avenues for profits : brochure series 200
and contents
|
|
TX3431952
|
Giving car dealers new avenues for profits; brochure series 200
and contents. By Credit Acceptance Corporation
|
|
TX4182062
|
No-risk financing for high-risk buyers
|
|
TX3432894
|
No-risk financing for high-risk buyers brochure. By Credit
Acceptance Corporation
|
|
TX4379523
|
The advantages and disadvantages of buy here, pay here/by
Richard Vanderport
|
|
TX3432530
|
The CAC sales and management video training seminar
|
|
TX3360449
|
Trademark Schedule
Credit Acceptance Corporation
|
|
|
|
|
MARK
|
|
SERIAL/REGIS. NO.
|
ASK OTTO
|
|
|
2,699,904
|
|
CREDIT ACCEPTANCE WE CHANGE LIVES!
|
|
|
2,644,387
|
|
MISCELLANEOUS DESIGN (checkmark in a box)
|
|
|
2,657,196
|
|
WE CHANGE LIVES
|
|
|
2,660,738
|
|
OTTO (and design)
|
|
|
2,887,186
|
|
CAPS
|
|
|
3,647,518
|
|
CAPS CREDIT APPROVAL PROCESSING SYSTEM
|
|
|
3,045,350
|
|
ASK ABOUT OUR GUARANTEED CREDIT APPROVAL
(and design)
|
|
|
3,564,263
|
|
CREDIT ACCEPTANCE WE CHANGE LIVES! (and design)
|
|
|
2,644,387
|
|
WE CHANGE LIVES! (and design) (European Trademark)
|
|
|
002455137
|
|
Patent Schedule
Credit Acceptance Corporation
|
|
|
|
|
PATENT
|
|
APPLICATION/PATENT NO.
|
System and Method for Providing Financing (Patent)
|
|
|
6,950,807 B2
|
|
Vehicle Leasing and Consumer Credit Rehabilitation
System and Method (AutoNet Patent)
|
|
|
20010034700
|
|
2
EXHIBIT A
TO
SECURITY AGREEMENT
FORM OF AMENDMENT
This Amendment, dated
, 20
, is delivered pursuant to
Section 4.15
of the Security
Agreement referred to below. The undersigned hereby agrees that this Amendment may be attached to
the Fourth Amended and Restated Security Agreement dated as of February
, 2010, among the
undersigned and Comerica Bank, as the Collateral Agent for the benefit of the Benefited Parties
referred to therein (the
Security Agreement
), and that the shares of stock, membership
interests, partnership units, notes or other instruments listed on
Schedule 1
hereto shall
be and become part of the Collateral referred to in the Security Agreement and shall secure payment
and performance of all First Lien Obligations as provided in the Security Agreement.
Capitalized terms used herein but not defined herein shall have the meanings therefor provided
in the Security Agreement.
|
|
|
|
|
|
CREDIT ACCEPTANCE CORPORATION
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
|
BUYERS VEHICLE PROTECTION PLAN, INC.
VEHICLE REMARKETING SERVICES, INC.
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
|
COMERICA BANK
, as Collateral Agent
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
EXHIBIT B
TO
SECURITY AGREEMENT
JOINDER AGREEMENT
THIS JOINDER AGREEMENT is dated as of
,
by the undersigned (
New Debtor
).
WHEREAS, pursuant to
Section 4.17
of that certain Fourth Amended and Restated Security
Agreement dated as of February
, 2010 as amended or otherwise modified from time to time, the
Security Agreement) executed and delivered by the Debtors signatory thereto, in favor of Comerica
Bank, as Collateral Agent for the benefit of the Benefited Parties referred to therein, the New
Debtor must execute and deliver a Joinder Agreement so as to become obligated under the Security
Agreement.
NOW THEREFORE, as a further inducement to the Benefited Parties to continue to provide the
Company and the other Debtors with the benefits (the Benefits) from the transactions evidenced by
the First Lien Credit Documents, the New Debtor hereby covenants and agrees as follows:
|
1.
|
|
All capitalized terms used herein shall have the meanings assigned to them in
the Security Agreement unless expressly defined to the contrary.
|
|
|
2.
|
|
The New Debtor hereby enters into this Joinder Agreement in order to comply
with
Section 4.17
of the Security Agreement and does so in consideration of the
continued receipt of the Benefits.
|
|
|
3.
|
|
The New Debtor shall be considered, and deemed to be, for all purposes of the
Security Agreement, a Debtor under the Security Agreement as fully as though the New
Debtor had executed and delivered the Security Agreement at the time originally
executed and delivered by the existing debtors, and hereby ratifies and confirms its
obligations under the Security Agreement, all in accordance with the terms thereof.
|
|
|
4.
|
|
No Default or Event of Default (each such term being defined in the
Intercreditor Agreement) has occurred and is continuing.
|
|
|
5.
|
|
This Joinder Agreement shall be governed by the laws of the State of Michigan
and shall be binding upon the New Debtor and its successors and assigns.
|
IN WITNESS WHEREOF, the undersigned New Debtor has executed and delivered this Joinder
Agreement as of the day and year first above written.
|
|
|
|
|
|
[NEW DEBTOR]
|
|
|
By:
|
|
|
|
|
Its:
|
|
|
|
|
|
|
|
Address for notices:
Filing Locations:
Tradenames:
|
|
|
|
|
|
|
|
|
|
|
|
2
EXHIBIT C
FORM OF AMENDMENT
This Amendment, dated
, 20
, is delivered pursuant to
Section 4.18(d)
of the Security
Agreement referred to below. The undersigned hereby agrees that this Amendment may be attached to
the Fourth Amended and Restated Security Agreement dated as of February
, 2010, among the
undersigned and Comerica Bank, as the Collateral Agent, as the same may be amended, restated or
otherwise modified from time to time (the Security Agreement), and that the intellectual property
listed on
Schedule F
hereto shall be and become part of the Collateral referred to in the
Security Agreement and shall secure payment and performance of all First Lien Obligations as
provided in the Security Agreement.
Capitalized terms used herein but not defined herein shall have the meanings therefor provided
in the Security Agreement.
|
|
|
|
|
|
[Debtors]
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
|
Comerica Bank
, as Collateral Agent
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
EXHIBIT D
FORM OF COPY RIGHT SECURITY AGREEMENT
THIS COPYRIGHT SECURITY AGREEMENT (this
Agreement
), dated as of February 1, 2010,
between Credit Acceptance Corporation (the
Debtor
) and Comerica Bank
(
Comerica
), as collateral agent for the benefit of the Credit Agreement Secured Parties,
the Senior Notes Secured Parties and the Additional Secured Parties (each as defined in the
Intercreditor Agreement referenced below) (in such capacity, together with its successors in such
capacity under the Intercreditor Agreement referred to below, the
Collateral Agent
).
WITNESSETH
A. WHEREAS, Comerica in its capacities as Collateral Agent and Authorized Representative for
the Credit Agreement Secured Parties, has entered into that Certain Amended and Restated
Intercreditor Agreement dated as of the date hereof (as amended, restated or otherwise modified
from time to time, the
Intercreditor Agreement
) with the Debtor, the Guarantors named
therein and U.S. Bank National Association as the Senior Notes Authorized Representative (as
referred to therein).
B. WHEREAS, pursuant to the Credit Agreement Documents and the Senior Notes First Lien
Documents (each as defined in the Intercreditor Agreement), the Debtor, together with the other
Debtors named therein, have executed and delivered that certain Fourth Amended and Restated
Security Agreement dated as of the date hereof (as amended or otherwise modified from time to time,
the Security Agreement); and
C. WHEREAS, the Debtor is required to execute and deliver this Agreement and to further
confirm the grant to the Collateral Agent for the benefit of the Benefited Parties (as defined in
the Intercreditor Agreement) of a continuing security interest in all of the Copyright Collateral
(as defined below) to secure the First Lien Obligations (as defined in the Intercreditor
Agreement).
NOW, THEREFORE, for good and valuable consideration the receipt of which is hereby
acknowledged, Debtor agrees, for the benefit of the Collateral Agent, as follows:
SECTION 1.
Definitions
. Unless otherwise defined herein or the context otherwise
requires, terms used in this Agreement, including its preamble and recitals, have the meanings
provided in the Security Agreement.
SECTION 2.
Grant of Security Interest
. For good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, to secure the prompt and complete payment
and performance when due of all of the First Lien Obligations, the Debtor hereby mortgages, pledges
and hypothecates to the Collateral Agent, and grants to the Collateral Agent a security interest
in, all of the following property of the Debtor (the
Copyright Collateral
), whether now
owned or hereafter acquired or existing:
(a) all license agreements with any other Person in connection with any of the copyrights or
such other Persons copyrights, whether a Debtor is a licensor or a licensee under any such license
agreement, including, without limitation, the exclusive license agreements listed on Schedule 1.1
hereto and made a part hereof, subject, in each case, to the terms of such license agreements and
the right to prepare for sale, sell and advertise for sale, all inventory now or hereafter covered
by such licenses;
(b) all copyrights and mask works, whether or not registered, and all applications for
registration of all copyrights and mask works, including, but not limited to all copyrights and
mask works, and all applications for registration of all copyrights and mask works identified on
Schedule 1.1 attached hereto and made a part hereof, and including without limitation (a) the right
to sue or otherwise recover for any and all past, present and future infringements and
misappropriations thereof; (b) all income, royalties, damages and other payments now and hereafter
due and/or payable with respect thereto (including, without limitation, payments under all
copyright licenses entered into in connection therewith, and damages and payments for past or
future infringements thereof); and (c) all rights corresponding thereto and all modifications,
adaptations, translations, enhancements and derivative works, renewals thereof, and all other
rights of any kind whatsoever of a Debtor accruing thereunder or pertaining thereto;
(c) all renewals, certifications, or extensions of any of the items described in
clauses
(a)
and
(b)
; and
(d) all proceeds of, and rights associated with, the foregoing, including any right to sue or
claim by the Debtor against third parties for past, present, or future infringement or dilution of
any copyright, copyright registration, or copyright license, including any copyright, copyright
registration or exclusive copyright license referred to in
Schedule 1.1
attached hereto, or
for any injury to the goodwill associated with the use of any copyright or for breach or
enforcement of any copyright license.
SECTION 3.
Security Agreement
. This Agreement has been executed and delivered by the
Debtor for the purpose of registering the security interest of the Collateral Agent in the
Copyright Collateral with the United States Copyright Office. The security interest granted hereby
has been granted as a supplement to, and not in limitation of, the security interest granted to the
Collateral Agent under the Security Agreement as security for the discharge and performance of the
First Lien Obligations. The Security Agreement (and all rights and remedies of the Collateral
Agent thereunder) shall remain in full force and effect in accordance with its terms.
SECTION 4.
Release of Security Interest
. The Collateral Agent shall release the
Copyright Collateral in accordance with the terms of the Security Agreement.
SECTION 5.
Acknowledgment
. The Debtor hereby further acknowledges and affirms that
the rights and remedies of the Collateral Agent with respect to the security interest in the
Copyright Collateral granted hereby are more fully set forth in the Security Agreement, the terms
and provisions of which (including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein.
2
SECTION 6.
Counterparts
. This Agreement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of which shall
constitute together but one and the same agreement.
3
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered by their respective officers thereunto duly authorized as of the day and year first above
written.
|
|
|
|
|
|
CREDIT ACCEPTANCE CORPORATION
|
|
|
By:
|
|
|
|
|
|
Douglas W. Busk
|
|
|
|
Its:
|
Treasurer
|
|
|
|
|
|
|
|
COMERICA BANK
, as Collateral Agent
|
|
|
By:
|
|
|
|
|
|
Michael P. Stapleton
|
|
|
|
Its:
|
Vice President
|
|
|
SCHEDULE 1.1
COPYRIGHT COLLATERAL
|
|
|
COPYRIGHT
|
|
REG. NO.
|
CAC program review: 18 minutes that can change the profitability
of your dealership : ser. 100
|
|
TX3449287
|
CAC program review: 18 minutes that can change the profitability
of your dealership : ser. 200
|
|
TX3449289
|
CAC Sales and management video seminar
|
|
TX3377499
|
CAC sales and management video seminar
|
|
TX3395660
|
CAC Sales and management video seminar : owners manual
|
|
TX3395659
|
Century Club stock option plan for dealers
|
|
TX3724334
|
Century Club stock option plan for dealers
|
|
TX3770159
|
Credit Acceptance Corporation dealership procedures
|
|
TX3467195
|
Credit Acceptance Corporation dealership procedures
|
|
TX3572818
|
Credit Acceptance Corporation management conference
|
|
TX3305783
|
Credit Acceptance Corporation management conference
|
|
TX3439695
|
Credit Acceptance Corporation management conference manual. By
Credit Acceptance Corporation
|
|
TX4348146
|
Credit Acceptance Corporation servicing agreement instructions
|
|
TX3436544
|
Credit Acceptance Corporation: servicing agreement instructions
|
|
TX3577877
|
Credit acceptance corporations 100% plus plan
|
|
TX4160147
|
Credit Acceptance corporations value advance program (VAP)
|
|
TX4160146
|
Don Foss/Credit Acceptance Corporation sales training tapes
|
|
PA565492
|
Don Foss Credit Acceptance Corporation seminar
|
|
TX3349797
|
Don Foss Credit Acceptance Corporation seminar
|
|
TX3349798
|
Don Foss Credit Acceptance Corporation seminar; sales training
manual. By Credit Acceptance Corporation
|
|
TX4379522
|
Get started videoeasy steps to successful CAC selling
|
|
TX3449288
|
Get started videoeasy steps to successful CAC selling : ser. 200
|
|
TX3449286
|
Giving car dealers new avenues for profits : brochure series 100
|
|
TX3432531
|
Giving car dealers new avenues for profits, brochure series 100.
By Credit Acceptance Corporation
|
|
TX4348147
|
Giving car dealers new avenues for profits : brochure series 200
and contents
|
|
TX3431952
|
Giving car dealers new avenues for profits; brochure series 200
and contents. By Credit Acceptance Corporation
|
|
TX4182062
|
No-risk financing for high-risk buyers
|
|
TX3432894
|
No-risk financing for high-risk buyers brochure. By Credit
Acceptance Corporation
|
|
TX4379523
|
The advantages and disadvantages of buy here, pay here/by
Richard Vanderport
|
|
TX3432530
|
The CAC sales and management video training seminar
|
|
TX3360449
|
EXHIBIT E
FORM OF PATENT SECURITY AGREEMENT
THIS PATENT SECURITY AGREEMENT (this
Agreement
), dated as of February 1, 2010,
between Credit Acceptance Corporation (the
Debtor
) and Comerica Bank
(
Comerica
), as collateral agent for the benefit of the Credit Agreement Secured Parties,
the Senior Notes Secured Parties and the Additional Secured Parties (each as defined in the
Intercreditor Agreement referenced below) (in such capacity, together with its successors in such
capacity under the Intercreditor Agreement referred to below, the
Collateral Agent
).
WITNESSETH
A. WHEREAS, Comerica in its capacities as Collateral Agent and Authorized Representative for
the Credit Agreement Secured Parties, has entered into that Certain Amended and Restated
Intercreditor Agreement dated as of the date hereof (as amended, restated or otherwise modified
from time to time, the
Intercreditor Agreement
) with the Debtor, the Guarantors named
therein and U.S. Bank National Association as the Senior Notes Authorized Representative (as
referred to therein).
B. WHEREAS, pursuant to the Credit Agreement Documents and the Senior Notes First Lien
Documents (each as defined in the Intercreditor Agreement), the Debtor, together with the other
Debtors named therein, have executed and delivered that certain Fourth Amended and Restated
Security Agreement dated as of the date hereof (as amended or otherwise modified from time to time,
the
Security Agreement
); and
C. WHEREAS, the Debtor is required to execute and deliver this Agreement and to further
confirm the grant to the Collateral Agent for the benefit of the Benefited Parties (as defined in
the Intercreditor Agreement) of a continuing security interest in all of the Patent Collateral (as
defined below) to secure the First Lien Obligations (as defined in the Intercreditor Agreement).
NOW, THEREFORE, for good and valuable consideration the receipt of which is hereby
acknowledged, Debtor agrees, for the benefit of the Collateral Agent, as follows:
SECTION 1.
Definitions
. Unless otherwise defined herein or the context otherwise
requires, terms used in this Agreement, including its preamble and recitals, have the meanings
provided in the Security Agreement.
SECTION 2.
Grant of Security Interest
. For good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, to secure the prompt and complete payment
and performance when due of all of the First Lien Obligations, the Debtor hereby mortgages, pledges
and hypothecates to the Collateral Agent, and grants to the Collateral Agent a security interest
in, all of the following property of the Debtor (the
Patent Collateral
), whether now
owned or hereafter acquired or existing:
(a) all license agreements with any other Person in connection with any of the patents or such
other Persons patents, whether the Debtor is a licensor or a licensee under any
such license agreement, subject, in each case, to the terms of such license agreements and the
right to prepare for sale, sell and advertise for sale, all inventory now or hereafter covered by
such licenses.
(b) all letters patent, patent applications and patentable inventions, including, without
limitation, all patents and patent applications identified on
Schedule 1.1
attached hereto and made
a part hereof, and including without limitation, (a) all inventions and improvements described and
claimed therein, and patentable inventions, (b) the right to sue or otherwise recover for any and
all past, present and future infringements and misappropriations thereof, (c) all income,
royalties, damages and other payments now and hereafter due and/or payable with respect thereto
(including, without limitation, payments under all patent Licenses entered into in connection
therewith, and damages and payments for past or future infringements thereof), and (d) all rights
corresponding thereto and all other rights of any kind whatsoever of a Debtor accruing thereunder
or pertaining thereto.
(c) all reissues, divisions, continuations, continuations in part, extensions, renewals,
improvements and re-examinations of any of the items described in
clauses (a)
and
(b)
; and
(d) all proceeds of, and rights associated with, the foregoing, including any right to sue or
claim by the Debtors against third parties for past, present, or future infringement of any patent,
patent applications, or patent Licenses, including any patents and patent applications or patent
License and all rights corresponding thereto throughout the world referred to in
Schedule
1.1
attached hereto and any patent License, or for breach or enforcement of any patent License.
SECTION 3.
Security Agreement
. This Agreement has been executed and delivered by the
Debtor for the purpose of registering the security interest of the Collateral Agent in the Patent
Collateral with the United States Patent and Trademark Office. The security interest granted
hereby has been granted as a supplement to, and not in limitation of, the security interest granted
to the Collateral Agent under the Security Agreement as security for the discharge and performance
of the First Lien Obligations. The Security Agreement (and all rights and remedies of the
Collateral Agent thereunder) shall remain in full force and effect in accordance with its terms.
SECTION 4.
Release of Security Interest
. The Collateral Agent shall release the
Patent Collateral in accordance with the terms of the Security Agreement.
SECTION 5.
Acknowledgment
. The Debtor hereby further acknowledges and affirms that
the rights and remedies of the Collateral Agent with respect to the security interest in the Patent
Collateral granted hereby are more fully set forth in the Security Agreement, the terms and
provisions of which (including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein.
SECTION 6.
Counterparts
. This Agreement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of which shall
constitute together but one and the same agreement.
2
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered by their respective officers thereunto duly authorized as of the day and year first above
written.
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CREDIT ACCEPTANCE CORPORATION
|
|
|
By:
|
|
|
|
|
Douglas W. Busk
|
|
|
|
Its: Treasurer
|
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|
|
|
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COMERICA BANK
, as Collateral Agent
|
|
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By:
|
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Michael P. Stapleton
|
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|
Its: Vice President
|
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SCHEDULE 1.1
PATENT COLLATERAL
|
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PATENT
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APPLICATION/PATENT NO.
|
System and Method for Providing Financing (Patent)
|
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|
6,950,807 B2
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Vehicle Leasing and Consumer Credit Rehabilitation
System and Method (AutoNet Patent)
|
|
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20010034700
|
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EXHIBIT F
FORM OF TRADEMARK SECURITY AGREEMENT
THIS TRADEMARK SECURITY AGREEMENT (this
Agreement
), dated as of February 1, 2010,
between Credit Acceptance Corporation (the
Debtor
) and Comerica Bank
(
Comerica
), as collateral agent for the benefit of the Credit Agreement Secured Parties,
the Senior Notes Secured Parties and the Additional Secured Parties (each as defined in the
Intercreditor Agreement referenced below) (in such capacity, together with its successors in such
capacity under the Intercreditor Agreement referred to below, the
Collateral Agent
).
WITNESSETH
A. WHEREAS, Comerica in its capacities as Collateral Agent and Authorized Representative for
the Credit Agreement Secured Parties, has entered into that Certain Amended and Restated
Intercreditor Agreement dated as of the date hereof (as amended, restated or otherwise modified
from time to time, the
Intercreditor Agreement
) with the Debtor, the Guarantors named
therein and U.S. Bank National Association as the Senior Notes Authorized Representative (as
referred to therein).
B. WHEREAS, pursuant to the Credit Agreement Documents and the Senior Notes First Lien
Documents (each as defined in the Intercreditor Agreement), the Debtor, together with the other
Debtors named therein, have executed and delivered that certain Fourth Amended and Restated
Security Agreement dated as of the date hereof (as amended or otherwise modified from time to time,
the
Security Agreement
); and
C. WHEREAS, the Debtor is required to execute and deliver this Agreement and to further
confirm the grant to the Collateral Agent for the benefit of the Benefited Parties (as defined in
the Intercreditor Agreement) of a continuing security interest in all of the Trademark Collateral
(as defined below) to secure the First Lien Obligations (as defined in the Intercreditor
Agreement).
NOW, THEREFORE, for good and valuable consideration the receipt of which is hereby
acknowledged, Debtor agrees, for the benefit of the Collateral Agent, as follows:
SECTION 1.
Definitions
. Unless otherwise defined herein or the context otherwise
requires, terms used in this Agreement, including its preamble and recitals, have the meanings
provided in the Security Agreement.
SECTION 2.
Grant of Security Interest
. For good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, to secure the prompt and complete payment
and performance when due of all of the First Lien Obligations, the Debtor hereby mortgages, pledges
and hypothecates to the Collateral Agent, and grants to the Collateral Agent a security interest
in, all of the following property of the Debtor (the
Trademark Collateral
), whether now
owned or hereafter acquired or existing:
(a) all license agreements with any other Person in connection with any of the trademarks or
such other Persons names or trademarks, whether the Debtor is a licensor or a
licensee under any such license agreement, subject, in each case, to the terms of such license
agreements, and the right to prepare for sale, and to sell and advertise for sale, all inventory
now or hereafter covered by such licenses;
(b) all trademarks, service marks, trade names, trade dress or other indicia of trade origin,
trademark and service mark registrations, and applications for trademark or service mark
registrations (except for intent to use applications for trademark or service mark registrations
filed pursuant to Section 1(b) of the Lanham Act, unless and until an Amendment to Allege Use or a
Statement of Use under Sections 1(c) and 1(d) of said Act has been filed), and any renewals
thereof, including, without limitation, each registration and application identified on
Schedule
1.1
attached hereto and made a part hereof, and including without limitation (a) the right to sue
or otherwise recover for any and all past, present and future infringements and misappropriations
thereof, (b) all income, royalties, damages and other payments now and hereafter due and/or payable
with respect thereto (including, without limitation, payments under all trademark Licenses entered
into in connection therewith, and damages and payments for past or future infringements thereof)
and (c) all rights corresponding thereto and all other rights of any kind whatsoever of a Debtor
accruing thereunder or pertaining thereto, together in each case with the goodwill of the business
connected with the use of, and symbolized by, each such trademark, service mark, trade name, trade
dress or other indicia of trade origin;
(c) all renewals of any of the items described in
clauses (a)
and
(b)
;
(d) all of the goodwill of the business connected with the use of, and symbolized by each of
the items described in,
clauses (a)
,
(b)
and
(c)
; and
(e) all proceeds of, and rights associated with, the foregoing, including any right to sue or
claim by the Debtor against third parties for past, present, or future infringement or dilution of
any trademark, trademark registration, or trademark license, including any trademark or trademark
registration referred to in
Schedule 1.1
attached hereto or any trademark license, or for
any injury to the goodwill associated with the use of any trademark or for breach or enforcement of
any trademark license.
SECTION 3.
Security Agreement
. This Agreement has been executed and delivered by the
Debtor for the purpose of registering the security interest of the Collateral Agent in the
Trademark Collateral with the United States Patent and Trademark Office. The security interest
granted hereby has been granted as a supplement to, and not in limitation of, the security interest
granted to the Collateral Agent under the Security Agreement as security for the discharge and
performance of the First Lien Obligations. The Security Agreement (and all rights and remedies of
the Collateral Agent thereunder) shall remain in full force and effect in accordance with its
terms.
SECTION 4.
Release of Security Interest
. The Collateral Agent shall release the
Trademark Collateral in accordance with the terms of the Security Agreement.
SECTION 5.
Acknowledgment
. The Debtor hereby further acknowledges and affirms that
the rights and remedies of the Collateral Agent with respect to the security interest in the
Trademark Collateral granted hereby are more fully set forth in the Security Agreement, the
2
terms and provisions of which (including the remedies provided for therein) are incorporated
by reference herein as if fully set forth herein.
SECTION 6.
Counterparts
. This Agreement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of which shall
constitute together but one and the same agreement.
3
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered by their respective officers thereunto duly authorized as of the day and year first above
written.
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CREDIT ACCEPTANCE CORPORATION
|
|
|
By:
|
|
|
|
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Douglas W. Busk
|
|
|
|
Its: Treasurer
|
|
|
|
|
|
|
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COMERICA BANK
, as Collateral Agent
|
|
|
By:
|
|
|
|
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Michael P. Stapleton
|
|
|
|
Its: Vice President
|
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SCHEDULE 1.1
TRADEMARK COLLATERAL
|
|
|
|
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MARK
|
|
SERIAL/REGIS. NO.
|
ASK OTTO
|
|
|
2,699,904
|
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CREDIT ACCEPTANCE WE CHANGE LIVES!
|
|
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2,644,387
|
|
MISCELLANEOUS DESIGN (checkmark in a box)
|
|
|
2,657,196
|
|
WE CHANGE LIVES
|
|
|
2,660,738
|
|
OTTO (and design)
|
|
|
2,887,186
|
|
CAPS
|
|
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3,647,518
|
|
CAPS CREDIT APPROVAL PROCESSING SYSTEM
|
|
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3,045,350
|
|
ASK ABOUT OUR GUARANTEED CREDIT APPROVAL
(and design)
|
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3,564,263
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|
CREDIT ACCEPTANCE WE CHANGE LIVES! (and design)
|
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2,644,387
|
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WE CHANGE LIVES! (and design) (European Trademark)
|
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002455137
|
|
Exhibit 4(g)(6)
Execution Version
AMENDED AND RESTATED INTERCREDITOR AGREEMENT
dated as of February 1, 2010,
among
CREDIT ACCEPTANCE CORPORATION,
the other GRANTORS party hereto,
COMERICA BANK,
as the Collateral Agent and
the Authorized Representative for the Credit Agreement Secured Parties,
U.S. BANK NATIONAL ASSOCIATION,
as the Senior Notes Authorized Representative for the Senior Notes Secured Parties,
and
each ADDITIONAL AUTHORIZED REPRESENTATIVE from time to time party hereto
This AMENDED AND RESTATED INTERCREDITOR AGREEMENT is dated as of February 1, 2010 (as amended,
supplemented or otherwise modified from time to time, this
Agreement
), among CREDIT
ACCEPTANCE CORPORATION, a Michigan corporation (together with its successors and assigns, the
Company
), the other GRANTORS (as defined below) party hereto, COMERICA BANK, as
collateral agent for the Secured Parties (as defined below) (together with its successors and
assigns, including any collateral agent under this Agreement, in such capacity, the
Collateral
Agent
), as administrative agent under the Original Credit Agreement and as the Authorized
Representative for the Credit Agreement Secured Parties (together with its successors and assigns,
including any successor administrative agent under the Credit Agreement, in such capacity, the
Original Administrative Agent
), U.S. BANK NATIONAL ASSOCIATION, as the Authorized
Representative for the Senior Notes Secured Parties (in such capacity, the
Senior Notes
Authorized Representative
) and each ADDITIONAL AUTHORIZED REPRESENTATIVE from time to time
party hereto, as the Authorized Representative for any Secured Parties of any other Class.
In consideration of the mutual agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Collateral Agent,
the Administrative Agent, for itself and on behalf of its Related Secured Parties, and the Senior
Notes Authorized Representative, for itself and on behalf of its Related Secured Parties, agree as
follows:
ARTICLE I
Definitions
SECTION 1.01.
Certain Defined Terms
. As used in this Agreement, the following terms
have the meanings specified below:
Additional Authorized Representative
has the meaning assigned to such term in
Article VI.
Additional Authorized Representative Joinder Agreement
means a supplement to this
Agreement (i) in the case of an Additional Authorized Representative under Additional First Lien
Documents, substantially in the form of Exhibit I-A, appropriately completed and (ii) in the case
of an Additional Authorized Representative under a Supplemental Credit Agreement, substantially in
the form of Exhibit I-B, appropriately completed.
Additional First Lien Documents
means the indentures or other agreements under which
Additional First Lien Obligations of any Class are issued or incurred and all other notes,
instruments, agreements and other documents evidencing or governing Additional First Lien
Obligations of such Class or providing any guarantee, Lien or other right in respect thereof. For
the purposes hereof, no Supplemental Credit Agreement, nor any Credit Agreement Documents executed
or delivered in connection therewith, shall constitute an Additional First Lien Document.
Additional First Lien Obligations
means all obligations of the Company and the other
Grantors that shall have been designated as such pursuant to Article VI.
Additional Secured Parties
means the holders of any Additional First Lien
Obligations.
Administrative Agent
means the Original Administrative Agent, or, from and after the
date of execution and delivery of any Supplemental Credit Agreement, the agent, collateral agent,
trustee or other representative of the lenders or holders of the indebtedness and other Credit
Agreement Obligations evidenced thereunder or governed thereby.
Affected Subsidiary
has the meaning assigned to such term in Section 2.01(b)(2)(i).
Affiliate
means, at any time, and with respect to any Person, (a) any other Person
that at such time directly or indirectly through one or more intermediaries Controls, or is
Controlled by, or is under common Control with, such first Person, (b) any Person beneficially
owning or holding, directly or indirectly, 10% or more of any class of voting or equity interests
of the Person or any corporation or other Person of which the Person beneficially owns or holds, in
the aggregate, directly or indirectly, 10% or more of any class of voting or equity interests and
(c) any officer or director of such first Person or any Person fulfilling an equivalent function of
an officer or director. As used in this definition,
Control
means the possession,
directly or indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
Agreement
has the meaning assigned to such term in the preamble hereto.
Applicable Authorized Representative
means, with respect to the Shared Collateral,
(a) until the earliest of (i) the Discharge of the Credit Agreement Obligations, (ii) the
occurrence of the Non-Controlling Authorized Representative Enforcement Date and (iii) so long as
the Original Credit Agreement (or any credit facility which has Refinanced or replaced the Original
Credit Agreement and which constitutes a Credit Agreement hereunder) shall remain in effect and no
Event of Default has occurred and is continuing, the date that the aggregate commitments of the
applicable lenders to make advances constituting Credit Agreement Obligations thereunder are less
than $25.0 million or, if the Original Credit Agreement (or any replacement credit facility, as
aforesaid) shall no longer be in effect, or any Event of Default shall have occurred and be
continuing or the lending commitments thereunder have been terminated, the date that the
outstanding Credit Agreement Obligations are less than $25.0 million, the Administrative Agent and
(b) from and after the earliest of (i) the Discharge of the Credit Agreement Obligations, (ii) the
occurrence of the Non-Controlling Authorized Representative Enforcement Date and (iii) so long as
the Original Credit Agreement (or any credit facility which has Refinanced or replaced the Original
Credit Agreement and which constitutes a Credit Agreement hereunder) shall remain in effect and no
Event of Default has occurred and is continuing, the date that the aggregate commitments of the
applicable lenders to make advances constituting Credit Agreement Obligations thereunder are less
than $25.0 million or, if the Original Credit Agreement (or any replacement credit facility, as
aforesaid) shall no longer be in effect, or any Event of Default shall have occurred and be
continuing or the lending commitments thereunder have been terminated, the date that the
outstanding Credit Agreement Obligations are less than $25.0 million, the Major Non-Controlling
Authorized Representative.
2
Authorized Representatives
means any Administrative Agent, the Senior Notes
Authorized Representative and each Additional Authorized Representative.
Banking Product Obligations
means any obligations of the Company or any of its
Subsidiaries owed to any Person in respect of treasury management services (including services in
connection with operating, collections, payroll, trust or other depository or disbursement
accounts, including automated clearinghouse, e-payable, electronic funds transfer, wire transfer,
controlled disbursement, overdraft, depositary, information reporting, lock-box and stop payment
services), commercial credit card and merchant card services, stored valued card services, other
cash management services, lock-box leases and other banking products or services related to any of
the foregoing.
Bankruptcy Case
has the meaning assigned to such term in Section 2.06.
Bankruptcy Code
means Title 11 of the United States Code.
Bankruptcy Law
means the Bankruptcy Code and any similar Federal, state or foreign
law for the relief of debtors.
Business Day
means any day that is not a Saturday, Sunday or other day on which
commercial banks in New York City or Detroit, Michigan are authorized or required by law to remain
closed.
Class
, when used in reference to (a) any First Lien Obligations, refers to whether
such First Lien Obligations are the Credit Agreement Obligations under the Original Credit
Agreement, Credit Agreement Obligations under any other Credit Agreement, the Senior Notes First
Lien Obligations or the Additional First Lien Obligations of any Series, (b) any Authorized
Representative, refers to whether such Authorized Representative is the Administrative Agent, the
Senior Notes Authorized Representative or the Additional Authorized Representative with respect to
the Additional First Lien Obligations of any Series, (c) any Secured Parties, refers to whether
such Secured Parties are the Credit Agreement Secured Parties, the Senior Notes Secured Parties or
the holders of the Additional First Lien Obligations of any Series, and (d) any First Lien Credit
Documents, refers to whether such First Lien Credit Documents are the Credit Agreement Documents,
the Senior Notes First Lien Documents or the Additional First Lien Documents with respect to
Additional First Lien Obligations of any Series.
Collateral
means all assets of the Company or any of the Subsidiaries now or
hereafter subject to a Lien created pursuant to any First Lien Security Document to secure any
First Lien Obligations.
Collateral Agent
has the meaning assigned to such term in the preamble hereto.
Company
has the meaning assigned to such term in the preamble hereto.
Controlling Secured Parties
means, at any time with respect to any Shared
Collateral, the Secured Parties of the same Class as the Authorized Representative that is the
Applicable Authorized Representative with respect to such Shared Collateral at such time.
3
Credit Agreement
means the Original Credit Agreement and any Supplemental Credit
Agreement.
Credit Agreement Documents
has the meaning assigned to the term Loan Documents
under the Original Credit Agreement and, with respect to any Supplemental Credit Agreement, such
Supplemental Credit Agreement and all other notes, instruments, agreements and other documents
evidencing or governing Credit Agreement Obligations thereunder or providing any guarantee, Lien or
other right in respect thereof.
Credit Agreement Obligations
has the meaning assigned to the term Indebtedness
under the Original Credit Agreement and, with respect to any Supplemental Credit Agreement, all
indebtedness and obligations incurred or arising under the Credit Agreement Documents and all
Banking Product Obligations and Hedging Obligations owed to any agent or lender thereunder or any
Affiliate thereof.
Credit Agreement Secured Parties
means, with respect to any Class of Credit
Agreement Obligations, the Administrative Agent and the lenders, noteholders, purchasers or other
holders of Credit Agreement Obligations (including any of their respective Affiliates that hold
Credit Agreement Obligations), in each case relating to such Class.
Default
means a Default (or a similar event, however designated) as defined in any
First Lien Credit Document.
DIP Financing
has the meaning assigned to such term in Section 2.06.
DIP Financing Liens
has the meaning assigned to such term in Section 2.06.
DIP Lenders
has the meaning assigned to such term in Section 2.06.
Discharge
means, with respect to any Shared Collateral and First Lien Obligations of
any Class, the date on which First Lien Obligations of such Class are no longer secured by Liens on
such Shared Collateral. The term Discharged shall have a corresponding meaning.
Discharge of the Credit Agreement Obligations
means the Discharge of all of the
Credit Agreement Obligations (including any Credit Agreement Obligations under a Supplemental
Credit Agreement);
provided
that the Discharge of the Credit Agreement Obligations shall
not be deemed to have occurred in connection with a Refinancing of the Credit Agreement Obligations
with a Supplemental Credit Agreement, secured by such Shared Collateral under Credit Agreement
Documents that has been designated in writing by the Company to the Collateral Agent and each
Authorized Representative as the Credit Agreement for purposes of this Agreement.
Event of Default
means an Event of Default (or a similar event, however
designated) as defined in any First Lien Credit Document.
Existing Securitization Intercreditor Agreement
means that certain Intercreditor
Agreement dated December 3, 2009, among the Company, CAC Warehouse Funding
4
Corporation II, CAC
Warehouse Funding III, LLC, Credit Acceptance Funding LLC 2008-1, Credit Acceptance Funding LLC
2009-1, Credit Acceptance Auto Loan Trust 2008-1, Credit Acceptance Auto Loan Trust 2009-1, Wells
Fargo Securities, LLC, as deal agent and collateral agent, Fifth Third Bank, as agent, Wells Fargo
Bank, National Association, as indenture trustee
and trust collateral agent, and Comerica Bank, as agent under the CAC Credit Facility
Documents (as defined therein).
First Lien Credit Documents
means, collectively, (a) the Credit Agreement Documents,
(b) the Senior Notes First Lien Documents and (c) the Additional First Lien Documents.
First Lien Obligations
means (a) all the Credit Agreement Obligations, (b) all the
Senior Notes First Lien Obligations and (c) all the Additional First Lien Obligations.
First Lien Security Documents
means the Collateral Documents (as defined in the
Credit Agreement), and each other agreement entered into in favor of the Collateral Agent for the
purpose of securing First Lien Obligations of any Class.
Future Senior Notes
means any notes issued after the date hereof under the Senior
Notes Indenture which are of the same Series as the Initial Senior Notes.
Grantor Joinder Agreement
means a supplement to this Agreement substantially in the
form of Exhibit II, appropriately completed.
Grantors
means, at any time, the Company and each Subsidiary that, at such time, has
granted a security interest in any of its assets pursuant to any First Lien Security Document to
secure any First Lien Obligations of any Class. The Persons that are Grantors on the date hereof
are set forth on Schedule 1.
Hedging Obligations
means, with respect to any Person, the obligations of such
Person under (i) interest rate swap agreements, interest rate cap agreements and interest rate
collar agreements and (ii) other agreements or arrangements designed to protect such Person against
fluctuations in interest or currency exchange rates.
Initial Senior Notes
means the notes issued under the Senior Notes Indenture on the
date hereof, and any notes issued in exchange, substitution or replacement thereof.
Impairment
has the meaning assigned to such term in Section 2.02.
Insolvency or Liquidation Proceeding
means:
(a) any case commenced by or against the Company or any other Grantor under any Bankruptcy
Law, any other proceeding for the reorganization, recapitalization or adjustment or marshalling of
the assets or liabilities of the Company or any other Grantor, any receivership or assignment for
the benefit of creditors relating to the Company or any other Grantor or any similar case or
proceeding relative to the Company or any other Grantor or its creditors, as such, in each case
whether or not voluntary;
5
(b) any liquidation, dissolution, marshalling of assets or liabilities or other winding up of
or relating to the Company or any other Grantor (other than liquidations and dissolutions of
Subsidiaries of the Company permitted under the First Lien Credit Documents), in each case whether
or not voluntary and whether or not involving bankruptcy or insolvency; or
(c) any other proceeding of any type or nature in which substantially all claims of creditors
of the Company or any other Grantor are determined and any payment or distribution is or may be
made on account of such claims.
Intervening Creditor
has the meaning assigned to such term in Section 2.02.
Intervening Lien
has the meaning assigned to such term in Section 2.02.
LC Cash Collateral
means any Collateral in the form of one or more Deposit Accounts
or Securities Accounts, and all Financial Assets or other funds held in or credited to any such
Deposit Account or Securities Account, all Security Entitlements in respect thereof and all
Proceeds of any of the foregoing, in each case in which a security interest has been granted by the
Company or any other Grantor to secure Credit Agreement Obligations consisting of obligations in
respect of Letters of Credit pursuant to the terms of the Credit Agreement. For purposes hereof,
the terms Deposit Accounts, Securities Accounts, Financial Assets, Security Entitlements
and Proceeds have the meaning assigned thereto in the Michigan UCC.
Lien
shall mean any pledge, assignment, hypothecation, mortgage, security interest,
deposit arrangement, option, trust receipt, conditional sale or title retaining contract, sale and
leaseback transaction, or any other type of lien, charge or encumbrance, whether based on common
law, statute or contract; provided that the term Lien shall not include any negative pledge
clauses in agreements relating to the borrowing of money or the obligation of Company or any of its
Subsidiaries to remit monies to Dealers (as defined in the Credit Agreement) under Dealer
Agreements (as defined in the Credit Agreement), claims or refunds under insurance policies or
claims or refunds under service contracts or (b) to make deposits in trust or otherwise as required
under re-insurance agreements and pursuant to state regulatory requirements, unless the Company or
any of its Subsidiaries, as the case may be, has encumbered its interest in such monies or deposits
or in other property of the Company to secure such obligations.
Major Non-Controlling Authorized Representative
means, with respect to any Shared
Collateral, the Authorized Representative of the same Class as the Class of the First Lien
Obligations (other than the First Lien Obligations of the same Class as the Class of the
Controlling Secured Parties with respect to such Shared Collateral) secured by valid and perfected
Liens on such Shared Collateral the aggregate amount of which exceeds the aggregate amount of First
Lien Obligations of any other Class (other than the First Lien Obligations of the same Class as the
Class of the Controlling Secured Parties with respect to such Shared Collateral) secured
by valid
and perfected Liens on such Shared Collateral; provided that for purposes of clause (b) of the
definition of Applicable Authorized Representative, Major Non-Controlling Authorized
Representative shall mean, with respect to any Shared Collateral, the Authorized Representative of
the same Class as the Class of the First Lien Obligations secured
6
by valid and perfected Liens on
such Shared Collateral the aggregate amount of which exceeds the aggregate amount of First Lien
Obligations of any other Class secured by valid and perfected Liens on such Shared Collateral.
Maximum Attributable Amount
means, in the case of any sale or other disposition of
Subject Securities of an Affected Subsidiary, the proceeds that would have been received from
the sale or disposition of the maximum amount of Subject Securities that, having been pledged
to the Collateral Agent, would not have resulted in such Subsidiary being an Affected Subsidiary,
as determined by the Collateral Agent, the Company and the Authorized Representatives in good
faith.
Michigan UCC
means the Uniform Commercial Code as from time to time in effect in the
State of Michigan.
Mortgaged Property
means any parcel of real property and improvements thereto that
constitute Shared Collateral.
Non-Controlling Authorized Representative
means, at any time with respect to any
Shared Collateral, any Authorized Representative that is not the Applicable Authorized
Representative at such time with respect to such Shared Collateral.
Non-Controlling Authorized Representative Enforcement Date
means, with respect to
any Non-Controlling Authorized Representative in respect of the Shared Collateral, the date that is
90 days (throughout which 90-day period such Non-Controlling Authorized Representative was the
Major Non-Controlling Authorized Representative with respect to the Shared Collateral) after the
occurrence of both (a) an Event of Default (under and as defined in the Senior Notes First Lien
Documents or the Additional First Lien Documents, in each case, under which such Non-Controlling
Authorized Representative is the Authorized Representative) and (b) the Collateral Agents and each
other Authorized Representatives receipt of written notice from such Non-Controlling Authorized
Representative certifying that (i) such Non-Controlling Authorized Representative is the Major
Non-Controlling Authorized Representative with respect to the Shared Collateral and that an Event
of Default (under and as defined in the Senior Notes First Lien Documents or the Additional First
Lien Documents, in each case, under which such Non-Controlling Authorized Representative is the
Authorized Representative) has occurred and is continuing and (ii) the First Lien Obligations of
the Class with respect to which such Non-Controlling Authorized Representative is the Authorized
Representative are currently due and payable in full (whether as a result of acceleration thereof
or otherwise) in accordance with the terms of the Additional First Lien Documents of such Class;
provided
that the Non-Controlling Authorized Representative Enforcement Date shall be
stayed and shall not occur (and shall be deemed not to have occurred for all purposes hereof) with
respect to the Shared Collateral (A) at any time the Collateral Agent has commenced and is
diligently pursuing any enforcement action with respect to the Shared Collateral (or the
Administrative Agent shall have instructed the Collateral Agent to do the same) or (B) at any time
the Grantor that has granted a security interest in such Shared Collateral is then a debtor under
or with respect to (or otherwise subject to) any Insolvency or Liquidation Proceeding.
7
Non-Controlling Secured Parties
means, at any time with respect to any Shared
Collateral, the Secured Parties that are not Controlling Secured Parties at such time with respect
to such Shared Collateral.
Original Credit Agreement
means that certain Fourth Amended and Restated Credit
Agreement dated as of February 7, 2006, among the Company, Comerica Bank, as administrative agent
and collateral agent for the banks, and the banks party thereto, as amended
(including without limitation through the date hereof), restated, extended, refinanced,
supplemented, waived or otherwise modified from time to time.
Person
means any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, governmental authority or other entity.
Possessory Collateral
means any Shared Collateral in the possession of the
Collateral Agent (or its agents or bailees), to the extent that possession thereof perfects a Lien
thereon under the Uniform Commercial Code of any jurisdiction. Possessory Collateral includes,
without limitation, any Certificated Securities, Promissory Notes, Instruments and Chattel
Paper (as such terms are defined under the Michigan UCC), in each case, delivered to or in the
possession of the Collateral Agent under the terms of the First Lien Security Documents.
Proceeds
has the meaning assigned to such term in Section 2.01(b).
Refinance
means, in respect of any indebtedness, to refinance, extend, renew,
refund, defease, amend, increase, modify, supplement, restructure, refund, replace or repay, or to
issue other indebtedness or enter into alternative financing arrangements, in exchange or
replacement for such indebtedness (and/or commitments with respect to indebtedness), in whole or in
part, in each case, whether by adding or replacing lenders, creditors, agents, borrowers,
guarantors or otherwise and including any of the foregoing effected through any credit agreement,
indenture or other agreement or instrument or after the original instrument giving rise to such
indebtedness has been terminated. "Refinanced and Refinancing have correlative meanings.
Related Secured Parties
means, with respect to the Authorized Representative of any
Class, the Secured Parties of such Class.
Responsible Officer
means, with respect to any Person, the chief executive officer,
the chief financial officer, principal accounting officer, treasurer, general counsel or another
executive officer of such Person.
Secured Parties
means (a) the Credit Agreement Secured Parties, (b) the Senior Notes
Secured Parties and (c) the Additional Secured Parties.
Securities Act
means the United States Securities Act of 1933, as amended.
Securitization Intercreditor Agreement(s)
has the meaning assigned to such term in
Section 2.05.
8
Senior Notes Authorized Representative
has the meaning assigned to such term in the
preamble hereto.
Senior Notes First Lien Documents
means the Senior Notes Indenture, and all other
instruments, agreements and other documents evidencing or governing Senior Notes First Lien
Obligations (including any Future Senior Notes) or providing any guarantee, Lien or other right in
respect thereof.
Senior Notes First Lien Obligations
has the meaning assigned to the term "Notes
Obligations in the Senior Notes First Lien Documents.
Senior Notes Indenture
means that certain Indenture dated as of February ___, 2010,
among the Company, the Guarantors identified therein and U.S. Bank National Association, as
Trustee.
Senior Notes Secured Parties
means the Senior Notes Authorized Representative, the
"Holders (as defined in the Senior Notes First Lien Documents) and the other holders of any Senior
Notes First Lien Obligations.
Series
, when used in reference to (a) Senior Notes First Lien Obligations, refers to
such Senior Notes First Lien Obligations as shall have been issued or incurred pursuant to the same
indentures or other agreements and with respect to which the same Person acts as the Senior Notes
Authorized Representative and (b) Additional First Lien Obligations, refers to such Additional
First Lien Obligations as shall have been issued or incurred pursuant to the same indentures or
other agreements and with respect to which the same Person acts as the Additional Authorized
Representative.
Shared Collateral
means, at any time, Collateral on which the Collateral Agent shall
have at such time a valid and perfected Lien for the benefit of Secured Parties of any two or more
Classes;
provided
that, for the avoidance of doubt, the LC Cash Collateral shall not
constitute Shared Collateral. If First Lien Obligations of more than two Classes are outstanding
at any time, then any Collateral shall constitute Shared Collateral with respect to First Lien
Obligations or Secured Parties of any Class only if the Collateral Agent has at such time a valid
and perfected Lien on such Collateral securing First Lien Obligations of such Class for the benefit
of the Secured Parties of such Class.
Subject Securities
has the meaning assigned to such term in Section 2.01(b)(2)(i).
Subsidiary
shall mean any other corporation, association, joint stock company,
business trust, limited liability company, partnership (whether general or limited) or any other
business entity of which more than fifty percent (50%) of the outstanding voting stock, share
capital, membership or other interests, as the case may be, is owned either directly or indirectly
by any Person or one or more of its Subsidiaries, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both, by any Person
and/or its Subsidiaries. Unless otherwise specified to the contrary herein or the context otherwise
requires, Subsidiary(ies) shall refer to each Person which is a Subsidiary of the Company.
9
Supplemental Credit Agreement
means any credit agreement, loan agreement, note
purchase agreement (except in connection with notes that are intended to be tradable either as
registered securities under the Securities Act or pursuant to Rule 144A or Regulation S under the
Securities Act), receivables purchase agreement, commercial paper facility, promissory note or
other agreement or instrument evidencing or governing the terms of a credit facility which meets
the requirements contained in Article VI of this Agreement. For the avoidance of doubt, no
facility evidenced or governed by a Supplemental Credit Agreement shall be required to be a
revolving or asset-based loan facility.
SECTION 1.02.
Terms Generally
. The definitions of terms herein shall apply equally to
the singular and plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words include,
includes and including shall be deemed to be followed by the phrase without limitation. The
word will shall be construed to have the same meaning and effect as the word shall. Unless the
context requires otherwise or unless specifically stated to the contrary, (a) any definition of or
reference to any agreement, instrument, other document, statute or regulation herein shall be
construed as referring to such agreement, instrument, other document, statute or regulation as from
time to time amended, supplemented or otherwise modified, (b) any reference herein to any Person
shall be construed to include such Persons successors and assigns, but shall not be deemed to
include the subsidiaries of such Person unless express reference is made to such subsidiaries, (c)
the words herein, hereof and hereunder, and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections and Exhibits shall be construed to refer to Articles and
Sections of, and Exhibits to, this Agreement and (e) the words asset and property shall be
construed to have the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.
SECTION 1.03.
Concerning the Collateral Agent and the Authorized Representatives
. (a)
Each acknowledgment, agreement, consent and waiver (whether express or implied) in this Agreement
made by the Collateral Agent and the Original Administrative Agent, whether on behalf of itself or,
in the case of the Original Administrative Agent, on behalf of any other Credit Agreement Secured
Party, is made in reliance on the authority granted to the Collateral Agent and the Original
Administrative Agent pursuant to the authorization thereof under the Credit Agreement. It is
understood and agreed that the Collateral Agent and the Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into whether any other Credit Agreement
Secured Party is in compliance with the terms of this Agreement, and no party hereto or any other
Secured Party shall have any right of action whatsoever against the Collateral Agent or the
Administrative Agent for any failure of any other Credit Agreement Secured Party to comply with the
terms hereof or for any other Credit Agreement Secured Party taking any action contrary to the
terms hereof.
(b) Each acknowledgment, agreement, consent and waiver (whether express or implied) in this
Agreement made by the Authorized Representative of any Class not referred to in paragraph (a)
above, whether on behalf of itself or any of its Related Secured Parties, is made in reliance on
the authority granted to such Authorized Representative pursuant to the
10
authorization thereof under
the First Lien Credit Documents of such Class. It is understood and agreed that any such
Authorized Representative shall not be responsible for or have any duty to ascertain or inquire
into whether any of its Related Secured Parties is in compliance with the terms of this Agreement,
and no party hereto or any other Secured Party shall have any right of action whatsoever against
such Authorized Representative for any failure of any of its Related Secured Parties to comply with
the terms hereof or for any of its Related Secured Parties taking any action contrary to the terms
hereof.
ARTICLE II
Priorities and Agreements with Respect to Shared Collateral
SECTION 2.01.
Equal Priority
. (a) Notwithstanding the date, time, method, manner or
order of grant, attachment or perfection of any Lien on any Shared Collateral securing First Lien
Obligations of any Class, and notwithstanding any provision of the Uniform Commercial Code of any
jurisdiction, any other applicable law or any First Lien Credit Document, or any other circumstance
whatsoever (but, in each case, subject to Section 2.02), each Authorized Representative, for itself
and on behalf of its Related Secured Parties, agrees that valid and perfected Liens on any Shared
Collateral securing First Lien Obligations of any Class shall be of equal priority with valid and
perfected Liens on such Shared Collateral securing First Lien Obligations of any other Class.
(b) The Collateral Agent and each Authorized Representative, for itself and on behalf of its
Related Secured Parties, agrees that, notwithstanding any provision of any First Lien Credit
Document to the contrary (but subject to Section 2.02), if (i) an Event of Default shall have
occurred and is continuing and the Collateral Agent or any such Authorized Representative or any of
its Related Secured Parties is taking action to enforce rights or exercise remedies in respect of
any Shared Collateral, (ii) any distribution is made in respect of any Shared Collateral in any
Insolvency or Liquidation Proceeding or (iii) an Event of Default shall have occurred and is
continuing and the Collateral Agent or any such Authorized Representative or any of its Related
Secured Parties receives any payment with respect to any Shared Collateral pursuant to any
intercreditor agreement other than this Agreement, then the proceeds of any sale, collection or
other liquidation of any Shared Collateral obtained by such Authorized Representative or any of its
Related Secured Parties on account of such enforcement of rights or exercise of remedies, and any
such distributions or payments received by such Authorized Representative or any of its Related
Secured Parties (all such proceeds, distributions and payments being collectively referred to as
Proceeds
), shall be applied as follows:
(1) FIRST, to the payment of all amounts owing (other than in respect of principal or
interest) to the Collateral Agent (in its capacity as such) pursuant to the terms of any
First Lien Credit Document, including all costs and expenses incurred by the Collateral
Agent in connection with such sale, collection or other liquidation, or such other
enforcement of rights or exercise of remedies (including all court costs and the fees and
expenses of its agents and legal counsel), the repayment of all advances made by the
Collateral Agent for protective advances to protect or preserve the Shared Collateral, any
other costs or expenses incurred in connection with the exercise of any right or remedy
hereunder or under any other First Lien Credit Document owing or reimbursable to the
11
Collateral Agent under any First Lien Credit Document in its capacity as such, and all other
fees, indemnities and other amounts (other than in respect of principal or interest) owing
or reimbursable to the Collateral Agent under any First Lien Credit Document in its capacity
as such), it being understood that the Collateral Agent may, if duly acting in other
capacities under any First Lien Credit Document, allocate any such costs and expenses which
apply to more than one capacity, on a reasonable basis determined by Collateral Agent in
good faith;
(2) SECOND, to the payment in full of the First Lien Obligations of each Class secured
by a valid and perfected Lien on such Shared Collateral at the time due and payable (the
amounts so applied to be distributed ratably in accordance with the amounts of the First
Lien Obligations of each such Class outstanding on the date of such application);
provided
that amounts applied under this clause SECOND during any period when the
First Lien Obligations of any such Class or any portion thereof (including without
limitation any Letters of Credit issued under the Credit Agreement or any Net Hedging
Obligations, to the extent constituting Credit Agreement Obligations) shall not be due and
payable in full shall be allocated to the applicable First Lien Obligations of such Class as
if such First Lien Obligations were at the time due and payable in full (as reasonably
determined by Collateral Agent), and any amounts so allocated to the payment of the First
Lien Obligations of such Class that are not yet due and payable shall be transferred to, and
held by, the Authorized Representative of such Class solely as collateral for the applicable
First Lien Obligations of such Class (and shall not constitute Shared Collateral for
purposes hereof) until the date on which the First Lien Obligations of such Class shall have
become due and payable in full (at which time such amounts shall be applied to the payment
thereof, with any excess promptly returned to the Collateral Agent for application under
this Section 2.01);
provided
,
further
, that no payments or distributions on
the account of any Senior Notes First Lien Obligations or Additional First Lien Obligations
under this Section 2.01(b)(2),
(i) shall be made from the proceeds of the sale or other disposition of any
stock, other equity interests and other securities (
Subject Securities
) of
a Subsidiary of the Company in excess of the proportional share of the Maximum
Attributable Amount of such proceeds if Rule 3-16 of Regulation S-X under the
Securities Act of 1933 (or any other federal law, rule or regulation) would require
separate financial statements of such Subsidiary (an
Affected Subsidiary
)
to be filed with the Securities and Exchange Commission (or any other federal
government agency) by virtue of the securities of such Affected Subsidiary being
part of the Collateral securing any of the Senior Notes First Lien Obligations or
Additional First Lien Obligations, as the case may be,
(ii) shall be made from the proceeds of the sale or other disposition of any of
the property or assets of any Unrestricted Subsidiary (as defined in the First
Lien Credit Documents relating thereto), and
(iii) shall be made from the proceeds of the sale or other disposition of any
of the property or assets of any Grantor if such Senior Notes First Lien
12
Obligations
or such Additional First Lien Obligations, as the case may be, have been defeased
(through legal defeasance or covenant defeasance) as provided in the applicable
First Lien Credit Documents or the conditions for the satisfaction and discharge
thereunder have been satisfied; and
(3) THIRD, after payment in full of all the First Lien Obligations, to the Company and
the other Grantors or their successors or assigns, as their interests may appear, to
whomsoever may be lawfully entitled to receive the same pursuant to this
Agreement or any other intercreditor agreement, or as a court of competent jurisdiction
may direct.
(c) It is acknowledged that the First Lien Obligations of any Class may, subject to the
limitations set forth in the First Lien Credit Documents, be increased, extended, renewed,
replaced, restated, supplemented, restructured, repaid, refunded, Refinanced or otherwise amended
or modified from time to time, all without affecting the priorities set forth in Section 2.01(a) or
the provisions of this Agreement defining the relative rights of the Secured Parties of any Class.
(d) Notwithstanding anything in this Agreement or any First Lien Security Document to the
contrary, LC Cash Collateral held by any Administrative Agent, the Collateral Agent or any Issuing
Bank pursuant to any Credit Agreement shall be applied as specified in the applicable section of
the applicable Credit Agreement.
(e) The Collateral Agent shall make all payments and distributions under Section 2.01(b): (i)
on account of Credit Agreement Obligations of any Class to the Administrative Agent of such Class,
pursuant to directions of the Administrative Agent, for redistribution to the holders of the
applicable Credit Agreement Obligations; (ii) on account of the Senior Notes First Lien Obligations
to the Senior Notes Authorized Representative, pursuant to directions of the Senior Notes
Authorized Representative, for redistribution to the holders of the applicable Senior Notes First
Lien Obligations; and (iii) on account of the Additional First Lien Obligations of any Class to the
Additional Authorized Representative of such Class pursuant to directions of such Additional
Authorized Representative, for redistribution to the holders of the applicable Additional First
Lien Obligations of such Class.
SECTION 2.02.
Impairments
. It is the intention of the parties hereto that the Secured
Parties of any Class (and not the Secured Parties of any other Class) bear the risk of (a) any
determination by a court of competent jurisdiction that (i) any First Lien Obligations of such
Class are unenforceable under applicable law or are subordinated to any other obligations (other
than to any First Lien Obligations of any other Class), (ii) any First Lien Obligations of such
Class do not have a valid and perfected Lien on any of the Collateral securing any First Lien
Obligations of any other Class and/or (iii) any Person (other than any Authorized Representative or
any Secured Party) has a Lien on any Shared Collateral that is senior in priority to the Lien on
such Shared Collateral securing First Lien Obligations of such Class, but junior to the Lien on
such Shared Collateral securing any First Lien Obligations of any other Class (any such Lien being
referred to as an
Intervening Lien
, and any such Person being referred to as an
Intervening Creditor
), or (b) the existence of any Collateral securing First Lien
Obligations of
13
any other Class that does not constitute Shared Collateral with respect to First
Lien Obligations of such Class (any condition referred to in clause (a) or (b) with respect to
First Lien Obligations of such Class being referred to as an
Impairment
of such Class);
provided
that the existence of any limitation on the maximum claim that may be made against
any Mortgaged Property that applies to First Lien Obligations of all Classes shall not be deemed to
be an Impairment of First Lien Obligations of any Class. In the event an Impairment exists with
respect to First Lien Obligations of any Class, the results of such Impairment shall be borne
solely by the Secured Parties of such Class, and the rights of the
Secured Parties of such Class (including the right to receive distributions in respect of
First Lien Obligations of such Class pursuant to Section 2.01(b)) set forth herein shall be
modified to the extent necessary so that the results of such Impairment are borne solely by the
Secured Parties of such Class. In furtherance of the foregoing, in the event First Lien
Obligations of any Class shall be subject to an Impairment in the form of an Intervening Lien of
any Intervening Creditor, the value of any Shared Collateral or Proceeds that are allocated to such
Intervening Creditor shall be deducted solely from the Shared Collateral or Proceeds to be
distributed in respect of First Lien Obligations of such Class. In addition, in the event the
First Lien Obligations of any Class are modified pursuant to applicable law (including pursuant to
Section 1129 of the Bankruptcy Code or any equivalent provision of, or order granted pursuant to,
any other Bankruptcy Law), any reference to the First Lien Obligations of such Class or the First
Lien Documents of such Class shall refer to such obligations or such documents as so modified.
SECTION 2.03.
Actions with Respect to Shared Collateral; Prohibition on Certain
Contests
. (a) Notwithstanding anything to the contrary in the First Lien Credit Documents
(other than this Agreement), (i) only the Collateral Agent shall, and shall have the right to,
exercise, or refrain from exercising, any rights, remedies and powers with respect to the Shared
Collateral, including any action to perfect (or further perfect) or enforce its security interest
in or realize upon any Shared Collateral and any right, remedy or power with respect to any Shared
Collateral under any intercreditor agreement (other than this Agreement), and then only on the
instructions of the Applicable Authorized Representative, (ii) the Collateral Agent shall not be
required to, and shall not, follow any instructions or directions with respect to Shared Collateral
(including with respect to any intercreditor agreement with respect to any Shared Collateral) from
any Non-Controlling Authorized Representative (or any other Secured Party, other than the
Applicable Authorized Representative), it being understood and agreed that, notwithstanding any
such instruction or direction by the Applicable Authorized Representative, the Collateral Agent
shall not be required to take any action that, in its opinion, could expose the Collateral Agent to
liability or be contrary to any First Lien Document or applicable law and (iii) no Non-Controlling
Authorized Representative or any other Secured Party (other than the Applicable Authorized
Representative) shall, or shall instruct the Collateral Agent to, commence any judicial or
nonjudicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator
or similar official appointed for or over, attempt any action to take possession of, take any other
action to enforce its security interest in or realize upon, or exercise any other right, remedy or
power with respect to (including any right, remedy or power under any intercreditor agreement other
than this Agreement) any Shared Collateral, whether under any First Lien Credit Document,
applicable law or otherwise, it being agreed that only the Collateral Agent, acting on the
instructions of the Applicable Authorized Representative and in accordance with the applicable
First Lien Security Documents, shall be entitled to take any such actions or exercise
14
any such
rights, remedies and powers with respect to Shared Collateral. Notwithstanding the equal priority
of the Liens established under Section 2.01(a), the Collateral Agent (acting on the instructions of
the Applicable Authorized Representative) may deal with the Shared Collateral as if such Applicable
Authorized Representative had a senior Lien on such Collateral. No Non-Controlling Authorized
Representative or Non-Controlling Secured Party will contest, protest or object to any foreclosure
proceeding or action brought by the Collateral Agent, the Applicable Authorized Representative or
any Controlling Secured Party, or any other exercise by the
Collateral Agent, the Applicable Authorized Representative or any Controlling Secured Party of
any rights, remedies or powers with respect to the Shared Collateral, or seek to cause the
Collateral Agent to do so. Nothing in this paragraph shall be construed to limit the rights and
priorities of the Collateral Agent, any Authorized Representative or any other Secured Party with
respect to any Collateral not constituting Shared Collateral.
(b) Each of the Authorized Representatives agrees, for itself and on behalf of its Related
Secured Parties, that it will not accept any Lien on any asset of the Company or any Subsidiary
securing First Lien Obligations of any Class for the benefit of any Secured Party of such Class
unless such Lien is created pursuant to a First Lien Security Document with the Collateral Agent
and the collateral created thereby becomes Shared Collateral under this Agreement, other than (i)
any Liens on LC Cash Collateral created pursuant to the Credit Agreement, (ii) any funds deposited
for the discharge or defeasance of First Lien Obligations of any Class and (iii) any rights of
set-off created under the First Lien Credit Documents of any Class.
(c) Each of the Authorized Representatives agrees, for itself and on behalf of its Related
Secured Parties, that neither such Authorized Representative nor its Related Secured Parties will
(and each hereby waives any right to) challenge or contest or support any other Person in
challenging or contesting, in any proceeding (including any Insolvency or Liquidation Proceeding),
(i) the validity, attachment, creation, perfection, priority or enforceability of a Lien held by or
on behalf of any other Authorized Representative or any of its Related Secured Parties in all or
any part of the Collateral, (ii) the validity, enforceability or effectiveness of any First Lien
Obligation of any Class or any First Lien Security Document of any Class or (iii) the validity,
enforceability or effectiveness of the priorities, rights or duties established by, or other
provisions of, this Agreement;
provided
that nothing in this Agreement shall be construed
to prevent or impair the rights of the Collateral Agent, any Authorized Representative or any of
its Related Secured Parties to enforce this Agreement.
SECTION 2.04.
No Interference; Payment Over
. (a) Each of the Authorized
Representatives, for itself and on behalf of its Related Secured Parties, agrees that (i) neither
such Authorized Representative nor its Related Secured Parties will (and each hereby waives any
right to) take or cause to be taken any action the purpose of which is, or could reasonably be
expected to be, to interfere, hinder or delay, in any manner, whether by judicial proceedings or
otherwise, any sale, transfer or other disposition of the Shared Collateral by the Collateral
Agent, (ii) except as provided in Section 2.03, neither such Authorized Representative nor its
Related Secured Parties shall have any right (A) to direct the
Collateral Agent or any other Secured Party to exercise any right, remedy or power with respect to any Shared Collateral
(including pursuant to any intercreditor agreement) or (B) to consent to the exercise by the
Collateral Agent or any
15
other Secured Party of any right, remedy or power with respect to any
Shared Collateral, (iii) neither such Authorized Representative nor its Related Secured Parties
will (and each hereby waives any right to) institute any suit or proceeding, or assert in any suit
or proceeding any claim, against the Collateral Agent or any other Secured Party seeking damages
from or other relief by way of specific performance, instructions or otherwise with respect to any
Shared Collateral, and none of the Collateral Agent, any Applicable Authorized Representative or
any other Secured Party shall be liable for any
action taken or omitted to be taken by the Collateral Agent, such Applicable Authorized
Representative or such other Secured Party with respect to any Shared Collateral in accordance with
the provisions of this Agreement, and (iv) neither such Authorized Representative nor its Related
Secured Parties will (and each hereby waives any right to) seek to have any Shared Collateral or
any part thereof marshaled upon any foreclosure or other disposition of such Shared Collateral;
provided that nothing in this Agreement shall be construed to prevent or impair the rights of the
Collateral Agent or any Authorized Representative or any of its Related Secured Parties to enforce
this Agreement.
(b) Each Authorized Representative, on behalf of itself and its Related Secured Parties,
agrees that if such Authorized Representative or any of its Related Secured Parties shall at any
time obtain possession of any Shared Collateral or receive any Proceeds (other than as a result of
any application of Proceeds pursuant to Section 2.01(b)) at any time prior to the Discharge of
First Lien Obligations of each other Class, (i) such Authorized Representative or its Related
Secured Party, as the case may be, shall promptly inform each Authorized Representative thereof,
(ii) such Authorized Representative or its Related Secured Party shall hold such Shared Collateral
or Proceeds in trust for the benefit of the Secured Parties of any Class entitled thereto pursuant
to Section 2.01(b) and (iii) such Authorized Representative or its Related Secured Party shall
promptly transfer such Shared Collateral or Proceeds to the Collateral Agent, for distribution in
accordance with Section 2.01(b).
SECTION 2.05.
Automatic Release of Liens; Amendments to First Lien Security Documents;
Securitization Intercreditor Agreement
. (a) Notwithstanding anything to the contrary in the
First Lien Credit Documents or First Lien Security Documents, if at any time the Collateral Agent
acting at the direction or with the concurrence of the Applicable Authorized Representative
forecloses upon or otherwise exercises legal rights, remedies and powers against any Shared
Collateral resulting in a disposition thereof, then (whether or not any Insolvency or Liquidation
Proceeding is pending at the time) the Liens on such Shared Collateral in favor of the Collateral
Agent, for the benefit of the Secured Parties of all Classes, will automatically be released and
discharged; provided that any Proceeds realized therefrom shall be applied pursuant to Section
2.01(b).
(b) Each of the Authorized Representatives, for itself and on behalf of its Related Secured
Parties, acknowledges and agrees that (i) the Collateral Agent may enter into any amendment or
other modification to any First Lien Security Document so long as the Collateral Agent receives a
certificate of the Company and an opinion of counsel reasonably satisfactory to the Collateral
Agent stating that such amendment or other modification is permitted by the terms of the First Lien
Credit Documents of each Class; (ii) the Collateral Agent may enter into any amendment or other
modification to any First Lien Security Document solely as such First Lien Security Document
relates to First Lien Obligations of a particular Class so
16
long as (A) such amendment or
modification is in accordance with the First Lien Credit Documents of such Class and (B) such
amendment or modification does not adversely affect the interests of the Secured Parties of any
other Class; and (iii) the Collateral Agent may enter into new or amended and restated
securitization intercreditor agreements (each, a Securitization Intercreditor Agreement), with
the same or other parties, on substantially the same terms as those contained in the Existing
Securitization Intercreditor Agreement, as in effect on the date
hereof, or enter into new Securitization Intercreditor Agreements or amend or modify any
Securitization Intercreditor Agreements on terms which do not adversely affect the interests of the
Secured Parties of any Class.
(c) Each Authorized Representative agrees to execute and deliver (at the sole cost and expense
of the Grantors) all such acknowledgments, consents, confirmations, authorizations and other
instruments as shall reasonably be requested by the Collateral Agent to evidence and confirm any
release of Shared Collateral or amendment or modification to any First Lien Security Document or
the entering into of any Securitization Intercreditor Agreement provided for in this Section.
SECTION 2.06.
Certain Agreements with Respect to Bankruptcy and Insolvency
Proceedings
. (a) The Authorized Representative of each Class, for itself and on behalf of its
Related Secured Parties, agrees that, if the Company or any other Grantor shall become subject to a
case or proceeding (a Bankruptcy Case) under the Bankruptcy Code or any other Bankruptcy Law and
shall, as debtor(s)-in-possession, move for approval of financing
(DIP Financing) to be provided
by one or more lenders (the DIP Lenders) under Section 364 of the Bankruptcy Code or any
equivalent provision of, or order granted pursuant to, any other Bankruptcy Law or the use of cash
collateral under Section 363 of the Bankruptcy Code or any equivalent provision of, or order
granted pursuant to, any other Bankruptcy Law, neither such Authorized Representative nor its
Related Secured Parties will raise any objection to any such financing or to the Liens or court
ordered charges, if applicable, on the Shared Collateral securing any such financing (DIP
Financing Liens) or to any use of cash collateral that constitutes Shared Collateral, in each case
unless the Applicable Authorized Representative, or any Controlling Secured Party, shall then
oppose or object to such DIP Financing or such DIP Financing Liens or such use of cash collateral
(and (i) to the extent that such DIP Financing Liens are senior to the Liens on any such Shared
Collateral for the benefit of the Controlling Secured Parties, each Non-Controlling Secured Party
will subordinate its Liens with respect to such Shared Collateral on the same terms as the Liens of
the Controlling Secured Parties (other than any Liens of any Controlling Secured Parties
constituting DIP Financing Liens) are subordinated thereto, and (ii) to the extent that such DIP
Financing Liens rank
pari passu
with the Liens on any such Shared Collateral granted to secure the
First Lien Obligations of the Controlling Secured Parties, each Non-Controlling Secured Party will
confirm the priorities with respect to such Shared Collateral as set forth herein), in each case so
long as (A) the Secured Parties of such Class retain the benefit of their Liens on all such Shared
Collateral subject to the DIP Financing Liens, including proceeds thereof arising after the
commencement of the Bankruptcy Case, with such Liens having the same priority with respect to Liens
of the Secured Parties of any other Class (other than any Liens of the Secured Parties of such
other Class constituting DIP Financing Liens) as existed prior to the commencement of the
Bankruptcy Case, (B) the Secured Parties of such Class are granted Liens on any additional
collateral provided to
17
the Secured Parties of any other Class as adequate protection or otherwise
in connection with such DIP Financing or use of cash collateral, with such Liens having the same
priority with respect to Liens of the Secured Parties of any other Class (other than any Liens of
the Secured Parties of such other Class constituting DIP Financing Liens) as existed prior to the
commencement of the Bankruptcy Case, and (C) if any amount of such DIP Financing or cash collateral
is applied to repay any First Lien Obligations,
such amount is applied in accordance with Section 2.01(b);
provided
that the Secured
Parties of each Class shall have a right to object to the grant, as security for the DIP Financing,
of a Lien on any Collateral subject to Liens in favor of the Secured Parties of such Class or its
Authorized Representative that shall not constitute Shared Collateral;
provided
further
that any Secured Party receiving adequate protection granted in connection with the
DIP Financing or such use of cash collateral shall not object to any other Secured Party receiving
adequate protection comparable to any such adequate protection granted to such Secured Party.
Notwithstanding the provisions of Section 2.01 and this Section 2.06, (A) if the Secured Parties of
any Class are granted adequate protection in the form of periodic payments in connection with such
DIP Financing or use of cash collateral, the proceeds of such adequate protection shall be for the
account of the Secured Parties of such Class and (B) no Secured Party of any Class shall be
prohibited from (x) seeking adequate protection in the form of periodic payments to the extent that
any Secured Party of any other Class is receiving such payments or (y) objecting to any DIP
Financing or use of cash collateral on the basis that any Secured Party of any other Class is
receiving such payments (but the Secured Parties of such Class are not).
SECTION 2.07.
Reinstatement
. If, in any Insolvency or Liquidation Proceeding or
otherwise, all or part of any payment with respect to the First Lien Obligations of any Class
previously made shall be rescinded for any reason whatsoever (including an order or judgment for
disgorgement of a preference under the Bankruptcy Code, or any similar Federal, state or foreign
law), then the terms and conditions of Article II shall be fully applicable thereto until all the
First Lien Obligations of such Class shall again have been paid in full in cash.
SECTION 2.08.
Insurance and Condemnation Awards
. As between the Secured Parties, the
Collateral Agent, acting at the direction of the Applicable Authorized Representative, shall have
the exclusive right, subject to the rights of the Grantors under the First Lien Secured Documents,
to settle and adjust claims in respect of Shared Collateral under policies of insurance covering or
constituting Shared Collateral and to approve any award granted in any condemnation or similar
proceeding, or any deed in lieu of condemnation, in respect of the Shared Collateral;
provided
that any Proceeds arising therefrom shall be subject to Section 2.01(b).
SECTION 2.09.
Refinancings
. The First Lien Obligations of any Class may be
Refinanced, in whole or in part, in each case, without notice to, or the consent of any Secured
Party of any other Class, all without affecting the priorities provided for herein or the other
provisions hereof;
provided
that nothing in this paragraph shall affect any limitation on,
or requirements in connection with, any such Refinancing that is set forth in the First Lien Credit
Documents of any such other Class; and
provided
further
that, if any obligations of
the Grantors in respect of such Refinancing indebtedness of such First Lien Obligations shall be
secured by Liens on any Shared Collateral, then such obligations and the holders thereof shall be
subject to
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and bound by the provisions of this Agreement, and the Authorized Representative of the
holders of any such Refinancing
indebtedness shall be required to execute an Additional Authorized Representative Joinder
Agreement.
SECTION 2.10.
Possessory Collateral Agent as Gratuitous Bailee for Perfection
. (a)
The Collateral Agent agrees to hold any Shared Collateral constituting Possessory Collateral that
is part of the Collateral in its possession or control (or in the possession or control of its
agents or bailees) as gratuitous bailee (such bailment being intended, among other things, to
satisfy the requirements of Sections 8-301(a)(2) and 9-313(c) of the Michigan UCC) for the benefit
of each other Secured Party and any assignee solely for the purpose of perfecting the security
interest granted in such Possessory Collateral, if any, pursuant to the applicable First Lien
Security Documents, in each case, subject to the terms and conditions of this Section. Pending
delivery to the Collateral Agent, each Authorized Representative agrees to hold any Shared
Collateral constituting Possessory Collateral, from time to time in its possession, as gratuitous
bailee for the benefit of each other Secured Party and any assignee, solely for the purpose of
perfecting the security interest granted in such Possessory Collateral, if any, pursuant to the
applicable First Lien Security Documents, in each case, subject to the terms and conditions of this
Section.
(b) The duties or responsibilities of the Collateral Agent and each Authorized Representative
under this Section shall be limited solely to holding any Shared Collateral constituting Possessory
Collateral as gratuitous bailee for the benefit of each other Secured Party for purposes of
perfecting the Lien held by such Secured Parties therein.
ARTICLE III
Determinations with Respect to Obligations and Liens
Whenever, in connection with the exercise of its rights or the performance of its obligations
hereunder, the Collateral Agent or the Authorized Representative of any Class shall be required to
determine the existence or amount of any First Lien Obligations of any Class, or the Shared
Collateral subject to any Lien securing the First Lien Obligations of any Class (and whether such
Lien constitutes a valid and perfected Lien), it may request that such information be furnished to
it in writing by the Authorized Representative of such Class and shall be entitled to make such
determination on the basis of the information so furnished;
provided
that if,
notwithstanding such request, the Authorized Representative of the applicable Class shall fail or
refuse reasonably promptly to provide the requested information, the requesting Collateral Agent or
Authorized Representative shall be entitled to make any such determination by such method as it
may, in the exercise of its good faith judgment, determine, including by reliance upon a
certificate of a Responsible Officer the Company. The Collateral Agent and each Authorized
Representative may, for the purposes of this Agreement, rely conclusively, and shall be fully
protected in so relying, on any determination made by it in accordance with the provisions of the
preceding sentence (or as otherwise directed by a court of competent jurisdiction) and shall have
no liability to any Grantor, any Secured Party or any other Person as a result of such
determination or any action or not taken pursuant thereto.
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ARTICLE IV
Concerning the Collateral Agent
SECTION 4.01.
Appointment and Authority
. (a) Each of the Authorized Representatives,
for itself and on behalf of its Related Secured Parties, hereby irrevocably appoints Comerica Bank
to act as the Collateral Agent hereunder and under each of the First Lien Security Documents, and
authorizes the Collateral Agent to take such actions and to exercise such powers as are delegated
to the Collateral Agent by the terms hereof or thereof, including for purposes of acquiring,
holding and enforcing any and all Liens on Collateral granted by any Grantor to secure any of the
First Lien Obligations, together with such actions and powers as are reasonably incidental thereto.
In addition, to the extent required under the laws of any jurisdiction other than the United
States, each of the Authorized Representatives, for itself and on behalf of its Related Secured
Parties, hereby grants to the Collateral Agent any required powers of attorney to execute any First
Lien Security Document governed by the laws of such jurisdiction on such Secured Partys behalf.
Without limiting the generality of the foregoing, the Collateral Agent is hereby expressly
authorized to execute any and all documents (including releases) with respect to the Shared
Collateral, and the rights of the Secured Parties with respect thereto, as contemplated by and in
accordance with the provisions of this Agreement and the First Lien Security Documents.
(b) Each of the Authorized Representatives, for itself and on behalf of its Related Secured
Parties, acknowledges and agrees that the Collateral Agent shall be entitled, for the benefit of
the Secured Parties, to sell, transfer or otherwise dispose of or deal with any Shared Collateral
as provided herein and in the First Lien Security Documents, without regard to any rights, remedies
or powers to which the Non-Controlling Secured Parties would otherwise be entitled to as a result
of their Non-Controlling Secured Obligations. Without limiting the foregoing, each of the
Authorized Representatives, for itself and on behalf of its Related Secured Parties, agrees that
none of the Collateral Agent, the Applicable Authorized Representative or any other Secured Party
shall have any duty or obligation first to marshal or realize upon any type of Shared Collateral
(or any other Collateral securing any of the First Lien Obligations), or to sell, dispose of or
otherwise liquidate all or any portion of such Shared Collateral (or any other Collateral securing
any First Lien Obligations), in any manner that would maximize the return to the Non-Controlling
Secured Parties, notwithstanding that the order and timing of any such realization, sale,
disposition or liquidation may affect the amount of proceeds actually received by the
Non-Controlling Secured Parties from such realization, sale, disposition or liquidation. Each of
the Authorized Representatives, for itself and on behalf of its Related Secured Parties, waives any
claim they may now or hereafter have against the Collateral Agent or the Authorized Representative
or any Secured Party of any other Class arising out of (i) any actions that the Collateral Agent or
any such Authorized Representative or Secured Party takes or omits to take (including actions with
respect to the creation, perfection or continuation of Liens on any Collateral, actions with
respect to the foreclosure upon, sale or other disposition, release or depreciation of, or failure
to realize upon, any of the Collateral and actions with respect to the collection of any claim for
all or any part of the First Lien Obligations from any account debtor, guarantor or any other
party) in accordance with the First Lien Security Documents and this Agreement or to the collection
of the First Lien Obligations or the valuation, use, protection or release of any security for the
First Lien Obligations, (ii) any election by any Applicable
20
Authorized Representative or Secured
Parties, in any proceeding instituted under the Bankruptcy Code, of the application of Section
1111(b) of the Bankruptcy Code or (iii) subject to Section 2.06, any borrowing by, or grant of a
security interest or administrative expense priority under
Section 364 of the Bankruptcy Code or any equivalent provision of or order granted pursuant
to, any other Bankruptcy Law by, the Company or any of the Subsidiaries, as debtor-in-possession.
Notwithstanding any other provision of this Agreement, the Collateral Agent shall not accept any
Shared Collateral in full or partial satisfaction of any First Lien Obligations pursuant to Section
9-620 of the Uniform Commercial Code of any jurisdiction or any similar provision for any other
personal property security laws in any other jurisdiction, without the consent of each Authorized
Representative representing Secured Parties for whom such Collateral constitutes Shared Collateral.
(c) Each of the Authorized Representatives, for itself and on behalf of its Related Secured
Parties, acknowledges and agrees that, upon any other obligations being designated hereunder as
Additional First Lien Obligations or any other Person becoming an Additional Authorized
Representative or any other Persons becoming Additional Secured Parties, the Collateral Agent will
continue to act in its capacity as Collateral Agent in respect of the then existing Authorized
Representatives and Secured Parties and such Additional Authorized Representative and Additional
Secured Parties.
SECTION 4.02.
Rights as a Secured Party
. (a) The Person serving as the Collateral
Agent hereunder shall have the same rights and powers in its capacity as a Secured Party of any
Class as any other Secured Party of such Class and may exercise the same as though it were not the
Collateral Agent and the term Secured Party, Secured Parties, Credit Agreement Secured Party,
Credit Agreement Secured Parties, Additional Secured Party or Additional Secured Parties, as
applicable, shall, unless otherwise expressly indicated or unless the context otherwise requires,
include the Person serving as the Collateral Agent hereunder in its individual capacity. The
Person serving as the Collateral Agent and its Affiliates may accept deposits from, lend money to,
act as the financial advisor or in any other advisory capacity for and generally engage in any kind
of banking, trust, advisory, underwriting or other business with the Company or any Subsidiary or
other Affiliate thereof as if such Person were not the Collateral Agent hereunder and without any
duty to obtain the consent of or to give notice to or to account therefor to any other Secured
Party.
SECTION 4.03.
Exculpatory Provisions
. The Collateral Agent shall not have any duties
or obligations except those expressly set forth herein and in the other First Lien Security
Documents. Without limiting the generality of the foregoing, as between the Collateral Agent and
the other Secured Parties, the Collateral Agent:
(i) shall not be subject to any fiduciary or other implied duties, regardless
of whether a Default or an Event of Default has occurred and is continuing;
(ii) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly contemplated
hereby or by the First Lien Security Documents that the Collateral
21
Agent is required to exercise as directed in writing by the Applicable
Authorized Representative; provided that the Collateral Agent shall not be required
to take any action that, in its opinion or the opinion of its counsel, may expose
the Collateral Agent to liability or that is contrary to any First Lien Security
Document or applicable law;
(iii) shall not, except as expressly set forth in this Agreement and in the
First Lien Security Documents, have any duty to disclose, and shall not be liable
for the failure to disclose, any information relating to the Company, any of its
Subsidiaries or any of their respective Affiliates that is communicated to or
obtained by the Person serving as the Collateral Agent or any of its Affiliates in
any capacity;
(iv) shall not be liable for any action taken or not taken by it (i) with the
consent or at the request of the Applicable Authorized Representative or (ii) in the
absence of its own gross negligence or wilful misconduct or (iii) in reliance on a
certificate of an authorized officer of the Company stating that such action is
permitted by the terms of this Agreement and each of the First Lien Credit
Documents;
(v) shall be deemed not to have knowledge of any Default or Event of Default
under any First Lien Credit Documents of any Class unless and until notice
describing such Default or Event Default (and captioned or otherwise identified as a
notice of default) is given to the Collateral Agent by the Authorized
Representative of such Class or the Company; and
(vi) shall not be responsible for or have any duty to ascertain or inquire into
(A) any statement, recital, warranty or representation made in or in connection with
this Agreement or any First Lien Security Document, (B) the contents of any
certificate, report or other document delivered hereunder or thereunder or in
connection herewith or therewith, (C) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein or
the occurrence of any Default or Event of Default, (D) the validity, enforceability,
effectiveness or genuineness of this Agreement, any First Lien Security Document or
any other agreement, instrument or document, or the validity, attachment, creation,
perfection, priority or enforceability of any Lien purported to be created by the
First Lien Security Documents, (E) the value or the sufficiency of any Collateral
for First Lien Obligations of any Class or (F) the satisfaction of any condition set
forth in any First Lien Credit Document, other than to confirm receipt of items
expressly required to be delivered to the Collateral Agent.
SECTION 4.04.
Reliance by Collateral Agent
. The Collateral Agent shall be entitled to
rely, and shall not incur any liability for relying, upon any notice, request, certificate,
consent, statement, instrument, document or other writing (including any electronic message,
Internet or intranet website posting or other
distribution) believed by it to be genuine and to have
22
been signed, sent or otherwise
authenticated by the proper Person. The Collateral Agent also shall be entitled to rely, and shall
not incur any liability for relying, upon any statement made to it orally or by telephone and
believed by it to have been made by the proper Person. The Collateral Agent may consult with legal
counsel (who may be counsel for the Company, any other Grantor or any Authorized Representative),
independent accountants and other experts selected by it, and shall not be liable for any action
taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
SECTION 4.05.
Delegation of Duties
. The Collateral Agent may perform any and all of
its duties and exercise its rights and powers hereunder or under any other First Lien Security
Document by or through any one or more sub-agents appointed by the Collateral Agent. The
Collateral Agent and any such sub-agent may perform any and all of its duties and exercise its
rights and powers by or through their respective Affiliates. The exculpatory provisions of this
Article shall apply to any such sub-agent and to the Affiliates of the Collateral Agent and any
such sub-agent, and shall apply to their respective activities as the Collateral Agent.
SECTION 4.06.
Resignation of Collateral Agent
. (a) The Collateral Agent may at any
time give notice of its resignation as Collateral Agent under this Agreement and the First Lien
Security Documents to each Authorized Representative and the Company, and shall be required to
resign at the request of Company or any Authorized Representative if, having served in such
capacity, it is replaced as Administrative Agent under the Credit Agreement. Upon receipt of any
such notice of resignation, the Applicable Authorized Representative shall have the right, in
consultation with the Company (provided no Event of Default has occurred and is continuing), to
appoint a successor, provided that if such resignation results from the Collateral Agents no
longer serving as Administrative Agent under the Credit Agreement, the successor Administrative
Agent under the Credit Agreement shall be the successor Collateral Agent under this Agreement, if
it elects to accept such appointment hereunder. Any successor Collateral Agent appointed pursuant
to this Section 4.06 (other than any successor Administrative Agent which shall not be required to
satisfy such standards) shall be a commercial bank or other financial institution or trust company
organized under the laws of the United States of America or any state thereof having (1) a combined
capital and surplus of at least $250,000,000 and (2) a rating of its long-term senior unsecured
indebtedness of A-2 or better by Moodys Investors Service, Inc. or A or better by Standard &
Poors Services, a division of The McGraw Hill Companies, Inc. If no such successor shall have
been so appointed by the Applicable Authorized Representative and shall have accepted such
appointment within 30 days after the retiring Collateral Agent gives notice of its resignation,
then the retiring Collateral Agent and/or any Authorized Representative may, on behalf of the
Secured Parties, petition a court of competent jurisdiction for the appointment of a successor
Collateral Agent (meeting the qualifications set forth above) with respect to the First Lien
Obligations, in each case at the sole cost and expense of the Company, and such court may thereupon
after such notice, if any, as it may deem proper and prescribe appoint a successor Collateral
Agent;
provided
that if the Collateral Agent shall notify each Authorized Representative
and the Company that no qualifying Person has accepted such appointment, then
such resignation shall nonetheless become effective in accordance with such notice and (x) the
retiring Collateral Agent shall be discharged from its duties and obligations hereunder and under
the First Lien Security Documents (except that in the case of any Collateral held by the Collateral
Agent on behalf of the Secured Parties under any First Lien
23
Security Document, the retiring
Collateral Agent shall continue to hold such Collateral solely for purposes of maintaining the
perfection of the security interests of the Secured Parties therein until such time as a successor
Collateral Agent is appointed but with no obligation to take any further action at the request of
the Applicable Authorized Representative or any other Secured Parties) and (y) all payments,
communications and determinations provided to be made by, to or through the Collateral Agent shall
instead be made by or to each Authorized Representative directly, until such time as the Applicable
Authorized Representative appoints a successor Collateral Agent as provided above.
(b) Upon the acceptance of a successors appointment as Collateral Agent hereunder and under
the First Lien Security Documents, such successor shall succeed to and become vested with all of
the rights, powers, privileges and duties of the retiring (or retired) Collateral Agent, and the
retiring Collateral Agent shall be discharged from all of its duties and obligations hereunder or
under the First Lien Security Documents (if not already discharged therefrom as provided above).
Notwithstanding the resignation of the Collateral Agent hereunder and under the First Lien Security
Documents, the provisions of this Article and Article VIII of the Original Credit Agreement (and
any comparable provisions contained in any Supplemental Credit Agreement) and the equivalent
provision of any Additional First Lien Document shall continue in effect for the benefit of such
retiring Collateral Agent, and its sub-agents in respect of any actions taken or omitted to be
taken by any of them while the retiring Collateral Agent was acting as Collateral Agent. Upon any
notice of resignation of the Collateral Agent hereunder and under the First Lien Security
Documents, each of the Grantors agrees to use commercially reasonable efforts to transfer (and
maintain the validity and priority of) the Liens in favor of the retiring Collateral Agent under
the First Lien Security Documents to the successor Collateral Agent.
SECTION 4.07.
Collateral Matters
. Each of the Secured Parties irrevocably authorizes
the Collateral Agent, at its option and in its discretion:
(a) to release any Lien on any property granted to or held by the Collateral Agent under any
First Lien Security Document (or confirm such release) in accordance with Sections 2.03 and 2.05 or
if permitted to do so by the terms of the First Lien Credit Documents; provided that the Collateral
Agent may conclusively rely upon receipt of a certificate of a Responsible Officer of the Company
stating that such release is permitted hereunder or by the terms of the First Lien Credit
Documents, whether in connection with a securitization permitted thereunder or otherwise; and
(b) to release any Grantor from its obligations under the First Lien Security Documents (or
confirm such release) if permitted to do so by the terms of the First Lien Credit Documents;
provided that the Collateral Agent may conclusively rely upon receipt of a
certificate of a Responsible Officer of the Company stating that such release is permitted by
the terms of the First Lien Credit Documents.
ARTICLE V
No Reliance; No Liability
24
SECTION 5.01.
No Reliance; Information
. Each Authorized Representative, for itself
and on behalf of its Related Secured Parties, acknowledges that (a) such Authorized Representative
and its Related Secured Parties have, independently and without reliance upon the Collateral Agent,
any other Authorized Representative or any of its Related Secured Parties, and based on such
documents and information as they have deemed appropriate, made their own decision to enter into
the First Lien Credit Documents to which they are party and (b) such Authorized Representative and
its Related Secured Parties will, independently and without reliance upon the Collateral Agent, any
other Authorized Representative or any of its Related Secured Parties, and based on such documents
and information as they shall from time to time deem appropriate, continue to make their own
decision in taking or not taking any action under this Agreement or any other First Lien Credit
Document to which they are party. The Collateral Agent or the Authorized Representative or Secured
Parties of any Class shall have no duty to disclose to any Secured Party of any other Class any
information relating to the Company or any of the Subsidiaries, or any other circumstance bearing
upon the risk of nonpayment of any of the First Lien Obligations, that is known or becomes known to
any of them or any of their Affiliates,
provided
that, in connection with any enforcement
action taken or proposed to be taken by Collateral Agent hereunder or otherwise upon the reasonable
request of the Collateral Agent from time to time, each Authorized Representative shall provide the
Collateral Agent with information (including reasonable supporting backup detail) as to the
aggregate amounts of principal, interest, make whole amounts or similar prepayment premiums or
breakage costs outstanding at such time in respect of the relevant First Lien Obligations of its
Related Secured Parties, and the undrawn amounts of any outstanding Letters of Credit and an
estimate of the amount of any Net Hedging Obligations with respect thereto, and shall exercise good
faith, reasonable efforts to confirm the accuracy of such information. If the Collateral Agent or
the Authorized Representative or any Secured Party of any Class, in its sole discretion, undertakes
at any time or from time to time to provide any such information to, as the case may be, the
Authorized Representative or any Secured Party of any other Class, it shall be under no obligation
(i) to make, and shall not be deemed to have made, any express or implied representation or
warranty, including with respect to the accuracy, completeness, truthfulness or validity of the
information so provided, (ii) to provide any additional information or to provide any such
information on any subsequent occasion or (iii) to undertake any investigation.
SECTION 5.02.
No Warranties or Liability
. (a) Each Authorized Representative, for
itself and on behalf of its Related Secured Parties, acknowledges and agrees that, neither the
Collateral Agent nor the Authorized Representative or any Secured Party of any other Class has made
any express or implied representation or warranty, including with respect to the execution,
validity, legality, completeness, collectability or enforceability of any of the First Lien Credit
Documents, the ownership of any Shared Collateral or the perfection or priority of any Liens thereon. The
Authorized Representative and the Secured Parties of any Class will be entitled to manage and
supervise their loans and other extensions of credit in the manner determined by them.
(b) No Authorized Representative or Secured Parties of any Class shall have any express or
implied duty to the Authorized Representative or any Secured Party of any other Class to act or
refrain from acting in a manner that allows, or results in, the occurrence or
25
continuance of a
Default or an Event of Default under any First Lien Credit Document, regardless of any knowledge
thereof that they may have or be charged with.
ARTICLE VI
Additional First Lien Obligations
The Company may, at any time and from time to time, subject to any limitations contained in
the First Lien Credit Documents in effect at such time, designate additional indebtedness and
related obligations that are, or are to be, secured by Liens on any assets of the Company or any
other Grantor that would, if such Liens were granted, constitute Shared Collateral as Credit
Agreement Obligations (to the extent issued under a Supplemental Credit Agreement) or Additional
First Lien Obligations by delivering to the Collateral Agent and each Authorized Representative
party hereto at such time a certificate of a Responsible Officer of the Company:
(a) describing the indebtedness and other obligations being designated as Credit Agreement
Obligations or Additional First Lien Obligations, as the case may be, and including a statement of
the maximum aggregate outstanding principal amount of such indebtedness as of the date of such
certificate;
(b) identifying the Additional First Lien Documents or Credit Agreement Documents under which
such Additional First Lien Obligations or Credit Agreement Obligations, as the case may be, are
issued or incurred or the guarantees of such First Lien Obligations are, or are to be, created, and
attaching copies of such Credit Agreement Documents or Additional First Lien Documents that each
Grantor has executed and delivered to the holder of such Credit Agreement Documents or Additional
First Lien Obligations, as the case may be, or the Person that serves as the administrative agent,
trustee or a similar representative for the holders of such First Lien Obligations (such Person
being referred to as the
Additional Authorized Representative
) with respect to such
Additional First Lien Obligations or Credit Agreement Obligations, as the case may be, on the
closing date of such Additional First Lien Obligations or Credit Agreement Obligations, certified
as being true and complete by a Responsible Officer of the Company;
(c) identifying the Person that serves as the Additional Authorized Representative;
(d) certifying that the incurrence of such Additional First Lien Obligations or Credit
Agreement Obligations, the creation of the Liens securing such Additional First Lien Obligations or
Credit Agreement Obligations and the designation of such Additional First Lien Obligations or
Credit Agreement Obligations as Additional First Lien Obligations or Credit
Agreement Obligations, respectively, hereunder do not violate or result in a default under
any provision of the First Lien Credit Documents in effect at such time;
(e) certifying that the Additional First Lien Documents or Credit Agreement Obligations
authorize the Additional Authorized Representative to become a party hereto by executing and
delivering an Additional Authorized Representative Joinder Agreement and
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provide that upon such
execution and delivery, such Additional First Lien Obligations or Credit Agreement Obligations and
the holders thereof shall become subject to and bound by the provisions of this Agreement; and
(f) attaching a fully completed Authorized Representative Joinder Agreement executed and
delivered by the Additional Authorized Representative.
Upon the delivery of such certificate and the related attachments as provided above, the
obligations designated in such notice as Additional First Lien Obligations or Credit Agreement
Obligations shall become Additional First Lien Obligations or Credit Agreement Obligations, as the
case may be, for all purposes of this Agreement.
ARTICLE VII
Miscellaneous
SECTION 7.01.
Notices
. All notices and other communications provided for herein shall
be in writing and shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to any Grantor, to it (or, in the case of any Grantor other than the Company, to it in
care of the Company) at Credit Acceptance Corporation, 25505 W. 12 Mile Road, Suite 3000,
Southfield, Michigan 48034, Attention of Doug Busk (Facsimile No.: 248-827-8542);
(b) if to the Collateral Agent or the Administrative Agent under the Original Credit
Agreement, to it at [Comerica Bank, One Detroit Center, 500 Woodward Avenue, Detroit, Michigan
48226, Attention: Corporate Finance (Facsimile No.: [ ]), with a copy to [ ]];
(c) if to the Senior Notes Authorized Representative, to it at [ ];
(d) if to any other Additional Authorized Representative, to it at the address set forth in
the applicable Joinder Agreement.
Any party hereto may change its address or facsimile number for notices and other
communications hereunder by notice to the other parties hereto. All notices and other
communications given to any party hereto in accordance with the provisions of this Agreement shall
be deemed to have been given on the date of receipt (if a Business Day) and on the next Business
Day thereafter (in all other cases) if delivered by hand or overnight courier service or sent by
facsimile or on the date five Business Days after dispatch by certified or registered mail if
mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in
this Section or in accordance with the latest unrevoked direction from such party given in
accordance with this Section. As agreed to in writing by any party hereto from time to time,
notices and other communications to such party may also be delivered by e-mail to the e-mail
address of a representative of such party provided from time to time by such party.
SECTION 7.02.
Waivers; Amendment; Joinder Agreements
. (a) No failure or delay on the
part of any party hereto in exercising any right or power hereunder shall operate as a
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waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of the parties hereto
are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or consent to any departure by any party therefrom shall
in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and
then such waiver or consent shall be effective only in the specific instance and for the purpose
for which given. No notice or demand on any party hereto in any case shall entitle such party to
any other or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended or otherwise
modified except pursuant to an agreement or agreements in writing entered into by the Collateral
Agent and each Authorized Representative then party hereto;
provided
that no such agreement
shall by its terms amend, modify or otherwise affect the rights or obligations of any Grantor
without the Companys prior written consent;
provided
further
that (i) without the
consent of any party hereto, (A) this Agreement may be supplemented by an Authorized Representative
Joinder Agreement, and an Additional Authorized Representative may become a party hereto, in
accordance with Article VI and (B) this Agreement may be supplemented by a Grantor Joinder
Agreement, and a Subsidiary may become a party hereto, in accordance with Section 7.13, and (ii) in
connection with any Refinancing of First Lien Obligations of any Class (including pursuant to any
Supplemental Credit Agreement), or the incurrence of Additional First Lien Obligations of any
Class, the Collateral Agent and the Authorized Representatives then party hereto shall enter (and
are hereby authorized to enter without the consent of any other Secured Party), at the request of
the Collateral Agent, any Authorized Representative or the Company, into such amendments,
supplements, modifications or restatements of this Agreement as are reasonably necessary or
appropriate to reflect and facilitate such Refinancing or such incurrence and are reasonably
satisfactory to the Collateral Agent and each such Authorized Representative.
SECTION 7.03.
Parties in Interest
. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns, as well as the other
Secured Parties, all of whom are intended to be bound by, and to be third party beneficiaries of,
this Agreement.
SECTION 7.04.
Effectiveness; Survival
. This Agreement shall become effective when executed and delivered by the parties hereto.
All covenants, agreements, representations and warranties made by any party in this Agreement shall
be considered to have been relied upon by the other parties hereto and shall survive the execution
and delivery of this Agreement. This Agreement shall continue in full force and effect
notwithstanding the commencement of any Insolvency or Liquidation Proceeding against the Company or
any of the Subsidiaries.
SECTION 7.05.
Counterparts
. This Agreement may be executed in counterparts, each of
which shall constitute an original but all of which when taken together shall constitute a single
contract. Delivery of an executed signature page to this Agreement by facsimile or other
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electronic transmission shall be as effective as delivery of a manually signed counterpart of this
Agreement.
SECTION 7.06.
Severability
. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such invalidity, illegality or unenforceability without affecting the validity, legality
and enforceability of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. The
parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as possible to that of
the invalid, illegal or unenforceable provisions.
SECTION 7.07.
Governing Law
. This Agreement shall be construed in accordance with and
governed by the law of the State of Michigan.
SECTION 7.08.
Submission to Jurisdiction Waivers; Consent to Service of Process
. The
Collateral Agent and each Authorized Representative, for itself and on behalf of its Related
Secured Parties, irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding relating to this
Agreement and the First Lien Security Documents, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the courts of the State of
Michigan, the courts of the United States of America for the Eastern District of Michigan and
appellate courts from any thereof;
(b) waives any defense of forum non conveniens;
(c) consents that any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(d) agrees that service of process in any such action or proceeding may be effected by mailing
a copy thereof by registered or certified mail (or any substantially similar form of mail), postage
prepaid, to such Person (or its Authorized Representative) at the address referred to in Section
7.01;
(e) agrees that service as provided in clause (d) above is sufficient to confer personal
jurisdiction over the applicable party in any such proceeding in any such, and otherwise
constitutes effective and binding service in every respect;
(f) agrees that nothing herein shall affect the right of any other party hereto (or any
Secured Party) to effect service of process in any other manner permitted by law or shall limit the
right of any party hereto (or any Secured Party) to sue in any other jurisdiction; and
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(g) waives, to the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this Section any special, exemplary,
punitive or consequential damages.
SECTION
7.09.
WAIVER OF JURY TRIAL
EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
HEREUNDER. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT. EACH PARTY
HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT
EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO
FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
SECTION 7.10.
Headings
. Article and Section headings used herein are for convenience
of reference only, are not part of this Agreement and are not to affect the construction of, or to
be taken into consideration in interpreting, this Agreement.
SECTION 7.11.
Conflicts
. In the event of any conflict or inconsistency between the
provisions of this Agreement and the provisions of any of the other First Lien Credit Documents,
the provisions of this Agreement shall control.
SECTION 7.12.
Provisions Solely to Define Relative Rights
. The provisions of this Agreement are and are intended solely for the purpose of defining
the relative rights of the Secured Parties in relation to one another. Except as expressly
provided in this Agreement, none of the Company, any other Grantor, any other Subsidiary or any
other creditor of any of the foregoing shall have any rights or obligations hereunder, and none of
the Company, any other Grantor or any other Subsidiary may rely on the terms hereof. Nothing in
this Agreement is intended to or shall impair the obligations of the Company or any other Grantor,
which are absolute and unconditional, to pay the First Lien Obligations as and when the same shall
become due and payable in accordance with their terms.
SECTION 7.13.
Additional Grantors
. In the event any Subsidiary shall have granted a
Lien on any of its assets to secure any First Lien Obligations, the Company shall cause such
Subsidiary, if not already a party hereto, to become a party hereto as a Grantor. Upon the
execution and delivery to the Collateral Agent by any Subsidiary of a Grantor Joinder Agreement,
any such Subsidiary shall become a party hereto and a Grantor hereunder with the same force and
effect as if originally named as such herein. The execution and delivery of any such instrument
shall not require the consent of any other party hereto. The rights and obligations of each party
hereto shall remain in full force and effect notwithstanding the addition of any new Grantor as a
party to this Agreement.
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SECTION 7.14.
Integration
. This Agreement, together with the other First Lien Credit
Documents, including the First Lien Security Documents, represents the agreement of each of the
Grantors, the Collateral Agent, the Authorized Representatives and the other Secured Parties with
respect to the subject matter hereof, and there are no promises, undertakings, representations or
warranties by any Grantor, the Collateral Agent, any Authorized Representative or any other Secured
Party relative to the subject matter hereof not expressly set forth or referred to herein or in the
other First Lien Credit Documents, including the First Lien Security Documents.
SECTION 7.15.
Further Assurances
. Each of the Collateral Agent, each Authorized
Representative and the Grantors agrees that it will execute, or will cause to be executed, any and
all further documents, agreements and instruments, and take all such further actions, as may be
required under any applicable law, or which the Collateral Agent or any Authorized Representative
may reasonably request, to effectuate the terms of this Agreement, including the relative Lien
priorities provided for herein.
SECTION 7.16.
Amendment and Restatement
. This Agreement shall be deemed to amend,
restate and replace, in its entirety, that certain prior intercreditor agreement dated as of
December 15, 1998, as amended, by and among Comerica Bank, as collateral agent, and the other
parties thereto on the date hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.
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COMERICA BANK,
as Administrative Agent and Collateral Agent,
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By
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/s/ Michael P. Stapleton
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Name:
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Michael P. Stapleton
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Title:
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Vice President
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U.S. BANK NATIONAL ASSOCIATION,
as Senior Notes
Authorized Representative,
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By
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/s/ Raymond S. Haverstock
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Name:
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Raymond S. Haverstock
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Title:
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Vice President
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CREDIT ACCEPTANCE CORPORATION, as a
Grantor
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By
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/s/ Douglas W. Busk
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Name:
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Douglas W. Busk
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Title:
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Senior Vice President and
Treasurer
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BUYERS VEHICLE PROTECTION PLAN, INC., as a
Grantor
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By
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/s/ Douglas W. Busk
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Name:
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Douglas W. Busk
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Title:
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Treasurer
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VEHICLE REMARKETING SERVICES, INC., as a
Grantor
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By
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/s/ Douglas W. Busk
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Name:
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Douglas W. Busk
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Title:
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Treasurer
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SCHEDULE 1
Initial Grantors
1.
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Credit Acceptance Corporation
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2.
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Buyers Vehicle Protection Plan, Inc.
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3.
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Vehicle Remarketing Services, Inc.
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EXHIBIT I-A
[FORM OF] ADDITIONAL AUTHORIZED REPRESENTATIVE JOINDER AGREEMENT NO. [ ] dated as of [ ],
20[ ] (this
Joinder Agreement
) to the AMENDED AND RESTATED INTERCREDITOR AGREEMENT dated
as of February ___, 2010 (as amended, restated, supplemented or otherwise modified from time to
time, the
Intercreditor Agreement
), among CREDIT ACCEPTANCE CORPORATION, a Michigan
corporation (the Company), the other GRANTORS party thereto, the ADDITIONAL AUTHORIZED
REPRESENTATIVE (as defined below) party hereto, COMERICA BANK, as collateral agent for the Secured
Parties (in such capacity, the Collateral Agent) and as the Authorized Representative for the
Credit Agreement Secured Parties under the Original Credit Agreement (in such capacity, the
Administrative Agent
), and U.S. BANK NATIONAL ASSOCIATION, as the Senior Notes Authorized
Representative for the Senior Notes Secured Parties (in such capacity, the
Senior Notes
Authorized Representative
) and each ADDITIONAL AUTHORIZED REPRESENTATIVE from time to time
party thereto, as the Authorized Representative for any Secured Parties of any other Class.
Capitalized terms used herein but not otherwise defined herein shall have the meanings
assigned to such terms in the Intercreditor Agreement.
The
Company and the other Grantors propose to issue or incur Additional First Lien
Obligations designated by the Company as such in accordance with Article VI of the Intercreditor
Agreement in a certificate of a Responsible Officer of the Company delivered concurrently herewith
to the Collateral Agent and the Authorized Representatives (the
Additional First Lien
Obligations
). The Person identified in the signature pages hereto as the
Additional
Authorized Representative
(the
Additional Authorized Representative
) will serve as
the administrative agent, trustee or a similar representative for the holders of the Additional
First Lien Obligations (the
Additional Secured Parties
).
The Additional Authorized Representative wishes, in accordance with the provisions of the
Intercreditor Agreement, to become a party to the Intercreditor Agreement and to acquire and
undertake, for itself and on behalf of the Additional Secured Parties, the rights and obligations
of an Additional Authorized Representative and Secured Parties thereunder.
Accordingly, the Additional Authorized Representative, for itself and on behalf of its Related
Secured Parties, and the Company agree as follows, for the benefit of the Collateral Agent, the
existing Authorized Representatives and the existing Secured Parties:
SECTION 1.01.
Accession to the Intercreditor Agreement
. The Additional Authorized
Representative hereby (a) accedes and becomes a party to the Intercreditor Agreement as an
Additional Authorized Representative, (b) agrees, for itself and on behalf of the Additional
Secured Parties, to all the terms and provisions of the Intercreditor Agreement and (c)
acknowledges and agrees that (i) the Additional First Lien Obligations and Liens on any Collateral
securing the same shall be subject to the provisions of the Intercreditor Agreement and (ii) the
Additional Authorized Representative and the Additional Secured Parties shall have the rights and
obligations specified under the Intercreditor Agreement with respect
to an Authorized
Representative
or a Secured Party, and shall be subject to and bound by the provisions of
the Intercreditor Agreement. The Intercreditor Agreement is hereby incorporated by reference.
SECTION 1.02.
Representations and Warranties of the Additional Authorized
Representative
. The Additional Authorized Representative represents and warrants to the
Collateral Agent, the existing Authorized Representatives and the existing Secured Parties that (a)
it has full power and authority to enter into this Joinder Agreement in its capacity as the
Additional Authorized Representative, (b) this Joinder Agreement has been duly authorized, executed
and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it
in accordance with its terms and (c) the Additional First Lien Documents relating to the Additional
First Lien Obligations provide that, upon the Additional Authorized Representatives execution and
delivery of this Joinder Agreement, (i) the Additional First Lien Obligations and Liens on any
Collateral securing the same shall be subject to the provisions of the Intercreditor Agreement and
(ii) the Additional Authorized Representative and the Additional Secured Parties shall have the
rights and obligations specified therefor under, and shall be subject to and bound by the
provisions of, the Intercreditor Agreement.
SECTION 1.03.
Parties in Interest
. This Joinder Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and assigns, as well as
the other Secured Parties, all of whom are intended to be bound by, and to be third-party
beneficiaries of, this Agreement.
SECTION 1.04.
Counterparts
. This Joinder Agreement may be executed in counterparts,
each of which shall constitute an original but all of which when taken together shall constitute a
single contract. This Joinder Agreement shall become effective when the Collateral Agent shall
have received a counterpart of this Joinder Agreement that bears the signature of the Additional
Authorized Representative. Delivery of an executed signature page to this Joinder Agreement by
facsimile or other electronic transmission shall be as effective as delivery of a manually-signed
counterpart of this Joinder Agreement.
SECTION 1.05.
Governing Law
. This Joinder Agreement shall be construed in accordance
with and governed by the law of the State of Michigan.
SECTION 1.06.
Notices
. All communications and notices hereunder shall be in writing
and given as provided in Section 7.01 of the Intercreditor Agreement. All communications and
notices hereunder to the Additional Authorized Representative shall be given to it at the address
set forth under its signature hereto, which information supplements Section 7.01 to the
Intercreditor Agreement.
SECTION 1.07.
Expenses
. The Company agrees to reimburse the Collateral Agent and each
of the Authorized Representatives for its reasonable out-of-pocket expenses in connection with this
Joinder Agreement, including the reasonable fees, other charges and disbursements of counsel for
the Collateral Agent and any of the Authorized Representatives.
2
SECTION 1.08.
Incorporation by Reference
. The provisions of Sections 7.04, 7.06,
7.08, 7.09, 7.10, 7.11 and 7.12 of the Intercreditor Agreement are hereby incorporated by
reference,
mutatis
mutandis
, as if set forth in full herein.
3
IN WITNESS WHEREOF, the Additional Authorized Representative and the Company have duly
executed this Joinder Agreement to the Intercreditor Agreement as of the day and year first above
written.
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[ ], as Additional Authorized Representative,
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By
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Name:
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Title:
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Address for notices:
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attention of:
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Facsimile:
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CREDIT ACCEPTANCE CORPORATION,
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By
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Name:
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Title:
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Acknowledged by:
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COMERICA BANK, as the
Collateral Agent and the Administrative Agent,
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By
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Name:
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Title:
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U.S. BANK NATIONAL ASSOCIATION, as the
Senior Notes Authorized Representative,
by
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by
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Name:
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Title:
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4
EXHIBIT I-B
[FORM OF] ADDITIONAL AUTHORIZED REPRESENTATIVE JOINDER AGREEMENT NO. [ ] dated as of [ ],
20[ [ (this
Joinder Agreement
) to the AMENDED AND RESTATED INTERCREDITOR AGREEMENT dated
as of February ___, 2010 (as amended, restated, supplemented or otherwise modified from time to
time, the
Intercreditor Agreement
), among CREDIT ACCEPTANCE CORPORATION, a Michigan
corporation (the Company), the other GRANTORS party thereto, COMERICA BANK, as collateral agent
for the Secured Parties (in such capacity, the Collateral Agent) and as the Authorized
Representative for the Credit Agreement Secured Parties under the Original Credit Agreement (in
such capacity, the
Administrative Agent
), U.S. BANK NATIONAL ASSOCIATION, as the
Authorized Representative for the Senior Notes Secured Parties (in such capacity, the
Senior
Notes Authorized Representative
) and each ADDITIONAL AUTHORIZED REPRESENTATIVE from time to
time party thereto, as the Authorized Representative for any Secured Parties of any other Class.
Capitalized terms used herein but not otherwise defined herein shall have the meanings
assigned to such terms in the Intercreditor Agreement.
The Company and the other Grantors propose to issue or incur Credit Agreement Obligations
(pursuant to a Supplemental Credit Agreement) designated by the Company as such in accordance with
Article VI of the Intercreditor Agreement in a certificate of a Responsible Officer of the Company
delivered concurrently herewith to the Collateral Agent and the Authorized Representatives (the
Supplemental Credit Agreement Obligations
). The Person identified in the signature pages
hereto as the
Additional Authorized Representative
(the
Additional Authorized
Representative
) will serve as the administrative agent, trustee or a similar representative
for the holders of such Supplemental Credit Agreement Obligations (the
Supplemental Credit
Agreement Secured Parties
).
The Additional Authorized Representative wishes, in accordance with the provisions of the
Intercreditor Agreement, to become a party to the Intercreditor Agreement and to acquire and
undertake, for itself and on behalf of the Supplemental Credit Agreement Secured Parties, the
rights and obligations of an Additional Authorized Representative and Secured Parties
thereunder.
Accordingly, the Additional Authorized Representative, for itself and on behalf of its Related
Secured Parties, and the Company agree as follows, for the benefit of the Collateral Agent, the
existing Authorized Representatives and the existing Secured Parties:
SECTION 1.01.
Accession to the Intercreditor Agreement
. The Additional Authorized
Representative hereby (a) accedes and becomes a party to the Intercreditor Agreement as an
Additional Authorized Representative, (b) agrees, for itself and on behalf of the Supplemental
Credit Agreement Secured Parties, to all the terms and provisions of the Intercreditor Agreement
and (c) acknowledges and agrees that (i) the Supplemental Credit Agreement Obligations and Liens on
any Collateral securing the same shall be subject to the provisions of the Intercreditor Agreement
and (ii) the Additional Authorized Representative and the Supplemental Credit Agreement Secured
Parties shall have the rights and obligations
specified under the Intercreditor Agreement with respect to an Authorized Representative or
a Secured Party, and shall be subject to and bound by the provisions of the Intercreditor
Agreement. The Intercreditor Agreement is hereby incorporated by reference.
SECTION 1.02.
Representations and Warranties of the Additional Authorized
Representative
. The Additional Authorized Representative represents and warrants to the
Collateral Agent, the existing Authorized Representatives and the existing Secured Parties that (a)
it has full power and authority to enter into this Joinder Agreement in its capacity as the
Additional Authorized Representative, (b) this Joinder Agreement has been duly authorized, executed
and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it
in accordance with its terms and (c) the Supplemental Credit Agreement Documents relating to the
Supplemental Credit Agreement Obligations provide that, upon the Additional Authorized
Representatives execution and delivery of this Joinder Agreement, (i) the Supplemental Credit
Agreement Obligations and Liens on any Collateral securing the same shall be subject to the
provisions of the Intercreditor Agreement and (ii) the Additional Authorized Representative and the
Supplemental Credit Agreement Secured Parties shall have the rights and obligations specified
therefor under, and shall be subject to and bound by the provisions of, the Intercreditor
Agreement.
SECTION 1.03.
Parties in Interest
. This Joinder Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and assigns, as well as
the other Secured Parties, all of whom are intended to be bound by, and to be third party
beneficiaries of, this Agreement.
SECTION 1.04.
Counterparts
. This Joinder Agreement may be executed in counterparts,
each of which shall constitute an original but all of which when taken together shall constitute a
single contract. This Joinder Agreement shall become effective when the Collateral Agent shall
have received a counterpart of this Joinder Agreement that bears the signature of the Additional
Authorized Representative. Delivery of an executed signature page to this Joinder Agreement by
facsimile or other electronic transmission shall be as effective as delivery of a manually-signed
counterpart of this Joinder Agreement.
SECTION 1.05.
Governing Law
. This Joinder Agreement shall be construed in accordance
with and governed by the law of the State of Michigan.
SECTION 1.06.
Notices
. All communications and notices hereunder shall be in writing
and given as provided in Section 7.01 of the Intercreditor Agreement. All communications and
notices hereunder to the Additional Authorized Representative shall be given to it at the address
set forth under its signature hereto, which information supplements Section 7.01 to the
Intercreditor Agreement.
SECTION 1.07.
Expenses
. The Company agrees to reimburse the Collateral Agent and each
of the Authorized Representatives for its reasonable out-of-pocket expenses in connection with this
Joinder Agreement, including the reasonable fees, other charges and disbursements of counsel for
the Collateral Agent and any of the Authorized Representatives.
2
SECTION 1.08.
Incorporation by Reference
. The provisions of Sections 7.04, 7.06,
7.08, 7.09, 7.10, 7.11 and 7.12 of the Intercreditor Agreement are hereby incorporated by
reference,
mutatis
mutandis
, as if set forth in full herein.
3
IN WITNESS WHEREOF, the Additional Authorized Representative and the Company have duly
executed this Joinder Agreement to the Intercreditor Agreement as of the day and year first above
written.
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[ ], as Additional Authorized Representative,
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By
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Name:
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Title:
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Address for notices:
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attention of:
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Facsimile:
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CREDIT ACCEPTANCE CORPORATION,
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By
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Name:
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Title:
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Acknowledged by:
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COMERICA BANK, as the
Collateral Agent and the Administrative Agent,
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By
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Name:
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Title:
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U.S. BANK NATIONAL ASSOCIATION, as the
Senior Notes Authorized Representative,
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By
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Name:
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Title:
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4
EXHIBIT II
[FORM OF] GRANTOR JOINDER AGREEMENT NO. [ ] dated as of [ ], 20[ ] (this
Joinder
Agreement
) to the AMENDED AND RESTATED INTERCREDITOR AGREEMENT dated as of February ___, 2010
(as amended, restated, supplemented or otherwise modified from time to time, the
Intercreditor
Agreement
), among CREDIT ACCEPTANCE CORPORATION, a Michigan corporation (the
Company
), the other GRANTORS party thereto, the ADDITIONAL GRANTOR (as defined below),
COMERICA BANK, as collateral agent for the Secured Parties (in such capacity, the
Collateral
Agent
) and as the Authorized Representative for the Credit Agreement Secured Parties under the
Original Credit Agreement (in such capacity, the
Administrative Agent
), and U.S. BANK
NATIONAL ASSOCIATION, as the Senior Notes Authorized Representative for the Senior Notes Secured
Parties (in such capacity, the
Senior Notes Authorized Representative
), and each
ADDITIONAL AUTHORIZED REPRESENTATIVE from time to time party thereto, as the Authorized
Representative for any Secured Parties of any other Class.
Capitalized terms used herein but not otherwise defined herein shall have the meanings
assigned to such terms in the Intercreditor Agreement.
[ ], a [ ] [corporation] and a Subsidiary of the Company (the Additional
Grantor), has granted a Lien on all or a portion of its assets to secure First Lien Obligations
and such Additional Grantor is not a party to the Intercreditor Agreement.
The Additional Grantor wishes to become a party to the First Lien Intercreditor Agreement and
to acquire and undertake the rights and obligations of a Grantor thereunder. The Additional
Grantor is entering into this Joinder Agreement in accordance with the provisions of the
Intercreditor Agreement in order to become a Grantor thereunder.
Accordingly, the Additional Grantor agrees as follows, for the benefit of the Collateral
Agent, the Authorized Representatives and the Secured Parties:
SECTION 1.01.
Accession to the Intercreditor Agreement
. The Additional Grantor (a)
hereby accedes and becomes a party to the Intercreditor Agreement as a Grantor, (b) agrees to all
the terms and provisions of the Intercreditor Agreement and (c) acknowledges and agrees that the
Additional Grantor shall have the rights and obligations specified under the Intercreditor
Agreement with respect to a Grantor, and shall be subject to and bound by the provisions of the
Intercreditor Agreement.
SECTION 1.02.
Representations and Warranties of the Additional Grantor
. The
Additional Grantor represents and warrants to the Collateral Agent, the Authorized Representatives
and the Secured Parties that this Joinder Agreement has been duly authorized, executed and
delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.
SECTION 1.03.
Parties in Interest
. This Joinder Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and assigns, as well
as the other Secured Parties, all of whom are intended to be third party beneficiaries of this
Agreement.
SECTION 1.04.
Effectiveness
. This Joinder Agreement shall become effective when the
Collateral Agent shall have received a counterpart of this Joinder Agreement that bears the
signature of the Additional Grantor. Delivery of an executed signature page to this Joinder
Agreement by facsimile or other electronic transmission shall be as effective as delivery of a
manually-signed counterpart of this Joinder Agreement.
SECTION 1.05.
Governing Law
. This Joinder Agreement shall be construed in accordance
with and governed by the law of the State of Michigan.
SECTION 1.06.
Notices
. All communications and notices hereunder shall be in writing
and given as provided in Section 7.01 of the Intercreditor Agreement.
SECTION 1.07.
Expenses
. The Grantor agrees to reimburse the Collateral Agent and each
of the Authorized Representatives for its reasonable out-of-pocket expenses in connection with this
Joinder Agreement, including the reasonable fees, other charges and disbursements of counsel for
the Collateral Agent and any of the Authorized Representatives.
SECTION 1.08.
Incorporation by Reference
. The provisions of Sections 7.04, 7.06,
7.08, 7.09, 7.10, 7.11 and 7.12 of the Intercreditor Agreement are hereby incorporated by
reference,
mutatis
mutandis
, as if set forth in full herein.
IN WITNESS WHEREOF, the Additional Grantor has duly executed this Joinder Agreement to the
Intercreditor Agreement as of the day and year first above written.
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[NAME OF SUBSIDIARY],
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by
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Name:
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Title:
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2