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EXHIBIT 4(g)4
EXECUTION COPY
AMENDED AND RESTATED SECURITY AGREEMENT
THIS AMENDED AND RESTATED SECURITY AGREEMENT (the "Agreement") dated
as of March 30, 2001, is entered into by and between Credit Acceptance
Corporation, a Michigan corporation (the "Debtor") and Comerica Bank, a
Michigan banking corporation ("Comerica"), as agent for the benefit of the
"Lenders", the "Noteholders" and the "Future Debt Holders" (each as referred
to below) (in such capacity, the "Collateral Agent"). The addresses for Debtor
and Collateral Agent are set forth on the signature pages.
R E C I T A L S:
A. The Debtor and certain of its foreign Subsidiaries, Comerica
(individually, and in the capacities referred to below) and the other
financial institutions signatory thereto, each as "Banks" thereunder (and, in
the case of Comerica, in its capacity as Agent for the Lenders and in its
separate additional capacities as "Issuing Bank" thereunder) (together with
any Successor Lenders (as hereinafter defined) party thereto from time to
time, collectively the "Lenders"), entered into that certain Third Amended and
Restated Credit Agreement dated as of June 15, 1999 (amending and restating
the Prior Credit Agreement), as amended by First Amendment dated as of
December 10, 1999, Second Amendment dated as of April 28, 2000, Third
Amendment dated as of June 13, 2000, Fourth Amendment dated as of November 30,
2000 and Fifth Amendment dated as of March 8, 2001, (said credit agreement, as
further amended, restated or otherwise modified from time to time, the "Credit
Agreement").
B. The Debtor entered into the separate note purchase agreements
with the 1994 Noteholders (as hereinafter defined) dated as of October 1, 1994
(collectively, as amended by First Amendment to Note Purchase Agreement dated
as of November 15, 1995, Second Amendment to Note Purchase Agreement dated as
of August 29, 1996, Third Amendment to Note Purchase Agreement dated as of
December 12, 0000, Xxxxxx Xxxxxxxxx to Note Purchase Agreement dated as of
July 1, 1998, as amended by Fifth Amendment to Note Purchase Agreement dated
as of April 13, 1999, Sixth Amendment to the Note Purchase Agreement dated as
of December 1, 1999, Seventh Amendment to the Note Purchase Agreement dated as
of April 27, 2000 and Eighth Amendment to Note Purchase Agreement dated as of
March 8, 2001, and as further amended, restated or otherwise modified from
time to time, the "1994 Note Agreements"), pursuant to which the First Amended
and Restated 9.12% Senior Notes due November 1, 2001 (collectively, as
amended, restated or otherwise modified from time to time, the "1994 Senior
Notes") are outstanding.
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C. The Debtor entered into the separate note purchase agreements
with the 1996 Noteholders (as hereinafter defined) dated as of August 1, 1996
(collectively, as amended by First Amendment to Note Purchase Agreement dated
as of December 12, 1997, Second Amendment to Note Purchase Agreement dated as
of July 1, 1998, Third Amendment to Note Purchase Agreement dated as of April
13, 0000, Xxxxxx Xxxxxxxxx to the Note Purchase Agreement dated as of December
1, 1999, and Fifth Amendment to the Note Purchase Agreement dated as of April
27, 2000 and Sixth Amendment to Note Purchase Agreement dated as of March 8,
2001, and as further amended, restated or otherwise modified from time to
time, the "1996 Note Agreements"), pursuant to which the First Amended and
Restated 8.24% Senior Notes due July 1, 2001 (collectively, as amended,
restated or otherwise modified from time to time, the "1996 Senior Notes") are
outstanding.
D. The Debtor entered into the separate note purchase agreements
with the 1997 Noteholders (as hereinafter defined) dated as of March 25, 1997
(collectively, as amended by the First Amendment to Note Purchase Agreement
dated as of December 12, 1997, the Second Amendment to Note Purchase Agreement
dated as of July 1, 1998, Third Amendment to Note Purchase Agreement dated as
of April 13, 0000, Xxxxxx Xxxxxxxxx to the Note Purchase Agreement dated as of
December 1, 1999, and Fifth Amendment to the Note Purchase Agreement dated as
of April 27, 2000 and Sixth Amendment to Note Purchase Agreement dated as of
March 8, 2001, as further amended, restated or otherwise modified from time to
time, the "1997 Note Agreements") pursuant to which the First Amended and
Restated 8.02% Senior Notes due October 1, 2001 (collectively, as amended,
restated or otherwise modified from time to time, the "1997 Senior Notes") are
outstanding.
E. Pursuant to Section 7.23 of the Credit Agreement, the Lenders
have required that the Debtor grant (or cause to be granted) certain liens and
security interests to Comerica Bank, as agent for the benefit of the Lenders,
Noteholders, and the Future Debt Holders, all to secure the obligations of the
Debtor under the Credit Documents, the obligations of the Debtor under the
Noteholder Documents and the obligations of the Debtor under the Future Debt
Documents.
F. The Lenders and the Noteholders have consented to the
transactions contemplated hereby, and by the Security Documents, and the
Lenders and the Noteholders have agreed that the Debtor's obligations under
the Credit Agreement, the Note Agreements and the Future Debt Documents (as
defined below) shall be equally and ratably secured pursuant to this Agreement
and the other Security Documents.
G. The Debtor has directly and indirectly benefited and will
directly and indirectly benefit from the transactions evidenced by and
contemplated in the Credit Agreement, the Note Agreements and the Future Debt
Documents (defined below) and consented to the execution and delivery of that
certain Intercreditor Agreement among Comerica, as Collateral Agent, the
Lenders (including Comerica), the Noteholders and the Future Debt Holders,
dated as of December 15, 1998, as amended by First Amendment to Intercreditor
Agreement dated as of the date hereof (as so
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amended, and as further amended, restated or otherwise modified from time to
time according to the terms thereof, the "Intercreditor Agreement").
H. The Lenders, the Noteholders and the Collateral Agent have
entered into the Intercreditor Agreement to define the rights, duties,
authority and responsibilities of the Collateral Agent, acting on behalf of
such parties regarding the Collateral (as defined below), and the relationship
among the parties regarding their equal and ratable interests in the
Collateral.
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:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. As used in this Agreement, capitalized terms
not otherwise defined herein or expressly referenced as being defined in the
Credit Agreement 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 the Debtor, and, in
any event, shall include, without limitation, each of the following, whether
now owned or hereafter acquired by the Debtor: (a) all rights of the Debtor to
payment for goods sold or leased or services rendered, whether or not earned
by performance, (b) all accounts receivable of the Debtor, (c) all rights of
the Debtor to receive any payment of money or other form of consideration, (d)
all security pledged, assigned or granted to or held by the 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 the Debtor as an unpaid seller
of goods or services, including, but not limited to, all rights of stoppage in
transit, replevin, reclamation and resale.
"Administrative Agency Agreement" is defined in the definition of
Titling Subsidiary Agreements.
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"Advances to Dealers" shall mean any and all advances by the Debtor to
Dealers under the Dealer Agreements whether in respect of Installment
Contracts or Leases, as outstanding from time to time.
"Benefited Obligations" has the meaning specified in the Intercreditor
Agreement.
"Benefited Parties" has the meaning specified 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 the
Debtor.
"Collateral" has the meaning specified in Section 2.1 of this
Agreement.
"Computer Records" has the meaning specified in Section 2.1(g) 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 Agreement(s)" shall mean the sales and/or servicing agreements
between the Debtor or its Subsidiaries and a participating Dealer which sets
forth the terms and conditions under which the Debtor or its Subsidiaries may
(i) accept, as nominee for such Dealer, the assignment of Installment
Contracts or Leases for purposes of administration, servicing and collection
and under which the Debtor or its Subsidiaries may make Advances to Dealers or
(ii) accept outright assignments of Installments Contracts or Leases from
Dealers or funds Installments Contracts or Leases originated by such Dealer in
the name of Debtor or any of its Subsidiaries, in each case as such agreements
may be in effect 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 the 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 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 the 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.
"Event of Default" has the meaning specified in the Intercreditor
Agreement.
"Financing Agreements" has the meaning specified in the Intercreditor
Agreement.
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"Future Debt Holders" has the meaning specified in the Intercreditor
Agreement.
"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
the Debtor and, in any event, shall include, without limitation, each of the
following, whether now owned or hereafter acquired by the Debtor: (a) all of
the Debtor's service marks, trade names, trade secrets, registrations,
goodwill, franchises, licenses, permits, proprietary information, customer
lists, designs and inventions; (b) all of the Debtor's books, records, data,
plans, manuals, computer software, computer tapes, computer disks, computer
programs, source codes, object codes and all rights of the Debtor to retrieve
data and other information from third parties; (c) all of the Debtor's
contract rights, partnership interests, membership interests, joint venture
interests, securities, deposit accounts, investment accounts and certificates
of deposit; (d) all rights of the Debtor to payment under letters of credit
and similar agreements; (e) all tax refunds and tax refund claims of the
Debtor; (f) all choses in action and causes of action of the Debtor (whether
arising in contract, tort or otherwise and whether or not currently in
litigation) and all judgments in favor of the Debtor; (g) all rights and
claims of the Debtor under warranties and indemnities; and (h) all rights of
the Debtor under any insurance, surety or similar contract or arrangement.
"Installment Contract(s)" shall mean retail installment contracts for
the sale of new or used motor vehicles assigned outright by Dealers to Debtor
or a Subsidiary of Debtor or written by Dealers in the name of the Debtor or a
Subsidiary of the Debtor (and funded by Debtor or such Subsidiary) or assigned
by Dealers to Debtor or a Subsidiary of Debtor, as nominee for the Dealer, for
administration, servicing, and collection, in each case pursuant to an
applicable Dealer Agreement; provided, however, that to the extent the Debtor
or any Subsidiary transfers or encumbers its interest in any Installment
Contracts (or any Advances to Dealers 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 Advances to Dealers by
the outstanding amount of such advances, if any, attributable to such
Installment Contracts) unless and until such Installment Contracts are
reassigned to the Debtor or a Subsidiary of the 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 the
Debtor, and, in any event, shall include all promissory notes, drafts, bills
of exchange and trade acceptances of the Debtor, whether now owned or
hereafter acquired.
"Inventory" means any "inventory," as such term is defined in Article
or Chapter 9 of the UCC, now owned or hereafter acquired by the Debtor, and,
in any event, shall include, without limitation, each of the following,
whether now owned or hereafter acquired by the Debtor: (a) all goods and other
personal property of the 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 the Debtor; (c) all
wrapping, packaging, advertising and shipping materials of the
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Debtor; (d) all goods that have been returned to, repossessed by or stopped in
transit by the Debtor; and (e) all Documents evidencing any of the foregoing.
"Lease(s)" shall mean the retail agreements for the lease of motor
vehicles assigned outright by Dealers to Debtor or a Subsidiary of Debtor or
written by a Dealer in the name of the Debtor or a Subsidiary of Debtor (and
funded by Debtor or such Subsidiary) or assigned by Dealers to Debtor or a
Subsidiary of Debtor, as nominee for the Dealer, for administration, servicing
and collection, in each case pursuant to an applicable Dealer Agreement;
provided, however, that to the extent the Debtor or any Subsidiary transfers
or encumbers its interest in any Leases pursuant to a Permitted
Securitization, such Leases shall, from and after the date of such transfer or
encumbrance, cease to be considered Leases under this Agreement (reducing the
aggregate amount of Advances to Dealers by the outstanding amount of Advances
to Dealers attributable to such Leases) unless and until such Leases are
reassigned to Debtor or a Subsidiary of the Debtor or such encumbrances have
been discharged.
"Lenders" has the meaning specified in the Intercreditor Agreement.
"Majority Benefited Parties" has the meaning specified in the
Intercreditor Agreement.
"Non-Specified Assets" has the meaning specified in the Titling
Subsidiary Agreements.
"Non-Specified Interest" has the meaning specified in the Titling
Subsidiary Agreements.
"Noteholders" has the meaning specified in the Intercreditor
Agreement.
"Permitted Liens" has the meaning specified in Section 3.1 of this
Agreement.
"Permitted Securitization" shall mean a "Permitted Securitization"
under each of the applicable Financing Agreements.
"Pledged Shares" means the shares of capital stock or other equity,
partnership or membership interests described on Schedule D attached hereto
and incorporated herein by reference, including without limitation the
Non-Specified Interest, as such schedule may be amended, modified or replaced
from time to time.
"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 the 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
the 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.
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"Records" is defined in Section 4.9 of this Agreement.
"Security Documents" has the meaning specified in the Intercreditor
Agreement.
"Significant Domestic Subsidiary" has the meaning specified in the
Intercreditor Agreement.
"Software" has the meaning specified in Section 2.1(g) of this
Agreement.
"Specified Assets" has the meaning specified in the Titling Subsidiary
Agreements.
"Specified Interest(s)" has the meaning specified in the Titling
Subsidiary Agreements.
"Titling Subsidiary" shall mean Auto Lease Services LLC, a Delaware
limited liability company controlled by the Debtor and a direct Subsidiary of
the Debtor.
"Titling Subsidiary Agreements" shall mean that certain Limited
Liability Company Agreement of the Titling Subsidiary, dated and effective as
of March 1, 2001 and the related Certificate of Formation (as therein
defined), and that certain Administrative Agency Agreement dated as of March
1, 2001 between the Company and the Titling Subsidiary ("Administrative Agency
Agreement"), each as amended 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.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. SECURITY INTEREST. As collateral security for the prompt
payment and performance in full when due of the Benefited Obligations (whether
at stated maturity, by acceleration or otherwise), the Debtor hereby pledges
and assigns (as collateral) to the Collateral Agent, and grants the Collateral
Agent a continuing lien on and security interest in, all of the Debtor's
right, title and interest in and to the following, whether now owned or
hereafter arising or acquired and wherever located (collectively, the
"Collateral"):
(a) all Accounts;
(b) all Chattel Paper;
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(c) all Leases;
(d) all General Intangibles;
(e) all Equipment;
(f) all Inventory;
(g) all Advances to Dealers, Dealer Agreements (and any amounts
advanced to or liens granted by Dealers thereunder), and the
Installment Contracts or Leases securing the repayment of such
Advances to Dealers (and other indebtedness of Dealers to
Debtor) and related financial property (the security interest
granted hereby in such Dealer Agreements, Advances to Dealers,
Installment Contracts and Leases, and the Accounts, Chattel
Paper, General Intangibles and proceeds therefrom relating to
such Dealer Agreements, Advances to Dealers, Installment
Contracts and Leases being subject to the rights of Dealers
under Dealer Agreements);
(h) 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;
(i) all shares of stock, and other equity, partnership or
membership interests constituting ownership interests (or
evidence thereof) or other securities, of the Significant
Domestic Subsidiaries of Debtor from time to time owned or
acquired by the Debtor in any manner (including without
limitation, as applicable, the Pledged Shares), and any
certificates at any time evidencing the same, 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 shares; and
(j) the Non-Specified Interest from time to time owned or acquired
by the Debtor in any manner and any certificates or other
instruments at any time evidencing the same, and all dividends,
cash, instruments, rights and other property (including any
Non-Specified Assets) from time to time received or otherwise
distributed in respect of or in exchange for any or all of such
interest; and
(k) 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 the Debtor with
respect thereto;
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
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interest in, the rights of a Grantor thereunder or which would be invalid or
enforceable upon any such assignment or grant; and provided further that
"Collateral" shall not include any (i) Advances to Dealers, Installment
Contracts, Leases, rights or interests under Dealer Agreements and related
financial property transferred by the Debtor prior to the date hereof pursuant
to a Permitted Securitization, except to the extent any such property is
re-transferred to the Debtor according to the terms of such Permitted
Securitization or (ii) Specified Interests or any Specified Assets, unless and
until any such Specified Interest or Specified Asset is redesignated by the
Debtor, the Titling Subsidiary or any other Subsidiary of Debtor as or to the
Non-Specified Interest or the Non-Specified Assets, as the case may be.
SECTION 2.2. DEBTOR REMAINS LIABLE. Notwithstanding anything to the
contrary contained herein, (a) the Debtor shall remain liable under the
contracts, agreements, documents and instruments included in the Collateral
(including without limitation Dealer Agreements, Advances to Dealers,
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,
Advances to Dealers, 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 the 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 the 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.
SECTION 2.3. DELIVERY OF COLLATERAL. All certificates or other
instruments representing or evidencing the Pledged Shares, promptly upon the
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.
SECTION 2.4. MARKING COMPUTER FILES. In connection with the security
interest and lien established hereby, the Debtor hereby agrees, at its sole
expense, to indicate clearly and unambiguously in its computer files with
respect to the Dealer Agreements, Advances to Dealers, Installment Contracts
and Leases encumbered hereby, that Debtor's rights to payment under such
Dealer Agreements, Advances to Dealers, Installment Contracts and Leases have
been pledged to the Collateral Agent pursuant to this Agreement for the
benefit of the Benefited Parties.
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SECTION 2.5. AFFIXING LEGENDS. The Debtor shall, within thirty (30)
days from the date hereof with respect to each Dealer Agreement which
constitutes Collateral on the date hereof and, with respect to each Dealer
Agreement which subsequently becomes Collateral hereunder, within five (5)
days of the Debtor's entering into any such agreement, clearly xxxx each such
Dealer Agreement encumbered hereby with the following legend: "THIS AGREEMENT
HAS BEEN PLEDGED TO COMERICA BANK, AS COLLATERAL AGENT FOR THE BENEFIT OF
CERTAIN BENEFITED PARTIES". Such legend shall be in bold, in type face at
least as large as 12 point and shall be entirely in capital letters.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Collateral Agent to enter into this Agreement and the
Intercreditor Agreement, and to induce the Lenders and the Noteholders to
enter into the Financing Agreements, the Debtor represents and warrants to the
Collateral Agent and to each Lender and each Noteholder that as of the date
hereof:
SECTION 3.1. TITLE. The Debtor is, and with respect to Collateral
acquired after the date hereof the 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 constitute both (x) Liens which are permitted under
Section 8.6 of the Credit Agreement and (y) Liens described in any of clauses
(i) through (vii) of Section 6.6(a) of the Note Agreements (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 shall
constitute a Permitted Lien, (b) with respect to Dealer Agreements and
Advances to Dealers, and the Installment Contracts, Accounts, Chattel Paper,
Leases and General Intangibles (and proceeds therefrom) relating to such
Dealer Agreements and Advances to Dealers, 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 Advances to Dealers (and all other indebtedness
of Dealers to Debtor) pursuant to the applicable Dealer Agreement.
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
Debtor 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 Section 3.1(c) hereof. As of the
date hereof, and to the best of Debtor's knowledge, except as otherwise
disclosed on Schedule E hereto, the 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.
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SECTION 3.3. PRINCIPAL PLACE OF BUSINESS. The principal place of
business and chief executive office of the Debtor, and the office where the
Debtor keeps its books and records, is located at the address of the Debtor
shown on the signature page hereto.
SECTION 3.4. LOCATION OF COLLATERAL. All Inventory (except Inventory
in transit) and Equipment (other than vehicles) of the Debtor in the
possession of the Debtor are located at the places specified on Schedule A
hereto. If any such location is leased by the 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 the 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 the Debtor representing shares
of stock or other ownership interests of any Significant Domestic Subsidiary
(including, without limitation, the Pledged Shares) or representing or
evidencing the Non-Specified Interest 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 the filing of Uniform Commercial Code
financing statements in the jurisdictions listed on Schedule B attached
hereto, and upon the Collateral Agent's obtaining possession of the
certificates evidencing the Pledged Shares, accompanied by duly executed stock
powers or instruments of transfer or assignments in blank, and upon
acknowledgment by the Titling Subsidiary, in favor of the Collateral Agent, of
a Notice of Registered Pledge in the form attached hereto as Schedule F, 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, obtaining an acknowledgment of lien from an issuer 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 Debtor to service Dealer Agreements, Advances to
Dealers, Installment Contracts and Leases (whether or not encumbered hereby)
are (a) the Application and Contract System which is used from the time a
dealer faxes an application to the Debtor 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 the
Debtor's 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, attached 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, including the Non-Specified Interests, 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 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 the Debtor has not sold, granted any
option with respect to, assigned, transferred or otherwise disposed of any of
its rights or interest in or to the Non-Specified Interests. None of the
Non-Specified Interests are subject to any contractual or other restrictions
upon the pledge or other transfer of such Non-Specified Interests, other than
those imposed by securities laws generally.
(c) On the date hereof, 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, 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 its Significant Domestic Subsidiaries owned by
the Debtor or with respect to the Non-Specified Interest in the Titling
Subsidiary (as such Schedule D may from time to time be supplemented, amended
or modified in accordance with the terms of this Agreement).
ARTICLE IV
COVENANTS
The Debtor covenants and agrees with the Collateral Agent that until
the Benefited Obligations are paid and performed in full and all commitments
to lend or provide other credit accommodations under the Credit Agreement have
been terminated:
SECTION 4.1. ENCUMBRANCES. The 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 in the Financing Agreements), and shall, subject to the
Permitted Liens, defend the Debtor's title to and other rights in the
Collateral and the Collateral Agent's 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 Financing Agreements or in
connection with any release of Collateral under Section 7.13 hereof (but only
to the extent of any Collateral so released), the 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
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
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such Accounts and from any Dealer or from any obligor under an Installment
Contract or Lease, as the case may be, any Advances to Dealers or other
amounts owing under a Dealer Agreement, Installment Contract or Lease, as
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
Advances to Dealers which have been transferred pursuant to a Permitted
Securitization, but which also cover Advances to Dealers encumbered hereby,
may contain the legend affixed in connection with the applicable Permitted
Securitization, so long as such Dealer Agreements also contain the legend
required under Section 2.5 hereof). Debtor shall also cause the Titling
Subsidiary to take the steps required under the Titling Subsidiary Agreements
properly to allocate Non-Specified Assets to the Non-Specified Interest and
Specified Assets to the applicable Specified Interests and clearly and
unambiguously to indicate such allocations on its records.
SECTION 4.3. DISPOSITION OF COLLATERAL. To the extent prohibited by
the terms of the Financing Agreements, the 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 Financing Agreements.
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
Debtor, the 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 Debtor to affix legends to
the Dealer Agreements, Installment Contracts or Leases (or folders containing
the same) prior to the times set forth in Sections 2.5 and 6.4, respectively.
Except as otherwise expressly permitted by the terms of the Financing
Agreements relating to disposition of assets, including without limitation any
Permitted Securitization and except for Permitted Liens, the Debtor agrees to
maintain and preserve the Collateral Agent's security interest in and pledge
and collateral assignment of the Collateral hereunder. Without limiting the
generality of the foregoing, the Debtor shall (a) execute and 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 Security
Documents. The 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 the Debtor unless
otherwise prohibited by law.
SECTION 4.5. INSURANCE. The Debtor shall maintain insurance of the
types and in amounts, and under the terms and conditions, specified in the
Financing Agreements and shall cause the
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Collateral Agent to be named as "lender loss payee" thereunder to the full
extent required to perfect and/or protect the Lien established hereby.
Recoveries under any such policy of insurance shall be paid as provided in the
Financing Agreements and 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 Debtor's
agents or processors, the Debtor shall, at the request of the Collateral Agent
(as directed by the Majority Benefited Parties), 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 Agent's
account subject to the Collateral Agent's instructions, and shall obtain such
acknowledgments and/or undertakings from such Persons as reasonably requested
by Collateral Agent (as directed by the Majority Benefited Parties).
SECTION 4.7. FURNISHING OF INFORMATION AND INSPECTION RIGHTS. (a)
Within 30 days following the execution and delivery of this Agreement, the
Debtor agrees to deliver to the Collateral Agent 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 Advances to Dealers, and all
Installment Contracts or Leases, as applicable, securing all such Advances to
Dealers or owned outright by Debtor, identified by account number, dealer
number (if not owned outright by Debtor) , and pool number and the outstanding
balance as of the date of such file or list. Such file or list shall be
delivered to the Collateral Agent as confidential and proprietary.
(b) Thereafter:
(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 Majority Benefited Parties), the Debtor
shall be obligated, but not more frequently than monthly; and
(ii) upon the occurrence and during the continuance of
an Event of Default, the Debtor shall be obligated, on a
monthly basis whether or not Collateral Agent shall so request,
and more frequently upon the written request of the Collateral
Agent (as directed by the Majority Benefited Parties);
to furnish to the Collateral Agent, a computer file, microfiche list or other
list identifying each of the Dealer Agreements, Advances to Dealers,
Installment Contracts and Leases encumbered hereby by pool number, account
number and dealer number (if not owned outright by Debtor) and by the
outstanding balance thereof and identifying the obligor on the relevant
Installment Contract or Lease, and the Debtor shall also furnish to the
Collateral Agent from time to time such other information with respect to
Dealer Agreements, the Advances to Dealers, 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 the
Debtor under any of the other Financing Agreements, as applicable, the
Collateral Agent shall furnish copies of the foregoing to any Lender,
Noteholder or Future Debt Holder upon its request following the occurrence and
during the continuance of any Default or Event of Default, and Debtor hereby
authorizes and approves such release. The Debtor will, at any time and from
time to time during regular business hours, upon 5
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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 the Debtor
for the purpose of examining such Records, and to discuss matters relating to
the Advances to Dealers, Installment Contracts, Leases or the Debtor's
performance hereunder and under the other Financing Documents with any of the
officers, directors, employees or independent public accountants of the 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 the 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
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 information, (v) to any prospective assignee of any note or
other instrument evidencing a Benefited 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 Benefited Party, subject to the confidentiality provisions contained in
this Agreement and any other Financing Agreement 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 Benefited Party hereunder to return such information to Collateral Agent
or the Debtor if any such Default or Event of Default is subsequently cured or
waived). Notwithstanding anything to the contrary in this Agreement, the
Collateral Agent may reply to a request from any Person for a list of Advances
to Dealers, 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 Debtor's sole cost and
expense) to take such measures as shall be reasonably requested by the Debtor
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 Debtor with written notice at least five (5) Business Days prior
to any disclosure pursuant to this Subsection 4.7(b).
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(c) Furthermore, the Debtor shall permit the Collateral Agent
and its representatives to examine, inspect and audit the Collateral and to
examine, inspect and audit the Debtor's books and Records as otherwise
provided under the Financing Agreements.
SECTION 4.8. CORPORATE CHANGES. The Debtor shall not 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 9-402(8) of the UCC unless the 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. The Debtor shall
not 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. The Debtor shall keep
accurate and complete books and records (the "Records") of the Collateral and
the Debtor's business and financial condition in accordance with the Financing
Agreements. Subject to Section 4.7, the Debtor shall from time to time at the
request of the Collateral Agent deliver to the Collateral Agent such
information regarding the Collateral and the 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. Debtor shall xxxx its books and records to reflect the security
interest of the Collateral Agent under this Agreement; provided, however, that
with respect to its computer files, Debtor's compliance with Section 2.4
hereof shall be deemed to satisfy its obligations under this sentence.
SECTION 4.10. ADMINISTRATIVE AND OPERATING PROCEDURES. The Debtor will
maintain and implement administrative and operating procedures (including
without limitation an ability to recreate records relating to the Dealer
Agreements, Advances to Dealers, 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, Advances to Dealers, Installment
Contracts and Leases encumbered hereby (including without limitation records
adequate to permit adjustments to amounts due under each of such Dealer
Agreements, Advances to Dealers, Installment Contracts and Leases), and,
unless it services the financial assets owned by the Titling Subsidiary, shall
cause the Titling Subsidiary to maintain and implement comparable procedures
and keep, maintain and/or obtain comparable information. The Debtor will give
the Collateral Agent notice of any material change in the administrative and
operating procedures of the Debtor (or the Titling Subsidiary) referred to in
the previous sentence. Notwithstanding the foregoing, Debtor shall not be
required to make or retain duplicate copies of Installment Contracts or
Leases.
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SECTION 4.11. EQUIPMENT AND INVENTORY.
(a) The Debtor shall keep the Equipment (other than vehicles) and
Inventory (other than Inventory in transit) which is in Debtor's 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 Agent's security interest in the Equipment and Inventory with the
priority required by this Agreement shall have been taken.
(b) The Debtor shall maintain the Equipment and Inventory in
accordance with the terms of the Financing Agreements.
SECTION 4.12. NOTIFICATION. The 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 Debtor shall have the right to collect
and receive payments on the Accounts, Dealer Agreements, Advances to Dealers,
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 Financing Agreements. In connection with such collections, the
Debtor may take (and, at the Collateral Agent's direction following the
occurrence and during the continuance of an Event of Default, shall take) such
actions as the Debtor or the Collateral Agent may deem necessary or advisable
to enforce collection of the Accounts, Dealer Agreements, Advances to Dealers,
Installment Contracts and other financial assets.
SECTION 4.14. VOTING RIGHTS; DISTRIBUTIONS, ETC.
(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) The 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 other Financing
Agreement; and
(ii) Except as otherwise provided in this Agreement or any of
the other Financing Agreements, the Debtor shall be entitled to
receive and retain any and all dividends, distributions and interest
paid in respect to any of the Pledged Shares; provided, however,
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that in the case of any Non-Specified Assets distributed to or for the
account of Debtor or in respect of the Non-Specified Interest, such
Dealer Agreements, Advances to Dealers, Leases and other Non-Specified
Assets shall immediately become subject to the Lien established by
this Agreement, and the applicable terms and conditions hereof,
without the requirement of any additional action on the part of
Collateral Agent or the Benefited Parties.
(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 Majority Benefited Parties as required under the
Intercreditor Agreement, (without notice to the Debtor), transfer or
register in the name of the Collateral Agent or any of its nominees,
for the equal and ratable benefit of the Lenders, the Noteholders and
the Future Debt Holders, 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 Majority Benefited
Parties as required under the Intercreditor Agreement, after delivery
of notice to the 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 (including without limitation
the right to direct the Titling Subsidiary to distribute all or any
portion of the Non-Specified Assets to or for the account of Debtor)
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 Debtor to exercise the voting and
other consensual rights which it would otherwise be entitled to
exercise pursuant to 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 Majority Benefited Parties 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.
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(iii) All dividends, interest and other distributions which
are received by the Debtor contrary to the provisions of this
Subsection 4.14(b) (including, without limitation, any Non-Specified
Assets received in respect of the Non-Specified Interest) shall be
received in trust for the benefit of the Collateral Agent, shall be
segregated from other funds and property of the Debtor 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 Debtor 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 Agent's power and authority granted pursuant to Section
5.1.
(v) Upon notice from the Collateral Agent, given, at the
direction or with the concurrence of the Majority Benefited Parties as
required under the Intercreditor Agreement, the Debtor shall cause the
Titling Subsidiary to transfer to or for the account of Debtor all or
such portion of the Non-Specified Assets as the Collateral Agent shall
specify (subject to the direction or concurrence of the Majority
Benefited Parties, as aforesaid), and to deliver all documents or
instruments evidencing the same to or for the account of Debtor, as so
directed, accompanied by such instruments of transfer as necessary or
appropriate to effectuate such transfer (as Collateral Agent shall
direct), duly executed by the Titling Subsidiary.
(vi) All rights of Debtor to designate or redesignate any
Non-Specified Assets as Specified Assets and to create any additional
Specified Interests (or in either case to allow the Titling Subsidiary
to do so), shall be suspended and shall remain so suspended until such
Event of Default shall no longer exist.
SECTION 4.15. TRANSFERS AND OTHER LIENS; ADDITIONAL INVESTMENTS. The
Debtor agrees that, (a) except with the written consent of the Collateral
Agent, it will not permit any Significant Domestic Subsidiary to issue to
Debtor or any of Debtor's other Subsidiaries any shares of stock, membership
interests, partnership units, notes or other securities or instruments
(including without limitation the Pledged Shares) in addition to or in
substitution for any of the Collateral, 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 Debtor shall, without further action by Debtor
or Collateral Agent, be automatically encumbered by this Agreement as Pledged
Shares) and (b) it will promptly upon the written request of Collateral Agent
following the issuance thereof (and in any event within three Business Days
following such request) deliver to the Collateral Agent (i)
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an amendment, duly executed by the 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 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 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 acknowledgment of any
issuer necessary or appropriate to perfect such pledge, security interest and
lien on any membership or similar ownership interest. The 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.
Furthermore, the Debtor agrees that it will not permit the Titling Subsidiary
to issue any other class or type of membership or other ownership interest to
Debtor, other than the Non-Specified Interest, or to issue or create any
Specified Interests, except in connection with and pursuant to a Permitted
Securitization and only while no Default or Event of Default has occurred and
is continuing.
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 the Debtor or an affiliate of the 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 Majority Benefited Parties. 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. 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), Debtor
will execute and deliver, or cause such Subsidiary to execute and deliver, to
the Collateral Agent a security agreement, substantially in the form of this
Agreement, granting to the Collateral Agent, for the benefit of the Benefited
Parties, a first priority security interest, mortgage
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and lien encumbering all right, title and interest of such Person in property,
rights and interests of the type included in the definition of the Collateral.
Promptly following the effective date of each acquisition or creation
by Debtor of a Significant Domestic Subsidiary, the Debtor 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), and upon such revision 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 Debtor) of
each such Significant Domestic Subsidiary so acquired or created to Collateral
Agent, for and on behalf of Benefited Parties.
ARTICLE V
RIGHTS OF THE COLLATERAL AGENT
SECTION 5.1. POWER OF ATTORNEY. The 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 the
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, the
Debtor hereby gives the Collateral Agent the power and right on behalf of the
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 Debtor:
(i) to demand, xxx for, collect or receive, in the name of
the Debtor 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; and to direct the Titling Subsidiary to distribute all or such
portion of the Non-Specified Assets to or for the account of the
Debtor, as the Collateral Agent shall specify (at the direction or
with the concurrence of the Majority Benefited Parties) and deliver
all documents or instruments
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evidencing the same to or for the account of Debtor, as so directed,
accompanied by such instruments of transfer as necessary or
appropriate to effectuate such transfer (as Collateral Agent shall
direct), duly executed and delivered by the Titling Subsidiary; (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 Debtor 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 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 Agent's option and the Debtor's
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 Agent's 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 Benefited Obligation
owing to such party under the Credit Agreement, the Note Agreements or the
Future Debt Documents, as the case may be, or when and to the extent any such
Benefited 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 Benefited Obligations owing to it (whether or
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not then due) any and all balances, credits, deposits, accounts or moneys of
Debtor 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
Benefited Obligations owing to it shall be subject to the provisions of
Sections 5 and 10 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
Security Documents (including, without limitation, the Benefited Obligations)
to any other Person, to the extent permitted by, and upon the conditions
contained in, the Intercreditor Agreement and the other Financing Agreements,
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 the 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 the Debtor, in which case Collateral Agent shall exercise good
faith and make diligent efforts to give Debtor prompt prior written notice of
such performance or attempted performance. In such event, the Debtor 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, from and including the
date of such expenditure to but excluding the date such expenditure is paid in
full. Notwithstanding the foregoing, it is expressly agreed that the
Collateral Agent shall not have any liability or responsibility for the
performance of any obligation of the Debtor 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 (i) shall take no action with regard to any Dealer which
is expressly prohibited by the related Dealer Agreement and (ii) acknowledges
that, with respect to the Titling Subsidiary, the Non-Specified Interest and
any Specified Interests, it shall be bound by the non-petition covenant
contained in the Notice of Registered Pledge delivered by it to the Titling
Subsidiary under Section 3.5 hereof.
SECTION 5.6. CERTAIN COSTS AND EXPENSES. The Debtor shall pay or
reimburse the Collateral Agent within five (5) Business Days after demand for
all reasonable costs and expenses (including reasonable attorney's and
paralegal fees and expenses supported by an itemized billing) incurred by it
in connection with the enforcement, attempted enforcement, or preservation of
any rights or remedies under this Agreement or any other Security Document
during the existence of an Event of Default or after acceleration of any of
the Benefited Obligations (including in connection with any "workout" or
restructuring regarding the Benefited Obligations, and including in any
insolvency proceeding or appellate proceeding); provided, however, that the
Debtor 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 Security Document for the
fees and expenses of one law firm in each jurisdiction governing the
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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
Benefited 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 Financing Agreements.
SECTION 5.7. INDEMNIFICATION. The Debtor shall indemnify, defend and
hold the Collateral Agent and each Benefited Party 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) of any kind or nature whatsoever which may at any time
(including at any time following repayment of the Benefited 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 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 Proceeding"
(as defined in the Intercreditor Agreement) or appellate proceeding) related
to or arising out of this Agreement or the Benefited 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 Debtor 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 the 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 Financing Agreements 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 the Debtor
on the other hand, (i) 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 Financing Agreements or (ii) the
Debtor by non-appealable judgment is the prevailing party. The agreements in
this Section 5.7 shall survive payment of all other Benefited 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 Majority
Benefited Parties as required under the Intercreditor Agreement:
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(i) In addition to all other rights and remedies granted to
the Collateral Agent in this Agreement, the Intercreditor Agreement or
in any other Financing Agreement 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, broker's board or at any of the
Collateral Agent's 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 Debtor (except as required under the Financing
Agreements 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 Agent's 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 Debtor, which right of redemption is hereby expressly
waived and released by the Debtor to the extent permitted by
applicable law. Upon the request of the Collateral Agent, the 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 the Debtor and the Collateral Agent. The
Debtor agrees 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 Debtor 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 Benefited Obligations and the
enforcement of the Collateral Agent's rights under this Agreement and
the Intercreditor Agreement. The Debtor shall, to the extent
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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 Benefited Obligations are insufficient to pay the
Benefited obligations in full. The Collateral Agent shall apply the
proceeds from the sale of the Collateral hereunder against the
Benefited Obligations in such order and manner as is provided in the
Intercreditor Agreement.
(ii) The Collateral Agent (A) 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 Agent's
nominee or nominees and (B) may direct the Titling Subsidiary to
distribute all or such portion of the Non-Specified Assets to or for
the account of Debtor, as the Collateral Agent shall specify (at the
direction or with the concurrence of the Majority Benefited Parties)
and to deliver all documents or instruments evidencing the same to or
for the account of Debtor, as so directed, accompanied by such
instruments of transfer as necessary or appropriate to effectuate such
transfer (as Collateral Agent shall direct), duly executed and
delivered by the Titling Subsidiary.
(iii) The Collateral Agent may exercise any and all rights and
remedies of the Debtor under or in respect of the Collateral,
including, without limitation, any and all rights of the Debtor 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 Agent's 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 successors and assigns to enjoy the full
benefits of the Collateral, the Debtor hereby grants to the Collateral
Agent an irrevocable, nonexclusive license (exercisable without
payment of royalty or other compensation to the 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 Collateral Agent succeeds to any of the Collateral
pursuant to an enforcement proceeding or voluntary arrangement with
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.
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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, 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 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,
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
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
Collateral Agent's 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) The Debtor further agrees to do or cause to be done, to the
extent that the 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 Debtor's expense.
6.3 ESTABLISHMENT OF SPECIAL ACCOUNT; AND LOCK BOX. Upon the
occurrence and during the continuance of any Event of Default, there shall be
established by the Debtor 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 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 Agreement 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
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continuance of any Event of Default, the Debtor agrees, upon the written
election of Collateral Agent, to establish and maintain at Debtor's sole
expense a United States Post Office lock box (the "Lock Box"), to which
Collateral Agent shall have exclusive access and control. Debtor expressly
authorizes 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, Debtor shall,
upon Collateral Agent's request, notify all account debtors, all Dealers under
Dealer Agreements encumbered hereby, and all obligors under Installment
Contracts or Leases encumbered hereby that all payments made to Debtor (a)
other than by electronic funds transfer, shall be remitted, for the credit of
Debtor, to the Lock Box, and Debtor shall include a like statement on all
invoices, and (b) by electronic funds transfer, shall be remitted to the
Special Account, and Debtor shall include a like statement on all invoices.
Debtor shall execute all documents and authorizations as reasonably required
by the Collateral Agent 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 Debtor 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.
6.4 LEGENDING INSTALLMENT CONTRACTS AND LEASES ON DEFAULT. Upon the
occurrence and during the continuance of any Event of Default, the Majority
Benefited Parties may elect (the "Election"), by directing the Collateral
Agent to notify the Debtor of such election, to affix to each Installment
Contract and Lease encumbered by this Agreement or securing Advances to
Dealers or otherwise related to a Dealer Agreement encumbered hereby (or, at
Debtor's 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". The
Election, once made by the Majority Benefited Parties, as aforesaid, shall
remain in effect, and Debtor 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 Majority Benefited Parties.
6.5 DEFAULT UNDER FINANCING AGREEMENTS. It shall constitute an
Event of Default under each of the Financing Agreements if (a) any
representation or warranty made or deemed made by the Debtor herein or in any
instrument submitted pursuant hereto proves untrue in any material adverse
respect when made or deemed made, or (b) the Debtor shall breach any covenant
or other provision hereof, and such breach shall continue for a period of
three (3) consecutive days, in the case of any failure to pay any money due
hereunder, and thirty (30) consecutive days, in the case of any other breach
hereunder or (c) this Agreement shall at any time for any reason (other than
in accordance with its terms or the terms of each of the Financing Agreements
or with the consent of the requisite Benefited Parties) cease to be valid and
binding and enforceable against the Debtor, or (d) the validity, binding
effect or enforceability hereof shall be contested by any Person, or (e) the
Debtor shall deny, prior to payment of the Benefited Obligations in full or
the termination of this Agreement according to its terms, that it has any
further liability hereunder, or (f) this Agreement (other than in accordance
with its terms or the terms of each of the Financing Agreements) shall be
terminated,
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invalidated, revoked or set aside or in any way cease to give or
provide to the Collateral Agent and the Benefited Parties the benefits
purported to be created hereby.
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 Debtor and the Collateral Agent and their
respective heirs, successors and assigns, except that the Debtor may not
assign any of its rights or obligations under this Agreement without the prior
written consent of the Collateral Agent.
SECTION 7.3. AMENDMENT; ENTIRE AGREEMENT. THIS AGREEMENT (AND THE
FINANCING AGREEMENTS 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 Debtor 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.
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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 SECURITY DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF MICHIGAN OR OF THE UNITED STATES FOR THE EASTERN DISTRICT OF
MICHIGAN, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE DEBTOR
AND THE COLLATERAL AGENT CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE DEBTOR 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 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.
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, the
Lenders, the Noteholders or the Future Debt Holders 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, the
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. The 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
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to review this Agreement with its legal counsel and that this Agreement shall
be construed as if jointly drafted by the Debtor and the Collateral Agent.
SECTION 7.12. TERMINATION. If all of the Benefited 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 Credit Agreement have been terminated, the Collateral Agent shall, upon
the written request of the Debtor, execute and deliver to the Debtor 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 Debtor (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 Debtor, execute and deliver to the Debtor a proper
instrument or instruments acknowledging the release of the security interest
and liens established hereby (a) on any Collateral (other than the Pledged
Shares) (i) which is permitted to be sold or disposed of by 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 Financing Agreements (or in the event any Financing Agreement
prohibits such sale or disposition, the applicable Benefited Parties under
such Financing Agreement shall have consented to such sale or disposition in
accordance with the terms thereof) and, at the time of such proposed release,
both before and after giving effect thereto, no Default or Event of Default
has occurred and is continuing, or (b) if such release has been approved by
the requisite Benefited Parties in accordance with Section 3(g) of the
Intercreditor Agreement.
SECTION 7.14. WAIVER OF JURY TRIAL. THE DEBTOR AND THE COLLATERAL
AGENT EACH 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
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
SECURITY DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT.
31
32
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 Financing Agreements. In the event that any provision of this Agreement
shall be inconsistent with any provision of any other Financing Agreements,
such provision of this Agreement shall govern.
* * * *
32
33
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first written above.
DEBTOR:
CORPORATION CREDIT ACCEPTANCE
By: /S/Xxxxxxx X. Xxxx
---------------------------------
---------------
Name:Xxxxxxx X. Xxxx
-------------------
Title:Chief Financial Officer
------------
---------
Address for Notices:
-------------------
Credit Acceptance Corporation
00000 X. 00 Xxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Fax No.: 000-000-0000
Telephone No.: 000-000-0000
Attention: Xxxx Xxxx
33
34
COLLATERAL AGENT:
----------------
COMERICA BANK as Collateral Agent
By: /S/ Xxxxxxx X. Xxxxxxxxx
----------------------------
Name:Xxxxxxx X. Xxxxxxxxx
--------------
Title: First Vice President
Address for Notices:
-------------------
Metropolitan Loans D
One Detroit Center, 6th Floor
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax No.: 313/000-0000
Telephone No.:313/000-0000
Attention: Xxxxxxx X. Xxxxxx
34
35
SCHEDULE A
TO
SECURITY AGREEMENT
Locations of Equipment and Inventory
(including leased locations) in the Possession of Debtor
00000 Xxxx Xxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
36
SCHEDULE B
TO
SECURITY AGREEMENT
Jurisdictions for Filing
UCC-1 Financing Statements
Michigan Secretary of State
37
SCHEDULE C
TO
SECURITY AGREEMENT
Primary Computer Systems and Software
Application and Contract System is software which utilizes the HP Unix
operating system and is resident on the Debtor's HP9000-K410 server. It was
designed by in-house personnel and TUSC, a consulting firm hired to assist
with the project.
The Loan Servicing System is software which utilizes the HP Unix
operating system and is resident on the Debtor's HP9000-K420 server. It was
designed by in-house personnel and TUSC.
The Collection System is software which utilizes the HP Unix operating
system and is resident on the Debtor's HP9000-T520 server. It was developed
and is owned by Ontario Systems Corporation and licensed to the Debtor under
an agreement dated November 15, 1989.
Further information regarding these systems is contained on the
attached excerpt from the Debtor's Form 10-K for the year ended December 31,
1997.
38
SCHEDULE D
TO
SECURITY AGREEMENT
Pledged Shares
The entire Non-Specified Interest of Debtor in the Titling Subsidiary,
evidenced by Certificate No. 1 issued under the Titling Subsidiary Agreements.
39
SCHEDULE E
TO
SECURITY AGREEMENT
Trade and Other Names
None.
40
SCHEDULE F
TO
SECURITY AGREEMENT
[FORM OF NOTICE OF REGISTERED PLEDGE]
AUTO LEASE SERVICES LLC
NOTICE OF REGISTERED PLEDGE
___________, 2001
TO: Auto Lease Service LLC and
Credit Acceptance Corporation
as Administrative Agent
for Auto Lease Services LLC
(the "Administrative Agent")
RE: Pledge of Certificate related to
Non-Specified Interest
Reference is made to the Limited Liability Company Agreement, dated as
of March 1, 2001, as amended (the "Titling Company Agreement"), among Credit
Acceptance Corporation ("CAC") as Founding Member and Auto Lease Services LLC,
as Titling Company, and the Administrative Agency Agreement dated as of March
1, 2001, between such parties, as amended (the "Administrative Agency
Agreement")
Each of the undersigned hereby certifies, represents and warrants as
follows:
1. Pursuant to Sections 5.7 and 5.9 of the Titling Company
Agreement, the Non-Specified Interest Certificate, Certificate No. 1, (the
"Pledged Certificate"), has been pledged by CAC, the existing registered
Holder thereof, (the "Pledgor"), to Comerica Bank, a Michigan banking
corporation, in its capacity as Collateral Agent for the Benefited Parties
pursuant to the Intercreditor Agreement (as such terms are defined in the
attached Pledge Documents, referred to in item 2 of this Notice) (the
"Pledgee").
2. Attached hereto as Exhibits [A and B] are true and complete
copies of the related security agreements and other agreements (the "Pledge
Documents") governing the exercise by the Pledgee of the Pledged Rights (as
defined below) of the Pledgor with respect to the Pledged Certificate, as
follows:
41
a. Amended and Restated Security Agreement dated as of March __,
2000 by CAC in favor of Comerica Bank, as Collateral Agent, for
and on behalf of the Benefited Parties; and
b. Intercreditor Agreement dated as of December 15, 1998 by and
among Comerica Bank, as Collateral Agent, the Lenders and the
Noteholders, and consented to by CAC, as amended by First
Amendment thereto dated as of March __, 2001.
3. Pursuant to the Pledge Documents, the Pledgor has agreed that
the Pledgee may exercise the rights set forth in the Pledge Documents
(collectively, the "Pledged Rights").
4. The pledge of the Pledged Certificate by the Pledgor to the
Pledgee pursuant to the Pledge Documents, and the exercise by the Pledgee of
the Pledged Rights, are each permitted by the Titling Company Agreement, and
the Pledge Documents have been duly authorized, executed and delivered, and
are enforceable by and against Pledgor and Pledgee, in accordance with their
respective terms, subject to applicable bankruptcy, reorganization,
insolvency, moratorium and similar laws affecting creditors rights generally
and to general equitable principles.
5. Accordingly, you are hereby authorized and directed to cause
the Titling Company Registry to reflect that the Pledgee has become the
Registered Pledgee with respect to the Pledged Certificate, entitled to
exercise the Pledged Rights with respect to the Pledged Certificate.
6. Furthermore, Pledgee, for itself and for and on behalf of the
Benefited Parties, hereby covenants that for a period of one year and one day
after payment in full of all distributions to all Holders pursuant to the
terms of the Titling Company Agreement, the Administrative Agency Agreement
and the Series Supplements, it will not institute against, or join any Person
in instituting against, the Titling Company any bankruptcy, reorganization,
insolvency or liquidation proceeding, or other similar proceeding, under the
laws of the United States or any state or other political subdivision thereof.
IN WITNESS WHEREOF, each of the undersigned has caused this Notice of
Registered Pledge to be duly executed and delivered by its respective officer
hereunto duly authorized, as of the date and year first above written.
CREDIT ACCEPTANCE CORPORATION,
as Pledgor
By:
------------------------------
Name:
Title:
42
COMERICA BANK, as Collateral Agent
for the Benefited Parties pursuant
to the Intercreditor Agreement, as
Pledgee
By:
-------------------------------
Name:
Title
43
FORM OF ACKNOWLEDGMENT AND CONSENT OF
AUTO LEASE SERVICES, LLC
The undersigned acknowledges receipt of: (i) notice, pursuant to
Notice of Registered Pledge dated _____________, 2001, that CREDIT ACCEPTANCE
CORPORATION ("Assigning Member") has assigned, pledged and granted to Comerica
Bank in its capacity as Collateral Agent for the Benefited Parties
("Collateral Agent") a security interest in such Assigning Member's entire
interest (which constitutes the entire Non-Specified Interest) as a member in
Auto Lease Services, LLC, a Delaware limited liability company ("Titling
Company") and (ii) a copy of the Security Agreement dated as of March __, 2001
made between the Assigning Member and Collateral Agent (in each case, as
amended or otherwise modified from time to time, the "Security Agreement").
The undersigned consents to such assignment, pledge and grant of security and
agrees that upon the written request of Collateral Agent, given at the
direction or with the concurrence of the Majority Benefited Parties as
required under the Intercreditor Agreement, the undersigned will (x) pay or
cause to be paid to Collateral Agent all monies to the extent required in the
Security Agreement, due the Assigning Member arising out of the interest of
Assigning Member in Subsidiary and (y) transfer or cause to be transferred to
Collateral Agent all or such portion of the Non-Specified Assets as Collateral
Agent shall direct, due the Assigning Member arising out of the Non-Specified
Interest of the Assigning Member in the Titling Company.
The undersigned warrants and represents to Collateral Agent that the
membership interests of Subsidiary assigned hereunder to Collateral Agent are
not (i) dealt in or traded on securities exchanges or in securities markets,
(ii) interests in a unit investment trust that is registered as an investment
company under Federal Investment Company laws and (iii) are not face amount
certificates issued by a face-amount certificate company that is registered as
an investment company under Federal Investment Company laws. And the
undersigned further represents and warrants that the undersigned is not
registered as an investment company under Federal Investment Company laws.
The undersigned warrants and represents to Collateral Agent that the
Titling Company Agreement ("Titling Company Agreement") governing the Titling
Company continues to be in full force and effect and that, to the knowledge of
the undersigned, no event has occurred or condition exists which reasonably
would be expected to result in a defense, offset or counterclaim limiting the
Titling Company's obligations to distribute any monies due or to become due to
the Assigning Member in accordance with such operating agreement. The
undersigned further warrants and represents to Collateral Agent that the
Titling Company Agreement authorizes the assignment and security interest made
by such Assigning Member to Collateral Agent. The undersigned agrees that,
unless and until Collateral Agent shall have exercised its rights and remedies
under the Security Agreement and then only to the extent set forth therein,
Collateral Agent shall have no responsibility for any of the liabilities or
obligations of the Assigning Member to the undersigned nor any interest in any
of the rights of the Assigning Member under the Titling Company Agreement.
Nothing in this
44
Acknowledgment and Consent shall be construed to expand the rights of the
Collateral Agent under the Security Agreement.
In Witness Whereof, each of the undersigned parties has executed this
acknowledgment and consent as of March __, 2001.
AUTO LEASE SERVICES, LLC
By:
------------------------------
Its:
-----------------------------
CREDIT ACCEPTANCE CORPORATION,
as Administrative Agent pursuant
to the Administrative Agency
Agreement
By:
------------------------------
Its:
-----------------------------
45
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 Security Agreement dated as of March
__, 2001, between the undersigned and Comerica Bank, as the Collateral Agent
for the benefit of the Banks and the Noteholders referred to therein (the
"Security Agreement"), and that the shares of stock, membership interests,
partnership units, notes or other instruments listed on Schedule 1 annexed
hereto shall be and become part of the Collateral referred to in the Security
Agreement and shall secure payment and performance of all Benefited 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:
-----------------------------
COMERICA BANK, as Collateral Agent
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
46
SCHEDULE I
TO
SECURITY AGREEMENT
-----------------------------------------------------------------------------------------
CLASS
OF
STOCK OR NUMBER
ISSUER OF STOCK OTHER CERTIFICATE PAR OF OUTSTANDING
OR OTHER INTEREST INTEREST NO(s) VALUE SHARES SHARES(1)
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------
ENTIRE
NON-SPECIFIED
AUTO LEASE SERVICES LLC INTEREST 1 N/A N/A N/A
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
--------
(1)Modify headings to the extent necessary to identify membership
interests, partnership units, notes or other instruments.
