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AMENDMENT NO. 5 TO CONTRIBUTION AGREEMENT
This AMENDMENT NO. 5 TO CONTRIBUTION AGREEMENT ("Amendment No. 5"),
dated as of July 20, 2001, is made between CREDIT ACCEPTANCE CORPORATION, a
Michigan corporation ("CAC") and CAC FUNDING CORP., a Nevada corporation
("Funding").
On July 7, 1998, CAC and Funding entered into a Contribution Agreement
pursuant to which CAC did assign, transfer and convey to Funding a pool of Loans
constituting the Contributed Property, and Funding did use such loans as
collateral to obtain financing from unrelated parties. On June 30, 1999,
December 15, 1999, August 8, 2000 and March 12, 2001, CAC and Funding entered
into Amendments Xx. 0, Xx. 0, Xx. 0 and No. 4, respectively, to the Contribution
Agreement to provide for the transfer by CAC to Funding of additional Loans and
related property. Funding now desires to acquire additional Loans and related
property from CAC identified herein, including CAC's rights in the Dealer
Agreements and Contracts securing payment of such Loans and the Collections
derived therefrom during the full term of this Agreement, and CAC desires to
transfer, convey and assign such additional Loans and related property to
Funding upon the terms and conditions hereinafter set forth. CAC has agreed to
service the Loans and related property to be transferred, conveyed and assigned
to Funding.
In consideration of the premises and the mutual agreements set forth
herein, it is hereby agreed by and between CAC and Funding as follows:
SECTION 1. Definitions. All capitalized terms used herein shall have
the meanings specified in the Contribution Agreement, as amended, or if not so
specified, the meaning specified in, or incorporated by reference into, the
Security Agreement or the Note Purchase Agreement, as each may be amended
through the date hereof, and shall include in the singular number the plural and
in the plural number the singular. All accounting terms not specifically defined
herein or therein shall be construed in accordance with GAAP. All terms used in
Article 9 of the Relevant UCC, and not specifically defined herein, are used
herein as defined in such Article 9. In addition, the following capitalized
terms shall have the meanings shown in this Section:
"Additional Contributed Property" means (i) all Loans, including,
without limitation, all monies due or to become due, and all monies received,
with respect thereto on or after the Cut-Off Date and all Related Security
therefor (including all of CAC's right, title and interest in and to the vehicle
retail installment sales contracts identified on Schedule 1 attached hereto),
(ii) all Collections and (v) and all proceeds (including "proceeds" as defined
in the UCC) of any of the foregoing.
"Closing Date" means July 20, 2001.
"Contribution Agreement" means the Contribution Agreement between CAC
and Funding dated July 7, 1998, as amended.
"Cut-Off Date" means July 1, 2001.
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"Loans" shall mean all amounts owing to CAC on account of advances made
by CAC pursuant to Dealer Agreements entered into between CAC and a new or used
automobile and/or light-duty truck dealer, including servicing charges,
insurance charges and service policies and all related finance charges, late
charges, and all other fees and charges charged to any such dealer, which Loans
are related to those vehicle retail installment sales contracts identified on
Schedule 1 attached hereto and are payable from Collections.
SECTION 2. Contribution and Sale of Additional Contributed Property.
(a) Upon the terms and subject to the conditions set forth herein (i) CAC hereby
assigns, transfers and conveys to Funding, and Funding hereby accepts from CAC,
on the terms and subject to the conditions specifically set forth herein, all of
CAC's right, title and interest, in, to and under the Additional Contributed
Property conveyed on the Closing Date. Such sale, assignment, transfer and
conveyance does not constitute an assumption by Funding of any obligations of
CAC or any other Person to Obligors or to any other Person in connection with
the Loans or under any Related Security, Dealer Agreement or other agreement and
instrument relating to the Loans.
(b) In connection with any such foregoing conveyance, CAC agrees to
record and file on or prior to the Closing Date, at its own expense, a financing
statement or statements with respect to the Additional Contributed Property
conveyed by CAC hereunder meeting the requirements of applicable state law in
such manner and in such jurisdictions as are necessary to perfect and protect
the interests of Funding created hereby under the Relevant UCC (subject, in the
case of Related Security constituting returned inventory, to the applicable
provisions of Section 9-306 of the Relevant UCC) against all creditors of and
purchasers from CAC, and to deliver either the originals of such financing
statements or a file-stamped copy of such financing statements or other evidence
of such filings to Funding on the Closing Date.
(c) CAC agrees that from time to time, at its expense, it will promptly
execute and deliver all instruments and documents and take all actions as may be
necessary or as Funding may reasonably request in order to perfect or protect
the interest of Funding in the Loans and other Additional Contributed Property
purchased hereunder or to enable Funding to exercise or enforce any of its
rights hereunder. CAC shall, upon request of Funding, obtain such additional
search reports as Funding shall request. To the fullest extent permitted by
applicable law, Funding shall be permitted to sign and file continuation
statements and amendments thereto and assignments thereof without CAC's
signature. Carbon, photographic or other reproduction of this Agreement or any
financing statement shall be sufficient as a financing statement.
(d) It is the express intent of CAC and Funding that the conveyance of
the Loans and other Additional Contributed Property by CAC to Funding pursuant
to this Amendment No. 5 be construed as a complete transfer of such Loans and
other Additional Contributed Property by CAC to Funding. Further, it is not the
intention of CAC and Funding that such conveyance be deemed a grant of a
security interest in the Loans and other Additional Contributed Property by CAC
to
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Funding to secure a debt or other obligation of CAC. However, in the event that,
notwithstanding the express intent of the parties, the Loans and other
Additional Contributed Property are construed to constitute property of CAC,
then (i) this Amendment No. 5 also shall be deemed to be, and hereby is, a
security agreement within the meaning of the Relevant UCC; and (ii) the
conveyance by CAC provided for in this Amendment No. 5 shall be deemed to be,
and CAC hereby grants to Funding, a security interest in, to and under all of
CAC's right, title and interest in, to and under the Additional Contributed
Property, to secure the rights of Funding set forth in this Amendment No. 5 or
as may be determined in connection therewith by applicable law. CAC and Funding
shall, to the extent consistent with this Amendment No. 5, take such actions as
may be necessary to ensure that, if this Amendment No. 5 were deemed to create a
security interest in the Loans and other Additional Contributed Property, such
security interest would be deemed to be a first priority perfected security
interest in favor of Funding under applicable law and will be maintained as such
throughout the term of this Agreement.
(e) In connection with such conveyance, CAC agrees to deliver to
Funding on the Closing Date, one or more computer files or microfiche lists
containing true and complete lists of all Dealer Agreements and Loans conveyed
to Funding on the Closing Date, and all Contracts securing all such Loans,
identified by account number, dealer number, and pool number and Outstanding
Balance as of the Cut-Off Date. Such file or list shall be marked as Schedule 1
to this Amendment No. 5, shall be delivered to Funding as confidential and
proprietary, and is hereby incorporated into and made a part of this Amendment
No. 5.
SECTION 3. Consideration. The consideration for the Loans and other
Additional Contributed Property conveyed on the Closing Date to Funding by CAC
under this Amendment No. 5 shall be reflected as by a credit on the books and
records of Funding of an amount of additional contributed capital in the form of
shareholders' equity with respect to the Shares previously issued to CAC, which
amount shall be equal to the aggregate principal amount of the Loans as of the
Cut-Off Date that are contributed by CAC to Funding on the Closing Date.
SECTION 4. Representations and Warranties. CAC represents and warrants
to Funding as of the Closing Date that:
(a) Corporate Existence and Power. CAC is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate power and all
material governmental licenses, authorizations, consents and approvals
required to carry on its business in each jurisdiction in which its
business is now conducted. CAC is duly qualified to do business in, and
is in good standing in, every other jurisdiction in which the nature of
its business requires it to be so qualified, except where the failure
to be so qualified or in good standing would not have a material
adverse effect.
(b) Corporate and Governmental Authorization; Contravention. The
execution, delivery and performance by CAC of this Amendment No. 5 are
within its corporate powers,
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have been duly authorized by all necessary corporate action, require no
action by or in respect of, or filing with, any Official Body or
official thereof (except for the filing by Seller of UCC financing
statements as required by this Amendment No. 5), and do not contravene,
or constitute a default under, any provision of applicable law, rule or
regulation or of the Articles of Incorporation or Bylaws or of any
agreement, judgment, injunction, order, writ, decree or other
instrument binding upon CAC, or result in the creation or imposition of
any Adverse Claim on the assets of CAC or any of its subsidiaries
(except those created by this Agreement).
(c) Binding Effect. This Amendment No. 5 constitutes the
legal, valid and binding obligation of CAC, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws affecting the rights of
creditors generally.
(d) Perfection. CAC is the owner of all of the Loans and the
other Additional Contributed Property, free and clear of all Adverse
Claims. On or prior to the Closing Date, all financing statements and
other documents required to be recorded or filed in order to perfect
and protect the ownership interest of Funding in and to the Loans and
the other Additional Contributed Property against all creditors of and
purchasers from CAC will have been duly filed in each filing office
necessary for such purpose and all filing fees and taxes, if any,
payable in connection with such filings shall have been paid in full.
(e) Accuracy of Information. All information heretofore
furnished by CAC to Funding, the Agent, Kitty Hawk and any Bank
Investor for purposes of or in connection with this Amendment No. 5 and
the Contribution Agreement or any transaction contemplated hereby or
thereby is, and all such information hereafter furnished by CAC to
Funding, the Agent, Kitty Hawk and any Bank Investor will be, true and
accurate in every material respect, on the date such information is
stated or certified.
(f) Tax Status. CAC has filed all material tax returns
(federal, state and local) required to be filed and has paid or made
adequate provision for the payment of all taxes, assessments and other
governmental charges.
(g) Action, Suits. There are no actions, suits or proceedings
pending, or to the knowledge of CAC, threatened against or affecting
CAC or any Affiliate of CAC or its properties, in or before any court,
arbitrator or other body, which may, individually or in the aggregate,
have a material adverse effect on CAC or the Additional Contributed
Property.
(h) Place of Business. The principal place of business and
chief executive office of CAC is in Southfield, Michigan, and the
office where CAC keeps all of its Records is at the address listed in
Section 9.3 of the Contribution Agreement, or such other locations
notified to Funding in accordance with the Contribution Agreement in
jurisdictions where all
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actions required by the terms of this Amendment No. 5 and the
Contribution Agreement have been taken and completed.
(i) Good Title. Upon the contribution of the Loans and related
property to Funding pursuant to this Amendment No. 5, Funding shall
acquire all of CAC's ownership and other interest in each Loan (and in
the Related Security, Collections and proceeds with respect thereto)
and in the Related Security, Collections and proceeds with respect
thereto, in each case free and clear of any Adverse Claim.
(j) Tradenames, Etc. As of the date hereof CAC has not, within
the last five (5) years, operated under any tradenames other than its
corporate name, nor has it changed its name, merged with or into or
consolidated with any other corporation or been the subject of any
proceeding under Xxxxx 00, Xxxxxx Xxxxxx Code (Bankruptcy).
(k) Nature of Loans, Contracts. Each Loan represented by CAC
to be an Eligible Loan, or included in the calculation of the Aggregate
Outstanding Eligible Loan Balance, at the time of such representation,
or at the time of such calculation, as applicable, in fact satisfies
the definition of "Eligible Loan" set forth in the Security Agreement.
Each Contract classified as an "Eligible Contract" (or included in any
aggregation of balances of "Eligible Contracts") by CAC satisfies at
the time of such classification the definition of "Eligible Contract"
set forth in the Security Agreement.
(l) Amount of Loans. As of the Cut-Off Date, as reported in
the loan servicing system of CAC, the Aggregate Outstanding Eligible
Loan Balance was not less than $321,739,071 and the Aggregate
Outstanding Eligible Loan Balance with respect to the Loans being
conveyed hereunder was not less than $142,240,258.
(m) Collection Guidelines. Since July 7, 1998, there have been
no material changes in the Collection Guidelines other than as
permitted hereunder and under the Security Agreement. Since such date,
no material adverse change has occurred in the overall rate of
collection of the Loans.
(n) Collections and Servicing. Since July 7, 1998, there has
been no material adverse change in the ability of the Servicer to
service and collect the Loans.
(o) Not an Investment Company. CAC is not, and is not
controlled by, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or each is exempt from all
provisions of such Act.
(p) ERISA. Each of CAC and its ERISA Affiliates is in
compliance in all material respects with ERISA and no lien exists in
favor of the Pension Benefit Guaranty Corporation on any of the Loans.
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(q) Bulk Sales. No transaction contemplated by this Amendment
No. 5 requires compliance with any bulk sales act or similar law.
(r) Preference; Voidability. The transfer of the Loans,
Collections, Related Security and other Additional Contributed Property
by the Servicer to Funding, has not been made for or on account of an
antecedent debt owed by Funding to CAC, or by CAC to Funding, and
neither of such transfers is or may be voidable under any Section of
the Bankruptcy Reform Act of 1978 (11 U.S.C.ss.ss.101 et seq.), as
amended. After giving effect to the transfer of the Additional
Contributed Property hereunder, CAC will not be insolvent.
(s) Consents, Licenses, Approvals. With respect to each Dealer
Agreement and each Loan and Contract and all other Additional
Contributed Property, all consents, licenses, approvals or
authorizations of or registrations or declarations with any
Governmental Authority required to be obtained, effected or given by
CAC, in connection with the conveyance of such Loan, Contract or other
Additional Contributed Property to Funding have been duly obtained,
effected or given and are in full force and effect.
(t) Schedule 1. Schedule 1 to this Amendment No. 5 is and will
be an accurate and complete listing of all Dealer Agreements and Loans
in all material respects and all Contracts securing such Loans on the
date each such Dealer Agreement, Contract and Loan was added to
Schedule 1, and the information contained therein with respect to the
identity of such Dealer Agreements and Loans and all Contracts securing
such Loans and the Outstanding Balances thereunder and under the
related Contracts is and will be true and correct in all material
respects as of each such date.
(u) Adverse Selection. No selection procedure believed by CAC
to be adverse to the interests of Funding has been or will be used in
selecting the Dealer Agreements or the Loans (it being expressly
understood that the Loans consist of closed pools of Loans under the
related Dealer Agreements).
(v) Use of Proceeds. No proceeds of any contribution hereunder
will be used for a purpose that violates, or would be inconsistent
with, Regulations T, U or X promulgated by the Board of Governors of
the Federal Reserve System.
The representations and warranties set forth in this Section 4 shall survive the
conveyance of the Additional Contributed Property to Funding, and termination of
the rights and obligations of Funding and CAC under this Amendment No. 5. Upon
discovery by Funding or CAC of a breach of any of the foregoing representations
and warranties, the party discovering such breach shall give prompt written
notice to the other within three Business Days of such discovery.
SECTION 5. Reaffirmation of Covenants, etc. CAC and Funding each
reaffirm to the other
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the covenants, undertakings, agreements and obligations set forth in Articles V
and VI of the Contribution Agreement as is the same were set forth herein in
full and made applicable to the Additional Contributed Property.
SECTION 6. Effectiveness. This Amendment No. 5 shall become effective
on July 19, 2001.
SECTION 7. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN.
SECTION 8. Counterparts. This Amendment No. 5 may be executed in two
or more counterparts including telecopy transmission thereof (and by different
parties on separate counterparts), each of which shall be an original, but all
of which together shall constitute one and the same instrument.
SECTION 9. Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
SECTION 10. Ratification. Except as expressly affected by the
provisions hereof, the Contribution Agreement, as amended hereby, shall remain
in full force and effect in accordance with its terms and is hereby ratified and
confirmed by the parties hereto. On and after the date hereof, each reference in
the Contribution Agreement to "this Agreement", "hereunder", "herein" or words
of like import shall mean and be a reference to the Contribution Agreement as
amended by this Amendment No. 5.
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IN WITNESS WHEREOF, Funding and CAC each have caused this Amendment No.
5 to the Contribution Agreement to be duly executed by their respective officers
as of the day and year first above written.
CAC FUNDING CORP.
By: /S/ Xxxxxxx X. Xxxx
----------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Treasurer and Chief Financial Officer
CREDIT ACCEPTANCE CORPORATION,
individually and as Servicer
By: /S/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
Title: Treasurer and Chief Financial Officer
Acknowledged and agreed as
of the date first above written:
KITTY HAWK FUNDING CORPORATION
By: /S/ Xxxx Xxx
-----------------------------------------
Name: Xxxx Xxx
Title: Vice President
BANK OF AMERICA, N.A., as Agent
By: /S/ Xxxxxxxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxxxxxxx X. Xxxxx
Title: Vice President
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