Exhibit 10(g)
FIRST AMENDMENT TO
RECEIVABLES PURCHASE AGREEMENT
THIS FIRST AMENDMENT dated as of February 28, 1997 to RECEIVABLES
PURCHASE AGREEMENT (this "Amendment") is entered into among AFC FUNDING
CORPORATION, an Indiana corporation (the "Seller"), AUTOMOTIVE FINANCE
CORPORATION, an Indiana corporation (the "Servicer"), POOLED ACCOUNTS RECEIVABLE
CAPITAL CORPORATION, a Delaware corporation (the "Purchaser"), and XXXXXXX XXXXX
SECURITIES INC., a Delaware corporation, as agent for Purchaser (the "Agent").
R E C I T A L S
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1. The Seller, the Servicer, the Purchaser and the Agent are parties to
that certain Receivables Purchase Agreement dated as of December 31, 1996 (the
"Agreement").
2. The Seller, the Servicer, the Purchaser and the Agent desire to
amend the Agreement as hereinafter set forth.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Certain Defined Terms. Capitalized terms which are used herein
without definition and that are defined in the Agreement shall have the same
meanings herein as in the Agreement.
2. Amendments to Agreement. The Agreement is amended as follows:
2.1 Amendment to Section 1.4 (b)(ii). Clause (b)(ii) of Section 1.4 of
the Agreement is amended to read as follows:
"(ii) subject to Section 1.4(f), if such day is not a
Termination Day, remit to the Seller (a) on behalf of the Purchaser,
the remainder of the percentage of such Collections, represented by the
Participation; such Collections shall first be used, if the Originator
or any Affiliate of the Seller is the Servicer, to pay any accrued but
unpaid Servicing Fee to the Servicer and the remainder shall be
automatically reinvested in Pool Receivables, and in the Related
Security and Collections and other proceeds with respect thereto, and
the Participation shall be automatically recomputed pursuant to Section
1.3; it being understood, that prior to remitting to the Seller the
remainder of such Collections by way of reinvestment in Pool
Receivables, the Servicer shall have calculated the Participation on
such day, and if such Participation shall exceed 100% of the sum of the
Net Receivables Pool Balance on such day plus the amount on deposit in
the Liquidation Account (other than amounts transferred thereto from
the Collection Account to pay Discount, the Servicing Fee and the
Program Fee pursuant to the preceding paragraph (i)), such Collections
shall not be remitted to the Seller but shall be transferred to the
Liquidation Account for the benefit of the Purchaser in accordance with
paragraph (iii) below and (b) the Seller's share of Collections;".
2.2 Automatic Termination Events. The proviso to the first sentence of
Section 2.2 of the Agreement is amended to read as follows:
"provided that, automatically upon the occurrence of any event (without
any requirement for the passage of time or the giving of notice)
described in subsection (g), (h), (k) or (m) of Exhibit V, the
Termination Date shall occur."
2.3 Servicing Fee: Section 4.6 of the Agreement is amended to read as
follows:
"Section 4.6. Servicing Fee. The Servicer shall be paid a fee,
through distributions contemplated by Section 1.4, equal to (a) at any
time AFC or an Affiliate of AFC is the Servicer, 2% per annum of the
average aggregate Outstanding Balance of all Receivables, and (b) at
any time a Person other than AFC or an Affiliate of AFC is the
Servicer, 110% of the Servicer's cost of acting as Servicer. The
Servicing Fee shall not be payable to the extent funds are not
available to pay the Servicing Fee pursuant to Section 1.4."
2.4 Costs and Expenses. Section 5.4(a) of the Agreement is amended to
read as follows:
"(a) In addition to the rights of indemnification granted
under Section 3.1 hereof, the Seller agrees to pay on demand all
reasonable costs and expenses in connection with the preparation,
execution, delivery and administration (including periodic auditing of
Pool Receivables) of this Agreement, the Liquidity Agreement, the
Purchase and Sale Agreement and the other documents and agreements to
be delivered hereunder or in connection herewith, including all
reasonable costs and expenses relating to the amending, amending and
restating, modifying or supplementing of this Agreement, the Liquidity
Agreement, the Purchase and Sale
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Agreement and the other documents and agreements to be delivered
hereunder or in connection herewith and the waiving of any provisions
thereof, and including in all cases, without limitation, Attorney Costs
for the Agent, the Purchaser, each Program Support Provider and their
respective Affiliates and agents with respect thereto and with respect
to advising the Agent, the Purchaser, each Program Support Provider and
their respective Affiliates and agents as to their rights and remedies
under this Agreement and the other Transaction Documents (provided the
costs and expenses payable in connection with the administration of the
Transaction Documents (excluding any costs and expenses in connection
with any amendment, amendment and restatement, modification, supplement
or waiver and any costs and expenses in connection with enforcement) in
any year shall not exceed $25,000), and all reasonable costs and
expenses, if any (including Attorney Costs), of the Agent, the
Purchaser, each Program Support Provider and their respective
Affiliates and agents, in connection with the enforcement of this
Agreement and the other Transaction Documents."
2.5 Default Ratio. The definition of "Default Ratio" in Exhibit I to
the Agreement is amended to read as follows:
"'Default Ratio' means the ratio (expressed as a percentage
and rounded upward to the nearest 1/100th of 1%) computed as of the
last day of each calendar month by dividing (i) the aggregate
Outstanding Balance of all Pool Receivables that were 91-120 days past
due on such day or that would have been 91-120 days past due on such
day had they not been written off the books of the Seller (the due date
being determined, in each case, without reference to any extension that
extends the due date to a date more than 90 days past the date such
Receivable arose (provided that the determination of such due date
shall include any extension that extends the due date to a date between
91 and 120 days past the date of such Receivable arose if, after giving
effect to such extension, such Receivable was still an Eligible
Receivable)) plus the aggregate amount of non-cash adjustments that
reduced the Outstanding Balance of any Pool Receivable during such
month by (ii) the aggregate amount of Pool Receivables that were
generated by the Originator during the calendar month that occurred
five calendar months prior to the calendar month ending on such day."
2.6 Defaulted Receivable. Clause (ii) of the definition of Defaulted
Receivable is amended by deleting the reference to "paragraph A. (g)" and
inserting in its place "paragraph (g)".
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2.7 Delinquent Receivable. The definition of "Delinquent Receivable"
in Exhibit I to the Agreement is amended to read as follows:
"`Delinquent Receivable' means a Receivable which is not a
Defaulted Receivable as to which any payment, or part thereof, remains
unpaid for more than 30 days after the due date for such payment (such
due date being determined without reference to any extension that
extends the due date to a date more than 90 days past the date such
Receivable arose (provided that the determination of such due date
shall include any extension that extends the due date to a date between
91 and 120 days past the date of such Receivable arose if, after giving
effect to such extension, such Receivable was still an Eligible
Receivable))."
2.8 Eligible Contract. The definition of Eligible Contract in Exhibit
I to the Agreement is amended to read as follows:
"Eligible Contract" means a Contract in one of the forms set
forth in Schedule IV with such variations as AFC shall approve
in its reasonable business judgment that shall not result in
materially lesser rights for the Originator, the Seller or the
Purchaser.
2.9 Insolvency. Paragraph (g) of Exhibit V to the Agreement is amended
to read as follows:
"(g) The Originator, ADESA Corporation, Minnesota Power &
Light Company or Seller shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the
Originator, ADESA Corporation, Minnesota Power & Light Company or
Seller seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment
of a receiver, trustee, custodian or other similar official for
it or for and substantial part of its property and, in the case
of any such proceeding instituted against it (but not instituted by
it), either such proceeding shall remain undismissed or unstayed for a
period of 60 days, or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief
against, or the appointment of a receiver,
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trustee, custodian or other similar official for, it or for any
substantial part of its property) shall occur; or the Originator,
ADESA Corporation, Minnesota Power & Light Company or Seller shall
take any corporate action to authorize any of the actions set forth
above in this paragraph (g); or"
2.10 Loss Reserve. The definition of Loss Reserve in Exhibit I to the
Agreement is amended to read as follows:
"`Loss Reserve' means, for the Participation, on any date, an
amount equal to the product of (a) the quotient obtained by dividing
(i) the Loss Percentage by (y) 1 - the Loss Percentage and (b) the
Investment at such time."
2.11 Performance Guaranty. Exhibit I to the Agreement is amended by
adding the following defined term in proper alphabetical order:
"`Performance Guaranty' means the Performance Guaranty, dated
as of February 28, 1997, made by ADESA Corporation in favor of the
Agent for the benefit of the Purchaser, the Agent and each Program
Support Provider, as the same may be amended, supplemented or otherwise
modified from time to time."
2.12 Net Spread. Paragraph (j) of Exhibit V to the Agreement is
amended to read as follows:
"(j) The Net Spread shall be 6% or less at any time; or"
2.13 Net Worth. Paragraph (n) of Exhibit V to the Agreement is amended
to read as follows:
"(n) The Tangible Net Worth of the Seller shall be less than
$1,000,000 or the Tangible Net Worth of the Originator shall be less
than the lesser of (i) $18,000,000 and (ii) the result of: (A)
$12,000,000 plus (B) 50% of the sum of the net income of the Originator
for each fiscal quarter of the Originator that, at the time of
determination, has concluded for which net income of the Originator was
positive, commencing with the fiscal quarter ending March 31, 1997."
2.14 Validity of Performance Guaranty. Exhibit V to the Agreement is
amended by inserting the following at the end thereof:
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" ; or (q) The Performance Guaranty shall cease to be in full
force and effect with respect to ADESA Corporation, ADESA Corporation
shall fail to comply with or perform any provision of the Performance
Guaranty, or ADESA Corporation (or any Person by, through or on behalf
of ADESA Corporation) shall contest in any manner the validity, binding
nature or enforceability of the Performance Guaranty with respect to
ADESA Corporation".
3. Representations and Warranties. Each of the Seller and the Servicer
hereby represents and warrants to the Agent and the Purchaser as follows:
(a) Representations and Warranties. The representations and
warranties of such Person contained in Exhibit III to the Agreement are
true and correct as of the date hereof (unless stated to relate solely
to an earlier date, in which case such representations and warranties
were true and correct as of such earlier date).
(b) Enforceability. The execution and delivery by such Person
of this Amendment, and the performance of its obligations under this
Amendment and the Agreement, as amended hereby, are within its
corporate powers and have been duly authorized by all necessary
corporate action on its part. This Amendment and the Agreement, as
amended hereby, are its valid and legally binding obligations,
enforceable in accordance with its terms.
(c) Termination Event. No Termination Event or Unmatured
Termination Event has occurred and is continuing.
4. Effectiveness. This Amendment shall become effective as of the date
hereof upon receipt by the Agent of the following, each duly executed and dated
as of the date hereof (or such other date satisfactory to the Agent), in form
and substance satisfactory to the Agent:
(a) counterparts of this Amendment (whether by facsimile or
otherwise) executed by each of the parties hereto;
(b) a Performance Guaranty executed by ADESA Corporation
("ADESA");
(c) a written statement from Xxxxx'x Investors Service, Inc.
and Standard & Poor's that this Amendment will not result in a
downgrade or withdrawal of the rating of the Notes;
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(d) a favorable opinion of Ice Xxxxxx Xxxxxxx & Xxxx, counsel
to the Seller, the Servicer and ADESA, as to such matters as the Agent
may request;
(e) a favorable opinion of Xxxxxx X. Xxxx, Esq., in-house
counsel for the Seller, the Servicer and ADESA, as to such matters as
the Agent may request;
(f) such other documents and instruments as the Agent may
reasonably request.
5. Effect of Amendment. Except as expressly amended and modified by
this Amendment, all provisions of the Agreement shall remain in full force and
effect. After this Amendment becomes effective, all references in the Agreement
(or in any other Transaction Document) to "the Receivables Purchase Agreement,"
"this Agreement," "hereof," "herein" or words of similar effect, in each case
referring to the Agreement, shall be deemed to be references to the Agreement as
amended by this Amendment. This Amendment shall not be deemed to expressly or
impliedly waive, amend or supplement any provision of the Agreement other than
as set forth herein.
6. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties on separate counterparts, and each
counterpart shall be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
7. Governing Law. This Amendment shall be governed by, and construed in
accordance with, the internal laws of the State of Indiana without reference to
conflict of laws principles.
8. Section Headings. The various headings of this Amendment are
inserted for convenience only and shall not affect the meaning or interpretation
of this amendment or the Agreement or any provision hereof or thereof.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
AFC FUNDING CORPORATION
By: Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
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Title: Chief Financial Officer
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AUTOMOTIVE FINANCE CORPORATION
By: Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
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Title: Chief Financial Officer
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POOLED ACCOUNTS RECEIVABLE
CAPITAL CORPORATION
By: Xxxxxxx X. Xxxxxx
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Name: XXXXXXX X. XXXXXX
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Title: VICE PRESIDENT
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XXXXXXX XXXXX SECURITIES INC.
By: Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
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Title: Managing Director
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By: Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Sr. Executive Vice
President
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