<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 2, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
CREDIT ACCEPTANCE CORPORATION
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
MICHIGAN 38-1999511
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
25505 WEST TWELVE MILE ROAD, SUITE 3000
SOUTHFIELD, MICHIGAN 48034
(248) 353-2700
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
BRETT A. ROBERTS
CREDIT ACCEPTANCE CORPORATION
25505 WEST TWELVE MILE ROAD, SUITE 3000
SOUTHFIELD, MICHIGAN 48034
(248) 353-2700
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------
COPY TO:
MARK A. METZ, ESQ. SCOTT N. GIERKE, ESQ.
Dykema Gossett PLLC McDermott, Will & Emery
400 Renaissance Center 227 Monroe Street
Detroit, MI 48243 Chicago, IL 60606-5096
(313) 568-5434 (312) 984-7521
------------------------------
Approximate date of commencement of proposed sale to public: From time to
time after this Registration Statement is declared effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or investment plans, please check the following box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
reinvestment plans, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
<S> <C> <C>
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED PRICE(1) REGISTRATION FEE
Debt Securities....................... $300,000,000 $90,910
</TABLE>
(1) Estimated solely for purposes of computing the registration fee, not
including accrued interest, if any. Any offering of Debt Securities
denominated in any foreign currency or foreign currency units will be
treated as the equivalent in U.S. dollars based on the exchange rate
applicable to the purchase of such Debt Securities from the Registrant.
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(A)
MAY DETERMINE.
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<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED JULY 2, 1997
PROSPECTUS
$300,000,000
CREDIT ACCEPTANCE CORPORATION
DEBT SECURITIES
Credit Acceptance Corporation ("CAC" or the "Company") may from time to time
offer up to $300,000,000 aggregate principal amount of debt securities (the
"Debt Securities") in offerings made by means of this Prospectus. The Company
may issue Debt Securities in separate series and may, prior to the time they are
issued, establish additional terms to govern Debt Securities in each series. A
Prospectus Supplement will be prepared with respect to each series of Debt
Securities which will disclose terms governing the Debt Securities in that
series, including the title, aggregate principal amount, currency or currencies
in which the principal (and premium, if any) and any interest are payable,
denominations, maturity, rate (which may be fixed or variable) and time of
payment of any interest, any additional covenants, any terms for redemption at
the option of the Company or the holder, any terms for sinking fund payments,
any listing on a securities exchange, whether such securities will be
represented by one or more global securities and any initial public offering
price and other terms in connection with the offering and sale of that series of
the Debt Securities.
The Company may sell Debt Securities to or through underwriters or dealers,
and/or through agents designated from time to time and may also sell Debt
Securities directly to other purchasers. Such underwriters may include William
Blair & Company, L.L.C., First Chicago Capital Markets, Inc. and NationsBanc
Capital Markets, Inc. or may be a group of underwriters represented by firms
including one or more of such firms. Such firms may also act as agents. See
"Plan of Distribution". If any agents of the Company or any underwriters are
involved in the sale of any issue of the Debt Securities, the names of such
agents or underwriters and any applicable commissions or discounts payable to
them will be set forth in the Prospectus Supplement relating to that issue of
Debt Securities.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is ______________, 1997
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549
and at the following regional offices of the Commission: New York Regional
Office, 7 World Trade Center, 13th Floor, New York, New York 10048; and Chicago
Regional Office, Suite 1400, 500 West Madison Street, Chicago, Illinois
60661-2511. In addition, copies of such material can be obtained at prescribed
rates from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549. The Commission also maintains a Web site
(http://www.sec.gov) that contains reports, proxy and information statements and
other information regarding the Company.
This Prospectus is a part of a Registration Statement on Form S-3 filed by
the Company with the Commission under the Securities Act of 1933, as amended
(the "Securities Act"). This Prospectus omits certain of the information
included in such Registration Statement. The Registration Statement may be
inspected by anyone at the office of the Commission without charge, and copies
of all or any part of it may be obtained upon payment of the Commission's charge
for copying. For further information about the Company and its securities,
reference is hereby made to such Registration Statement, and to the exhibits and
financial schedules filed as part thereof or otherwise incorporated herein. Each
summary herein of additional information included in the Registration Statement
or any exhibit thereto is qualified in its entirety by reference to such
information or exhibit.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents have been filed by the Company (File No. 0-20202)
with the Commission and are hereby incorporated by reference herein:
(i) Annual Report on Form 10-K for the year ended December 31, 1996; and
(ii) Quarterly Report on Form 10-Q for the quarter ended March 31, 1997.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the securities
covered by this Prospectus shall be deemed to be incorporated herein by
reference and to be a part hereof from the respective date of filing of each
such document. Any statement contained in a document incorporated by reference
or deemed to be incorporated by reference in this Prospectus shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any subsequently filed document which also is
incorporated or deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
Copies of documents incorporated by reference herein may be obtained without
charge (other than for exhibits to such documents) upon written or oral request
directed to the Company's principal executive office, located at 25505 West
Twelve Mile Road, Suite 3000, Southfield, Michigan 48034 (telephone number:
(248) 353-2700), to the attention of the Chief Financial Officer.
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<PAGE>
THE COMPANY
Credit Acceptance Corporation is a specialized financial services company
which provides funding, receivables management, collection, sales training and
related products and services to automobile dealers located in the United
States, the United Kingdom, Ireland and Canada. The Company assists dealers who
have executed a servicing agreement with the Company ("Dealers") with the sale
of used vehicles by providing an indirect source of financing for buyers with
limited access to traditional sources of consumer credit (the "Non-prime
Consumers"). The Company also provides Dealers with enhancements to the
Company's program which provide the Non-prime Consumer with the opportunity to
purchase point-of-sale dual interest collateral protection insurance, credit
life and disability insurance and vehicle service contracts. To a significantly
lesser extent, the Company assists Dealers in financing their inventories and
businesses by providing floor plan financing and secured working capital loans.
The Company was incorporated in Michigan during 1972. Its executive offices
are located at 25505 West Twelve Mile Road, Suite 3000, Southfield, Michigan
48034, telephone: (248) 353-2700.
USE OF PROCEEDS
Except as may be otherwise set forth in a Prospectus Supplement for any
series of Debt Securities, the net proceeds to be received by the Company from
the sale of Debt Securities will be added to the general funds of the Company
and may be used for various corporate purposes, including to repay a portion of
the Company's outstanding debt, to increase the Company's acceptance of retail
installment sales contracts, to finance possible acquisitions of other
businesses, to further penetrate existing markets and to enter new markets, and
for other corporate purposes. Pending such use, net proceeds may be temporarily
invested in short-term securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company for the periods indicated. The ratio of earnings to fixed charges
was computed by dividing earnings by fixed charges. For this purpose, "earnings"
consist of earnings before income taxes and "fixed charges", and "fixed charges"
consist of interest on indebtedness, amortization of deferred debt costs and the
portion of rental expenses which is deemed to be representative of the interest
component.
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
- ----------------------------------------------------- --------------------
1992 1993 1994 1995 1996 1996 1997
- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
65.22 320.63 12.67 6.12 5.64 7.45 4.20
</TABLE>
3
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under an Indenture (the "Indenture")
between the Company and The Bank of New York, as Trustee (the "Trustee"). A copy
of the form of Indenture has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part. The following brief summary of
certain provisions of the Indenture does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, all of the
provisions of the Indenture, and is further qualified by any description
contained in the applicable Prospectus Supplement. Certain terms capitalized and
not otherwise defined herein are defined in the Indenture. Wherever particular
sections or defined terms of the Indenture are referred to, such sections or
defined terms are incorporated herein by reference. The Debt Securities may be
issued from time to time in one or more series. The terms of each series of Debt
Securities will be established by or pursuant to a resolution of the Board of
Directors of the Company and set forth or determined in the manner provided in
an Officers' Certificate or by a supplemental indenture. The particular terms of
the Debt Securities offered pursuant to any Prospectus Supplement will be
described in such Prospectus Supplement.
GENERAL
The Indenture will not limit the aggregate principal amount of Debt
Securities which may be issued thereunder nor the amount of other debt which may
be issued by the Company. The Debt Securities will be unsecured obligations of
the Company and will rank on a parity with all other unsecured and
unsubordinated indebtedness of the Company.
Unless otherwise indicated in the applicable Prospectus Supplement, the Debt
Securities of any series will be issued only in fully registered form in
denominations of $1,000 or any amount in excess thereof which is an integral
multiple of $1,000. (Section 302) Debt Securities may be issuable in the form of
one or more Global Securities, as described below under "--Global Securities."
The Debt Securities (other than those issued in the form of a Global Security)
are exchangeable or transferable without charge therefor, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charges payable in connection therewith and require the holders to furnish
appropriate endorsements and transfer documents. (Section 305)
Debt Securities may be issued as Original Issue Discount Debt Securities to
be sold at a substantial discount below their principal amount. Special federal
income tax and other considerations applicable thereto and special federal tax
and other considerations applicable to any Debt Securities which are denominated
in a currency or currency unit other than United States dollars will be
described in the Prospectus Supplement relating thereto.
Unless otherwise indicated in the applicable Prospectus Supplement,
principal of and any premium and interest on the Debt Securities will be
payable, and the transfer of the Debt Securities will be registrable, at the
principal corporate trust office of the Trustee. In addition, unless otherwise
provided in the applicable Prospectus Supplement and, except in the case of
Global Securities, payment of interest may be made at the option of the Company
by check mailed to the address of the person entitled thereto as it appears on
the Security Register. (Sections 301, 305, 1001 and 1002).
The applicable Prospectus Supplement will describe the terms of the Debt
Securities offered thereby (the "Offered Debt Securities"), including the
following: (1) the title of the Offered Debt Securities; (2) any limit on the
aggregate principal amount of the Offered Debt Securities; (3) the Person to
whom any interest on the Offered Debt Securities will be payable, if other than
the Person in whose name it is registered on the Regular Record Date for such
interest; (4) the date or dates on which the Offered Debt Securities will mature
and any rights of extension; (5) the rate or rates at which the Offered Debt
Securities will bear interest, if any, or the formula pursuant to which such
rate or rates shall be determined, the date from which any such interest will
accrue and the dates on which any such interest on the Offered Debt Securities
will be payable and the Regular Record Dates therefor; (6) the place or places
where the
4
<PAGE>
principal of and any premium and interest on the Offered Debt Securities will be
payable; (7) the period or periods within which, the price or prices at which
and the terms and conditions upon which the Offered Debt Securities may be
redeemed, if applicable, at the option of the Company; (8) the obligation, if
any, of the Company to redeem or purchase Offered Debt Securities pursuant to
any sinking fund or analogous provisions or at the option of a Holder thereof
and the period or periods within which, the price or prices at which and the
terms and conditions upon which Offered Debt Securities shall be redeemed or
purchased, in whole or in part, pursuant to such obligation; (9) the
denominations in which any Offered Debt Securities will be issuable, if other
than denominations of $1,000 or any amount in excess thereof which is an
integral multiple of $1,000; (10) the currency, currencies or currency units for
the payment of principal of and any premium and interest payable on the Offered
Debt Securities, if other than United States dollars, and the manner of
determining the equivalent; (11) any other event or events of default applicable
with respect to the Offered Debt Securities in addition to or in lieu of those
described below under "--Events of Default"; (12) if other than the principal
amount thereof, the portion of the principal payable upon acceleration of such
Offered Debt Securities following an Event of Default; (13) whether such Offered
Debt Securities are to be issued in whole or in part in the form of one or more
Global Securities and, if so, the identity of the Depositary for such Global
Security or Securities and the circumstances under which any such Global
Security may be exchanged for Securities registered in the name of, and any
transfer of such Global Security may be registered to, a Person other than such
Depositary or its nominee; (14) whether and under what terms and conditions the
Company may defease the Offered Debt Securities; and (15) any other terms of the
Offered Debt Securities not inconsistent with the provisions of the Indenture.
(Section 301)
GLOBAL SECURITIES
Unless otherwise specified in the applicable Prospectus Supplement, the Debt
Securities of any series will be issued in the form of one or more fully
registered Global Securities (the "Global Securities"), which will be deposited
with, or on behalf of The Depository Trust Company (the "Depositary") and
registered in the name of the Depositary's nominee. Except as provided below,
owners of beneficial interests in the Global Securities will not be entitled to
have the Global Securities registered in their names and will not receive or be
entitled to receive physical delivery of the Global Securities in definitive
form. Unless and until definitive Debt Securities are issued to owners of
beneficial interests in the Global Securities, such owners of beneficial
interests will not be recognized as Holders of the Debt Securities by the
Trustee. Hence, until such time, owners of beneficial interests in the Global
Securities will only be able to exercise the rights of Holders indirectly
through the Depositary and its participating organizations. Except as set forth
below, the certificates may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
nominee to a successor or the Depositary or a nominee of such successor.
The Depositary has advised the Company that it is a limited-purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code, and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Exchange Act. The Depositary was created to hold
securities for its participants and to facilitate the clearance and settlement
of securities transactions among its participants in such securities through
electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. The
Depositary's participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations, some of which
(and/or their representatives) own the Depositary. Access to the Depositary's
book-entry system is also available to others, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a participant, either directly or indirectly. Persons who are not participants
may beneficially own securities held by the Depositary only through
participants.
5
<PAGE>
The Depositary advises that pursuant to procedures established by it (i)
upon the issuance of the Debt Securities of any series by the Company, the
Depositary will credit the accounts of participants designated by the
underwriters with the amount of the Global Securities purchased by the
underwriters, and (ii) ownership of beneficial interests in the certificates
representing the Global Securities will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the Depositary
(with respect to participants' interests) and the participants and the indirect
participants (with respect to beneficial owners' interests). The laws of some
states require that certain persons take physical delivery in definitive form of
securities which they own. Consequently, the ability to transfer beneficial
interests in such certificates is limited to such extent.
Neither the Company, the Trustee, any Paying Agent, nor the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the certificates representing the Global Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
Principal and interest payments on the Global Securities registered in the
name of the Depositary's nominee will be made by the Trustee to the Depositary's
nominee as the registered owner of the certificates relating to the Global
Securities. The Indenture provides that the Company and the Trustee will treat
the persons in whose names the Global Securities are registered (the Depositary
or its nominee) as the owners of the Global Securities for the purpose of
receiving payment of principal and interest on the Global Securities and for all
other purposes whatsoever. Therefore, neither the Company, the Trustee nor any
Paying Agent has any direct responsibility or liability for the payment of
principal or interest on the Global Securities to owners of beneficial interests
in the certificates relating to the Global Securities. The Depositary has
advised the Company and the Trustee that its present practice is, upon receipt
of any payment of principal or interest, to immediately credit the accounts of
the participants with such payment in amounts proportionate to their respective
holdings in principal amount of beneficial interests in the certificates
relating to the Global Securities, as shown on the records of the Depositary.
Payments by participants and indirect participants to owners of beneficial
interests in the certificates relating to the Global Securities will be governed
by standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of the participants or indirect
participants.
If the Depositary is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by the Company, the
Company will issue Debt Securities in definitive form in exchange for the total
amount of the certificates representing the Global Securities. In addition, the
Company may at any time determine not to have Debt Securities represented by
Global Securities, and, in such event, the Company will issue Debt Securities in
definitive form in exchange for the total amount of the certificates
representing the Global Securities. In addition, if any event shall have
happened and be continuing that constitutes an Event of Default with respect to
the Debt Securities, the owners of beneficial interests in certificates for the
Global Securities will be entitled to receive Debt Securities in certificated
form in exchange for the Global Securities representing the Debt Securities. In
any such instance, an owner of a beneficial interest in such certificates will
be entitled to physical delivery in definitive form of Debt Securities equal in
amount to such beneficial interest and to have such Debt Securities registered
in its name.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of interest on a Debt Security on any Interest Payment Date will be made to the
Person in whose name such Debt Security (or one or more Predecessor Securities)
is registered at the close of business on the Regular Record Date for such
interest. (Section 307)
6
<PAGE>
The Company will maintain in each place of payment for any series of Debt
Securities an office or agency where Debt Securities of that series may be
presented or surrendered for payment, where Debt Securities of that series may
be surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Debt Securities of that series
and this Indenture may be served. The Company may also from time to time
designate one or more other offices or agencies where the Debt Securities of one
or more series may be presented or surrendered for any or all such purposes and
may from time to time rescind such designations.
All moneys paid by the Company to a Paying Agent for the payment of the
principal of or any premium or interest on any Debt Securities which remain
unclaimed at the end of two years after such principal, premium or interest has
become due and payable will be repaid to the Company and the Holder of such Debt
Security thereafter may look only to the Company for payment thereof. (Section
1003)
RESTRICTIVE COVENANTS
LIMITATION ON SECURED INDEBTEDNESS
The Company will not create, assume, incur or guarantee, and will not permit
any Subsidiary to create, assume, incur or guarantee, any Secured Indebtedness
without making provision whereby all the Debt Securities shall be secured
equally and ratably with (or prior to) such Secured Indebtedness (together with,
if the Company shall so determine, any other Debt of the Company or such
Subsidiary then existing or thereafter created which is not subordinate to the
Debt Securities) so long as such Secured Indebtedness shall be outstanding
unless such Secured Indebtedness, when added to (i) the aggregate amount of all
Secured Indebtedness then outstanding (not including in this computation Secured
Indebtedness if the Debt Securities are secured equally and ratably with (or
prior to) such Secured Indebtedness and further not including in this
computation any Secured Indebtedness which is concurrently being retired) and
(ii) the aggregate amount of all Attributable Debt then outstanding pursuant to
Sale and Lease-Back Transactions entered into by the Company after May 15, 1997
or entered into by a Subsidiary after May 15, 1997 or, if later, the date on
which it became a Subsidiary (not including in this computation any Attributable
Debt which is concurrently being retired), would not exceed 3% of Consolidated
Net Tangible Assets. In addition, the Company may create, assume, incur or
guaranty Secured Indebtedness in connection with Securitizations. (Section 1008)
LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS. The Company will not, and
will not permit any Subsidiary to, enter into any Sale and Lease-Back
Transaction unless (i) the sum of (a) the Attributable Debt to be outstanding
pursuant to such Sale and Lease-Back Transaction, (b) all Attributable Debt then
outstanding pursuant to all other Sale and Lease-Back Transactions entered into
by the Company after May 15, 1997, or entered into by a Subsidiary after May 15,
1997 or, if later, the date on which it became a Subsidiary, and (c) the
aggregate of all Secured Indebtedness then outstanding (other than Secured
Indebtedness with which the Debt Securities are secured equally and ratably and
Secured Indebtedness issued in connection with one or more Securitizations)
would not exceed 3% of the Company's Consolidated Net Tangible Assets or (ii) an
amount equal to the greater of (a) the net proceeds to the Company or the
Subsidiary of the sale of the Principal Property sold and leased back pursuant
to such Sale and Lease-Back Transaction and (b) the amount of Attributable Debt
to be outstanding pursuant to such Sale and Lease-Back Transaction is applied to
the retirement of Funded Debt of the Company or any Subsidiary (other than
Funded Debt which is subordinate to the Debt Securities or which is owing to the
Company or any Subsidiary) within 180 days after the consummation of such Sale
and Lease-Back Transaction. (Section 1009)
CERTAIN DEFINITIONS
The term "Attributable Debt" when used in connection with a Sale and
Lease-Back Transaction involving a Principal Property shall mean, at the time of
determination, the lesser of: (a) the fair value of
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<PAGE>
such property (as determined in good faith by the Board of Directors of the
Company); or (b) the present value of the total net amount of rent required to
be paid under such lease during the remaining term thereof (including any
renewal term or period for which such lease has been extended), discounted at
the rate of interest set forth or implicit in the terms of such lease or, if not
practicable to determine such rate, the weighted average interest rate per annum
(in the case of Original Issue Discount Securities, the imputed interest rate)
borne by the Securities of each series outstanding pursuant to the Indenture
compounded semi-annually. For purposes of the foregoing definition, rent shall
not include amounts required to be paid by the lessee on account of or
contingent upon maintenance and repairs, insurance, taxes, assessments, water
rates and similar charges, unless such costs are included in base rent in the
applicable lease. In the case of any lease which is terminable by the lessee
upon the payment of a penalty, such net amount shall be the lesser of the net
amount determined assuming termination upon the first date such lease may be
terminated (in which case the net amount shall also include the amount of the
penalty, but no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated) and the net
amount determined assuming no such termination.
The term "Consolidated Net Tangible Assets" shall mean, as of any particular
time, total assets of the Company and its subsidiaries (excluding applicable
reserves and other properly deductible items) less goodwill, patents and
trademarks, to the extent included in total assets; all as set forth on the most
recent consolidated balance sheet of the Company and its Subsidiaries and
computed in accordance with generally accepted accounting principles.
The term "Debt" shall mean (without duplication), with respect to any
Person, whether recourse is to all or a portion of the assets of such Person and
whether or not contingent, (i) every obligation of such Person for money
borrowed, (ii) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations Incurred in connection
with the acquisition of property, assets or businesses, (iii) every
reimbursement obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
Person, (iv) the present value of all payments due under any arrangement for
retention of title or any conditional sale agreement (other than a capital
lease, trade accounts payable or accrued liabilities arising in the ordinary
course of business) discounted at the implicit rate, if known, with respect
thereto or, if unknown, at 9% per annum, (v) every obligation to pay rent or
other payment amounts of such Person with respect to any Sale and Lease-Back
Transaction to which such Person is a party and (vi) every obligation of the
type referred to in Clauses (i) through (v) of another Person and all dividends
of another Person the payment of which, in either case, such Person has
guaranteed or is responsible or liable, directly or indirectly, as obligor, or
otherwise; provided, that dealer holdbacks shall not be considered Debt of the
Company or its Subsidiaries.
The term "Funded Debt" means any Debt maturing more than one year from the
date of issuance thereof, including any indebtedness renewable or extendible at
the option of the obligor to a date later than one year from the date of the
original issuance thereof.
The term "Principal Property" shall mean the land, land improvements,
buildings and fixtures (to the extent they constitute real property interests,
including any leasehold interest therein) constituting any office facility,
operating facility or service facility (whether now owned or hereafter acquired)
which: (a) is owned by or leased to the Company or any Subsidiary; (b) is
located within the United States (or the District of Columbia); (c) has not been
determined in good faith by the Board of Directors of the Company not to be
materially important to the total business conducted by the Company and its
Subsidiaries taken as a whole; and (d) has a market value on the date as of
which the determination is being made in excess of 0.5% of Consolidated Net
Tangible Assets of the Company as most recently determined on or prior to such
date.
The term "Sale and Lease-Back Transaction" shall mean any arrangement with
any person providing for the leasing by the Company or any Subsidiary of any
Principal Property which property has been or is to be sold or transferred by
the Company or such Subsidiary to such Person.
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The term "Secured Indebtedness" means (i) Debt of the Company or a
Subsidiary which is secured by any Lien upon any of its assets and (ii) Debt of
the Company or a Subsidiary in respect of any conditional sale or other title
retention agreement covering any of its assets; but "Secured Indebtedness" shall
not include any of the following:
(a) Debt of the Company and the Subsidiaries outstanding on May 15,
1997, secured by then existing Liens upon, or incurred in connection with
conditional sales agreements or other title retention agreements with
respect to, any of its assets:
(b) Debt which is secured (1) purchase money Liens upon any assets
acquired after May 15, 1997 or (2) Liens placed on any assets subsequent to
May 15, 1997, during construction or improvement thereof (including any
improvements on any asset) or placed thereon within 180 days after the later
of acquisition, completion of construction or improvements or the
commencement of commercial operation of such asset or improvement, or (3)
conditional sale agreements or other title retention agreements with respect
as to any assets acquired after May 15, 1997, if (in each case referred to
in this subparagraph (b)) (x) such Lien or agreement secures all or any part
of the Debt incurred for the purpose of financing all or any part of the
purchase price and (y) such Lien or agreement does not extend to assets
other than the assets so acquired; provided, however, that the amount by
which the aggregate principal amount of Debt secured by any such Lien or
agreement exceeds the cost of the Company or such Subsidiary of the related
assets shall be considered to be "Secured Indebtedness";
(c) Debt which is secured by Liens on any assets, which Liens exist at
the time of acquisition (by any manner whatsoever) of such assets by the
Company or a Subsidiary;
(d) Debt of Subsidiaries owing to the Company or any other Subsidiary
and Debt of the Company owing to any Subsidiary, Debt of the Company to any
person secured solely by the guaranty of one or more Subsidiaries and Debt
of a Subsidiary secured solely by the guaranty of, or an unsecured letter of
credit issued on behalf of, the Company or one or more Subsidiaries;
(e) In the case of any corporation which becomes (by any manner
whatsoever) a Subsidiary after May 15, 1997 Debt which is secured by Liens
upon, or conditional sale agreements or other title retention agreements
with respect to, its assets, which Liens exist at the time such corporation
becomes a Subsidiary;
(f) Guarantees by the Company of Secured Indebtedness and Attributable
Debt of any Subsidiary and guarantees by a Subsidiary of Secured
Indebtedness and Attributable Debt of the Company and any other
Subsidiaries;
(g) Attributable Debt arising from any Sale and Lease-Back Transactions;
(h) Debt secured by Liens on assets of the Company or a Subsidiary in
favor of the United States of America, any State, Territory or possession
thereof, or the District of Columbia, or any department, agency or
instrumentality or political subdivision of the United States of America or
any State, Territory or possession thereof, or the District of Columbia, or
in favor of any other country or any political subdivisions thereof, if such
Debt was incurred for the purpose of financing all or any part of the
purchase price or the cost of construction of the property subject to such
Lien; provided, however, that the amount by which the aggregate principal
amount of Debt secured by any such Lien exceeds the cost of the Company or
such subsidiary of the related acquisition or construction shall be
considered "Secured Indebtedness";
(i) The replacement, extension or renewal (or successive replacements,
extension or renewals) of any Debt (in whole or in part) excluded from the
definition of "Secured Indebtedness" by subparagraphs (a) through (h) above;
provided, however, that no Lien securing, or conditional sale or title
retention agreement with respect to, such Debt shall extend to or cover any
assets, other than such assets which secured the Debt so replaced, extended
or renewed (plus improvements on or to any
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such assets); provided further, however, that to the extent that such
replacement extension or renewal increase the principal amount of Debt
secured by such Lien or is in a principal amount in excess of the principal
amount of Debt excluded from the definition of "Secured Indebtedness" by
subparagraphs (a) through (h) above, the amount of such increase or excess
shall be considered to be "Secured Indebtedness".
In no event shall the foregoing provisions be interpreted to mean or their
operation to cause the same Debt to be included more than once in the
calculation of "Secured Indebtedness" as that term is used in the Indenture.
The term "Securitization" shall mean the transfer or pledge of assets or
interests in assets to a trust, partnership, corporation or other entity, which
transfer or pledge is funded by such entity in whole or in part by the issuance
of instruments or securities that are paid principally from the cash flow
derived from such assets or interests in such assets.
The term "Subsidiary" shall mean any corporation of which at least a
majority of the outstanding voting stock having the power to elect a majority of
the board of directors of such corporation is at the time owned, directly or
indirectly, by the Company or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries. For the purposes of this definition,
"voting stock" means stock which ordinarily has voting power for the election of
directors, whether at all times or only so long as no senior class of stock has
such voting power by reason of any contingency.
Other than as described above and except as may be otherwise specified in
the applicable Prospectus Supplement, the Indenture does not contain covenants
specifically designed to protect Holders in the event of a highly leveraged
transaction involving the Company.
EVENTS OF DEFAULT
The following events are defined in the Indenture as "Events of Default"
with respect to the Debt Securities of any series issued pursuant to such
Indenture, unless otherwise provided with respect to such series: (1) failure to
pay any interest on any Debt Security of that series when due and payable,
continued for 30 days; (2) failure to pay principal of or any premium on any
Debt Security of that series when due and payable; (3) failure to deposit any
sinking fund payment, when and as due, in respect of any Debt Security of that
series; (4) failure to perform any covenant or warranty of the Company in the
Indenture (other than a covenant included in the Indenture solely for the
benefit of a series of Debt Securities other than that series), continued for 90
days after written notice as provided in the Indenture; (5) the occurrence of a
default under any indenture or instrument under which the Company or any
Subsidiary shall have outstanding at least $10,000,000 aggregate principal
amount of Debt for money borrowed which default constitutes a failure to pay
principal when due or results in such Debt becoming or being declared due and
payable prior to its maturity, without such past due principal having been
discharged or such acceleration having been rescinded or annulled, in each case
within 30 days after written notice as provided in the Indenture; (6) certain
events in bankruptcy, insolvency or reorganization involving the Company; and
(7) any other Event of Default provided with respect to Debt Securities of that
series. (Section 501)
If an Event of Default (other than (6) above) with respect to any series of
Debt Securities outstanding under the Indenture occurs and is continuing, then
either the Trustee or the Holders of at least 25% in aggregate principal amount
of the Outstanding Debt Securities of that series by notice as provided in the
Indenture may declare the principal amount (or, if any of the Debt Securities of
that series are Original Issue Discount Debt Securities, such lesser portion of
the principal amount of such Debt Securities as may be specified in the terms
thereof) of all of the Debt Securities of that series to be due and payable
immediately. If an Event of Default specified in (6) above with respect to Debt
Securities of any series at the time outstanding occurs, the principal amount of
all Debt Securities of that series will immediately become due and payable
automatically. At any time after a declaration of acceleration with respect to
Debt Securities of any series has been made, but before a judgment or decree for
payment of money has been
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obtained by the Trustee, the Holders of a majority in aggregate principal amount
of the Outstanding Debt Securities of that series may, under certain
circumstances, rescind and annul such acceleration. (Section 502)
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable indemnity. (Sections 601, 603) Subject to such
provisions for the indemnification of the Trustee, the Holders of a majority in
aggregate principal amount of the Outstanding Debt Securities of any series will
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee, with respect to the Debt Securities of that series.
(Section 512)
No Holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the Indenture, or for the appointment of a
receiver or a trustee, or for any other remedy thereunder, unless (i) such
Holder has previously given to the Trustee written notice of a continuing Event
of Default with respect to the Debt Securities of that series, (ii) the Holders
of at least 25% in principal amount of the Outstanding Debt Securities of that
series have made written request, and such Holder or Holders have offered
reasonable indemnity, to the Trustee to institute such proceeding as Trustee and
(iii) the Trustee has failed to institute such proceeding, and has not received
from the Holders of a majority in principal amount of the Outstanding Securities
of that series a direction inconsistent with such request, within 60 days after
such notice, request and offer. (Section 507) However, such limitations do not
apply to a suit instituted by a Holder of a Debt Security for the enforcement of
payment of the principal of or any premium or interest on such Debt Security on
or after the applicable due date specified in such Debt Security. (Section 508)
The Company will be required to furnish to the Trustee annually a statement
by certain of its officers as to whether or not the Company, to the best of
their knowledge, is in default in the performance or observance of any of the
terms, provisions and conditions of the Indenture and, if so, specifying all
such known defaults. (Section 1004)
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of not less than a majority in
principal amount of the Outstanding Debt Securities of each series affected by
such modification or amendment; PROVIDED, HOWEVER, that no such modification or
amendment may, without the consent of the Holder of each Outstanding Debt
Security affected thereby, (a) change the Stated Maturity of the principal of,
or any installment of principal of or interest on, any Debt Security; (b) reduce
the principal amount of, or premium or interest on, any Debt Security; (c)
reduce the amount of principal of an Original Issue Discount Debt Security due
and payable upon acceleration of the Maturity thereof; (d) change the place of
payment where or coin or currency in which the principal of, or any premium or
interest on, any Debt Security is payable; (e) impair the right to institute
suit for the enforcement of any payment on or with respect to any Debt Security
on or after the Stated Maturity or redemption date; (f) reduce the percentage in
principal amount of Outstanding Debt Securities of any series, the consent of
the Holders of which is required for modification or amendment of the Indenture;
(g) reduce the percentage in principal amount of Outstanding Debt Securities of
any series necessary for waiver of compliance with certain provisions of the
Indenture or for waiver of certain defaults or (h) modify such provisions with
respect to modification and waiver. (Section 902)
The Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of each series may, on behalf of the Holders of all
Debt Securities of that series, waive, insofar as that series is concerned,
compliance by the Company with certain restrictive provisions of the Indenture.
(Section 1010) The Holders of not less than a majority in aggregate principal
amount of the Outstanding Debt Securities
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of each series may, on behalf of the Holders of all Debt Securities of that
series, waive any past default under the Indenture with respect to Debt
Securities of that series, except a default (1) in the payment of principal of,
or any premium or interest on, any Debt Security of such series, or (2) in
respect of a covenant or provision of the Indenture which cannot be modified or
amended without the consent of the Holder of each Outstanding Debt Security of
such series affected. (Section 513)
The Indenture provides that, in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given any
request, demand, authorization, direction, notice, consent or waiver thereunder
or whether a quorum is present at a meeting of Holders of Debt Securities, (1)
the principal amount of an Original Issue Discount Debt Security that will be
deemed to be Outstanding will be the amount of the principal thereof that would
be due and payable as of the date of such determination upon acceleration of the
Maturity thereof to such date, (2) if, as of such date, the principal amount
payable at the Stated Maturity of a Debt Security is not determinable, the
principal amount of such Debt Security which will be deemed to be outstanding
will be the amount specified or determined by board resolution, (3) the
principal amount of a Debt Security denominated in a foreign currency or
currency unit that will be deemed to be Outstanding will be the United States
dollar equivalent, determined as of the date of original issuance of such Debt
Security, of the principal amount of such Debt Security (or, in the case of an
Original Issue Discount Debt Security, the United States dollar equivalent,
determined as of the date of original issuance of such Debt Security, of the
amount determined as provided in (1) or (2) above), and (4) securities owned by
the Company or any other obligor upon the Debt Securities or any Affiliate of
the Company or such obligor will be disregarded and deemed not outstanding,
except for certain limited purposes provided in the Indenture. (Section 101)
Except in certain limited circumstances, the Company will be entitled to set
any day as a record date for the purpose of determining the Holders of
Outstanding Securities of any series entitled to give, make or take any demand,
request, authorization, direction, notice, consent, waiver or other action under
the Indenture, in the manner and subject to the limitations provided in the
Indenture. In certain limited circumstances, the Trustee will be entitled to set
a record date for action by Holders. If a record date is set for any action to
be taken by Holders of a particular series, such action may be taken only by
persons who are Holders of Outstanding Debt Securities of that series on the
record date. To be effective, such action must be taken by Holders of the
requisite principal amount of such Securities within a specified period
following the record date. For any particular record date, this period will be
180 days or such shorter period as may be specified by the Company (or the
Trustee, if it set the record date), and may be shortened or lengthened (but not
beyond 180 days) from time to time. (Section 104)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company or any Subsidiary may consolidate with or merge into, or convey,
transfer or lease its properties and assets substantially as an entirety to, any
Person (a "Successor Person") if (i) the Successor Person, if any, of the
Company is a corporation, partnership or trust organized and validly existing
under the laws of any domestic jurisdiction and assumes the Company's
obligations on the Debt Securities and under the Indenture; (ii) immediately
after giving effect to the transaction, no Event of Default, and no event which,
after notice or lapse of time, would become an Event of Default, shall have
occurred and be continuing under the Indenture; and (iii) the Company delivers
to the Trustee an officers' certificate and an opinion of counsel stating that
the transaction and any related supplemental indenture complies with conditions
required under the Indenture. (Section 801)
DEFEASANCE PROVISIONS
If and to the extent indicated in the applicable Prospectus Supplement, the
Company may elect, at its option at any time, to have the provisions of Section
1302 of the Indenture, relating to defeasance and discharge of indebtedness, or
Section 1303 of the Indenture, relating to defeasance of certain restrictive
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covenants in the Indenture, applied to the Debt Securities of any series, or to
any specified part of a series. (Section 1301)
DEFEASANCE AND DISCHARGE. The Indenture provides that, upon the Company's
exercise of its option to have Section 1302 of the Indenture apply to any Debt
Securities, the Company will be discharged from any and all obligations with
respect to such Debt Securities (except for certain obligations to exchange or
register the transfer of Debt Securities, to replace stolen, lost or mutilated
Debt Securities, to maintain paying agencies and to hold moneys for payment in
trust) upon the deposit with the Trustee, in trust for the benefit of the
Holders of such Debt Securities, of money, U.S. Government Obligations (as
defined below) or a combination thereof, which through the payment of interest
and principal thereof in accordance with their terms, will provide money in an
amount sufficient to pay any installment of principal of (and premium, if any),
interest on, and any mandatory sinking fund payments in respect of the Debt
Securities on the respective Stated Maturities in accordance with the terms of
the Indenture and such Debt Securities. Such discharge may only occur if, among
other things, the Company has delivered to the Trustee an opinion of counsel to
the effect that the Company has received from, or there has been published by,
the United States Internal Revenue Service a ruling, or there has been a change
in tax law, in either case to the effect that Holders of such Debt Securities
will not recognize gain or loss for federal income tax purposes as a result of
such deposit, defeasance and discharge and will be subject to federal income tax
on the same amount, in the same manner and at the same times as would have been
the case if such deposit, defeasance and discharge were not to occur. (Sections
1302 and 1304) The term "U.S. Government Obligations" is defined generally to
include direct obligations of the United States of America, backed by its full
faith and credit. (Section 101)
DEFEASANCE OF CERTAIN COVENANTS. The Indenture provides that, upon the
Company's exercise of its option to have Section 1303 of the Indenture apply to
any Debt Securities, the Company may omit to comply with, and will have no
liability in respect of, certain restrictive covenants, including those
described under "Restrictive Covenants," that may be described in the applicable
Prospectus Supplement, and the occurrence of certain Events of Default, and any
that may be described in the applicable Prospectus Supplement, will be deemed
not to be or result in an Event of Default, in each case with respect to such
Debt Securities. To exercise such option, the Company must deposit with the
Trustee, for the benefit of the Holders of such Debt Securities, money, U.S.
Government Obligations or a combination thereof, which through the payment of
interest and principal thereof in accordance with their terms will provide money
in an amount sufficient to pay any installment of principal of (and premium, if
any), interest on and any mandatory sinking fund payments in respect of the Debt
Securities on the respective Stated Maturities of such payments in accordance
with the terms of the Indenture and such Debt Securities. The Company will also
be required to deliver to the Trustee an opinion of counsel to the effect that
the Holders of such Debt Securities will not recognize gain or loss for federal
income tax purposes as a result of such deposit and defeasance of certain
obligations and will be subject to federal income tax on the same amount, in the
same manner and at the same times as would have been the case if such deposit
and defeasance were not to occur. (Sections 1303 and 1304)
REGARDING THE TRUSTEE
The Bank of New York is the Trustee under the Indenture.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York, without regard to conflicts
of laws principles thereof. (Section 112)
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PLAN OF DISTRIBUTION
The Company may sell all or part of the Debt Securities from time to time on
terms determined at the time such Debt Securities are offered for sale. The Debt
Securities may be sold (i) through underwriters or dealers; (ii) through agents;
(iii) directly to one or more purchasers; (iv) through a combination of any such
methods of sale. Such underwriters or agents may include one or more of William
Blair & Company, L.L.C., First Chicago Capital Markets, Inc. and NationsBanc
Capital Markets, Inc. or a group of underwriters represented by firms including
one or more of such firms. Such firms may also act as agents.
The Prospectus Supplement or Supplements with respect to any particular
issuance of Debt Securities will describe the terms of the offering of such Debt
Securities, including the name or names of any underwriters or agents, the
purchase price of Debt Securities, the proceeds to the Company, the initial
public offering price, any discounts, commissions and other items constituting
compensation from the Company, and any discounts, concessions or commissions to
be allowed or reallowed or paid by any underwriters to dealers, if any.
The Debt Securities may be sold from time to time in one or more
transactions at a fixed price or prices, which may be changed, at market prices
prevailing at the time of the sale, at prices related to such prevailing market
prices, or at negotiated prices. In the event that any particular issue of Debt
Securities is sold pursuant to a firm commitment underwriting, the relevant
Prospectus Supplement will set forth on the cover page the price at which the
underwriters will purchase that issue of Debt Securities from the Company and
will also state that, after those Debt Securities are released for sale to the
public, the offering price and other selling terms of those Debt Securities may
from time to time be varied by the underwriters or their representatives.
In the event that any particular issue of Debt Securities is not listed on
the Nasdaq Stock Market or a national securities exchange, certain
broker-dealers may make a market in those Debt Securities but will not be
obligated to do so and may discontinue any market in those Debt Securities at
any time. The Prospectus Supplement with respect to those Debt Securities will
state, if known, whether or not any broker-dealer intends to make a market in
such Debt Securities. If no such determination has been made, the Prospectus
Supplement will so state. No assurance can be given as to the liquidity of a
secondary market for the Debt Securities.
If so indicated in the relevant Prospectus Supplement, the Company may
authorize dealers or other persons acting as the Company's agents to solicit
offers by certain institutions to purchase the Debt Securities from the Company
pursuant to contracts providing for payment and delivery on a future date.
Institutions with which such contracts may be made include commercial savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions and others, but in all cases such institutions must be
approved by the Company. The obligations of any purchaser under any such
contract will be subject to the condition that the purchase of the Debt
Securities involved shall not at the time of delivery be prohibited under the
laws of the jurisdiction to which such purchaser is subject. The dealers and
such other agents will not have any responsibility in respect of the validity or
performance of such contracts. The Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
Underwriters and agents who participate in the distribution of Debt
Securities may be entitled under agreements which may be entered into with the
Company to indemnification by the Company against certain liabilities, including
liabilities under the Securities Act of 1933, as amended, or to contribution
with respect to payments which the underwriters or agents may be required to
make in respect thereof. Such underwriters and agents may be customers of,
engage in transactions with, or perform services for the Company in the ordinary
course of business.
Thomas A. FitzSimmons, one of the Company's four outside directors, was
formerly a principal of William Blair & Company, L.L.C.
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LEGAL MATTERS
Certain legal matters with respect to the offering made hereby will be
passed upon for the Company by Dykema Gossett PLLC, Detroit, Michigan. Certain
legal matters will be passed upon for the underwriters or agents by McDermott,
Will & Emery, Chicago, Illinois.
EXPERTS
The consolidated balance sheets as of December 31, 1996 and 1995 and the
consolidated statements of income, shareholders' equity and cash flows for each
of the three years in the period ended December 31, 1996 included in the
Company's Form 10-K for the year ended December 31, 1996 and incorporated by
reference in this Registration Statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, included therein and incorporated herein by reference. Such
consolidated financial statements have been incorporated herein by reference in
reliance upon such report given upon the authority of said firm as experts in
accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following statement sets forth the estimated amounts of expenses, all of
which will be borne by the Company in connection with the distribution of the
Debt Securities offered hereby:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee....................... $ 90,910
Rating Agency Fees........................................................ 140,000
Printing and Engraving Fees............................................... 35,000
Trustee Fees and Expenses................................................. 7,000
Accounting Fees and Expenses.............................................. 75,000
Legal Fees and Expenses................................................... 225,000
Blue Sky Fees and Expenses................................................ 2,000
Miscellaneous Expenses.................................................... 25,090
Total Expenses............................................................ $ 600,000
</TABLE>
All amounts in the table above are estimated, other than the Commission
Registration Fee.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company is organized under the Michigan Business Corporation Act (the
"MBCA") which, in general, empowers Michigan corporations to indemnify a person
who is a party or threatened to be made a party to any civil, criminal,
administrative or investigative action, suit or proceeding (other than actions
by or in the right of the corporation) by reason of the fact that such person is
or was a director, officer, employee or agent of the corporation, or of another
enterprise at such corporation's request, against expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection
therewith if such person acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation or its shareholders and, in the case of a criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
If a person is successful in defending against a derivative action or
third-party action, the MBCA requires that a Michigan corporation indemnify the
person against expenses incurred in the action.
The MBCA also empowers Michigan corporations to provide similar indemnity
against amounts paid in settlement and expenses actually and reasonably incurred
by such a person in actions or suits by or in the right of the corporation
except in respect of any claim, issue or matter as to which such person is
adjudged to be liable to the corporation, unless and only to the extent that a
court determines that, despite the adjudication of the liability but in view of
all circumstances of the case, such person is fairly and reasonably entitled to
indemnity.
The Company's bylaws generally require the Company to indemnify its
directors and officers to the fullest extent permissible under Michigan law,
require the advancement and reimbursement of expenses under certain
circumstances and establish a procedure for determination of when
indemnification is proper.
The MBCA permits Michigan corporations to limit the personal liability of
directors for a breach of their fiduciary duty. The Company's Articles of
Incorporation, which limit liability to the maximum extent permitted by law,
provide that a director of the Company shall not be personally liable to the
Company or its shareholders for monetary damages for breach of the director's
fiduciary duty. However, the MBCA and the Articles of Incorporation do not
eliminate or limit the liability of a director for any of the following: (i) a
breach of the director's duty of loyalty to the Company or its shareholders;
(ii) acts or omissions not in good faith or that involve intentional misconduct
or a knowing violation of law;
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(iii) declaration of a unlawful dividend, stock purchase or redemption; (iv) a
transaction from which the director derives an improper personal benefit; and
(v) an act or omission occurring prior to the date when the provision becomes
effective. As a result of the inclusion of such a provision, shareholders of the
Company may be unable to recover monetary damages against directors for actions
taken by them which constitute negligence or gross negligence or which are in
violation of their fiduciary duties, although it may be possible to obtain
injunctive or other equitable relief with respect to such actions.
Under an insurance policy maintained by the Company, the directors and
officers of the Company are insured, within the limits and subject to the
limitations of the policy, against certain expenses and liabilities incurred in
connection with the defense of certain claims, actions, suits or proceedings
which may be brought against them by reason of being or having been directors or
officers. In addition, a certain registration rights agreement to which the
Company is a party provides that the Company will indemnify, to the extent
permitted by law, each holder of "registrable securities" (as defined in such
agreement) against all losses, claims, damages, liabilities and expenses caused
by misstatements or omissions in any registration statement, prospectus or
preliminary prospectus, except insofar as such misstatements are caused by or
contained in information furnished to the Company by such holders.
Pursuant to agreements which the Company may enter into with underwriters or
agents (forms of which are or will be filed as exhibits to this Registration
Statement), officers and directors of the Company may be entitled to
indemnification by such underwriters or agents against certain liabilities,
including liabilities under the Securities Act of 1933, as amended, arising from
information appearing in the Registration Statement or any Prospectus or
Prospectus Supplement which has been furnished to the Company by such
underwriters or agents.
ITEM 16. EXHIBITS
A list of exhibits included as part of this Registration Statement is set
forth below.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- ----------------------------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement
1.2 Form of Distribution Agreement
4.1 Form of Indenture
4.2 Form of Debt Security (included in Exhibit 4.1)
5.1 Opinion of Dykema Gossett PLLC
12.1 Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Dykema Gossett PLLC (included in Exhibit 5.1)
24.1 Powers of Attorney (included on Signature Page)
25.1 Form T-1 Statement of Eligibility of Trustee
</TABLE>
ITEM 17. UNDERTAKINGS
1. Except to the extent that the information is contained in periodic
reports filed by the Company pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 and incorporated by reference into this registration
statement, the undersigned registrant hereby undertakes to file, during any
period in which offers or sales are being made, a post-effective amendment to
this registration statement (i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933 and (ii) to reflect in the prospectus any
facts or events arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase or
decrease in the volume of securities offered (if the total value of securities
offered would not exceed that which was registered) and any deviation from the
low or high and of the maximum offering
II-2
<PAGE>
range may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement.
2. The undersigned registrant hereby undertakes: (a) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this registration statement to include any material information with respect to
the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement, (b)
that, for the purpose of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof, and (c) to remove from registration by means of a
post-effective amendment any of the securities which remain unsold at the
termination of the offering.
3. The undersigned registrant hereby undertakes that for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
4. The undersigned registrant hereby undertakes that insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
5. The undersigned registrant hereby undertakes that (a) for purposes of
determining any liability under the Securities Act of 1933, the information
omitted from the form of prospectus filed as part of this registration statement
in reliance upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this registration statement as of the time it was
declared effective and (b) for the purpose of determining any liability under
the Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Southfield, State of Michigan on the 2nd day of July,
1997.
CREDIT ACCEPTANCE CORPORATION
By: /s/ DONALD A. FOSS
-----------------------------------------
Donald A. Foss,
CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard E. Beckman, Brett A. Roberts and Douglas
W. Busk, and each of them, jointly and severally, his true and lawful
attorneys-in-fact and agents, each with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments to this Registration Statement and to
sign any registration statement pursuant to Rule 462(b) under the Securities Act
of 1933 for registering additional securities of Credit Acceptance Corporation
comprising the same offering for which this Registration Statement is being
filed and any and all amendments thereto, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto such attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that such attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the 2nd day of July, 1997.
SIGNATURE
/s/ DONALD A. FOSS
- ------------------------------
Donald A. Foss
CHAIRMAN, CHIEF EXECUTIVE
OFFICER AND DIRECTOR
(PRINCIPAL EXECUTIVE OFFICER)
/s/ RICHARD E. BECKMAN
- ------------------------------
Richard E. Beckman
PRESIDENT, CHIEF OPERATING
OFFICER AND DIRECTOR
II-4
<PAGE>
<TABLE>
<S> <C> <C>
/s/ BRETT A. ROBERTS
- ------------------------------
Brett A. Roberts
EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
(PRINCIPAL FINANCIAL OFFICER)
/s/ JOHN P. CAVANAUGH
- ------------------------------
John P. Cavanaugh
CONTROLLER
(PRINCIPAL ACCOUNTING OFFICER)
/s/ HARRY E. CRAIG
- ------------------------------
Harry E. Craig
DIRECTOR
/s/ THOMAS A. FITZSIMMONS
- ------------------------------
Thomas A. FitzSimmons
DIRECTOR
/s/ DAVID T. HARRISON
- ------------------------------
David T. Harrison
DIRECTOR
/s/ SAM M. LAFATA
- ------------------------------
Sam M. LaFata
DIRECTOR
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBITS
- ----------------------------------------------------------------
1.1 Form of Underwriting Agreement
1.2 Form of Distribution Agreement
4.1 Form of Indenture
4.2 Form of Debt Security (included in Exhibit 4.1)
5.1 Opinion of Dykema Gossett PLLC
12.1 Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Dykema Gossett PLLC (included in
Exhibit 5.1)
24.1 Powers of Attorney (included on Signature Page)
25.1 Form T-1 Statement of Eligibility of Trustee
II-6
<PAGE>
EXHIBIT 1.1
$_________
_____% NOTES DUE __________, ____
CREDIT ACCEPTANCE CORPORATION
UNDERWRITING AGREEMENT
[______________, 1997]
William Blair & Company, L.L.C.
First Chicago Capital Markets, Inc.
NationsBanc Capital Markets, Inc.
As Representatives of the Several
Underwriters Named in Schedule A
c/o William Blair & Company, L.L.C.
222 West Adams Street
Chicago, Illinois 60606
Ladies and Gentlemen:
SECTION 1. INTRODUCTORY. Credit Acceptance Corporation (the
"COMPANY"), a Michigan corporation, subject to the terms and conditions stated
herein, proposes to issue and sell to the several underwriters named in SCHEDULE
A ("Underwriters"), who are acting severally and not jointly, $________
aggregate principal amount of its [___________________] (the "Notes"). The
Notes shall be issued under an indenture, dated as of [________, 1997] (the
"Indenture"), between the Company and The Bank of New York (the "Trustee").
The Company hereby confirms its agreement with the Underwriters as
follows:
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to the several Underwriters that:
(a) A registration statement on Form S-3 (Registration No. 333-_____)
with respect to debt securities of the Company, including the Notes,
has been filed with the Securities and Exchange Commission (the
"Commission"); such registration statement and any post-effective
amendment thereto, each in the form heretofore
1
<PAGE>
delivered to you, and, excluding exhibits thereto but including all
documents incorporated by reference in the prospectus contained therein,
to you for each of the other Underwriters, have been declared effective by
the Commission in such form; no other document with respect to such
registration statement or document incorporated by reference therein has
heretofore been filed with the Commission; and no stop order suspending the
effectiveness of such registration statement has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in such registration
statement or filed with the Commission pursuant to Rule 424(a) of the
rules and regulations of the Commission under the Securities Act of
1933, as amended (the "1933 Act;" all references herein to specific
rules are rules promulgated under the 1933 Act unless otherwise
specified), being hereinafter called a "Preliminary Prospectus"; the
various parts of such registration statement, including all exhibits
thereto but excluding the Statement of Eligibility on Form T-1 (the
"Statement of Eligibility") and including (i) the information
contained in the prospectus included therein and, if applicable, in
the form of final prospectus filed with the Commission pursuant to
Rule 424(b) in accordance with Section 5(a) hereof and deemed by
virtue of Rule 430A to be part of the registration statement at the
time it was declared effective and (ii) the documents incorporated by
reference in the prospectus contained in the registration statement at
the time such part of the registration statement became effective,
each as amended at the time such part of the registration statement
became effective, being hereinafter called the "Registration
Statement"; and such prospectus included therein, as supplemented by
the prospectus supplement relating to the Notes, or, if applicable,
such final prospectus, relating to the Notes, in either case in the
form first filed pursuant to Rule 424(b), being hereinafter called the
"Prospectus"; and any reference herein to any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus or Prospectus, as the
case may be, under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and incorporated by reference in such
Preliminary Prospectus or
2
<PAGE>
Prospectus, as the case may be; and any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any annual
report of the Company filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the Registration Statement that
is incorporated by reference in the Registration Statement.
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the 1933 Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and, when read together and
with the other information in the Prospectus, none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment
or supplement thereto, when such documents become effective or are
filed with the Commission, as the case may be, will conform in all
material respects to the requirements of the 1933 Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information specified in Section 3 of this Agreement furnished in
writing to the Company by an Underwriter through you expressly for use
therein.
(c) The Notes have been duly and validly authorized and, when
authenticated by the Trustee in the manner set forth in the Indenture
and issued, sold and delivered in accordance with this Agreement and
the Indenture against payment therefor, will have been duly and
validly executed, authenticated, issued and delivered and will
constitute valid and binding obligations of the Company, entitled to
the benefits provided by the Indenture and enforceable against the
Company in accordance with their terms, except as enforceability of
the same may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors'
3
<PAGE>
rights and by the exercise of judicial discretion in accordance with
general principles applicable to equitable and similar remedies. The
Notes conform to the descriptions thereof contained in the Prospectus.
(d) The Indenture has been duly and validly authorized, executed
and delivered by the Company and the Trustee and constitutes a valid
and binding instrument of the Company, enforceable against the Company
in accordance with its terms, except as enforceability of the same may
be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights and by the exercise of
judicial discretion in accordance with general principles applicable
to equitable and similar remedies. The Indenture complies with the
Trust Indenture Act of 1939, as amended, and the rules and regulations
of the Commission thereunder (the "Trust Indenture Act") and has been
duly qualified under the Trust Indenture Act. The Indenture conforms
to the description thereof contained in the Prospectus.
(e) Each preliminary prospectus has conformed in all material
respects with the requirements of the 1933 Act and the Trust Indenture
Act and, as of its date, has not included any untrue statement of a
material fact or omitted to state a material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading; and when the Registration Statement
became effective, and at all times subsequent thereto up to the
Closing Date (as defined in Section 4(a) hereof), the Registration
Statement and the Prospectus and any amendments or supplements
thereto, contained or will contain all statements that are required to
be stated therein in accordance with the 1933 Act and the Trust
Indenture Act and in all material respects conformed and will in all
material respects conform to the requirements of the 1933 Act and the
Trust Indenture Act, and neither the Registration Statement nor the
Prospectus, nor any amendment or supplement thereto, included or will
include any untrue statement of a material fact or omitted or will
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that the Company makes no representation or warranty as to
information contained in or omitted from any preliminary prospectus,
the Registration Statement, the Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information
specified in Section 3 of this Agreement furnished to the
4
<PAGE>
Company by or on behalf of any Underwriter through the Representatives
specifically for use in the preparation thereof.
(f) The subsidiaries (the "Subsidiaries") identified in an
officers' certificate, dated the date hereof, are the only
subsidiaries of the Company. The only Subsidiaries that own over five
percent (5%) of the Consolidated Net Tangible Assets (as defined in
the Indenture) or are "significant subsidiaries," as such term is
defined in Rule 405 are Buyers Vehicle Protection Plan, Inc., a
Michigan corporation ("BVPP"), and Credit Acceptance Corporation UK
Limited, a limited liability company incorporated under the laws of
England and Wales ("CACUK" and together with BVPP, the "Significant
Subsidiaries").
(g) The Company and the Subsidiaries have been duly incorporated
and are validly existing as corporations, or in the case of CACUK and
Credit Acceptance Corporation Ireland Limited ("CACIL") as a limited
liability company, in good standing under the laws of their respective
places of incorporation, or in the case of CACUK and CACIL no
liquidator, administrator or receiver has been appointed, with
corporate power and authority to own their properties and conduct
their business as described in the Prospectus; the Company and each
Subsidiary is duly qualified to do business as a foreign corporation,
or in the case of CACUK and CACIL as a limited liability company,
under the corporation law of, and is in good standing as such in, each
jurisdiction in which it owns or leases properties, has an office, or
in which business is conducted by it and such qualification is
required except in any such case where the failure to so qualify or be
in good standing would not have a material adverse effect upon the
financial condition, assets, business, business prospects or results
of operations of the Company and the Subsidiaries taken as a whole (a
"Material Adverse Effect"); and no proceeding of which the Company has
knowledge has been instituted in any such jurisdiction revoking,
limiting or curtailing, or seeking to revoke, limit or curtail, such
power and authority or qualification.
(h) The Company has an authorized capitalization as set forth in
the Prospectus. The issued and outstanding shares of capital stock of
the Company as set forth in the Prospectus have been duly authorized
and validly issued and are fully paid and nonassessable. All of the
issued and outstanding shares of capital stock of each
5
<PAGE>
Subsidiary have been duly authorized and validly issued, are fully paid
and non-assessable and are owned of record directly or indirectly by the
Company (except that all of the outstanding common shares of CAC Ohio,
which constitutes 1% of the issued and outstanding capital stock of
CAC Insurance Agency of Ohio, Inc., are owned by Thomas Ciatti and one
share of CACIL is held by the Company's attorney in Ireland as a
nominee and on behalf of and in trust for the Company), and, except as
set forth in the Registration Statement, are free and clear of any
liens, claims, security interests, pledges, charges, encumbrances,
stockholders' agreements and voting trusts or rights of others.
Except as set forth in the Registration Statement and other than
options granted subsequent to December 31, 1996 pursuant to option
plans described in the Registration Statement, there are no options,
agreements, contracts or other rights in existence to acquire from the
Company or any Subsidiary any of the capital stock of the Company or
any Subsidiary.
(i) The making and performance by the Company of this Agreement
has been duly authorized by all necessary corporate action and will
not violate any provision of the Company's articles of incorporation
or bylaws and will not result in the breach, or be in contravention,
of any provision of any agreement, franchise, license, indenture,
mortgage, deed of trust, or other instrument to which the Company or
any Subsidiary is a party or by which the Company, any Subsidiary or
the property of any of them may be bound or affected (other than any
such violation, breach or contravention which would not have a
Material Adverse Effect), or any order, rule or regulation applicable
to the Company or any Subsidiary of any court or regulatory body,
administrative agency or other governmental body having jurisdiction
over the Company or any Subsidiary or any of their respective
properties, or any order of any court or governmental agency or
authority entered in any proceeding to which the Company or any
Subsidiary was or is now a party or by which it is bound. No consent,
approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required for the
execution and delivery of this Agreement or the Indenture or the
issuance and sale of the Notes, except for compliance with the 1933
Act, the Trust Indenture Act, and any blue sky laws applicable to the
public offering of the Notes by the Underwriters. This Agreement has
been duly authorized, executed and delivered by the Company.
6
<PAGE>
(j) The accountants who have expressed their opinions with
respect to certain of the financial statements and schedules included
or incorporated by reference in the Registration Statement are
independent accountants as required by the 1933 Act.
(k) The consolidated financial statements and schedules of the
Company included or incorporated by reference in the Registration
Statement present fairly the consolidated financial position of the
Company as of the respective dates of such financial statements, and
the consolidated statements of income, shareholders' equity and cash
flows of the Company for the respective periods covered thereby, all
in conformity with generally accepted accounting principles
consistently applied throughout the periods involved, except as
disclosed in the Prospectus, and the supporting schedules included or
incorporated by reference in the Registration Statement present fairly
the information required to be stated therein. The financial
information set forth in the Prospectus under "Selected Consolidated
Financial and Operating Data" presents fairly on the basis stated in
the Prospectus, the information set forth therein. All pro forma
financial statements and other pro forma information included in the
Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and other pro forma
information, have been properly compiled on the pro forma basis
described therein, and, in the opinion of the Company, the assumptions
used in the preparation thereof are reasonable and the adjustments
used therein are appropriate under the circumstances.
(l) Neither the Company nor any Subsidiary is in violation of its
articles of incorporation or bylaws or in default under any consent
decree, or in default with respect to any material provision of any
lease, loan agreement, franchise, license, permit or other contract
obligation to which it is a party and there does not exist any state
of facts which constitutes an event of default as defined in such
documents or which, with notice or lapse of time or both, would
constitute such an event of default, in each case, except for defaults
which would not have a Material Adverse Effect.
(m) There are no legal or governmental proceedings pending or, to
the Company's knowledge, threatened to which the Company or any
Subsidiary is or may be a party or of which material property owned or
leased by the
7
<PAGE>
Company or any Subsidiary is or may be the subject, or related to
environmental or discrimination matters which are not disclosed in the
Prospectus and which, if determined adversely to the Company or such
Subsidiary, could reasonably be expected to have a Material Adverse Effect,
or which question the validity of this Agreement or any action taken or
to be taken pursuant hereto or thereto.
(n) There are no holders of securities of the Company having
rights to registration thereof or preemptive rights to purchase Common
Stock except as disclosed in the Prospectus.
(o) The Company and each of its Subsidiaries have good and
marketable title to all the properties and assets reflected as owned
in the financial statements hereinabove described (or elsewhere in the
Prospectus), subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except those, if any, reflected in such
financial statements (or elsewhere in the Prospectus) or which are not
material to the Company and its Subsidiaries taken as a whole. The
Company and each of its Subsidiaries hold their respective leased
properties which are material to the Company and its Subsidiaries
taken as a whole under valid and binding leases.
(p) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as
contemplated by, set forth in or incorporated by reference in the
Registration Statement or the Prospectus, the Company and the
Subsidiaries, taken as a whole, have not incurred any material
liabilities or obligations, direct or contingent, nor entered into any
material transactions not in the ordinary course of business and there
has not been any material adverse change in their condition (financial or
otherwise) or results of operations nor any material change in their
capital stock, short-term debt or long-term debt.
(q) There is no material document of a character required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement which is not
described or filed as required.
(r) The Company together with the Subsidiaries owns and possesses
all right, title and interest in and to, or
8
<PAGE>
has duly licensed from third parties, all trademarks, copyrights and other
proprietary rights ("Trade Rights") material to the business of the Company
and each of the Subsidiaries taken as a whole. Neither the Company nor any
Subsidiary has received any notice of infringement, misappropriation
or conflict from any third party as to such material Trade Rights
which has not been resolved or disposed of and neither the Company nor
any Subsidiary has infringed, misappropriated or otherwise conflicted
with material Trade Rights of any third parties, which infringement,
misappropriation or conflict would have a Material Adverse Effect.
(s) The conduct of the business of the Company and each
Subsidiary is in compliance in all respects with applicable federal,
state, local and foreign laws and regulations (including, without
limitation, Regulation Z, the Truth in Lending Act, the Equal Credit
Opportunity Act, the Fair Credit Reporting Act, the rules and
regulations of the Federal Trade Commission, and other federal, state
and local laws, rules and regulations that pertain to repossession of
collateral, consumer debt collection practices, garnishment of wages,
truth in lending, insurance premium financing and the sale of vehicle
service agreements) except where the failure to be in compliance would
not have a Material Adverse Effect.
(t) All offers and sales of the Company's capital stock prior to
the date hereof were at all relevant times duly registered with or
exempt from the registration requirements of the 1933 Act and were
duly registered with or the subject of an available exemption from the
registration requirements of the applicable state securities or blue
sky laws.
(u) The Company and each Subsidiary have filed all necessary
federal, state and local income and franchise tax returns and have
paid all taxes shown as due thereon, and there is no tax deficiency
that has been, or to the knowledge of the Company might be, asserted
against the Company or any of its properties or assets that would or
could reasonably be expected to have a Material Adverse Effect.
(v) The Company is not conducting, and does not intend to
conduct, its business in a manner in which it would become, an
"investment company" as defined in Section 3(a) of the Investment
Company Act of 1940, as amended ("INVESTMENT COMPANY ACT").
9
<PAGE>
(w) There are no negotiations now underway with any party or
parties with regard to the possible sale of the Company or of a block
of its capital stock exceeding, in the aggregate, 5% of the
outstanding capital stock except as described in the Registration
Statement.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS. The
Representatives, on behalf of the several Underwriters, represent and warrant to
the Company that (a) the information set forth on the cover page of the
Prospectus with respect to price, underwriting discount and terms of the
offering and (b) the information set forth under "Underwriting" in the
Prospectus, the only information furnished to the Company by and on behalf of
the Underwriters for use in connection with the preparation of the Registration
Statement, is correct and complete in all material respects.
SECTION 4. PURCHASE, SALE AND DELIVERY OF NOTES. Subject to the
terms and conditions herein set forth, the Company agrees to issue and sell to
each of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the company, at a purchase price of [_____] percent of
the principal amount thereof, plus accrued interest, if any, from [__________,
1997] to the Closing Date hereunder, the principal amount of Notes set forth
opposite the name of such Underwriter in SCHEDULE A hereto.
(a) The Notes to be purchased by each Underwriter hereunder will be
represented by one or more definitive global securities in book-entry form which
will be deposited by or on behalf of the Company with The Depository Trust
Company ("DTC") or its designated custodian. The Company will deliver the Notes
to William Blair & Company, L.L.C., for the account of each Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer to an account specified by the Company in Federal (same day)
funds, by causing DTC to credit the Notes to the account of William Blair &
Company, L.L.C. at DTC. The Company will cause the certificates representing
the Notes to be made available to William Blair & Company, L.L.C. for checking
at least twenty-four hours prior to the Closing Date (as defined below) at the
office of DTC or its designated custodian (the "Designated Office"). The time
and date of such delivery and payment shall be 9:00 a.m., Chicago time, on
[___________, 1997] or such other time and date as William Blair & Company,
L.L.C. and the Company may agree upon in writing. Such time and date are herein
called the "Closing Date".
10
<PAGE>
(b) The documents to be delivered at the Closing Date by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross-receipt
for the Notes and any additional documents requested by the Underwriters
pursuant to Section 7(g)(v) hereof, will be delivered at the offices of Dykema
Gossett PLLC, 400 Renaissance Center, Detroit, Michigan 48243 (the "Closing
Location"), and the Notes will be delivered at the Designated Office, all at the
Closing Date. A meeting will be held at the Closing Location at 3:00 p.m.,
Detroit time, on the Business Day (as hereinafter defined) next preceding the
Closing Date, at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the parties
hereto. For the purposes of this Section 4, "Business Day" shall mean each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in Chicago are generally authorized or obligated by law or
executive order to close.
You have advised the Company that each Underwriter has authorized you
to accept delivery of its Notes, to make payment and to receipt therefor. You,
individually and not as the Representatives of the Underwriters, may make
payment for any Notes to be purchased by any Underwriter whose funds shall not
have been received by you by the Closing Date for the account of such
Underwriter, but any such payment shall not relieve such Underwriter from any
obligation hereunder.
SECTION 5. COVENANTS OF THE COMPANY. The Company covenants and
agrees that:
(a) To prepare the Prospectus in a form approved by you and to
file such prospectus pursuant to Rule 424(b) not later than the
Commission's close of business on the second business day following
the execution and delivery of this Agreement, or, if applicable, such
earlier time as may be required by Rule 430A(a)(3); to make no further
amendment or any supplement to the Registration Statement or
Prospectus prior to the Closing Date which shall be disapproved by you
promptly after reasonable notice thereof; to advise you, promptly
after it receives notice thereof, of the time when the Registration
Statement, or any amendment thereto, has been filed or becomes
effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish you with copies thereof; to
file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection
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with the offering or sale of the Notes; to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, of the suspension of the qualification of
the Notes for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request
by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information;
and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus or suspending any such qualification, to use promptly its
best efforts to obtain its withdrawal.
(b) Neither the Company nor any Subsidiary will, prior to the
Closing Date, incur any liability or obligation, direct or contingent,
or enter into any material transaction, other than in the ordinary
course of business, except as contemplated by the Prospectus.
(c) Not later than 18 months after the effective date of the
Registration Statement, the Company will make generally available to
its security holders an earnings statement (which need not be audited)
covering a period of at least 12 months beginning after the Closing
Date which will satisfy the provisions of the last paragraph of
Section 11(a) of the 1933 Act and Rule 158 promulgated thereunder.
(d) During such period as a prospectus is required by law to be
delivered in connection with offers and sales of the Notes by an
Underwriter or dealer, the Company will furnish to you at its expense,
copies of the Registration Statement, the Prospectus, each preliminary
prospectus, the documents incorporated by reference therein, and all
amendments and supplements to any such documents in each case as soon
as available (and in the case of the Prospectus, not later than 11:00
a.m. Chicago time on the business day following the date of this
Agreement) and in such quantities as you may reasonably request, for
the purposes contemplated by the 1933 Act.
(e) During the period beginning from the date hereof and
continuing to and including the earlier of (i) the termination of
trading restrictions on the Notes, as notified to the Company by you,
and (ii) the Closing Date, not to offer, sell, contract to sell or
otherwise dispose of any debt securities of the Company which
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mature more than one year after the Closing Date and which are substantially
similar to the Notes, without your prior written consent.
(f) During the period of five years hereafter, the Company will
furnish you and each of the other Underwriters with a copy (i) as soon
as practicable after the filing thereof, of each report filed by the
Company with the Commission, any securities exchange or the NASD; (ii)
as soon as practicable after the release thereof, of each press
release in respect of the Company; and (iii) as soon as available, of
each report of the Company mailed to shareholders.
(g) The Company will use the net proceeds received by it from the
sale of the Notes being sold by it in the manner specified in the
Prospectus.
SECTION 6. PAYMENT OF EXPENSES. Whether or not the transactions
contemplated hereunder are consummated or this Agreement is terminated, the
Company agrees to pay (i) all costs, fees and expenses incurred in connection
with the performance of the Company's obligations hereunder, including without
limiting the generality of the foregoing, all fees and expenses of legal counsel
for the Company, legal counsel for the Underwriters and of the Company's
independent accountants, all costs and expenses incurred in connection with the
preparation, printing, filing and distribution of the Registration Statement,
each preliminary prospectus and the Prospectus (including all documents
incorporated by reference therein, exhibits and financial statements) and all
amendments and supplements provided for herein, this Agreement, the Indenture,
(ii) all costs, fees and expenses (including legal fees (not to exceed $2,000
without the Company's reasonable consent) incurred by the Underwriters in
connection with qualifying or registering all or any part of the Notes for offer
and sale under blue sky laws of any jurisdiction and any required clearance of
such offering with the NASD; (iii) any fees charged by securities rating
services for rating the Notes; (iv) the cost of preparing the Notes; (v) the
fees and expenses of the Trustee and any agent of the Trustee and the fees and
disbursements of counsel for the Trustee in connection with the Indenture and
the Notes; and (vi) all other costs and expenses incident to the performance of
its obligations hereunder which are not otherwise specifically provided for in
this Section.
SECTION 7. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the several Underwriters to purchase and pay for the Notes on the
Closing Date shall be subject to the accuracy of the representations and
warranties on the part
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of the Company herein set forth as of the date hereof and as of the Closing
Date, to the accuracy of the statements of officers of the Company made
pursuant to the provisions hereof, to the performance by the Company of its
respective obligations hereunder, and to the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulation under the 1933 Act and in
accordance with Section 5(a) hereof; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall
have been issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your reasonable satisfaction.
(b) The Notes shall have been qualified for sale under the blue
sky laws of such states as shall have been specified by the
Representatives.
(c) The legality and sufficiency of the authorization, issuance
and sale of the Notes hereunder, the validity and form of the
certificates representing the Notes, the execution and delivery of
this Agreement and the Indenture and the corporate proceedings and
other legal matters incident thereto, and the form of the Registration
Statement and the Prospectus (except financial statements) shall have
been approved by counsel for the Underwriters.
(d) You shall not have advised the Company that the Registration
Statement or the Prospectus or any amendment or supplement thereto,
contains an untrue statement of fact, which, in the opinion of counsel
for the Underwriters, is material or omits to state a fact which, in
the opinion of such counsel, is material and is required to be stated
therein or necessary to make the statements therein not misleading.
(e) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred any change, or any development involving
a prospective change, in or affecting particularly the business or
properties of the Company or any Subsidiary, whether or not arising in
the ordinary course of business, which, in the reasonable judgment of
the Representatives makes it impractical or inadvisable to proceed
with the public offering or purchase of the Notes as contemplated
hereby.
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(f) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities by any
"nationally recognized statistical rating organization", as that term
is defined by the Commission for purposes of Rule 436(g)(2) and (ii)
no organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities.
(g) There shall have been furnished to you, as Representatives of
the Underwriters, on the Closing Date, except as otherwise expressly
provided below:
(i) An opinion of Dykema Gossett PLLC, counsel for the
Company addressed to the Underwriters and dated the Closing
Date to the effect that:
(1) the Company and BVPP have been duly incorporated and
are validly existing as corporations in good standing under the
laws of the jurisdiction in which they are incorporated with
corporate power and authority to own their properties and conduct
their business as described in the Prospectus. With respect to
CACUK's due incorporation, existence, good standing and
corporate power and authority, such counsel may state that it is
aware that an opinion of local counsel in the country in which
CACUK does business has been obtained by the Company and is
being delivered to you on the Closing Date and may assume that
you have reviewed a copy of such opinion;
(2) all of the issued and outstanding capital stock of BVPP
has been duly authorized, validly issued and is fully paid and
nonassessable, is owned by the Company and, except as disclosed
in the Registration Statement or in this Agreement, to the best
knowledge of such counsel, the Company owns directly or
indirectly
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all of the outstanding capital stock of each Subsidiary, free
and clear of any claims, liens, encumbrances or security
interests;
(3) the authorized capital stock of the Company is as set
forth in the Registration Statement. The issued and outstanding
capital stock of the Company has been duly authorized and validly
issued and is fully paid (to such counsel's actual knowledge and
based upon a certificate of the chief executive officer or chief
operating officer and of the principal financial officer of the
Company) and nonassessable;
(4) the Notes have been duly and validly authorized by the
Company and, when duly authenticated by the Trustee and issued,
delivered and sold in accordance with this Agreement and the
Indenture, will have been duly and validly executed,
authenticated, issued and delivered and will constitute valid
and binding obligations of the Company, entitled to the benefits
provided by the Indenture, enforceable against the Company in
accordance with their terms and the terms of the Indenture, except
as enforceability of the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights and by the exercise of judicial
discretion in accordance with general principles of equity,
regardless of whether such enforceability is considered in a
proceeding in equity or at law;
(5) the Notes conform in all material respects to the
description thereof contained in the Prospectus and conform in
all material respects
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to the applicable provisions of the Indenture;
(6) the Indenture has been duly authorized, executed and
delivered by the Company and the Trustee and constitutes a valid
and binding instrument of the Company, enforceable against the
Company in accordance with its terms, except as enforceability of
the same may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
and by the exercise of judicial discretion in accordance with
general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law;
the Indenture has been duly qualified under the Trust Indenture
Act; and the Indenture conforms in all material respects to the
description thereof contained in the Prospectus;
(7) the Registration Statement has become effective under
the 1933 Act, and, to the actual knowledge of such counsel, no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the
1933 Act; and the Registration Statement, the Prospectus and each
amendment or supplement thereto (except for the financial
statements and the notes and schedules related thereto and other
numerical, statistical or financial data included therein and the
Statement of Eligibility as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the 1933 Act and the Indenture complies in all
material respects as
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to form with the Trust Indenture Act;
(8) such counsel does not know of any statutes, rules and
regulations required to be described or referred to in the
Registration Statement or the Prospectus that are not described
or referred to therein as required; and such counsel does not
know of any legal or governmental proceedings pending or
threatened required to be described in the Prospectus which are
not described as required, nor of any contracts or documents of
a character required to be described in the Registration Statement
or Prospectus or to be filed as exhibits to the Registration
Statement which are not described or filed, as required;
(9) this Agreement has been duly authorized, executed and
delivered by and on behalf of the Company, and is the legal,
valid and binding agreement of the Company, except as
enforceability of the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights and by the exercise of judicial
discretion in accordance with general principles of equity,
regardless of whether such enforceability is considered in a
proceeding in equity or at law, and except to the extent the
enforceability of the indemnification, exculpation and
contribution provisions of this Agreement may be limited by
applicable law and as to which no opinion need be expressed;
(10) no approval, authorization or consent of any public
board, agency, or instrumentality of the United States
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or of any state or other jurisdiction is necessary in connection
with the issue or sale of the Notes by the Company pursuant
to this Agreement (other than under the 1933 Act, any applicable
blue sky laws and the rules of the NASD) or the consummation by
the Company of any other transactions contemplated hereby;
(11) the execution and performance of this Agreement will
not contravene any of the provisions of, or result in a default
under, any agreement, franchise, license, indenture, mortgage,
deed of trust, or other instrument known to such counsel, of the
Company or any Subsidiary or by which the property of any of them
is bound and which contravention or default would be material to
the Company and the Subsidiaries taken as a whole; or violate any
of the provisions of the articles of incorporation, charter or
bylaws of the Company or any Subsidiary or, so far as is known to
such counsel, violate any statute, order, rule or regulation of
any regulatory or governmental body having jurisdiction over the
Company or any Subsidiary the effect of which would be materially
adverse to the Company and the Subsidiaries taken as a whole;
(12) all documents incorporated by reference in the
Prospectus, when they were filed with the Commission, complied
as to form in all material respects with the requirements of the
Exchange Act;
(13) the Company is not an "investment company" or a person
controlled by" an "investment company" within the meaning of the
Investment Company Act.
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In addition, such counsel shall state that (x) in passing on the
form of the Registration Statement and the Prospectus, such counsel
has necessarily assumed the correctness and completeness of the
statements made or included therein by the Company since such
counsel did not verify independently the accuracy or completeness of
such statements, (y) however, in the course of preparation of the
Registration Statement and the Prospectus, such counsel had
conferences with officials of the Company and its independent
auditors, and with representatives of the Underwriters and their
counsel, and also had discussions with such officials of the Company
with a view toward a clear understanding on their part of the
requirements of the 1933 Act and the rules and regulations with
reference to the preparation of registration statements and
prospectuses, and (z) such counsel's examination of the Registration
Statement and the Prospectus and its discussions in the above-mentioned
conferences did not disclose to it any information which gives it
reason to believe that the Registration Statement or the Prospectus
(other than numerical, financial or statistical data, the financial
statements and notes or any related schedules thereto and the Statement
of Eligibility, as to which such counsel need express no opinion or
belief) at the time the Registration Statement became effective
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading, or that the Prospectus (other
than numerical, financial or statistical data, the financial
statements and notes or any related schedules thereto, and the
Statement of Eligibility, as to which such counsel need express no
opinion or belief) as of the Closing Date contains any untrue statement
of a material fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances in
which they were made, not misleading.
In rendering such opinion, such counsel may assume that the laws of
the States of New York and Illinois as to the enforceability of
20
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contracts are not different than the laws of the state of Michigan.
(ii) An opinion of counsel reasonably acceptable to the
Representatives addressed to the Underwriters and dated the Closing
Date to the effect that:
(1) CACUK has been duly organized and is validly existing
as a limited liability company under the laws of England and
Wales with corporate power and authority to own its properties
and conduct its business as described in the Prospectus;
(2) a search with the Registrar of Companies for England
and Wales with respect to CACUK does not reveal the appointment
of any liquidator, administrator or receiver; and
(3) the entire issued share capital of CACUK has been duly
authorized and validly issued and an inspection of CACUK's
Register of Members and of CACUK's filings with the Registrar
of Companies for England and Wales indicate that the Company
owns the whole of the issued share capital of CACUK.
(iii) Such opinion or opinions of McDermott, Will & Emery, counsel
for the Underwriters, dated the Closing Date, with respect to the
valid existence of the Company, the validity of the Notes to be sold
by the Company, the Registration Statement and the Prospectus and
other related matters as you may reasonably require, and the Company
shall have furnished to such counsel such documents and shall have
exhibited to them such papers and records as they request for the
purpose of enabling them to pass upon such matters.
(iv) A certificate of the chief executive officer or chief
operating officer and of the principal financial officer of the
21
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Company, dated the Closing Date, to the effect that:
(1) the representations and warranties of the Company set
forth in Section 2 of this Agreement are true and correct as of
the date of this Agreement and as of the Closing Date and the
Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or
prior to the Closing Date; and
(2) the Commission has not issued an order preventing or
suspending the use of the Prospectus or any preliminary
prospectus filed as a part of the Registration Statement or any
amendment thereto; no stop order suspending the effectiveness of
the Registration Statement has been issued; and to the best
knowledge of the respective signers, no proceedings for that
purpose have been instituted or are pending or contemplated
under the 1933 Act.
The delivery of the certificate provided for in this subparagraph
shall be and constitute a representation and warranty of the Company
as to the facts required in the immediately foregoing clauses (1) and
(2) of this subparagraph to be set forth in said certificate.
(v) Immediately prior to the time this Agreement is executed and
also on the Closing Date, there shall be delivered to you a letter
addressed to you, as Representatives of the Underwriters, from Arthur
Andersen LLP, independent accountants, the first one to be dated the
date of this Agreement and the second one to be dated the Closing
Date, to the effect set forth in SCHEDULE B together with such
additional matters as the Underwriters may reasonably request. There
shall not have been disclosed in the letters referred to in this
subparagraph any
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information which makes it impractical or inadvisable in the judgment
of the Representatives to proceed with the public offering or purchase
of the Notes as contemplated hereby.
(vi) Such further certificates and documents as you may
reasonably request.
In giving their opinions, such counsel may rely, or assume the
accuracy of, the opinions of other competent counsel and, as to factual matters,
on representations of the Company made herein and on certificates of officers of
the Company and of state officials, in which case their opinion is to state that
they are so doing and copies of said opinions or certificates are to be attached
to the opinion unless said opinions or certificates (or, in the case of
certificates, the information therein) have been furnished to the
Representatives in other form.
All opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you and
to McDermott, Will & Emery, counsel for the Underwriters. The Company shall
furnish you with such manually signed or conformed copies of such opinions,
certificates, letters and documents as you request.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at the Closing Date is not so satisfied, this Agreement at
your election will terminate upon notification to the Company without liability
on the part of any Underwriter or the Company, except for the expenses to be
paid or reimbursed by the Company pursuant to Sections 6 hereof and except to
the extent provided in Section 9 hereof.
SECTION 8. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale to
the Underwriters of the Notes on the Closing Date is not consummated because any
condition of the Underwriters' obligations hereunder is not satisfied or because
of any refusal, inability or failure on the part of the Company to perform any
agreement herein or to comply with any provision hereof, unless such failure to
satisfy such condition or to comply with any provision hereof is due to the
default or omission of any Underwriter, the Company agrees to reimburse you and
the other Underwriters upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been reasonably
incurred by you and them in connection with the proposed purchase and the sale
of the Notes. Any such termination shall be without liability of any party to
any other party except that the provisions of this Section, Section 6 and
Section 9 shall at all times be effective and shall apply.
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SECTION 9. INDEMNIFICATION. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of the 1933 Act or the Exchange Act against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter or such controlling person may become subject under the 1933 Act,
the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise (including in settlement of any litigation if such
settlement is effected with the written consent of the Company), insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, including the information
deemed to be part of the Registration Statement at the time of effectiveness
pursuant to Rule 430A, if applicable, any preliminary prospectus, the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading;
and will reimburse each Underwriter and each such controlling person for any
legal or other expenses reasonably incurred by such Underwriter or such
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not
be liable in any such case to the extent that (i) any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in the Registration
Statement, any preliminary prospectus, the Prospectus or any amendment or
supplement thereto in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Underwriter through the
Representatives, specifically for use therein; or (ii) if such statement or
omission was contained or made in any preliminary prospectus and corrected in
the Prospectus and (1) any such loss, claim, damage or liability suffered or
incurred by any Underwriter (or any person who controls any Underwriter)
resulted from an action, claim or suit by any person who purchased Notes which
are the subject thereof from such Underwriter in the offering and (2) such
Underwriter failed to deliver or provide a copy of the Prospectus to such person
at or prior to the confirmation of the sale of such Notes in any case where such
delivery is required by the 1933 Act. In addition to their other obligations
under this Section 9(a), the Company agrees that, as an interim measure during
the pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged statement
or omission, described in this Section 9(a), they will reimburse the
Underwriters on a monthly basis for all reasonable legal and other expenses
incurred in connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
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judicial determination as to the propriety and enforceability of the Company's
obligation to reimburse the Underwriters for such expenses and the possibility
that such payments might later be held to have been improper by a court of
competent jurisdiction. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Underwriter will severally indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of the 1933 Act or the Exchange Act, against any losses, claims, damages or
liabilities to which the Company, or any such director, officer or controlling
person may become subject under the 1933 Act, the Exchange Act or other federal
or state statutory law or regulation, at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the Representatives on behalf of the Underwriters), insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue or alleged untrue statement of any material fact
contained in the Registration Statement, any preliminary prospectus, the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any preliminary prospectus, the Prospectus, or any
amendment or supplement thereto in reliance upon and in conformity with Section
3 of this Agreement or any other written information furnished to the Company by
such Underwriter through the Representatives specifically for use in the
preparation thereof, and will reimburse any legal or other expenses reasonably
incurred by the Company, or any such director, officer or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action. In addition to their other obligations under this Section
9(b), the Underwriters agree that, as an interim measure during the pendency of
any claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in this Section 9(b), they will reimburse the Company on a monthly
basis for all reasonable legal and other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Underwriters' obligation to reimburse
the Company for such expenses and the possibility that such payments might later
be held to have been improper by a court of competent jurisdiction. This
indemnity agreement will be in
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addition to any liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party except to the extent that
the indemnifying party was prejudiced by such failure to notify. In case any
such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
all other indemnifying parties similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided, however,
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, or the indemnified and indemnifying parties may have
conflicting interests which would make it inappropriate for the same counsel to
represent both of them, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defense and otherwise to
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election so to assume the defense of such action and approval by
the indemnified party of counsel, which approval shall not be unreasonably
withheld, the indemnifying party will not be liable to such indemnified party
under this Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed such counsel in connection with the
assumption of legal defense in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved by the
Representatives in the case of paragraph (a) and by the Company in the case of
paragraph (b) representing all indemnified parties not having different or
additional defenses or potential conflicting interest among themselves who are
parties to such action), (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party. No
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indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability arising out of such proceeding.
(d) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under paragraphs (a) or (b) hereof in
respect of any losses, claims, damages or liabilities referred to therein, then
each applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Underwriters from the offering of the Notes or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Underwriters in connection with the statements or omissions which resulted
in such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The respective relative benefits received by the
Company and the Underwriters shall be deemed to be in the same proportion in the
case of the Company as the total price paid to the Company for the Notes by the
Underwriters (net of underwriting discount but before deducting expenses), and
in the case of the Underwriters as the underwriting discount received by them
bears to the total of such amounts paid to the Company received by the
Underwriters as underwriting discount in each case as contemplated by the
Prospectus. The relative fault of the Company and the Underwriters shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, claims, damages and liabilities referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section were determined by pro
rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section 9, no
Underwriter
27
<PAGE>
shall be required to contribute any amount in excess of the amount by which
the total price at which the Notes underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the 1933 Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section are several in proportion
to their respective underwriting commitments and not joint.
(e) The provisions of this Section shall survive any termination of
this Agreement.
SECTION 10. DEFAULT OF UNDERWRITERS. It shall be a condition to the
agreement and obligation of the Company to sell and deliver the Notes hereunder,
and of each Underwriter to purchase the Notes hereunder, that, except as
hereinafter in this paragraph provided, each of the Underwriters shall purchase
and pay for the aggregate principal amount of Notes agreed to be purchased by
such Underwriter hereunder upon tender to the Representatives of such Notes in
accordance with the terms hereof. If any Underwriter or Underwriters default in
their obligations to purchase the aggregate principal amount of Notes hereunder
on the Closing Date and the aggregate number of Notes which such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10
percent of the aggregate principal amount of Notes which the Underwriters are
obligated to purchase on the Closing Date, the Representatives may make
arrangements satisfactory to the Company for the purchase of such aggregate
principal amount of Notes by other persons, including any of the Underwriters,
but if no such arrangements are made by such date the nondefaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the aggregate principal amount of Notes which such
defaulting Underwriters agreed but failed to purchase on such date. If any
Underwriter or Underwriters so default and the aggregate principal amount of
Notes with respect to which such default or defaults occur is more than the
above percentage and arrangements satisfactory to the Representatives and the
Company for the purchase of such Notes by other persons are not made within 36
hours after such default, this Agreement will terminate without liability on the
part of any nondefaulting Underwriter or the Company, except for the expenses to
be paid by the Company pursuant to Section 6 hereof and except to the extent
provided in Section 9 hereof.
In the event that the aggregate principal amount of Notes to which a
default relates are to be purchased by the nondefaulting
28
<PAGE>
Underwriters or by another party or parties, the Representatives or the
Company shall have the right to postpone the Closing Date for not more than
seven business days in order that the necessary changes in the Registration
Statement, Prospectus and any other documents, as well as any other
arrangements, may be effected. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability
for its default.
SECTION 11. TERMINATION. Without limiting the right to terminate
this Agreement pursuant to any other provision hereof, this Agreement may be
terminated by you prior to the Closing Date if (i) trading in securities on the
New York Stock Exchange shall have been suspended or minimum prices shall have
been established on such exchange, or (ii) a banking moratorium shall have been
declared by Illinois, Michigan, New York, or United States authorities, or (iii)
there shall have been any material and adverse change in financial markets or in
political, economic or financial conditions which, in the opinion of the
Representatives, either renders it impracticable or inadvisable to proceed with
the offering and sale of the Notes on the terms set forth in the Prospectus or
materially and adversely affects the market for the Notes, or (iv) there shall
have been an outbreak of major armed hostilities between the United States and
any foreign power which in the opinion of the Representatives makes it
impractical or inadvisable to offer or sell the Notes. Any termination pursuant
to this Section 11 shall be without liability on the part of any Underwriter to
the Company or on the part of the Company to any Underwriter (except for
expenses to be paid or reimbursed pursuant to Section 6 hereof and except to the
extent provided in Section 9 hereof).
SECTION 12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter
or the Company or any of its or their partners, officers or directors or any
controlling person, and will survive delivery of and payment for the Notes sold
hereunder.
SECTION 13. NOTICES. All communications hereunder will be in writing
and, if sent to the Underwriters will be mailed, delivered or telegraphed and
confirmed to you c/o William Blair & Company, L.L.C., 222 West Adams Street,
Chicago, Illinois 60606, Attention: Manager, Fixed Income, with a copy to
McDermott, Will & Emery, 227 W. Monroe Street, Chicago, Illinois 60606-5096,
29
<PAGE>
Attention: Scott N. Gierke, P.C.; and if sent to the Company will be mailed,
delivered or telegraphed and confirmed to the Company at its corporate
headquarters with a copy to Dykema Gossett PLLC, Attention Fredrick M. Miller,
Esq., 400 Renaissance Center, Detroit, Michigan 48243.
SECTION 14. SUCCESSORS. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors, personal
representatives and assigns, and to the benefit of the officers and directors
and controlling persons referred to in Section 9, and no other person will have
any right or obligation hereunder. The term "successors" shall not include any
purchaser of the Notes as such from any of the Underwriters merely by reason of
such purchase.
SECTION 15. REPRESENTATION OF UNDERWRITERS. You will act as
Representatives for the several Underwriters in connection with this financing,
and any action under or in respect of this Agreement taken by you will be
binding upon all the Underwriters.
SECTION 16. PARTIAL UNENFORCEABILITY. If any section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, paragraph or provision hereof.
SECTION 17. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois.
30
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the several
Underwriters including you, all in accordance with its terms.
Very truly yours,
CREDIT ACCEPTANCE CORPORATION
By:
---------------------------------
Its:
---------------------------------
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
William Blair & Company, L.L.C.
First Chicago Capital Markets, Inc.
NationsBanc Capital Markets, Inc.
As Representatives of the several
Underwriters named in Schedule A
By: William Blair & Company, L.L.C.
By:
---------------------------------
Its:
--------------------------------
31
<PAGE>
SCHEDULE A
PRINCIPAL
AMOUNT OF
NOTES TO BE
UNDERWRITER PURCHASED
- ----------- -----------
William Blair & Company, L.L.C.. . . . . . . . . . . . . . . $
First Chicago Capital Markets, Inc.. . . . . . . . . . . . .
NationsBanc Capital Markets, Inc.. . . . . . . . . . . . . .
-----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . $
-----------
-----------
<PAGE>
SCHEDULE B
Comfort Letter of Arthur Andersen LLP
(1) They are independent public accountants with respect to the
Company and its subsidiaries within the meaning of the 1933 Act.
(2) In their opinion the consolidated financial statements and
schedules of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement and the consolidated financial
statements of the Company from which the information presented under the caption
"Selected Consolidated Financial Data" has been derived which are stated therein
to have been examined by them comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act and the Exchange Act.
(3) They have undertaken specified procedures (but not an examination
in accordance with generally accepted auditing standards), including inquiries
of certain officers of the Company and its subsidiaries responsible for
financial and accounting matters as to transactions and events subsequent to
December 31, 1996, a reading of minutes of meetings of the stockholders and
directors of the Company and its subsidiaries since __________________, 19____,
a reading of the latest available interim unaudited consolidated financial
statements of the Company and its subsidiaries (with an indication of the date
thereof) and other procedures as specified in such letter, and have been advised
by officers of the Company that (i) the unaudited consolidated financial
statements of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act and the
Exchange Act and that such unaudited financial statements are fairly presented
in accordance with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements included
in the Registration Statement, [IF APPLICABLE, COVER PRO FORMA FINANCIAL
STATEMENTS] and (ii) at a specified date not more than five days prior to the
date thereof in the case of the first letter and not more than two business days
prior to the date thereof in the case of the second letter, there was no change
in the capital stock or long-term debt or short-term debt (other than normal
payments) of the Company and its subsidiaries on a consolidated basis and no
decrease in consolidated net current assets or consolidated stockholders' equity
as compared with amounts shown on the latest unaudited balance sheet of the
Company included in the Registration Statement or for the period from the date
of such balance sheet to a date not more than five days prior
C-1
<PAGE>
to the date thereof in the case of the first letter and not more than two
business days prior to the date thereof in the case of the second and third
letters, there were no decreases, as compared with the corresponding period
of the prior year, in consolidated total revenue, operating income or in the
total or per share amounts of consolidated net income except, in all
instances, for changes or decreases which the Prospectus discloses have
occurred or may occur or which are set forth in such letter.
(4) They have carried out specified procedures, which have been
agreed to by the Representatives, with respect to certain information in the
Prospectus specified by the Representatives, and on the basis of such
procedures, they have found such information to be in agreement with the general
accounting records of the Company and its subsidiaries.
C-2
<PAGE>
EXHIBIT 1.2
CREDIT ACCEPTANCE CORPORATION
MEDIUM-TERM NOTES, SERIES A
DISTRIBUTION AGREEMENT
William Blair & Company, L.L.C. NationsBanc Capital Markets, Inc.
222 West Adams Street NationsBanc Corporate Center
Chicago, Illinois 60606 7th Floor
100 N. Tryon St., NC1-007-07-01
First Chicago Capital Markets, Charlotte, NC 28255
Inc.
One First National Plaza
Chicago, IL 60670
_________________, 1997
Ladies and Gentlemen:
Credit Acceptance Corporation, a Michigan corporation (the "Company"),
proposes to issue and sell from time to time its Medium-Term Notes, Series A
(the "Securities") in an aggregate amount of up to $_______________ and agrees
with each of you (individually, an "Agent," and collectively, the "Agents") as
set forth in this Agreement.
Subject to the terms and conditions stated herein and to the reservation by
the Company of the right to sell Securities directly on its own behalf, the
Company hereby (i) appoints each Agent as an agent of the Company for the
purpose of soliciting and receiving offers to purchase Securities from the
Company pursuant to Section 2(a) hereof and (ii) agrees that, except as
otherwise contemplated herein, whenever it determines to sell Securities
directly to any Agent as principal, it will enter into a separate agreement
(each a "Terms Agreement"), substantially in the form of Annex I hereto,
relating to such sale in accordance with Section 2(b) hereof.
The Securities will be issued under an indenture, dated as of
______________, 1997 (the "Indenture"), between the Company and The Bank of New
York, as Trustee (the "Trustee"). The Securities shall have the maturity
ranges, interest rates, if any, redemption provisions and other terms set forth
in the Prospectus referred to below as it may be amended or supplemented from
time to time. The Securities will be issued, and the terms and rights thereof
<PAGE>
established, from time to time by the Company in accordance with the Indenture.
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, each Agent that:
(a) A registration statement on Form S-3 (Registration No.
333-_________) in respect of debt securities of the Company, including the
Securities, has been filed with the Securities and Exchange Commission
(the "Commission") in the form heretofore delivered or to be delivered
to such Agent, excluding exhibits to such registration statement but
including all documents incorporated by reference in the prospectus
contained therein, and such registration statement in such form has
been declared effective by the Commission and no stop order suspending
the effectiveness of such registration statement has been issued and
no proceeding for that purpose has been initiated or threatened by the
Commission (the various parts of such registration statement together
with any other registration statement with respect to the Securities,
including all exhibits thereto and the documents incorporated by
reference in the prospectus contained in the registration statement at
the time such part of the registration statement became effective but
excluding the Statement of Eligibility on Form T-1 (the "Statement of
Eligibility") and, if applicable, including the information contained
in the form of final prospectus filed with the Commission pursuant to
Rule 424 under the Securities Act of 1933, as amended (the "Act"), in
accordance with Section 4(a) hereof and deemed by virtue of Rule 430A
under the Act to be part of the registration statement, each as
amended at the time such part became effective, being hereinafter
collectively called the "Registration Statement"; the prospectus
(including the prospectus supplement dated ______________, 1997)
relating to the Securities, in the form in which it has most recently
been filed or transmitted for filing with the Commission on or prior
to the date of this Agreement, being hereinafter called the
"Prospectus"; any reference herein to the Prospectus shall be deemed
to refer to and include the documents incorporated by reference
therein pursuant to the applicable form under the Act, as of the date
of such Prospectus; any reference to any amendment or supplement to
the Prospectus, including any supplement to the Prospectus that sets
forth only the terms of a particular issue of the Securities (a
"Pricing Supplement"), shall be deemed to refer to and include any
documents filed after the date of such Prospectus, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by
2
<PAGE>
reference in such Prospectus; any amendment to the Registration Statement
shall be deemed to include any annual report of the Company filed pursuant
to Section 13(a) or 15(d) of the Exchange Act after the effective date of
the Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to and include the Prospectus as
amended or supplemented (including by the applicable Pricing Supplement
filed in accordance with Section 4(a) hereof) in relation to Securities sold
pursuant to this Agreement, in the form filed with the Commission pursuant
to Rule 424 under the Act and in accordance with Section 4(a) hereof,
including any documents incorporated by reference therein as of the
date of such filing);
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and, when read together with
the other information in the Prospectus, none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, or any amendment or
supplement thereto, when such documents become effective or are filed
with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by any Agent expressly for use in
the Prospectus as amended or supplemented to relate to a particular
issuance of Securities;
(c) The Registration Statement and the Prospectus conform, and
any amendments or supplements thereto will conform, in all material
respects, to the requirements of the Act and the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), and the rules and
regulations
3
<PAGE>
of the Commission thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment thereto
and as of the applicable filing date as to the Prospectus and any amendment
or supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by any Agent expressly for use in the Prospectus as
amended or supplemented to relate to a particular issuance of Securities;
(d) The Securities have been duly and validly authorized, and,
when authenticated by the Trustee in accordance with the Indenture and
issued and delivered pursuant to this Agreement, the Indenture and any
Terms Agreement against payment of the consideration therefor, will
have been duly and validly executed, authenticated, issued and
delivered and will constitute valid and binding obligations of the
Company entitled to the benefits provided by the Indenture and
enforceable against the Company in accordance with their terms, except
as enforceability of the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights and by the exercise of judicial discretion in
accordance with general principles applicable to equitable and similar
remedies; and the Securities of any particular issuance of Securities
will conform to the description thereof in the Prospectus as amended
or supplemented to relate to such issuance of Securities;
(e) The Indenture has been duly and validly authorized, executed
and delivered by the Company and, upon execution and delivery by the
Trustee, will constitute a valid and binding instrument of the
Company, enforceable against the Company in accordance with its terms,
except as enforceability of the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights and by the exercise of judicial discretion in
accordance with general principles applicable to equitable and similar
remedies. The Indenture complies with the Trust Indenture Act and has
been duly qualified under the Trust Indenture Act. The Indenture
conforms to the description thereof contained in the Prospectus;
4
<PAGE>
(f) This Agreement has been duly authorized, executed and
delivered by the Company. The issue and sale of the Securities, the
compliance by the Company with all of the provisions of the
Securities, the Indenture, this Agreement and any Terms Agreement, and
the consummation of the transactions herein and therein contemplated
will not result in the breach, or be in contravention, of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company is
bound or to which any of the property or assets of the Company is
subject, nor will such action result in any violation of the
provisions of the Articles of Incorporation, as amended, or the Bylaws
of the Company or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its properties; and no consent, approval,
authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the
solicitation of offers to purchase Securities, the issue and sale of
the Securities by the Company or the consummation by the Company of
the other transactions contemplated by this Agreement or any Terms
Agreement or the Indenture, except such as have been, or will have
been prior to the Commencement Date (as defined in Section 3 hereof),
obtained under the Act and the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with
the solicitation by such Agent of offers to purchase Securities from
the Company and with purchases of Securities by such Agent as
principal, as the case may be, in each case in the manner contemplated
hereby;
(g) The subsidiaries (the "Subsidiaries") identified in an
officers' certificate, dated the date hereof, are the only
subsidiaries of the Company. The only Subsidiaries that own over five
percent (5%) of the Consolidated Net Tangible Assets (as defined in
the Indenture) or are "significant subsidiaries," as such term is
defined in Rule 405 are Buyers Vehicle Protection Plan, Inc., a
Michigan corporation ("BVPP"), and Credit Acceptance Corporation UK
Limited, a limited liability company organized under the laws of
England and Wales ("CACUK" and together with BVPP, the "Significant
Subsidiaries").
(h) The Company and the Subsidiaries have been duly incorporated
or organized and are validly existing as corporations, or in the case
of CACUK and Credit Acceptance
5
<PAGE>
Corporation Ireland Limited ("CACIL") as a limited liability company, in
good standing under the laws of their respective places of incorporation, or
in the case of CACUK and CACIL no liquidator, administrator or receiver has
been appointed, with corporate power and authority to own their properties
and conduct their business as described in the Prospectus; the Company and
each Subsidiary is duly qualified to do business as a foreign corporation,
or in the case of CACUK and CACIL as a limited liability company,
under the corporation law of, and is in good standing as such in, each
jurisdiction in which it owns or leases properties, has an office, or
in which business is conducted by it and such qualification is
required except in any such case where the failure to so qualify or be
in good standing would not have a material adverse effect upon the
financial condition, assets, business, business prospects or results
of operations of the Company and the Subsidiaries taken as a whole (a
"Material Adverse Effect"); and no proceeding of which the Company has
knowledge has been instituted in any such jurisdiction revoking,
limiting or curtailing, or seeking to revoke, limit or curtail, such
power and authority or qualification;
(i) The Company has an authorized capitalization as set forth in
or incorporated by reference in the Prospectus. The issued and
outstanding shares of capital stock of the Company as set forth in the
Prospectus have been duly authorized and validly issued and are fully
paid and nonassessable. All of the issued and outstanding shares of
capital stock of each Subsidiary have been duly authorized and validly
issued, are fully paid and non-assessable and are owned of record
directly or indirectly by the Company (except that all of the
outstanding common shares of CAC Ohio, which constitutes 1% of the
issued and outstanding capital stock of CAC Insurance Agency of Ohio,
Inc., are owned by Thomas Ciatti and one share of CACIL is held by the
Company's attorney in Ireland as a nominee and on behalf of and in
trust for the Company), and, except as set forth in the Registration
Statement or the Prospectus, are free and clear of any liens, claims,
security interests, pledges, charges, encumbrances, shareholders'
agreements and voting trusts or rights of others. Except as set forth
in the Registration Statement or the Prospectus and other than options
granted subsequent to December 31, 1996 pursuant to option plans
described in the Registration Statement or the Prospectus, there are
no options, agreements, contracts or other rights in existence to
acquire from the Company or any Subsidiary any of the capital stock of
the Company or any Subsidiary;
6
<PAGE>
(j) The accountants who have expressed their opinions with
respect to certain of the financial statements and schedules included
or incorporated by reference in the Registration Statement are
independent accountants as required by the Act;
(k) The consolidated financial statements and schedules of the
Company included or incorporated by reference in the Registration
Statement present fairly the consolidated financial position of the
Company as of the respective dates of such financial statements, and
the consolidated statements of income, shareholders' equity and cash
flows of the Company for the respective periods covered thereby, all
in conformity with generally accepted accounting principles
consistently applied throughout the periods involved, except as
disclosed in the Prospectus, and the supporting schedules included or
incorporated by reference in the Registration Statement present fairly
the information required to be stated therein;
(l) Neither the Company nor any Subsidiary is in violation of its
articles of incorporation or bylaws or in default under any consent
decree, or in default with respect to any material provision of any
lease, loan agreement, franchise, license, permit or other contract
obligation to which it is a party and there does not exist any state
of facts which constitutes an event of default as defined in such
documents or which, with notice or lapse of time or both, would
constitute such an event of default, in each case, except for defaults
which would not have a Material Adverse Effect;
(m) Except as set forth or incorporated by reference in the
Registration Statement or the Prospectus, there are no material legal
or governmental proceedings pending, or to the Company's knowledge,
threatened to which the Company or any Subsidiary is or may be a party
or of which material property owned or leased by the Company or any
Subsidiary is or may be the subject, or related to environmental or
discrimination matters which are required to be disclosed in the
Registration Statement or Prospectus and which are not so disclosed,
or which question the validity of this Agreement or any action taken
or to be taken pursuant hereto or thereto;
(n) There are no holders of securities of the Company having
rights to registration thereof or preemptive rights to purchase Common
Stock except as disclosed in the Prospectus;
7
<PAGE>
(o) The Company and each of its Subsidiaries have good and
marketable title to all the properties and assets reflected as owned
in the financial statements hereinabove described (or elsewhere in the
Prospectus), subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except those, if any, reflected in such
financial statements (or elsewhere in the Prospectus) or which are not
material to the Company and its Subsidiaries taken as a whole. The
Company and each of its Subsidiaries hold their respective leased
properties which are material to the Company and its Subsidiaries
taken as a whole under valid and binding leases;
(p) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as
contemplated by, set forth in or incorporated by reference in the
Registration Statement or the Prospectus, the Company and the
Subsidiaries, taken as a whole, have not incurred any material
liabilities or obligations, direct or contingent, nor entered into any
material transactions not in the ordinary course of business and there
has not been any change in the financial condition, assets, business,
business prospects or results of operations of the Company and the
Subsidiaries which would have a Material Adverse Effect;
(q) There is no material document of a character required to be
described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement which is not
described or filed as required;
(r) The Company together with the Subsidiaries owns and possesses
all right, title and interest in and to, or has duly licensed from
third parties, all trademarks, copyrights and other proprietary rights
("Trade Rights") material to the business of the Company and each of
the Subsidiaries taken as a whole. Neither the Company nor any
Subsidiary has received any notice of infringement, misappropriation
or conflict from any third party as to such material Trade Rights
which has not been resolved or disposed of and neither the Company nor
any Subsidiary has infringed, misappropriated or otherwise conflicted
with material Trade Rights of any third parties, which infringement,
misappropriation or conflict would have a Material Adverse Effect;
(s) The conduct of the business of the Company and each
Subsidiary is in compliance in all respects with applicable federal,
state, local and foreign laws and
8
<PAGE>
regulations (including, without limitation, Regulation Z, the Truth in
Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting
Act, the rules and regulations of the Federal Trade Commission, and other
federal, state and local laws, rules and regulations that pertain to
repossession of collateral, consumer debt collection practices, garnishment
of wages, truth in lending, insurance premium financing and the sale of
vehicle service agreements) except where the failure to be in compliance
would not have a Material Adverse Effect;
(t) All offers and sales of the Company's capital stock prior to
the date hereof were at all relevant times duly registered with or
exempt from the registration requirements of the Act and were duly
registered with or the subject of an available exemption from the
registration requirements of the applicable state securities or blue
sky laws;
(u) The Company and each Subsidiary have filed all necessary
federal, state and local income and franchise tax returns and have
paid all taxes shown as due thereon, and there is no tax deficiency
that has been, or to the knowledge of the Company might be, asserted
against the Company or any of its properties or assets that would or
could reasonably be expected to have a Material Adverse Effect;
(v) There are no negotiations now underway with any party or
parties with regard to the possible sale of the Company or of a block
of its capital stock exceeding, in the aggregate, 5% of the then-outstanding
capital stock except as described in the Registration Statement;
(w) The Company is not conducting, and does not intend to
conduct, its business in a manner in which it would become, an
"investment company" as defined in Section 3(a) of the Investment
Company Act of 1940, as amended ("Investment Company Act"); and
(x) Immediately after any sale of Securities by the Company
hereunder or under any Terms Agreement, the aggregate amount of
Securities which shall have been issued and sold by the Company
hereunder or under any Terms Agreement and of any debt securities of
the Company (other than such Securities) that shall have been issued
and sold pursuant to the Registration Statement will not exceed the
amount of debt securities registered under the Registration Statement.
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2. SOLICITATIONS BY AGENTS.
(a) On the basis of the representations and warranties, but subject to the
terms and conditions herein set forth, each of the Agents hereby severally and
not jointly agrees, as agent of the Company, to use its reasonable efforts to
solicit and receive offers to purchase the Securities from the Company upon the
terms and conditions set forth in the Prospectus as amended or supplemented from
time to time. So long as this Agreement shall remain in effect with respect to
any Agent, the Company shall not, without the consent of such Agent, solicit or
accept offers to purchase, or sell, any debt securities with a maturity at the
time of original issuance of 9 months to 30 years except pursuant to this
Agreement, any Terms Agreement, or except pursuant to a private placement not
constituting a public offering under the Act or except in connection with a firm
commitment underwriting pursuant to an underwriting agreement that does not
provide for a continuous offering of medium-term debt securities.
Notwithstanding anything to the contrary in this Agreement, the Company reserves
the right to sell, and may solicit and accept offers to purchase, Securities
directly on its own behalf, and, in the case of any such sale not resulting from
a solicitation made by any Agent, no commission will be payable with respect to
such sale. These provisions shall not limit 4(f) hereof or any similar
provision included in any Terms Agreement.
Procedural details relating to the issue and delivery of Securities, the
solicitation of offers to purchase Securities and the payment in each case
therefor shall be as set forth in the Administrative Procedures attached hereto
as Annex II as it may be amended from time to time by written agreement between
the Agents and the Company (the "Administrative Procedure"). The provisions of
the Administrative Procedure shall apply to all transactions contemplated
hereunder other than those made pursuant to a Terms Agreement. Each Agent and
the Company agree to perform the respective duties and obligations specifically
provided to be performed by each of them in the Administrative Procedure. The
Company will furnish to the Trustee a copy of the Administrative Procedure as
from time to time in effect.
The Company reserves the right, in its sole discretion, to instruct any or
all of the Agents to suspend at any time, for any period of time or permanently,
the solicitation of offers to purchase the Securities. As soon as practicable,
but in any event not later than one business day in Chicago, Illinois, after
receipt of notice from the Company, the Agents will suspend solicitation of
offers to purchase Securities from the Company until such time as the Company
has advised the Agents that such solicitation may be resumed.
The Company agrees to pay each Agent in the form of a discount a
commission, at the time of settlement of any sale of a Security by
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the Company as a result of a solicitation made by such Agent, in an amount
equal to the following applicable percentage of the principal amount of such
Security sold:
Commission
(percentage of
aggregate
principal amount
RANGE OF MATURITIES OF SECURITIES SOLD)
From 9 months to less than 1 year......... .125%
From 1 year to less than 18 months........ .150%
From 18 months to less than 2 years....... .200%
From 2 years to less than 3 years......... .250%
From 3 years to less than 4 years......... .350%
From 4 years to less than 5 years.......... .450%
From 5 years to less than 6 years......... .500%
From 6 years to less than 7 years......... .550%
From 7 years to less than 10 years........ .600%
From 10 years to less than 15 years....... .625%
From 15 years to less than 20 years....... .675%
20 years and more......................... .750%
(b) Each sale of Securities to any Agent as principal shall be made in
accordance with the terms of this Agreement and (unless the Company and such
Agent shall otherwise agree) a Terms Agreement (which may be an oral agreement,
confirmed in writing) which will provide for the sale of such Securities to, and
the purchase thereof by, such Agent. A Terms Agreement may also specify certain
provisions relating to the reoffering of such Securities by such Agent. The
commitment of any Agent to purchase Securities as principal, whether pursuant to
any Terms Agreement or otherwise, shall be deemed to have been made on the basis
of the representations and warranties of the Company herein contained and shall
be subject to the terms and conditions herein set forth. Each Terms Agreement
shall specify the principal amount of Securities to be purchased by any Agent
pursuant thereto, the price to be paid to the Company for such Securities, any
provisions relating to rights of, and default by, underwriters acting together
with such Agent in the reoffering of the Securities and the time and date and
place of delivery of and payment for such Securities. Such Terms Agreement
shall also specify any requirements for opinions of counsel, accountants'
letters and officers' certificates pursuant to Section 4 hereof.
For each sale of Securities to an Agent as principal that is not made
pursuant to a Terms Agreement, the procedural details relating to the issue and
delivery of such Securities and payment therefor shall be as set forth in the
Administrative Procedure. For each such sale of Securities to an agent as
principal that is not made pursuant to a Terms Agreement, the Company agrees to
pay such Agent a
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commission (or grant an equivalent discount) as provided in Section 2(a)
hereof and in accordance with the schedule set forth therein.
Each time and date of delivery of and payment for Securities to be
purchased by an Agent as principal, whether set forth in a Terms Agreement or in
accordance with the Administrative Procedure, is referred to herein as a "Time
of Delivery."
3. DOCUMENT DELIVERY. The documents required to be delivered pursuant to
Section 6 hereof on the Commencement Date (as defined below) shall be delivered
to the Agents at the offices of William Blair & Company, L.L.C., 222 West Adams
Street, Chicago, Illinois, on the date of this Agreement, which date of such
delivery may be postponed by agreement between the Agents and the Company but in
no event shall be later than the day prior to the date on which solicitation of
offers to purchase Securities is commenced or on which any Terms Agreement is
executed (such date being referred to herein as the "Commencement Date").
4. COVENANTS OF THE COMPANY. The Company covenants and agrees with each
Agent:
(a)(i) To make no amendment or supplement to the Registration
Statement or the Prospectus (A) prior to the Commencement Date which
shall be reasonably disapproved by any Agent promptly after reasonable
notice thereof, unless such amendment or supplement has been requested
by the Commission or is, in the Company's judgment, required by law or
(B) after the date of any Terms Agreement or other agreement by an
Agent to purchase Securities as principal and prior to the related
Time of Delivery which shall be reasonably disapproved by any Agent
party to such Terms Agreement or so purchasing as principal promptly
after reasonable notice thereof; (ii) to prepare, with respect to any
Securities to be sold through or to such Agent pursuant to this
Agreement, a Pricing Supplement with respect to such Securities in a
form previously approved by such Agent and the Company and to file
such Pricing Supplement pursuant to Rule 424 under the Act; (iii) to
make no further amendment or any supplement to the Registration
Statement or Prospectus, other than through the filing of reports
under the Exchange Act or through the Pricing Supplement, at any time
prior to having afforded each Agent a reasonable opportunity to review
and comment on it; (iv) to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Securities,
and during such same period to
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advise such Agent, promptly after the Company receives notice thereof, of
the time when any amendment to the Registration Statement has been filed or
has become effective or any supplement to the Prospectus or any amended
Prospectus (other than any Pricing Supplement that relates to Securities not
purchased through or by such Agent) has been filed or transmitted for filing
with the Commission, of the issuance by the Commission of any stop order
preventing or suspending the use of any prospectus relating to the
Securities, of the suspension of the qualification of the Securities
for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request
by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information;
and (v) in the event of the issuance of any such stop order or of any
such order preventing or suspending the use of any such prospectus or
suspending any such qualification, to use promptly its reasonable
efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as such Agent
reasonably may request to qualify the Securities for offering and sale
under the securities laws of such jurisdictions as such Agent may
request and to comply with such laws so as to permit the continuance
of sales and dealings therein for as long as may be necessary to
complete the distribution of the Securities; provided, that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process
in any jurisdiction.
(c) To furnish such Agent with copies of the Registration
Statement and each amendment thereto, with copies of the Prospectus as
each time amended or supplemented, other than any Pricing Supplement
(except as provided in the Administrative Procedure), in the form in
which it is filed with the Commission pursuant to Rule 424 under the
Act, and with copies of the documents incorporated by reference
therein, all in such quantities as such Agent may reasonably request
from time to time so long as the Agents are required to deliver a
Prospectus in connection with the sales of, or solicitations of offers
to purchase, the Securities; and, if the delivery of a prospectus is
required at any time in connection with the offering or sale of the
Securities (including Securities purchased from the Company by such
Agent as principal) and if at such time any event shall have occurred
as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or
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omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such same period to amend or supplement
the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with
the Act, the Exchange Act or the Trust Indenture Act, to notify such
Agent and request such Agent, in its capacity as agent of the Company,
to suspend solicitation of offers to purchase Securities from the
Company (and, if so notified, such Agent shall cease such
solicitations as soon as practicable, but in any event not later than
one business day later); and if the Company shall decide to amend or
supplement the Registration Statement or the Prospectus as then
amended or supplemented, to so advise such Agent promptly by telephone
(with confirmation in writing) and to prepare and cause to be filed
promptly with the Commission an amendment or supplement to the
Registration Statement or the Prospectus as then amended or
supplemented that will correct such statement or omission or effect
such compliance; provided, however, that if during such same period
such Agent continues to own Securities purchased from the Company by
such Agent as principal or such Agent is otherwise required to deliver
a prospectus in respect of transaction in the Securities, the Company
shall promptly prepare and file with the Commission such an amendment
or supplement;
(d) To make generally available to its security holders as soon
as practicable, but in any event not later than eighteen months after
(i) the effective date of the Registration Statement, (ii) the
effective date of each post-effective amendment to the Registration
Statement, and (iii) the date of each filing by the Company with the
Commission of an Annual Report on Form 10-K that is incorporated by
reference in the Registration Statement, an earning statement of the
Company and its subsidiaries (which need not be audited) complying
with Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company, Rule
158);
(e) So long as any Securities are outstanding, to furnish to such
Agent copies of all reports or other communications (financial or
other) furnished to shareholders and deliver to such Agent (i)
promptly after they are filed, copies of any reports and financial
statements furnished to or filed with the Commission or any national
securities exchange on which any class of
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<PAGE>
securities of the Company is listed; and (ii) such additional information
concerning the business and financial condition of the Company as such Agent
may from time to time reasonably request (such financial statements to be on
a consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its shareholders
generally or to the Commission);
(f) That, from the date of any Terms Agreement with such Agent or
other agreement by such Agent to purchase Securities as principal and
continuing to and including the earlier of (i) the termination of the
trading restrictions for the Securities purchased thereunder, as
notified to the Company by such Agent, and (ii) the related Time of
Delivery, the Company will not, without the prior written consent of
such Agent, offer, sell, contract to sell or otherwise dispose of any
debt securities of the Company which both mature more than nine months
after such Time of Delivery and are substantially similar to such
Securities;
(g) That each acceptance by the Company of an offer to purchase
Securities hereunder (including any purchase by such Agent as
principal not pursuant to a Terms Agreement), and each execution and
delivery by the Company of a Terms Agreement with such Agent, shall be
deemed to be an affirmation to such Agent that the representations and
warranties of the Company contained in or made pursuant to this
Agreement are true and correct as of the date of such acceptance or of
such Terms Agreement, as the case may be, as though made at and as of
such date, and an undertaking that such representations and warranties
will be true and correct as of the Time of Delivery for the Securities
relating to such acceptance or as of the Time of Delivery relating to
such sale, as the case may be, as though made at and as of such date
(except that such representations and warranties shall be deemed to
relate to the Registration Statement and the Prospectus as amended and
supplemented relating to such Securities).
(h) That reasonably in advance of each time the Registration
Statement or the Prospectus shall be amended or supplemented (other
than by a Pricing Supplement) and each time a document filed under the
Act or the Exchange Act is incorporated by reference into the
Prospectus, and each time the Company sells Securities to such Agent
as principal pursuant to a Terms Agreement and such Terms Agreement
specifies the delivery of an opinion or opinions by McDermott, Will &
Emery, counsel to the Agents, as a condition to the purchase of
Securities pursuant to such
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<PAGE>
Terms Agreement, the Company shall furnish to such counsel such papers and
information as they may reasonably request to enable them to furnish to such
Agent the opinion or opinions referred to in Section 6(b) hereof;
(i) That (1) unless the Company and any Agent shall agree
otherwise, each time the Registration Statement or the Prospectus
shall be amended or supplemented (other than by a Pricing Supplement)
and each time a document filed under the Act or the Exchange Act is
incorporated by reference into the Prospectus and (2) each time the
Company sells Securities to such Agent as principal pursuant to a
Terms Agreement and such Terms Agreement specifies the delivery of an
opinion under this Section 4(i) as a condition to the purchase of
Securities pursuant to such Terms Agreement, then, in any such case,
the Company shall furnish or cause to be furnished forthwith to such
Agent a written opinion or opinions of counsel for the Company
satisfactory to such Agent, dated the date of such amendment,
supplement, incorporation or Time of Delivery relating to such sale,
as the case may be, in form satisfactory to such Agent, and of the
same tenor as the opinions of counsel referred to in Sections 6(c) and
6(d) hereof but modified to relate to the Registration Statement and
the Prospectus as amended and supplemented to such date;
(j) That each time the Registration Statement or the Prospectus
shall be amended or supplemented and each time that a document filed
under the Act or the Exchange Act is incorporated by reference into
the Prospectus, in either case to set forth financial information
included in or derived from the Company's consolidated financial
statements or accounting records, and each time the Company sells
Securities to such Agent as principal pursuant to a Terms Agreement
and such Terms Agreement specifies the delivery of a letter under this
Section 4(j) as a condition to the purchase of Securities pursuant to
such Terms Agreement, the Company shall cause the independent
certified public accountants who have certified the financial
statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement forthwith to
furnish such Agent a letter, dated the date of such amendment,
supplement, incorporation or Time of Delivery relating to such sale,
as the case may be, in form satisfactory to such Agent, of the same
tenor as the letter referred to in Section 6(e) hereof but modified to
relate to the Registration Statement and the Prospectus as amended or
supplemented to the date of such letter, with such changes as may be
necessary to reflect changes in the
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<PAGE>
financial statements and other information derived from the accounting
records of the Company, to the extent such financial statements and other
information are available as of a date not more than five business days
prior to the date of such letter; provided, however, that, with respect to
any financial information or other matter, such letter may reconfirm as true
and correct at such date as though made at and as of such date, rather
than repeat, statements with respect to such financial information or
other matters made in the letter referred to in Section 6(e) hereof
which was last furnished to such Agent;
(k) That each time the Registration Statement or the Prospectus
shall be amended or supplemented (other than by a Pricing Supplement),
each time a document filed under the Act or the Exchange Act is
incorporated by reference into the Prospectus, and each time the
Company sells Securities to such Agent as principal and the applicable
Terms Agreement specifies the delivery of a certificate under this
Section 4(k) as a condition to the purchase of Securities pursuant to
such Terms Agreement, the Company shall furnish or cause to be
furnished forthwith to such Agent a certificate, dated the date of
such supplement, amendment, incorporation or Time of Delivery relating
to such sale, as the case may be, in such form and executed by such
officers of the Company as shall be satisfactory to such Agent, to the
effect that the statements contained in the certificate referred to in
Section 6(h) hereof which was last furnished to such Agent are true
and correct at such date as though made at and as of such date (except
that such statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date)
or, in lieu of such certificate, certificates of the same tenor as the
certificates referred to in said Section 6(h) but modified to relate
to the Registration Statement and the Prospectus as amended and
supplemented to such date; and
(l) To offer to any person who has agreed to purchase Securities
as the result of an offer to purchase solicited by such Agent the
right to refuse to purchase and pay for such Securities if, at the
related Time of Delivery fixed pursuant to the Administrative
Procedure, any condition set forth in Sections 6(a), 6(e), 6(f) or
6(g) hereof shall not have been satisfied (it being understood that
the judgment of such person with respect to the impracticability or
inadvisability of such purchase of Securities shall be substituted,
for purposes of this Section 4(l), for the respective judgments of an
Agent with respect to certain matters referred to in such Sections
6(a), 6(e) and 6(f),
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<PAGE>
and that such Agent shall have no duty or obligation whatsoever to exercise
the judgment permitted under such Sections 6(a), 6(e) and 6(f) on behalf of
any such person).
5. PAYMENT OF EXPENSES. The Company covenants and agrees with each Agent
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, the Prospectus and any Pricing Supplements and all other
amendments and supplements thereto and the mailing and delivering of copies
thereof to or on behalf of such Agent; (ii) the fees and expenses of counsel for
the Agents in connection with the establishment of the program contemplated
hereby, any opinions to be rendered by such counsel hereunder and the
transactions contemplated hereunder; (iii) the cost of preparing this Agreement,
any Terms Agreement, any Indenture, any Blue Sky Memorandum and any other
documents in connection with the offering, purchase, sale and delivery of the
Securities; (iv) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 4(b) hereof, including fees and disbursements of counsel for the Agents
in connection with such qualification and in connection with the Blue Sky
survey; (v) any fees charged by securities rating services for rating the
Securities; (vi) any filing fees incident to any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Securities; (vii) the cost of preparing certificates evidencing the Securities;
(viii) the fees and expenses of any Trustee and any agent of any Trustee and any
transfer or paying agent of the Company and the fees and disbursements of
counsel for any Trustee or such agent in connection with any Indenture and the
Securities; (ix) any advertising expenses connected with the solicitation of
offers to purchase and the sale of Securities so long as such advertising
expenses are incurred with the approval of the Company; and (x) all other costs
and expenses incident to the performance of the Company's obligations hereunder
which are not otherwise specifically provided for in this Section. It is
understood, however, that, except as provided in this Section 5 and Sections 7
and 8 hereof, each Agent shall pay all of their own costs and other expenses it
incurs including transfer taxes on resale of any Securities by them.
6. CONDITIONS OF OBLIGATIONS. The obligation of any Agent, as agent of the
Company, at any time ("Solicitation Time") to solicit offers to purchase the
Securities and the obligation of any Agent to purchase Securities as principal,
pursuant to any Terms Agreement or otherwise, shall in each case be subject, in
such Agent's discretion, to the condition that all representations and
warranties and other statements of the Company herein (and, in the case of an
obligation of an Agent under a Terms Agreement, in or incorporated in such Terms
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<PAGE>
Agreement by reference) are true and correct at and as of the Commencement Date
and any applicable date referred to in Section 4(k) hereof that is prior to such
Solicitation Time or Time of Delivery (provided that any representations and
warranties which refer to the Prospectus shall be deemed to refer to the
Prospectus as amended and supplemented to the relevant date or times), as the
case may be, and at and as of such Solicitation Time or Time of Delivery, as the
case may be, the condition that prior to such Solicitation Time or Time of
Delivery, as the case may be, the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions (in rendering legal opinions, such counsel may state that they are
relying upon the opinions of other competent counsel and, as to factual matters,
on representations of the Company made herein and on certificates of officers of
the Company and of state officials, in which case their opinion is to state that
they are so doing and copies of said opinions or certificates are to be attached
to the opinion unless said opinions or certificates (or, in the case of
certificates, the information therein) have been furnished to such Agent in
other form):
(a) (i) With respect to any Securities sold at or prior to such
Solicitation Time or Time of Delivery, as the case may be, the
Prospectus as amended or supplemented (including the Pricing
Supplement) with respect to such Securities shall have been filed or
transmitted for filing with the Commission pursuant to and in
accordance with Rule 424 under the Act within the applicable time
period prescribed for such filing by the rules and regulations under
the Act and in accordance with Section 4(a) hereof; (ii) no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and (iii) all requests for
additional information on the part of the Commission shall have been
complied with to the reasonable satisfaction of such Agent;
(b) McDermott, Will & Emery, counsel to the Agents, shall have
furnished to such Agent (i) such opinion or opinions, dated the
Commencement Date, with respect to the valid existence of the Company,
the validity of the Indenture, the Securities, the Registration
Statement, the Prospectus as amended or supplemented and other related
matters as such Agent may reasonably request, and (ii) if and to the
extent requested by such Agent, with respect to each applicable date
referred to in Section 4(h) hereof that is at or prior to such
Solicitation Time or Time of Delivery, as the case may be, an opinion
or opinions, dated such applicable date, to the effect that such Agent
may rely on the opinion or opinions which were last furnished
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to such Agent pursuant to this Section 6(b) to the same extent as though it
or they were dated the date of such letter authorizing reliance (except
that the statements in such last opinion or opinions shall be deemed
to relate to the Registration Statement and the Prospectus as amended
and supplemented to such date) or, in any case, in lieu of such an
opinion or opinions, an opinion or opinions of the same tenor as the
opinion or opinions referred to in clause (i) but modified to relate
to the Registration Statement and the Prospectus as amended and
supplemented to such date; and in each case such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(c) Dykema Gossett PLLC, counsel for the Company shall have
furnished to such Agent their written opinion, dated the Commencement
Date and each applicable date referred to in Section 4(i) hereof that
is on or prior to such Solicitation Time or Time of Delivery, as the
case may be, in form and substance satisfactory to such Agent, to the
effect that:
(i) the Company and BVPP have been duly incorporated
and are validly existing as corporations in good standing
under the laws of the jurisdiction in which they are
incorporated with corporate power and authority to own their
properties and conduct their business as described in the
Prospectus. With respect to CACUK's due incorporation,
existence, good standing and corporate power and authority,
such counsel may state that it is aware that an opinion of
local counsel in the country in which CACUK does business
has been obtained by the Company and is being delivered to
you on the Closing Date and may assume that you have
reviewed a copy of such opinion;
(ii) all of the issued and outstanding capital stock of
BVPP has been duly authorized, validly issued and is fully
paid and nonassessable, is owned by the Company and, except
as disclosed in the Registration Statement or in this
Agreement, to the best knowledge of such counsel, the
Company owns directly or indirectly all of the outstanding
capital stock of each Subsidiary, free and clear of any
claims, liens, encumbrances or security interests;
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(iii) the authorized capital stock of the Company is as
set forth in the Registration Statement. The issued and
outstanding capital stock of the Company has been duly
authorized and validly issued and is fully paid (to such
counsel's actual knowledge and based upon a certificate of
the chief executive officer or chief operating officer and
of the principal financial officer of the Company) and
nonassessable;
(iv) the Securities have been duly and validly
authorized by the Company and, when duly authenticated by
the Trustee and issued, delivered and sold in accordance
with this Agreement (and any applicable Terms Agreement) and
the Indenture, will have been duly and validly executed,
authenticated, issued and delivered and will constitute
valid and binding obligations of the Company, entitled to
the benefits provided by the Indenture, enforceable against
the Company in accordance with their terms and the terms of
the Indenture, except as enforceability of the same may be
limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
and by the exercise of judicial discretion in accordance
with general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity
or at law;
(v) the Securities conform in all material respects to
the description thereof contained in the Prospectus and
conform in all material respects to the applicable
provisions of the Indenture;
(vi) the Indenture has been duly authorized, executed
and delivered by the Company and the Trustee and constitutes
a valid and binding instrument of the Company, enforceable
against the Company in accordance with its terms, except as
enforceability of the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights and by the exercise of judicial
discretion in accordance with general principles of equity,
regardless of whether such enforceability is considered in a
proceeding
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in equity or at law; the Indenture has been duly qualified
under the Trust Indenture Act; and the Indenture conforms in
all material respects to the description thereof contained in
the Prospectus;
(vii) the Registration Statement has become effective
under the Act, and, to the actual knowledge of such counsel,
no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or
contemplated under the Act; and the Registration Statement,
the Prospectus and each amendment or supplement thereto
(except for the financial statements and the notes and
schedules related thereto and other numerical, statistical
or financial data included therein and the Statement of
Eligibility, as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Act; and the Indenture complies in all
material respects as to form with the Trust Indenture Act;
(viii) such counsel does not know of any statutes,
rules and regulations required to be described or referred
to in the Registration Statement or the Prospectus that are
not described or referred to therein as required; and such
counsel does not know of any legal or governmental
proceedings pending or threatened required to be described
in the Prospectus which are not described as required, nor
of any contracts or documents of a character required to be
described in the Registration Statement or Prospectus or to
be filed as exhibits to the Registration Statement which are
not described or filed, as required;
(ix) this Agreement has been duly authorized, executed
and delivered by and on behalf of the Company, and is the
legal, valid and binding agreement of the Company, except as
enforceability of the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights and by the exercise of judicial
discretion in accordance with general principles of equity,
regardless of whether such
22
<PAGE>
enforceability is considered in a proceeding in equity or at
law, and except to the extent the enforceability of the
indemnification, exculpation and contribution provisions of
this Agreement may be limited by applicable law and as to
which no opinion need be expressed;
(x) no approval, authorization or consent of any public
board, agency, or instrumentality of the United States or of
any state or other jurisdiction is necessary in connection
with the issue or sale of the Securities by the Company
pursuant to this Agreement (other than under the Act, any
applicable blue sky laws and the rules of the NASD) or the
consummation by the Company of any other transactions
contemplated hereby;
(xi) the execution and performance of this Agreement
will not contravene any of the provisions of, or result in a
default under, any agreement, franchise, license, indenture,
mortgage, deed of trust, or other instrument known to such
counsel, of the Company or any Subsidiary or by which the
property of any of them is bound and which contravention or
default would be material to the Company and the
Subsidiaries taken as a whole; or violate any of the
provisions of the articles of incorporation, charter or
bylaws of the Company or any Subsidiary or, so far as is
known to such counsel, violate any statute, order, rule or
regulation of any regulatory or governmental body having
jurisdiction over the Company or any Subsidiary the effect
of which would be materially adverse to the Company and the
Subsidiaries taken as a whole;
(xii) all documents incorporated by reference in the
Prospectus, when they were filed with the Commission,
complied as to form in all material respects with the
requirements of the Exchange Act; and
(xiii) the Company is not an "investment company" or a
person controlled by" an "investment company" within the
meaning of the Investment Company Act.
In addition, such counsel shall state that (x) in passing on the
form of the Registration Statement and the
23
<PAGE>
Prospectus, such counsel has necessarily assumed the correctness and
completeness of the statements made or included therein by the Company since
such counsel did not verify independently the accuracy or completeness of
such statements, (y) however, in the course of preparation of the
Registration Statement and the Prospectus, such counsel had
conferences with officials of the Company and its independent
auditors, and with representatives of the Agents and their counsel,
and also had discussions with such officials of the Company with a
view toward a clear understanding on their part of the requirements of
the Act and the rules and regulations with reference to the
preparation of registration statements and prospectuses, and (z) such
counsel's examination of the Registration Statement and the Prospectus
and its discussions in the above-mentioned conferences did not
disclose to it any information which gives it reason to believe that
the Registration Statement or the Prospectus (other than financial
statements and the notes and schedules related thereto and other
numerical, statistical or financial data included therein and the
Statement of Eligibility, as to which such counsel need express no
opinion or belief) at the time the Registration Statement became
effective contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, or that the Prospectus
(other than financial statements and the notes and schedules related
thereto and other numerical, statistical or financial data included
therein and the Statement of Eligibility, as to which such counsel
need express no opinion or belief) as of the date of such opinion
contains any untrue statement of a material fact or omits to state any
material fact necessary to make the statements therein, in the light
of the circumstances in which they were made, not misleading. Such
counsel may assume that the laws of the States of New York and
Illinois as to the enforceability of contracts are not different than
the laws of the State of Michigan.
(d) An opinion of counsel reasonably acceptable to the
Representatives addressed to the Underwriters and dated the Closing
Date to the effect that:
(i) CACUK has been duly organized and is validly
existing as a limited liability company under the laws of
England and Wales with corporate power and authority to own
its properties and conduct its business as described in the
Prospectus;
24
<PAGE>
(ii) a search with the Registrar of Companies for
England and Wales with respect to CACUK does not reveal the
appointment of any liquidator, administrator or receiver;
and
(iii) the entire issued share capital of CACUK has been
duly authorized and validly issued and an inspection of
CACUK's Register of Members and of CACUK's filings with the
Registrar of Companies for England and Wales indicate that
the Company owns the whole of the issued share capital of
CACUK.
(e) Not later than 10:00 a.m., Chicago time, on the Commencement
Date and on each applicable date referred to in Section 4(j) hereof
that is at or prior to such Solicitation Time or Time of Delivery, as
the case may be, the independent accountants who have certified the
financial statements of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement shall have
furnished to such Agent a letter, dated the Commencement Date or such
applicable date, as the case may be, in form and substance reasonably
satisfactory to such Agent, to the effect set forth in Annex III
hereto;
(f) Since the respective dates as of which information is given
in the Prospectus as amended or supplemented, there shall not have
occurred any change, or any development involving a prospective
change, in or affecting particularly the business or properties of the
Company or any Subsidiary, whether or not arising in the ordinary
course of business, which is in the reasonable judgment of such Agent
so material and adverse as to make it impracticable or inadvisable to
proceed with the solicitation by such Agent of offers to purchase
Securities from the Company or the purchase by such Agent of
Securities from the Company as principal, as the case may be, on the
terms and in the manner contemplated in the Prospectus as amended or
supplemented;
(g) There shall not have occurred any of the following: (i)
trading in securities on the New York Stock Exchange shall have been
suspended or minimum prices shall have been established on such
exchange, or (ii) a banking moratorium shall have been declared by
Illinois, Michigan, New York, or United States authorities, or (iii)
there shall have been any material and adverse change in financial
markets or in political, economic or financial conditions which, in
the opinion of such Agent, either renders it impracticable or
inadvisable to proceed with the
25
<PAGE>
solicitation of offers to purchase Securities or the purchase of Securities
from the Company and sale of the Securities on the terms set forth in the
Prospectus or materially and adversely affects the market for the
Securities, or (iv) there shall have been an outbreak of major armed
hostilities between the United States and any foreign power which in the
opinion of such Agent makes it impractical or inadvisable to proceed with
the solicitation of offers to purchase Securities or the purchase of
Securities from the Company as principal, pursuant to the applicable Terms
Agreement or otherwise, as the case may be, on the terms and in the manner
contemplated in the Prospectus as amended or supplemented;
(h) No downgrading shall have occurred in the rating accorded the
Company's debt securities by any "nationally recognized statistical
rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) and (ii) no organization shall have
publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's
debt securities; and
(i) The Company shall have furnished or caused to be furnished to
such Agent certificates of officers of the Company (acting on behalf
of the Company and without personal liability) dated the Commencement
Date and each applicable date referred to in Section 4(k) hereof that
is on or prior to such Solicitation Time or Time of Delivery, as the
case may be, satisfactory to such Agent, as to the accuracy of the
representations and warranties of the Company herein at and as of the
Commencement Date or such applicable date, as the case may be, as to
the performance by the Company of all of its obligations hereunder to
be performed at or prior to the Commencement Date or such applicable
date, as the case may be, as to the matters set forth in subsections
(a), (e), (f) and (g) of this Section 6, and as to such other matters
as such Agent may reasonably request.
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each Agent and each
person, if any, who controls any Agent within the meaning of the Act or the
Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which such Agent or such controlling person may become subject under
the Act, the Exchange Act or other federal or state statutory law or regulation,
at common law or otherwise (including in settlement of any litigation if such
settlement is effected with the written consent of the Company),
26
<PAGE>
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and will reimburse each Agent and each
such controlling person for any legal or other expenses reasonably incurred
by such Agent or such controlling person in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, the Prospectus or any amendment
or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Agent,
specifically for use therein. In addition to their other obligations under
this Section 7(a), the Company agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any statement or omission, or any alleged
statement or omission, described in this Section 7(a), they will reimburse
the Agents on a monthly basis for all reasonable legal and other expenses
incurred in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the Company's obligation to reimburse the Agents for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each Agent will indemnify and hold harmless the Company, each of
its directors, each of its officers who signed the Registration Statement and
each person, if any, who controls the Company within the meaning of the Act or
the Exchange Act, against any losses, claims, damages or liabilities to which
the Company, or any such director, officer or controlling person may become
subject under the Act, the Exchange Act or other federal or state statutory law
or regulation, at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Agent), insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue or alleged untrue
statement of any material fact contained in the Registration Statement, the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but
27
<PAGE>
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Registration Statement, the
Prospectus, or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by such Agent
specifically for use therein, and will reimburse any legal or other expenses
reasonably incurred by the Company, or any such director, officer or
controlling person in connection with investigating or defending any such
loss, claim, damage, liability or action. In addition to their other
obligations under this Section 7(b), each Agent agrees that, as an interim
measure during the pendency of any claim, action, investigation, inquiry or
other proceeding arising out of or based upon any statement or omission, or
any alleged statement or omission, described in this Section 7(b), such Agent
will reimburse the Company on a monthly basis for all reasonable legal and
other expenses incurred in connection with investigating or defending any
such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety
and enforceability of such Agent's obligation to reimburse the Company for
such expenses and the possibility that such payments might later be held to
have been improper by a court of competent jurisdiction. This indemnity
agreement will be in addition to any liability which such Agent may otherwise
have.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party except to the extent that
the indemnifying party was prejudiced by such failure to notify. In case any
such action is brought against any indemnified party, and it notifies an
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
all other indemnifying parties similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; provided, however,
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, or the indemnified and indemnifying parties may have
conflicting interests which would make it inappropriate for the same counsel to
represent both of them, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defense and otherwise to
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of its election
28
<PAGE>
so to assume the defense of such action and approval by the indemnified party
of counsel, which approval shall not be unreasonably withheld, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed such counsel in connection with the
assumption of legal defense in accordance with the proviso to the next
preceding sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel,
approved by the Agents in the case of paragraph (a) and by the Company in the
case of paragraph (b) representing all indemnified parties not having
different or additional defenses or potential conflicting interest among
themselves who are parties to such action), (ii) the indemnifying party shall
not have employed counsel satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of commencement
of the action or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying
party. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability arising out of such proceeding.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under paragraphs (a) or (b) hereof in
respect of any losses, claims, damages or liabilities referred to therein, then
each applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and each Agent from the offering of the Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
each Agent in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The respective relative benefits received by the Company and
each Agent shall be deemed to be in the same proportion as the total net
proceeds from the sale of Securities received by the Company, before deducting
expenses, bears to the total commissions or discounts received by such Agent in
respect thereof, in each case as contemplated by the Prospectus. The relative
fault of the Company and each Agent shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
29
<PAGE>
fact or the omission to state a material fact relates to information supplied
by the Company or by such Agent and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
claims, damages and liabilities referred to above shall be deemed to include
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim.
The Company and each Agent agree that it would not be just and
equitable if contribution pursuant to this Section were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section, no Agent shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities purchased by or through it were sold to the public exceeds the
amount of any damages which such Agent has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Agents'
obligations to contribute pursuant to this Section are several in proportion to
their respective underwriting commitments and not joint.
(e) The provisions of this Section shall survive any termination of
this Agreement.
8. ACTION AS AGENT. Each Agent, in soliciting offers to purchase
Securities from the Company and in performing the other obligations of such
Agent hereunder (other than in respect of any purchase by an Agent as principal,
pursuant to a Terms Agreement or otherwise), is acting solely as agent for the
Company and not as principal. Each Agent will make reasonable efforts to assist
the Company in obtaining performance by each purchaser whose offer to purchase
Securities from the Company was solicited by such Agent and has been accepted by
the Company, but such Agent shall not have any liability to the Company in the
event such purchase is not consummated for any reason. If the Company shall
default on its obligation to deliver Securities to a purchaser whose offer it
has accepted, the Company shall (i) hold each Agent harmless against any loss,
claim or damage arising from or as a result of such default by the Company and
(ii) notwithstanding such default, pay to the Agent that solicited such offer
any commission to which it would be entitled in connection with such sale.
9. SURVIVAL. The respective indemnities, agreements, representations,
warranties and other statements by any Agent and the
30
<PAGE>
Company set forth in or made pursuant to this Agreement shall remain in full
force and effect regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Agent or any controlling person
of any Agent, or the Company, or any officer or director or any controlling
person of the Company, and shall survive each delivery of and payment for any
of the Securities.
10. TERMINATION. The provisions of this Agreement relating to the
solicitation of offers to purchase Securities from the Company may be suspended
or terminated at any time by the Company as to any Agent or by any Agent as to
such Agent upon the giving of written notice of such suspension or termination
to such Agent or the Company, as the case may be. In the event of such
suspension or termination with respect to any Agent, (x) this Agreement shall
remain in full force and effect with respect to any Agent as to which such
suspension or termination has not occurred, (y) this Agreement shall remain in
full force and effect with respect to the rights and obligations of any party
which have previously accrued or which relate to Securities which are already
issued, agreed to be issued or the subject of a pending offer at the time of
such suspension or termination and (z) in any event, this Agreement shall remain
in full force and effect insofar as the fourth paragraph of Section 2(a),
Section 4(d), Section 4(e), Section 5, Section 7, Section 8 and Section 9 hereof
are concerned.
Notwithstanding anything to the contrary contained herein, the Company
may authorize any other person, partnership or corporation (an "Additional
Agent") to act as its agent to solicit offers for the purchase of all or part of
the Securities of the Company upon thirty days' prior notice to such Agents as
are at such time parties to this Agreement; PROVIDED, HOWEVER that any
Additional Agent shall execute this Agreement and become a party hereto and
thereafter the term Agent as used in this Agreement shall mean the Agents and
such Additional Agent.
11. NOTICES. Except as otherwise specifically provided herein or in the
Administrative Procedure, all statements, requests, notices and agreements
hereunder shall be in writing, or by telephone if promptly confirmed in writing,
and if to William Blair & Company, L.L.C. shall be sufficient in all respects
when delivered or sent by facsimile transmission or registered mail to 222 West
Adams Street, Chicago, Illinois 60606, Attention: Manager, Fixed Income, FAX:
(312) ____________, if to First Chicago Capital Markets, Inc. shall be
sufficient in all respects when delivered or sent by facsimile transmission or
registered mail to _________________________________, Attention:
_______________, FAX: _______________; if to NationsBanc Capital Markets, Inc.
shall be sufficient in all respects when delivered or sent by facsimile
transmission or registered mail to: __________________________________,
Attention: _______________, FAX: _______________; and if to the Company shall
be sufficient in all
31
<PAGE>
respects when delivered or sent by facsimile transmission or registered mail
to 25505 W. 12 Mile Road, Suite 3000, Southfield, MI 48034-8339, Attention:
Chief Financial Officer.
12. BINDING EFFECT. This Agreement and any Terms Agreement shall be
binding upon, and inure solely to the benefit of, each Agent and the Company,
and to the extent provided in Section 7, Section 8 and Section 9 hereof, the
officers and directors of the Company and any person who controls any Agent or
the Company, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement or any Terms Agreement. No purchaser of any of the
Securities through or from any Agent hereunder shall be deemed a successor or
assign by reason of such purchase.
13. TIME OF THE ESSENCE. Time shall be of the essence in this Agreement
and any Terms Agreement. As used herein, the term "business day" shall mean any
day when the office of the Commission in Washington, D.C. is open for business.
14. GOVERNING LAW. This Agreement and any Terms Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Illinois.
15. COUNTERPARTS. This Agreement and any Terms Agreement may be executed
by any one or more of the parties hereto and thereto in any number of
counterparts, each of which shall be an original, but all of such respective
counterparts shall together constitute one and the same instrument.
32
<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us seven counterparts hereof, whereupon this letter and the
acceptance by each of you thereof shall constitute a binding agreement between
the Company and each of you in accordance with its terms.
Very truly yours,
CREDIT ACCEPTANCE CORPORATION
By: __________________________________
Title: _______________________________
Accepted as of the date hereof:
WILLIAM BLAIR & COMPANY, L.L.C.
By: _____________________________
Title: __________________________
FIRST CHICAGO CAPITAL MARKETS, INC.
By: _____________________________
Title: __________________________
NATIONSBANC CAPITAL MARKETS, INC.
By: _____________________________
Title: __________________________
33
<PAGE>
ANNEX I
CREDIT ACCEPTANCE CORPORATION
MEDIUM-TERM NOTES
TERMS AGREEMENT
______ __, 19___
William Blair & Company, L.L.C. NationsBanc Capital Markets, Inc.
222 West Adams Street NationsBanc Corporate Center
Chicago, Illinois 60606 7th Floor
100 N. Tryon St., NC1-007-07-01
First Chicago Capital Markets, Charlotte, NC 28255
Inc.
One First National Plaza
Chicago, IL 60670
Ladies and Gentlemen:
Credit Acceptance Corporation (the "Company") proposes, subject to
the terms and conditions stated herein and in the Distribution Agreement,
dated _________, l997 (the "Distribution Agreement"), between the Company on
the one hand and William Blair & Company, L.L.C., First Chicago Capital
Markets, Inc., and NationsBanc Capital Markets, Inc. (the "Agents") on the
other, to issue and sell to [name of Agent] the securities specified in the
Schedule hereto (the "Purchased Securities"). Each of the provisions of the
Distribution Agreement not specifically related to the solicitation by the
Agents, as agents of the Company, of offers to purchase Securities is
incorporated herein by reference in its entirety, and shall be deemed to be
part of this Terms Agreement to the same extent as if such provisions had
been set forth in full herein. Nothing contained herein or in the
Distribution Agreement shall make any party hereto an agent of the Company or
make such party subject to the provisions therein relating to the
solicitation of offers to purchase securities from the Company, solely by
virtue of its execution of this Terms Agreement. Each of the representations
and warranties set forth therein shall be deemed to have been made at and as
of the date of this Terms Agreement, except that each representation and
warranty in Section 1 of the Distribution Agreement which makes reference to
the Prospectus shall be deemed to be a representation and warranty as of the
date of the Distribution Agreement in relation to the Prospectus (as therein
defined), and
I-1
<PAGE>
also a representation and warranty as of the date of this Terms Agreement in
relation to the Prospectus as amended and supplemented to relate to the
Purchased Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Purchased Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to [Name of Agent] which agrees to purchase from the Company the
Purchased Securities, at the time and place, in the principal amount and at the
purchase price set forth in the Schedule hereto.
If the foregoing is in accordance with your understanding, please sign
and return to us counterparts hereof, and upon acceptance hereof by you, this
letter and such acceptance hereof, including those provisions of the
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
CREDIT ACCEPTANCE CORPORATION
By: _________________________________
Title: ______________________________
Accepted:
[Name of Agent]
BY: ______________________________
Title: ___________________________
I-2
<PAGE>
Schedule to Annex I
Title of Purchased Securities:
[__$] Medium-Term Notes
Aggregate Principal Amount:
[$_______]
[Price to Public:]
Purchase Price by Agent:
% of the principal amount of the Purchased Securities [, plus accrued
interest from ______ to ______] [and accrued amortization, if any, from ______
to ______]
Time of Delivery:
____________________________________
Closing Location:
____________________________________
Maturity:
____________________________________
Interest Rate Provisions:
Interest Payment Dates:
[months and dates]
Other Provisions:
I-3
<PAGE>
Documents to be Delivered:
The following documents referred to in the Distribution Agreement shall be
delivered as a condition to the Closing:
[(1) The opinion or opinions of counsel to the agents referred
to in Section 4(h).]
[(2) The opinion of counsel to the Company referred to in
Section 4(i).]
(3) [The accountants' letter referred to in section 4(j).]
(4) [The officers' certificate referred to in Section 4(k).]
Other Provisions (including Syndicate Provisions, if applicable):
I-4
<PAGE>
ANNEX II
CREDIT ACCEPTANCE CORPORATION
MEDIUM-TERM NOTES, SERIES A
ADMINISTRATIVE PROCEDURES
(Dated as of ___________, 1997)
Medium-Term Notes (the "Notes") with an aggregate initial issuance
price of up to $_______________ are to be offered on a continuing basis by
Credit Acceptance Corporation (the "Company") through William Blair &
Company, L.L.C., First Chicago Capital Markets, Inc. and NationsBanc Capital
Markets, Inc., who, as agents (each an "Agent," and, collectively, the
"Agents"), have agreed to use their reasonable efforts to solicit offers to
purchase the Notes from the Company. The Agents may also purchase Notes as
principal for resale.
The Notes are being sold pursuant to a Distribution Agreement between
the Company and each of the Agents, dated ___________, 1997 (the
"Distribution Agreement"). The Notes will constitute a part of a series of
debt securities, to be issued under the Indenture dated as of ______________,
1997 (the "Indenture") between the Company and ___________________________,
as trustee (the "Trustee"). Each Note will be denominated in U.S. dollars.
A Registration Statement on Form S-3 with respect to debt securities of the
Company, including the Notes, has been filed with the Securities and Exchange
Commission (the "Commission") and has become effective. The base prospectus
relating to the debt securities and a prospectus supplement relating to the
Notes in the form most recently filed with the Commission is herein referred
to as the "Prospectus." The description of the Notes included in the
Prospectus shall be deemed to be included herein. The most recent supplement
to the Prospectus with respect to the specific terms of particular Notes is
herein referred to as the "Pricing Supplement."
The Notes will be issued in book-entry form and represented by one or
more fully registered Notes (each, a "Global Note") delivered to the
Trustee, as agent for The Depository Trust Company ("DTC") and recorded in
the book-entry system maintained by DTC. Owners of beneficial interests in
Global Notes will be entitled to physical delivery of Notes in certificated
form equal in principal amount to their respective beneficial interests only
upon certain limited circumstances described in the Indenture.
In connection with the qualification of book-entry Notes issued for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
<PAGE>
the custodial, document control and administrative functions described below, in
accordance with its respective obligations under a Letter of Representation from
the Company and the Trustee to DTC, and a Medium-Term Note Certificate Agreement
between the Trustee and DTC (the "Certificate Agreement"), and its obligations
as a participant in DTC, including DTC's Same-Day Funds Settlement System
("SDFS").
Administrative procedures and specific terms of the offering are
explained below. Capitalized terms used herein that are not otherwise defined
shall have the meanings ascribed thereto in the applicable Indenture or the
Notes as the case may be.
Acceptance and The Company shall have the sole right
Rejection of to accept offers to purchase Notes from
Offers: the Company and may reject any such offer in whole
or in part. Each Agent shall communicate to the
Company, orally or in writing, each reasonable offer to
purchase Notes from the Company received by it.
Each Agent shall have the right, in its discretion,
without notice to the Company, to reject any offer to
purchase Notes in whole or in part.
Procedure for When a decision has been reached to change the interest
Changing Rates rate or any other variable term on any Notes being offered
or Other by the Company, the Company will promptly advise the Agents
Variable Terms: and the Agents will forthwith suspend solicitation of offers
to purchase such Notes. The Agents will telephone the Company
with recommendations as to the changed interest rates or
other variable terms. At such time as the Company advises
the Agents of the new interest rates or other variable terms,
the Agents may resume solicitation of offers to purchase
such Notes. Until such time only "indications of interest"
may be recorded. Immediately after acceptance by the
Company of an offer to purchase at a new interest rate or
new variable term, the Company, the Agent which presented
such offer (the "Presenting Agent") and the Trustee shall
follow the procedures set forth below under "Settlement
Procedures." The foregoing procedure for changes shall in
no way affect the Company's right to suspend all
solicitations of offers to purchase Notes as set forth in
the Distribution Agreement.
Suspension of The Company may instruct the Agents to suspend solicitation
Solicitation; of purchases at any time. Upon receipt of such instructions
Amendment the Agents will forthwith suspend solicitation of offers to
or Supplement:
<PAGE>
purchase from the Company until such time as the Company has
advised them that solicitation of offers to purchase may be
resumed. If the Company decides to amend the Registration
Statement or the Prospectus (including incorporating any
documents by reference therein) or supplement any of such
documents (other than to change rates or other variable
terms), it will promptly advise the Agents and will furnish
the Agents and their counsel with copies of the proposed
amendment (including any document proposed to be
incorporated by reference therein) or supplement. One
copy of such filed document will be delivered or mailed to
the Agents.
In the event that at the time the solicitation of offers
to purchase from the Company is suspended (other than to
change interest rates or other variable terms) there shall
be any orders outstanding which have not been settled, the
Company will promptly advise the Agents and the Trustee
whether such orders may be settled and whether copies of
the Prospectus as theretofore amended and/or supplemented
as in effect at the time of the suspension may be
delivered in connection with the settlement of such
orders. The Company will have the sole responsibility for
such decision and for any arrangements which may be made
in the event that the Company determines that such orders
may not be settled or that copies of such Prospectus may
not be so delivered.
Delivery of A copy of the most recent Prospectus and the applicable
Prospectus Pricing and the applicable Supplement must accompany or
and applicable precede the earlier of (a) the written confirmation of a
Pricing sale sent to a customer or his agent or (b) the delivery of
Supplement: Notes to a purchaser or its agent.
Authenticity of The Agents will have no obligations or liability to the
Signatures: Company or the Trustee in respect of the authenticity
of the signature of any officer, employee or agent of
the Company or the Trustee on any Note.
<PAGE>
Preparation of If any offer to purchase a Note is accepted by the
Pricing Company, the Company, with the approval of the Presenting
Supplement: Agent, will prepare a Pricing Supplement reflecting the
terms of such Note and file such Pricing Supplement relating
to the Notes and the plan of distribution thereof with the
Commission, in accordance with Rule 424(b) under the
Securities Act of 1933, as amended. The Presenting Agent
will cause a Prospectus with a Pricing Supplement attached
to be delivered to the purchaser of the Note.
In each instance that a Pricing Supplement is prepared,
the Agents will affix the Pricing Supplement to the
Prospectus prior to its use.
Information to be included in the Pricing Supplement shall
include:
1. the name of the Company;
2. the title of the Notes;
3. the date of the Pricing Supplement and the date of
the Prospectus to which the Pricing Supplement relates;
4. the name of the Presenting Agent (as defined below);
5. whether such Notes are being sold to the Presenting
Agent as principal or to an investor or other purchaser
through the Presenting Agent acting as agent for the
Company;
<PAGE>
6. with respect to Notes sold to the Presenting Agent as
principal; whether such Notes will be resold by the
Presenting Agent to investors and other purchasers at (i)
a fixed public offering price of a specified percentage of
their principal amount or (ii) at varying prices related
to prevailing market prices at the time of resale to be
determined by the Presenting Agent;
7. with respect to Notes sold to an investor or other
purchaser through the Presenting Agent acting as agent for
the Company, whether such Notes will be sold at (i) 100%
of their principal amount or (ii) a specified percentage
of their principal amount;
8. the Presenting Agent's discount or commission;
9. Net proceeds to the Company;
10. the Principal Amount, Original Issue Date, Stated
Maturity, Interest Payment Date(s), Redemption Date, if
any, Initial Redemption Percentage, if any, Annual
Redemption Percentage Reduction, if any, Optional
Repayment Date(s), if any, and, in the case of Fixed Rate
Notes, the Interest Rate, and whether such Fixed Rate Note
is a Discount Note (and, if so, the Issue Price), and, in
the case of Floating Rate Notes, the Base Rate, Index
Maturity (if applicable), Initial Interest Rate, if any,
Maximum Interest Rate, if any, Initial Interest Reset
Date, Interest Reset Dates, Spread and/or Spread
Multiplier, if any, and Calculation Agent; and
11. any other additional provisions of the Notes material
to investors or other purchasers of the Notes not
otherwise specified in the Prospectus.
<PAGE>
The Company shall use its reasonable best efforts to send
such Pricing Supplement by telecopy or overnight express
(for delivery by the close of business on the applicable
trade date, but in no event later than 11:00 a.m. Central
time, on the Business Day following the applicable trade
date) to the Presenting Agent and the Trustee at the
following applicable address: if to William Blair &
Company, L.L.C., to:
______________________________________,
______________________________________,
______________________________________;if to
First Chicago Capital Markets, Inc., to:
___________________________
______________________________________,
______________________________________,
______________________________________; and, if to
NationsBanc Capital Markets, Inc., to:
____________________________,
______________________________________.
Issuance: All Fixed Rate Notes issued in book-entry form having the
same Original Issue Date, interest rate, and Stated
Maturity (collectively, the "Fixed Rate Terms") will be
represented initially by a single Global Note in fully
registered form without coupons; and all Floating Rate
Notes issued in book-entry form having the same Original
Issue Date, base rate upon which interest may be
determined (each, a "Base Rate"), which may be the
Commercial Paper Rate, the Treasury Rate or LIBOR, the
lower of two or more Base Rates, or any other rate set
forth by the Company, Initial Interest Rate, Index
Maturity, Spread or Spread multiplier, if any, minimum
interest rate, if any, maximum interest rate, if any, and
Stated Maturity (collectively, "Floating Rate Terms")
will be represented initially by a single Note.
The Company has arranged with the CUSIP Service Bureau of
Standard & Poor's Corporation (the "CUSIP Service
Bureau") for the reservation of approximately 900 CUSIP
numbers which have been reserved for future assignment to
Global Notes and the Company has delivered to the Trustee
and DTC an initial written list of such CUSIP numbers.
The Trustee will assign CUSIP numbers to Global Notes as
described below under Settlement Procedure B. DTC will
notify the CUSIP Service Bureau periodically of the CUSIP
numbers that the Trustee has assigned to Global Notes.
<PAGE>
The Trustee will notify the Company at any time when fewer
than 100 of the reserved CUSIP numbers remain unassigned
to Global Notes, and, if it deems necessary, the Company
will reserve additional CUSIP numbers for assignment to
Global Notes. Upon obtaining such additional CUSIP
numbers, the Company will deliver a list of such
additional numbers to the Trustee and DTC.
Registration: Unless otherwise specified by DTC, each Global Note will be
registered in the name of CEDE & CO., as nominee for DTC, on
the register maintained by the Trustee under the Indenture.
The beneficial owner of a Note issued in book-entry form
(I.E., an owner of a beneficial interest in a Global Note)
(or one or more indirect participants in DTC designated by
such owner) will designate one or more participants in DTC
(with respect to such Note issued in book-entry form, the
"Participants") to act as agent for such beneficial
owner in connection with the book-entry system maintained
by DTC, and DTC will record in book-entry form, in
accordance with instructions provided by such
Participants, a credit balance with respect to such Note
issued in book-entry form in the account of such
Participants. The ownership interest of such beneficial
owner in such Note issued in book-entry form will be
recorded through the records of such Participants or
through the separate records of such Participants and one
or more indirect participants in DTC.
Transfers: Transfers of beneficial interests in a Global Note will be
accomplished by book entries made by DTC and, in turn, by
Participants (and in certain cases, one or more indirect
participants in DTC) acting on behalf of beneficial
transferors and transferees of such Global Note.
Exchanges: The Trustee may deliver to DTC and the CUSIP Service
Bureau at any time a written notice specifying (a) the
CUSIP numbers of two or more Global Notes outstanding on
such date that represent Global Notes having the same
Fixed Rate Terms or Floating Rate Terms, as the case may
be, (other than Original Issue Dates) and for which
interest has been paid to the same date; (b) a date,
occurring at least 30 days after such written notice is
delivered and at least 30 days before the next Interest
<PAGE>
Payment Date for the related Notes issued in book-entry
form, on which such Global Notes shall be exchanged for a
single replacement Global Note; and (c) a new CUSIP
number, obtained from the Company, to be assigned to such
replacement Global Note. Upon receipt of such a notice,
DTC will send to its participants (including the Trustee)
a written reorganization notice to the effect that such
exchange will occur on such date. Prior to the specified
exchange date, the Trustee will deliver to the CUSIP
Service Bureau written notice setting forth such exchange
date and the new CUSIP number and stating that, as of such
exchange date, the CUSIP numbers of the Global Notes to be
exchanged will no longer be valid. On the specified
exchange date, the Trustee will exchange such Global Notes
for a single Global Note bearing the new CUSIP number and
the CUSIP numbers of the exchanged Global Notes will, in
accordance with CUSIP Service Bureau procedures, be
cancelled and not immediately reassigned.
Notice of Interest On the first Business Day of January, April,
Payment Dates: July and October of each year, the Trustee will
deliver to the Company and DTC a written list of Regular
Record Dates and Interest Payment Dates that will occur
during the six-month period beginning on such first
Business Day with respect to Floating Rate Notes issued in
book-entry form. Promptly after each Interest
Determination Date for Floating Rate Notes issued in
book-entry form, the Trustee will notify Standard & Poor's
of the interest rates determined on such Interest
Determination Date.
Payments of PAYMENTS OF INTEREST ONLY. Promptly Principal after
Principal each Regular Record Date, the Trustee will deliver to the
and Interest Company and DTC a written notice specifying, by CUSIP
number, the amount of interest to be paid on each Global
Note on the following Interest Payment Date (other than an
Interest Payment Date coinciding with Maturity) and the
total of such amounts. DTC will confirm the amount
payable on each Global Note on such Interest Payment Date
by reference to the daily bond reports published by
Standard & Poor's. On such Interest Payment Date, the
<PAGE>
Company will pay to the Trustee in immediately available
funds, and the Trustee in turn will pay to DTC in
immediately available funds, such total amount of interest
due (other than at Maturity), at the times and in the
manner set forth below under "Manner of Payment."
PAYMENTS AT MATURITY. On or about the first Business Day
of each month, the Trustee will deliver to the Company and
DTC a written list of principal, interest and premium, if
any, to be paid on each Global Note maturing or otherwise
becoming due in the following month. The Trustee, the
Company and DTC will confirm the amounts of such principal
and interest payments with respect to a Global Note on or
about the fifth Business Day preceding the Maturity of
such Global Note. At such Maturity, the Company will pay
to the Trustee in immediately available funds, and the
Trustee in turn will pay to DTC in immediately available
funds, the principal amount of such Note, together with
interest and premium, if any, due at such Maturity, at the
times and in the manner set forth below under "Manner of
Payment." If any Maturity of a Global Note is not a
Business Day, the payment due on such day shall be made on
the next succeeding Business Day and no interest shall
accrue on such payment for the period from and after such
Maturity. Promptly after payment to DTC of the principal,
interest and premium, if any, due at the Maturity of such
Global Note, the Trustee will cancel such Global Note and
deliver it to the Company with an appropriate debit
advice. On the first Business Day of each month, the
Trustee will deliver to the Company a written statement
indicating the total principal amount of outstanding
Global Notes as of the immediately preceding Business Day.
MANNER OF PAYMENT. The total amount of any principal,
premium, if any, and interest due on Global Notes on any
Interest Payment Date or at Maturity shall be paid by the
Company to the Trustee in immediately available funds no
later than 10:00 a.m., New York City time, on such date.
Prior to 10:00 a.m., New York City time, on such date or
as soon as possible thereafter, the Trustee will pay by
separate wire transfer (using Fedwire message entry
instructions in a form previously specified by DTC) to an
account at the Federal Reserve Bank of New York previously
specified by DTC, in funds available for immediate use by
<PAGE>
DTC, each payment of interest, principal and premium, if
any, due on a Global Note on such date. Thereafter on
such date, DTC will pay, in accordance with its SDFS
operating procedures then in effect, such amounts in funds
available for immediate use to the respective Participants
in whose names such Notes are recorded in the book-entry
system maintained by DTC. Neither the Company nor the
Trustee shall have any responsibility or liability for the
payment by DTC of the principal of, or interest on, the
Global Notes to such Participants.
WITHHOLDING TAXES. The amount of any taxes required under
applicable law to be withheld from any interest payment on
a Note will be determined and withheld by the Participant,
indirect participant in DTC or other Person responsible
for forwarding payments and materials directly to the
beneficial owner of such Note.
Settlement: The receipt of immediately available funds by the Company
in payment for a Note and the authentication and delivery
of such Note shall, with respect to such Note, constitute
"settlement." Offers accepted by the Company will be
settled three Business Days following acceptance or at
such other time as the purchaser and the Company shall
agree, pursuant to the timetable for settlement set forth
under "Settlement Procedures". If procedures A and B of
the Settlement Procedures with respect to a particular
offer are not completed on or before the time set forth
under the "Settlement Procedures Timetable," such offer
shall not be settled until the Business Day following the
completion of Settlement Procedures A and B or such later
date as the purchaser and the Company shall agree.
In the event of a purchase of Notes by any Agent as
principal, appropriate settlement details will be set
forth in the applicable Terms Agreement to be entered into
between such Agent and the Company pursuant to the
Distribution Agreement.
Settlement Settlement Procedures with regard to each Note sold
Procedures: by each Agent, as agent of the Company, will be as follows:
<PAGE>
A. The Agent will advise the Company by telephone of the
following Settlement information:
1. Taxpayer identification number of the purchaser.
2. Principal amount of the Note.
3. Fixed Rate Notes:
(a) interest rate; and
(b) interest payment dates.
Floating Rate Notes:
(a) interest rate basis;
(b) initial interest rate;
(c) spread or spread multiplier, if any;
(d) interest rate reset dates;
(e) interest rate reset period;
(f) interest payment dates;
(g) index maturity;
(h) calculation agent;
(i) maximum interest rate, if any;
(j) minimum interest rate, if any;
(k) calculation date; and
(l) interest determination dates.
4. Price to public of the Note.
5. Trade date.
6. Settlement Date (Original Issue Date).
7. Stated Maturity.
8. Redemption provisions, if any.
9. Repayment provisions, if any.
10. Net proceeds to the Company.
11. Agent's discount or commission.
12. Whether such Note is being sold to the Agent as
principal or to an investor through the Agent acting as
agent of the Company.
<PAGE>
13. Any additional terms with respect to the Note.
B. The Company will advise the Trustee by electronic
transmission of the above settlement information
received from the Presenting Agent and the Trustee will
assign a CUSIP number to the Global Note.
C. The Trustee will communicate to DTC and the Agent
through DTC's Participant Terminal System, a pending
deposit message specifying the following settlement
information:
1. The information set forth in Settlement Procedure A.
2. Identification numbers of the participant accounts
maintained by DTC on behalf of the Trustee and the Agent.
3. Identification as a Fixed Rate Global Note or
Floating Rate Global Note.
4. Initial Interest Payment Date for such Note, number
of days by which such date succeeds the related record
date for DTC purposes (or, in the case of Floating Rate
Notes which reset daily or weekly, the date five calendar
days preceding the Interest Payment Date) and, if then
calculable, the amount of interest payable on such
Interest Payment Date (which amount shall have been
confirmed by the Trustee).
5. CUSIP number of the Global Note.
6. Whether such Global Note represents any other Notes
issued or to be issued in book-entry form.
D. The Company will complete and deliver to the Trustee, or
the Trustee will complete with terms furnished by the
Company, as appropriate in the circumstances, a Global
Note representing such Note in a form that has been
approved by the Company, the Agents and the Trustee.
<PAGE>
E. The Trustee will authenticate the Global Note representing
such Note.
F. DTC will credit such Note to the participant account of
the Trustee maintained by DTC.
G. The Trustee will enter an SDFS deliver order through DTC's
Participant Terminal System instructing DTC (i) to debit
such Note to the Trustee's participant account and credit
such Note to the participant account of the Presenting
Agent maintained by DTC and (ii) to debit the settlement
account of the Presenting Agent and credit the settlement
account of the Trustee maintained by DTC, in an amount
equal to the price of such Note less such Agent's
commission. Any entry of such a deliver order shall be
deemed to constitute a representation and warranty by the
Trustee to DTC that (i) the Global Note representing such
Note has been issued and authenticated and (ii) the
Trustee is holding such Global Note pursuant to the
Medium-Term Note Certificate Agreement between the Trustee
and DTC.
H. The Presenting Agent will enter an SDFS deliver order
through DTC's Participant Terminal system instructing DTC
(i) to debit such Note to the Presenting Agent's
participant account and credit such Note to the
participant account of the participants maintained by DTC
and (ii) to debit the settlement accounts of such
Participants and credit the settlement account of the
Presenting Agent maintained by DTC, in an amount equal to
the initial public offering price of such Note.
I. Transfers of funds in accordance with SDFS deliver orders
described in Settlement Procedures G and H will be settled
in accordance with SDFS operating procedures in effect on
the Settlement Date.
<PAGE>
J. The Trustee will credit to an account of the Company
maintained at the Trustee funds available for immediate
use in the amount transferred to the Trustee in accordance
with Settlement Procedure G.
K. The Trustee will send a copy of the Global Note by
first-class mail to the Company together with a statement
setting forth the principal amount of Notes outstanding as
of the related Settlement Date after giving effect to such
transaction and all other offers to purchase Notes of
which the Company has advised the Trustee but which have
not yet been settled.
L. The Agent will confirm the purchase of such Note to the
purchaser either by transmitting to the Participant with
respect to such Note a confirmation order through DTC's
Participant Terminal System or by mailing a written
confirmation to such purchaser.
Settlement For offers to purchase Notes accepted by the Company,
Procedures Settlement Procedures "A" through "L" set forth above
Timetable: shall be completed as soon as possible but not later above
above the respective times (New York City time) set forth
below:
Settlement
Procedure Time
---------- ----
A-B 11:00 a.m. on the trade date or within one hour
following trade
C No later than the close of business on
the trade date
D 3:00 p.m. on the Business Day before
Settlement Date
E 9:00 a.m. on Settlement Date
F 10:00 a.m. on Settlement Date
G-H No later than 2:00 p.m. on
Settlement Date
I 4:45 p.m. on Settlement Date
J-L 5:00 p.m. on Settlement Date
<PAGE>
If a sale is to be settled more than one Business Day
after the sale date, Settlement Procedures A, B, and C
may, if necessary, be completed at any time prior to the
specified times on the first Business Day after such sale
date. In connection with a sale which is to be settled
more than one Business Day after the trade date, if the
Initial Interest Rate for a Floating Rate Note is not
known at the time that Settlement Procedure A is
completed, Settlement Procedures B and C shall be
completed as soon as such rates have been determined, but
no later than 11:00 a.m. and 2:00 p.m., New York City
time, respectively, on the second Business Day before the
Settlement Date. Settlement Procedure I is subject to
extension in accordance with any extension of Fedwire
closing deadlines and in the other events specified in the
SDFS operating procedures in effect on the settlement date.
If Settlement of a Note issued in book-entry form is
rescheduled or canceled, the Trustee will deliver to DTC,
through DTC's Participant Terminal System, a cancellation
message to such effect by no later than 5:00 p.m., New
York City time, on the Business Day immediately preceding
the scheduled Settlement Date.
Failure to Settle: If the Trustee fails to enter an SDFS deliver order
with respect to a Book-Entry Note issued in book-entry
form pursuant to Settlement Procedure G, the
Trustee may deliver to DTC, through DTC's Participant
Terminal System, as soon as practicable a withdrawal
message instructing DTC to debit such Note to the
participant account of the Trustee maintained at DTC. DTC
will process the withdrawal message, provided that such
participant account contains a principal amount of the
Global Note representing such Note that is at least equal
to the principal amount to be debited. If withdrawal
messages are processed with respect to all the Notes
represented by a Global Note, the Trustee will mark such
Global Note "cancelled," make appropriate entries in its
records and send such cancelled Global Note to the
Company. The CUSIP number assigned to such Global Note
shall, in accordance with CUSIP Service Bureau procedures,
be cancelled and not immediately reassigned. If
withdrawal messages are processed with respect to a
portion of the Notes represented by a Global Note, the
<PAGE>
Trustee will exchange such Global Note for two Global
Notes, one of which shall represent the Global Notes for
which withdrawal messages are processed and shall be
cancelled immediately after issuance, and the other of
which shall represent the other Notes previously
represented by the surrendered Global Note and shall bear
the CUSIP number of the surrendered Global Note.
If the purchase price for any Note is not timely paid to
the Participants with respect to such Note by the
beneficial purchaser thereof (or a person, including an
indirect participant in DTC, acting on behalf of such
purchaser), such Participants and, in turn, the related
Agent may enter SDFS deliver orders through DTC's
Participant Terminal System reversing the orders entered
pursuant to Settlement Procedures G and H, respectively.
Thereafter, the Trustee will deliver the withdrawal
message and take the related actions described in the
preceding paragraph. If such failure shall have occurred
for any reason other than default by the applicable Agent
to perform its obligations hereunder or under the
Distribution Agreement, the Company will reimburse such
Agent on an equitable basis for its loss of the use of
funds during the period when the funds were credited to
the account of the Company.
Notwithstanding the foregoing, upon any failure to settle
with respect to a Note in book-entry form, DTC may take
any actions in accordance with its SDFS operating
procedures then in effect. In the event of a failure to
settle with respect to a Note that was to have been
represented by a Global Note also representing other
Notes, the Trustee will provide, in accordance with
Settlement Procedures D and E, for the authentication and
issuance of a Global Note representing such remaining
Notes and will make appropriate entries in its records.
<PAGE>
ANNEX III
Pursuant to Section 6(e) of the Distribution Agreement, the
independent accountants shall furnish letters to the Agents to the effect that:
(1) They are independent public accountants with respect to the
Company and its subsidiaries within the meaning of the 1933 Act.
(2) In their opinion the consolidated financial statements and
schedules of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement and the consolidated financial
statements of the Company from which the information presented under the caption
"Selected Consolidated Financial Data" has been derived which are stated therein
to have been examined by them comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act and the Exchange Act.
(3) They have undertaken specified procedures (but not an examination
in accordance with generally accepted auditing standards), including inquiries
of certain officers of the Company and its subsidiaries responsible for
financial and accounting matters as to transactions and events subsequent to
December 31, 1996, a reading of minutes of meetings of the stockholders and
directors of the Company and its subsidiaries since __________________, 19____,
a reading of the latest available interim unaudited consolidated financial
statements of the Company and its subsidiaries (with an indication of the date
thereof) and other procedures as specified in such letter, and have been advised
by officers of the Company that (i) the unaudited consolidated financial
statements of the Company and its subsidiaries included or incorporated by
reference in the Registration Statement comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act and the
Exchange Act and that such unaudited financial statements are fairly presented
in accordance with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements included
in the Registration Statement, [IF APPLICABLE, COVER PRO FORMA FINANCIAL
STATEMENTS] and (ii) at a specified date not more than five days prior to the
date thereof in the case of the first letter and not more than two business days
prior to the date thereof in the case of the second letter, there was no change
in the capital stock or long-term debt or short-term debt (other than normal
payments) of the Company and its subsidiaries on a consolidated basis and no
decrease in consolidated net current assets or consolidated stockholders' equity
as compared with amounts shown on the latest unaudited balance sheet of the
Company included in the Registration Statement or for the period from the date
of such balance sheet to a date not more than five days prior to the date
III-1
<PAGE>
thereof in the case of the first letter and not more than two business days
prior to the date thereof in the case of the second and third letters, there
were no decreases, as compared with the corresponding period of the prior year,
in consolidated total revenue, operating income or in the total or per share
amounts of consolidated net income except, in all instances, for changes or
decreases which the Prospectus discloses have occurred or may occur or which are
set forth in such letter.
(4) They have carried out specified procedures, which have been
agreed to by the Representatives, with respect to certain information in the
Prospectus specified by the Representatives, and on the basis of such
procedures, they have found such information to be in agreement with the general
accounting records of the Company and its subsidiaries.
III-2
<PAGE>
EXHIBIT 4.1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CREDIT ACCEPTANCE CORPORATION
TO
THE BANK OF NEW YORK
Trustee
______________
INDENTURE
DATED AS OF MAY 15, 1997
______________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO SECTIONS 310 THROUGH 318,
INCLUSIVE, OF THE TRUST INDENTURE ACT OF 1939:
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
Section 310(a)(1). . . . . . . . . . . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . 608
610
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . . . 613
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . 613
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . . . 701
702
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . 702
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . 702
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . . . 703
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . 703
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . 703
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . 703
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . . 704
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . 101
1004
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . . . 601
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . 602
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . 601
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . 601
(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . 514
Section 316(a) . . . . . . . . . . . . . . . . . . . . . . . . 101
(a)(1)(A). . . . . . . . . . . . . . . . . . . . . . . . . 502
512
(a)(1)(B). . . . . . . . . . . . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . 508
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
Section 317(a)(1). . . . . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 504
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . 1003
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . . . 107
___________________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
__________
PAGE
RECITALS OF THE COMPANY..................................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION........................ 1
SECTION 101. DEFINITIONS................................................... 1
Act..................................................................... 2
Affiliate............................................................... 2
Attributable Debt....................................................... 2
Authenticating Agent.................................................... 2
Board of Directors...................................................... 2
Board Resolution........................................................ 2
Business Day............................................................ 3
Commission.............................................................. 3
Company................................................................. 3
Company Request or Company Order........................................ 3
Consolidated Net Tangible Assets........................................ 3
Corporate Trust Office.................................................. 3
corporation............................................................. 3
Covenant Defeasance..................................................... 3
Debt.................................................................... 3
Defaulted Interest...................................................... 4
Defeasance.............................................................. 4
Depositary.............................................................. 4
Event of Default........................................................ 4
Exchange Act............................................................ 4
Expiration Date......................................................... 4
Funded Debt............................................................. 4
Global Security......................................................... 4
Holder.................................................................. 4
Incur................................................................... 4
Indenture............................................................... 5
interest................................................................ 5
Interest Payment Date................................................... 5
Investment Company Act.................................................. 5
Lien.................................................................... 5
___________________
NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
<PAGE>
PAGE
Maturity................................................................ 5
Notice of Default....................................................... 5
Officers' Certificate................................................... 5
Opinion of Counsel...................................................... 6
Original Issue Discount Security........................................ 6
Outstanding............................................................. 6
Paying Agent............................................................ 7
Person.................................................................. 7
Place of Payment........................................................ 7
Predecessor Security.................................................... 7
Principal Property...................................................... 7
Redemption Date......................................................... 7
Redemption Price........................................................ 8
Regular Record Date..................................................... 8
Sale and Lease-Back Transaction......................................... 8
Securities.............................................................. 8
Secured Indebtedness.................................................... 8
Securities Act.......................................................... 9
Securitization.......................................................... 9
Security Register and Security Registrar................................ 10
Significant Subsidiary.................................................. 10
Special Record Date..................................................... 10
Stated Maturity......................................................... 10
Subsidiary.............................................................. 10
Trust Indenture Act..................................................... 10
Trustee................................................................. 10
U.S. Government Obligation.............................................. 10
Vice President.......................................................... 10
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.......................... 11
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE........................ 11
SECTION 104. ACTS OF HOLDERS; RECORD DATES................................. 12
SECTION 105. NOTICES, ETC., TO TRUSTEE AND COMPANY......................... 14
SECTION 106. NOTICE TO HOLDERS; WAIVER..................................... 14
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT............................. 15
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS...................... 15
ii
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PAGE
SECTION 109. SUCCESSORS AND ASSIGNS........................................ 15
SECTION 110. SEPARABILITY CLAUSE........................................... 15
SECTION 111. BENEFITS OF INDENTURE......................................... 15
SECTION 112. GOVERNING LAW................................................. 16
SECTION 113. LEGAL HOLIDAYS................................................ 16
ARTICLE TWO
SECURITY FORMS............................................ 16
SECTION 201. FORMS GENERALLY............................................... 16
SECTION 202. FORM OF FACE OF SECURITY...................................... 17
SECTION 203. FORM OF REVERSE OF SECURITY................................... 18
SECTION 204. FORM OF LEGEND FOR GLOBAL SECURITIES.......................... 23
SECTION 205. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION............... 23
ARTICLE THREE
THE SECURITIES............................................ 24
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.......................... 24
SECTION 302. DENOMINATIONS................................................. 26
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING................ 27
SECTION 304. TEMPORARY SECURITIES.......................................... 28
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE........... 29
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.............. 31
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED................ 31
iii
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PAGE
SECTION 308. PERSONS DEEMED OWNERS......................................... 33
SECTION 309. CANCELLATION.................................................. 33
SECTION 310. COMPUTATION OF INTEREST....................................... 33
SECTION 311. CUSIP NUMBERS................................................. 33
ARTICLE FOUR
SATISFACTION AND DISCHARGE................................... 34
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE....................... 34
SECTION 402. APPLICATION OF TRUST MONEY.................................... 35
ARTICLE FIVE
REMEDIES................................................ 35
SECTION 501. EVENTS OF DEFAULT............................................. 35
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT............ 37
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT
BY TRUSTEE.............................................................. 38
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.............................. 39
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES... 39
SECTION 506. APPLICATION OF MONEY COLLECTED................................ 40
SECTION 507. LIMITATION ON SUITS........................................... 40
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST.................................................... 41
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES............................ 41
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE................................ 41
SECTION 511. DELAY OR OMISSION NOT WAIVER.................................. 42
iv
<PAGE>
PAGE
SECTION 512. CONTROL BY HOLDERS............................................ 42
SECTION 513. WAIVER OF PAST DEFAULTS....................................... 42
SECTION 514. UNDERTAKING FOR COSTS......................................... 43
SECTION 515. WAIVER OF USURY, STAY OR EXTENSION LAWS....................... 43
ARTICLE SIX
THE TRUSTEE.............................................. 43
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES........................... 43
SECTION 602. NOTICE OF DEFAULTS............................................ 44
SECTION 603. CERTAIN RIGHTS OF TRUSTEE..................................... 44
SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES........ 45
SECTION 605. MAY HOLD SECURITIES........................................... 45
SECTION 606. MONEY HELD IN TRUST........................................... 45
SECTION 607. COMPENSATION AND REIMBURSEMENT................................ 46
SECTION 608. CONFLICTING INTERESTS......................................... 46
SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY....................... 47
SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR............. 47
SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR........................ 49
SECTION 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS... 50
SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY............. 50
SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT........................... 50
ARTICLE SEVEN
v
<PAGE>
PAGE
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY................. 52
SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS..... 52
SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS........ 52
SECTION 703. REPORTS BY TRUSTEE............................................ 53
SECTION 704. REPORTS BY COMPANY............................................ 53
SECTION 705. CALCULATION OF ORIGINAL ISSUE DISCOUNT........................ 53
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE............... 54
SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.......... 54
SECTION 802. SUCCESSOR SUBSTITUTED......................................... 55
ARTICLE NINE
SUPPLEMENTAL INDENTURES..................................... 55
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS............ 55
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS............... 56
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES.......................... 57
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES............................. 57
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT........................... 58
SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES............ 58
ARTICLE TEN
COVENANTS............................................... 58
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST................... 58
vi
<PAGE>
PAGE
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.............................. 58
SECTION 1003. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST............ 59
SECTION 1004. STATEMENT BY OFFICERS AS TO DEFAULT.......................... 60
SECTION 1005. EXISTENCE.................................................... 60
SECTION 1006. MAINTENANCE OF PROPERTIES.................................... 61
SECTION 1007. PAYMENT OF TAXES AND OTHER CLAIMS............................ 61
SECTION 1008. LIMITATION ON SECURED INDEBTEDNESS........................... 61
SECTION 1009. LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS............... 62
SECTION 1010. WAIVER OF CERTAIN COVENANTS.................................. 62
ARTICLE ELEVEN
REDEMPTION OR REPAYMENT OF SECURITIES.......................... 62
SECTION 1101. APPLICABILITY OF ARTICLE..................................... 62
SECTION 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE........................ 63
SECTION 1103. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED............ 63
SECTION 1104. NOTICE OF REDEMPTION......................................... 64
SECTION 1105. DEPOSIT OF REDEMPTION PRICE.................................. 65
SECTION 1106. SECURITIES PAYABLE ON REDEMPTION DATE........................ 65
SECTION 1107. SECURITIES REDEEMED IN PART.................................. 65
Section 1108. RIGHT OF REPAYMENT........................................... 65
Section 1109. FORM OF OPTION TO ELECT REPAYMENT............................ 66
ARTICLE TWELVE
vii
<PAGE>
PAGE
SINKING FUNDS............................................ 67
SECTION 1201. APPLICABILITY OF ARTICLE..................................... 67
SECTION 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES........ 67
SECTION 1203. REDEMPTION OF SECURITIES FOR SINKING FUND.................... 67
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE............................. 68
SECTION 1301. COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE. 68
SECTION 1302. DEFEASANCE AND DISCHARGE..................................... 68
SECTION 1303. COVENANT DEFEASANCE.......................................... 69
SECTION 1304. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.............. 69
SECTION 1305. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD
IN TRUST; MISCELLANEOUS PROVISIONS....................................... 71
SECTION 1306. REINSTATEMENT................................................ 72
viii
<PAGE>
INDENTURE, dated as of May 15, 1997, between Credit Acceptance
Corporation, a corporation duly organized and existing under the laws of the
State of Michigan (herein called the "Company"), having its principal office at
25505 West Twelve Mile Road, Southfield, Michigan 48034, and The Bank of New
York, a New York banking corporation, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as
are generally accepted at the date of such computation;
(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may
be, of this Indenture; and
<PAGE>
(5) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings corresponding to the
foregoing.
"Attributable Debt" when used in connection with a Sale and Lease-Back
Transaction involving a Principal Property means, at the time of determination,
the lesser of: (a) the fair value of such property (as determined in good faith
by the Board of Directors of the Company); or (b) the present value of the total
net amount of rent required to be paid under such lease during the remaining
term thereof (including any renewal term or period for which such lease has been
extended), discounted at the rate of interest set forth or implicit in the terms
of such lease or, if not practicable to determine such rate, the weighted
average interest rate per annum (in the case of Original Issue Discount
Securities, the imputed interest rate) borne by the Securities of each series
outstanding pursuant to the Indenture compounded semi-annually. For purposes of
the foregoing definition, rent shall not include amounts required to be paid by
the lessee on account of or contingent upon maintenance and repairs, insurance,
taxes, assessments, water rates and similar charges, unless such costs are
included in base rent under the applicable lease. In the case of any lease which
is terminable by the lessee upon the payment of a penalty, such net amount shall
be the lesser of the net amount determined assuming termination upon the first
date such lease may be terminated (in which case the net amount shall also
include the amount of the penalty, but no rent shall be considered as required
to be paid under such lease subsequent to the first date upon which it may be so
terminated) and the net amount determined assuming no such termination.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee. In the event the Board of Directors
shall delegate to any director or officer of the Company or any group consisting
of directors of the Company, officers of the Company
2
<PAGE>
or directors and officers of the Company the authority to take any action
which under the terms of this Indenture may be taken by "Board Resolution,"
then any action so taken by, and set forth in a resolution adopted by, the
director, officer or group within the scope of such delegation shall be
deemed to be a "Board Resolution" for purposes of this Indenture.
"Business Day", when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.
"Commission" means the Securities and Exchange Commission, from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this instrument such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President or
a Vice President, and by its Chief Financial Officer, Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Consolidated Net Tangible Assets" means, as of any particular time,
total assets of the Company and its Subsidiaries (excluding applicable reserves
and other properly deductible items) less goodwill, patents and trademarks, to
the extent included in total assets; all as set forth on the most recent
consolidated balance sheet of the Company and its Subsidiaries and computed in
accordance with generally accepted accounting principles.
"Corporate Trust Office" means the principal office of the Trustee in
New York, New York at which at any particular time its corporate trust business
shall be administered, which at the date hereof is 101 Barclay Street, Floor
21W, New York, New York 10286.
"corporation" means a corporation, association, company, joint-stock
company or business trust.
"Covenant Defeasance" has the meaning specified in Section 1303.
"Debt" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person and whether
or not contingent, (i) every obligation of such Person for money borrowed, (ii)
every obligation of such Person evidenced by bonds, debentures, notes or other
similar instruments, including obligations Incurred in connection with the
acquisition of property, assets or businesses, (iii) every
3
<PAGE>
reimbursement obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
Person, (iv) the present value of all payments due under any arrangement for
retention of title or any conditional sale agreement (other than a capital
lease, trade accounts payable or accrued liabilities arising in the ordinary
course of business) discounted at the implicit rate, if known, with respect
thereto or, if unknown, at 9% per annum, (v) every obligation to pay rent or
other payment amounts of such Person with respect to any Sale and Lease-Back
Transaction to which such Person is a party and (vi) every obligation of the
type referred to in Clauses (i) through (v) of another Person and all
dividends of another Person the payment of which, in either case, such Person
has guaranteed or is responsible or liable, directly or indirectly, as
obligor, guarantor or otherwise; provided, that dealer holdbacks (as such
term is used in the Company's financial statements) shall not be considered
Debt of the Company or its subsidiaries.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Depositary" means, with respect to Securities of any series issuable
in whole or in part in the form of one or more Global Securities, a clearing
agency registered under the Exchange Act that is designated to act as Depositary
for such Securities as contemplated by Section 301.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 104.
"Funded Debt" means any Debt maturing more than one year from the date
of issuance thereof, including any Debt renewable or extendible at the option of
the obligor to a date later than one year from the date of the original issuance
thereof.
"Global Security" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Section 204 (or such
legend as may be specified as contemplated by Section 301 for such Securities).
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Incur" means, with respect to any Debt or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), assume,
guarantee or otherwise become liable in respect of such Debt or other obligation
or the recording, as required pursuant to generally accepted accounting
principles or otherwise, of any such Debt or other obligation on the balance
sheet of such Person (and "Incurrence", "Incurred",
4
<PAGE>
"Incurrable" and "Incurring" shall have the meanings correlative to the
foregoing); PROVIDED, HOWEVER, that a change in generally accepting
accounting principles that results in an obligation of such Person that
exists at such time becoming Debt shall not be deemed an Incurrence of such
Debt.
"Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.
"interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an instalment of interest on such Security.
"Investment Company Act" means the Investment Company Act of 1940 and
any statute successor thereto, in each case as amended from time to time.
"Lien" means any mortgage, lien, pledge, security interest, charge or
encumbrance; provided that the term "Lien" shall not include: (a) any negative
pledge clauses in agreements relating to the borrowing of money; (b) the right
of a lender, upon acceleration of indebtedness, to apply to the payment of such
indebtedness any and all balances, credits, deposits, accounts or moneys of the
Company or any Subsidiary (c) the obligation of the Company or any of its
Subsidiaries (i) to remit monies held by it in connection with dealer holdbacks,
claims or refunds under insurance policies or claims or refunds under service
contracts or (ii) to make deposits in trust or otherwise as required under
re-insurance agreements and pursuant to state regulatory requirements, unless
the Company or any of its Subsidiaries, as the case may be, has encumbered its
interest in such monies or deposits or in other property of the Company to
secure such obligations.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an instalment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in
Section 501(4) or 501(5).
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President or a Vice President, and by the Chief Financial
Officer, Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company, and delivered to the
5
<PAGE>
Trustee. One of the officers signing an Officers' Certificate given pursuant
to Section 1004 shall be the principal executive, financial or accounting
officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, EXCEPT:
(1) Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
(2) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent)
for the Holders of such Securities; PROVIDED that, if such Securities are
to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has been
made;
(3) Securities as to which Defeasance has been effected pursuant
to Section 1302; and
(4) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations of the
Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original Issue
Discount Security which shall be deemed to be Outstanding shall be the amount of
the principal thereof that pursuant to the terms of such Original Issue Discount
Security would be declared (or shall have been declared to be) due and payable
as of such date upon acceleration of the Maturity thereof to such date pursuant
to Section 502, (B) if, as of such date, the principal amount payable at the
Stated Maturity of a Security is not determinable, the principal amount of such
Security which shall be deemed to be Outstanding shall be the amount as
specified or determined as contemplated by Section 301, (C) the principal amount
of a Security denominated in one or more foreign currencies or currency units
which shall be deemed to be Outstanding
6
<PAGE>
shall be the U.S. dollar equivalent, determined as of such date in the manner
provided as contemplated by Section 301, of the principal amount of such
Security (or, in the case of a Security described in Clause (A) or (B) above,
of the amount determined as provided in such Clause), and (D) Securities
owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent, waiver or other action, only Securities which the
Trustee actually knows to be so owned shall be so disregarded. Securities so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's
right so to act with respect to such Securities and that the pledgee is not
the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof or any other entity.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Principal Property" means the land, land improvements, buildings and
fixtures (to the extent they constitute real property interests), (including any
leasehold interest therein) constituting any office facility, operating
facility, or service facility (whether now owned or hereafter acquired) which:
(a) is owned by the Company or any Subsidiary; (b) is located within any of the
present 50 states of the United States (or the District of Columbia); (c) has
not been determined in good faith by the Board of Directors of the Company not
to be materially important to the total business conducted by the Company and
its Subsidiaries taken as a whole; and (d) has a market value on the date as of
which the determination is being made in excess of .50% of Consolidated Net
Tangible Assets as most recently determined on or prior to such date.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture or such Security.
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"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture or such Security.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.
"Sale and Lease-Back Transaction" means any arrangement with any
person providing for the leasing by the Company or any Subsidiary of any
Principal Property which property has been or is to be sold or transferred by
the Company or such Subsidiary to such person.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and delivered
under this Indenture.
"Secured Indebtedness" means (a) Debt of the Company or a Subsidiary
which is secured by any Lien upon any of its assets and (b) Debt of the Company
or a Subsidiary in respect of any conditional sale or other title retention
agreement covering any of its assets; but "Secured Indebtedness" shall not
include any of the following:
(i) Debt of the Company and the Subsidiaries outstanding on May 15,
1997, secured by then existing Liens upon, or incurred in connection with
conditional sales agreements or other title retention agreements with
respect to, any of its assets;
(ii) Debt which is secured by (A) purchase money Liens upon any
assets acquired after May 15, 1997, or (B) Liens placed on any assets
subsequent to May 15, 1997, during construction or improvement thereof
(including any improvements on any asset) or placed thereon within 180 days
after the later of acquisition, completion of construction or improvement
or the commencement of commercial operation of such asset or improvement,
or (C) conditional sale agreements or other title retention agreements with
respect to any assets acquired after May 15, 1997, if (in each case
referred to in this subparagraph (ii)) (x) such Lien or agreement secures
all or any part of the Debt incurred for the purpose of financing all or
any part of the purchase price and (y) such Lien or agreement does not
extend to any assets other than the assets so acquired; PROVIDED, HOWEVER,
that the amount by which the aggregate principal amount of Debt secured by
any such Lien or agreement exceeds the cost to the Company or such
Subsidiary of the related assets shall be considered to be "Secured
Indebtedness";
(iii) Debt which is secured by Liens on any assets, which Liens exist
at the time of acquisition (by any manner whatsoever) of such assets by the
Company or a Subsidiary;
(iv) Debt of Subsidiaries owing to the Company or any other
Subsidiary, Debt of the Company owing to any Subsidiary, Debt of a
Subsidiary secured solely by the guaranty of, or an unsecured letter of
credit issued on behalf of, the Company or one or more Subsidiaries and
Debt of the Company to any Person secured solely by the guaranty of one or
more Subsidiaries.
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(v) In the case of any corporation which becomes (by any manner
whatsoever) a Subsidiary subsequent to May 15, 1997, Debt which is secured
by Liens upon, or conditional sale agreements or other title retention
agreements with respect to, its assets, which Liens exist at the time such
corporation becomes a Subsidiary;
(vi) Guarantees by the Company of Secured Indebtedness and
Attributable Debt of any Subsidiary and guarantees by a Subsidiary of
Secured Indebtedness and Attributable Debt of the Company and any other
Subsidiary;
(vii) Attributable Debt arising from any Sale and Lease-Back
Transaction;
(viii) Debt secured by Liens on assets of the Company or a Subsidiary
in favor of the United States of America, any State, Territory or
possession thereof, or the District of Columbia, or any department, agency
or instrumentality or political subdivision of the United States of America
or any State, Territory or possession thereof, or the District of Columbia,
or in favor of any other country or any political subdivision thereof, if
such Debt was incurred for the purpose of financing all or any part of the
purchase price or the cost of construction of the property subject to such
Lien; PROVIDED, HOWEVER, that the amount by which the aggregate principal
amount of Debt secured by any such Lien exceeds the cost to the Company or
such Subsidiary of the related acquisition or construction shall be
considered to be "Secured Indebtedness";
(ix) The replacement, extension or renewal (or successive
replacements, extensions or renewals) of any Debt (in whole or in part)
excluded from the definition of "Secured Indebtedness" by subparagraphs
(i) through (viii) above; PROVIDED, HOWEVER, that no Lien securing, or
conditional sale or title retention agreement with respect to, such Debt
shall extend to or cover any assets, other than such assets which secured
the Debt so replaced, extended or renewed (plus improvements on or to any
such assets); PROVIDED FURTHER, that to the extent that such replacement,
extension or renewal increases the principal amount of Debt secured by such
Lien or is in a principal amount in excess of the principal amount of Debt
excluded from the definition of "Secured Indebtedness" by subparagraphs
(i) through (viii) above, the amount of such increase or excess shall be
considered to be "Secured Indebtedness".
In no event shall the foregoing provisions be interpreted to mean or their
operation to cause the same Debt to be included more than once in the
calculation of "Secured Indebtedness" as that term is used in this Indenture.
"Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.
"Securitization" shall mean the transfer or pledge of assets or
interests in assets to a trust, partnership, corporation or other entity, which
transfer or pledge is funded by such entity in whole or in part by the issuance
of instruments or securities that are paid principally from the cash flow
derived from such assets or interests in assets.
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"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Significant Subsidiary" means, as of the date of determination, any
Subsidiary which has total assets in excess of five percent (5%) of Consolidated
Net Tangible Assets, determined based upon the most recent quarterly or annual
financial statements filed with the Securities and Exchange Commission by the
Company.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
instalment of principal thereof or interest thereon, means the date specified in
such Security as the fixed date on which the principal of such Security or such
instalment of principal or interest is due and payable.
"Subsidiary" means any corporation of which at least a majority of the
outstanding voting stock having the power to elect a majority of the board of
directors of such corporation, or in the case of CAC Insurance Agency of Ohio,
Inc., at least 99% of the shares of capital stock issued and outstanding of all
classes in the aggregate, is at the time owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors, whether
at all times or only so long as no senior class of stock has such voting power
by reason of any contingency.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; PROVIDED, HOWEVER,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
"U.S. Government Obligation" has the meaning specified in
Section 1304.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
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SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided in this Indenture, upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee such
certificates and opinions as may be required under the Trust Indenture Act. Each
such certificate or opinion shall be given in the form of an Officers'
Certificate, if to be given by an officer of the Company, or an Opinion of
Counsel, if to be given by counsel, and shall comply with the requirements of
the Trust Indenture Act and any other requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include,
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company or any Subsidiary
stating that the information with respect to such factual matters is in the
possession of the Company or such Subsidiary, as the case may be, unless such
counsel knows that the certificate or
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opinion or representations with respect to such matters are erroneous.
Opinions of counsel may have qualifications customary for opinions of the
type required and counsel delivering such opinions of counsel may rely on
certificates of government or other officials customary for opinions of the
type required, including, without limitation, certificates certifying as to
matters of fact.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. ACTS OF HOLDERS; RECORD DATES.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given, made or
taken by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
The ownership, principal amount and serial numbers of Securities shall
be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee, any Security
Registrar, any Paying Agent, any Authenticating Agent or the Company in reliance
thereon, whether or not notation of such action is made upon such Security.
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The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series, PROVIDED that the
Company may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next paragraph. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date; PROVIDED that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities of such
series on such record date. Nothing in this paragraph shall be construed to
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be cancelled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Trustee in writing and to each Holder of Securities of the relevant series in
the manner set forth in Section 106.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section 512, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; PROVIDED that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Company in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.
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With respect to any record date set pursuant to this Section, the
party hereto which sets such record dates may designate any day as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day PROVIDED that no Expiration Date shall be later than the
180th day after the applicable record date; and PROVIDED, FURTHER, that no such
change shall be effective unless notice of the proposed new Expiration Date is
given to the other party hereto in writing, and to each Holder of Securities of
the relevant series in the manner set forth in Section 106, on or prior to the
existing Expiration Date. If an Expiration Date is not designated with respect
to any record date set pursuant to this Section, the party hereto which set such
record date shall be deemed to have initially designated the 180th day after
such record date as the Expiration Date with respect thereto, subject to its
right to change the Expiration Date as provided in this paragraph.
Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
SECTION 105. NOTICES, ETC., TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with the Trustee at its Corporate Trust Office, Attention:
Corporate Trust Trustee Administration, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the
Company addressed to it at the address of its principal office specified in
the first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 106. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with
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respect to other Holders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall
be the equivalent of such notice. Waivers of notice by Holders shall be filed
with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act which is required under such Act to be a
part of and govern this Indenture, such required provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act which may be so modified or excluded, such provision of the Trust
Indenture Act shall be deemed to apply to this Indenture as so modified or
excluded, as the case may be.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
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SECTION 112. GOVERNING LAW.
This Indenture and the Securities shall be governed by and construed
in accordance with the law of the State of New York, without regard to conflicts
of laws principles thereof.
SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of any Security which specifically states that such
provision shall apply in lieu of this Section)) payment of interest or principal
(and premium, if any) need not be made at such Place of Payment on such date,
but may be made on the next succeeding Business Day at such Place of Payment
with the same force and effect as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity.
ARTICLE TWO
SECURITY FORMS
SECTION 201. FORMS GENERALLY.
The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof. If the form of Securities of any series is established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.
The definitive Securities shall be typewritten, printed, lithographed
or engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers executing such Securities, as evidenced by
their execution of such Securities.
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SECTION 202. FORM OF FACE OF SECURITY.
[INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND THE
REGULATIONS THEREUNDER.]
CREDIT ACCEPTANCE CORPORATION
No. ......... $ ........
CUSIP NO. ............
Credit Acceptance Corporation, a corporation duly organized and
existing under the laws of Michigan (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to
..............................................., or registered assigns, the
principal sum of ...................................... Dollars on
........................................................ [IF THE SECURITY IS TO
BEAR INTEREST PRIOR TO MATURITY, INSERT -- , and to pay interest thereon from
............. or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, semi-annually on ............ and
............ in each year, commencing ........., at the rate of ....% per annum,
until the principal hereof is paid or made available for payment [IF APPLICABLE,
INSERT -- , PROVIDED that any principal and premium, and any such instalment of
interest, which is overdue shall bear interest at the rate of ...% per annum (to
the extent that the payment of such interest shall be legally enforceable), from
the dates such amounts are due until they are paid or made available for
payment, and such interest shall be payable on demand]. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the ....... or
....... (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture].[ IF APPLICABLE, INSERT --- Interest on this Security shall
be computed on the basis of a 360-day year of twelve 30-day months.]
[IF THE SECURITY IS NOT TO BEAR INTEREST PRIOR TO MATURITY, INSERT -- The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption[, repayment]
or at Stated Maturity and in such case the overdue principal and any overdue
premium shall bear interest at the rate of ....% per
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annum (to the extent that the payment of such interest shall be legally
enforceable), from the dates such amounts are due until they are paid or made
available for payment. Interest on any overdue principal or premium shall be
payable on demand. [Any such interest on overdue principal or premium which is
not paid on demand shall bear interest at the rate of ......% per annum (to
the extent that the payment of such interest on interest shall be legally
enforceable), from the date of such demand until the amount so demanded is
paid or made available for payment. Interest on any overdue interest shall be
payable on demand.]]
Payment of the principal of (and premium, if any) and [IF APPLICABLE,
INSERT - any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in ............, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts [IF APPLICABLE, INSERT -- ;
PROVIDED, HOWEVER, that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register].
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
CREDIT ACCEPTANCE CORPORATION
By...........................
Attest:
.........................................
SECTION 203. FORM OF REVERSE OF SECURITY.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or
more series under an Indenture, dated as of May 15, 1997 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and The Bank of New York, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), and reference is hereby made to the Indenture for a statement of the
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respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof [IF APPLICABLE,
INSERT -- , limited in aggregate principal amount to $...........].
[IF APPLICABLE, INSERT -- The Securities of this Series are subject to
repayment on or after ________, ____, at the option of the Holder upon not less
than 30 days' (but not more than 60 days') notice by mail to the Paying Agent
prior to the repayment date including (a) appropriate wire instructions and (b)
either (i) the Security with the form entitled Option to Elect Repayment (as set
forth below) attached to the Security duly completed or (ii) a facsimile
transmission or letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company in the United States setting forth the name of the Holder of such
Security, the principal amount of such Security, the portion of the principal
amount of such Security to be repaid, the certificate number or a description of
the tenor and terms of such Security, a statement that the option to elect
repayment is being exercised thereby and a guarantee that such Security to be
repaid with the form entitled Option to Elect Repayment (substantially in the
form set out in the Indenture) attached to such Security duly completed will be
received by the Paying Agent not later than five Business Days after the date of
such facsimile transmission or letter and such Security and form duly completed
must be received by the Paying Agent by such fifth Business Day. Exercise of
the repayment option by the Holder of such Security shall be irrevocable. The
repayment option may be exercised by the Holder of such Security for less than
the entire principal amount of the Security provided that the principal amount
of the Security remaining outstanding after repayment is an authorized
denomination. No registration of, transfer or exchange of such Security (or, in
the event that such Security is to be repaid in part, the portion of the
Security to be repaid) will be permitted after exercise of a repayment option.]
[IF APPLICABLE, INSERT -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [IF APPLICABLE, INSERT --
(1) on ........... in any year commencing with the year ...... and ending with
the year ...... through operation of the sinking fund for this series at a
Redemption Price equal to 100% of the principal amount, and (2)] at any time [IF
APPLICABLE, INSERT -- on or after .........., 19..], as a whole or in part, at
the election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed [IF APPLICABLE, INSERT -- on
or before ..............., ...%, and if redeemed] during the 12-month period
beginning ............. of the years indicated,
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Redemption Redemption
Year Price Year Price
- ---- ---------- ---- ----------
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption [IF APPLICABLE, INSERT -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[IF APPLICABLE, INSERT -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on ............ in
any year commencing with the year .... and ending with the year .... through
operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time [IF
APPLICABLE, INSERT -- on or after ............], as a whole or in part, at the
election of the Company, at the Redemption Prices for redemption otherwise than
through operation of the sinking fund (expressed as percentages of the principal
amount) set forth in the table below: If redeemed during the 12-month period
beginning ............ of the years indicated,
Redemption Price
For Redemption Redemption Price For
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
- ---- ----------------- ----------------------
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such
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Securities, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.]
[IF APPLICABLE, INSERT -- Notwithstanding the foregoing, the Company
may not, prior to ............., redeem any Securities of this series as
contemplated by [IF APPLICABLE, INSERT -- Clause (2) of] the preceding paragraph
as a part of, or in anticipation of, any refunding operation by the application,
directly or indirectly, of moneys borrowed having an interest cost to the
Company (calculated in accordance with generally accepted financial practice) of
less than .....% per annum.]
[IF APPLICABLE, INSERT -- The sinking fund for this series provides
for the redemption on ............ in each year beginning with the year .......
and ending with the year ...... of [IF APPLICABLE, INSERT -- not less than
$.......... ("mandatory sinking fund") and not more than] $......... aggregate
principal amount of Securities of this series. Securities of this series
acquired or redeemed by the Company otherwise than through [IF APPLICABLE,
INSERT -- mandatory] sinking fund payments may be credited against subsequent
[IF APPLICABLE, INSERT -- mandatory] sinking fund payments otherwise required to
be made [IF APPLICABLE, INSERT -- , in the inverse order in which they become
due].]
[IF THE SECURITY IS SUBJECT TO REDEMPTION OF ANY KIND, INSERT -- In
the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.]
[IF APPLICABLE, INSERT -- The Indenture contains provisions for
defeasance at any time of [the entire indebtedness of this Security] [or]
[certain restrictive covenants and Events of Default with respect to this
Security] [, in each case] upon compliance with certain conditions set forth in
the Indenture.]
[IF THE SECURITY IS NOT AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT --
If an Event of Default with respect to Securities of this series shall occur and
be continuing, the principal of the Securities of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.]
[IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT -- If
an Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- INSERT FORMULA FOR DETERMINING THE
AMOUNT. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal, premium and interest (in each
case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and premium and interest, if any, on the Securities of this series
shall terminate.]
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights
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of the Holders of the Securities of each series to be affected under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of a majority in principal amount of the Securities at the time
Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal
amount of the Securities of each series at the time Outstanding, on behalf of
the Holders of all Securities of such series, to waive compliance by the
Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer of this Security or in exchange for or in lieu of
this Security, whether or not notation of such consent or waiver is made upon
this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $....... and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable
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for a like aggregate principal amount of Securities of this series and of
like tenor of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
This Security is governed and construed in accordance with the law of
the State of New York, without regard to conflicts of laws principles thereof.
SECTION 204. FORM OF LEGEND FOR GLOBAL SECURITIES.
Unless otherwise specified as contemplated by Section 301 for the
Securities evidenced thereby, every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
SECTION 205. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificates of authentication shall be in substantially
the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
DATED: ..................
THE BANK OF NEW YORK,
AS TRUSTEE
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By.........................................
AUTHORIZED SIGNATORY
ARTICLE THREE
THE SECURITIES
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the first
issuance of a Security of any series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any other
series);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 304, 305, 306, 906 or 1107 and
except for any Securities which, pursuant to Section 303, are deemed never
to have been authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the series
shall be payable, if other than the Person in whose name that Security (or
one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest;
(4) the date or dates on which the principal of any Securities
of the series is payable;
(5) the rate or rates at which any Securities of the series
shall bear interest, if any, the date or dates from which any such interest
shall accrue, the Interest Payment Dates on which any such interest shall
be payable and the Regular Record Date for any such interest payable on any
Interest Payment Date;
(6) the place or places where the principal of and any premium
and interest on any Securities of the series shall be payable;
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(7) the period or periods within which, the price or prices at
which and the terms and conditions upon which any Securities of the series
may be redeemed, in whole or in part, at the option of the Company and, if
other than by a Board Resolution, the manner in which any election by the
Company to redeem the Securities shall be evidenced;
(8) the obligation, if any, of the Company to redeem or purchase
any Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of the Holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions
upon which any Securities of the series shall be redeemed or purchased, in
whole or in part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which any Securities of the series
shall be issuable;
(10) if the amount of principal of or any premium or interest on
any Securities of the series may be determined with reference to an index
or pursuant to a formula, the manner in which such amounts shall be
determined;
(11) if other than the currency of the United States of America,
the currency, currencies or currency units in which the principal of or any
premium or interest on any Securities of the series shall be payable and
the manner of determining the equivalent thereof in the currency of the
United States of America for any purpose, including for purposes of the
definition of "Outstanding" in Section 101;
(12) if the principal of or any premium or interest on any
Securities of the series is to be payable, at the election of the Company
or the Holder thereof, in one or more currencies or currency units other
than that or those in which such Securities are stated to be payable, the
currency, currencies or currency units in which the principal of or any
premium or interest on such Securities as to which such election is made
shall be payable, the periods within which and the terms and conditions
upon which such election is to be made and the amount so payable (or the
manner in which such amount shall be determined);
(13) if other than the entire principal amount thereof, the
portion of the principal amount of any Securities of the series which shall
be payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 502;
(14) if the principal amount payable at the Stated Maturity of
any Securities of the series will not be determinable as of any one or more
dates prior to the Stated Maturity, the amount which shall be deemed to be
the principal amount of such Securities as of any such date for any purpose
thereunder or hereunder, including the principal amount thereof which shall
be due and payable upon any Maturity other than the Stated Maturity or
which shall be deemed to be Outstanding as of any date prior to the Stated
Maturity (or, in any such case, the manner in which such amount deemed to
be the principal amount shall be determined);
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(15) if applicable, that the Securities of the series, in whole
or any specified part, shall be defeasible pursuant to Section 1302 or
Section 1303 or both such Sections and, if other than by a Board
Resolution, the manner in which any election by the Company to defease such
Securities shall be evidenced;
(16) if applicable, that any Securities of the series shall be
issuable in whole or in part in the form of one or more Global Securities
and, in such case, the respective Depositaries for such Global Securities,
the form of any legend or legends which shall be borne by any such Global
Security in addition to or in lieu of that set forth in Section 204 and any
circumstances in addition to or in lieu of those set forth in Clause (2) of
the last paragraph of Section 305 in which any such Global Security may be
exchanged in whole or in part for Securities registered, and any transfer
of such Global Security in whole or in part may be registered, in the name
or names of Persons other than the Depositary for such Global Security or a
nominee thereof;
(17) any addition to or change in the Events of Default which
applies to any Securities of the series and any change in the right of the
Trustee or the requisite Holders of such Securities to declare the
principal amount thereof due and payable pursuant to Section 502;
(18) any addition to or change in the covenants set forth in
Article Ten which applies to Securities of the series;
(19) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 901(5)); and
(20) the identity of the Trustee (if different than the Trustee
executing this Indenture) and, if not the Trustee, the identity of each
Paying Agent or Authenticating Agent with respect to such Securities.
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 303) set
forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
SECTION 302. DENOMINATIONS.
The Securities of each series shall be issuable only in registered
form without coupons and only in such denominations as shall be specified as
contemplated by
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Section 301. In the absence of any such specified denomination with respect
to the Securities of any series, the Securities of such series shall be
issuable in denominations of $1,000 and any integral multiple thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its President, a Vice President or its Chief Financial
Officer and attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and make available for delivery such
Securities. If the form or terms of the Securities of the series have been
established by or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,
(1) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such form
has been established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or
pursuant to Board Resolution as permitted by Section 301, that such terms
have been established in conformity with the provisions of this Indenture;
(3) that such Securities, when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
fraudulent conveyance, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
subject to general equity principles (regardless of whether enforcement is
sought in a proceeding in equity or at law); such opinion need express no
opinion as to the availability of equitable remedies; and
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(4) that all laws and requirements in respect of the execution and
delivery by the Company of such Securities have been complied with.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 309, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
make available for delivery, temporary Securities which are typewritten,
printed, lithographed, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
Except in the case of temporary Global Securities, which shall be
exchanged in accordance with the terms thereof, if temporary Securities of any
series are issued, the Company will cause definitive Securities of that series
to be prepared without unreasonable delay. After the preparation of definitive
Securities of such series, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series upon surrender
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of the temporary Securities of such series at the office or agency of the
Company in a Place of Payment for that series, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities of
any series, the Company shall execute and the Trustee shall authenticate and
make available for delivery in exchange therefor one or more definitive
Securities of the same series, of any authorized denominations and of like
tenor and aggregate principal amount. Until so exchanged, the temporary
Securities of any series shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities of such series and
tenor.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of a
series at the office or agency of the Company in a Place of Payment for that
series, the Company shall execute, and the Trustee shall authenticate and make
available for delivery, in the name of the designated transferee or transferees,
one or more new Securities of the same series, of any authorized denominations
and of like tenor and aggregate principal amount.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
like tenor and aggregate principal amount, upon surrender of the Securities to
be exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and make available for delivery, the Securities which the Holder
making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of
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transfer or exchange of Securities, other than exchanges pursuant to Section
304, 906 or 1107 not involving any transfer.
If the Securities of any series (or of any series and specified tenor)
are to be redeemed in part, the Company shall not be required (A) to issue,
register the transfer of or exchange any Securities of that series (or of that
series and specified tenor, as the case may be) during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of any such Securities selected for redemption under Section 1103 and
ending at the close of business on the day of such mailing, or (B) to register
the transfer of or exchange any Security so selected for redemption in whole or
in part, except the unredeemed portion of any Security being redeemed in part.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only
to Global Securities:
(1) Each Global Security authenticated under this Indenture
shall be registered in the name of the Depositary designated for such
Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no
Global Security may be exchanged in whole or in part for Securities
registered, and no transfer of a Global Security in whole or in part may be
registered, in the name of any Person other than the Depositary for such
Global Security or a nominee thereof unless (A) such Depositary (i) has
notified the Company that it is unwilling or unable to continue as
Depositary for such Global Security and a successor depository is not
appointed by the Company within 30 days of the date the Company is so
informed in writing or (ii) has ceased to be a clearing agency registered
under the Exchange Act, (B) there shall have occurred and be continuing an
Event of Default with respect to such Global Security or (C) there shall
exist such circumstances, if any, in addition to or in lieu of the
foregoing as have been specified for this purpose as contemplated by
Section 301.
(3) Subject to Clause (2) above, any exchange of a Global
Security for other Securities may be made in whole or in part, and all
Securities issued in exchange for a Global Security or any portion thereof
shall be registered in such names as the Depositary for such Global
Security shall direct in accordance with its records.
(4) Every Security authenticated and delivered upon registration
of transfer of, or in exchange for or in lieu of, a Global Security or any
portion thereof, whether pursuant to this Section, Section 304, 306, 906 or
1107 or otherwise, shall be authenticated and delivered in the form of, and
shall be, a Global Security, unless such Security is registered in the name
of a Person other than the Depositary for such Global Security or a nominee
thereof.
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SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and make available for delivery
in exchange therefor a new Security of the same series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee
(i) evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and the Trustee shall
authenticate and make available for delivery, in lieu of any such destroyed,
lost or stolen Security, a new Security of the same series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Except as otherwise provided as contemplated by Section 301 with
respect to any series of Securities, interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
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Unless otherwise provided in or pursuant to this Indenture, any
interest on any Security of any series which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security of such series and the
date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited
to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this Clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than
10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special
Record Date and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be given to each Holder of
Securities of such series in the manner set forth in Section 106, not
less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record
Date therefor having been so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Securities of such series (or
their respective Predecessor Securities) are registered at the close
of business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this Clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
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SECTION 308. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and any premium
and (subject to Section 307) any interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
No holder of any beneficial interest in any Global Security held on
its behalf by a Depositary shall have any rights under this Indenture with
respect to such Global Security, and such Depositary may be treated by the
Company, the Trustee, and any agent of the Company or the Trustee as the owner
of such Global Security for all purposes whatsoever. None of the Company, the
Trustee, any Paying Agent or the Security Registrar will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests of a Global Security or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
SECTION 309. CANCELLATION.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of as directed by a Company
Order; PROVIDED, HOWEVER, that the Trustee shall not be required to destroy such
cancelled Securities.
SECTION 310. COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 311. CUSIP NUMBERS.
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The Company in issuing the Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; PROVIDED that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of
a redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further
effect with respect to any series of Securities specified in the Company
Request (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities of such series theretofore authenticated and
delivered (other than (i) Securities which have been destroyed, lost
or stolen and which have been replaced or paid as provided in
Section 306 and (ii) Securities for whose payment money has
theretofore been deposited in trust or segregated and held in trust by
the Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 1003) have been delivered to the
Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Company,
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and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose money in an amount sufficient to
pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for
principal and any premium and interest to the date of such deposit
(in the case of Securities which have become due and payable) or
to the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Company to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.
ARTICLE FIVE
REMEDIES
SECTION 501. EVENTS OF DEFAULT.
"Event of Default", wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
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(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for
a period of 30 days; or
(2) default in the payment of the principal of or any premium on any
Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
this Section specifically dealt with or which has expressly been included
in this Indenture solely for the benefit of series of Securities other than
that series), and continuance of such default or breach for a period of 90
days after there has been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of
at least 25% in principal amount of the Outstanding Securities of that
series a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(5) a default under any bond, debenture, note or other evidence of
Debt for money borrowed by the Company (including a default with respect to
Securities of any series other than that series), or under any mortgage,
indenture or instrument (including this Indenture) under which there may be
issued or by which there may be secured or evidenced any Debt for money
borrowed by the Company having an aggregate principal amount outstanding of
at least $10 million, whether such Debt now exists or shall hereafter be
created, which default (A) shall constitute a failure to pay any portion of
the principal of such Debt when due and payable after the expiration of any
applicable grace period with respect thereto or (B) shall have resulted in
such Debt becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, without, in the case
of Clause (A), such past due principal of such Debt having been discharged
or without, in the case of Clause (B), such Debt having been discharged or
such acceleration having been rescinded or annulled, in each such case,
within a period of 30 days after there shall have been given, by registered
or certified mail, to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities of that series a written notice specifying such
default and requiring the Company to cause such Debt to be discharged or
cause such acceleration to be rescinded or annulled, as the case may be,
and stating that such notice is a "Notice of Default" hereunder; or
(6) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company or any of its
Significant Subsidiaries in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or (B) a decree or order adjudging the Company or any of its
Significant Subsidiaries a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or
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composition of or in respect of the Company or any of its Significant
Subsidiaries under any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any of its Significant Subsidiaries or
of any substantial part of its property (or that of any such Significant
Subsidiary), or ordering the winding up or liquidation of its affairs, and
the continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive days;
or
(7) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company or any of its
Significant Subsidiaries in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or answer or
consent seeking reorganization or relief under any applicable Federal or
State law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or
any of its Significant Subsidiaries or of any substantial part of its
property ( or that of any such Significant Subsidiary), or the making by it
of an assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due, or
the taking of corporate action by the Company or any of its Significant
Subsidiaries in furtherance of any such action; or
(8) any other Event of Default provided with respect to Securities of
that series.
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default specified in
Section 501(6) or 501(7)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of that series may declare the principal amount of all the Securities of that
series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified by the terms thereof) to be due and payable immediately, by a notice
in writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount) shall become
immediately due and payable. If an Event of Default specified in Section 501(6)
or 501 (7) with respect to Securities of any series at the time Outstanding
occurs, the principal amount of all the Securities of that series (or, if any
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified by the terms
thereof) shall automatically, and without any declaration or other action on the
part of the Trustee or any Holder, become immediately due and payable.
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At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration
of acceleration and any interest thereon at the rate or rates
prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue
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interest, at the rate or rates prescribed therefor in such Securities, and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Company (or any other obligor upon
the Securities), its property or its creditors, the Trustee shall be entitled
and empowered, by intervention in such proceeding or otherwise, to take any and
all actions authorized under the Trust Indenture Act in order to have claims of
the Holders and the Trustee allowed in any such proceeding. In particular, the
Trustee shall be authorized to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; PROVIDED,
HOWEVER, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and be a member of a creditors'
or other similar committee.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust,
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and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607;
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due
and payable on such Securities for principal and any premium and interest,
respectively; and
THIRD: To the Company.
SECTION 507. LIMITATION ON SUITS.
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
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(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to Section 307)
interest on such Security on the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
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SECTION 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Securities
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 512. CONTROL BY HOLDERS.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, PROVIDED that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default
(1) in the payment of the principal of or any premium or interest on
any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
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SECTION 514. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs,
including legal fees and expenses, against any such party litigant, in the
manner and to the extent provided in the Trust Indenture Act; PROVIDED that
neither this Section nor the Trust Indenture Act shall be deemed to authorize
any court to require such an undertaking or to make such an assessment in any
suit instituted by the Company, by the Trustee, or by any Holder or group of
Holders holding in the aggregate more than 10% in principal amount of
Outstanding Securities of any series, or by any Holder for the enforcement of
payment of (or premium, if any) or interest on any Security on or after the
respective Stated Maturity expressed in such Security (or, in the case of
redemption, on or after the redemption date).
SECTION 515. WAIVER OF USURY, STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
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SECTION 602. NOTICE OF DEFAULTS.
If a default occurs hereunder with respect to Securities of any
series, the Trustee shall give the Holders of Securities of such series notice
of such default as and to the extent provided by the Trust Indenture Act;
PROVIDED, HOWEVER, that in the case of any default of the character specified in
Section 501(4) with respect to Securities of such series, no such notice to
Holders shall be given until at least 30 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default with
respect to Securities of such series.
SECTION 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 601 and to Section 315 of the
Trust Indenture Act:
(1) the Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of Debt or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order, and any
resolution of the Board of Directors shall be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel of its selection and the
written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of Debt
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or other paper or document, but the Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further inquiry
or investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(8) the Trustee shall not be liable for any action taken, suffered,
or omitted to be taken by it in good faith and reasonably believed by it to
be authorized or within the discretion or rights or powers conferred upon
it by this Indenture; and
(9) the Trustee shall not be deemed to have notice of any default or
Event of Default unless a responsible officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact
such a default is received by the Trustee at the Corporate Trust Office of
the Trustee, and such notice references the Securities and this Indenture.
SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. Neither the
Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 605. MAY HOLD SECURITIES.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613 of this Indenture and Sections 310(b) and 311 of the Trust
Indenture Act, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
SECTION 606. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except as otherwise provided in this Indenture or to the extent
required by law. The
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Trustee shall be under no liability for interest on any money received by it
hereunder except as otherwise agreed in writing with the Company.
SECTION 607. COMPENSATION AND REIMBURSEMENT.
The Company agrees
(1) to pay to the Trustee from time to time such compensation as
shall be agreed in writing from time to time by the Company and the Trustee
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify each of the Trustee and any predecessor Trustee for,
and to hold it harmless against, any and all loss, liability, damage, claim
or expense incurred without negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration of the trust
or trusts hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
The Trustee shall have a lien prior to the Securities as to all
property and funds held by it hereunder, except for funds held in trust for the
benefit of the Holders of particular Securities, for any amount owing it or any
predecessor Trustee pursuant to this Section 607.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(6) or Section 501(7), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 608. CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act
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and this Indenture. To the extent permitted by such Act, the Trustee shall not
be deemed to have a conflicting interest by virtue of being a trustee under
this Indenture with respect to Securities of more than one series.
SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be one (and only one) Trustee hereunder with
respect to the Securities of each series, which may be Trustee hereunder for
Securities of one or more other series. Each Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such has a combined
capital and surplus of at least $50,000,000. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee with respect to the Securities of any series shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
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(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of
such series and that at any time there shall be only one Trustee with respect to
the Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 611, become the successor Trustee
with respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security of such series for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series to all Holders
of Securities of such series in the manner provided in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.
If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of removal, the Trustee being removed may petition, at
the expense of the Company, any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
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SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates,
(2) if the retiring Trustee is not retiring with respect to all Securities,
shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor
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Trustee all such rights, powers and trusts referred to in the first or second
preceding paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue and upon exchange, registration of transfer or partial redemption thereof
or pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and
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surplus of not less than $50,000,000 and subject to supervision or examination
by Federal or State authority. If such Authenticating Agent publishes reports
of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 106 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
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This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
DATED:
THE BANK OF NEW YORK,
AS TRUSTEE
By......................................,
AS AUTHENTICATING AGENT
By.......................................
AUTHORIZED SIGNATORY
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee
(1) semi-annually, not later than January 15 and July 15 in each
year, a list, in such form as the Trustee may reasonably require, of
the names and addresses of the Holders of Securities of each series as
of the preceding December 31 or June 30, as the case may be, and
(2) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished;
provided, however, that so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.
SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee
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in its capacity as Security Registrar. The Trustee may destroy any list
furnished to it as provided in Section 701 upon receipt of a new list so
furnished.
The rights of Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 703. REPORTS BY TRUSTEE.
The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
If required by Section 313(a) of the Trust Indenture Act, the Trustee shall,
within 60 days after each May 15 following the date of this Indenture, deliver
to Holders a brief report, dated as of such May 15, which complies with the
provisions of such Section 313(a).
A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will promptly notify the Trustee when any Securities are listed on any stock
exchange.
SECTION 704. REPORTS BY COMPANY.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; PROVIDED that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission. Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 705. CALCULATION OF ORIGINAL ISSUE DISCOUNT.
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The Company shall file with the Trustee reasonably promptly after the
end of each calendar year during which an Original Issue Discount Security is
outstanding, (i) a written notice specifying the amount of original issue
discount (including daily rates and accrual periods) accrued on Outstanding
Securities as of the end of such year and (ii) such other specific information
relating to such original issue discount as may then be relevant under the
Internal Revenue Code of 1986, as amended from time to time.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
Nothing contained in this Indenture or in any of the Securities shall
prevent any consolidation or merger of the Company or any Subsidiary with or
into any other Person or Persons, or shall prevent any conveyance, transfer or
lease of the properties and assets of the Company or any Subsidiary
substantially as an entirety to any Person provided that:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, the Person formed by such consolidation or
into which the Company is merged or the Person which acquires by conveyance
or transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, partnership or trust,
shall be organized and validly existing under the laws of the United States
of America, any State thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of and any premium and interest on all
the Securities and the performance or observance of every covenant of this
Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction and treating
any Debt which becomes an obligation of the Company or any Subsidiary as a
result of such transaction as having been incurred by the Company or such
Subsidiary at the time of such transaction, no Event of Default, and no
event which, after notice or lapse of time or both, would become an Event
of Default, shall have occurred and be continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
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SECTION 802. SUCCESSOR SUBSTITUTED.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such additional Events
of Default are to be for the benefit of less than all series of Securities,
stating that such additional Events of Default are expressly being included
solely for the benefit of such series); or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the
issuance of Securities in uncertificated form; or
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(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, PROVIDED that any
such addition, change or elimination (A) shall neither (i) apply to any
Security of any series created prior to the execution of such supplemental
indenture and entitled to the benefit of such provision nor (ii) modify the
rights of the Holder of any such Security with respect to such provision or
(B) shall become effective only when there is no such Security Outstanding;
or
(6) to secure the Securities pursuant to the requirements of Section
1008 or otherwise; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 611; or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, PROVIDED that such action pursuant
to this Clause (9) shall not adversely affect the interests of the Holders
of Securities of any series then outstanding in any material respects.
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; PROVIDED, HOWEVER,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any instalment
of principal of or interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any premium payable upon
the redemption thereof, or reduce the amount of the principal of an
Original Issue Discount Security or any other Security which would be due
and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502, or change any Place of Payment where, or the coin
or currency in which, any Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the
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Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1010, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby; PROVIDED, HOWEVER, that this clause shall not be deemed to require
the consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section and Section 1010, or the
deletion of this proviso, in accordance with the requirements of
Sections 611 and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601 of this Indenture and Section 315 of the Trust
Indenture Act) shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a
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part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be
bound thereby.
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of that series in accordance with the terms of
the Securities and this Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
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The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; PROVIDED, HOWEVER, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
SECTION 1003. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will (1) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent and (2) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
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Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in New York City,
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the
Company.
SECTION 1004. STATEMENT BY OFFICERS AS TO DEFAULT.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
Upon the occurrence of any event which is, or after notice or lapse of
time or both would become, an Event of Default, or if the Trustee or any Holder
or the trustee for or the holder of any other evidence of Debt of the Company or
any Subsidiary gives any notice or takes any other action with respect to a
claimed default, the Company shall deliver to the Trustee by registered or
certified mail or by facsimile transmission an Officers' Certificate specifying
such event, notice or other action within fifteen Business Days of its notice of
such default.
SECTION 1005. EXISTENCE.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; PROVIDED, HOWEVER, that the
Company shall not be required to preserve any such right or franchise if the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders.
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SECTION 1006. MAINTENANCE OF PROPERTIES.
The Company will cause all properties used or useful in the conduct of
its business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; PROVIDED, HOWEVER, that
nothing in this Section shall prevent the Company from discontinuing the
operation or maintenance of any of such properties if such discontinuance is, in
the judgment of the Company, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any material respect to
the Holders.
SECTION 1007. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and
(2) all lawful claims for labor, materials and supplies which, if unpaid, might
by law become a lien upon the property of the Company or any Subsidiary;
PROVIDED, HOWEVER, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings.
SECTION 1008. LIMITATION ON SECURED INDEBTEDNESS.
The Company will not create, assume, incur or guarantee, and will not
permit any Subsidiary to create, assume, incur or guarantee, any Secured
Indebtedness without making provision whereby all the Securities shall be
secured equally and ratably with (or prior to) such Secured Indebtedness
(together with, if the Company shall so determine, any other Debt of the Company
or such Subsidiary then existing or thereafter created which is not subordinate
to the Securities) so long as such Secured Indebtedness shall be outstanding
unless such Secured Indebtedness, when added to (a) the aggregate amount of all
Secured Indebtedness then outstanding (not including in this computation Secured
Indebtedness if the Securities are secured equally and ratably with (or prior
to) such Secured Indebtedness and further not including in this computation any
Secured Indebtedness which is concurrently being retired) and (b) the aggregate
amount of all Attributable Debt then outstanding pursuant to Sale and Lease-Back
Transactions entered into by the Company after May 15, 1997, or entered into by
a Subsidiary after May 15, 1997 or, if later, the date on which it became a
Subsidiary (not including in this computation any Attributable Debt which is
concurrently being retired), would not exceed 3% of Consolidated Net Tangible
Assets. In addition, the Company may create, assume, incur or guarantee Secured
Indebtedness in connection with one or more Securitizations.
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SECTION 1009. LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS.
The Company will not, and will not permit any Subsidiary to, enter
into any Sale and Lease-Back Transaction unless (a) the sum of (i) the
Attributable Debt to be outstanding pursuant to such Sale and Lease-Back
Transaction, (ii) all Attributable Debt then outstanding pursuant to all other
Sale and Lease-Back Transactions entered into by the Company after May 15, 1997,
or entered into by a Subsidiary after May 15, 1997 or, if later, the date on
which it became a Subsidiary, and (iii) the aggregate of all Secured
Indebtedness then outstanding (not including in this computation Secured
Indebtedness if the Securities are secured equally and ratably with (or prior
to) such Secured Indebtedness and any Secured Indebtedness issued in connection
with one or more Securitizations as permitted by Section 1008) would not exceed
3% of Consolidated Net Tangible Assets or (b) an amount equal to the greater of
(i) the net proceeds to the Company or the Subsidiary of the sale of the
Principal Property sold and leased back pursuant to such Sale and Lease-Back
Transaction and (ii) the amount of Attributable Debt to be outstanding pursuant
to such Sale and Lease-Back Transaction is applied to the retirement of Funded
Debt of the Company or any Subsidiary (other than Funded Debt which is
subordinate to the Securities or which is owing to the Company or any
Subsidiary) within 180 days after the consummation of such Sale and Lease-Back
Transaction.
SECTION 1010. WAIVER OF CERTAIN COVENANTS.
Except as otherwise specified as contemplated by Section 301 for
Securities of such series, the Company may, with respect to the Securities of
any series, omit in any particular instance to comply with any term, provision
or condition set forth in any covenant provided pursuant to Section 301(18),
901(2) or 901(7) for the benefit of the Holders of such series or in either
Section 1008 or Section 1009, inclusive, if before the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
ARTICLE ELEVEN
REDEMPTION OR REPAYMENT OF SECURITIES
SECTION 1101. APPLICABILITY OF ARTICLE.
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Securities of any series which are redeemable or repayable before
their Stated Maturity shall be redeemable or repayable in accordance with their
terms and (except as otherwise specified as contemplated by Section 301 for such
Securities) in accordance with this Article.
SECTION 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution or in another manner specified as contemplated
by Section 301 for such Securities. In case of any redemption at the election of
the Company of less than all the Securities of any series (including any such
redemption affecting only a single Security), the Company shall, at least
60 days prior to the Redemption Date fixed by the Company (unless a shorter
notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date, of the principal amount of Securities of such series to be
redeemed and, if applicable, of the tenor of the Securities to be redeemed. In
the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
SECTION 1103. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.
If less than all the Securities of any series are to be redeemed
(unless all the Securities of such series and of a specified tenor are to be
redeemed or unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of a portion of the principal amount of any Security of such series,
PROVIDED that the unredeemed portion of the principal amount of any Security
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security. If less than all the Securities of
such series and of a specified tenor are to be redeemed (unless such redemption
affects only a single Security), the particular Securities to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the Trustee,
from the Outstanding Securities of such series and specified tenor not
previously called for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption as aforesaid and, in case of any Securities
selected for partial redemption as aforesaid, the principal amount thereof to be
redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of
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the principal amount of the Security shall be in an authorized denomination
(which shall not be less than the minimum authorized denomination) for such
Security.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 1104. NOTICE OF REDEMPTION.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register and to the Trustee; PROVIDED, that if the Trustee is
requested by the Company to give notice of such redemption to the Holders,
notice of such redemption and request shall be given to the Trustee not later
than 45 days prior to the Redemption Date.
All notices of redemption shall identify the Securities to be redeemed
(including CUSIP numbers) and shall state:
(1) the Redemption Date,
(2) the Redemption Price and any accrued interest,
(3) if less than all the Outstanding Securities of any series
consisting of more than a single Security are to be redeemed, the
identification (and, in the case of partial redemption of any such
Securities, the principal amounts) of the particular Securities to be
redeemed and, if less than all the Outstanding Securities of any series
consisting of a single Security are to be redeemed, the principal amount of
the particular Security to be redeemed,
(4) that on the Redemption Date the Redemption Price and any accrued
interest will become due and payable upon each such Security to be redeemed
and, if applicable, that interest thereon will cease to accrue on and after
said date,
(5) the place or places where each such Security is to be surrendered
for payment of the Redemption Price and accrued interest, if any, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
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SECTION 1105. DEPOSIT OF REDEMPTION PRICE.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.
SECTION 1106. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; PROVIDED, HOWEVER, that, unless otherwise specified as
contemplated by Section 301, installments of interest whose Stated Maturity is
on or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.
SECTION 1107. SECURITIES REDEEMED IN PART.
Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and make available for delivery to the Holder of such
Security without service charge, a new Security or Securities of the same series
and of like tenor, of any authorized denomination as requested by such Holder,
in aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Security so surrendered.
SECTION 1108. RIGHT OF REPAYMENT.
In order for any Security that is subject to repayment at the option
of the Holder to be repaid, the Paying Agent must receive at least 30 days but
not more than 60 days prior to the repayment date (a) appropriate wire
instructions and (b) either (i) the Security with
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the form entitled Option to Elect Repayment (as set forth below) attached to
the Security duly completed or (ii) a facsimile transmission or letter from a
member of a national securities exchange or the National Association of
Securities Dealers, Inc. or a commercial bank or trust company in the United
States setting forth the name of the Holder of such Security, the principal
amount of such Security, the portion of the principal amount of such Security
to be repaid, the certificate number or a description of the tenor and terms
of such Security, a statement that the option to elect repayment is being
exercised thereby and a guarantee that such Security to be repaid with the form
entitled Option to Elect Repayment attached to such Security duly completed
will be received by the Paying Agent not later than five Business Days after
the date of such facsimile transmission or letter and such Security and form
duly completed must be received by the Paying Agent by such fifth Business Day.
Exercise of the repayment option by the Holder of such Security shall be
irrevocable, except as otherwise provided in the Board Resolution establishing
the term of the Security. The repayment option may be exercised by the Holder
of such Security for less than the entire principal amount of the Security
provided that the principal amount of the Security remaining outstanding after
repayment is an authorized denomination. No registration of, transfer or
exchange of such Security (or, in the event that such Security is to be repaid
in part, the portion of the Security to be repaid) will be permitted after
exercise of a repayment option. All questions as to the validity, eligibility
(including time of receipt) and acceptance of any Security for repayment will
be determined by the Company, whose determination will be final, binding and
non-appealable.
SECTION 1109. FORM OF OPTION TO ELECT REPAYMENT
The following text shall be attached to each Security to which the
provisions of Section 1108 apply:
FORM OF OPTION TO ELECT REPAYMENT ON ___________, __________
I or we hereby irrevocably elect to exercise the option to have the
principal sum of _________________ together with accrued interest thereon to
__________, ___ repaid by the Company on ________________, ______. If less
than the entire principal amount of the Security is to be repaid specify the
denomination or denominations (which shall be in authorized denominations) of
the Securities to be issued to the Holder for the portion of the within
Security not being repaid (in the absence of any such specification, one such
Security will be issued for the portion not being repaid.
_______________________________________________________________________________
Dated:_________________________________________________________________________
Signed:________________________________________________________________________
Signature Guarantee:________________________________________
(Signature must be guaranteed by
an eligible institution within
the meaning of Rule 17A(d)-15
under the Securities Exchange
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Act of 1934, as amended)
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of any series except as otherwise specified as
contemplated by Section 301 for such Securities.
The minimum amount of any sinking fund payment provided for by the
terms of any Securities is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of such Securities is herein referred to as an "optional sinking fund
payment". If provided for by the terms of any Securities, the cash amount of any
sinking fund payment may be subject to reduction as provided in Section 1202.
Each sinking fund payment shall be applied to the redemption of Securities as
provided for by the terms of such Securities.
SECTION 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to any Securities of such series required to be made
pursuant to the terms of such Securities as and to the extent provided for by
the terms of such Securities; PROVIDED that the Securities to be so credited
have not been previously so credited. The Securities to be so credited shall be
received and credited for such purpose by the Trustee at the Redemption Price,
as specified in the Securities so to be redeemed, for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.
SECTION 1203. REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than 45 days prior to each sinking fund payment date for any
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for such
Securities pursuant to the terms of such Securities, the portion thereof, if
any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities
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pursuant to Section 1202 and will also deliver to the Trustee any Securities
to be so delivered. Not less than 30 days prior to each such sinking fund
payment date, the Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 1104. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE.
The Company may elect, at its option at any time, to have Section 1302
or Section 1303 applied to any Securities or any series of Securities, as the
case may be, designated pursuant to Section 301 as being defeasible pursuant to
such Section 1302 or 1303, in accordance with any applicable requirements
provided pursuant to Section 301 and upon compliance with the conditions set
forth below in this Article. Any such election shall be evidenced by a Board
Resolution or in another manner specified as contemplated by Section 301 for
such Securities.
SECTION 1302. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise of its option (if any) to have this
Section applied to any Securities or any series of Securities, as the case may
be, the Company shall be deemed to have been discharged from its obligations
with respect to such Securities as provided in this Section on and after the
date the conditions set forth in Section 1304 are satisfied (hereinafter called
"Defeasance"). For this purpose, such Defeasance means that the Company shall be
deemed to have paid and discharged the entire indebtedness represented by such
Securities and to have satisfied all its other obligations under such Securities
and this Indenture insofar as such Securities are concerned (and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging the
same), subject to the following which shall survive until otherwise terminated
or discharged hereunder: (1) the rights of Holders of such Securities to
receive, solely from the trust fund described in Section 1304 and as more fully
set forth in such Section, payments in respect of the principal of and any
premium and interest on such Securities when payments are due, (2) the Company's
obligations with respect to such Securities under Sections 304, 305, 306, 1002
and 1003, (3) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and (4) this Article. Subject to compliance with this Article, the
Company may exercise its option (if any) to have this Section applied to any
Securities notwithstanding the prior exercise of its option (if any) to have
Section 1303 applied to such Securities.
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SECTION 1303. COVENANT DEFEASANCE.
Upon the Company's exercise of its option (if any) to have this
Section applied to any Securities or any series of Securities, as the case may
be, (1) the Company shall be released from its obligations under
Sections 801(3), 1008 and 1009, and any covenants provided pursuant to
Section 301(18), 901(2) or 901(7) for the benefit of the Holders of such
Securities and (2) the occurrence of any event specified in Sections 501(4)
(with respect to any of Section 801(3), 1008 and 1009, and any such covenants
provided pursuant to Section 301(18), 901(2) or 901(7)), 501(5) and 501(8) shall
be deemed not to be or result in an Event of Default, in each case with respect
to such Securities as provided in this Section on and after the date the
conditions set forth in Section 1304 are satisfied (hereinafter called "Covenant
Defeasance"). For this purpose, such Covenant Defeasance means that, with
respect to such Securities, the Company may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in any
such specified Section (to the extent so specified in the case of
Section 501(4)), whether directly or indirectly by reason of any reference
elsewhere herein to any such Section or by reason of any reference in any such
Section to any other provision herein or in any other document, but the
remainder of this Indenture and such Securities shall be unaffected thereby.
SECTION 1304. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of
Section 1302 or Section 1303 to any Securities or any series of Securities, as
the case may be:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee which satisfies the
requirements contemplated by Section 609 and agrees to comply with the
provisions of this Article applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefits of the Holders of such
Securities, (A) money in an amount, or (B) U.S. Government Obligations
which through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one day
before the due date of any payment, money in an amount, or (C) a
combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or any such other
qualifying trustee) to pay and discharge, the principal of and any premium
and interest on such Securities on the respective Stated Maturities, in
accordance with the terms of this Indenture and such Securities. As used
herein, "U.S. Government Obligation" means (x) any security which is (i) a
direct obligation of the United States of America for the payment of which
the full faith and credit of the United States of America is pledged or
(ii) an obligation of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America the payment of
which is unconditionally guaranteed as a full faith and credit obligation
by the United States of America, which, in either case
69
<PAGE>
(i) or (ii), is not callable or redeemable at the option of the issuer
thereof, and (y) any depositary receipt issued by a bank (as defined in
Section 3(a)(2) of the Securities Act) as custodian with respect to any
U.S. Government Obligation which is specified in Clause (x) above and held
by such bank for the account of the holder of such depositary receipt, or
with respect to any specific payment of principal of or interest on any
U.S. Government Obligation which is so specified and held, PROVIDED that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depositary receipt
from any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal or interest evidenced by
such depositary receipt.
(2) In the event of an election to have Section 1302 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(A) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of this instrument,
there has been a change in the applicable Federal income tax law, in either
case (A) or (B) to the effect that, and based thereon such opinion shall
confirm that, the Holders of such Securities will not recognize gain or
loss for Federal income tax purposes as a result of the deposit, Defeasance
and discharge to be effected with respect to such Securities and will be
subject to Federal income tax on the same amount, in the same manner and at
the same times as would be the case if such deposit, Defeasance and
discharge were not to occur.
(3) In the event of an election to have Section 1303 apply to any
Securities or any series of Securities, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of such Securities will not recognize gain or loss for
Federal income tax purposes as a result of the deposit and Covenant
Defeasance to be effected with respect to such Securities and will be
subject to Federal income tax on the same amount, in the same manner and at
the same times as would be the case if such deposit and Covenant Defeasance
were not to occur.
(4) The Company shall have delivered to the Trustee an Officers'
Certificate to the effect that neither such Securities nor any other
Securities of the same series, if then listed on any securities exchange,
will be delisted as a result of such deposit.
(5) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Securities or any other
Securities shall have occurred and be continuing at the time of such
deposit or, with regard to any such event specified in Sections 501(6) and
(7), at any time on or prior to the 90th day after the date of such deposit
(it being understood that this condition shall not be deemed satisfied
until after such 90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust
Indenture Act.
70
<PAGE>
(7) Such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any other agreement
or instrument to which the Company is a party or by which it is bound.
(8) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within
the meaning of the Investment Company Act unless such trust shall be
registered under such Act or exempt from registration thereunder.
(9) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
SECTION 1305. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN
TRUST; MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee or other qualifying trustee (solely for purposes of this
Section and Section 1306, the Trustee and any such other trustee are referred to
collectively as the "Trustee") pursuant to Section 1304 in respect of any
Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture, to the payment, either
directly or through any such Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Holders of such
Securities, of all sums due and to become due thereon in respect of principal
and any premium and interest, but money so held in trust need not be segregated
from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 1304 with
respect to any Securities which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect the Defeasance or Covenant Defeasance, as
the case may be, with respect to such Securities.
71
<PAGE>
SECTION 1306. REINSTATEMENT.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 1302 or 1303 shall be revived and reinstated as
though no deposit had occurred pursuant to this Article with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section 1305 with respect to such Securities
in accordance with this Article; PROVIDED, HOWEVER, that if the Company makes
any payment of principal of or any premium or interest on any such Security
following such reinstatement of its obligations, the Company shall be subrogated
to the rights (if any) of the Holders of such Securities to receive such payment
from the money so held in trust.
_____________________________
72
<PAGE>
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
CREDIT ACCEPTANCE CORPORATION
By............................
Attest:
......................................
THE BANK OF NEW YORK, as Trustee
By..............................
Attest:
......................................
73
<PAGE>
STATE OF )
) ss.:
COUNTY OF )
On the .... day of ..........., ...., before me personally came
..........................., to me known, who, being by me duly sworn, did
depose and say that he is .................... of Credit Acceptance Corporation,
one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by authority of
the Board of Directors of said corporation; and that he signed his name thereto
by like authority.
...............................................
STATE OF )
) ss.:
COUNTY OF )
On the .... day of ..........., ...., before me personally came
..........................., to me known, who, being by me duly sworn, did
depose and say that he is .................... of The Bank of New York, one of
the corporations described in and which executed the foregoing instrument; that
he knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that he signed his name thereto by like
authority.
...............................................
74
<PAGE>
June 23, 1997
EXHIBIT 5.1
Credit Acceptance Corporation
25505 West Twelve Mile Road
Southfield, MI 48034
Re: Credit Acceptance Corporation
Registration Statement on Form S-3
Gentlemen:
We have acted as counsel for Credit Acceptance Corporation, a Michigan
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Act"), of a Registration Statement on Form S-3 (the "Registration
Statement") in connection with the registration of $300,000,000 aggregate
principal amount of debt securities (the "Debt Securities") of the Company. The
Debt Securities are to be issued under an Indenture, dated as of May 15, 1997
(the "Indenture"), between the Company and The Bank of New York, as trustee (the
"Trustee"), a form of which Indenture is included as an exhibit to the
Registration Statement. The Debt Securities are to be issued in substantially
the form included as part of the Indenture (with maturities, interest rates and
other terms of the Debt Securities appropriately filled in). The Debt
Securities are to be sold from time to time as set forth in the Registration
Statement, any amendment thereto, the prospectus contained therein (the
"Prospectus") and any supplements to the Prospectus (the "Prospectus
Supplements").
We have examined instruments, documents and records which we deemed
relevant and necessary for the basis of our opinion hereinafter expressed.
Based on such examination, we are of the opinion that when the issuance of the
Debt Securities has been duly authorized by appropriate corporate action and the
Debt Securities have been duly completed, executed, authenticated and delivered
in accordance with the Indenture and sold as described in the Registration
Statement, any amendment thereto, the Prospectus and any Prospectus Supplement
relating thereto, the Debt Securities will be legal, valid and binding
obligations of the Company.
Our opinion that the Debt Securities are legal, valid and binding
obligations is qualified by limitations imposed by bankruptcy, insolvency,
reorganization, moratorium and other similar
<PAGE>
Credit Acceptance Corporation
June 23, 1997
Page 2
laws affecting creditors' rights and by the exercise of judicial discretion
in accordance with general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the heading "Legal
Matters" in the Registration Statement. In giving such consent, we do not
concede that we are experts within the meaning of the Act or the rules or
regulations thereunder or that this consent is required under Section 7 of the
Act.
Very truly yours,
DYKEMA GOSSETT PLLC
/s/ Dykema Gossett
------------------------------
<PAGE>
EXHIBIT 12.1
CREDIT ACCEPTANCE CORPORATION
RATIO OF EARNINGS TO FIXED CHARGES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Three months ended
Year ended December 31, March 31,
------------------------------------------------ ------------------
1992 1993 1994 1995 1996 1996 1997
------------------------------------------------ ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings $ 8,625 $12,395 $20,570 $29,572 $41,509 $ 9,188 $12,038
Income taxes 2,549 6,783 11,024 15,921 22,126 4,977 6,299
Fixed charges 174 60 2,708 8,890 13,706 2,195 5,726
------- ------- ------- ------- ------- ------- -------
Total $11,348 $19,238 $34,302 $54,383 $77,341 $16,360 $24,063
Interest expense 114 0 2,651 8,785 13,568 2,073 5,669
Amortized debt
costs 0 0 10 62 89 111 43
Portion of rent representing
interest component 60 60 47 43 49 11 14
------- ------- ------- ------- ------- ------- -------
Fixed charges $174 $60 $2,708 $8,890 $13,706 $2,195 $5,726
FIXED CHARGE RATIO 65.22 320.63 12.67 6.12 5.64 7.45 4.20
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated January 20,
1997, included in Credit Acceptance Corporation's Form 10-K for the year
ended December 31, 1996, and to all references to our Firm included in this
registration statement.
ARTHUR ANDERSEN LLP
Detroit, Michigan
June 30, 1997.
<PAGE>
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
CREDIT ACCEPTANCE CORPORATION
(Exact name of obligor as specified in its charter)
Michigan 38-1999511
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
25505 West Twelve Mile Road
Suite 3000
Southfield, Michigan 48034
(Address of principal executive offices) (Zip code)
______________________
Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York, N.Y.
New York 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 16th day of May, 1997.
THE BANK OF NEW YORK
By: /S/ WALTER N. GITLIN
-----------------------
Name: WALTER N. GITLIN
Title: VICE PRESIDENT
3
<PAGE>
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 6,024,605
Interest-bearing balances .......... 808,821
Securities:
Held-to-maturity securities ........ 1,071,747
Available-for-sale securities ...... 3,105,207
Federal funds sold in domestic offices
of the bank: .......................... 4,250,941
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ............................ 31,962,915
LESS: Allowance for loan and
lease losses ...................... 635,084
LESS: Allocated transfer risk
reserve............................ 429
Loans and leases, net of unearned
income, allowance, and reserve 31,327,402
Assets held in trading accounts ....... 1,539,612
Premises and fixed assets (including
capitalized leases) ................ 692,317
Other real estate owned .............. 22,123
Investments in unconsolidated
subsidiaries and associated
companies .......................... 213,512
Customers' liability to this bank on
acceptances outstanding ............ 985,297
Intangible assets .................... 590,973
Other assets ......................... 1,487,903
-----------
Total assets ......................... $52,120,460
-----------
-----------
LIABILITIES
Deposits:
In domestic offices ................ $25,929,642
Noninterest-bearing ................ 11,245,050
Interest-bearing ................... 14,684,592
In foreign offices, Edge and
<PAGE>
Agreement subsidiaries, and IBFs ... 12,852,809
Noninterest-bearing ................ 552,203
Interest-bearing .................. 12,300,606
Federal funds purchased and securities
sold under agreements to repurchase
in domestic offices of the
bank and of its Edge and Agreement
subsidiaries, and in IBFs:
Federal funds purchased ............ 1,360,877
Securities sold under agreements
to repurchase....................... 226,158
Demand notes issued to the U.S.
Treasury ........................... 204,987
Trading liabilities .................. 1,437,445
Other borrowed money:
With original maturity of one year
or less .......................... 2,312,556
With original maturity of more than
one year ......................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,014,717
Subordinated notes and debentures .... 1,014,400
Other liabilities .................... 1,721,291
-----------
Total liabilities .................... 48,095,648
-----------
-----------
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 731,319
Undivided profits and capital
reserves .......................... 2,354,095
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 7,030
Cumulative foreign currency transla-
tion adjustments .................. ( 9,916)
-----------
Total equity capital ................ 4,024,812
-----------
Total liabilities and equity
capital ........................... $52,120,460
-----------
-----------
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
]
J. Carter Bacot ]
Thomas A. Renyi ] Directors
Alan R. Griffith ]
]
