THIRD AMENDMENT TO
RECEIVABLES PURCHASE AGREEMENT
THIS THIRD AMENDMENT (this "Amendment") dated as of October 30, 1998 is
entered into among AFC FUNDING CORPORATION, an Indiana corporation (the
"Seller"), AUTOMOTIVE FINANCE CORPORATION, an Indiana corporation (the
"Servicer"), POOLED ACCOUNTS RECEIVABLE CAPITAL CORPORATION, a Delaware
corporation (the "Purchaser"), and NESBITT BURNS SECURITIES INC., a Delaware
corporation, as agent for Purchaser (the "Agent").
R E C I T A L S
1. The Seller, the Servicer, the Purchaser and the Agent are parties
to that certain Receivables Purchase Agreement dated as of December 31, 1996
(as amended by the first Amendment dated as of February 28, 1997 and the
Second Amendment dated as of August 15, 1997, the "Agreement").
2. The Seller, the Servicer, the Purchaser and the Agent desire to
amend the Agreement as hereinafter set forth.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Certain Defined Terms. Capitalized terms which are used herein
without definition and that are defined in the Agreement shall have the same
meanings herein as in the Agreement.
2. Amendments to Agreement. The Agreement is hereby amended as
follows:
2.1 Change in Control. Paragraph (a) of the definition of "Change in
Control" in Exhibit I to the Agreement is amended to read as follows:
"(a) Minnesota Power, Inc. shall fail to own at least
50% of the outstanding voting stock of ADESA;"
2.2 Eligible Receivable. Paragraph (m) of the definition of "Eligible
Receivable" in Exhibit I to the Agreement is amended in its entirety as follows:
"which arises from the making of a loan to finance the
purchase of a motor vehicle, the ownership of which is evidenced by a
certificate of title, driven or drawn by mechanical power, manufactured
primarily for use on the public streets, roads or highways with two
axles (but not
including any recreational vehicles); provided, however, that up to 5%
(but in any event not to exceed $5,000,000) of the Net Receivables Pool
Balance (which Net Receivables Pool Balance shall be calculated without
taking into account any Tractor Receivables) may consist of otherwise
Eligible Receivables which are Tractor Receivables."
2.3 Receivable. The definition of "Receivable" in Exhibit I to the
Agreement is amended in its entirety as follows:
"'Receivable' means any right to payment from any Person,
whether constituting an account, chattel paper, instrument or a general
intangible, arising from the providing of financing and other services
by the Originator to new, used and wholesale automobile or other motor
vehicle dealers for which the Obligor under the Dealer Note or similar
agreement is a resident of the United States of America, or any of its
possessions or territories, and that is denominated and payable only in
United States dollars, and includes the right to payment of any
interest or finance charges and other obligations of such Person with
respect thereto."
2.4 Exhibit I to the Agreement is amended by adding thereto the
following definitions in the appropriate alphabetical order:
"GAAP" means, generally accepted accounting principles and
practices in the United States, consistently applied."
"Tangible Net Worth" means, with respect to any Person, the net
worth of such Person calculated in accordance with GAAP after
subtracting therefrom the aggregate amount of such Person's intangible
assets, including, without limitation, goodwill, franchises, licenses,
patents, trademarks, tradenames, copyrights, service marks and brand
names and capitalized software."
"Tractor Receivable" means, those Receivables generated as a
result of the making of loans to finance the purchase of Tractors.
"Tractors" means, any non-cargo carrying power unit
manufactured with a minimum of two axles and a maximum of three axles
intended primarily for use on the public streets, roads and highways
and designed to operate in combination with a semitrailer or trailer;
provided, further, this definition specifically excludes any
semitrailer or trailer.
2.5 Reporting Requirements. Paragraph (l)(i) and (ii) of Exhibit IV to
the Agreement are amended to read as follows:
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"(l) Reporting Requirements. The Seller will provide to the Agent
(in multiple copies, if requested by the Agent)(except that with
respect to paragraphs (i), (ii), (iii) and (iv)) the Seller will cause
the Servicer to provide to the Agent and the Servicer will deliver to
the Agent the following:
(i) as soon as available and in any event within 45 days after
the end of the first three quarters of each fiscal year of AFC
in a format acceptable to the Agent, balance sheets of AFC,
its consolidated subsidiaries and Seller as of the end of such
quarter and statements of income, cash flows and retained
earnings of AFC and its consolidated subsidiaries and balance
sheets and income statements of the Seller for the period
commencing at the end of the previous fiscal year and ending
with the end of such quarter, certified by the chief financial
officer of such Person;
(ii) as soon as available and in any event within 90 days
after the end of each fiscal year of AFC, (A) a copy of the
annual report for AFC and its consolidated subsidiaries,
containing financial statements for such year audited by
PricewaterhouseCoopers LLP or other independent certified
public accountants acceptable to the Agent and (B) the income
statement of the Seller for such year certified by the chief
financial officer of the Seller;"
2.6 Termination Events: Paragraph (e) of Exhibit V to the Agreement is
amended to read as follows:
"(e) A default shall occur in the payment when due (subject to any
applicable grace period), whether by acceleration or otherwise, of
any Debt of either the Seller, AFC or ADESA or a default shall occur in
the performance or observance of any obligation or condition with
respect to such Debt if the effect of such default is to accelerate the
maturity of any such Debt and the Debt with respect to which
non-payment and/or non-performance shall have occurred exceeds, at any
point in time, with respect to the Seller or AFC, $1,000,000 in the
aggregate for all such occurrences or, with respect to ADESA,
$5,000,000, in the aggregate for all such occurrences;"
2.7 Net Worth. Paragraph (n)(i) of Exhibit V to the Agreement is
amended by deleting "$18,000,000" and inserting in its place "$24,000,000."
2.8 Leverage Test. Exhibit V to the Agreement is amended by inserting
the following at the end thereof:
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" ; or (r) The sum of all of AFC's Debt (including
intercompany loans between AFC and Minnesota Power, Inc.), plus the
Investment of the Participation, plus the outstanding balance of any
other non-recourse transactions exceeds 8.5 times the total
stockholder's equity of AFC on a quarterly basis."
3. Representations and Warranties. Each of the Seller and the Servicer
hereby represents and warrants to the Agent and the Purchaser as follows:
(a) Representations and Warranties. The representations and
warranties of such Person contained in Exhibit III to the Agreement are
true and correct as of the date hereof (unless stated to relate solely
to an earlier date, in which case such representations and warranties
were true and correct as of such earlier date).
(b) Enforceability. The execution and delivery by such Person of
this Amendment, and the performance of its obligations under this
Amendment and the Agreement, as amended hereby, are within its
corporate powers and have been duly authorized by all necessary
corporate action on its part. This Amendment and the Agreement, as
amended hereby, are its valid and legally binding obligations,
enforceable in accordance with its terms.
(c) Termination Event. No Termination Event or Unmatured
Termination Event has occurred and is continuing.
4. Effectiveness. This Amendment shall become effective as of the date
hereof upon receipt by the Agent of the following, each duly executed and dated
as of the date hereof (or such other date satisfactory to the Agent), in form
and substance satisfactory to the Agent:
(a) counterparts of this Amendment (whether by facsimile or
otherwise) executed by each of the parties hereto;
(b) a written statement from Moody's Investors Service, Inc. and
Standard & Poor's that this Amendment will not result in a downgrade or
withdrawal of the rating of the Notes; and
(c) such other documents and instruments as the Agent may
reasonably request.
5. Effect of Amendment. Except as expressly amended and modified by
this Amendment, all provisions of the Agreement shall remain in full force and
effect. After this Amendment becomes
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effective, all references in the Agreement (or in any other Transaction
Document) to "the Receivables Purchase Agreement," "this Agreement," "hereof,"
"herein" or words of similar effect, in each case referring to the Agreement,
shall be deemed to be references to the Agreement as amended by this Amendment.
This Amendment shall not be deemed to expressly or impliedly waive, amend or
supplement any provision of the Agreement other than as set forth herein.
6. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties on separate counterparts, and each
counterpart shall be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
7. Governing Law. This Amendment shall be governed by, and construed
in accordance with, the internal laws of the State of Indiana without reference
to conflict of laws principles.
8. Section Headings. The various headings of this Amendment are
inserted for convenience only and shall not affect the meaning or interpretation
of this amendment or the Agreement or any provision hereof or thereof.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
AFC FUNDING CORPORATION
By: Curtis L. Phillips
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Name: Curtis L. Phillips
---------------------------------
Title: Executive Vice President/Chief
Financial Officer and Treasurer
---------------------------------
AUTOMOTIVE FINANCE CORPORATION
By: Curtis L. Phillips
---------------------------------------
Name: Curtis L. Phillips
---------------------------------
Title: Executive Vice President/Chief
Financial Officer and Treasurer
---------------------------------
POOLED ACCOUNTS RECEIVABLE CAPITAL
CORPORATION
By: Dwight Jenkins
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Name: Dwight Jenkins
---------------------------------
Title: Vice President
---------------------------------
NESBITT BURNS SECURITIES INC.
By: David J. Kucera
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Name: David J. Kucera
---------------------------------
Title: Managing Director
---------------------------------
By: Jeffrey J. Phillips
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Name:
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Title:
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