Document:

4.2_Supp3SecAgmt

SUPPLEMENT NO. 3 dated as of September 27, 2013 (this “Supplement”), to the Security Agreement dated as of June 4, 2010 (as amended, supplemented or otherwise modified from time to time the “Security Agreement”), among DriveTime Automotive Group, Inc., a Delaware corporation (“DTAG”), DT Acceptance Corporation, an Arizona corporation (“DTAC” and together with DTAG the “Issuers”), DriveTime Car Sales Company, LLC, an Arizona limited liability company (the “Secured Guarantor” and together with the Issuers, the “Grantors” and each a “Grantor”) and Wells Fargo Bank, National Association, as collateral agent (in such capacity, the “Collateral Agent”) for the Secured Parties (as defined in the Security Agreement). 
A.  Reference is made to (a) the Indenture, dated as of June 4, 2010 (as amended, supplemented or otherwise modified from time to time, the “Indenture”), among the Issuers, the Secured Guarantor, the other Guarantors from time to time party thereto and Wells Fargo Bank, National Association, as trustee (in such capacity, the “Trustee”), pursuant to which the Issuers issued 12.625% Senior Secured Notes due 2017 (collectively, the “Notes”), and (b) the Intercreditor Agreement dated as of June 4, 2010 (as amended, supplemented, replaced or otherwise modified from time to time, the “Intercreditor Agreement”), among the Issuers, the Secured Guarantor, DriveTime Sales and Finance Company, LLC, the Collateral Agent and Manheim Automotive Financial Services, Inc. and Santander Consumer USA Inc., as lenders under the Senior Inventory Facility (as defined in the Indenture).
B.  Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Security Agreement and, if not defined therein, in the Indenture.
C.  The Grantors have entered into the Security Agreement in order to induce the Holders to purchase Notes.  Each Subsidiary of an Issuer that is a Guarantor under the Indenture that pledges Inventory pursuant to a Permitted Inventory Facility is required to enter into the Security Agreement as a Grantor upon becoming a Secured Guarantor.  Section 7.15 of the Security Agreement provides that such Guarantor may become Grantors under the Security Agreement by execution and delivery of an instrument in the form of this Supplement.
Accordingly, the Collateral Agent and the undersigned (the “New Grantor”) agree as follows:
SECTION 1.  In accordance with Section 7.15 of the Security Agreement, the New Grantor by its signature below becomes a Grantor under the Security Agreement with the same force and effect as if originally named therein as a Grantor and the New Grantor hereby (a) agrees to all the terms and provisions of the Security Agreement applicable to it as a Grantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Grantor thereunder are true and correct on and as of the date hereof except to the extent a representation and warranty expressly relates solely to a specific date, in which case such representation and warranty shall be true and correct on such date.  In furtherance of the foregoing, the New Grantor, as 

security for the payment and performance in full of the Secured Obligations (as defined in the Security Agreement), does hereby create and grant to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, their successors and assigns, a security interest in and lien on all of the New Grantor’s right, title and interest in and to the Grantor Collateral of the New Grantor.  Each reference to a “Grantor” or “Secured Guarantor” in the Security Agreement shall be deemed to include the New Grantor.  The Security Agreement is hereby incorporated herein by reference.
SECTION 2.  In accordance with Section 7.17 of the Security Agreement, the Liens created by the Security Agreement with respect to the Grantor Collateral are junior and subordinate to the Liens on such property created by any similar instrument now or hereafter granted to any First Priority Creditor, in such property, in accordance with the provisions of the Intercreditor Agreement.  Notwithstanding anything to the contrary, the exercise of any right or remedy by the Collateral Agent hereunder with respect to the Grantor Collateral is subject to the provisions of the Intercreditor Agreement.  In the event of any conflict between the terms of the Intercreditor Agreement and the Security Agreement with respect to the Grantor Collateral, the terms of the Intercreditor Agreement shall govern. 
SECTION 3.  The New Grantor represents and warrants to the Collateral Agent and the other Secured Parties that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.
SECTION 4.  This Supplement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Supplement shall become effective when the Collateral Agent shall have received counterparts of this Supplement that, when taken together, bear the signatures of the New Grantor and the Collateral Agent.  Delivery of an executed signature page to this Supplement by facsimile or Adobe .pdf transmission shall be as effective as delivery of a manually signed counterpart of this Supplement.
SECTION 5.  The New Grantor hereby represents and warrants that (a) set forth on Schedule I attached hereto is a true and correct schedule of the location of any and all Grantor Collateral of the New Grantor and (b) set forth under its signature hereto, is the true and correct location of the chief executive office of the New Grantor.
SECTION 6.  Except as expressly supplemented hereby, the Security Agreement shall remain in full force and effect.
SECTION 7.  THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.

    

SECTION 8.  In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Security Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction).  The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
SECTION 9.  All communications and notices hereunder shall be in writing and given as provided in Section 7.01 of the Security Agreement.  All communications and notices hereunder to the New Grantor shall be given to it at the address set forth under its signature below, with a copy to the Issuer.
SECTION 10.  The New Grantor agrees to reimburse the Collateral Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Collateral Agent. 
[Signature Pages Follow]

    

IN WITNESS WHEREOF, the New Grantor and the Collateral Agent have duly executed this Supplement to the Security Agreement as of the day and year first above written.
	
		
	 
	DRIVER’S SEAT, LLC

	 
	 

	 
	By: /s/Jon Ehlinger__________________ 

	 
	Name: Jon Ehlinger

	 
	Title:   Secretary

	 
	

4020 E. Indian School Rd.
Phoenix, Arizona 85018 

	 
	 

	 
	WELLS FARGO BANK, NATIONAL ASSOCIATION, as Collateral Agent

	 
	 

	 
	By: /s/Raymond Delli Colli_____________

	 
	Name: Raymond Delli Colli

	 
	Title:  Vice President

	 
	 

[Signature Page to Supplement No. 3 to Security Agreement]

Schedule I to Supplement No. 3  
to the Security Agreement

	
					
	LOCATION OF COLLATERAL

	Grantor
	 
	Description
	 
	Location

	 
	 
	 
	 
	 

	Driver’s Seat, LLC
	 
	Motor Vehicles
	 
	The dealership and inspection center locations operated by DriveTime Car Sales Company, LLC10.1_JoinderInvLoanAgmtDS

JOINDER AGREEMENT
This JOINDER AGREEMENT, dated as of September 27, 2013 (the “Joinder”), is made by Driver’s Seat, LLC, a Delaware limited liability company (the “Additional Borrower”), DriveTime Automotive Group, Inc., (“DriveTime”), a Delaware corporation, DriveTime Sales and Finance Company, LLC (“DriveTime Sales”), an Arizona limited liability company, DriveTime Car Sales Company, LLC (“Car Sales”), an Arizona limited liability company, DriveTime Ohio Company, LLC (“DriveTime Ohio”), an Arizona limited liability company and Carvana LLC (“Carvana”), an Arizona limited liability company (each a “Borrower” and collectively the “Borrowers”), and Wells Fargo Bank, N.A., a national banking association (together with its successors and assigns, “WFBNA”), as the lead lender, and as the agent (the “Agent”) for the Lenders (as hereinafter defined). 
RECITALS
A.    The Borrowers, WFBNA, as Agent and a lender, Santander Consumer USA Inc., an Illinois corporation (together with its successors and assigns, “SCUSA”), as a lender, and Manheim Automotive Financial Services, Inc., a Delaware corporation (together with its successors and assigns, “MAFS”), as a lender (WFBNA, SCUSA and MAFS referred to herein individually as “Lender” and collectively as “Lenders”) entered into the Loan and Security Agreement, dated October 28, 2011 (as amended, restated, extended, supplemented, or otherwise modified in writing from time to time, the “Loan Agreement”).
B.    Pursuant to Section 10.21 of the Loan Agreement, at the time that any Borrower forms any direct or indirect Subsidiary or acquires any direct or indirect Subsidiary after the Effective Date, such Borrower shall cause any such new Subsidiary to become a “Borrower” under the Loan Agreement and the other Loan Documents.
C.    The Additional Borrower was formed on September 10, 2013 and is a wholly-owned Subsidiary of Car Sales.  
NOW, THEREFORE, in consideration of the foregoing Recitals and the terms, covenants, and conditions of this Joinder, the receipt of which and sufficiency of which are hereby acknowledged, the Additional Borrower, Borrowers, WFBNA, SCUSA and MAFS agree as follows:
1.Defined Terms.  Capitalized terms used and not otherwise defined in this Joinder have the same meaning or meanings given to them in the Credit Agreement.
2.    Joinder as Borrower.  The Additional Borrower, by its signature below, assumes and agrees to be bound by all of the terms, covenants, representations, warranties and conditions of the Loan Agreement, Notes and other Loan Documents, jointly and severally with the other Persons comprising the Borrowers, and assumes and agrees to be bound thereby as a “Borrower” as if the Additional Borrower had originally executed the Loan Documents.  Borrowers, WFBNA, SCUSA and MAFS agree that Additional Borrower shall be deemed a “Borrower” under the Loan Agreement 

        

and all other Loan Documents.  Each reference to a “Borrower” or “Borrowers” in the Loan Documents shall be deemed to include the Additional Borrower.  
3.    Representations and Warranties.  The Additional Borrower hereby represents and warrants to the Agent and the Lenders that (a) this Joinder has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, (b) the representations and warranties of the Borrowers set forth in the Loan Agreement and the other Loan Documents (if any) are true and correct representations and warranties of the Additional Borrower on and as of the date hereof except to the extent a representation and warranty expressly relates solely to a specific date, in which case such representation and warranty is true and correct on such date, and (c) it has reviewed and approved of copies of the Notes, Loan Agreement and Loan Documents related thereto and described therein.  The Additional Borrower agrees to execute and deliver such additional documents as Required Lenders may reasonably require including with respect to Liens securing the Obligations. 
4.    Consent and Acceptance.  The Borrowers, Agent and the Lenders hereby consent to the joinder of the Additional Borrower and the assumption of the Loan Documents by the Additional Borrower and agree and acknowledge that after the date of this Joinder, the Additional Borrower shall be a “Borrower” for all purposes of the Loan Documents.  Additional Borrower shall be a co-obligor/co-borrower with the Borrowers with respect to Loan Agreement, Notes and other Loan Documents, and shall be jointly and severally liable with the Borrowers for repayment of the Inventory Facility and the Obligations thereunder.  Nothing herein shall be construed to or shall release any Borrower from its obligations to repay the Notes or perform its obligations under the Loan Documents.   
5.    Reaffirmation.  All of the terms, covenants and conditions of the Loan Agreement, Notes and other Loan Documents, are hereby ratified, reaffirmed and confirmed and shall continue in full force and effect, except as amended hereby, as therein written and are not intended to be re-enacted as of the above date, but rather to be effective as of the original date of such documents.  
6.    Incorporation of Loan Documents.  All of the terms, covenants and conditions of the Loan Documents are incorporated in this Joinder as if set forth in full herein.
7.    Update of Exhibit 8.1(S).  Pursuant to Section 10.21 of the Loan Agreement, attached is an updated Exhibit 8.1(S) to the Loan Agreement reflecting the addition of the Additional Borrower.
8.    Acknowledgement.  Pursuant to Section 10.21 of the Loan Agreement, the Borrowers provided notice of the formation of the Additional Borrower within the required timeframe set forth in the Loan Agreement.  The parties hereto acknowledge and agree that the Agent in its sole discretion, as permitted under Section 10.21 of the Loan Agreement, extended the time period set forth in Section 10.21 of the Loan Agreement for the execution of this Joinder and the other required documentation.

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9.    Counterparts.  This Joinder may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
10.    Binding Effect.  This Joinder shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns, and nothing herein is intended, or shall be construed to give, any other Person any right, remedy or claim under, to or in respect of this Joinder.
11.    Amendment and Waiver.  No amendment of this Joinder, and no waiver of any one or more of the provisions hereof shall be effective unless set forth in a writing and signed by the parties hereto.
12.    Governing Law.  This Agreement shall be construed in accordance with and governed by the law of the State of New York, except as otherwise required by mandatory provisions of law and except to the extent that remedies provided by the laws of any jurisdiction other than the State of New York are governed by the laws of such jurisdiction.
13.    Headings.  Section headings used herein are for convenience of reference only, are not part of this Joinder and shall not affect the construction of, or be taken into consideration in interpreting, this Joinder.

[SIGNATURE PAGES FOLLOW]

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IN WITNESS WHEREOF, this Joinder is executed as of the date first above written.
	
		
	 
	WELLS FARGO BANK, N.A., as Agent and Lead Lender

	 
	By:   /s/Chad McNeill   

	 
	Name:  Chad McNeill

	 
	Title:    VP

	 
	 

	 
	DRIVETIME AUTOMOTIVE GROUP, INC.

	 
	 

	 
	By: /s/ Raymond Fidel   

	 
	Name: Raymond Fidel   

	 
	Title:   President and CEO   

	 
	 

	 
	DRIVETIME CAR SALES COMPANY, LLC

	 
	 

	 
	By:/s/ Raymond Fidel   

	 
	Name: Raymond Fidel   

	 
	Title:   President   

	 
	 

	 
	DRIVETIME SALES AND FINANCE

	 
	COMPANY, LLC

	 
	 

	 
	By:/s/ Raymond Fidel   

	 
	Name: Raymond Fidel   

	 
	Title:   President and CEO   

	 
	 

	 
	DRIVETIME OHIO COMPANY, LLC

	 
	By:/s/ Raymond Fidel   

	 
	Name: Raymond Fidel   

	 
	Title:   President and CEO

	 
	 

	 
	CARVANA, LLC

	 
	By:/s/ Ernest Garcia    

	 
	Name: Ernest C Garcia III   

	 
	Title:   President

	
		
	 
	DRIVER’S SEAT, LLC

	 
	By:/s/ Mark G. Sauder   

	 
	Name: Mark G. Sauder   

	 
	Title:   President

[Signature Page to Joinder Agreement to Inventory Loan Agreement]

    

EXHIBIT 8.1(S)
ACTIVE AND INACTIVE SUBSIDIARIES

Active Subsidiaries

DriveTime Automotive Group, Inc.
DriveTime Sales and Finance Company, LLC
DriveTime Car Sales Company, LLC
Drake Property & Casualty Insurance Co.
DriveTime Ohio Company, LLC
Carvana, LLC
Driver’s Seat, LLC

DriveTime Sales and Finance Company, LLC
DriveTime Car Sales Company, LLC
Drake Property & Casualty Insurance Co.
DriveTime Ohio Company, LLC
Carvana, LLC
Driver’s Seat, LLC

DriveTime Car Sales Company, LLC
DriveTime Ohio Company, LLC
Carvana, LLC
Driver’s Seat, LLC

DriveTime Ohio Company, LLC
None

Non-active Subsidiaries

None

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