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EXHIBIT 4(a)(9)
EIGHTH AMENDMENT TO NOTE PURCHASE AGREEMENT
RE:
CREDIT ACCEPTANCE CORPORATION
SECOND AMENDED AND RESTATED
10.37% SENIOR NOTES DUE NOVEMBER 1, 2001
Dated as of March 8, 2001
To the Noteholders listed on Annex I hereto
Ladies and Gentlemen:
Credit Acceptance Corporation, a Michigan corporation (together with
its successors and assigns, the "Company"), hereby agrees with you as follows:
SECTION 1. INTRODUCTORY MATTERS.
1.1 DESCRIPTION OF OUTSTANDING NOTES. The Company currently has
outstanding its Second Amended and Restated 10.37% Senior Notes due November 1,
2001 (collectively, the "Notes") which it issued pursuant to the separate Note
Purchase Agreements, each dated as of October 1, 1994 (collectively, as amended
by the First Amendment to Note Purchase Agreement, dated as of November 15,
1995, the Second Amendment to Note Purchase Agreement, dated as of August 29,
1996, the Third Amendment to Note Purchase Agreement, dated as of December 12,
1997, the Fourth Amendment to Note Purchase Agreement, dated as of July 1, 1998,
the Fifth Amendment to Note Purchase Agreement, dated as of April 13, 1999, the
Sixth Amendment, dated as of December 1, 1999, and the Seventh Amendment, dated
as of April 27, 2000, the "Agreement"), entered into by the Company with each of
the original holders of the Notes listed on Annex 1 thereto, respectively. Terms
used herein but not otherwise defined herein shall have the meanings assigned
thereto in the Agreement, as amended hereby.
1.2 PURPOSE OF AMENDMENT. The Company and you desire to amend the
Agreement as set forth in Section 2 hereof.
SECTION 2. AMENDMENT TO THE AGREEMENT.
Pursuant to Section 10.5 of the Agreement, the Company hereby agrees
with you that the Agreement shall be amended by this Eighth Amendment to Note
Purchase Agreement (this "Eighth Amendment") in the following respects:
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2.1 SECTION 6.1. (a) Sections 6.1(a)(i), 6.1(b)(i) and
6.1(c) are each amended by adding the following at the end thereof, immediately
following the word "GAAP" (prior to the ending punctuation):
, other than Debt represented by Intercompany Loans incurred
by the English Special Purpose Subsidiary pursuant to the UK
Restructuring
(b) Section 6.1(d) is hereby amended by adding the following
at the end thereof (before the "."):
or (C) on or after June 13, 2000, thirty-five percent (35%) of
Consolidated Tangible Net Worth
2.2 SECTION 6.6. Section 6.6(a)(i) is amended and restated in its
entirety as follows:
(i) (A) Liens securing Property taxes,
assessments or governmental charges or levies or the claims or
demands of materialmen, mechanics, carriers, warehousemen,
vendors, landlords and other like Persons, provided that the
payment thereof is not at the time required by Section 6.12,
(B) any Lien encumbering Securitization Property which is the
subject of a Transfer pursuant to a Permitted Securitization,
(C) any Lien granted in favor of the "Collateral Agent" (as
defined in the Intercreditor Agreement) for the benefit of the
Banks, the holders of Notes and "Future Debt Holders" (as
defined in the Intercreditor Agreement) and subject to the
Intercreditor Agreement, and (D) Liens encumbering assets
owned by CAC UK securing Debt incurred by Subsidiaries
organized outside the United States if, in the case of this
clause (D), immediately before and after the incurrence of any
such Lien, and after giving effect thereto and to any
concurrent transactions, no Default or Event of Default would
exist;
2.3 SECTION 6.7. Section 6.7(a) is amended by replacing the "." at
the end thereof with "; and" and by adding the following at the end thereof:
(v) Transfers made in accordance with the terms
of the UK Restructuring if, immediately before and after the
consummation of such Transfer, and after giving effect thereto
and to any concurrent transactions, no Default or Event of
Default would exist.
2.4 SECTION 6.8(a). (a) Clause (i) of Section 6.8(a) is hereby
amended in its entirety as follows:
(i) (A) Transfers from a Restricted
Subsidiary to the Company or to a Wholly-Owned Restricted Subsidiary; and
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(B) Transfers from an Unrestricted
Subsidiary to the Company or to a Wholly-Owned Restricted
Subsidiary if, immediately before and after the consummation
of such Transfer, and after giving effect thereto and to any
concurrent transactions, no Default or Event of Default would
exist.
(b) Clause (v) of Section 6.8(a) is hereby amended and
restated in its entirety as follows:
(v) any Transfer made pursuant to the Montana
Disposition (including without limitation the transfer by the
Company of its intellectual property rights to the name
Tele-Track, Inc.), the Arlington Disposition or the UK
Restructuring if, immediately before and after the
consummation of such Transfer, and after giving effect thereto
and to any concurrent transactions, no Default or Event of
Default would exist; and
2.5 SECTION 6.8(c). Section 6.8(c) is hereby amended and restated
in its entirety as follows:
(c) ACCOUNTS RECEIVABLE AND LEASES. Notwithstanding
the provisions of Section 6.8(a), except to the Company or a
Wholly- Owned Restricted Subsidiary pursuant to Section
6.8(a)(i) or to Comerica Bank in its capacity as "Collateral
Agent" under the Intercreditor Agreement, or pursuant to or in
connection with a Permitted Securitization, the Montana
Disposition, the Arlington Disposition or the UK
Restructuring, neither the Company nor any Restricted
Subsidiary will Transfer, or reallocate from the Non-Specified
Interest to a Specified Interest, any accounts receivable,
leases or other financial assets if the sum of
(i) the face value of the accounts receivable, leases
or other financial assets proposed to be Transferred, plus
(ii) the face value of the accounts receivable,
leases or other financial assets Transferred by the Company
and all Restricted Subsidiaries during the then current fiscal
year of the Company (other than pursuant to the UK
Restructuring),
would exceed five percent (5%) of the face value of the
accounts receivable, leases and other financial assets of the
Company and the Restricted Subsidiaries determined on a
consolidated basis as at the
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at the end of the most recently ended fiscal year of Company
prior to giving effect to any such Transfer.
2.6 SECTION 6.10. Section 6.10 is amended and restated in its
entirety as follows:
6.10 TRANSACTIONS WITH AFFILIATES. The Company will
not, and will not permit any Restricted Subsidiary to, enter
into any transaction, including, without limitation, the
purchase, sale or exchange of Property or the rendering of any
service, with any Affiliate, except (a) a Permitted
Securitization, (b) transactions in accordance with the terms
of the UK Restructuring, or (c) in the ordinary course of and
pursuant to the reasonable requirements of the Company's or
such Restricted Subsidiary's business and upon fair and
reasonable terms no less favorable to the Company or such
Restricted Subsidiary than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate.
2.7 SECTION 6.22. Section 6.22 is added to read as follows:
6.22 AMENDMENTS TO TITLING SUBSIDIARY AGREEMENTS. The
Company will not, and will not permit the Titling Subsidiary
to, amend, modify or otherwise alter (or permit to be amended,
modified or altered) in any material respect adverse to the
Holders, any of the Titling Subsidiary Agreements or any other
documents or instruments relating to the establishment or
operation of the Titling Subsidiary. For purposes of such
documents or instruments, any amendments to or changes in the
provisions relating to the creation or transfer of Specified
Interests and the allocation or reallocation of financial
assets or other property thereto, and any amendment,
modification, resignation or removal whereby the Company shall
cease to be the founding member of or otherwise cease to
control the Titling Subsidiary or cease to be the
administrative agent under the Titling Subsidiary Agreements
shall (without reducing the scope of this Section 6.22) be
deemed to be materially adverse to the Holders.
2.8 SECTION 6.23. Section 6.23 is added to read as follows:
6.23 CHANGES TO COLLATERAL ARRANGEMENTS.
(a) Prior to the transfer to or creation in
the name of the Titling Subsidiary of any Leased Vehicles or
Leases, the Company shall execute and deliver additional
agreements (or an
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amendment to the Security Agreement, dated as of December 15,
1998, executed and delivered by the Company in favor of
Comerica Bank, as agent under the Intercreditor Agreement)
consisting of a security agreement and pledge encumbering the
Company's entire Non-Specified Interest and any related
documents or instruments necessary to encumber and/or perfect
a security interest in such collateral, all as determined by
and in form and substance satisfactory to the "Collateral
Agent" and the "Majority Benefited Parties" under the
Intercreditor Agreement, in their reasonable discretion.
(b) Before conducting the UK Restructuring,
the Company shall grant a perfected first priority security
interest, lien and charge to the "Collateral Agent" under the
Intercreditor Agreement in not less than 65% of the aggregate
partnership interests of the Scottish Partnership, as security
for the indebtedness owed to the parties to the Intercreditor
Agreement, on substantially the terms of that certain Deed of
Charge dated as of December 17, 1998 and executed by Company
in favor of the Collateral Agent (subject to local law
variations) and otherwise satisfactory in form and substance
to the "Collateral Agent" and the "Majority Benefited Parties"
under the Intercreditor Agreement, in their reasonable
discretion, provided that, concurrently therewith, Collateral
Agent shall have released and discharged (or caused to be
released and discharged) such Deed of Charge.
2.9 SECTION 6.24. Section 6.24 is added to read as follows:
6.24 SPECIAL LEASING COVENANTS. Except for Leases
with respect to motor vehicles located outside the United
States of America and its territories and possessions (which
shall be originated by the Company or a Subsidiary, in its own
name or using an assumed name), (a) originate and hold Leases
other than (x) in the Company's own name or by the Company,
but under the assumed name "CAC Auto Leasing" or "AutoNet
Xxxxxxx.xxx", (y) in the name of AutoNet Finance Xxxxxxx.xxx,
Inc. or CAC Leasing, Inc. to the extent applicable state law
prohibits the Company from originating Leases in such state
using an assumed name, or (z) in the name of the Titling
Subsidiary; and (b) except in connection with a Permitted
Securitization, allocate or reallocate Leases, Leased Vehicles
or other financial assets to a Specified Interest.
2.10 SECTION 7.1(j). Clause (2) of Section 7.1(j) is hereby
amended and restated in its entirety as follows:
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(2) promptly upon the request of the Required Holders
from time to time (but no more often than semi-annually), a
"static pool analysis" which analyzes the performance of any
Installment Contracts or Leases transferred, encumbered,
reallocated from the Non-Specified Interest to a Specified
Interest or otherwise disposed of pursuant to a Permitted
Securitization comparable to the static pool analysis required
to be delivered pursuant to clause (1) of this Section 7.1(j);
and
2.11 SECTION 8.1(k). Paragraph (k) of Section 8.1 is hereby
amended and restated in its entirety as follows:
(k) SECURITIZATIONS - with respect to the
Securitization Documents, the occurrence (beyond any
applicable period of grace or cure) of any "servicer event of
default" thereunder or the occurrence of any other default
(beyond any applicable period of grace or cure) by the Company
or any of its Subsidiaries, including any Special Purpose
Subsidiary, under the Securitization Documents which can be
reasonably expected to result in recourse liability against
the Company or any of its Restricted Subsidiaries in an
aggregate amount exceeding $2,000,000 or, with respect to the
Titling Subsidiary Agreements, the occurrence (beyond any
applicable period of grace or cure) of any "administrative
agent event of default" thereunder relating to or otherwise
enforceable by the holder of a Specified Interest.
2.12 SECTION 9.1.
(a) The definition of "Cleanup Call" in Section 9.1 is
hereby amended and restated in its entirety as follows:
CLEANUP CALL(s) -- means
(a) in the case of an optional cleanup call, a
cleanup call to be exercised at the option of the Company, the
Titling Subsidiary or a Special Purpose Subsidiary under the
terms of the applicable Permitted Securitization (provided
that, both before and after giving effect thereto, no Default
or Event of Default has occurred and is continuing when such
option is exercised), in an amount not in excess of (i)
Fifteen Percent (15%) of the initial amount received by the
Company, the Titling Subsidiary or the Special Purpose
Subsidiary pursuant to such Permitted Securitization (before
fees and other
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deductions), it being understood that, for purposes of the
calculation under this clause (a)(i) of this definition, each
tranche of a multi-tranche Permitted Securitization shall be
considered a separate Permitted Securitization or (ii) in the
case of any Securitization Transaction structured on a
revolving basis, Fifteen Percent (15%) of the maximum
aggregate availability at any time to the Company, the Titling
Subsidiary or a Special Purpose Subsidiary, each such optional
cleanup call to be accompanied (x) by the repurchase of or
release of encumbrances on Advances, Leased Vehicles,
Installment Contracts (whether assigned outright or related to
Advances) or Leases (whether assigned outright or related to
Leased Vehicles), as the case may be, previously transferred
or encumbered pursuant to such Permitted Securitization in an
amount equal to at least the amount of such cleanup call, or
(y) if such Leased Vehicles or Leases are held by the Titling
Subsidiary, by the reallocation of such Leases and Leased
Vehicles from the applicable Specified Interest to the
Non-Specified Interest in an amount equal to at least the
amount of such cleanup call, and
(b) in the case of a mandatory cleanup call, a
mandatory cleanup call to be exercised at the option of the
investors under the terms of the applicable Permitted
Securitization(s), in an amount not in excess of (i) Two and
One-Half Percent (2 1/2%) of the aggregate amount received by
the Company, the Titling Subsidiary or a Special Purpose
Subsidiary pursuant to the Permitted Securitization to which
such mandatory cleanup call relates (before fees and other
deductions), it being understood that, for purposes of the
calculation under this clause (b)(i) of this definition, all
tranches of a multi-tranche Permitted Securitization shall be
together be considered one Permitted Securitization, or (ii)
in the case of any Securitization Transaction structured on a
revolving basis, Two and One-Half Percent (2 1/2%) of the
maximum aggregate availability at any time to the Company, the
Titling Subsidiary or a Special Purpose Subsidiary, each such
mandatory cleanup call to be accompanied (x) by the repurchase
of or release of encumbrances on Advances, Leased Vehicles,
Installment Contracts (whether assigned outright or related to
Advances) or Leases (whether assigned outright or related to
Leased Vehicles), as the case may be, previously transferred
or encumbered pursuant to such Permitted Securitization in an
amount equal to at least the lesser of (A) the amount of such
cleanup call or (B) the book value at the time of such cleanup
call of the Advances, Leased Vehicles, Installment Contracts
or Leases previously transferred or encumbered pursuant to
such Permitted Securitization,
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or (y) if such Leased Vehicles or Leases are held by the
Titling Subsidiary, by the reallocation of such Leases and
Leased Vehicles from the applicable Specified Interest to the
Non-Specified Interest in an amount equal to at least the
lesser of (A) the amount of such cleanup call or (B) the book
value at the time of such cleanup call of the Leased Vehicles
and Leases currently held in such Specified Interest.
(b) The last sentence of the definition of "Debt" is
hereby amended and restated in its entirety as follows:
Except as provided in Sections 6.1(a)(i), 6.1(b)(i) and
6.1(c), neither Debt of any Special Purpose Subsidiary which
is an Unrestricted Subsidiary incurred pursuant to a Permitted
Securitization (whether or not such Debt is reflected on the
consolidated balance sheet of the Company and its Restricted
Subsidiaries prepared in accordance with GAAP) nor dealer
holdbacks shall be considered Debt of the Company or any
Restricted Subsidiary.
(c) The definition of "English Special Purpose
Subsidiary" is hereby added to Section 9.1 to read as follows:
ENGLISH SPECIAL PURPOSE SUBSIDIARY - means a Special
Purpose Subsidiary organized by the Company, as part of the UK
Restructuring, under the laws of England.
(d) The definition of "Equity Offering" in Section 9.1 is
hereby amended by adding the following at the end thereof (before the "."):
, and other than the creation or disposition of any interest
in the Titling Subsidiary
(e) The definition of "Intercompany Loans" is hereby
added to Section 9.1 to read as follows:
INTERCOMPANY LOANS - means any loan or advance in the
nature of a loan by the Company to any Subsidiary or by any
Subsidiary to any other Subsidiary or to the Company.
(f) The definition of "Intercompany Loans, Advances and
Investments" is hereby added to Section 9.1 to read as follows:
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INTERCOMPANY LOANS, ADVANCES AND INVESTMENTS - means
any Intercompany Loan and any other advance or Investment by
the Company to a Subsidiary or by any Subsidiary to the
Company or any other Subsidiary.
(g) The definition of "Leased Vehicles" in Section 9.1
is hereby amended and restated in its entirety as follows:
LEASED VEHICLES - means, as of any applicable date of
determination, the dollar amount of advances in respect of
Leases, as such amount would appear in the footnotes to the
financial statements of the Company and its Restricted
Subsidiaries prepared in accordance with GAAP or, if
specifically identified, elsewhere in such financial
statements, net of depreciation on the motor vehicles which
are covered by Leases with respect to which such Leased
Vehicles are attributable (and if such amount is not shown net
of such reserves, then net of any reserves established by the
Company as an allowance for credit losses related to such
advances not expected to be recovered), provided that Leased
Vehicles shall not include (a) the amount of any such advances
attributable to any Leases transferred or encumbered or
reallocated from the Non-Specified Interest to a Specified
Interest pursuant to a Permitted Securitization (whether or
not attributable to the Company under GAAP) unless and until
such advances (and the related Leases) are either reassigned
to the Company or a Restricted Subsidiary (other than the
Titling Subsidiary) or such encumbrances are discharged, or
such advances (and the related Leases and vehicles) are
reallocated from the applicable Specified Interest to the
Non-Specified Interest or (b) Charged-Off Lease Advances, to
the extent that such Charged-Off Lease Advances (i) exceed the
portion of the allowance for credit losses related to reserves
against such advances not expected to be recovered, as such
allowance would appear in the footnotes to the financial
statements of the Company and its Restricted Subsidiaries
prepared in accordance with GAAP at such time or if
specifically identified, elsewhere in such financial
statements and (ii) have not already been eliminated in the
determination of Leased Vehicles.
(h) The definition of "Lease(s)" in Section 9.1 is
hereby amended and restated in its entirety as follows:
LEASE(S) - means the retail agreements for the lease
of motor vehicles assigned outright by Dealers to the Company
or a Restricted Subsidiary or written by a Dealer in the name
of the Company or a
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Restricted Subsidiary (and funded by the Company or such
Restricted Subsidiary) or assigned by Dealers to the Company
or a Restricted Subsidiary, as nominee for the Dealer, for
administration, servicing and collection, in each case
pursuant to an applicable Dealer Agreement; provided, however,
that to the extent the Company or any Restricted Subsidiary
transfers or encumbers its interest in any Leases or
reallocates such Leases from the Non-Specified Interest to a
Specified Interest pursuant to a Permitted Securitization,
such Leases shall, from and after the date of such transfer or
encumbrance or such reallocation, cease to be considered
Leases under this Agreement (reducing the amount of Leased
Vehicles by the outstanding amount of Leased Vehicles
attributable to such Leases) unless and until such Leases are
reassigned to the Company or a Restricted Subsidiary (other
than the Titling Subsidiary) or such encumbrances have been
discharged or such Leases are reallocated from the applicable
Specified Interest to the Non-Specified Interest.
(i) The definition of "Luxembourg Subsidiary" is hereby
added to Section 9.1 to read as follows:
LUXEMBOURG SUBSIDIARY - means a wholly-owned direct
or indirect Subsidiary organized under the laws of Luxembourg.
(j) The definition of "Net Leased Vehicle Dealer
Holdbacks" in Section 9.1 is hereby amended and restated in its entirety as
follows:
NET LEASED VEHICLE DEALER HOLDBACKS - means, at any
time, with respect to Dealer Agreements relating to Leases,
amounts due to Dealers at such time from collections of Leased
Vehicles by the Company or any Restricted Subsidiary (other
than with respect to Leases which have been transferred or
encumbered, or reallocated from the Non-Specified Interest to
a Specified Interest, pursuant to a Permitted Securitization
and (x) have not been reassigned to the Company or a
Restricted Subsidiary or the encumbrances on which have not
been discharged or (y) have not been reallocated from the
applicable Specified Interest to the Non-Specified Interest)
pursuant to the applicable Dealer Agreements.
(k) The definition of "Non-Specified Assets" is hereby
added to Section 9.1 to read as follows:
NON-SPECIFIED ASSETS - has the meaning ascribed
thereto in the Titling Subsidiary Agreements.
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(l) The definition of "Non-Specified Interest" is hereby
added to Section 9.1 to read as follows:
NON-SPECIFIED INTEREST - has the meaning ascribed
thereto in the Titling Subsidiary Agreements.
(m) The lead-in paragraph and paragraph (b) of the definition
of "Permitted Securitization(s)" are hereby amended and restated in their
entirety as follows:
PERMITTED SECURITIZATION(S) - means each transfer or
encumbrance (each a "disposition") of specific Advances or
Leased Vehicles funded under Back-End Dealer Agreements (and
any interest in or lien on the Installment Contracts, Leases,
motor vehicles or other rights relating thereto) or of
specific Installment Contracts or Leases (and any interest in
or lien on motor vehicles or other rights relating thereto)
arising under Outright Dealer Agreements and each transfer or
encumbrance (also, a "disposition") of a Specified Interest
(and the reallocation of Leased Vehicles, Leases and related
financial assets from the Non-Specified Interest to such
Specified Interest in connection therewith), in each case by
the Company or one or more Restricted Subsidiaries to a
Special Purpose Subsidiary conducted in accordance with the
following requirements:
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(b) (i) The disposition of Advances, Leased Vehicles,
Installment Contracts or Leases will not result in
the aggregate principal amount of Debt at any time
outstanding, and (without duplication) of similar
securities at any time issued and outstanding (other
than subordinated securities issued to and held by
the Company or a Subsidiary), of any Special Purpose
Subsidiaries pursuant to Permitted Securitizations
exceeding $125,000,000, which amount may be
readvanced and reborrowed and (ii) the Company or the
Restricted Subsidiary disposing of Advances, Leased
Vehicles, Installment Contracts or Leases (directly,
or by the transfer or encumbrance or other
disposition of a Specified Interest) to a Special
Purpose Subsidiary pursuant to such Permitted
Securitization shall itself actually receive
(substantially contemporaneously with such
disposition) cash from each disposition of such
financial assets in connection with any such
Securitization Transaction in an amount not less than
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Seventy-Five Percent (75%) of the sum of (A) the
amount of such Advances, (B) the amount of Net
Installment Contract Receivables in respect of
Installment Contracts arising under Outright Dealer
Agreements, and (C) the amount of Leased Vehicles, in
each case determined on the date of such
Securitization Transaction;
(n) The definition of "Restricted Investment" in Section
9.1 is hereby amended by replacing existing clauses (l) and (m) with the
following:
(l) Intercompany Loans, Advances and Investments
by the Company to or in the Titling Subsidiary, each such
loan, advance or Investment being (x) allocated to the
Non-Specified Interest and made by Company in the ordinary
course of conducting its leasing business through the Titling
Subsidiary, including without limitation any advances or
investments made by the Company (acting as administrative
agent under the Titling Subsidiary Agreements) to or in the
Titling Subsidiary to reacquire Leases and the related leased
vehicles as may be required from time to time under the
Titling Subsidiary Agreements but only to the extent such
Leases (and leased vehicles) are allocated to the
Non-Specified Interest immediately prior to the making of the
related loan, advance or investment, or (y) allocated to a
Specified Interest and made to reacquire Leases and the
related leased vehicles as may be required from time to time
under the Titling Subsidiary Agreements but only to the extent
such Leases (and leased vehicles) are allocated to the
Specified Interest immediately prior to the making of the
related loan, advance or investment;
(m) Investments by the Company or any Restricted
Subsidiary in the Company, any Restricted Subsidiary or any
Special Purpose Subsidiary from and after the effective date
of the Fourth Amendment, consisting of (i) dispositions of
specific Advances, Leased Vehicles, Installment Contracts
(whether assigned outright or related to Advances) or Leases
(whether assigned outright or related to Leased Vehicles) made
pursuant to a Permitted Securitization and the resultant Debt
issued by a Special Purpose Subsidiary to another Subsidiary
as part of a Permitted Securitization, in each case to the
extent constituting Investments, (ii) advances by the Company,
as servicer or administrative agent of the Installment
Contracts or Leases covered by a Permitted Securitization or
as administrative agent for the Titling Subsidiary under the
Titling Subsidiary Agreements, in an aggregate amount not to
exceed $1,500,000 outstanding at any time, for the purpose of
fulfilling its obligation under applicable
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Securitization Documents to (A) advance funds equal to the
interest component of obligations issued as part of a
Permitted Securitization and payable from collections on such
Installment Contracts or Leases, (B) advance funds, upon the
expiration or termination of a Lease held by the Titling
Subsidiary or a Lease included in a Permitted Securitization,
in the amount the Company and its Subsidiaries expect to
receive upon the sale or other disposition of the vehicle
subject to such Lease or (C) advance funds equal to any
portion of the "constant yield payment" (as defined in the
Titling Subsidiary Agreements or applicable Securitization
Documents) due in any particular period which was not received
with respect to a Lease held by the Titling Subsidiary or a
securitized Lease (such payments in the case of (A), (B) and
(C) of this clause (ii) to be repayable to the Company on a
priority basis from such collections, sales or other
dispositions), (iii) the repurchase or replacement from and
after the date of the effectiveness of the Fourth Amendment of
an aggregate amount not to exceed $5,000,000 in Advances,
Leased Vehicles, Installment Contracts (whether assigned
outright or related to Advances) or Leases (whether assigned
outright or related to Leased Vehicles) subsequently
determined not to satisfy the eligibility standards contained
in the applicable Securitization Documents relating to a
Permitted Securitization or otherwise required to be
repurchased by the applicable Securitization Documents entered
into in compliance with the terms of this Agreement, so long
as (x) such replacement is accompanied by the repurchase of or
release of encumbrances on such financial assets previously
transferred or encumbered pursuant to such securitization and
in the amount thereof, (y) any replacement Advances, Leased
Vehicles, Installment Contracts (whether assigned outright or
related to Advances) or Leases (whether assigned outright or
related to Leased Vehicles) are selected by the Company
according to the requirements set forth in clause (a) of the
definition of Permitted Securitization and (z) such
replacements are made at a time when (both before and after
giving effect thereto) no Default or Event of Default exists
or would exist, (iv) amounts required to fund any Cleanup Call
under the terms of such Permitted Securitization, and (v) the
disposition of the capital stock of a Special Purpose
Subsidiary;
(n) Intercompany Loans, Advances and Investments
made pursuant to the UK Restructuring; and
(o) Investments not otherwise included in clause
(a) through clause (n) of this definition, provided that the
aggregate
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amount of all such Investments does not at any time exceed Two
Million Five Hundred Thousand Dollars ($2,500,000).
(o) The definition of "Restricted Subsidiary" in Section
9.1 is hereby amended and restated in its entirety as follows:
RESTRICTED SUBSIDIARY -- means any Subsidiary (a) in
respect of which the Company owns, directly or indirectly, (i)
at least eighty percent (80%) (by number of votes) of each
class of such Subsidiary's Voting Stock, or (ii) 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, (b) that is organized under the laws of the
United States of America or any jurisdiction thereof, the
United Kingdom or any jurisdiction thereof (including, without
limitation, England, Scotland and Wales), Canada or any
jurisdiction thereof, Luxembourg or any jurisdiction thereof
or the Republic of Ireland or any jurisdiction thereof, and
that conducts all of its business in, and has all of its
Property located in, the United States of America, the United
Kingdom, Canada, Luxembourg and/or the Republic of Ireland and
(c) that is not an Unrestricted Subsidiary. Any Restricted
Subsidiary in compliance with the requirements set forth in
the first sentence of this definition and designated as a
Restricted Subsidiary on the Closing Date shall be deemed to
have been a Restricted Subsidiary for all periods prior to the
Closing Date. Notwithstanding any provision in Section 6.17 to
the contrary, CAC International and CAC UK shall be deemed
Restricted Subsidiaries as of October 1, 1995 and CAC of
Canada Limited and any Subsidiary formed by the Company to
provide property and casualty insurance shall each be deemed a
Restricted Subsidiary as of the date of its formation.
(p) The definition of "Scottish Partnership" is hereby
added to Section 9.1 to read as follows:
SCOTTISH PARTNERSHIP - means a partnership
established by the Company under the laws of Scotland pursuant
to the UK Restructuring whose partners consist of the Company
and a Restricted Subsidiary organized in the United States.
(q) The definition of "Securitization Property" in
Section 9.1 is hereby amended and restated in its entirety as
follows:
SECURITIZATION PROPERTY -- means (i) amounts advanced
by the Company or a Restricted Subsidiary under a Dealer
Agreement and
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payable from collections, including servicing charges,
insurance charges and service policies and all related finance
charges, late charges, and all other fees and charges charged
to customers and all monies due or to become due, and all
monies received, with respect thereto ("Loans"); (ii) all
proceeds (including "proceeds" as defined in the Uniform
Commercial Code) thereof; (iii) all of the Company's or a
Restricted Subsidiary's interest in the Dealer Agreements and
Installment Contracts securing payment of Loans, all security
interests or liens purporting to secure payment of Loans and
all other property obtained upon foreclosure of any security
interest securing payment of Loans or any related Installment
Contract and all guarantees, insurance (including insurance
insuring the priority or perfection of any lien) or other
agreements or arrangements of any kind from time to time
supporting or securing payment of such Installment Contract
whether pursuant to such Installment Contract or otherwise;
(iv) all records with respect to Loans, (v) the Company's or a
Restricted Subsidiary's right, title and interest in and to
business interruption insurance, (vi) all payments received by
the Company in respect of Transferred Loans in the form of
cash, checks, wire transfers or other form of payment and
(vii) a Specified Interest in the Titling Subsidiary.
(r) The definition of "Securitization Transaction" in
Section 9.1 is hereby amended and restated in its entirety as follows:
SECURITIZATION TRANSACTION - means a Transfer of, or
grant of a Lien on, Advances, Installment Contracts, Leased
Vehicles, Leases, accounts receivable and/or other financial
assets by the Company or any Restricted Subsidiary to a
Special Purpose Subsidiary or other special purpose or limited
purpose entity or the reallocation of Leases and Leased
Vehicles (and related financial assets) by the Company or any
Restricted Subsidiary from the Non-Specified Interest to a
Specified Interest and the transfer of a Specified Interest to
a Special Purpose Subsidiary or other special purpose or
limited purpose entity and the issuance (whether by such
Special Purpose Subsidiary or other special purpose or limited
purpose entity or any other Person) of Debt or of any
securities secured directly or indirectly by interests in, or
of trust certificates, Specified Interests or other securities
directly or indirectly evidencing interests in, such Advances,
Installment Contracts, Leased Vehicles, Leases, accounts
receivable and/or other financial assets.
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(s) The definition of "Specified Assets" is hereby added
to Section 9.1 to read as follows:
SPECIFIED ASSETS - has the meaning ascribed thereto
in the Titling Subsidiary Agreements.
(t) The definition of "Specified Interest" is hereby
added to Section 9.1 to read as follows:
SPECIFIED INTEREST - has the meaning ascribed thereto
in the Titling Subsidiary Agreements.
(u) The definition of "Subsidiary" is hereby amended and
restated in its entirety as follows:
SUBSIDIARY - means a corporation, partnership,
association, joint stock company, business trust, limited
liability company or any other business entity of which the
Company owns, directly or indirectly, more than fifty percent
(50%) (by number of votes) of each class of the Voting Stock
or sufficient equity or voting interests to enable it
ordinarily, in the absence of contingencies, to elect a
majority of the directors (or Persons performing similar
functions) of such entity. Unless otherwise specified to the
contrary herein or the context otherwise requires, Subsidiary
shall include the Titling Subsidiary.
(v) The definition of "Titling Subsidiary" is hereby
added to Section 9.1 to read as follows:
TITLING SUBSIDIARY - means Auto Lease Services LLC, a
Delaware limited liability company controlled by the Company
and a direct Subsidiary of the Company.
(w) The definition of "Titling Subsidiary Agreements" is
hereby added to Section 9.1 to read as follows:
TITLING SUBSIDIARY AGREEMENTS - means that certain
Limited Liability Company Agreement of the Titling Subsidiary,
dated and effective as of March 1, 2001 (and the related
Certificate of Formation, as therein defined), and that
certain Administrative Agency Agreement, dated as of March 1,
2001, among the Company and the Titling Subsidiary, each as
amended (subject to the terms hereof) from time to time.
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(x) The definition of "UK Restructuring" is hereby added
to Section 9.1 to read as follows:
UK RESTRUCTURING - means (i) the creation by the
Company of the Scottish Partnership, the Luxembourg Subsidiary
and the English Special Purpose Subsidiary, (ii) the
capitalization of the Scottish Partnership with CAC UK stock
by the Company, (iii) Intercompany Loans from time to time
from the Company to the Scottish Partnership in an amount
substantially equivalent to the fair market value of assets
being transferred to the English Special Purpose Subsidiary at
such time by CAC UK, provided that such Intercompany Loans are
substantially contemporaneously repaid pursuant to clauses
(ix) and (x) of this definition, (iv) the contribution of a
nominal amount of capital to the Luxembourg Subsidiary, (v)
the contributions to capital from time to time by the Scottish
Partnership to the English Special Purpose Subsidiary out of
the proceeds of the Company's substantially contemporaneous
loan to the Scottish Partnership under clause (iii) of this
definition, (vi) Intercompany Loans from time to time by the
Scottish Partnership to the Luxembourg Subsidiary out of the
proceeds of the Company's substantially contemporaneous loan
to the Scottish Partnership under clause (iii) of this
definition, (vii) Intercompany Loans from time to time by the
Luxembourg Subsidiary to the English Special Purpose
Subsidiary substantially equivalent in amount to the
substantially contemporaneous loan made to the Luxembourg
Subsidiary by the Scottish Partnership, (viii) transfers from
time to time of Advances (and its rights in the related
Installment Contracts or Leases) by CAC UK to the English
Special Purpose Subsidiary for cash consideration in an amount
substantially equivalent to the fair market value of the
assets being transferred to the English Special Purpose
Subsidiary at such time by CAC UK, (ix) dividends from CAC UK
to Scottish Partnership in an amount substantially equal to
the cash received by CAC UK in exchange for the assets
transferred at such time to the English Special Purpose
Subsidiary, and (x) repayments from time to time of
Intercompany Loans by the Scottish Partnership to the Company.
(y) The definition of "Voting Stock" is hereby added to
Section 9.1 to read as follows:
VOTING STOCK - means, with respect to any Person,
capital stock (or other equity interests) of any class or
classes of a corporation, an association or another business
entity the holders of
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which are ordinarily, in the absence of contingencies,
entitled to vote in the election of corporate directors (or
individuals performing similar functions) of such Person or
which permit the holders thereof to control the management of
such Person, including general partnership interests in a
partnership and membership interests in a limited liability
company.
SECTION 3. MISCELLANEOUS
3.1 COUNTERPARTS. This Eighth Amendment may be executed in any
number of counterparts, each executed counterpart constituting an original, but
all together only one Eighth Amendment.
3.2 HEADINGS. The headings of the sections of this Eighth
Amendment are for purposes of convenience only and shall not be construed to
affect the meaning or construction of any of the provisions hereof.
3.3 GOVERNING LAW. This Eighth Amendment shall be governed by and
construed in accordance with the internal laws of the State of Connecticut.
3.4 EFFECT OF AMENDMENT. Except as expressly provided herein (a)
no other terms and provisions of the Agreement shall be modified or changed by
this Eighth Amendment and (b) the terms and provisions of the Agreement, as
amended by this Eighth Amendment, shall continue in full force and effect. The
Company hereby acknowledges and reaffirms all of its obligations and duties
under the Agreement, as modified by this Eighth Amendment, and the Notes.
3.5 REFERENCES TO THE AGREEMENT. Any and all notices, requests,
certificates and other instruments executed and delivered concurrently with or
after the execution of the Eighth Amendment may refer to the Agreement without
making specific reference to this Eighth Amendment but nevertheless all such
references shall be deemed to include, to the extent applicable, this Eighth
Amendment unless the context shall otherwise require.
3.6 COMPLIANCE. The Company certifies that all necessary actions
have been taken by the Company to authorize the execution and delivery of this
Eighth Amendment, and immediately before and after giving effect to this Eighth
Amendment, no Default or Event of Default exists or would exist after giving
effect hereto.
3.7 EFFECTIVENESS OF AMENDMENTS. The amendments to the Agreement
contemplated by Section 2 hereof shall (in accordance with Section 10.5(a) of
the Agreement) become effective, if at all, at such time as the Company and the
Required Holders of the Notes shall have indicated their written consent to such
amendments by executing and delivering the applicable counterparts of this
Eighth Amendment. It is understood that any holder of Notes may withhold its
consent for
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any reason, including, without limitation, any failure of the Company to satisfy
all of the following conditions:
(a) This Eighth Amendment shall have been executed and
delivered by the Company and each of the Required Holders of the Notes.
(b) The execution, delivery and effectiveness of an
agreement, signed by the Company and the requisite holders of the
Company's Second Amended and Restated 9.49% Senior Notes due July 1,
2001 issued under Note Purchase Agreements dated as of August 1, 1996,
containing an amendment to such Note Purchase Agreements identical in
substance to the amendment set forth in Section 2 hereof.
(c) The execution, delivery and effectiveness of an
agreement, signed by the Company and the requisite holders of the
Company's Second Amended and Restated 9.27% Senior Notes due October 1,
2001 issued under Note Purchase Agreements dated as of March 25, 1997,
containing an amendment to such Note Purchase Agreements identical in
substance to the amendment set forth in Section 2 hereof.
(d) The receipt by all holders of Notes of a fee, in
consideration of the time and expense required to review this
Amendment, in an amount equal to .04% of the outstanding principal
amount of the Notes held by such holder as of the date hereof.
(e) The Company shall have paid the statement for
reasonable fees and disbursements of Xxxxxxx Xxxx LLP, your special
counsel, presented to the Company on or prior to the effective date of
this Eighth Amendment.
3.8 AMENDMENT TO CREDIT AGREEMENT. The Company represents that the
Fifth Amendment to the Credit Agreement, as executed by the "Majority Banks" (as
defined in the Credit Agreement), is in the form attached as Attachment 1 hereto
and in effect on the date of effectiveness of this Eighth Amendment.
3.9 FULL DISCLOSURE. The Company warrants and represents to you
that, as of the effective date hereof, none of the written statements, documents
or other written materials furnished by, or on behalf of, the Company to you in
connection with the negotiation, execution and delivery of this Eighth Amendment
contain any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein or herein not misleading in
light of the circumstances in which they were made. There is no fact of which
any of the Company's executive officers has actual knowledge which the Company
has not disclosed to you which materially affects adversely or, so far as the
Company can now reasonably foresee, will materially affect adversely the
business, prospects, profits, Properties or condition (financial or otherwise)
of the Company and the Subsidiaries, taken as a whole, or the ability of the
Company to perform its obligations set forth in the Agreement (after giving
effect to this Eighth Amendment) and the Notes.
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3.10 RELEASE OF ENGLISH SHARE CHARGE. The Holders hereby authorize,
pursuant to Section 3(g) of the Intercreditor Agreement, the "Collateral Agent"
under the Intercreditor Agreement to release that certain Deed of Charge dated
as of December 17, 1998 and executed by Company in favor of the Collateral
Agent, provided that, concurrently therewith, the Company shall have granted a
perfected first priority security interest, lien and charge to the "Collateral
Agent" under the Intercreditor Agreement in not less than 65% of the aggregate
partnership interests of the Scottish Partnership as required under Section
6.23(b) of the Agreement, as amended hereby.
[Remainder of page intentionally blank. Next page is signature page.]
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If this Eighth Amendment is satisfactory to you, please sign the form
of acceptance on the enclosed counterpart of this letter and return the same to
the Company, whereupon this Eighth Amendment shall become binding between us in
accordance with its terms.
Very truly yours,
CREDIT ACCEPTANCE CORPORATION
By /S/ Xxxxxxx X. Xxxx
------------------------------
Name: Xxxxxxx X. Xxxx
Title: Chief Financial Officer
[Signature Page to Eighth Amendment to Note Purchase Agreement in respect of
10.37% Senior Notes Due November 1, 2001 of Credit Acceptance Corporation]
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ACCEPTED:
ALLSTATE LIFE INSURANCE CO.
By /S/ Xxxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Authorized Signatory
By /S/ Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Authorized Signatory
[Signature Page to Eighth Amendment to Note Purchase Agreement in respect of
10.37% Senior Notes Due November 1, 2001 of Credit Acceptance Corporation]
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ACCEPTED:
XXXXXXX XXXXX & COMPANY, LLC
By Xxxxxxx Xxxxx & Company, LLC,
Attorney-in-Fact
By /S/ Xxxxx X. XxXxxxxx
--------------------------------
Name: Xxxxx X. XxXxxxxx
Title: Principal and Manager
Debt Capital Markets
[Signature Page to Eighth Amendment to Note Purchase Agreement in respect of
10.37% Senior Notes Due November 1, 2001 of Credit Acceptance Corporation]
24
ACCEPTED:
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
BY CIGNA INVESTMENTS, INC. (authorized agent)
By /S/ Xxxxx X. Height
--------------------------------
Name: Xxxxx X. Height
Title: Managing Director
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY,
ON BEHALF OF ONE OR MORE SEPARATE ACCOUNTS
BY CIGNA INVESTMENTS, INC. (authorized agent)
By /S/ Xxxxx X. Height
--------------------------------
Name: Xxxxx X. Height
Title: Managing Director
ACE PROPERTY AND CASUALTY
INSURANCE COMPANY (F.K.A. CIGNA
PROPERTY AND CASUALTY
INSURANCE COMPANY)
BY CIGNA INVESTMENTS, INC. (authorized agent)
By /S/ Xxxxx X. Height
--------------------------------
Name: Xxxxx X. Height
Title: Managing Director
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[Signature Page to Eighth Amendment to Note Purchase Agreement in respect of
10.37% Senior Notes Due November 1, 2001 of Credit Acceptance Corporation]
ACCEPTED:
PHOENIX HOME LIFE MUTUAL
INSURANCE COMPANY
BY: PHOENIX INVESTMENT COUNSEL, INC.
By /S/ Xxxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Senior Managing Director
26
[Signature Page to Eighth Amendment to Note Purchase Agreement in respect of
10.37% Senior Notes Due November 1, 2001 of Credit Acceptance Corporation]
27
ANNEX I
SECOND AMENDED AND RESTATED 10.37% SENIOR NOTES
DUE NOVEMBER 1, 2001
Allstate Life Insurance Company
Connecticut General Life Insurance Company
Ace Property and Casualty Insurance Company (f.k.a CIGNA Property and Casualty
Insurance Company)
Phoenix Home Life Mutual Insurance Company
Xxxxxxx Xxxxx & Company, LLC
