Exhibit 4(c)(21)
EXECUTION COPY
THIRD AMENDMENT
TO
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
This THIRD AMENDMENT TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
("Third Amendment") is made as of June 14, 2007 by and among Credit Acceptance
Corporation, a Michigan corporation ("Company"), Comerica Bank and the other
banks signatory hereto (individually, a "Bank" and collectively, the "Banks")
and Comerica Bank, as administrative agent for the Banks (in such capacity,
"Agent").
RECITALS
A. Company, Agent and the Banks entered into that certain Fourth Amended
and Restated Credit Acceptance Corporation Credit Agreement dated as of February
7, 2006 (as amended by that First Amendment dated September 20, 2006 and that
Second Amendment dated January 19, 2007, the "Credit Agreement") under which the
Banks renewed and extended (or committed to extend) credit to the Company, as
set forth therein.
B. The Company has requested that Agent and the Banks agree to certain
amendments to the Credit Agreement and Agent and the Banks are willing to do so,
but only on the terms and conditions set forth in this Third Amendment.
NOW, THEREFORE, Company, Agent and the Banks agree:
1. Section 1 of the Credit Agreement is hereby amended by amending and
restating (in their entirety) the following specified definitions, and
deleting certain definitions, in each case, as follows:
"Additional Commitment Fee" is deleted.
"Borrowing Base Limitation" shall mean, as of any date of determination, an
amount equal to (i) eighty percent (80%) of Dealer Loans Receivable, plus
(ii) eighty percent (80%) of the Purchased Contract Balance, minus (iii)
the Hedging Reserve and minus (iv) the aggregate principal amount
outstanding from time to time of any Debt (other than the Indebtedness)
secured by any of the Collateral; provided, however, that if, at any time,
the advance rates under any Securitization Transaction (other than a Bridge
Securitization and the Securitization Transaction pursuant to the Sale and
Servicing Agreement dated April 18, 2006 among the Company, Credit
Acceptance Auto Dealer Loan Trust 2006-1, Credit Acceptance Funding LLC
2006-1, JPMorgan Chase Bank, N.A., and Systems & Services Technologies,
Inc.) set forth in the related Securitization Documents ("Securitization
Advance Rates") are lower than the applicable advance rates expressed in
clauses (i) or (ii) of this definition ("Credit Agreement Advance Rates"),
the applicable Credit Agreement Advance Rates shall be deemed to be
automatically reduced to the lowest Securitization Advance Rates then in
effect, such reduction to remain in effect so
long as the Securitization Advance Rates are lower than the Credit
Agreement Advance Rates set forth in this definition. At no time, however,
shall the Credit Agreement Advance Rates exceed eighty percent (80%)."
"Consolidated Net Assets" shall mean, as of any applicable date of
determination, the sum of (i) 100% of all cash and the value (at book) of
all Permitted Investments and (ii) 80% of the aggregate net book value of
Dealer Loans Receivable and Purchased Contracts; determined on a
Consolidated basis for the Company and its Subsidiaries according to GAAP,
but including the amount of any such assets held by a Special Purpose
Subsidiary, whether or not includible under GAAP, and excluding such assets
of the Trusts to the extent such assets are Consolidated under GAAP.
"Fees" shall mean the Agent's Fees, the Revolving Credit Facility Fee and
the Letter of Credit Fees."
"Revolving Credit Maturity Date" shall mean the earlier to occur of (i)
June 20, 2009, as such date may be extended from time to time pursuant to
Section 2.16 hereof, and (ii) the date on which the Revolving Credit
Maximum Amount shall be terminated pursuant to Section 2.15 or 9.2 hereof."
"Revolving Credit Maximum Amount" shall mean Seventy Five Million Dollars
($75,000,000), subject to any increases in the Revolving Credit Maximum
Amount pursuant to Section 2.17 of this Agreement, by an amount not to
exceed the Revolving Credit Optional Increase, and subject to any
reductions or termination of the Revolving Credit Maximum Amount under
Sections 2.15 or 9.2 of this Agreement."
"Swing Line Maximum Amount" shall mean Ten Million Dollars ($10,000,000)."
2. Section 2.13 of the Credit Agreement is amended to delete clause (c)
thereof (thereby eliminating the Additional Commitment Fee referred to
therein).
3. Section 7.5 of the Credit Agreement is hereby amended and restated as
follows:
"7.5 Maintain Funded Debt Ratio Level.
On a Consolidated basis, maintain as of the end of each fiscal quarter
a ratio of Consolidated Funded Debt (including in the calculation
thereof, for purposes of this Section 7.5, all Debt incurred by a
Special Purpose Subsidiary, whether or not included therein under
GAAP) to the Company's Consolidated Tangible Net Worth equal to or
less than 4.0 to 1.0."
4. Section 7.6 of the Credit Agreement is hereby amended and restated as
follows:
"7.6 Maintain Minimum Net Income.
On a Consolidated basis, maintain as of the end of each fiscal quarter
calculated for the two fiscal quarters then ending, Consolidated Net
Income of not less than $1.00."
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5. Section 7.7 of the Credit Agreement is hereby amended and restated as
follows:
"7.7. Maintain Fixed Charge Coverage Ratio. On a Consolidated basis,
maintain as of the end of each fiscal quarter a Fixed Charge Coverage
Ratio of not less than 1.75 to 1.0."
6. Schedule 1.1 to the Credit Agreement is hereby amended and restated by
deleting such Schedule and inserting the replacement Schedule 1.1 attached
hereto as Attachment 1 in its place.
7. Exhibit D to the Credit Agreement is hereby amended and restated by
deleting such Exhibit and inserting the replacement Exhibit D attached
hereto as Attachment 2 in its place.
8. Exhibit O to the Credit Agreement is hereby amended and restated by
deleting such Exhibit and inserting the replacement Exhibit O attached
hereto as Attachment 3 in its place.
9. On the date on which the conditions set forth in Section 10 of this Third
Amendment shall have been satisfied (the "Third Amendment Effective Date"),
each Bank shall have (i) a Percentage equal to the applicable percentage
set forth in Attachment 2 hereto, (ii) its own Advances of the Revolving
Credit (and participation in Letters of Credit) in its Percentage of all
such Advances (and Letters of Credit) outstanding on the Third Amendment
Effective Date and (iii) the Terminating Bank (defined below) shall no
longer be considered a Bank under the Credit Agreement. To facilitate the
foregoing, each Bank which as a result of the adjustments of Percentages
shown on Attachment 2 is to have a greater principal amount of Advances of
the Revolving Credit outstanding than such Bank had outstanding under the
Credit Agreement immediately prior to the Third Amendment Effective Date
shall deliver to the Agent immediately available funds to cover such
Advances of Revolving Credit (and the Agent shall, to the extent of the
funds so received, disburse funds to each Bank which, as a result of the
aforesaid adjustment of the Percentages, is to have a lesser principal
amount of Advances of the Revolving Credit outstanding than such Bank had
under the Credit Agreement immediately prior to the Third Amendment
Effective Date). Each Bank which was a party to the Credit Agreement prior
the Third Amendment Effective Date, upon receipt of its New Note(s) (which
Notes are to be in exchange for and not in payment of the predecessor
Revolving Credit Notes) issued by the Company to such Bank, shall return
its predecessor Notes including, if applicable, its Swing Line Note, to the
Agent which shall stamp such Notes "Exchanged" and deliver said Notes to
the Company. The Banks agree that all interest and fees accrued under the
Credit Agreement prior to the Third Amendment Effective Date shall
constitute the property of the Banks which were parties to the Credit
Agreement prior to the Third Amendment Effective Date and shall be
distributed (to the extent distributed by Agent received from the Company)
to such Banks on the basis of the Percentages in effect prior to the Third
Amendment Effective Date. Furthermore, it is acknowledged and agreed that
all fees paid prior to the Third Amendment Effective Date shall not be
recalculated, redistributed or reallocated by Agent among the Banks.
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10. This Third Amendment shall become effective, according to the terms and as
of the date hereof, upon satisfaction by the Company of the following
conditions:
(a) Agent shall have received counterpart originals of (i) this Third
Amendment, duly executed and delivered by the Company and the
requisite Banks.
(b) Agent shall have received a release letter executed by Company and
LaSalle Bank National Association (the "Terminating Bank") in form and
substance satisfactory to Agent, and shall have complied with the
conditions set forth therein such that the Terminating Bank shall no
longer be a Bank under the Credit Agreement.
(c) The Company, to the extent applicable, shall have reduced the
aggregate face amount of the Letters of Credit and principal amount of
the Advances issued or outstanding under the Credit Agreement to an
amount not in excess of the reduced Revolving Credit Maximum Amount
provided for under this Third Amendment and shall have paid to Agent,
for distribution to the Bank's based on their Percentages in effect
prior to the Third Amendment Effective Date, (i) all interest on the
outstanding Advances and (ii) the Revolving Credit Facility Fee, in
each case accrued to the Third Amendment Effective Date.
(d) Agent shall have received for distribution to the Banks, based on
their respective new Percentages set forth in this Third Amendment, an
upfront fee equal to $281,250.
(e) Agent shall have received executed replacement Revolving Credit
Notes for each Bank reflecting the new Percentages set forth on
Attachment 2 hereto and the reduction of the Revolving Credit Maximum
Amount pursuant to this Third Amendment.
(f) Agent shall received an executed replacement Swing Line Note in
the amount of $10,000,000.
(g) Agent shall have received from a responsible senior officer of the
Company a certification (i) that all necessary actions have been taken
by the Company to authorize execution and delivery of this Third
Amendment, supported by such resolutions or other evidence of
corporate authority or action as reasonably required by Agent and the
Majority Banks and that no consents or other authorizations of any
third parties are required in connection therewith; and (ii) that,
after giving effect to this Third Amendment, no Default or Event of
Default has occurred and is continuing on the proposed effective date
of the Third Amendment.
11. The Company ratifies and confirms, as of the date hereof and after giving
effect to the amendments contained herein, each of the representations and
warranties set forth in Sections 6.1 through 6.18, inclusive, of the Credit
Agreement and acknowledges that
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such representations and warranties are and shall remain continuing
representations and warranties during the entire life of the Credit
Agreement.
12. Except as specifically set forth above, this Third Amendment shall not be
deemed to amend or alter in any respect the terms and conditions of the
Credit Agreement, any of the Notes issued thereunder or any of the other
Loan Documents, or to constitute a waiver by the Banks or Agent of any
right or remedy under or a consent to any transaction not meeting the terms
and conditions of the Credit Agreement, any of the Notes issued thereunder
or any of the other Loan Documents.
13. Unless otherwise defined to the contrary herein, all capitalized terms used
in this Third Amendment shall have the meaning set forth in the Credit
Agreement.
14. This Third Amendment may be executed in counterpart in accordance with
Section 13.10 of the Credit Agreement.
15. This Third Amendment shall be construed in accordance with and governed by
the laws of the State of Michigan.
[SIGNATURES FOLLOW ON SUCCEEDING PAGES]
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EXECUTION COPY
ATTACHMENT 1
SCHEDULE 1.1(1)
PRICING MATRIX
APPLICABLE
THE APPLICABLE MARGIN FOR FEE PERCENTAGE FOR
---------------------------------- ----------------------
ADVANCES OF
THE REVOLVING
CREDIT CARRIED REVOLVING
NOTWITHSTANDING ADVANCES AT AT THE CREDIT
THE COMPANY'S THE PRIME-BASED EURODOLLAR-BASED FACILITY LETTER OF
RATING LEVEL: RATE SHALL BE RATE SHALL BE FEE CREDIT FEE
--------------- --------------- ---------------- --------- ----------
minus 1.65% 1.25% .3750% 1.375%
(inclusive
of facing
fee)
----------
(1) All terms as defined in the Agreement.
EXECUTION COPY
ATTACHMENT 2
REPLACEMENT EXHIBIT D
(PERCENTAGES)
REVOLVING
BANK CREDIT COMMITMENT PERCENTAGE
---- ----------------- ----------
Comerica Bank $21,000,000 28%
National City Bank of the Midwest $13,500,000 18%
Fifth Third Bank (Eastern Michigan) $13,500,000 18%
BMO Capital Markets Financing, Inc. $13,500,000 18%
Bank of America, N.A. $13,500,000 18%
----------- ---
Total $75,000,000 100%
=========== ===
ATTACHMENT 3
EXHIBIT O
BORROWING BASE CERTIFICATE
This certificate submitted for the fiscal quarter ending _____________, as
follows:
(A) Dealer Loans Receivable(1) $__________
times Advance Rate (80%) $__________
(B) Purchased Contract Balance(1) $__________
times Advance Rate (80%) $__________
Total (A PLUS B) $_________
MINUS:
(C) Hedging Reserve(2) (see attached breakdown) $_________
MINUS
(D) Other Debt Secured by the Collateral (excluding
Indebtedness under Credit Agreement)(3)
(1) Future Debt $ [0]
Subtotal $_________
Borrowing Base Limitation $_________
----------
(1) Calculated as of the most recent quarter end for regular quarterly
certificates and as of the most recent month end for which financial
information is available for all other certificates.
(2) Calculated as of the most recent quarter end, and with disclosure of
additional Hedging Agreements not included in calculation. Adequacy of
reserve subject to review and approval of Majority Banks and affected
Banks, upon request.
(3) These amounts calculated as of the date of the certificate set forth in the
signature block.
The undersigned authorized officer certifies the matters contained in this
Borrowing Base Certificate as correct, accurate and complete as of the date set
forth below.
CREDIT ACCEPTANCE CORPORATION
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Xxxxxxx X. Xxxx
Its: Treasurer
ATTACHMENT TO BORROWING BASE CERTIFICATE
(Breakdown of Hedging Reserve
for _______________ [month or quarter] ending __________)
(I) HEDGING RESERVE AS ALLOCATED TO BANKS OR AFFILIATES BY CREDIT ACCEPTANCE
CORPORATION AS OF MOST RECENT QUARTER END:
1. Bank (or Affiliate) _______________ $__________
2. Bank (or Affiliate) _______________ $__________
3. Bank (or Affiliate) _______________ $__________
Subtotal $__________
Maximum: Hedging Reserve Cannot Exceed $1,000,000 $__________
(II) HEDGING AGREEMENTS NOT INCLUDED IN HEDGING RESERVE CALCULATION (ENTERED
INTO AFTER MOST RECENT QUARTER END):
1. Bank (or affiliate) _______________ ___________________________________
___________________________________
2. Bank (or affiliate) _______________ ___________________________________
___________________________________
3. Bank (or affiliate) _______________ ___________________________________
___________________________________
[Brief description, including date,
nature of instrument, etc.]
WITNESS the due execution hereof as of the day and year first above
written.
COMERICA BANK,
as Agent
By: /s/ Xxxxx X. Light
------------------------------------
Xxxxx X. Light
Its: Vice President
SIGNATURE PAGE FOR
CAC THIRD AMENDMENT
CREDIT ACCEPTANCE
CORPORATION
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Xxxxxxx X. Xxxx
Its: Treasurer
SIGNATURE PAGE FOR
CAC THIRD AMENDMENT
BANKS:
COMERICA BANK
By: /s/ Xxxxx X. Light
------------------------------------
Xxxxx X. Light
Its: Vice President
SIGNATURE PAGE FOR
CAC THIRD AMENDMENT
BANK OF AMERICA, N.A.
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Xxxxxx X. Xxxxxx
Its: Senior Vice President
SIGNATURE PAGE FOR
CAC THIRD AMENDMENT
BMO CAPITAL MARKETS FINANCING, INC.
By: /s/ Xxxxxx Xxxxxx
------------------------------------
Xxxxxx Xxxxxx
Its: Director
SIGNATURE PAGE FOR
CAC THIRD AMENDMENT
FIFTH THIRD BANK
(EASTERN MICHIGAN)
By: /s/ Xxxx Xxxxxxxxx
------------------------------------
Xxxx Xxxxxxxxx
Its: Vice President
SIGNATURE PAGE FOR
CAC THIRD AMENDMENT
NATIONAL CITY BANK OF THE MIDWEST,
FORMERLY KNOWN AS NATIONAL CITY BANK OF
MICHIGAN/ILLINOIS
By: /s/ Xxxxxxx Xxxx
------------------------------------
Xxxxxxx Xxxx
Its: Vice President
SIGNATURE PAGE FOR
CAC THIRD AMENDMENT
