SEVENTH AMENDMENT TO
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
This Seventh
Amendment and Consent under the Fourth Amended and Restated Credit
Agreement (“Seventh Amendment”) is made as of
June 15, 2009 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”).
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A.
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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 the First Amendment dated September 20, 2006,
Second Amendment dated January 19, 2007, Third Amendment dated
June 14, 2007, Fourth Amendment dated as of January 25,
2008, Fifth Amendment dated July 31, 2008, Sixth Amendment dated as
of December 9, 2008 and as may be further amended or otherwise
modified from time to time, the “Credit Agreement”)
under which the Banks renewed and extended (or committed to extend)
credit to the Company, as set forth therein.
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B.
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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 Seventh Amendment.
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NOW, THEREFORE
, Company, Agent and the
Banks agree:
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1.
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Section 1 of the Credit
Agreement is hereby amended as follows:
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(a)
The following specified definitions are hereby amended and restated
(in their entirety), as follows:
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“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,
(a) the advance rates under any Securitization Transaction
(other than a Bridge Securitization) set forth in the related
Securitization Documents (“Securitization Advance
Rates”) are more than ten percentage points lower than the
applicable advance rates expressed in clauses (i) or
(ii) of this definition (“Credit Agreement Advance
Rates”), or (b) the stated advance rates
under
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any Future Debt set forth in the
related Future Debt Documents (“Future Debt Advance
Rates”) are lower than the Credit Agreement Advance Rates
then, the applicable Credit Agreement Advance Rates shall be deemed
to be automatically reduced to the lowest Securitization Advance
Rates or Future Debt Advance Rates, as the case may be, then in
effect, such reduction to remain in effect so long as the
Securitization Advance Rates or Future Debt Advance Rates, as
applicable, 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%).
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“Eurodollar-based Rate”
shall mean a per annum interest rate which is equal to the sum of
(a) the Applicable Margin plus (b) the greater of
(x) the LIBOR Floor and (y) the quotient
of:
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(ii)
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a percentage equal to 100% minus the
maximum rate on such date at which the Agent is required to
maintain reserves on ‘Eurodollar Liabilities’ as
defined in and pursuant to Regulation D of the Board of
Governors of the Federal Reserve System or, if such regulation or
definition is modified, and as long as the Agent is required to
maintain reserves against a category of liabilities which includes
Eurodollar deposits or includes a category of assets which includes
Eurodollar loans, the rate at which such reserves are required to
be maintained on such category,
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such sum to be rounded upward, if
necessary, to the nearest whole multiple of 1/100th of
1%.
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“Future Debt” shall mean
Debt evidenced by Long Term Notes; provided that the aggregate
principal amount of all such Debt outstanding at any time from and
after the date hereof shall not exceed Five Hundred Million Dollars
($500,000,000); and provided further that, at the time any such
Debt is incurred, the Funding Conditions have been satisfied. For
the purposes of this definition, “Long Term Notes”
shall mean unsecured or secured non-revolving promissory notes to
be issued by the Company, which Debt shall have a term extending at
least beyond the Revolving Credit Maturity Date then in effect,
have an amortization schedule not greater than level amortization
to maturity (but with no principal payments required for a period
of
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2
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at least 12 months) and have no
requirement for mandatory early repayment except (x) upon
default, (y) following a change in control or
(z) following the sale of any material portion of the assets
of the Company or any of its Subsidiaries, to the extent of the
proceeds of such sale.
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“Revolving Credit Maturity
Date” shall mean the earlier to occur of
(i) June 23, 2011, 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.
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“Revolving Credit Maximum
Amount” shall mean the aggregate of the Revolving Credit
Commitments of the Lenders as set forth on Exhibit D hereto,
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; provided,
however, that in no event shall the Revolving Credit Maximum Amount
hereunder at any time exceed Two Hundred Million Dollars
($200,000,000).
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“Revolving Credit Optional
Increase” shall mean an amount equal to $60,000,000 minus the
portion thereof applied from time to time under Section 2.17
hereof to increase the Revolving Credit Maximum Amount
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(b)
The following new definitions are hereby inserted in the
appropriate alphabetical order:
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“LIBOR Floor” shall mean
a per annum interest rate equal to 1.5%.
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(c)
The defined term “Lead Arranger” is hereby deleted in
its entirety.
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2.
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Section 2 of the Credit
Agreement is amended as follows;
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(a)
The first sentence of Section 2.5(a) is amended and restated
in its entirety as follows:
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“The Swing Line Bank may, on
the terms and subject to the conditions hereinafter set forth
(including without limitation Section 2.5(c) hereof), but
shall not be required to, make one or more advances (each such
advance being a “Swing Line Advance”) to Company from
time to time on any Business Day
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during the period from the date
hereof to (but excluding) the Revolving Credit Maturity Date in an
a
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