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EXHIBIT 4(d)(3)
THIRD AMENDMENT TO CREDIT AGREEMENT AND CONSENT
This THIRD AMENDMENT TO CREDIT AGREEMENT AND CONSENT ("Third Amendment") is
made as of this 28th day of August, 1996 by and among Credit Acceptance
Corporation, a Michigan corporation ("Company"), Credit Acceptance Corporation
UK Limited, a corporation organized under the laws of England ("Permitted
Borrower"), Comerica Bank and the other banks signatory hereto (individually, a
"Bank" and collectively, the "Banks") and Comerica Bank, as agent for the Banks
(in such capacity, "Agent").
RECITALS
A. Company, Permitted Borrower, Agent and the Banks entered into that certain
Amended and Restated Credit Agreement dated as of January 8, 1996, as amended
by First Amendment dated April 19, 1996 and the Second Amendment dated as of
July 1, 1996 (as so amended, 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 and the Permitted Borrower have requested that Agent and the
Banks agree to make certain amendments to the Credit Agreement and consent to
specified transactions, 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, Permitted Borrower, Agent and the Banks agree:
1. Section 7.9 of the Credit Agreement (Fixed Charge Coverage Ratio) is
hereby amended by deleting the ratio "2.0 to 1" in the third line thereof and
replacing it with the ratio "2.5 to 1".
2. Section 8.2 (Business Purpose) is hereby amended by adding the following
language immediately following the words "casualty insurance" and before the
";" in the third line thereof:
"unless the Company or such Subsidiary shall maintain reinsurance of its
underwriting risk with a third party(ies) rated "A-" or better by Standard &
Poor's Ratings Group or "A3" or better by Xxxxx'x Investor's Services, Inc.
for all of
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the Company's or such Subsidiary's exposure in excess of one
hundred percent (100%) of the premiums written by the Company or such
Subsidiary.".
3. Section 8.8(f) (Investments in Floor Plan Receivables and Notes
Receivables) is hereby amended by deleting the words "five percent (5%)"
beginning in the second line thereof and replacing them with the words "ten
percent (10%)".
4. Section 8.13 of the Credit Agreement is amended and restated in its
entirety as follows:
"8.13 Amendment of Senior Debt or Future Debt Documents. Except with the
prior written approval of Agent and the Majority Banks, amend, modify or
otherwise alter (or suffer to be amended, modified or altered) or waive (or
permit to be waived) in any material respect, any documents or instruments
evidencing or otherwise related to Senior Debt or Future Debt so as to
shorten the original maturity date or amortization schedule thereof, or
amend, modify or otherwise alter (or suffer to be amended, modified or
altered) any documents or instruments evidencing or otherwise related to
Senior Debt or Future Debt to include (or enter into any Future Debt
Documents which include) any covenants or other provisions, other than a
provision not more onerous to the Company than Section 6.18 of the note
purchase agreements governing the New Senior Debt as in effect on the date
of issuance thereof, that require, for the amendment of any term or
provision of this Agreement, or the waiver of any term or provision hereof,
the approval or consent of any other creditor of the Company."
5. New Section 8.14 is added to the Credit Agreement, as follows:
"8.14 Amendment of Subordinated Debt Documents. Amend, modify or otherwise
alter (or suffer to be amended, modified or altered) any of the material
terms and conditions of those documents or instruments evidencing or
otherwise related to Subordinated Debt or waive (or permit to be waived) any
such provision thereof in any
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material respect, without the prior written approval of Agent and the
Majority Banks. For purposes of those documents and instruments evidencing
or otherwise related to the Subordinated Debt, any increase in the original
interest rate or principal amount, any shortening of the original
amortization, any change in any default, remedial or other repayment terms,
any change in or waiver of conditions contained therein which are required
under or necessary for compliance with this Agreement or the other Loan
Documents or any change in the subordination provisions contained therein,
shall (without reducing the scope of this Section 8.14) be deemed to be
material."
6. Schedule 6.15 (Litigation-Company) is amended and restated in its entirety
by the attached Schedule A.
7. Notwithstanding the requirements set forth in Section 1.65 of the Credit
Agreement (defining "Future Debt"), the Banks hereby consent to the Company's
incurring, as Future Debt, up to $70,000,000 in additional Debt (defined herein
and for purposes of the Credit Agreement, as "New Senior Debt") pursuant to
that certain "Term Sheet $70 Million Senior Unsecured Notes Credit Acceptance
Corporation", attached hereto as Exhibit "A" (the "Term Sheet"), provided that
both immediately before and immediately after such additional Debt is incurred,
no Default or Event of Default (whether or not related to such additional Debt,
and taking into account the incurring of such additional Debt) has occurred and
is continuing.
8. This Third Amendment shall become operative upon satisfaction by the
Company and the Permitted Borrower, on or before August 31, 1996, of the
following conditions:
(a) Agent shall have received counterpart originals of this Third
Amendment, in each case duly executed and delivered by Company, the
Permitted Borrower and the Banks, in form satisfactory to Agent and the
Banks;
(b) Agent shall have received from the Company and the Permitted
Borrower a certification that all necessary actions have been taken by such
parties to authorize execution and delivery of this Third Amendment,
supported by such
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resolutions or other evidence of corporate authority or action as reasonably
required by Agent and the Majority Banks; and
(c) Company (i) has issued, concurrently with the date upon which this
Third Amendment becomes operative, and in compliance with paragraph 7 of this
Third Amendment, the New Senior Debt and (ii) has entered into an amendment
to the Senior Debt Documents substantially in the form of the second
amendment attached to the Term Sheet.
If the foregoing conditions have not been satisfied or waived on or before
August 31, 1996, this Third Amendment shall lapse and be of no further force
and effect.
9. Company and Permitted Borrower ratify and confirm, as of the date hereof,
each of the representations and warranties set forth in Sections 6.1 through
6.22, inclusive, of the Credit Agreement and acknowledge that such
representations and warranties are and shall remain continuing representations
and warranties during the entire life of the Credit Agreement.
10. 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.
11. 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.
12. This Third Amendment may be executed in counterpart in accordance with
Section 13.10 of the Credit Agreement.
[signatures follow on succeeding pages]
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WITNESS the due execution hereof as of the day and year first above written.
COMERICA BANK, CREDIT ACCEPTANCE
CORPORATION
as Agent
By:____________________________ By:____________________________
Its:___________________________ Its:___________________________
One Detroit Center
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxx
CREDIT ACCEPTANCE CORPORATION
UK LIMITED
By:____________________________
Its:___________________________
BANKS:
COMERICA BANK LASALLE NATIONAL BANK
By:___________________________ By:___________________________
Its:__________________________ Its:__________________________
THE FIRST NATIONAL BANK BANK HAPOALIM, B.M.
OF CHICAGO
By:___________________________ By:___________________________
Its:__________________________ Its:__________________________
By:___________________________
Its:__________________________
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FIFTH THIRD BANK OF XXXXXX TRUST AND SAVINGS BANK
NORTHWESTERN OHIO, N.A.
By:___________________________ By:___________________________
Its:__________________________ Its:__________________________
MERCANTILE BANK OF ST. LOUIS THE BANK OF NEW YORK
NATIONAL ASSOCIATION
By:___________________________ By:___________________________
Its:__________________________ Its:__________________________
THE SUMITOMO BANK, LIMITED,
CHICAGO BRANCH
By:__________________________
Its:_________________________
By:__________________________
Its:_________________________
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