Document:

Exhibit

AMENDMENT NO. 4 TO LOAN AND SECURITY AGREEMENT
This AMENDMENT NO. 4 TO THE SIXTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Amendment”) is made as of June 25, 2020, by and among CAC WAREHOUSE FUNDING CORPORATION II, as the borrower (the “Borrower”), CREDIT ACCEPTANCE CORPORATION, as the servicer (in such capacity, the “Servicer”) and as the custodian (in such capacity, the “Custodian”), WELLS FARGO BANK, NATIONAL ASSOCIATION, as a lender (the “WF Lender”), the LENDERS FROM TIME TO TIME PARTY THERETO, as lenders (together with WF Lender, the “Lenders”), WELLS FARGO BANK, NATIONAL ASSOCIATION, as the deal agent (in such capacity, together with its successors and assigns, the “Deal Agent”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as the backup servicer (in such capacity, together with its successors and assigns, the “Backup Servicer”) and as the collateral agent (in such capacity, together with its successors and assigns, the “Collateral Agent”). Capitalized terms used and not otherwise defined herein shall have the meanings given to such terms in the Agreement (as defined below).
R E C I T A L S
WHEREAS, the Borrower, the Servicer, the Lenders, the Deal Agent, the Backup Servicer and the Collateral Agent entered into that certain Sixth Amended and Restated Loan and Security Agreement, dated as of June 23, 2016, as amended by Amendment No.1 to the Sixth Amended and Restated Loan and Security Agreement, dated as of December 20, 2017, as further amended by Amendment No. 2 to the Sixth Amended and Restated Loan and Security Agreement, dated as of July 12, 2019, and as further amended by Amendment No. 3 to the Sixth Amended and Restated Loan and Security Agreement, dated as of August 16, 2019 (as so amended and as further amended from time to time, the “Agreement”); and 
WHEREAS, the parties hereto desire to amend the Agreement pursuant to Section 14.1 thereof in certain respects as provided herein;
NOW, THEREFORE, based upon the above Recitals, the mutual premises and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
Section 1.Amendments.
(a)    The following amendments shall be effective as of January 1, 2020:
(i)    Section 5.4 of the Agreement is hereby amended by deleting clause (p) thereof in its entirety and replacing it with the following:

“(p)    Minimum Net Income.  The Servicer shall, 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; provided, that, when calculating the Consolidated Net Income for any date of determination, (x) each component of such calculation relating to a fiscal quarter ending on or prior to December 31, 2020 shall be calculated based on the GAAP accounting methodology used by the Company during the fiscal year ending December 31, 2019, without application of the CECL Methodology (whether or not the Servicer has adopted the CECL Methodology prior to such date) and (y) each component of such calculation relating to a fiscal quarter ending on or after March 31, 2021 shall be calculated based on the CECL Methodology.”
(ii)    Section 5.4 of the Agreement is hereby amended by deleting clause (q) thereof in its entirety and replacing it with the following:
“(q)    Fixed Charge Coverage Ratio.  The Servicer shall, on a consolidated basis, maintain as of the end of each fiscal quarter a Fixed Charge Coverage Ratio of not less than 2.0 to 1.0; provided, that, when calculating the Fixed Charge Coverage Ratio for any date of determination,  (x) each component of such calculation relating to a fiscal quarter ending on or prior to December 31, 2020 shall be calculated based on the GAAP accounting methodology used by the Company during the fiscal year ending December 31, 2019, without application of the CECL Methodology (whether or not the Servicer has adopted the CECL Methodology prior to such date) and (y) each component of such calculation relating to a fiscal quarter ending on or after March 31, 2021 shall be calculated based on the CECL Methodology.”
SECTION 2.    Agreement in Full Force and Effect as Amended.
Except as specifically amended hereby, all provisions of the Agreement shall remain in full force and effect. After this Amendment becomes effective, all references to the Agreement, the “Loan and Security Agreement,” “hereof,” “herein,” or words of similar effect referring to the Agreement shall be deemed to mean the Agreement as amended hereby. This Amendment shall not constitute a novation of the Agreement, but shall constitute an amendment thereof. This Amendment shall not be deemed to expressly or impliedly waive, amend or supplement any provision of the Agreement other than as expressly set forth herein.
SECTION 3.    Representations. 
Each of the Borrower and the Servicer represent and warrant as of the date of this Amendment as follows:

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(a)    it is duly incorporated or organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization;
(b)    the execution, delivery and performance by it of this Amendment are within its powers, have been duly authorized, and do not contravene (A) its charter, by-laws, or other organizational documents, or (B) any Applicable Law;
(c)    no consent, license, permit, approval or authorization of, or registration, filing or declaration with, any governmental authority is required in connection with the execution, delivery, performance, validity or enforceability of this Amendment by or against it;
(d)    this Amendment has been duly executed and delivered by it;
(e)    this Amendment constitutes its legal, valid and binding obligation enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by general principles of equity;
(f)    each of the representations and warranties set forth in Sections 4.1, 4.2 and 4.3 of the Agreement made by it is true and correct; and
(g)    no Amortization Event or Termination Event has occurred and is continuing and no event or condition exists that, with the giving of notice and/or passage of time, would constitute an Amortization Event or a Termination Event.
SECTION 4.    Conditions to Effectiveness.
This Amendment shall become effective on the date on which each party hereto shall have delivered an executed signature page hereto to the Deal Agent.
SECTION 5.    Miscellaneous. 
(a)    This Amendment may be executed in any number of counterparts (including by facsimile), and by the different parties hereto on the same or separate counterparts, each of which shall be deemed to be an original instrument but all of which together shall constitute one and the same agreement.
(b)    The descriptive headings of the various sections of this Amendment are inserted for convenience of reference only and shall not be deemed to affect the meaning or construction of any of the provisions hereof.

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(c)    This Amendment may not be amended or otherwise modified except as provided in the Agreement.
(d)    The failure or unenforceability of any provision hereof shall not affect the other provisions of this Amendment.
(e)    Whenever the context and construction so require, all words used in the singular number herein shall be deemed to have been used in the plural, and vice versa, and the masculine gender shall include the feminine and neuter and the neuter shall include the masculine and feminine.
(f)    This Amendment represents the final agreement between the parties only with respect to the subject matter expressly covered hereby and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements between the parties. There are no unwritten oral agreements between the parties.
(g)    THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written. 

	
		
	THE BORROWER:
	CAC WAREHOUSE FUNDING CORPORATION II

	 
	By:  /s/ Douglas W. Busk             

	 
	   Name: Douglas W. Busk

	 
	   Title: Treasurer

	 
	 

	THE SERVICER AND CUSTODIAN:
	CREDIT ACCEPTANCE CORPORATION

	 
	By:  /s/ Douglas W. Busk             

	 
	   Name: Douglas W. Busk

	 
	   Title: Senior Vice President and Treasurer

	 
	 

	 
	 

	THE COLLATERAL AGENT AND BACKUP SERVICER:
	WELLS FARGO BANK, NATIONAL ASSOCIATION, as Collateral Agent and Backup Servicer

	 
	By:  /s/ Kristen L. Puttin             

	 
	   Name: Kristen L. Puttin

	 
	   Title: Vice President

	 
	 

	 
	 

	THE DEAL AGENT AND SOLE LENDER:
	WELLS FARGO BANK, NATIONAL ASSOCIATION, as Deal Agent and Lender

	 
	By:  /s/ James B. Brinkley II             

	 
	   Name: James B. Brinkley II

	 
	   Title: Managing Director

	 
	 

[Wells Fargo/CAC Warehouse (CAC II) — Amendment No. 4 to Sixth A&R Loan and Security
Agreement]Exhibit

FOURTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT
THIS FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as of June 26, 2020, to the Loan and Security Agreement, dated as of December 1, 2017 (the “Original Loan Agreement”), as amended by the First Amendment to Loan and Security Agreement, dated as of December 17, 2018 (the “First Amendment”), as further amended by the Second Amendment to Loan and Security Agreement, dated as of July 18, 2019 (the “Second Amendment”), as further amended by the Third Amendment to Loan and Security Agreement, dated as of December 19, 2019 (the “Third Amendment” and, together with the Original Loan Agreement, as amended by the First Amendment, the Second Amendment and the Third Amendment, the “Loan Agreement”), among CAC WAREHOUSE FUNDING LLC VII, a Delaware limited liability company (the “Borrower”), CREDIT ACCEPTANCE CORPORATION, a Michigan corporation (“Credit Acceptance”, the “Originator”, the “Servicer”, or the “Custodian”), the persons from time to time party thereto as LENDERS, the persons from time to time party thereto as MANAGING AGENTS, and CREDIT SUISSE AG, NEW YORK BRANCH, as deal agent (in such capacity, together with its successors and assigns, the “Deal Agent”).  Unless defined elsewhere herein, capitalized terms used in this Amendment shall have the meanings assigned to such terms in the Loan Agreement.
RECITALS
WHEREAS, the Borrower, the Servicer, the Custodian, the Lenders, the Managing Agents, the Deal Agent, and Wells Fargo Bank, National Association, as Collateral Agent and Backup Servicer are parties to the Loan Agreement; and
WHEREAS, the Borrower and the Servicer have requested that the Deal Agent, the Managing Agents and the Lenders amend the Loan Agreement as specified herein and, subject to the terms and conditions hereof, the Deal Agent, the Managing Agents and the Lenders are willing to amend the Loan Agreement as specified herein.
NOW THEREFORE, in consideration of the mutual execution hereof and other good and valuable consideration, the parties hereto agree as follows: 
		
	1.
	Amendments to the Loan Agreement.  

(a)The definition of “GAAP” appearing in Section 1.1 of the Loan Agreement is hereby deleted and replaced with the following:

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“GAAP”: Except as otherwise expressly provided in this Agreement, generally accepted accounting principles as in effect from time to time in the United States.
(b)Clauses (p) and (q) of Section 5.4 of the Loan Agreement are hereby deleted in their entirety and replaced with the following:
“(p)    Minimum Net Income.  Effective commencing with the quarter ended March 31, 2020 and each quarter ended thereafter, the Servicer shall, on a Consolidated basis, maintain as of the end of each fiscal quarter (i) ended on or prior to December 31, 2020, for the two (2) consecutive quarters then ended, Consolidated Net Income of not less than $1.00 calculated in accordance with GAAP without giving effect to the adoption of the CECL Methodology and (ii) ended after December 31, 2020, for the two (2) consecutive quarters then ended, Consolidated Net Income of not less than $1.00 calculated in accordance with GAAP as then in effect.”
“(q)    Fixed Charge Coverage Ratio.  The Servicer shall, on a Consolidated basis, maintain as of the end of each fiscal quarter a Fixed Charge Coverage Ratio of not less than 2.0 to 1.0, it being understood that the Fixed Charge Ratio shall be calculated (i) for each fiscal quarter ended on or prior to December 31, 2020 in accordance with GAAP without giving effect to the adoption of the CECL Methodology and (ii) for each fiscal quarter ended after December 31, 2020 in accordance with GAAP as then in effect.”
2.Condition Precedent to Effectiveness.  The effectiveness of this Amendment (the “Effective Date”) is subject to the condition precedent that the Deal Agent and each Managing Agent shall have received counterparts of this Amendment duly executed by each of the respective parties hereto.
3.Representations and Warranties.  In order to induce the Deal Agent and each of the Managing Agents to execute, deliver and perform this Amendment, each of Borrower and Servicer hereby represents and warrants that before and after giving effect to this Amendment:
(a)     each of its representations and warranties set forth in Article IV of the Loan Agreement is true and correct in all material respects on and as of the date hereof (except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties are true and correct in all material respects as of such earlier date); provided, that the preceding materiality standard shall not apply to those representations and warranties which themselves contain materiality standards; and

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(b)     on the date hereof, no Amortization Event, Unmatured Termination Event, Termination Event, Servicer Termination Event, or Potential Servicer Termination Event has occurred and is continuing (either before or after giving effect to this Amendment).
4.Loan Agreement in Full Force and Effect, as Amended.   All the terms and conditions of the Loan Agreement shall remain in full force and effect, as amended by this Amendment.  All references to the Loan Agreement in any other document or instrument shall be deemed to mean the Loan Agreement, as amended by this Amendment.  This Amendment shall not constitute a novation of the Loan Agreement, but shall constitute an amendment thereto. The parties hereto agree to be bound by the terms and obligations of the Loan Agreement, as amended by this Amendment. 
5.Governing Law; Consent to Jurisdiction; Waiver of Objection to Venue.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.  EACH OF THE PARTIES HERETO HEREBY AGREES TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO AND EACH SECURED PARTY HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
6.Execution in Counterparts; Severability; Integration.  This Amendment may be executed in any number of counterparts (including by way of facsimile or electronic transmission) and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.  In case any provision in or obligation under this Amendment shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. The Loan Agreement, as amended by this Amendment, and any agreements or letters (including fee letters) executed in connection herewith contain the final and complete integration of all prior expressions by the parties hereto with respect to the subject matter hereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof, superseding all prior oral or written understandings.
7.Fees and Expenses.  The Borrower hereby confirms its agreement to pay on demand all reasonable, properly documented costs and expenses of the Deal Agent in connection with the preparation, execution and delivery of this Amendment and any of the other instruments, documents 

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and agreements to be executed and/or delivered in connection herewith, including, without limitation, the reasonable fees and expenses of outside legal counsel to the Deal Agent with respect thereto.
8.No Petition; Limited Recourse.  Sections 13.06 (as it relates to Sections 13.10 and 13.11), 13.10(b) and 13.11 of the Loan Agreement are hereby incorporated by reference as if set forth at length herein.
[Signature pages follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered by their duly authorized officers as of the date hereof.

CAC WAREHOUSE FUNDING LLC VII, as Borrower
By: /s/ Douglas W. Busk
  Name: Douglas W. Busk
  Title:  Treasurer
CREDIT ACCEPTANCE CORPORATION, as Servicer
By: /s/ Douglas W. Busk
  Name: Douglas W. Busk
  Title:  Senior Vice President and Treasurer
 
 

[Signature Page to Fourth Amendment to CAC Loan and Security Agreement]

CREDIT SUISSE AG, NEW YORK BRANCH,  
as a Managing Agent

By: /s/ Enrique Flores Ruiz
Name: Enrique Flores Ruiz
Title: Vice President

By: /s/ Jason Ruchelsman
Name: Jason Ruchelsman
Title: Director

GIFS CAPITAL COMPANY, LLC, 
as a Conduit Lender 

By: /s/ Carey D. Fear
Name: Carey D. Fear
Title: Manager

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Committed Lender

By: /s/ Enrique Flores Ruiz
Name: Enrique Flores Ruiz
Title: Authorized Signatory

By: /s/ Jason Ruchelsman
Name: Jason Ruchelsman
Title: Authorized Signatory

[Signature Page to Fourth Amendment to CAC Loan and Security Agreement]

CREDIT SUISSE AG, NEW YORK BRANCH,  
as Deal Agent

By: /s/ Enrique Flores Ruiz
Name: Enrique Flores Ruiz
Title: Vice President

By: /s/ Jason Ruchelsman
Name: Jason Ruchelsman
Title: Director

 

[Signature Page to Fourth Amendment to CAC Loan and Security Agreement]

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