FOURTH AMENDMENT TO AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
This Fourth Amendment to Amended and Restated Revolving Credit Agreement
("Fourth Amendment") dated as of October 30, 1997 by and among EAGLE FINANCE
CORP., a Delaware corporation ("Borrower"), CORESTATES BANK, N.A., a national
banking association, XXXXXX TRUST AND SAVINGS BANK, an Illinois banking
corporation, BANK ONE, CHICAGO, N.A., a national banking association, XXXX
XXXXXX BANK, an Illinois banking corporation, FLEET BANK, N.A. (successor in
interest to Natwest Bank N.A.), NBD BANK, a Michigan banking association,
LASALLE NATIONAL BANK, a national banking association, THE SUMITOMO BANK,
LIMITED, Chicago branch, a bank organized under the laws of Japan (successor in
interest to The Daiwa Bank, Limited), THE NORTHERN TRUST COMPANY (successor in
interest to Northern Trust Bank\O'Hare, N.A.) (each individually a "Bank" and
collectively "Banks" and CORESTATES BANK, N.A., as agent for the Banks hereunder
(in such capacity as "Agent").
BACKGROUND
A. Borrower, Banks and Agent are parties to a certain Amended and
Restated Revolving Credit Agreement dated as of June 30, 1995, as amended (the
"Credit Agreement"), which they are willing to further amend on the terms and
conditions set forth herein.
B. Capitalized terms used but not otherwise defined in this Fourth
Amendment shall have the meanings respectively ascribed to them in the Credit
Agreement.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby promise and agree as follows:
1. AMENDMENTS.
A. The Credit Agreement is amended by deleting the definitions of
"Termination Date" and "Borrowing Base" contained in Section 1.01 of the Credit
Agreement in their entirety and replacing such definitions with the following
respective definitions:
"Termination Date" means the earlier of (1) January 30, 1998, or
(2) the date of termination of the Commitments pursuant to Section
2.02 or Section 9.01.
"Borrowing Base" means seventy-five percent (75%) of Eligible
Receivables.
B. The Credit Agreement is amended by adding the following new
definition to Section 1.01 of the Credit Agreement:
"NET WORTH" means the amount of capital stock of Borrower on a
consolidated basis, PLUS (or minus in the case of a deficit) the
capital surplus and earned surplus of Borrower on a consolidated basis
minus the cost of Treasury shares.
C. The Credit Agreement is amended by modifying the definition of
"Eligible Receivable" by deleting Subsections "(xii)" "(xiii)", "(xiv)" and
"(xvi)" thereof, and inserting the following new subsections "(xii)" and
"(xiii")":
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(xii) the receivable is not D Paper;
(xiii) there has been no Modification with respect to the
receivable.
Subsection "(xv)" of the definition "Eligible Receivable" is
renumbered as subsection "(xiv)" and subsection "(xvii)" thereof is renumbered
as subsection "(xv)".
D. The number "$30,000,000" presently contained in the 29th line of
Section 2.01 of the Credit Agreement shall automatically be reduced to
"$25,000,000" as of November 20, 1997, to "$20,000,000" as of December 19, 1997
and to "$15,000,000" as of January 20, 1998. In connection with each such
above-stated reduction in the aggregate Commitments of all of the Banks, each
Bank's Commitment will be reduced pro rata to the amount opposite each Bank's
name on the Schedule "A" attached hereto and made part hereof. Each such
reduction in the aggregate Commitments of all of the Banks shall be accompanied
by a mandatory prepayment of outstanding Loans to the extent necessary to reduce
the amount of Loans outstanding to the then applicable amount of the aggregate
Commitments of the Banks.
E. The LIBOR Interest Rate option is no longer available to Borrower
and all Loans shall hereafter be Base Rate Loans. All references to LIBOR Loans
contained in the Credit Agreement shall be of no further force or effect. The
Credit Agreement is amended by deleting subsections 2.05(1) and (2) thereof in
their entirety and replacing such subsections with the following:
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For any Base Rate Loan, at a per annum rate equal to the Prime Rate
plus three (3) percentage points.
F. The Credit Agreement is amended by deleting Section 2.11 thereof
in its entirety and replacing such Section with the following:
SECTION 2.11 TERM. The term of the Commitments and the Credit
Facility under which Revolving Credit Loans shall be made available to
Borrower under the terms of this Agreement shall expire on January 30,
1998, as of which date no further Loans shall be made available by
Banks to Borrower and on which date all of Borrower's obligations of
every kind and nature shall, unless sooner becoming due under the
terms of this Agreement, become due and payable in full.
G. The Credit Agreement is amended by adding new subsections
6.11(19), 6.11(20) and 6.11(21) thereto as follows:
(19) Within twenty-five (25) days after each month end, a company
prepared balance sheet as of the end of such month, a statement
of income and retained earnings of Borrower for such month and on
a fiscal year to date basis and a statement of cash flows of
Borrower for such month and on a fiscal year to date basis, all
in reasonable detail and all prepared in accordance with GAAP
consistently applied (subject to year-end adjustment) and
certified by the chief financial officer of Borrower;
(20) Within five (5) days of (a) the last day of each month and
(b) the fifteenth day of each month, statements of receivable
delinquency, certified as to accuracy by Borrower's chief
financial officer; and
(21) Within five (5) days of (a) the last day of each month and
(b) the fifteenth day of each month, certified as to accuracy by
Borrower's chief financial officer, to the best of his knowledge,
a borrowing base or availability certificate showing the interim
calculations for the Borrowing Base. Borrower reconfirms its
obligation to provide a borrowing base or availability
certificate with the submission of each Advance Request form.
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H. The Credit Agreement is amended by deleting subsection 6.11(4) in
is entirety and replacing such subsection with the following:
(4) (a) Contemporaneously with the delivery of the financial
statements called for under Section 6.11(1), (2) and (19), a
certificate of the chief financial officer of Borrower,
certifying that to the best of his knowledge no Default or Event
of Default has occurred and is continuing or, if a Default or
Event of Default has occurred and is continuing, a statement as
to the nature thereof and the action which is proposed to be
taken with respect thereto; and (b) as soon as available and in
any event within sixty (60) days after the end of each of the
first three fiscal quarters of each fiscal year of Borrower, a
Quarterly Compliance Certificate with computations demonstrating
compliance with the covenants contained in Article VIII;
I. The Credit Agreement is amended by adding the following sentence
to the end of Section 6.14:
In addition to the foregoing examinations, Borrower shall cause BDO
Xxxxxxx to perform an additional examination of Borrower and to cause
a written report thereof to be promptly submitted to Banks prior to
December 31, 1997 (the cost and expenses of which shall be the sole
responsibility of Borrower), which examination shall include a review
of Borrower's reports related to underwriting exceptions for newly
purchased accounts (which review shall include a sampling of such
accounts to test the validity of the reports), verification of the
accuracy of the Borrowing Base and a review of Borrower's collections
and delinquencies.
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J. The Credit Agreement is amended by deleting Section 8.01 in its
entirety and replacing such Section with the following:
SECTION 8.01. NET WORTH. Borrower shall maintain a Net Worth of
not less than the greater of ("Minimum Net Worth") (a) $5,000,000 or
(b) Borrower's actual Net Worth as shown on Borrower's balance sheet
prepared as of September 30, 1997.
The Minimum Net Worth requirement shall be reduced from time to
time by an amount equal to 20% of the net cash proceeds received by
Borrower from any sales of receivables permitted hereunder, provided
that such covenant requirement shall never decrease below $3,500,000.
K. The Credit Agreement is amended by deleting Section 8.05 in its
entirety.
L. The Credit Agreement is amended by deleting Section 8.07 in its
entirety and replacing such Section with the following:
(1) Borrower shall not permit the sum of aggregate Net
Owned Receivables with payments 31 days or more
contractually past due to exceed $8,000,000 as of the last
day of each calendar month. Borrower shall not permit the
sum of aggregate Net Owned Receivables with payments 62 days
or more contractually past due to exceed $2,500,000 as of
the last day of each calendar month.
M. The Credit agreement in amended by deleting Section 11.04 in its
entirety and replacing such Section with the following:
SECTION 11.04. SUCCESSORS, ASSIGNS AND PARTICIPATIONS. (a) This
Agreement shall be binding upon and inure to the benefit of Borrower,
each Bank
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and Agent and their respective successors and assigns except
that Borrower may not assign or transfer any of its rights or
obligations under any Loan Document without the prior written consent
of all Banks. Each bank may assign all of its rights and interest in
the Loans provided, however, that (i) the parties execute an
assignment agreement in form and substance satisfactory to Agent, (ii)
the assigning Bank pays Agent a $3,000.00 assignment fee for Agent's
account, (iii) any such assignee shall become a Bank for all purposes
hereunder, (iv) any such assignment is for an amount not less than the
full amount of such Bank's Commitment, (v) the assignment is to a
single financial institution and (vi) such assigning Bank receives the
prior written consent of Agent and Borrower which consent may be
withheld at the discretion of Agent or Borrower, provided, however,
that Borrower's consent shall not be required after January 20, 1998
or after the occurrence of an Event of Default of the type described
in Section 9.01(1) herein, including without limitation Borrower's
failure to timely make any mandatory prepayment required by Section
2.07 hereof or in Section 9.01(5) herein.
(b) (i) Any Bank may in the ordinary course of its business and in
accordance with applicable law, with the prior written consent of
Agent, which consent shall not unreasonably be withheld, at any time
sell to one
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or more banks or other entities ("Participants") participating
interests in its respective share of the Loans, any Note held by
such Bank, any Commitment of such Bank or any other interest of such
Bank under the Loan Documents. In the event of any such sale by a
Bank of a participating interest to a Participant, such Bank's
obligations under the Loan Documents shall remain unchanged, such
Bank shall remain solely responsible to the other parties hereto for
the performance of such obligations, such Bank shall remain the
owner of its Loans and the holder of any Note issued to it in
evidence thereof for all purposes under the Loan Documents, all
amounts payable by the Borrower under this Agreement shall be
determined as if such Bank had not sold such participating interest,
and the Borrower and the Agent shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and
obligations under the Loan Documents.
(ii) Each Bank shall retain the sole right to approve, without
the consent of any Participant, any amendment, modification or waiver
of any provision of the Loan Documents other than any amendment,
modification or waiver with respect to any Loan or Commitment in which
any such Participant has an interest which forgives principal,
interest or fees or reduces the interest rate or fees payable with
respect to any such Loan or
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Commitment, extends the Termination Date, postpones any date fixed
for any regularly-scheduled payment of principal of, or interest or
fees on, any such Loan or Commitment; releases any guarantor of any
such Loan or releases all or any substantial part of the
Collateral, if any, securing any such Loan.
(c) Each Bank may from time to time provide financial and other
information concerning Borrower to any purchaser, participant or
prospective purchaser or participant, provided such party executes a
confidentiality agreement.
2. EXTENSION FEE.
Borrower shall, contemporaneously with the execution hereof, pay to
Agent in good funds, for the benefit of Banks, an extension fee of $300,000.
Agent shall distribute $150,000 of such fee to Banks based on their respective
Pro Rata Percentages. The balance of such Fee shall be held by Agent in escrow
until January 30, l998, at which time, if Borrower terminates the Commitments
and satisfies all obligations of every kind of Borrower to Agent and Banks by
January 30, 1998, Agent will refund the $150,000 balance of such fee to Borrower
and, if such conditions have not been satisfied, Agent shall distribute such
amount to Banks, together with any interest earned thereon, in accordance with
their respective Pro Rata Percentages.
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3. MISCELLANEOUS.
A. Borrower represents and warrants to Banks and Agent that it has
taken all necessary corporate action to authorize the execution, delivery and
performance of this Fourth Amendment. This Fourth Amendment is, or when
executed by Borrower and delivered to Agent will be, duly executed and
constitute valid and legally binding obligations of Borrower, enforceable
against Borrower in accordance with its terms. Borrower hereby ratifies and
restates each of the representations and warranties of Borrower set forth in
Article V of the Credit Agreement as being true and correct on the date
hereof.
B. This Fourth Amendment may be executed in any number of
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.
C. This Fourth Amendment shall amend and is incorporated into the
Credit Agreement. To the extent of any express inconsistency between the
terms hereof and the terms of the Credit Agreement, the terms hereof shall
control. Except as expressly amended by this Fourth Amendment, all of the
terms and conditions of the Credit Agreement remain in full force and effect.
D. Borrower acknowledges, confirms, represents and covenants that
as of October 30, 1997, (a) it is indebted to Banks, without defense, setoff,
counterclaim or recoupment of any nature, in the aggregate principal amount
of $29,319,000 for
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Revolving Credit Loans made pursuant to the Credit Agreement and (b) all
security interests and liens in the Collateral granted to Agent (for the
benefit of Agent and Banks) under the Credit Agreement continue to be first
priority perfected security interests and continue to secure all obligations
and indebtedness of every kind owing from Borrower to Banks and/or Agent.
IN WITNESS WHEREOF, the parties have caused this Fourth Amendment to be
executed by their respective duly authorized officers as of the date first above
written.
EAGLE FINANCE CORP.
By: __________________________
__________________________
(print name and title)
XXXXXX TRUST AND SAVINGS BANK
By:___________________________
(print name and title)
CORESTATES BANK, N.A.
By:____________________________
(print name and title)
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