1
EXHIBIT 10.1
------------
--------------------------------------------------------------------------------
THIRD AMENDMENT
TO
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
--------------------------------------------------------------------------------
Third Amendment dated as of May 8, 2001 to the Fourth Amended and Restated
Credit Agreement (the "Amendment"), by and among HPSC, INC., a Delaware
corporation (the "Borrower"), AMERICAN COMMERCIAL FINANCE COMPANY, a Delaware
corporation (the "Guarantor" or "ACFC"), FLEET NATIONAL BANK and the other
lending institutions listed on SCHEDULE 1 to the Credit Agreement (as
hereinafter defined) (the "Banks"), Fleet National Bank as agent for the Banks
(in such capacity, the "Agent"), and Fleet Securities, Inc. as arranger,
amending certain provisions of the Fourth Amended and Restated Credit Agreement
dated as of May 12, 2000 (as amended and in effect from time to time, the
"Credit Agreement") by and among the Borrower, the Guarantor, the Banks and the
Agent. Terms not otherwise defined herein which are defined in the Credit
Agreement shall have the same respective meanings herein as therein.
WHEREAS, the Borrower and the Banks have agreed to modify certain terms and
conditions of the Credit Agreement as specifically set forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
SS.1. AMENDMENTS TO THE CREDIT AGREEMENT.
(a) Section 1.1 of the Credit Agreement is hereby amended by amending and
restating in their entirety the following definitions:
BORROWING BASE. At the relevant time of reference thereto, an amount
determined by the Agent by reference to the most recent Borrowing Base Report
delivered to the Banks and the Agent pursuant to ss.9.4(e), which is equal to
the sum of the following:
(i) 80% of Eligible Accounts Receivable; plus
(ii) 50% of the Residual Value of Equipment, provided, that the
amount included in the Borrowing Base pursuant to this clause
(ii) shall not exceed $2,000,000; minus
(iii) the Reserve Amount;
PROVIDED, HOWEVER, that (x) the net amount attributable to ACFC Receivables
included in the Borrowing Base shall not comprise more than 50% of the Borrowing
Base and (y) (A) the aggregate gross amount of Practice Receivables included as
Eligible Accounts Receivable shall not exceed $30,000,000, (B) and the net
amount attributable to Practice Receivables included in the Borrowing Base shall
not comprise more than 50% of the Borrowing Base and (C) the aggregate gross
amount of Progress Payment Notes included as Eligible Accounts Receivable shall
not exceed $10,000,000. The Agent may, in its
2
-2-
discretion, from time to time, upon five (5) days' prior notice to the Borrower,
reduce the lending formula with respect to Eligible Accounts Receivable to the
extent that the Agent determines that: (a) the dilution with respect of the
Accounts Receivable for any period has increased in any material respect or may
be reasonably anticipated to increase in any material respect above historical
levels, or (b) the general creditworthiness of account debtors or other obligors
of the Borrower has declined. In determining whether to reduce the lending
formula, the Agent may consider events, conditions, contingencies or risks which
are also considered in determining Eligible Accounts Receivable or in
establishing the Reserve Amount.
RESERVE AMOUNT. $2,000,000, provided that the Agent may, in its discretion,
from time to time, upon five (5) days' prior notice to the Borrower, revise the
Reserve Amount (a) to reflect events, conditions, contingencies or risks which
do or may have a material adverse effect on the business or financial condition
of the Borrower and its Subsidiaries or (b) to reflect the belief of the Agent
that any Borrowing Base Report or other collateral report or financial
information furnished by or on behalf of the Borrower to the Agent or any of the
Banks is or may have been incomplete, inaccurate or misleading in any material
respect. The Reserve Amount may include, but is not limited to: payables based
upon past due normal trade terms; taxes and other governmental charges, whether
ad valorem, personal or real property or otherwise and whether or not the tax
claims therefor may have priority over the Agent's security interest in any of
the Collateral.
REVOLVING CREDIT LOAN MATURITY DATE. May 6, 2002.
TERM LOAN MATURITY DATE. May 2, 2003.
(b) Section 1.1. of the Credit Agreement is hereby amended by inserting the
following new definitions in the appropriate alphabetical sequence:
CONSOLIDATED TOTAL FUNDED DEBT. With respect to the Borrower and its
Subsidiaries, the sum, without duplication, of (a) the aggregate amount of
Indebtedness of the Borrower and its Subsidiaries, on a consolidated basis,
whether recourse or non-recourse, relating to (i) the borrowing of money or the
obtaining of credit, including, without limitation, the issuance of notes or
bonds, (ii) all sales under FASB 125 or 140 by the Borrower or any of its
Subsidiaries of (A) accounts or general intangibles for money due or to become
due, (B) chattel paper, instruments or documents creating or evidencing a right
to payment of money or (C) other receivables (collectively "RECEIVABLES"),
whether pursuant to a purchase facility or otherwise, other than in connection
with the disposition of the business operations of such Person relating thereto
or a disposition of defaulted receivables for collection and not as a financing
arrangement, and together with any obligation of such Person to pay any
discount, interest, fees, indemnities, penalties, recourse, expenses or other
amounts in connection therewith, (iii) the deferred purchase price of assets
(other than trade payables incurred in the ordinary course of business), (iv) in
respect of any Capitalized Leases, and (v) the maximum drawing amount of all
letters of credit outstanding PLUS (b) Indebtedness of the type referred to in
clause (a) of another Person guaranteed by the Borrower or any of its
Subsidiaries.
CONSOLIDATED RECOURSE DEBT. With respect to the Borrower and its
Subsidiaries the aggregate amount of Indebtedness of the Borrower and its
Subsidiaries, on a consolidated
3
-3-
basis, which is recourse to the Borrower or ACFC, including without limitation,
Indebtedness under this Credit Agreement and under the Sales Agreements.
(c) Clause (xii) of the definition of "Eligible Accounts Receivable" is
hereby amended to read in its entirety as follows:
(xii) that are not due from any single Customer if, after including
such Accounts Receivable, the Borrowing Base will be comprised of more than
$3,000,000 of Accounts Receivable owing from such Customer PROVIDED,
HOWEVER that Practice Receivables and ACFC Receivables shall not be
included when calculating this $3,000,000 Customer concentration
limitation;
(d) The definition of "Eligible Accounts Receivable" is further hereby
amended by adding the following sentences to the end thereof:
Furthermore, Eligible Accounts Receivable shall not include any Customer
Receivable that has been rewritten more than twice. General criteria for
Eligible Accounts Receivable may be established and revised from time to
time by the Agent.
(e) Clause (e) of the definition of "Interest Period" is hereby amended by
inserting the words "Term Loan" before the words "Maturity Date" in both places
where they appear in such clause.
(f) Section 2.3.2 of the Credit Agreement is hereby amended by deleting the
dollar amount "$125,000,000" and substituting in place thereof the dollar amount
"$100,000,000".
(g) Section 2.5 of the Credit Agreement is hereby amended by:
(i) replacing the table therein in its entirety with the following
table:
Applicable Applicable
Applicable Base Eurodollar Rate Commitment
Rate Margin Margin Fee Rate
Debt Ratio (Per Annum) (Per Annum) (Per Annum)
---------- ----------- --------------- -----------
LEVEL I: greater than or 1.25% 2.75% 0.75%
equal to 7.00:1.00
LEVEL II: less than 1.00% 2.50% 0.625%
7.00:1.00 and greater
than or equal to 6.50:1.00
LEVEL III: less than 0.75% 2.25% 0.50%
6.50:1.00
4
-4-
(ii) inserting the following sentence after such table in ss.2.5(b):
For purposes of determining the Debt Ratio in the above table for
the fiscal quarters ending December 31, 2000, March 31, 2001,
June 30, 2001, September 30, 2001 and December 31, 2001, the
Newco Transaction Costs and the effects of FASB 133 shall be
excluded from such calculation.
(iii) inserting the following sentence at the end of the first
sentence in ss.2.5(c):
Notwithstanding the foregoing, the Applicable Margin and the
Applicable Commitment Fee Rate payable during the period
commencing on May 8, 2001 through June 1, 2001 shall be the
Applicable Margin and the Applicable Commitment Fee Rate set
forth in Level II above.
(h) Section 4.3 of the Credit Agreement is hereby amended by changing the
date "June 30, 2001" in the seventh line thereof to "June 30, 2002".
(i) Section 9.4(e) of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
(e) within three (3) Business Days after the end of each calendar
week, a Borrowing Base Report setting forth the Borrowing Base as at the
end of such week;
(j) Section 9.9.2 is hereby amended by deleting the dollar amount "$25,000"
set forth in the final clause of such section and substituting in place thereof
the dollar amount "$75,000" and adding the following sentence to the end
thereof:
Such collateral reports shall in any event be obtained at least once each
calendar year and shall under normal circumstances be obtained three times
each calendar year.
(k) Section 10.1(m) of the Credit Agreement is hereby amended to read in
its entirety as follows:
(m) Indebtedness incurred by the Borrower pursuant to the Sale
Agreements, PROVIDED THAT no Event of Default has occurred and is
continuing at the time such Indebtedness is incurred and PROVIDED FURTHER
that the sum of (i) aggregate outstanding principal amount of such
Indebtedness of the Borrower under such Sale Agreements and (ii) other
proceeds received by the Borrower under such Sale Agreements and not
characterized as Indebtedness shall not exceed $35,000,000 at any time.
(l) Section 10.3(e) of the Credit Agreement is hereby amended to read in
its entirety as follows:
5
-5-
(e) Investments with respect to Indebtedness permitted by ss.10.1(j)
so long as (i) such entities remain Subsidiaries of the Borrower, (ii) the
aggregate amount of incremental Investments made by the Borrower and its
subsidiaries in ACFC does not exceed $25,000,000 during the period of
twelve consecutive months commencing on May 1, 2001 and does not exceed
$15,000,000 thereafter;
(m) Section 11.2 of the Credit Agreement is hereby amended by deleting the
date "October 1, 1999" in the fifth line thereof and substituting therefor the
dated "April 1, 2001".
(n) Section 11.8 of the Credit Agreement is hereby deleted.
(o) Section 11.10 of the Credit Agreement is hereby amended by replacing
"50%" in the fourth line thereof with "25%".
(p) Section 11 of the Credit Agreement is hereby amended by inserting the
following new Sections 11.11 and 11.12 before the provision at the end thereof:
11.11. CONSOLIDATED RECOURSE DEBT TO CONSOLIDATED TANGIBLE CAPITAL
FUNDS. The Borrower will not permit at any time the ratio of (i)
Consolidated Recourse Debt to (ii) Consolidated Tangible Capital Funds to
be greater than 2.50:1.00.
11.12. CONSOLIDATED TOTAL FUNDED DEBT TO CONSOLIDATED TANGIBLE CAPITAL
FUNDS. The Borrower will not permit at any time the ratio of (i)
Consolidated Total Funded Debt to (ii) Consolidated Tangible Capital Funds
to be greater than 13.5:1.00.
(q) The provision at the end of SECTION 11 of the Credit Agreement is
hereby amended to read in its entirety as follows:
For purposes of determining compliance with (a) ss.11.1 for the fiscal
quarters ending December 31, 2000, March 31, 2001, June 30, 2001, September
30, 2001 and December 31, 2001, (b) ss.11.2 for the fiscal quarters ending
December 31, 2000 and March 31, 2001, and (c) ss.11.3 for the fiscal
quarters ending December 31, 2000, March 31, 2001, June 30, 2001 and
September 30, 2001, the Newco Transaction Costs shall be excluded from such
calculation. With respect to each such quarter, each compliance certificate
delivered pursuant to SECTION 9.4(c) shall show the amounts and categories
of adjustments necessary to exclude such Newco Transaction Costs from the
relevant financial statements of the Borrower and its Subsidiaries in a
manner satisfactory to the Agent. In addition, the effects of FASB 133
shall be excluded for purposes of determining compliance with each of the
financial covenants contained in ss.11 of the Credit Agreement.
SS.2. AMENDMENT TO SCHEDULE 1 TO CREDIT AGREEMENT. SCHEDULE 1 to the Credit
Agreement is hereby replaced by the SCHEDULE 1 attached to this Amendment.
6
-6-
SS.3. FEES. On the date of the closing of the Third Amendment (the "Third
Amendment Closing Date"), the Borrower will pay to the Agent for the account of
each Bank the amendment fee in the amount set forth below:
Fleet National Bank $35,000.00
KeyBank National Association $18,500.00
National Bank of Canada $10,000.00
First Massachusetts Bank, N.A. $10,000.00
Citizens Bank $10,000.00
TOTAL $83,500.00
The Borrower shall pay to the Agent on the Third Amendment Closing Date certain
fees as previously agreed to in writing by and between the Borrower and the
Agent. The Borrower shall pay to the Agent annually in advance, for the Agent's
own account, a non refundable Agent's fee in the amount previously agreed to in
writing by and between the Borrower and the Agent.
SS.4. CONDITIONS TO EFFECTIVENESS. This Amendment shall not become
effective until the Agent receives (a) a counterpart of this Amendment, executed
by the Borrower, the Guarantor and each of the Banks, (b) payment by the
Borrower of the fees referred to ss.3 hereof, (c) an officer's certificate and a
legal opinion of counsel to the Borrower, each in a form satisfactory to the
Agent and (d) such other documents including without limitation, replacement
Notes to reflect changes in Commitments and Commitment Percentages, if any, and
uniform commercial code financing statements, as the Agent may request.
SS.5. REPRESENTATIONS AND WARRANTIES. The Borrower hereby repeats, on and
as of the date hereof, each of the representations and warranties made by it in
SECTION 8 of the Credit Agreement, and such representations and warranties
remain true as of the date hereof (except to the extent of changes resulting
from transactions contemplated or permitted by the Credit Agreement and the
other Loan Documents, and to the extent that such representations and warranties
relate expressly to an earlier date), PROVIDED, that all references therein to
the Credit Agreement shall refer to such Credit Agreement as amended hereby. In
addition, the Borrower hereby represents and warrants that the execution and
delivery by the Borrower of this Amendment and the performance by the Borrower
of all of its agreements and obligations under the Credit Agreement as amended
hereby are within the corporate authority of the Borrower and has been duly
authorized by all necessary corporate action on the part of the Borrower.
SS.6. TRANSITIONAL ARRANGEMENTS. Each of the "Loans" (as defined in the
Credit Agreement) outstanding under the Credit Agreement on the date hereof
shall, for all purposes of the Credit Agreement, continue to be Loans. Upon its
receipt of any Notes to be delivered hereunder on the date hereof, each Bank
receiving a Note will promptly return to the Borrower, marked "Canceled", the
notes of the Borrower held by such Bank which are being replaced pursuant to
this Amendment, if any. On the date hereof, each of the
7
-7-
Banks shall pay through the Agent to each of the other Banks such amounts, if
any, as may be necessary so as to result in the outstanding amount of Loans made
by each Bank being equal to such Bank's Commitment Percentage of the aggregate
amount of Loans outstanding as of the date hereof. The Borrower and the Banks
hereby agree that all amounts paid to any Bank by any other Bank in connection
with interbank settlements with respect to Loans outstanding immediately prior
to the date hereof shall be deemed to constitute Loans under the Credit
Agreement.
SS.7. RATIFICATION, ETC. Except as expressly amended hereby, the Credit
Agreement, the Security Documents and all documents, instruments and agreements
related thereto are hereby ratified and confirmed in all respects and shall
continue in full force and effect. The Credit Agreement and this Amendment shall
be read and construed as a single agreement. All references in the Credit
Agreement or any related agreement or instrument to the Credit Agreement shall
hereafter refer to the Credit Agreement as amended hereby.
SS.8. NO WAIVER. Nothing contained herein shall constitute a waiver of,
impair or otherwise affect any Obligations, any other obligation of the Borrower
or any rights of the Agent or the Banks.
SS.9. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but which together shall
constitute one and the same instrument.
SS.10. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (WITHOUT
REFERENCE TO CONFLICT OF LAWS).
8
-8-
IN WITNESS WHEREOF, the undersigned have duly executed this Amendment as a
sealed instrument as of the date first set forth above.
HPSC, INC.
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Name: Xxxx Xxxxxxxx
Title: VP. CFO
FLEET NATIONAL BANK, individually and
as Agent
By: /s/ Xxxxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: Vice President
KEYBANK NATIONAL ASSOCIATION
By: /s/ Xxxx X. Xxxxxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxxxxx
Title: Vice President
NATIONAL BANK OF CANADA
By: /s/ A. Xxxxx Xxxxxxx
------------------------------------
Name: A. Xxxxx Xxxxxxx
Title: Vice President & Manager
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
FIRST MASSACHUSETTS BANK, N.A.
By: /s/ Xxx X. Xxxxxxxxx
------------------------------------
Name: Xxx X. Xxxxxxxxx
Title: Senior Vice President
CITIZENS BANK OF MASSACHUSETTS
By: /s/ Xxxx X. Xxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
9
-9-
RATIFICATION BY GUARANTOR
The undersigned Guarantor hereby acknowledges and consents to the foregoing
Amendment as of May 8, 2001 and agrees that the Guaranty dated as of June 23,
1994 from the undersigned in favor of the Agent and each of the Banks, as
amended by Omnibus Amendment No. 4 to Security Documents, dated as of May 12,
2000, and each of the other Security Documents to which it is a party remain in
full force and effect, and the Guarantor confirms and ratifies all of its
obligations thereunder.
AMERICAN COMMERCIAL
FINANCE CORPORATION
By: /s/ Xxxx Xxxxxxxx
------------------------------------
Name: Xxxx Xxxxxxxx
Title: VP
10
-10-
FOURTH AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
SCHEDULE 1
Banks; Addresses; Commitments; Commitment Percentages
--------------------------------------------------------------------------------------------
BANK'S NAME AND ADDRESS COMMITMENT PERCENTAGE
--------------------------------------------------------------------------------------------
FLEET NATIONAL BANK $35,000,000 41.92%
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Xx.
Phone: 000-000-0000
Fax: 000-000-0000
--------------------------------------------------------------------------------------------
KEYBANK NATIONAL ASSOCIATION $18,500,000 22.16%
Xxx Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxxxxx
Phone: 000-000-0000
Fax: 000-000-0000
--------------------------------------------------------------------------------------------
NATIONAL BANK OF CANADA $10,000,000 11.98%
Xxx Xxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxx
Phone: 000-000-0000
Fax: 000-000-0000
--------------------------------------------------------------------------------------------
FIRST MASSACHUSETTS BANK N.A. $10,000,000 11.98%
0 Xxx Xxxxxxx Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxx X. Xxxxxxxxx
PHFG Corporate Banking
Phone: 000-000-0000
Fax: 000-000-0000
--------------------------------------------------------------------------------------------
CITIZENS BANK OF MASSACHUSETTS
A MASSACHUSETTS BANK
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
Phone: 000-000-0000
Fax: 000-000-0000
--------------------------------------------------------------------------------------------
TOTAL $83,500,000 100%
--------------------------------------------------------------------------------------------
