AMENDMENT TO CREDIT AGREEMENT
This Amendment, dated as of March 27, 2001, is made by and between FACTUAL
DATA CORP., a Colorado corporation (the "Borrower"), and
XXXXX FARGO BANK, NATIONAL ASSOCIATION, a national banking association (the
"Lender"), and is effective as of December 31, 2000.
Recitals
The Borrower and the Lender have entered into that certain Credit Agreement
dated as of May 23, 2000 (as supplemented and amended, the "Credit Agreement").
Capitalized terms used in these recitals have the meanings given to them in the
Credit Agreement unless otherwise specified.
The Borrower has voluntarily undertaken two significant one-time charges to
its income statement that altered its financial results for the fourth quarter
of 2000: (a) the Borrower took a charge of nearly $12,000,000 related to a
change in its accounting policy from valuing Intangible Assets based on
undiscounted cash flows to valuing such Intangible Assets based on discounted
cash flows, and (b) the Borrower took a charge of over $3,000,000 related to the
strategic consolidation of several of its branch offices (collectively, the
"One-Time Charges").
The Borrower has requested that certain amendments be made to the Credit
Agreement, effective as of December 31, 2000, which the Lender is willing to
make pursuant to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, it is agreed as follows:
1. Defined Terms. Capitalized terms used in this Amendment which are
defined in the Credit Agreement shall have the same meanings as defined therein,
unless otherwise defined herein. In addition, Section 1.1 of the Credit
Agreement is amended by adding or amending, as the case may be, the following
definitions:
"Adjusted Funded Debt" means, with respect to the applicable Covenant
Computation Date, Funded Debt minus the Experian Lease Amount.
"Adjusted Pro Forma EBITDA" of any Person means, with respect to the
applicable Covenant Computation Period, the Pro Forma EBITDA minus the Experian
Lease Payments.
"Cash Flow Available for Debt Service" of any Person means, with respect to
the applicable Covenant Computation Period, such Person's Pro Forma EBITDA minus
taxes payable on account thereof and minus Capital Expenditures not financed
with proceeds of additional Debt.
"Cash Interest Expense" of any Person means, for the applicable period,
such Person's Interest Expense minus any Interest Expense the payment of which
has been deferred by the related creditor for a period greater than twelve (12)
calendar months.
"Covenant Computation Date" means, (a) with respect to the Total Leverage
Ratio and the Senior Leverage Ratio, the last Business Day of each calendar
month, and (b) for all other purposes, the last Business Day of each fiscal
quarter (March 31, June 30, September 30, and December 31, as the case may be).
"Debt Service Requirements" of any Person means, with respect to the
applicable Covenant Computation Period, the aggregate, without duplication, of
such Person's (a) Cash Interest Expense, (b) all scheduled installments of
principal on Funded Debt excluding voluntary prepayments of principal made, or
to be made, under the Term Note and any principal payments made under the
Revolving Note which are due on demand or during such period, (c) all
Capitalized Lease Principal which is due on demand or during such period, and
(d) Experian Lease Payments.
"Experian" means Experian Information Solutions, Inc., an Ohio corporation.
"Experian Leases" means the three (3) lease arrangements entered into by
and between the Borrower and Experian as follows: (a) that certain agreement
dated as of April 28, 2000, relating to the State of Colorado; (b) that certain
agreement dated as of December 1, 2000, relating to the Southern Region of the
State of Texas; and (c) that certain agreement dated as of February 1, 2001,
relating to the State of Wyoming.
"Experian Lease Amount" means, with respect to the applicable Covenant
Computation Date, the amount outstanding under the Experian Leases, equal to the
present value of all scheduled lease payments that are not yet due and payable
under the lease arrangement discounted at a rate of 9.985%.
"Experian Lease Payments" means, with respect to the applicable Covenant
Computation Period, the aggregate of payments made by the Borrower to Experian
in accordance with the terms of the Experian Leases, including any fees
associated therewith and prepayments thereof.
"Eurodollar Spread" means the amount as set forth below:
Term Facility Revolving Facility Status
------------- ------------------ ------
2.75% 2.75% Xxxxx 0 Xxxxxx
0.00% 0.00% Xxxxx 0 Xxxxxx
3.50% 3.50% Level 3 Status
This spread shall be established for each calendar month, commencing on the
date hereof, and shall be determined monthly based on the Borrower's financial
statements which are to be delivered pursuant to Section 5.1(b) hereof. Any
adjustment to this spread shall not become effective until two (2) days after
receipt of such financial statements by the Bank. For the period from the date
hereof up to the point when this spread shall be determined based upon the
Borrower's financial statements for the period ending March 31, 2001, this
spread shall be at a Level 2 Status.
"Floating Spread" means the amount as set forth below:
Term Facility Revolving Facility Status
------------- ------------------ ------
0.25% 0.25% Xxxxx 0 Xxxxxx
0.00% 0.00% Xxxxx 0 Xxxxxx
0.75% 0.75% Level 3 Status
This spread shall be established for each calendar month, commencing on the
date hereof, and shall be determined monthly based on the Borrower's financial
statements which are to be delivered pursuant to Section 5.1(b) hereof. Any
adjustment to this spread shall not become effective until two (2) days after
receipt of such financial statements by the Bank. For the period from the date
hereof up to the point when this spread shall be determined based upon the
Borrower's financial statements for the period ending March 31, 2001, this
spread shall be at a Level 2 Status.
"Level 1 Status" means that period of time during which the ratio of the
FDC Group's Adjusted Funded Debt to Adjusted Pro Forma EBITDA, on a trailing
twelve-month basis, is less than 2.00 to 1.00.
"Level 2 Status" means that period of time during which the ratio of the
FDC Group's Adjusted Funded Debt to Adjusted Pro Forma EBITDA, on a trailing
twelve month basis, is equal to or greater than 2.00 to 1.00 and is less than or
equal to 2.25 to 1.00.
"Level 3 Status" means that period of time during which the ratio of the
FDC Group's Adjusted Funded Debt to Adjusted Pro Forma EBITDA, on a trailing
twelve-month basis, with respect to computation of the Term Spread only, is
greater than 2.25 to 1.00.
"Senior Leverage Ratio" has the meaning specified in Section 5.8.
"Total Leverage Ratio" has the meaning specified in Section 5.9.
2. Senior Leverage Ratio. Section 5.8 of the Credit Agreement is hereby
amended in its entirety to read as follows:
Section 5.8 Senior Leverage Ratio. The FDC Group will maintain, on a
combined basis, as of each Covenant Computation Date, the ratio of its Adjusted
Funded Debt, excluding Subordinated Debt, to its Adjusted Pro Forma EBITDA (its
"Senior Leverage Ratio") at not more than 2.50 to 1.00 for the Covenant
Computation Periods ending on or near January 31, 2001, February 28, 2001, March
31, 2001, April 30, 2001, and May 31, 2001; at not more than 2.25 to 1.00 for
the Covenant Computation Periods ending on or near June 30, 2001, July 31, 2001,
August 31, 2001, and September 30, 2001; and, at not more than 2.00 to 1.00 for
the Covenant Computation Periods ending on or near October 31, 2001, November
30, 2001, December 31, 2001, and thereafter.
3. Total Leverage Ratio. Section 5.9 of the Credit Agreement is hereby
amended in its entirety to read as follows:
Section 5.9 Total Leverage Ratio. The FDC Group will maintain, on a
combined basis, as of each Covenant Computation Date, the ratio of its total
Adjusted Funded Debt to its Adjusted Pro Forma EBITDA (its "Total Leverage
Ratio") at not more than 3.50 to 1.00 for the Covenant Computation Periods
ending on or near January 31, 2001, February 28, 2001, March 31, 2001, April 30,
2001, and May 31, 2001; at not more than 3.25 to 1.00 for the Covenant
Computation Periods ending on or near June 30, 2001, July 31, 2001, August 31,
2001, and September 30, 2001; and, at not more than 3.00 to 1.00 for the
Covenant Computation Periods ending on or near October 31, 2001, November 30,
2001, December 31, 2001, and thereafter.
4. Debt Service Coverage Ratio. Section 5.10 of the Credit Agreement is
hereby amended in its entirety to read as follows:
Section 5.10 Debt Service Coverage Ratio. The FDC Group will maintain, on a
combined basis, as of December 31, 2001, and each Covenant Computation Date
thereafter, its Debt Service Coverage Ratio at not less than 1.15 to 1.00.
5. Minimum Stockholder's Equity. Section 5.11 of the Credit Agreement is
hereby amended in its entirety to read as follows:
Section 5.11 Minimum Stockholders' Equity. The FDC Group will maintain, on
a combined basis, as of each Covenant Computation Date, its Stockholders' Equity
at not less than the total of $15,000,000 plus, subsequent to December 31, 2000,
fifty percent (50%) of the after tax net income of the FDC Group for the fiscal
year ending December 31, 2001, and thereafter (with any negative net income
counting as zero (0) for purposes of the foregoing).
6. Minimum Pro Forma EBITDA. Section 5.12 of the Credit Agreement is hereby
amended in its entirety to read as follows:
Section 5.12 Minimum Pro Forma EBITDA. The FDC Group will achieve Pro Forma
EBITDA, on a combined basis and prior to deduction of the One-Time Charges, as
of each Covenant Computation Date, amounts not less than the amounts set forth
opposite the applicable Covenant Computation Periods set forth below:
Covenant Computation Minimum
Periods (ending on or near) Pro Forma EBITDA
--------------------------- ----------------
01/31/2001 and 02/28/2001 $4,500,000
03/31/2001, 04/30/2001 and $5,500,000
05/31/2001
06/30/2001, 07/31/2001 and $5,750,000
08/31/2001
09/30/2001, 10/31/2001 and $6,000,000
11/30/2001
12/31/2001 and thereafter $6,500,000
7. Interest Coverage Ratio. Section 5.13 of the Credit Agreement is hereby
amended in its entirety to read as follows:
Section 5.13 Interest Coverage Ratio. The FDC Group will maintain, on a
combined basis and prior to deduction of the One-Time Charges, as of December
31, 2001, and each Covenant Computation Date thereafter, its Interest Coverage
Ratio at not less than 3.00 to 1.00.
8. Consolidation and Merger; Asset Acquisitions. Section 6.7 of the Credit
Agreement is hereby amended in its entirety to read as follows:
Section 6.7 Consolidation and Merger; Asset Acquisitions; Lease
Transactions. The Borrower will not, nor will it allow any member of the
Affiliated Group to, consolidate with or merge into any Person, or permit any
other Person to merge into it, or acquire (in a transaction analogous in purpose
or effect to a consolidation or merger) all or substantially all the assets of
any other Person; provided, however, that the Borrower (or any member of the
Affiliated Group) may make Permitted Business Acquisitions, with the express
written consent of the Bank, so long as the purchase price for any such
Permitted Business Acquisition does not exceed $100,000 per individual
transaction, and the purchase price for all such Permitted Business Acquisitions
within any fiscal year of the Borrower does not exceed $100,000 in the
aggregate. For purposes of the foregoing, "Permitted Business Acquisition" shall
mean a purchase by the Borrower (or any member of the Affiliated Group) of a
Person which (a) is in a similar line of business as the Borrower, (b) where the
Person being acquired has posted positive EBITDA (as such term would apply to
such Person) for the most recent twelve (12) month trailing period, and (c )
where the Borrower (or any member of the Affiliated Group) acquires at least
fifty-one percent (51%) of the outstanding stock of such Person being acquired.
The Borrower will not, nor will it allow any member of the Affiliated Group to,
enter into a licensing or lease transaction with Experian or any other entity
without the express prior written consent and approval of the Lender.
9. Capital Expenditures. Section 6.11 of the Credit Agreement is hereby
amended in its entirety to read as follows:
Section 6.11 Capital Expenditures. The FDC Group will not incur or contract
to incur Capital Expenditures, on a combined basis, during any fiscal year of
more than $2,000,000 in the aggregate.
10. Events of Default. The period at the end of paragraph (l) of Section
7.1 is deleted and replaced with "; or" and following paragraph (m) is added to
the end of Section 7.1:
(m) breach of the covenant of the Borrower in Section 5.8 of this
Agreement, and the continuance of such breach for a period of five (5) days
after the occurrence of such breach.
11. Rights and Remedies. The period at the end of paragraph (e) of Section
7.2 is deleted and replaced with "; and" and following paragraph (f) is added to
the end of Section 7.2:
(f) with respect to a breach under Section 7.1(m) hereof, with notice to
the Borrower, the outstanding principal balance of each Advance shall bear
interest at the Default Rate until the Borrower either (1) cures such breach, or
(2) repays the outstanding principal balance of such Advances in full, including
interest at the Default Rate.
12. No Other Changes. Except as explicitly amended by this Amendment, all
of the terms and conditions of the Credit Agreement shall remain in full force
and effect and shall apply to any advance or letter of credit thereunder.
13. Waiver of Certain Financial Covenants. Prior to the effectiveness of
this Amendment, the Borrower was not in compliance with the following financial
covenants of the Credit Agreement:
(a) Senior Leverage Ratio, as provided in Section 5.8 of the Credit
Agreement, for the Covenant Computation Period ending on December 31, 2000, was
in excess of 2.00 to 1.00 (maximum was 2.00 to 1.00);
(b) Minimum Stockholders' Equity, as provided in Section 5.11 of the Credit
Agreement, for the fiscal year ending on December 31, 2000, was $15,255,300
(minimum was $25,000,000);
(c) Minimum EBITDA, as provided in Section 5.12 of the Credit Agreement,
for the fiscal year ending on December 31, 2000, was $4,749,474 (minimum was
$6,000,000); and,
(d) Capital Expenditures, as provided in Section 6.11 of the Credit
Agreement, for the fiscal year ending on December 31, 2000, was $2,007,750
(maximum was $1,500,000).
Upon execution of this Amendment by the parties hereto, and subject to the
terms and conditions set forth in this Amendment, the Lender hereby waives the
Borrower's failure to comply with the financial covenants set forth above. This
waiver shall be effective only in this specific instance and for the specific
purpose for which it is given, and this waiver shall not entitle the Borrower to
any other or further waiver in any similar or other circumstances.
14. Conditions Precedent. This Amendment, and the waiver set forth in
Paragraph 13 hereof, shall be effective when the Lender shall have received an
executed original hereof, together with each of the following, each in substance
and form acceptable to the Lender in its sole discretion:
(a) The Acknowledgment and Agreement of Guarantor set forth at the end of
this Amendment, duly executed by the Guarantor.
(b) A Certificate of the Secretary of the Borrower certifying as to (i) the
resolutions of the board of directors of the Borrower approving the execution
and delivery of this Amendment, (ii) the fact that the articles of incorporation
and bylaws of the Borrower, which were certified and delivered to the Lender
pursuant to the Certificate of Authority of the Borrower's secretary or
assistant secretary dated as of April 28, 2000, in connection with the execution
and delivery of the Credit Agreement, continue in full force and effect and have
not been amended or otherwise modified except as set forth in the Certificate to
be delivered, and (iii) certifying that the officers and agents of the Borrower
who have been certified to the Lender, pursuant to the Certificate of Authority
of the Borrower's secretary or assistant secretary dated as of April 28, 2000,
as being authorized to sign and to act on behalf of the Borrower continue to be
so authorized or setting forth the sample signatures of each of the officers and
agents of the Borrower authorized to execute and deliver this Amendment and all
other documents, agreements and certificates on behalf of the Borrower.
(c) An opinion of the Borrower's counsel as to the matters set forth in
paragraphs 15(a) and 15(b) hereof and as to such other matters
as the Lender shall require.
(d) Payment of or reimbursement for the costs and expenses described in
Paragraph 19.
(e) Such other matters as the Lender may require.
15. Representations and Warranties. The Borrower hereby represents and
warrants to the Lender as follows:
(a) The Borrower has all requisite power and authority to execute this
Amendment and to perform all of its obligations hereunder, and this Amendment
has been duly executed and delivered by the Borrower and constitutes the legal,
valid and binding obligation of the Borrower, enforceable in accordance with its
terms.
(b) The execution, delivery and performance by the Borrower of this
Amendment have been duly authorized by all necessary corporate action and do not
(i) require any authorization, consent or approval by any governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, (ii) violate any provision of any law, rule or regulation or of any
order, writ, injunction or decree presently in effect, having applicability to
the Borrower, or the articles of incorporation or by-laws of the Borrower, or
(iii) result in a breach of or constitute a default under any indenture or loan
or credit agreement or any other agreement, lease or instrument to which the
Borrower is a party or by which it or its properties may be bound or affected.
(c) All of the representations and warranties contained in Article IV of
the Credit Agreement are correct on and as of the date hereof as though made on
and as of such date, except to the extent that such representations and
warranties relate solely to an earlier date.
16. References. All references in the Credit Agreement to "this Agreement"
shall be deemed to refer to the Credit Agreement as amended hereby; and any and
all references in the Security Documents to the Credit Agreement shall be deemed
to refer to the Credit Agreement as amended hereby.
17. No Other Waiver. Except as set forth in Paragraph 13 hereof, the
execution of this Amendment and acceptance of any documents related hereto shall
not be deemed to be a waiver of any breach or default under the Credit Agreement
or breach, default or event of default under any Security Document or other
document held by the Lender, whether or not known to the Lender and whether or
not existing either on the date hereof or the effective date hereof.
18. Release. The Borrower, and each Guarantor by signing the Acknowledgment
and Agreement of Guarantor set forth below, hereby absolutely and
unconditionally releases and forever discharges the Lender, and any and all
participants, parent corporations, subsidiary corporations, affiliated
corporations, insurers, indemnitors, successors and assigns thereof, together
with all of the present and former directors, officers, agents and employees of
any of the foregoing, from any and all claims, demands or causes of action of
any kind, nature or description, whether arising in law or equity or upon
contract or tort or under any state or federal law or otherwise, which the
Borrower or such Guarantor has had, now has or has made claim to have against
any such person for or by reason of any act, omission, matter, cause or thing
whatsoever arising from the beginning of time to and including the date hereof,
whether such claims, demands and causes of action are matured or unmatured or
known or unknown.
19. Costs and Expenses. The Borrower hereby reaffirms its agreement under
the Credit Agreement to pay or reimburse the Lender on demand for all costs and
expenses incurred by the Lender in connection with the Credit Agreement, the
Security Documents and all other documents contemplated thereby, including
without limitation all reasonable fees and disbursements of legal counsel.
Without limiting the generality of the foregoing, the Borrower specifically
agrees to pay all fees and disbursements of counsel to the Lender for the
services performed by such counsel in connection with the preparation of this
Amendment and the documents and instruments incidental hereto. The Borrower
hereby agrees that the Lender may, at any time or from time to time in its sole
discretion and without further authorization by the Borrower, make a loan to the
Borrower under the Credit Agreement, or apply the proceeds of any loan, for the
purpose of paying any such fees, disbursements, costs and expenses.
20. Miscellaneous. This Amendment and the Acknowledgment and Agreement of
Guarantor may be executed in any number of counterparts, each of which when so
executed and delivered shall be deemed an original and all of which
counterparts, taken together, shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first written above.
XXXXX FARGO BANK, NATIONAL ASSOCIATION FACTUAL DATA CORP.
By /s/ Xxxxxxx X. XxXxxxxxx
Xxxxxxx X. XxXxxxxxx By /s/ X. X. Xxxxxx
Its Vice President X. X. Xxxxxx
Its President
ACKNOWLEDGMENT AND AGREEMENT OF GUARANTOR
The undersigned, a guarantor of the indebtedness of Factual Data Corp., a
Colorado corporation (the "Borrower"), to Xxxxx Fargo Bank, National
Association, a national banking association (the "Lender") pursuant to a
Guaranty dated as of May 23, 2000 (the "Guaranty"), hereby (i) acknowledges
receipt of the foregoing Amendment; (ii) consents to the terms (including
without limitation the release set forth in paragraph 18 of the Amendment) and
execution thereof; (iii) reaffirms its obligations to the Lender pursuant to the
terms of its Guaranty; and (iv) acknowledges that the Lender may amend, restate,
extend, renew or otherwise modify the Credit Agreement and any indebtedness or
agreement of the Borrower, or enter into any agreement or extend additional or
other credit accommodations, without notifying or obtaining the consent of the
undersigned and without impairing the liability of the undersigned under the
Guaranty for all of the Borrower's present and future indebtedness to the
Lender.
FDC ACQUISITION, INC.
By /s/ X. X. Xxxxxx
X. X. Xxxxxx
Its President
