FIRST AMENDMENT
TO REVOLVING CREDIT AGREEMENT
This FIRST AMENDMENT TO SECOND AMENDED AND RESTATED REVOLVING CREDIT
AGREEMENT (this "Amendment") dated as of March 26, 1997, by and among HPSC,
Inc. (the "Borrower"), a Delaware corporation, American Commercial Finance
Corporation ("ACFC"), a Delaware corporation, The First National Bank of
Boston, Bank of America Illinois, NationsBank, N.A., CoreStates Bank, N.A.,
The Sumitomo Bank, Limited (collectively, the "Banks"), and The First
National Bank of Boston as managing agent (the "Agent") for the Banks and
NationsBank, N.A., as agent for the Banks. Capitalized terms used herein
without definition shall have the meanings set forth in the Credit Agreement
(as defined below).
WHEREAS, the Borrower, the Agent and the Banks are parties to that
certain Second Amended and Restated Revolving Credit Agreement dated as of
December 12, 1996 (as amended, modified or supplemented and in effect from
time to time, the "Credit Agreement");
WHEREAS, the Borrower has requested that certain terms and conditions of
the Credit Agreement be amended and the Banks and the Agent have agreed to so
amend the Credit Agreement;
NOW, THEREFORE, in consideration of the premises contained herein, and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Amendment to the Credit Agreement.
1.1 Certain Definitions. Section 1 of the Credit Agreement is
hereby amended by adding the following definition of "Indenture" and deleting
the definition of Subordinated Debt and inserting in lieu thereof the
following definition of Subordinated Debt:
"Indenture. The Indenture between HPSC Inc. as Issuer and State
Street Bank and Trust Company, as Trustee entered into at the time
of issuance of up to $23,000,000 of Senior Subordinated Notes,
which Indenture contains subordination provisions substantially in
the form of Exhibit K attached hereto."
"Subordinated Debt. The Senior Subordinated Notes Due 2007 issued
by the Borrower in an aggregate principal amount not exceeding
$23,000,000 which are expressly subordinated and made junior to the
payment and performance in full of the Obligations, and evidenced as
such by the Indenture."
1.2 Amendment to Section 6 of the Credit Agreement. Section 6 of
the Credit Agreement is amended by inserting the following new Section 6.23.
"6.23. Subordinated Debt. The Obligations constitute "Secured
Portfolio Debt" under the terms of the Indenture and are entitled to the
full benefit of the subordination provisions contained in Article XI of
the Indenture."
1.3 Amendment to Section 8.4 of the Credit Agreement. Section 8.4
of the Credit Agreement is hereby amended to read as follows:
"8.4 Distributions. The Borrower will not make any Distributions.
The Borrower will not permit ACFC to make any Distributions if a Default
or Event of Default exists at the time of the proposed Distribution."
1.4. Amendment to Section 8.8 of the Credit Agreement. Section 8.8
of the Credit Agreement is hereby amended to read as follows:
"8.8 Other Debt. The Borrower will not, and will not permit any of
its Subsidiaries to, (a) amend, supplement or otherwise modify the terms
of any Subordinated Debt or prepay, redeem or repurchase any
Subordinated Debt (other than, so long as no Default or Event of Default
exists or would result from any such repurchase, repurchases of
Subordinated Debt pursuant to Section 4.16 of the Indenture that do not
exceed (i) $250,000 in principal amount (plus accrued interest), in the
aggregate with respect to all holders of Subordinated Debt, in any
calendar year or (ii) $25,000 in principal amount (plus accrued
interest), in the aggregate with respect to any single holder of
Subordinated Debt, in any calendar year) or (b) other than the Funding
Subsidiaries, prepay, redeem or repurchase Indebtedness outstanding
under the Funding Indenture, the Bravo Credit Agreement or the Sale
Agreements."
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1.5. Amendment to Section 12.1 of the Credit Agreement. Section
12.1 of the Credit Agreement is amended so that paragraphs (j) and (q) read
as follows:
"(j) the holders of all or any part of the Subordinated Debt
or Indebtedness under the Funding Indenture or Indebtedness under
the Bravo Facility Documents shall accelerate the maturity of all or
any part of such debt or such debt shall be prepaid, redeemed or
repurchased in whole or in part; provided, however, that (A) early
termination of the Funding Indenture by Funding I pursuant to the
terms thereof shall not constitute an acceleration by such holders;
(B) early termination of the Bravo Credit Agreement by Bravo
pursuant to the terms thereof shall not constitute an acceleration
by such holders; (C) payments by Bravo pursuant to Sections 2.05(b)
and 2.05(c) of the Purchase Agreement shall not constitute
prepayment of Indebtedness under the Bravo Credit Agreement; and (D)
repurchases of Subordinated Debt pursuant to Section 4.16 of the
Indenture that do not exceed (i) $250,000 in principal amount (plus
accrued interest) in the aggregate with respect to all holders of
Subordinated Debt in any calendar year or (ii) $25,000 in principal
amount (plus accrued interest) in the aggregate with respect to any
single holder of Subordinated Debt in any calendar year, shall not
constitute a Default or Event of Default pursuant to this subsection
12.1(j);"
"(q) any person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as amended)
shall have acquired beneficial ownership (within the meaning of Rule
13d-3 promulgated by the Securities and Exchange Commission under
said Act) of fifty-one percent (51%) or more of the outstanding
shares of common stock of the Borrower or any "Change in Control"
shall occur under the terms of the Indenture;"
1.6. Amendment to Sections 12.1 and 12.2 of the Credit Agreement.
Each of Section 12.1 (third to last line) and Section 12.2 (second line) are
amended by adding a reference to "Section 12.1(q)" in addition to the existing
reference to "Section 12.1(g), Section 12.1(h) and Section 12.1(j)."
2. Conditions to Effectiveness. This Amendment shall not become
effective unless and until:
(a) the Agent receives counterparts of this Amendment executed by each
of the Borrower, the Majority Banks, the Agent and ACFC; and
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(b) each of the Banks and the Agent receives a favorable opinion
addressed to the Banks and the Agent, in form and substance
satisfactory to the Agent, from Hill & Xxxxxx, counsel to the
Borrower and its Subsidiaries, confirming that the Obligations
constitute senior debt pursuant to the Indenture.
(c) all proceedings in connection with the transactions contemplated by
this Amendment and all documents incident hereto, shall be
satisfactory in form and substance to the Agent, and the Agent shall
have received all information and counterpart originals or certified
or other copies of such documents as the Agent may reasonably
request.
3. Representations and Warranties; No Default. The Borrower represents
and warrants to the Agent and the Banks that (a) each and every one of the
representations and warranties made by the Borrower to the Agent and the
Banks in Section 6 or elsewhere in the Credit Agreement or in the other Loan
Documents, as amended by this Amendment, are true and correct in all material
respects on and as of the date hereof except to the extent that any of such
representations and warranties relate, by the express terms thereof, solely
to a date prior hereto; (b) the Borrower has duly and properly performed,
complied with and observed each of its covenants, agreements and obligations
contained in Sections 7 and 8 or elsewhere in the Credit Agreement or the
other Loan Documents, as amended by this Amendment; and (c) no event has
occurred or is continuing and no condition exists which constitutes a Default
or Event of Default.
4. Ratification, Etc. Except as expressly amended by this Amendment, the
Credit Agreement and the other Loan Documents and all documents, instruments
and agreements related thereto, including, but not limited to the Security
Documents, are hereby ratified and confirmed in all respects and shall
continue in full force and effect. The Borrower and ACFC confirm and agree
that the Obligations of the Borrower to the Banks under the Loan Documents,
as amended hereby, are secured by, guarantied under, and entitled to the
benefits, of the Security Documents. The Borrower, the Guarantor, the Agent
and the Banks hereby acknowledge and agree that all references to the Credit
Agreement and the Obligations thereunder contained in any of the Loan
Documents shall be references to the Credit Agreement and the Obligations, as
the same may be amended, modified, supplemented, or restated from time to
time. The Security Documents and the perfected first priority security
interests of the Agent on behalf of the Banks thereunder shall continue in
full force and effect, and the collateral security and guaranties provided
for in the Security Documents shall not be impaired by this Amendment. The
Credit Agreement and this Amendment shall be read and construed as a single
agreement.
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5. Miscellaneous. The Borrower hereby agrees to pay to the Agent, on
demand by the Agent, all reasonable out-of-pocket costs and expenses incurred
or sustained by the Agent in connection with the preparation of this
Amendment and the documents referred to herein (including reasonable legal
fees). Nothing contained herein shall constitute a waiver of, impair or
otherwise affect any Obligations, any other obligation of the Borrower or
ACFC or any rights of the Agent or either of the Banks consequent thereon.
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. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute part of this Amendment
for any other purpose. This Amendment shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts (without
reference to conflict of laws).
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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: CFO
THE FIRST NATIONAL BANK
OF BOSTON, individually and
as Agent
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
BANK OF AMERICA ILLINOIS
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
NATIONSBANK, N.A.
By: /s/ Xxxxx X. Xxx
-------------------------------------
Name: Xxxxx X. Xxx
Title: Vice President
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CORESTATES BANK, N.A.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
THE SUMITOMO BANK, LIMITED
By: /s/ X.X. Xxxxxxx
-------------------------------------
Name: X.X. Xxxxxxx
Title: Vice President & Manager
By: /s/ Xxxxxx XxXxxxxx
-------------------------------------
Name: Xxxxxx XxXxxxxx
Title: Vice President
Agreed to by the undersigned:
AMERICAN COMMERCIAL
FINANCE CORPORATION
By: /s/ Xxxx X. Xxxxxxx
--------------------------
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Exhibit K
Part I: SUBORDINATION PROVISIONS
Part II: Definitions
Part I: Subordination Provisions
ARTICLE XI
SUBORDINATION OF SECURITIES
SECTION 11.1. Securities Subordinated to Secured Portfolio Debt.
The Company and each Securityholder, by its acceptance of Securities,
agree that (a) the payment of the principal of and interest on the Securities
and (b) any other payment or obligations in respect of the Securities,
including on account of the acquisition or redemption of the Securities by
the Company (including, without limitation, pursuant to Articles III or X) is
subordinated, to the extent and in the manner provided in this Article XI, to
the prior payment in full in Cash or Cash Equivalents of all Secured
Portfolio Debt of the Company and that these subordination provisions are
for the benefit of the holders of Secured Portfolio Debt.
This Article XI shall constitute a continuing offer to all Persons who,
in reliance upon such provisions, become holders of, or continue to hold,
Secured Portfolio Debt, and such provisions are made for the benefit of the
holders of Secured Portfolio Debt, and such holders are made obligees
hereunder and any one or more of them may enforce such provisions.
The Securities shall in all respects rank (i) pari passu with all other
unsecured Funded Recourse Debt of the Company outstanding on the Issue Date
and (ii) senior to any Funded Recourse Debt of the Company issued after the
Issue Date, and only Indebtedness of the Company which is Secured Portfolio
Debt shall rank senior to the Securities in accordance with the provisions
set forth herein.
SECTION 11.2. No Payment on Securities in Certain Circumstances.
(a) No payment (by set-off or otherwise) shall be made by or on
behalf of the Company, as applicable, on account of the principal of,
premium, if any, or interest on the Securities (including any repurchases of
Securities), or on account of the redemption provisions of the Securities or
any obligation in respect of the Securities, for Cash or property, (i) upon
the maturity of any Secured Portfolio Debt of the Company, as applicable, by
lapse of time, acceleration (unless waived) or otherwise, unless and until
all principal of and the interest on such Secured Portfolio Debt are first
paid in full in Cash or Cash Equivalents, or (ii) in the event of default in
the payment of any principal or interest on or fee in respect of Secured
Portfolio Debt of the Company when it becomes due and payable, whether at
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maturity or at a date fixed for prepayment or by declaration or otherwise (a
"Payment Default"), unless and until such Payment Default has been cured or
waived or otherwise has ceased to exist; provided that the Company may pay
the Securities without regard to the foregoing if the Company and the Trustee
receive written notice approving such payment from the Representative of the
Designated Secured Portfolio Debt with respect to which such payment default
has occurred and is continuing.
(b) In furtherance of the provisions of Section 11.1, in the event that,
notwithstanding the foregoing provisions of this Section 11.2, any payment or
distribution of assets of the Company shall be received by the Trustee or the
Securityholders at a time when such payment or distribution is prohibited by
the provisions of this Section 11.2, such payment or distribution shall be
held in trust for the benefit of the holders of such Secured Portfolio Debt,
and shall be paid or delivered by the Trustee or such Securityholders, as the
case may be, to the holders of such Secured Portfolio Debt remaining unpaid
or to their Representative or Representatives, ratably according to the
aggregate principal amounts remaining unpaid on account of such Secured
Portfolio Debt held or represented by each, for application to the payment of
all such Secured Portfolio Debt remaining unpaid, to the extent necessary to
pay all such Secured Portfolio Debt in full in Cash or Cash Equivalents after
giving effect to any concurrent payment or distribution to the holders of
such Secured Portfolio Debt.
SECTION 11.3. Securities Subordinated to Prior Payments of All Secured
Portfolio Debt on Dissolution, Liquidation or Reorganization.
Upon any distribution of assets of the Company or upon any dissolution,
winding up, total or partial liquidation or reorganization of the Company,
whether voluntary or involuntary, in bankruptcy, insolvency, receivership or
a similar proceeding or upon assignment for the benefit of creditors or any
marshalling of assets or liabilities:
(a) the holders of all Secured Portfolio Debt of the Company, as
applicable, will first be entitled to receive payment in full in Cash or Cash
Equivalents before the Securityholders are entitled to receive any payment on
account of the principal of, premium, if any, and interest on the Securities
or any obligation in respect of the Securities;
(b) any payment or distribution of assets of the Company of any kind or
character from any source, whether in Cash, property or securities to which
the Securityholders or the Trustee on behalf of the Securityholders would be
entitled (by set-off or otherwise), except for the provisions of this Article
XI, shall be paid by the liquidating trustee or agent or other person making
such a payment or distribution directly to the holders of such Secured
Portfolio Debt or their Representative to the extent necessary to make
payment in full on all such Secured Portfolio Debt remaining unpaid, after
giving effect to any concurrent payment or distribution to the holders of
such Secured Portfolio Debt; and
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(c) in the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company shall be received by the Trustee or the
Securityholders at a time when such payment or distribution is prohibited by
the foregoing provisions, such payment or distribution shall be held in trust
for the benefit of the holders of such Secured Portfolio Debt, and shall be
paid or delivered by the Trustee or such Securityholders, as the case may be,
to the holders of such Secured Portfolio Debt remaining unpaid or to their
Representative or Representatives ratably according to the aggregate
principal amounts remaining unpaid on account of such Secured Portfolio Debt
held or represented by each, for application to the payment of all such
Secured Portfolio Debt remaining unpaid, to the extent necessary to pay all
such Secured Portfolio Debt in full in Cash or Cash Equivalents after giving
effect to any concurrent payment or distribution to the holders of such
Secured Portfolio Debt.
SECTION 11.4. Securityholders to Be Subrogated to Rights of Holders of
Secured Portfolio Debt.
Subject to the payment in full in Cash or Cash Equivalents of all
Secured Portfolio Debt of the Company as provided herein, the Securityholders
shall be subrogated to the rights of the holders of such Secured Portfolio
Debt to receive payments or distributions of assets of the Company applicable
to the Secured Portfolio Debt until all amounts owing on the Securities shall
be paid in full, and for the purpose of such subrogation no such payments or
distributions to the holders of such Secured Portfolio Debt by or on behalf
of the Company, or by or on behalf of the Securityholders by virtue of this
Article XI, which otherwise would have been made to the Securityholders
shall, as between the Company or on account of such Secured Portfolio Debt,
it being understood that the provisions of this Article XI are and are
intended solely for the purpose of defining the relative rights of the
Securityholders, on the one hand, and the holders of such Senior Debt, on the
other hand.
If any payment or distribution to which the Securityholders would
otherwise have been entitled but for the provisions of this Article XI shall
have been applied and the Securityholders, be deemed to be payment by the
Company pursuant to the provisions of this Article XI, to the payment of
amounts payable under Secured Portfolio Debt of the Company, then the
Securityholders shall be entitled to receive from the holders of such Secured
Portfolio Debt any payments or distributions received by such holders of
Secured Portfolio Debt in excess of the amount sufficient to pay all amounts
payable under or in respect of such Secured Portfolio Debt in full in Cash or
Cash Equivalents.
SECTION 11.5. Obligations of the Company Unconditional.
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Nothing contained in this Article XI or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Company and
the Securityholders, the obligation of the Company, which is absolute and
unconditional, to pay to the Securityholders the principal of, premium, if
any, and interest on the Securities as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the Securityholders and creditors of the Company other
than the holders of the Secured Portfolio Debt, nor shall anything herein or
therein prevent the Trustee or any Securityholder from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XI, of the
holders of Secured Portfolio Debt in respect of Cash, property or securities
of the Company received upon the exercise of any such remedy. Notwithstanding
anything to the contrary in this Article XI or elsewhere in this Indenture or
in the Securities, upon any distribution of assets of the Company referred to
in this Article XI, the Trustee, subject to the provisions of Sections 7.1
and 7.2, and the Securityholders shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which such dissolution,
winding up, liquidation or reorganization proceedings are pending, or a
certificate of the liquidating Trustee or agent or other Person making any
distribution to the Trustee or the Securityholders for the purpose of
ascertaining the Persons entitled to participate in such distribution, the
holders of the Secured Portfolio Debt and other Indebtedness of the Company,
the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
XI so long as such court has been apprised of the provisions of, or the
order, decree or certificate makes reference to, the provisions of this
Article XI. Nothing in this Section 11.5 shall apply to the claims of, or
payments to, the Trustee under or pursuant to Section 7.7.
SECTION 11.6. Trustee Entitled to Assume Payments Not Prohibited in
Absence of Notice.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or
by the Trustee unless and until a Trust Officer of the Trustee or any Paying
Agent shall have received, no later than one Business Day prior to such
payment, written notice thereof from the Company or from one or more holders
of Secured Portfolio Debt or from any Representative therefor and, prior to
the receipt of any such written notice, the Trustee, subject to the
provisions of Sections 7.1 and 7.2, shall be entitled in all respects
conclusively to assume that no such fact exists.
SECTION 11.7. Application by Trustee of Assets Deposited with It.
Amounts deposited by the Company in trust with the Trustee pursuant to
and in accordance with Article VIII shall be for the sole benefit of
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Securityholders and, to the extent (i) the making of such deposit did not, or
after giving effect to such deposit does not, result in any contravention of
any term or provision of the Revolver Agreement and (ii) allocated for the
payment of Securities, shall not be subject to the subordination provisions
of this Article XI. Otherwise, any deposit of assets with the Trustee or the
Paying Agent (whether or not in trust) for the payment of principal of or
interest on any Securities shall be subject to the provisions of Sections
11.1, 11.2, 11.3 and 11.4; provided that, if prior to one Business Day
preceding the date on which by the terms of this Indenture any such assets
may become distributable for any purpose (including without limitation, the
payment of either principal of or interest on any Security) the Trustee or
such Paying Agent shall not have received with respect to such assets the
written notice provided for in Section 11.6, then the Trustee or such Paying
Agent shall have full power and authority to receive such assets and to apply
the same to the purpose for which they were received, and shall not be
affected by any notice to the contrary which may be received by it on or
after such date.
SECTION 11.8. Subordination Rights Not Impaired by Acts or Omissions of
the Company or Holders of Secured Portfolio Debt.
No right of any present or future holders of any Secured Portfolio Debt
to enforce subordination provisions contained in this Article XI shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of the Company or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by the Company with the terms of this
Indenture, regardless of any knowledge thereof which any such holder may have
or be otherwise charged with. The holders of Secured Portfolio Debt may
extend, renew, modify or amend the terms of the Secured Portfolio Debt or any
security therefor and release; sell or exchange such security and otherwise
deal freely with the Company, all without affecting the liabilities and
obligations of the parties to this Indenture or the Securityholders.
SECTION 11.9. Securityholders Authorize Trustee to Effectuate
Subordination of Securities.
Each Securityholder by his acceptance thereof authorizes and expressly
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provisions contained in this
Article XI and to protect the rights of the Securityholders pursuant to this
Indenture, and appoints the Trustee his attorney-in-fact for such purpose,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors
or any other marshalling of assets and liabilities of the Company), the
immediate filing of a claim for the unpaid balance of his Securities in the
form required in said proceedings and cause said claim to be approved. If the
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Trustee does not file a proper claim or proof of debt in the form required in
such proceeding prior to 30 days before the expiration of the time to file
such claim or claims, then the holders of the Secured Portfolio Debt or their
representative are or is hereby authorized to have the right to file and are
or is hereby authorized to file an appropriate claim for and on behalf of the
Securityholders. Nothing herein contained shall be deemed to authorize the
Trustee or the holders of Secured Portfolio Debt or their Representative to
authorize or consent to or accept or adopt on behalf of any Securityholder
any plan of reorganization, arrangement, adjustment or composition affecting
the Securities or the rights of any Securityholder thereof, or to authorize
the Trustee or the holders of Secured Portfolio Debt or their Representative
to vote in respect of the claim of any Securityholder in any such proceeding.
SECTION 11.10. Right of Trustee to Hold Secured Portfolio Debt.
The Trustee shall be entitled to all of the rights set forth in this
Article XI in respect of any Secured Portfolio Debt at any time held by it to
the same extent as any other holder of Secured Portfolio Debt, and nothing in
this Indenture shall be construed to deprive the Trustee of any of its rights
as such holder.
SECTION 11.11. Article XI Not to Prevent Events of Default.
The failure to make a payment on account of principal of, premium, if
any, or interest on the Securities by reason of any provision of this Article
XI shall not be construed as preventing the occurrence of a Default or an
Event of Default under Section 6.1 or in any way limit the rights of the
Trustee or any Securityholder to pursue any other rights or remedies with
respect to the Securities.
SECTION 11.12. No Fiduciary Duty of Trustee to Holders of Secured Port-
folio Debt.
The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Secured Portfolio Debt, and shall not be liable to any such holders (other
than for its willful misconduct or negligence) if it shall in good faith
mistakenly pay over or distribute to the Securityholders of the Securities or
the Company or any other Person, Cash, property or securities to which any
holders of Secured Portfolio Debt shall be entitled by virtue of this Article
XI or otherwise. Nothing in this Section 11.12 shall affect the obligation of
any other such Person to hold such payment for the benefit of, and to pay
such payment over to, the holders of Secured Portfolio Debt or their
Representative. In the event of any conflict between the fiduciary duty of
the Trustee to the Holders of Securities and to the holders of Secured
Portfolio Debt, the Trustee is expressly authorized to resolve such conflict
in favor of the Securityholders.
SECTION 11.13. Acceleration of Payment of Securities.
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If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify the holders of the Designated
Secured Portfolio Debt (or their Representative) of the acceleration. If any
Designated Secured Portfolio Debt is outstanding, the Company may not pay the
Securities until five days after such holders or the Representative of the
Designated Secured Portfolio Debt receive notice of such acceleration and,
thereafter, may pay the Securities only if this Article XI otherwise permits
payment at that time.
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Part II: Definitions
SECTION 1.1 Definitions.
"Acceleration Notice" shall have the meaning specified in Section 6.2.
"Acquired Recourse Debt" means Funded Recourse Debt or Disqualified
Capital Stock of any Person existing at the time such Person becomes a
Subsidiary of the Company or is merged or consolidated into or with the
Company or one of its Subsidiaries.
"Acquistion" means the purchase or other acquisition of any Person or
substantially all the assets of any Person by any other Person, whether by
purchase, merger, consolidation or other transfer, and whether or not for
consideration.
"Affiliate" means any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company.
For purposes of this definition, the term "control" means the power to direct
the management and policies of a Person, directly or through one or more
intermediaries, whether through the ownership of voting securities, by
contract or otherwise, provided that a beneficial owner of 10% or more of the
total voting power normally entitled to vote in the election of directors,
managers or trustees, as applicable, shall for such purposes be deemed to
constitute control.
"Affiliate Transaction" shall have the meaning specified in Section
4.10.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Attributable Indebtedness" means, with respect to any particular
lease under which any Person is at the time liable and at any date as of
which the amount thereof is to be determined, the present value of the total
net amount of rent required to be paid by such Person under the lease during
the primary term thereof, without giving effect to any renewals at the option
of the lessee, discounted from the respective due dates thereof to such date
at the rate of interest per annum implicit in the terms of the lease. As used
1
in the preceding sentence, the net amount of rent under any lease for any
such period shall mean the sum of rental and other payments required to be
paid with respect to such period by the lessee thereunder excluding any
amounts required to be paid by such lessee on account of maintenance and
repairs, insurance, taxes, assessments, water rates or similar charges. In
the case of any lease which is terminable by the lessee upon payment of a
penalty, such net amount of rent shall also include the amount of such
penalty, but no rent shall be considered as required to be paid under such
lease subsequent to the first date upon which it may be so terminated.
"Average Life" means, as of the date of determination, with respect to
any security or instrument, the quotient obtained by dividing (i) the sum of
the product of (a) the number of years from the date of determination to the
date or dates of each successive scheduled principal (or redemption) payment
of such security or instrument and (b) the amount of each such respective
principal (or redemption) payment by (ii) the sum of all such principal (or
redemption) payments.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar Federal,
state or foreign law for the relief of debtors.
"Beneficial Owner," for purposes of the definition of Change of
Control, has the meaning attributed to it in Rules 13d-3 and 13d-5 under the
Exchange Act (as in effect on the Issue Date), whether or not applicable,
except that a "person" (as such term is used for purposes of such Rules)
shall be deemed to have "beneficial ownership" of all shares that such
person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person or any committee of the Board of Directors of such
Person authorized, with respect to any particular matter, to exercise the
power of the Board of Directors of such Person. With respect to any Person
that is not organized as a corporation, "Board of Directors" shall refer to
the entity or entities having similar powers.
"Board Resolution" means, with respect to any Person, a duly adopted
resolution of the Board of Directors of such Person.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York, New York
or the city in which the principal office of the Trustee is located are
authorized or obligated by law or executive order to close.
"Capitalized Lease Obligation" means rental obligations under a lease
that are required to be capitalized for financial reporting purposes in
accordance with GAAP, and the amount of Indebtedness represented by such
obligations shall be the capitalized amount of such obligations, as
determined in accordance with GAAP.
2
"Capital Stock" means, (i) with respect to any Person formed as a
corporation, any and all shares, interests, rights to purchase (other than
convertible or exchangeable Indebtedness), warrants, options, participations
or other equivalents of or interests (however designated) in stock issued by
that corporation and (ii) with respect to any Person formed other than as a
corporation, any and all partnership or other equity interests of such Person.
"Cash" means such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public and
private debts.
"Cash Equivalent" means (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof) maturing within one
year after the date of acquisition, (ii) time deposits, certificates of
deposit, bankers' acceptances and commercial paper issued by the parent
corporation of any domestic commercial bank of recognized standing having
capital and surplus in excess of $1 billion, (iii) commercial paper issued by
any other issuer which is rated in the case of commercial paper which matures
one year or more after the date of acquisition, at least A-1 or the
equivalent thereof by Standard & Poor's Corporation ("S&P") or at least P-1
or the equivalent thereof by Xxxxx'x Investors Service, Inc. ("Moody's"), (iv)
securities commonly known as "short-term bank notes" issued by any commercial
bank denominated in U.S. Dollars which at the time of purchase is rated at
least A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent
thereof by Moody's, (v) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clauses (i)
and (ii) above entered into with any commercial bank meeting the
qualifications specified in clause (ii) above and (vi) shares of any money
market fund, or similar fund, in each case having assets in excess of $1
billion, which invests predominantly in investments of the type described in
clauses (i), (ii), (iii), (iv) or (v) above.
"Change of Control" means (i) any sale, merger or consolidation with or
into any Person or any transfer or other conveyance, whether direct or
indirect, of all or substantially all of the assets of the Company, on a
consolidated basis, in one transaction or in a series of related
transactions, if, immediately after giving effect to such transaction, any
"person" or "group" (as such terms are used for purposes of Sections 13(d)
and 14(d) of the Exchange Act, whether or not applicable) is or becomes the
"beneficial owner," directly or indirectly, of more than 50% of the total
voting power in the aggregate normally entitled to vote in the election of
directors, managers or trustees, as applicable, of the transferee or
surviving entity, (ii) any "person" or "group" (as such terms are used for
purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or not
applicable) is or becomes the "beneficial owner," directly or indirectly, of
more than 50% of the total voting power in the aggregate of all classes of
Capital Stock of the Company then outstanding normally entitled to vote in
elections of directors or (iii)
3
during any period of 12 consecutive months after the Issue Date, individuals
who at the beginning of any such 12-month period constituted the Board of
Directors of the Company (together with any new directors whose election by
such Board or whose nomination for election by the shareholders of the
Company was approved by a vote of a majority of the directors then still in
office who were either directors at the beginning of such period or whose
election, recommendation, or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company then in office.
"Change of Control Offer" shall have the meaning specified in Section
10.1.
"Change of Control Offer Period" shall have the meaning specified in
Section 10.1.
"Change of Control Purchase Date" shall have the meaning specified in
Section 10.1.
"Change of Control Purchase Price" shall have the meaning specified in
Section 10.1.
"Change of Control Put Date" shall have the meaning specified in Section
10.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means HPSC, Inc., a Delaware corporation, until a successor
replaces it pursuant to this Indenture, and thereafter means such successor.
"Consolidated EBITDA" means, with respect to any Person, for any period,
the Consolidated Net Income of such Person for such period adjusted to add
thereto (to the extent deducted from net revenues in determining Consolidated
Net Income), without duplication, the sum of (i) consolidated income tax
expense for such period, (ii) consolidated depreciation and amortization
expense for such period, (iii) non-cash charges of such Person and its
Consolidated Subsidiaries during such period less the amount of all cash
payments made during such period to the extent such payments relate to
non-cash charges that were added back in determining Consolidated EBITDA for
such period, (iv) Consolidated Interest Expense for such period and (v) to
the extent not excluded from the Consolidated Net Income of such Person for
such period, losses (determined on a consolidated basis in accordance with
GAAP) which are either extraordinary (as determined in accordance with GAAP)
or are unusual or nonrecurring.
"Consolidated Interest Coverage Ratio" of any Person on any date of
determination (the "Transaction Date") means the ratio, on a pro forma basis,
of (a) the aggregate amount of Consolidated EBITDA of such Person
attributable to continuing operations and businesses (exclusive of amounts,
whether positive or negative,
4
attributable to operations and businesses permanently discontinued or
disposed of) for the Reference Period to (b) the aggregate Consolidated
Interest Expense of such Person (exclusive of amounts attributable to
operations and businesses permanently discontinued or disposed of, but only
to the extent that the obligations giving rise to such Consolidated Interest
Expense would no longer be obligations contributing to such Person's
Consolidated Interest Expense subsequent to the Transaction Date) during the
Reference Period; provided, that for purposes of such calculation, (i)
Acquisitions which occurred during the Reference Period or subsequent to the
Reference Period and on or prior to the Transaction Date (including any
Consolidated EBITDA associated with such Acquisition) shall be assumed to
have occurred on the first day of the Reference Period, (ii) transactions
giving rise to the need to calculate the Consolidated Interest Coverage Ratio
shall be assumed to have occurred on the first day of the Reference Period,
(iii) the incurrence or repayment of any Indebtedness or issuance of any
Disqualified Capital Stock during the Reference Period or subsequent to the
Reference Period and on or prior to the Transaction Date (and the application
of the proceeds therefrom to the extent used to refinance or retire other
Indebtedness), other than under a revolving credit or similar facility to the
extent that the proceeds were used to finance working capital requirements in
the ordinary course of business, shall be assumed to have occurred on the
first day of such Reference Period and (iv) the Consolidated Interest Expense
of such Person attributable to interest on any Indebtedness or dividends on
any Disqualified Capital Stock bearing a floating interest (or dividend) rate
shall be computed on a pro forma basis as if the rate in effect on the
Transaction Date had been the applicable rate of the entire period, unless
such Person or any of its Subsidiaries is a party to a Hedging and Interest
Swap Obligation (which shall remain in effect for the 12-month period
immediately following the Transaction Date) that has the effect of fixing the
interest rate on the date of computation, in which case such rate (whether
higher or lower) shall be used.
"Consolidated Interest Expense" of any Person means, for any period, the
aggregate amount (without duplication and determined in each case in
accordance with GAAP) of (a) interest expensed or capitalized, paid, accrued,
or scheduled to be paid or accrued (including, in accordance with the
following sentence, interest attributable to Capitalized Lease Obligations)
of such Person and its Consolidated Subsidiaries during such period,
including (i) original issue discount and noncash interest payments or
accruals on any Indebtedness, (ii) the interest portion of all deferred
payment obligations and (iii) all commissions, discounts and other fees and
charges owed with respect to bankers' acceptances and letters of credit
financing and currency and Hedging and Interest Swap Obligations, in each
case to the extent attributable to such period and (b) the amount of
dividends accrued or payable (other than in additional shares of such
Preferred Stock) by such Person or any of its Consolidated Subsidiaries in
respect of Preferred Stock (other than by Subsidiaries of such Person to such
Person or such Person's Consolidated Subsidiaries). For purposes of this
definition, (x) interest on a Capitalized Lease Obligation shall be deemed to
accrue at an interest rate reasonably determined by the Company to be the
rate of interest implicit in such Capitalized Lease Obligation in accordance
with GAAP, (y) interest expense attributable to any
5
Indebtedness represented by the guaranty by such Person or a Subsidiary of
such Person of an obligation of another Person shall be deemed to be the
interest expense attributable to the Indebtedness guaranteed, and (z)
dividends in respect of Preferred Stock shall be deemed to be an amount equal
to the actual dividends paid divided by one minus the applicable actual
combined Federal, state, local and foreign income tax rate of the Company and
its Consolidated Subsidiaries (expressed as a decimal).
"Consolidated Net Income" means, with respect to any Person for any
period, the net income (or loss) of such Person and its Consolidated
Subsidiaries (determined on a consolidated basis in accordance with GAAP) for
such period, (i) adjusted to exclude (only to the extent included in
computing such net income (or loss) and without duplication); (a) net gains
(but not net losses) from the sale, lease, transfer or other dispositions of
assets or property not in the ordinary course of business; (b) net gains (but
not net losses) which are either extraordinary (as determined in accordance
with GAAP) or are either unusual or nonrecurring, (c) the net income, if
positive, of any other Person accounted for by the equity method of
accounting, except to the extent of the amount of any dividends or
distributions actually paid in cash to such Person or a Consolidated
Subsidiary of such Person during such period, but in any case not in excess
of such Person's pro rata share of such Person's net income for such period,
(d) the net income, if positive, of any Person acquired in a pooling-
of-interests transaction for any period prior to the date of such
acquisition, (e) the net income, if positive, of any of such Person's
Consolidated Subsidiaries in the event and solely to the extent that the
declaration or payment of dividends or similar distributions is not at the
time permitted by operation of the terms of its charter or bylaws or any
other agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Consolidated Subsidiary, (f) all
gains (but not losses) from currency exchange transactions not in the
ordinary course of business consistent with past practice and (g) any
non-cash expense determined in accordance with GAAP in connection with a
transaction between the Company and the ESOP; and (ii) adjusted to include
the amount of any dividends or distributions actually paid in cash to such
Person or a Consolidated Subsidiary of such Person by an Unrestricted
Subsidiary in an amount not to exceed such Person's pro rata share of such
Unrestricted Subsidiary's net income.
"Consolidated Net Worth" of any Person at any date means the aggregate
consolidated stockholders' equity of such Person (plus amounts of equity
attributable to Preferred Stock) and its Consolidated Subsidiaries, as would
be shown on the consolidated balance sheet of such Person prepared in
accordance with GAAP, adjusted to exclude (to the extent included in
calculating such equity), (a) the amount of any such stockholders' equity
attributable to Disqualified Capital Stock or treasury stock of such Person
and its Consolidated Subsidiaries, (b) all upward revaluations and other
write-ups in the book value of any asset of such Person or a Consolidated
Subsidiary of such Person subsequent to the Issue Date and (c) all
investments in Subsidiaries that are not Consolidated Subsidiaries and in
Persons that are not Subsidiaries.
6
"Consolidated Subsidiary" means, for any Person, each Subsidiary of such
Person (whether now existing or hereafter created or acquired) the financial
statements of which are consolidated for financial statement reporting
purposes with the financial statements of such Person in accordance with GAAP.
"Customer" means any Person for whom the Company or any of its
Subsidiaries finances property, equipment, goods, leasehold improvements or
working capital requirements.
"Customer Receivable" means any obligation of any kind or nature,
however denominated, to the Company or any of its Subsidiaries (i) incurred
by Customers in the ordinary course of the respective business of the Company
and its Subsidiaries or (ii) arising from the purchase or acquisition by the
Company or any of its Subsidiaries of any lease, promissory note, account
receivable, loan or similar financial arrangement, or any right or asset
reasonably related to any of the foregoing.
"Covenant Defeasance" shall have the meaning specified in Section 8.3.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means any event or condition that is, or after notice or
passage of time or both would be, an Event of Default.
"Defaulted Interest" shall hae the meaning specified in Section 2.12.
"Definitive Securities" means Securities that are in the form of Security
attached hereto as Exhibit A that do not include the information called for
by footnotes 1 and 2 thereof.
"Depository" means, with respect to the Securities issuable or issued in
whole or in part in global form, the Person specified in Section 2.3 as the
Depository with respect to the Securities, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter. "Depository" shall mean or include such successor.
"Designated Secured Portfolio Debt" means (a) the Indebtedness under the
Revolver Agreement and (b) any other Secured Portfolio Debt which (i) at the
date of determination has an aggregate principal amount outstanding of, or
under which at the date of determination the holders thereof are committed to
lend up to, at least $10,000,000 and (ii) is specifically designated by the
Company in the instrument governing such Secured Portfolio Debt as
"Designated Secured Portfolio Debt" for purposes of this Indenture.
7
"Disqualified Capital Stock" means (a) except as set forth in (b), with
respect to any Person, Capital Stock of such Person that, by its terms or by
the terms of any security into which it is then convertible, exercisable or
exchangeable, is, or upon the happening of an event or the passage of time
would be, required to be redeemed or repurchased (including at the option of
the holder thereof) by such Person or any of its Subsidiaries, in whole or in
part, on or prior to the Stated Maturity of the Securities and (b) with
respect to any Subsidiary of any Person (including with respect to any
Subsidiary of the Company), any Capital Stock of such Subsidiary other than
any common stock with no preference, privileges, or redemption or repayment
provisions.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ESOP" means, collectively, the HPSC, Inc. Employee Stock Ownership Plan
and the Supplemental HPSC, Inc. Employee Stock Ownership Plan, and any
successor employee stock ownership plans having terms similar to the
foregoing plans, as amended from time to time by a resolution of the Board of
Directors of the Company or a duly authorized committee thereof.
"Event of Default" shall have the meaning specified in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"Exempted Affiliate Transaction" means (a) transactions solely between
the Company and any of its Wholly-Owned Subsidiaries or solely among
Wholly-Owned Subsidiaries of the Company, (b) transactions permitted under
Section 4.3 hereof, (c) customary employee compensation arrangements approved
by a majority of independent (as to such transactions) members of the Board
of Directors of the Company, (d) reasonable fees and compensation paid to,
and indemnities to, and directors and officers and ERISA-based fiduciary
liability insurance provided on behalf of, officers, directors, agents or
employees of the Company or any of its Subsidiaries or the ESOP or any
trustee thereof, in each case in the ordinary course of business and as
determined in good faith by the Board of Directors of the Company and (e) any
guaranty by the Company or any of its Subsidiaries of any Indebtedness of the
Company and/or any Wholly-Owned Subsidiary of the Company (but not of any
other Person).
"Funded Recourse Debt" means, without duplication, any Indebtedness of
the Company or any Subsidiary of the Company which by its terms matures at or
is extendible or renewable at the sole option of the obligor without
requiring the consent of the obligee to a date more than one year after the
date of the creation or incurrence of such obligation; provided that Funded
Recourse Debt shall not include any Non-Recourse Indebtedness of the Company
or any Subsidiary of the Company.
8
"GAAP" means United States generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession as in effect on the Issue Date.
"Global Security" means a Security that contains the paragraph referred
to in footnote 1 and the additional schedule referred to in footnote 2 to the
form of Security attached hereto as Exhibit A.
"Hedging and Interest Swap Obligations" means, with respect to any
Person, the obligations of such Person under (i) interest rate swap
agreements, interest rate cap agreements and interest rate collar agreements
and (ii) other agreements or agreements designed to protect such Person
against fluctuations in interest rates.
"Holder" or "Securityholder" means the Person in whose name a Security
is registered on the Registrar's book or, for purposes of Section 4.16, the
beneficial owner of Securities held in global form.
"Indebtedness" of any Person means, without duplication: (a) all
liabilities and obligations, contingent or otherwise, of any such Person, (i)
in respect of borrowed money (whether or not the recourse of the lender is to
the whole of the assets of such Person or only to a portion thereof), (ii)
evidenced by bonds, notes, debentures or similar instruments, (iii)
representing the balance deferred and unpaid of the purchase price of any
property or services, except (other than accounts payable or other
obligations to trade creditors which have remained unpaid for greater than 90
days past their original due date unless contested in good faith) those
incurred in the ordinary course of its business that would constitute
ordinarily a trade payable to creditors, (iv) evidenced by bankers'
acceptances or similar instruments issued or accepted by banks, (v) for the
payment of money relating to a Capitalized Lease Obligation, or (vi)
evidenced by a letter of credit or a reimbursement obligation of such Person
with respect to any letter of credit; (b) all net obligations of such Person
under Hedging and Interest Swap Obligations; (c) all liabilities and
obligations of others of the kind described in the preceding clauses (a) or
(b) that such Person has guaranteed or that is otherwise legal liability or
which are secured by any assets or property of such Person; and (d) all
immediately enforceable obligations to purchase, redeem or acquire any
Capital Stock of such Person (other than, in the case of the Company or any
of its Subsidiaries, obligations under the Restricted Stock Plans or the
Stock Options Plans).
"Indenture" means this Indenture as amended or supplemented from time to
time in accordance with the terms hereof.
"Independent Committee" shall have the meaning set forth in Section 4.10.
9
"Interest Payment Date" means the stated due date of an installment of
interest on the Securities.
"Investment" by any person in any other person means (without
duplication): (a) the acquisition (whether by purchase, merger, consolidation
or otherwise) by such Person (whether for cash, property, services,
securities or otherwise) of Capital Stock, bonds, notes, debentures,
partnership or other ownership interests or other securities, including any
options or warrants, of such other Person or any agreement to make any such
acquisition; (b) the making by such Person of any deposit with, or advance,
loan or other extension of credit to, such other Person (including the
purchase of property from another Person subject to an understanding or
agreement, contingent or otherwise, to resell such property to such other
Person) or any commitment to make any such advance, loan or extension (but
excluding accounts receivable or deposits arising in the ordinary course of
business); (c) other than guarantees of Indebtedness of the company to the
extent permitted by Section 4.11 hereof, the entering into by such Person of
any guarantee of, or other credit support or contingent obligation with
respect to, Indebtedness or other liability of such other Person; and (d) the
making of any capital contribution by such Person to such other Person.
"Issue Date" means the date of first issuance of the Securities under
this Indenture.
"Legal Defeasance" shall have the meaning specified in Section 8.2.
"Lien" means any mortgage, lien, pledge, charge, security interest, or
other encumbrance of any kind, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other title
retention agreement and any lease deemed to constitute a security interest
and any option or other agreement to give any security interest).
"Maturity Date" means, when used with respect to any Security, the date
specified on such Security as the fixed date on which the final installment
of principal of such Security is due and payable (in the absence of any
acceleration thereof pursuant to the provisions of this Indenture regarding
acceleration of Indebtedness or any redemption thereof pursuant to Article
III of this Indenture, or any Change of Control Offer or repurchase upon the
death of the Holder of such Security).
"Net Cash Proceeds" means the aggregate amount of Cash and Cash
Equivalents received by the company in the case of a sale of Qualified
Capital Stock plus, in the case of an issuance of Qualified Capital Stock
upon any exercise, exchange or conversion of securities (including options,
warrants, rights and convertible or exchangeable debt) of the Company that
were issued for cash on or after the Issue Date, the amount of cash
originally received by the Company upon the issuance of such securities
(including
10
options, warrants, rights and convertible or exchangeable debt) less, in each
case, the sum of all payments, fees, commissions and reasonable and
customary) expenses (including, without limitation, the fees and expenses of
legal counsel and investment banking fees and expenses) incurred in
connection with such sale of Qualified Capital Stock.
"Non-Receivable Asset" means any asset, property or right of the Company
or any of its Subsidiaries, other than any Customer Receivable, or asset
related to such Customer Receivable, such as inventory, records, intellectual
property and proceeds of Customer Receivables.
"Non-Recourse Indebtedness" means Indebtedness or that portion of
Indebtedness (i) as to which neither the Company nor any of its Subsidiaries
(a) provide credit support (including any undertaking, agreement or instrument
which would constitute Indebtedness), (b) is directly or indirectly liable or
(c) constitutes the lender and (ii) with respect to which no default would
permit (upon notice, lapse of time or both) any holder of any other
Indebtedness of the Company or any Subsidiary to declare a default on such
other Indebtedness or cause the payment therefor to be accelerated or payable
prior to its stated maturity.
"Notice of Default" shall have the meaning specified in Section 6.1(4).
"Obligation" means any principal, premium, interest, penalties, fees,
reimbursements, damages, indemnification and other liabilities relating to
obligations of the Company under the Securities or this Indenture.
"Officer" means, with respect to the Company, the Chief Executive
Officer, the President, any Executive or Senior Vice President, the Chief
Financial Officer, the Treasurer, the Controller, or the Secretary of the
Company.
"Officers' Certificate" means, with respect to the Company, a
certificate signed by two Officers or by an Officer and an Assistant
Secretary of the Company and otherwise complying with the requirements of
Sections 12.4 and 12.5.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee complying with the requirements of
Sections 12.4 and 12.5.
"Outstanding" as used with reference to the Securities shall have the
meaning specified in Section 2.8.
"Paying Agent" shall have the meaning specified in Section 2.3.
"Permitted Lien" means any of the following:
11
(a) Liens existing on the Issue Date;
(b) Liens imposed by governmental authorities for taxes, assessments or
other charges not yet subject to penalty or which are being
converted in good faith and by appropriate proceedings, if adequate
reserves with respect thereto are maintained on the books of the
Company in accordance with GAAP;
(c) Statutory Liens of carriers, warehousemen, mechanics, materialmen,
landlords, repairmen or other like Liens arising by operation of
law in the ordinary course of business provided that (i) the
underlying obligations are not overdue for a period of more than 30
days or (ii) such Liens are being contested in good faith and by
appropriate proceedings and adequate reserves with respect thereto
are maintained on the books of the Company in accordance with GAAP;
(d) Liens securing the performance of bids, trade contracts (other than
for borrowed money), leases statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(e) Easements, rights-of-way, zoning, similar restrictions and other
similar encumbrances or title effects which, singly or in the
aggregate, do not in any case materially detract from the value of
the property subject thereto (as such property is used by the
Company or any of its Subsidiaries) or interfere with the ordinary
conduct of the business of the Company or any of its Subsidiaries;
(f) Liens arising by operation of law in connection with judgments, only
to the extent, for an amount and for a period not resulting in an
Event of Default with respect thereto;
(g) Pledges or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and
other types of social security legislation;
(h) Liens on the property or assets of a Person existing at the time
such person becomes a Subsidiary or is merged with or into the
Company or a Subsidiary, provided in each case that such Liens were
in existence prior to the date of such acquisition, merger or
consolidation were not incurred in anticipation therof and do not
extend to any other assets;
(i) Liens on property or assets existing at the time of the acquisition
thereof by the Company or any of its Subsidiaries, provided that
such Liens were
12
in existence prior to the date of such acquisition and were not
incurred in anticipation thereof;
(j) Liens securing Refinancing Indebtedness incurred to refinance any
Indebtedness that was previously so secured in a manner no more
adverse to the Holders of the Securities than the terms of the
Liens securing such refinanced Indebtedness;
(k) Liens securing Portfolio Debt;
(l) Liens securing Purchase Money Indebtedness or Capitalized Lease
Obligations permitted to be incurred under clause (c) of the
definition of "Permitted Recourse Debt";
(m) Liens in favor of the Company or any Subsidiary of the Company; and
(n) Liens securing the Securities.
"Permitted Recourse Debt" means any of the following:
(a) Indebtedness of the Company evidenced by the Securities pursuant to
this Indenture up to the amounts specified herein as of the Issue
Date;
(b) Indebtedness of the Company and its Subsidiaries under the Revolver
Agreement (including any Indebtedness issued to refinance, refund
or replace such Indebtedness in whole or in part, including any
extended maturity or increase in the amount thereof);
(c) Indebtedness of the Company and its Subsidiaries (in addition to
Indebtedness permitted by any other clause of this definition) in
an aggregate amount outstanding at any time (including any
Indebtedness issued to refinance, replace or refund such
Indebtedness in whole or in part) of up to $1,500,000;
(d) Refinancing Indebtedness of the Company and its Subsidiaries
incurred with respect to any Indebtedness or Disqualified Capital
Stock, as applicable, described in clause (ii) of the proviso
contained in Section 4.11 or described in clause (e) of this
definition of "Permitted Recourse Debt";
(e) Indebtedness of the Company owed to any Wholly-Owned Subsidiary,
and Indebtedness of any Subsidiary of the Company owed to any other
Wholly-Owned Subsidiary or to the Company; provided that any such
obligations of the Company owed to any Wholly-Owned Subsidiary of
the Company shall be unsecured and subordinated in all respects to
the
13
Company's obligations pursuant to the Securities; and, provided,
further, that if any Wholly-Owned Subsidiary ceases to be a
Wholly-Owned Subsidiary of the Company or if the Company or any
Wholly-Owned Subsidiary transfers such Indebtedness to any Person
(other than to the Company or another Wholly-Owned Subsidiary),
such events, in each case, shall constitute the incurrence of such
Indebtedness by the Company or such Wholly-Owned Subsidiary, as the
case may be, at the time of such event;
(f) Indebtedness of the Company and its Subsidiaries existing on the
Issue Date;
(g) Indebtedness of the Company and its Subsidiaries incurred solely in
respect of bankers acceptances, letters of credit, surety bonds and
performance bonds (in each case to the extent that such incurrence
does not result in the incurrence of any obligation for the payment
of borrowed money of others) issued (i) in connection with the
incurrence or refinancing of Secured Portfolio Debt and (ii) in the
ordinary course of business consistent with past practice;
(h) Indebtedness of the Company and its Subsidiaries represented by
Hedging and Interest Swap Obligations entered into in the ordinary
course of business consistent with past practice and related to
Indebtedness of the Company and its Subsidiaries otherwise
permitted to be incurred pursuant to the Indenture; and
(i) Secured Portfolio Debt.
"Person" or "person" means any corporation, individual, limited
liability company, joint stock company, joint venture, partnership,
unincorporated association, governmental regulatory entity, country, state or
political subdivision thereof, trust, municipality or other entity.
"Principal" of any Indebtedness means the principal of such Indebtedness
plus, without duplication, any applicable premium, if any, on such
Indebtedness.
"Pro Rata Portion" shall have the meaning set forth in Section 11.1(d).
"Property" means any right or interest in or to property or assets of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Purchase Money Indebtedness" means Indebtedness of the Company or its
Subsidiaries to the extent that (i) such Indebtedness is incurred in
connection with the acquisition of specialized assets and property (the
"Subject Assets") for the business of the
14
Company or its Subsidiaries, including Indebtedness which existed at the time
of the acquisition of such Subject Asset and was assumed in connection
therewith, and (ii) the Liens securing such Indebtedness are limited to the
Subject Asset.
"Qualified Capital Stock" means any Capital Stock of the Company that is
not Disqualified Capital Stock.
"Qualified Exchange" means any legal defeasance, redemption, retirement,
repurchase or other acquisition of Capital Stock or Subordinated
Indebtedness of the Company issued on or after the Issue Date with the Net
Cash Proceeds received by the Company from the substantially concurrent
(i.e., within 60 days) sale (other than to a Subsidiary of the Company or
the ESOP) of Qualified Capital Stock or any issuance of Qualified Capital
Stock in exchange for any Capital Stock or Subordinated Indebtedness issued
on or after the Issue Date.
"Record Date" means a Record Date specified in the Securities whether or
not such Record Date is a Business Day.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to Article III
of this Indenture and Paragraph 5 of such Security.
"Redemption Price," when used with respect to any Security to be
redeemed, means the redemption price for such redemption pursuant to
Paragraph 5 of such Security, which shall include, without duplication, in
each case, accrued and unpaid interest to the Redemption Date.
"Reference Period" with regard to any Person means the four full fiscal
quarters (or such lesser period during which such Person has been in
existence) of such Person ended immediately preceding any date upon which
any determination is to be made pursuant to the terms of the Securities or
this Indenture.
"Refinancing Indebtedness" means Indebtedness or Disqualified Capital
Stock (a) issued in exchange for, or the proceeds from the issuance and sale
of which are used substantially concurrently to repay, redeem, defease,
refund, refinance, discharge or otherwise retire for value, in whole or in
part, or (b) constituting an amendment, modification or supplement to, or a
deferral or renewal of (each of (a) and (b) above is a "Refinancing"), any
Indebtedness or Disqualified Capital Stock in a principal amount or, in the
case of Disqualified Capital Stock, liquidation preference, not to exceed
(after deduction of reasonable and customary fees and expenses incurred in
connection with the Refinancing) the lesser of (i) the principal amount or,
in the case of Disqualified Capital Stock, liquidation preference, of the
Indebtedness or Disqualified Capital Stock so refinanced and (ii) if such
Indebtedness being refinanced was issued with an original issue discount, the
accreted value thereof (as determined in accordance with GAAP) at
15
the time of such Refinancing; provided that (A) such Refinancing Indebtedness
of any Subsidiary of the Company shall only be used to refinance outstanding
Indebtedness or Disqualified Capital Stock of such Subsidiary, (B)
Refinancing Indebtedness shall (x) not have an Average Life shorter than the
Indebtedness or Disqualified Capital Stock to be so refinanced at the time of
such Refinancing and (y) in all respects, be no less subordinated or junior,
if applicable, to the rights of Holders of the Securities than was the
Indebtedness or Disqualified Capital Stock to be refinanced and (C) such
Refinancing Indebtedness shall have no installment of principal (or
redemption payment) scheduled to come due earlier than the scheduled maturity
of any installment of principal of the Indebtedness or Disqualified Capital
Stock to be so refinanced which was scheduled to come due prior to the Stated
Maturity.
"Registrar" shall have the meaning specified in Section 2.3.
"Related Business" means the business conducted by the company and its
Subsidiaries as of the Issue Date and any and all businesses that in the good
faith judgment of the Board of Directors of the Company are materially
related businesses.
"Representative" means the trustee, agent or representative (if any) of
Secured Portfolio Debt.
"Repurchase Date," when used with respect to any Security to be
repurchased pursuant to the provisions of Section 4.16, means the date fixed
for the repurchase of such Security pursuant to Section 4.16.
"Repurchase Price," when used with respect to any Security to be
repurchased pursuant to the provisions of Section 4.16, means an amount equal
to 100% of the principal amount thereof and shall include, without
duplication, in each case, accrued and unpaid interest to the Repurchase
Date of such Security.
"Restricted Investment" means any Investment other than:
(a) Investments in Customer Receivables;
(b) Investments in Cash Equivalents;
(c) Investments existing on the Issue Date;
(d) Investments in the Company or a Wholly-Owned Subsidiary;
(e) Investments in any Person engaged in a Related Business if, as a
consequence of such Investment, (i) such Person becomes a
Wholly-Owned Subsidiary of the Company or (ii) such Person is merged,
16
consolidated or amalgamated with or into, or conveys substantially
all of its assets to the Company or a Wholly-Owned Subsidiary of
the Company;
(f) Investments consisting of loans or advances to employees of the
Company or any of its Subsidiaries (i) for moving, entertainment,
travel and other similar expenses in the ordinary course of
business not exceeding $250,000 outstanding in the aggregate at any
one time or (ii) pursuant to the HPSC Stock Loan Program not
exceeding $400,000 (or such greater amount as may be permitted
under Federal Reserve regulations from time to time) outstanding in
the aggregate at any one time;
(g) Investments made as a result of the receipt of non-cash
consideration in connection with the sale, lease, disposal, pledge,
encumbrance or other transfer of Customer Receivables:
(h) Investments not otherwise specified in clauses (a) through (g)
above not exceeding $1,000,000 outstanding in the aggregate at any
one time; and
(i) Investments not otherwise specified in clauses (a) through (h)
above which are from time to time permitted to be made by HPSC or
any of its Subsidiaries under Section 8.3 (or any successor
provision) of the Revolver Agreement.
"Responsible Officer" means an officer of the Trustee in the department
or other group administering the trust established hereby.
"Restricted Payment" means, with respect to any Person, (a) the
declaration or payment of any dividend or other distribution in respect of
any Capital Stock of such Person or any Subsidiary of such Person, (b) any
payment on account of the purchase, redemption or other acquisition or
retirement for value of Capital Stock of such Person or any Subsidiary of
such Person, (c) other than with the proceeds from the substantially
concurrent (i.e., within 60 days) sale of, or in exchange for, Refinancing
Indebtedness, any purchase, redemption or other acquisition or retirement for
value of, any payment in respect of any amendment of the terms of or any
defeasance of, any Subordinated Indebtedness of such Person or any Affiliate
or Subsidiary of such Person, directly or indirectly, by such Person or any
Subsidiary of such Person prior to the scheduled maturity, any scheduled
repayment of principal, or any scheduled sinking fund payment, as the case
may be, of such Subordinated Indebtedness and (d) any Restricted Investment
by such Person; provided that the term "Restricted Payment" does not
include (i) any dividend, distribution or other payment on or with respect
to, or on account of the purchase, redemption or other acquisition or
retirement for value of, Capital Stock of an issuer to the extent payable
solely in shares of Qualified Capital Stock of such issuer or (ii) any
dividend, distribution or other payment to the Company or to any of its
Wholly-Owned Subsidiaries by the Company or any of its Subsidiaries.
17
"Restricted Stock Plans" shall mean collectively, (i) the Company's 1995
Stock Incentive Plan and (ii) comparable plans providing for the issuance of
Capital Stock of the Company to officers, directors and employees of the
Company and its Subsidiaries having terms similar to the foregoing, each as
amended from time to time by a resolution of the Board of Directors of the
Company or a duly authorized committee thereof.
"Revolver Agreement" means the credit agreement dated as of December 12,
1996, as amended on the Issue Date, by and among the Company and ACFC,
certain financial institutions, and The First National Bank of Boston, as
agent, providing for an aggregate $95,000,000 revolving credit facility,
including any related notes, guarantees, collateral documents, instruments
and agreements executed in connection therewith, as such credit agreement
and/or related documents may by the Company be amended, restated,
supplemented, renewed, replaced or otherwise modified from time to time
whether or not with the same agent, trustee, representative lenders or
holders, and irrespective of any changes in the terms and conditions thereof.
Without limiting the generality of the foregoing, the term "Revolver
Agreement" shall include any amendment, amendment and restatement, renewal,
extension, restructuring, supplement or modification to any Revolver Agreement
by the Company and all refundings, refinancings and replacements of any such
Revolver Agreement, including any agreement (i) extending the maturity of any
Indebtedness incurred thereunder or contemplated thereby, (ii) adding or
deleting borrowers or guarantors thereunder, so long as borrowers and issuers
thereunder include the Company and its successors and assigns, (iii)
increasing the amount of Indebtedness incurred thereunder or available to be
borrowed thereunder or (iv) otherwise altering the terms and conditions
thereof.
"Savings Bank Indebtedness" of the Company or any Subsidiary means any
Indebtedness owed to a savings bank or other financial institution, which
Indebtedness is (i) created, incurred, assumed or guaranteed by the Company
or such Subsidiary of the Company in order to finance one or more Customer
Receivables created in the ordinary course of business of the Company or such
Subsidiary and (ii) secured by a Lien on such Customer Receivable(s).
"Secured Portfolio Debt" of the Company or any Subsidiary means any
indebtedness, including principal, interest (including, without limitation
interest accruing after the commencement of any bankruptcy case or
proceedings whether or not allowed as a claim in such case or proceeding)
fees, collateral protection expenses and enforcement costs, of the Company or
such Subsidiary under the Revolver Agreement, Savings Bank Indebtedness and
any other Indebtedness of the Company or such Subsidiary, whether outstanding
on the Issue Date or thereafter created, incurred, assumed or guaranteed by
the Company or such Subsidiary, which Indebtedness is (i) created, incurred,
assumed or guaranteed by the Company or such Subsidiary of the Company in
order to finance one or more Customer Receivables created
18
in the ordinary course of business of the Company or such Subsidiary and (ii)
secured by a Lion on such Customer Receivable(s).
"SEC" means the Securities and Exchange Commission.
"Securities" means the __% Senior Subordinated Notes due 2007 as amended
or supplemented from time to time pursuant to the terms of this Indenture,
that are issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Securities Custodian" means the Trustee, as custodian with respect to
the Securities in global form, or any successor entity thereto.
"Securityholder" or "Holder" means the Person in whose name a Security
is registered on the Registrar's books.
"Senior Indebtedness" of the Company or any of its Subsidiaries means
any Indebtedness of the Company or such Subsidiary, whether outstanding on
the Issue Date or thereafter created, incurred, assumed or guaranteed by the
Company or such Subsidiary, other than Indebtedness as to which the
instrument creating or evidencing the same or the assumption or guarantee
thereof expressly provides that such Indebtedness is subordinated or junior
to the Securities. Notwithstanding the foregoing, however, in no event shall
Senior Indebtedness include (a) Indebtedness owed to any Subsidiary of the
Company or any officer, director or employee of the Company or any Subsidiary
of the Company or (b) Indebtedness incurred in violation of the terms of this
Indenture.
"Sinking Fund" means the method provided in this Indenture and the
Securities for amortizing the aggregate principal amount of the Securities.
"Sinking Fund Payment Date" means the first day of each ___,___,___, and
___, commencing ___ 1, ___ and continuing through ___ 1,200 ___.
"Special Record Date" for payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 2.12.
"Stated Maturity," when used with respect to any Security, means _____,
2007.
"Stock Option Plans" shall mean collectively, (i) the Company's 1987
Stock Option Plan, (ii) the HPSC, Inc. 1988 Director's Stock Option Plan, and
(iii) comparable plans providing for the issuance of options to purchase
Capital Stock of the Company to officers, directors and/or employees of the
Company and its Subsidiaries having terms
19
similar to the foregoing, each as amended from time to time by a resolution
of the Board of Directors of the Company or a duly authorized committee
thereof.
"Subordinated Indebtedness" means Indebtedness of the Company that is
(i) subordinated in right of payment to the Securities in any respect or (ii)
any Indebtedness which is expressly subordinate to Senior Indebtedness and
has a stated maturity on or after the Stated Maturity.
"Subsidiary" with respect to any Person, means (i) a corporation a
majority of whose Capital Stock with voting power under ordinary
circumstances to elect directors is at the time, directly or indirectly owned
by such Person, by such Person and one or more Subsidiaries of such Person or
by one or more Subsidiaries of such Person, or (ii) any other Person (other
than a corporation described in clause (i) above) in which such Person, one
or more Subsidiaries of such Person or such Person and one or more
Subsidiaries of such Person directly or indirectly at the date of
determination thereof has at least majority ownership interest.
Notwithstanding the foregoing, an Unrestricted Subsidiary shall not
constitute a Subsidiary of the Company or of any of the Company's
Subsidiaries.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of the execution of this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"U.S. Government Obligations" means direct non-callable obligations of
or noncallable obligations guaranteed by, the United States of America for
the payment of which obligation or guarantee the full faith and credit of the
United States of America is pledged.
"Voting Stock" means Capital Stock of the Company having generally the
right to vote in the election of the majority of the directors of the Company
or having generally the right to vote with respect to the organizational
matters of the Company.
"Wholly-Owned" or "wholly-owned" with respect to a Subsidiary of any
Person means a Subsidiary of such Person of which all of the outstanding
Capital Stock or other ownership interests (other than directors' qualifying
shares) shall at the time be owned by such Person or by one or more
Wholly-Owned Subsidiaries of such Person or by such Person and one or more
Wholly-Owned Subsidiaries of such Person.
20
