Exhibit 10d
U.S. $14,250,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of February 1, 1996
among
C.I.S., INC.,
as Borrower,
C.I.S. TECHNOLOGIES, INC.,
as Parent,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Lender
THIS AMENDED AND RESTATED CREDIT AGREEMENT ("Agreement") is
entered into as of February 1, 1996 by and among C.I.S., INC., an
Oklahoma corporation ("Borrower"), C.I.S. TECHNOLOGIES, INC., a
D e laware corporation ("Parent"), and GENERAL ELECTRIC CAPITAL
CORPORATION, a corporation organized under the banking laws of the
State of New York, (together with its successors and assigns in such
capacity, "Lender").
RECITALS
A. Borrower, Parent and Lender are parties to that certain Credit
Agreement dated as of October 15, 1994, as amended by the First
Amendment, dated as of May 31, 1995, and the Second Amendment, dated
as of July 21, 1995 (as so amended, the "Existing Credit Agreement").
B. Effective 12:01 a.m. on January 1, 1996 each of the following
of Parent's subsidiaries (i) CIS Administrative Services, Inc., a
Delaware corporation, (ii) CIS Funding Corp., a Delaware corporation,
(iii) CIS Healthcare Research Systems, Inc., a Delaware corporation,
(iv) Hospital Billing Analysis, Inc., a California corporation
("HBA"), and (v) Hospital Cost Consultants, Inc., a California
corporation ("HCCI") merged with and into Borrower, with Borrower in
e a c h case as the surviving corporation (collectively, the
"Reorganization").
C. Pursuant to the Existing Credit Agreement, Lender has agreed to
make certain loans to Borrower upon the terms and conditions set
forth therein.
D. In connection with the Reorganization, Borrower has requested
that Lender enter into this Agreement to amend and restate the
Existing Credit Agreement to, among other things, increase the
Revolving Credit Commitment (as defined in Annex A) from $5,000,000
to $6,000,000 and increase the Term Loan Commitment (as defined in
Annex A) by an additional $5,000,000.
E. To effectuate the foregoing, each of the parties hereto is
agreeable to amending and restating the Existing Credit Agreement on
the terms and conditions set forth herein.
F. Unless otherwise defined herein, capitalized terms used herein
shall have the respective meanings ascribed to them in Annex A and,
for purposes of this Agreement and the other Loan Documents, the
rules of construction set forth in Annex A shall govern. Unless
otherwise indicated, all references in this Agreement to sections,
subsections, schedules, exhibits, and attachments shall refer to the
corresponding sections, subsections, schedules, exhibits, and
attachments of or to this Agreement. All schedules, annexes,
exhibits and attachments hereto, or expressly identified to this
Agreement, are incorporated herein by reference, and taken together,
shall constitute but a single agreement. Unless otherwise expressly
set forth herein, or in a written amendment referring to such
schedules and annexes, all schedules and annexes referred to herein
shall mean the schedules and annexes as in effect as of the Closing
Date. These Recitals shall be construed as part of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, the parties hereto agree as follows:
STM-62336.3
1. AMOUNT AND TERMS OF CREDIT
1.1 Revolving Credit Advances.
(a) Upon and subject to the terms and conditions hereof, Lender
agrees to make available, from time to time until the Commitment
Termination Date, for Borrower's use and upon the request of Borrower
therefor to Lender, advances (each, including such advances made
pursuant to the terms of the Existing Credit Agreement which remain
outstanding as of the Closing Date, a "Revolving Credit Advance") in
an aggregate principal amount at any time outstanding up to but not
exceeding the Revolving Credit Commitment of Lender, provided that in
no event shall the aggregate principal amount of the Revolving Credit
Loan exceed the Borrowing Availability. Borrower may from time to
time borrow, repay and reborrow Revolving Credit Advances under this
Section 1.1, provided that each borrowing of Revolving Credit
Advances hereunder shall be made only at the Revolving Credit Rate.
(b) Borrower shall give Lender notice of each borrowing of a
Revolving Credit Advance hereunder as provided in Section 1.1(c) and
on the date specified for such borrowing Lender shall make available
the amount of the Revolving Credit Advances to be made by it on such
date to Borrower in immediately available funds.
(c) Each notice of a borrowing of a Revolving Credit Advance
shall be given in writing (by telecopy, hand delivery, or U.S. mail)
by Borrower to Lender at its address at 201 High Ridge Road,
Stamford, Connecticut 06927, Attention: Portfolio Analyst
Department, Telephone No. (203) 316-7500, Telecopy No. (203) 316-
7816/7817, given no later than 12:00 noon (New York time) on the
Business Day of the proposed Revolving Credit Advance. Each such
notice of borrowing (a "Notice of Revolving Credit Advance") shall be
substantially in the form of Exhibit A, specifying therein the
requested date, the amount of such Revolving Credit Advance and such
other information as may be required by Lender. Lender shall be
entitled to rely upon any Notice of Revolving Credit Advance
delivered to Lender by Borrower. Subject to the terms and conditions
of this Agreement, if Lender shall have received a Notice of
Revolving Credit Advance prior to 12:00 noon (New York time) on a
Business Day, Lender shall, not later than 3:00 p.m. (New York time)
on such Business Day cause the amount requested in such Notice of
Revolving Credit Advance to be wired to the Disbursement Account.
(d) The Revolving Credit Advances made by Lender shall be
evidenced by a single promissory note of Borrower substantially in
the form of Exhibit C, dated the date hereof, payable to Lender in a
principal amount equal to the amount of the Revolving Credit
Commitment as originally in effect on the Closing Date and otherwise
duly completed, which note shall be substituted in exchange for (but
not in repayment of) that certain revolving credit note, dated
October 31, 1994, delivered by Borrower and HBA in connection with
the Existing Credit Agreement. The date and amount of each Revolving
Credit Advance made by Lender and each payment of principal with
respect thereto shall be recorded on the books and records of Lender,
which books and records shall constitute prima facie evidence of the
accuracy of the information therein recorded. The entire unpaid
balance of the Revolving Credit Loan shall be immediately due and
payable on the Commitment Termination Date.
(e) Borrower shall furnish to Lender a Borrowing Base
Certificate substantially in the form of Exhibit B, completed and
signed by the Chief Executive Officer or Chief Financial Officer of
Borrower, which sets forth a calculation of the Borrowing Base at the
times and for the periods set forth in Annex E. Borrower agrees that
in making any Revolving Credit Advance hereunder Lender shall be
entitled to rely upon the most recent Borrowing Base Certificate
delivered to Lender. Borrower further agrees that, if Borrower shall
have failed to deliver a Borrowing Base Certificate to Lender within
the specified period,
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Lender shall be under no obligation to make any further Revolving
Credit Advances until such time as such Borrowing Base Certificate is
delivered to Lender.
1.2 Term Loan.
(a) Upon and subject to the terms and conditions hereof, the
Lender agrees to make available (or has made available in connection
with the terms of the Existing Credit Agreement, as the case may be)
to Borrower the Term Loan in a maximum principal amount equal to the
Lender's Term Loan Commitment as follows: (i) on the Closing Date
(as defined in the Existing Credit Agreement), in a single funding, a
portion of the Term Loan in a principal amount equal to $1,000,000
(the "Tranche A Term Loan"); (ii) on the date of consummation of the
acquisition of AMSC, in a single funding, a portion of the Term Loan
in a principal amount equal to $1,000,000 (the "Tranche B Term
Loan"); (iii) on the effective date of the Second Amendment to the
Existing Credit Agreement, dated as of July 21, 1995, in a single
funding, a portion of the Term Loan in a principal amount equal to
$1,250,000 (the "Tranche C Term Loan"); and (iv) on the Closing Date,
in a single funding, a portion of the Term Loan in a principal amount
equal to $5,000,000 (the "Tranche D Term Loan"). The Term Loan shall
be evidenced by a single promissory note of Borrower substantially in
the form of Exhibit D, dated the date hereof, payable to Lender in a
principal amount equal to $7,138,888.78 (which amount represents the
outstanding principal amount of the Term Loan as of the Closing Date)
and otherwise duly completed, which note shall be in substitution and
exchange for (but not in repayment of) that certain term note, dated
October 31, 1994, delivered by Borrower and HBA in connection with
the Existing Credit Agreement.
(b) Subject to the terms and conditions of this Agreement, on
any date of funding of the Tranche A Term Loan, the Tranche B Term
Loan, the Tranche C Term Loan or the Tranche D Term Loan, Lender
shall cause to be wired to the Disbursement Account, the proceeds of
such Term Loan.
(c) The aggregate principal amount of the Tranche A Term Loan,
the Tranche B Term Loan, the Tranche C Term Loan and the Tranche D
Term Loan shall be payable in quarterly installments until paid in
full as follows:
Payment Tranche A Tranche B Tranche C Tranche D
Date Term Loan Term Loan Term Loan Term Loan
01/1/95 $83,333.33 $83,333.33 $ 0 $ 0
04/1/95 83,333.33 83,333.33 0 0
07/1/95 83,333.33 83,333.33 0 0
10/1/95 83,333.33 83,333.33 138,888.88 0
01/1/96 83,333.33 83,333.33 138,888.88 0
04/1/96 83,333.33 83,333.33 138,888.88 12,500.00
07/1/96 83,333.33 83,333.33 138,888.88 312,500.00
10/1/96 83,333.33 83,333.33 138,888.88 312,500.00
01/1/97 83,333.33 83,333.33 138,888.88 312,500.00
04/1/97 83,333.33 83,333.33 138,888.88 312,500.00
07/1/97 83,333.33 83,333.33 138,888.88 312,500.00
10/1/97 83,333.37 83,333.37 138,888.89 3,125,000.00
Total $1,000,000.00 $1,000,000.00 $1,250,000.00 $5,000,000.00
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Notwithstanding anything to the contrary contained herein or in the
Term Note, the entire unpaid balance of the Term Loan shall be
immediately due and payable on the Commitment Termination Date.
(d) Amounts repaid or prepaid in respect of the Term Loan may
not be reborrowed. The Term Loan shall be subject to mandatory
prepayment as set forth in Section 1.3(c) and may be voluntarily
prepaid as set forth in Section 1.3(d).
1.3 Repayment; Termination of Commitment.
(a) Borrower hereby promises to pay to Lender the entire
outstanding principal amount of the Revolving Credit Loan and the
Term Loan, and the Revolving Credit Loan and the Term Loan shall
mature, on the Commitment Termination Date.
(b) In the event that the outstanding balance of the Revolving
Credit Loan shall at any time exceed the Borrowing Availability, (i)
Borrower shall immediately repay the Revolving Credit Loan in the
amount of such excess; and (ii) the excess balance shall nevertheless
constitute Obligations that are secured by the Collateral and
entitled to all of the benefits thereof and of the Loan Documents and
shall be evidenced by the Revolving Credit Note.
(c) Borrower shall have the right at any time, upon ten (10)
days prior written notice to Lender, to voluntarily terminate the
Revolving Credit Commitment (in whole but not in part). Upon such
termination, Borrower's right to receive Revolving Credit Advances
shall simultaneously terminate and Borrower's obligation to pay the
Non-Use Fee shall terminate, and notwithstanding anything to the
contrary contained herein or in any Loan Document, the entire
outstanding balance of the Revolving Credit Loan and the Term Loan
shall be immediately due and payable. On the date of such
termination, Borrower shall pay to Lender in immediately available
funds all of the Obligations and any accrued and unpaid interest
thereon. In the event that Borrower, Parent or any of their
respective Subsidiaries or Affiliates, as the case may be, issues,
with (to the extent required pursuant to the terms hereof) the
written consent of Lender, any Stock, Borrower shall, on the first
Business Day after such issuance, prepay the Tranche D Term Loan in
an amount equal to the Net Proceeds of such issuance. Any such
prepayment shall be applied to the installments of the Tranche D Term
Loan in the inverse order of their scheduled maturities until such
Tranche D Term Loan has been satisfied in full.
(d) Borrower shall have the right at any time, upon thirty (30)
days prior written notice to Lender, to voluntarily prepay all or a
portion of the Term Loan, without premium or penalty. Any such
payments of less than all of the outstanding balance of the Term Loan
shall be applied to the remaining installments of the Term Loan in
the inverse order of their maturity.
1.4 Use of Proceeds.
(a) Borrower shall use the proceeds of the Revolving Credit Loan
for (i) the payment of costs and expenses of the financing
transactions contemplated by this Agreement that are payable by
Borrower, and (ii) for working capital, other corporate purposes and
acquisitions permitted by the terms of this Agreement and the other
Loan Documents.
(b) Borrower shall use (or has used in accordance with the terms
of the Existing Credit Agreement, as the case may be) the proceeds of
the Term Loan as follows: (i) the Tranche B Term Loan has been used
only for the financing of the acquisition of AMSC; (ii) the
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Tranche A Term Loan has been used only for working capital and other
corporate purposes permitted by the terms of this Agreement and the
other Loan Documents; (iii) the Tranche C Term Loan has been used
only to repay outstanding Revolving Credit Advances; and (iv) the
Tranche D Term Loan shall be used only to repay in full the
outstanding principal amount of the FFMC Note.
1.5 Interest.
(a) Borrower shall pay interest on the Term Loan (including,
without limitation, interest on any portion of the Tranche D Term
Loan prepaid in accordance with Section 1.3(c)) and the Revolving
Credit Loan to Lender, (i) in arrears for the preceding calendar
month, on the first day of each calendar month commencing on
November 1, 1994, (ii) on the Commitment Termination Date, and (iii)
if any interest accrues or remains payable after the Commitment
Termination Date, upon demand. If any interest or other payment
under this Agreement becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during
such extension.
(b) Borrower shall be obligated to pay interest to Lender: (i)
on the outstanding balance of the Revolving Credit Loan, at a
floating rate equal to the Revolving Credit Rate; and (ii) on the
outstanding balance of the Term Loan, at a floating rate equal to the
Term Rate. All computations of interest shall be made by Lender and
on the basis of a three hundred and sixty (360) day year, in each
case for the actual number of days occurring in the period for which
such interest is payable. Each determination by Lender of an
interest rate hereunder shall be conclusive and binding for all
purposes, absent manifest error or bad faith.
(c) Upon notice from Lender to Borrower after the occurrence of
any Default, the interest rate applicable to the Obligations
(including, without limitation, the Revolving Credit Loan and the
Term Loan) shall, from the date of the occurrence of such Default and
so long as such Default continues, be the Default Rate, provided,
that upon the occurrence of an Event of Default specified in Sections
8.1(f), (g), or (h), the interest rate applicable to all of the
Obligations shall be increased automatically to the Default Rate
without the necessity of any action on the part of Lender.
(d) Notwithstanding anything to the contrary set forth in this
Section 1.5, if, at any time until payment in full of all of the
Obligations, the rate of interest payable hereunder exceeds the
highest rate of interest permissible under any law which a court of
c o mpetent jurisdiction shall, in a final determination, deem
applicable hereto (the "Maximum Lawful Rate"), then in such event and
so long as the Maximum Lawful Rate would be so exceeded, the rate of
interest payable hereunder shall be equal to the Maximum Lawful Rate;
provided, that if at any time thereafter the rate of interest payable
hereunder is less than the Maximum Lawful Rate, Borrower shall
continue to pay interest hereunder at the Maximum Lawful Rate until
such time as the total interest received by Lender from the making of
the Revolving Credit Loan and the Term Loan hereunder is equal to the
total interest which Lender would have received had the interest rate
payable hereunder been (but for the operation of this paragraph) the
interest rate payable since the Closing Date as otherwise provided in
this Agreement. Thereafter, the interest rate payable hereunder
shall be the rate of interest provided in Sections 1.5 (a) through
(c), unless and until the rate of interest again exceeds the Maximum
Lawful Rate, in which event this Section 1.5(d) shall again apply.
In no event shall the total interest received by Lender pursuant to
the terms hereof exceed the amount which Lender could lawfully have
received had the interest due
STM-62336.3
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hereunder been calculated for the full term hereof at the Maximum
Lawful Rate. In the event the Maximum Lawful Rate is calculated
pursuant to this paragraph, such interest shall be calculated at a
daily rate equal to the Maximum Lawful Rate divided by the number of
days in the year in which such calculation is made. In the event
that a court of competent jurisdiction, notwithstanding the
provisions of this Section 1.5(d), shall make a final determination
that Lender has received interest hereunder or under any of the Loan
Documents in excess of the Maximum Lawful Rate, Lender shall, to the
extent permitted by applicable law, promptly apply such excess first
to any lawful interest due and not yet paid hereunder, then to the
outstanding principal of the Obligations, then to Fees and any other
unpaid Obligations, and thereafter shall refund any excess to
Borrower or as a court of competent jurisdiction may otherwise order.
1.6 Eligible Accounts. Based on the most recent Borrowing Base
Certificate delivered by Borrower to Lender and on other information
available to Lender, Lender shall determine which Accounts shall be
deemed to be Eligible Accounts and Eligible Charge Recovery Accounts
for purposes of determining the amounts, if any, to be advanced to
Borrower under the Revolving Credit Loan.
1.7 Fees. As compensation for Lender's costs, skills, services
and efforts incurred and expended in making the Revolving Credit Loan
and the Term Loan available to Borrower, Borrower agrees to pay to
Lender the fees and charges set forth in Annex D.
1.8 Cash Management System. On or prior to the Closing Date,
Borrower will establish (if it has not already done so pursuant to
the terms of the Existing Credit Agreement) and maintain until the
Termination Date, the cash management system described in Annex B.
1.9 Receipt of Payments. Borrower shall make each payment under
this Agreement not later than 2:00 p.m. (New York time) on the day
when due in Dollars in immediately available funds to the Collection
Account. For purposes of computing interest and Fees and determining
the Borrowing Availability: (a) all payments (including cash sweeps)
consisting of cash, wire, or electronic transfers in immediately
available funds shall be deemed received by Lender upon deposit in
the Collection Account and notice to Lender of such deposit; and (b)
all payments consisting of checks, drafts, or similar non-cash items
shall be deemed received upon receipt of good funds following deposit
in the Collection Account (together with notice to Lender of such
deposit).
1.10 Application and Allocation of Payments. Borrower
irrevocably waives the right to direct the application of any and all
payments at any time or times hereafter received from or on behalf of
Borrower, and Borrower irrevocably agrees that Lender shall have the
continuing exclusive right to apply any and all such payments against
the then due and payable Obligations of Borrower and in repayment of
the Revolving Credit Loan and the Term Loan as Lender may deem
advisable. In the absence of a specific determination by Lender with
respect thereto, the same shall be applied in the following order:
(a) then due and payable Fees and expenses; (b) then due and payable
interest payments; (c) then due and payable Obligations other than
Fees, expenses and interest and principal payments; (d) then due and
payable principal payments on the Term Loan; and (e) then due and
payable principal payments on the Revolving Credit Loan. Lender is
authorized to, and at its option may, make or cause to be made
Revolving Credit Advances on behalf of Borrower for payment of all
Fees, expenses, charges, costs, principal, interest, or other
Obligations then due and payable by Borrower under this Agreement or
any of the Loan Documents, even if the making of such Revolving
Credit Advance causes the
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outstanding balance of the Revolving Credit Loan to exceed the
Borrowing Availability, in which case the terms of Section 1.3(b)
shall apply.
1.11 Accounting. Lender will provide a monthly accounting of
transactions under the Revolving Credit Loan to Borrower. Each and
every such accounting shall (absent manifest error) be deemed final,
binding and conclusive upon Borrower in all respects as to all
matters reflected therein, unless Borrower, within thirty (30) days
after the date any such accounting is rendered, shall notify Lender
in writing of any objection which Borrower may have to any such
accounting, describing the basis for such objection with specificity.
In that event, only those items (the "disputed items") expressly
objected to in such notice shall be deemed to be disputed by
Borrower. Lender's determination, based upon the facts available, of
any disputed item shall (absent manifest error) be final, binding and
conclusive on Borrower.
1.12 Indemnity.
(a) Borrower shall indemnify and hold Lender and its Affiliates,
officers, directors, employees, attorneys and agents (each, an
"Indemnified Person"), harmless from and against any and all suits,
actions, costs, fines, deficiencies, penalties, proceedings, claims,
damages, losses, liabilities and expenses (including reasonable
attorneys' fees and disbursements and other costs of investigations
or defense, including those incurred upon any appeal) (each, a
"Claim") which may be instituted or asserted against or incurred by
such Indemnified Person as the result of credit having been extended
under this Agreement or any other Loan Document or otherwise arising
in connection with the transactions contemplated hereunder and
thereunder, including any and all Environmental Liabilities and Costs
and regardless of whether the Indemnified Person is a party to such
Claim; provided, that Borrower shall not be liable for any
indemnification to such Indemnified Person with respect to any
portion of any such Claim which results solely from such Indemnified
Person's gross negligence or willful misconduct as determined by a
final judgment of a court of competent jurisdiction. NEITHER LENDER
NOR ANY OTHER INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO
ANY OTHER PARTY HERETO, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY
BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS
DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT
HAVING BEEN EXTENDED UNDER THE LOAN DOCUMENTS OR OTHERWISE IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED THEREBY.
In any suit proceeding or action brought by Lender relating to any
Account, Chattel Paper, Contract, General Intangible, Inventory,
Instrument, Equipment or Document for any sum owing thereunder, or to
enforce any provision of any Account, Chattel Paper, Contract,
General Intangible, Instrument or Document, Borrower shall save,
indemnify and keep Lender harmless from and against all expense, loss
or damage suffered by reason of any defense, setoff, counterclaim,
recoupment or reduction of liability whatsoever of the obligor
thereunder arising out of a breach by Borrower of any obligation
thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to, or in favor of, such obligor or its
successors from Borrower, all such obligations of Borrower shall be
and remain enforceable against, and only against, Borrower and shall
not be enforceable against Lender.
(b) Borrower hereby acknowledges and agrees that Lender (as of
the date hereof) (i) is not now nor has ever been in control of any
of the Subject Property or the affairs of any Loan Party, and (ii)
does not have the capacity through the provisions of the Loan
Documents
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to influence the conduct of any Loan Party with respect to the
ownership, operation or management of any of the Subject Property.
1.13 Access. Borrower and Parent shall (and shall cause each of
their respective Subsidiaries to): (a) provide access during normal
business hours to Lender and any of its officers, employees and
agents, as frequently as Lender determines to be appropriate, upon
reasonable advance notice (unless a Default shall have occurred and
be continuing, in which event no notice shall be required and Lender
shall have access at any and all times), to the properties and
facilities of the Loan Parties; (b) permit Lender and any of its
officers, employees and agents to inspect, audit and make extracts
from all of the Loan Parties' records, files and books of account;
and (c) permit Lender to conduct audits to inspect, review and
evaluate the Collateral, and Borrower and Parent agree to render to
Lender at Borrower's cost and expense, such clerical and other
assistance as may be reasonably requested with regard thereto.
Borrower shall, and shall cause each of its Subsidiaries, if any, to,
make available to Lender and its counsel, as quickly as practicable
under the circumstances, originals or copies of all books, records,
board minutes, contracts, insurance policies, environmental audits,
business plans, files, financial statements (actual and pro forma),
filings with federal, state and local regulatory agencies, and other
instruments and documents which Lender may request. Borrower and
Parent shall deliver any document or instrument reasonably necessary
for Lender, as it may from time to time request, to obtain records
from any service bureau or other Person which maintains records for
such Loan Party, and shall maintain duplicate records or supporting
documentation on media, including computer tapes and discs owned by
such Loan Party. Borrower and Parent agree to make available to
Lender upon its reasonable request information and records prepared
by its independent certified public accountants and its banking and
other financial institutions.
1.14 Taxes.
(a) Any and all payments by or on behalf of Borrower hereunder
or under the Revolving Credit Note, the Term Note, or any other Loan
Document, shall be made, in accordance with this Section 1.14, free
and clear of and without deduction for any and all present or future
Taxes. If Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under the Revolving
Credit Note, the Term Note or any other Loan Document to Lender, (i)
the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section 1.14) Lender receives an
amount equal to the sum it would have received had no such deductions
been made, (ii) Borrower shall make such deductions, and (iii)
Borrower shall pay the full amount deducted to the relevant taxing or
other authority in accordance with applicable law.
(b) In addition, Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes,
charges or similar levies that arise from any payment made hereunder
or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement (hereinafter referred to as "Other
Taxes").
(c) Borrower shall indemnify and pay, within ten (10) days of
demand therefor, Lender for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 1.14) paid by Lender and any
liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted.
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(d) Within thirty (30) days after the date of any such payment
of Taxes or Other Taxes, Borrower shall furnish to Lender, the
original or a certified copy of a receipt evidencing payment thereof.
2. CONDITIONS PRECEDENT
2.1 Conditions to the effectiveness of this Agreement and the
Tranche D Term Loan and further Revolving Credit Advances pursuant to
this Agreement. Notwithstanding any other provision of this
Agreement, the effectiveness of this Agreement and the obligation of
Lender to make the Tranche D Term Loan and further Revolving Credit
Advances pursuant to this Agreement on the Closing Date or Lender's
obligation to take, fulfill, or perform any other action hereunder
are subject to the following conditions having been fulfilled to the
satisfaction of Lender:
(a) This Agreement or counterparts thereof shall have been duly
executed by Borrower, Parent and acknowledged and agreed to by AMSC
and delivered to Lender.
(b) Lender shall have received such documents, instruments,
certificates, opinions and agreements as Lender shall request in
connection with the transactions contemplated by this Agreement,
including all documents, instruments, agreements and other materials
listed in the Schedule of Documents each in form and substance
satisfactory to Lender.
(c) Evidence satisfactory to Lender that the Loan Parties have
obtained consents and acknowledgments of all Persons whose consents
and acknowledgments may be required, including all requisite
Governmental Authorities, to the terms and to the execution and
delivery of this Agreement and the other Loan Documents and the
consummation of the transactions contemplated hereby and thereby.
(d) Evidence satisfactory to Lender that the insurance policies
provided for in Section 3.19 and Annex F are in full force and
effect, together with appropriate evidence showing a loss payable
and/or additional insured clauses or endorsements, as appropriate, in
favor of Lender and in form and substance satisfactory to Lender.
(e) Payment by Borrower to Lender of all Fees, costs, and
expenses of closing (including fees and expenses of consultants and
counsel to Lender presented as of the Closing Date).
(f) No action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before
any court, governmental agency or legislative body to enjoin,
restrain or prohibit, or to obtain damages in respect of, or which is
related to or arises out of, this Agreement or any of the other Loan
Documents or the consummation of the transactions contemplated hereby
and thereby and which, in Lender's sole judgment, would make it
inadvisable to consummate the transactions contemplated by this
Agreement or any of the other Loan Documents.
(g) Section 3.1 of the Limited Liability Company Agreement of SA
Services, L.L.C., dated as of October 31, 1994, between Parent and GE
Capital Commercial Finance, Inc. shall have been amended in a manner
satisfactory to Lender.
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(h) Evidence satisfactory to Lender that all Indebtedness and
other obligations of Borrower under its financing agreements and
instruments with FFMC (including, without limitation, the FFMC Note,
the FFMC Guaranty, the FFMC Security Agreement and the FFMC Pledge
Agreement) (collectively, the "FFMC Agreements") will be performed
and paid in full from the proceeds of the Tranche D Term Loan and all
Liens upon any of the property of any Loan Party securing such
Indebtedness shall be terminated and released immediately upon such
payment, and Lender and FFMC shall have entered into an escrow or
other agreement in form and substance satisfactory to Lender
providing for the release and termination of all such Liens,
termination of the FFMC Agreements and acknowledgement of payment in
full of all outstanding Indebtedness and other obligations under or
relating to the FFMC Agreements.
(i) Evidence satisfactory to Lender that the Reorganization has
been duly completed in accordance with all applicable laws.
(j) Lender shall be satisfied, in its reasonable judgment, with
the corporate, capital, tax, legal and management structure of each
Loan Party, and shall be satisfied, in its sole judgment exercised
r e a s onably, with the nature and status of all contractual
o b ligations, securities, labor, tax, ERISA, employee benefit,
environmental, health and safety matters, in each case, involving or
affecting any Loan Party.
2.2 Further Conditions to Each Loan. It shall be a further
condition to the funding of the Tranche A Term Loan, the Tranche B
Term Loan, the Tranche C Term Loan or the Tranche D Term Loan and
each Revolving Credit Advance that the following statements shall be
true on the date of each such funding, advance or incurrence, as the
case may be:
(a) Each Loan Party's representations and warranties contained
herein or in any of the Loan Documents shall be true and correct on
and as of the Closing Date and the date on which such Revolving
Credit Advance or such Term Loan is made, as though made on or
incurred on and as of such date, except to the extent that any such
representation or warranty expressly relates solely to an earlier
date and except for changes therein permitted or contemplated by this
Agreement.
(b) No event shall have occurred and be continuing, or would
result from the making of such Term Loan or such Revolving Credit
Advance, as the case may be, which constitutes or would constitute a
Default.
(c) After giving effect to such Revolving Credit Advance, the
aggregate principal amount of the Revolving Credit Loan shall not
exceed the Borrowing Availability.
(d) With respect to the Tranche D Term Loan, the principal
amount of the FFMC Note shall be indefeasibly paid in full with the
proceeds of such Loan and Lender shall have received such evidence of
such payment as it may require, including, without limitation, the
FFMC Note marked cancelled.
The request and acceptance by Borrower of the proceeds of any Term
Loan or any Revolving Credit Advance, as the case may be, shall be
deemed to constitute, as of the date of such request or acceptance,
(i) a representation and warranty by Parent and Borrower that the
conditions in this Section 2.2 have been satisfied and (ii) a
confirmation by Parent and Borrower of the granting and continuance
of Lender's Liens pursuant to the Collateral Documents.
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3. REPRESENTATIONS AND WARRANTIES
To induce Lender to enter into this Agreement, Borrower and Parent
represent and warrant to Lender that:
3.1 Corporate Existence; Compliance with Law. Each Loan Party:
(a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and
is duly qualified to do business and is in good standing in each
other jurisdiction where its ownership or lease of property or the
conduct of its business requires such qualification and the failure
to so qualify would not have a Material Adverse Effect; (b) has the
requisite corporate power and authority and the legal right to own,
pledge, mortgage or otherwise encumber and operate its properties, to
lease the property it operates under lease, and to conduct its
business as now, heretofore and proposed to be conducted; (c) has all
material licenses, permits, consents or approvals from or by, and has
made all filings with, and has given all notices to, all Governmental
Authorities having jurisdiction, to the extent required for such
ownership, operation and conduct; (d) is in compliance with its
articles or certificate of incorporation and by-laws; and (e) is in
compliance in all material respects with all applicable provisions of
law.
3.2 Executive Offices; Collateral Locations; Corporate or Other
Names. The current locations of each Loan Party's executive office,
principal place of business, corporate offices, all warehouses and
premises within which any Collateral is stored or located, and the
locations of all of the Loan Parties' records concerning the
Collateral are set forth in Schedule 3.2 and, except as set forth in
Schedule 3.2, such locations have not changed during the preceding 12
months. During the prior five (5) years, except as set forth in
Schedule 3.2, no Loan Party has been known as or used any corporate,
fictitious or trade name.
3.3 Corporate Power; Authorization; Enforceable Obligations.
The execution, delivery and performance by each Loan Party of the
Loan Documents and all other instruments and documents to be
delivered by such Loan Party hereunder and thereunder to the extent
it is a party thereto and the creation of all Liens provided for
herein and therein: (a) are within such Loan Party's corporate
power; (b) have been duly authorized by all necessary corporate and
shareholder action; (c) are not in contravention of any provision of
such Loan Party's articles or certificate of incorporation or by-laws
or other organizational documents; (d) will not violate any law or
regulation, or any order or decree of any court or governmental
instrumentality; (e) will not conflict with or result in the breach
or termination of, constitute a default under or accelerate any
performance required by, any indenture, mortgage, deed of trust,
lease, agreement or other instrument to which any Loan Party is a
party or by which any Loan Party or any of its property is bound; (f)
will not result in the creation or imposition of any Lien upon any of
the property of any Loan Party other than those in favor of Lender,
all pursuant to the Loan Documents; and (g) do not require the
consent or approval of any Governmental Authority or any other
Person, except those referred to in Section 2.1(c), all of which will
have been duly obtained, made or complied with prior to the Closing
Date and which are in full force and effect. At or prior to the
Closing Date, each of the Loan Documents shall have been duly
executed and delivered for the benefit of or on behalf of each Loan
Party which is a party thereto and each shall then constitute a
legal, valid and binding obligation of such Loan Party to the extent
it is a party thereto, enforceable against such Loan Party in
a c cordance with its terms, subject to applicable bankruptcy,
i n s olvency, moratorium, reorganization or other similar laws
affecting creditors' rights and to equitable principles of general
applicability.
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3.4 Financial Statements. Borrower and Parent have delivered
the Financials identified in Schedule 3.4, and each of such
Financials complies with the description thereof contained in
Schedule 3.4.
3.5 Material Adverse Change. As of the date hereof, no Loan
Party has any obligations, contingent liabilities, or liabilities for
Charges, long-term leases or unusual forward or long-term commitments
w h i ch are not reflected in the audited December 31, 1994,
consolidated balance sheet of Parent, which could have a Material
Adverse Effect. Except as otherwise permitted hereunder or as set
forth in Schedule 3.5, no Restricted Payment has been made since
December 31, 1994, and no shares of Stock of Parent have been, or are
now required to be, redeemed, retired, purchased or otherwise
acquired for value by Parent. Except as otherwise disclosed in
paragraph 1 of Schedule 3.12, since December 31, 1994, no event has
occurred or is continuing which would result in a Material Adverse
Effect.
3.6 Ownership of Property; Liens. Except as described in
Schedule 3.6, the real estate listed in Schedule 3.6 constitutes all
of the real property owned, leased, or used in its business by each
Loan Party. Each Loan Party holds good and marketable title to all
of its property and assets and valid leasehold interests in all of
such Loan Party's Leases and none of the properties or assets of any
L o a n Party are subject to any Liens, except (x) Permitted
Encumbrances and (y) the Lien in favor of Lender pursuant to the
Collateral Documents. Each Loan Party has received all deeds,
assignments, waivers, consents, non-disturbance and recognition or
similar agreements, bills of sale and other documents, and duly
effected all recordings, filings and other actions necessary to
establish, protect and perfect such Loan Party's right, title and
interest in and to all such real estate and other assets or property.
Except as described in Schedule 3.6, (a) no Loan Party or, to
Borrower's or Parent's knowledge, any other party to any Lease, is in
default of its obligations thereunder or has delivered or received
any notice of default under any such Lease, and no event has occurred
which, to Borrower's or Parent's knowledge, with the giving of
notice, the passage of time, or both, would constitute a default
under any such Lease; (b) no Loan Party owns or holds, or is
obligated under or a party to, any option, right of first refusal or
any other contractual right to purchase, acquire, sell, assign or
dispose of any property owned or leased by such Loan Party except as
set forth in Schedule 3.6; and (c) no material portion of any real
property owned or leased by any Loan Party has suffered any material
damage by fire or other casualty loss which has not heretofore been
completely repaired and restored to its original condition. All
permits required to have been issued or appropriate to enable the
real property owned or leased by any Loan Party to be lawfully
occupied and used for all of the purposes for which they are
currently occupied and used, have been lawfully issued and are, as of
the date hereof, in full force and effect, except to the extent that
the failure to have any such permit would not have a Material Adverse
Effect.
3.7 Restrictions; No Default. No Contract, lease, agreement,
instrument or other document to which any Loan Party is a party or by
which it or any of its properties or assets is bound or affected and
no provision of any charter, corporate restriction, applicable law or
governmental regulation has resulted in or will result in a Material
Adverse Effect. No Loan Party is in default and, to Borrower's or
Parent's knowledge, no third party is in default, under or with
respect to any Contract, lease, agreement, instrument or other
document to which any Loan Party is a party, which default could
result in a Material Adverse Effect. No Default has occurred and is
continuing.
3.8 Labor Matters. There are no strikes or other labor disputes
against any Loan Party that are pending or, to Borrower's or Parent's
knowledge, threatened. Hours worked by
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and payment made to employees of each Loan Party have not been in
violation of the Fair Labor Standards Act or any other applicable law
dealing with such matters which would have a Material Adverse Effect.
All material payments due from any Loan Party on account of employee
health and welfare insurance have been paid or accrued as a liability
on the books of such Loan Party. Except as set forth in Schedule
3.8, no Loan Party has any obligation under any collective bargaining
agreement, management agreement, or any employment agreement, and a
correct and complete copy of each agreement listed on Schedule 3.8
has been provided to Lender. There is no organizing activity
involving any Loan Party pending or, to Borrower's or Parent's
knowledge, threatened by any labor union or group of employees.
Except as set forth in Schedule 3.14, there are no representation
proceedings pending or, to Borrower's or Parent's knowledge,
threatened with the National Labor Relations Board, and no labor
organization or group of employees of any Loan Party has made a
pending demand for recognition, and, there are no complaints or
charges against any Loan Party pending or threatened to be filed with
any federal, state, local or foreign court, governmental agency or
arbitrator based on, arising out of, in connection with, or otherwise
relating to the employment or termination of employment by any Loan
Party of any individual.
3.9 Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness. Except as set forth in Schedule 3.9, no Loan Party has
any Subsidiaries, or is engaged in any joint venture or partnership
with, or an Affiliate of, any other Person. The Stock of each
Subsidiary owned by each of the stockholders thereof named in
Schedule 3.9 constitutes all of the issued and outstanding Stock of
such Loan Party. Except as set forth in Schedule 3.9, there are no
outstanding rights to purchase options, warrants or similar rights or
agreements pursuant to which any Loan Party may be required to issue,
sell or purchase any Stock or other equity security. Schedule 3.9
lists all outstanding Stock of each Loan Party as of the Closing
Date. Schedule 6.3 lists all Indebtedness of each Loan Party as of
the Closing Date.
3.10 G o vernment Regulation. No Loan Party: (a) is an
"investment company" or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms
are defined in the Investment Company Act of 1940 as amended; (b) is
subject to regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act, the Interstate Commerce Act or any other
federal or state statute that restricts or limits such Loan Party's
ability to incur Indebtedness, pledge its assets, or to perform its
obligations hereunder, or under any other Loan Document, and the
making of the Term Loan and the Revolving Credit Advances, in each
case by Lender, the application of the proceeds and repayment thereof
by each Loan Party, and the consummation of the transactions
contemplated by this Agreement and the other Loan Documents, will not
violate any provision of any such statute or any rule, regulation or
order issued by the Securities and Exchange Commission.
3.11 Margin Regulations. No Loan Party is engaged in the
business of extending credit for the purpose of purchasing or
carrying Margin Stock and no proceeds of the Term Loan nor of any
Revolving Credit Advance will be used to purchase or carry any Margin
Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock. No Loan Party will take or permit to be
taken any action which might cause any Loan Document or any document
or instrument delivered pursuant hereto or thereto to violate any
regulation of the Board of Governors of the Federal Reserve Board.
3.12 Taxes. Except as set forth in Schedule 3.12, all federal,
state, local and foreign tax returns, reports and statements,
including information returns required to be filed by each Loan
Party, have been filed with the appropriate Governmental Authority
and all Charges and
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other impositions shown thereon to be due and payable have been paid
prior to the date on which any fine, penalty, interest or late charge
may be added thereto for nonpayment thereof, or any such fine,
penalty, interest, late charge or loss has been paid. Except as set
forth in Schedule 3.12, each Loan Party has paid when due and payable
all material Charges required to be paid by it. Proper and accurate
amounts have been withheld by each Loan Party from their respective
employees for all periods in full and complete compliance with the
tax, social security and unemployment withholding provisions of
applicable federal, state, local and foreign law and such
withholdings have been timely paid to the respective Governmental
Authorities. Schedule 3.12 sets forth those taxable years for which
any of the tax returns of each Loan Party are currently being audited
by the IRS or any other applicable Governmental Authority; and any
assessments or threatened assessments in connection with such audit
or otherwise currently outstanding. Except as described in Schedule
3.12, no Loan Party has executed or filed with the IRS or any other
Governmental Authority any agreement or other document extending, or
having the effect of extending, the period for assessment or
collection of any Charges. None of the property owned by any Loan
Party is property which is required to treat as being owned by any
other Person pursuant to the provisions of IRC Section 168(f)(8) of
the Internal Revenue Code of 1954, as amended, and in effect
immediately prior to the enactment of the Tax Reform Act of 1986 or
is "tax-exempt use property" within the meaning of IRC Section
168(h). No Loan Party has agreed or been requested to make any
adjustment under IRC Section 481(a) by reason of a change in
accounting method or otherwise. No Loan Party has any obligation
under any written tax sharing agreement except as described in
Schedule 3.12.
3.13 ERISA. Schedule 3.13 lists all Plans maintained or
contributed to by any Loan Party and all Qualified Plans, unfunded
Pension Plans, or Welfare Plans maintained or contributed to by any
ERISA Affiliate. No Loan Party or any current or former ERISA
Affiliate sponsors (or has sponsored), contributes to (or has
contributed to), or is (or was) required to contribute to any Title
IV Plan, any Plan subject to IRC Section 412 or ERISA Section 302, or
any Retiree Welfare Plan. IRS determination letters regarding the
qualified status under IRC Section 401 of each Qualified Plan have
been received as of the dates listed in Schedule 3.13. Each of the
Qualified Plans has been amended to comply with the Tax Reform Act of
1986 and to make other changes required under the IRC or ERISA, and
if such required amendments are not subject to the determination
letters described in the previous sentence, each Qualified Plan so
amended will be submitted to the IRS for a determination letter as to
the ongoing qualified status of the Plan under the IRC within the
applicable IRC Section 401(b) remedial amendment period; and each
such Plan shall be amended, including retroactive amendments, as
required during such determination letter process to maintain the
qualified status of such Plans. To the knowledge of Borrower and
Parent, the Qualified Plans as amended continue to qualify under
Section 401 of the IRC, the trusts created thereunder continue to be
exempt from tax under the provisions of IRC Section 501(a), and
nothing has occurred which would cause the loss of such qualification
or tax-exempt status. To the knowledge of Borrower and Parent, each
Plan is in compliance in all material respects with the applicable
provisions of ERISA and the IRC, including the filing of all reports
required under the IRC or ERISA which are true and correct as of the
date filed, and all required contributions and benefits have been
paid in accordance with the provisions of each such Plan. No Loan
Party has engaged in a prohibited transaction, as defined in IRC
Section 4975 or Section 406 of ERISA, in connection with any Plan
which would subject any such Person (after giving effect to any
exemption) to a material tax on prohibited transactions imposed by
IRC Section 4975 or any other material liability. Except as set
forth in Schedule 3.13: (i) there are no pending, or to the
knowledge of Borrower and Parent, threatened claims, actions or
lawsuits (other than claims for benefits in the normal course),
asserted or instituted against (x) any Plan or its assets, (y) any
fiduciary with respect to any Plan or (z) any
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Loan Party or any ERISA Affiliate with respect to any Plan (ii) each
Loan Party or other ERISA Affiliate has complied with the notice and
continuation coverage requirements of IRC Section 4980B and the
proposed or final regulations thereunder; and (iii) no liability
under any Plan has been funded, nor has such obligation been
satisfied with, the purchase of a contract from an insurance company
that is not rated AAA by Standard & Poor's Corporation and the
equivalent by each other nationally recognized rating agency.
3.14 No Litigation. Except as set forth in Schedule 3.14, no
action, claim or proceeding is now pending or, to the knowledge of
Borrower and Parent, threatened against any Loan Party, at law, in
equity or otherwise, before any court, board, commission, agency or
instrumentality of any federal, state, or local government or of any
agency or subdivision thereof, or before any arbitrator or panel of
arbitrators (a) which challenges any such Person's right, power, or
competence to enter into or perform any of its obligations under the
Loan Documents, or the validity or enforceability of any Loan
Document or any action taken thereunder, or (b) which if determined
adversely, could have or result in a Material Adverse Effect. To the
knowledge of Borrower and Parent, there does not exist a state of
facts which is reasonably likely to give rise to such proceedings.
3.15 Brokers. No broker or finder acting on behalf of any Loan
Party brought about the obtaining, making or closing of the credit
extended pursuant to this Agreement or the transactions contemplated
by the Loan Documents and no Loan Party has any obligation to any
Person in respect of any finder's or brokerage fees in connection
therewith.
3.16 Intellectual Property. Except as otherwise set forth in
Schedule 3.16, each Loan Party owns all Intellectual Property which
is necessary to continue to conduct its business as heretofore
c o nducted by it, except where the failure to own any such
Intellectual Property right would not have or result in a Material
Adverse Effect, now conducted by it and, to the Borrower's and
Parent's knowledge, proposed to be conducted by it, each of which is
listed, together with United States Patent and Trademark Office
application or registration numbers, where applicable, in Schedule
3.16. Each Loan Party conducts business without infringement or
claim of infringement of any Intellectual Property right of others,
except where such infringement or claim of infringement could not
have or result in a Material Adverse Effect. Except as set forth in
Schedule 3.16, to Borrower's and Parent's knowledge, there is no
infringement or claim of infringement by others of any material
Intellectual Property of any Loan Party, except where such
infringement or claim of infringement could not have or result in a
Material Adverse Effect.
3.17 Full Disclosure. No information contained in this
Agreement, the other Loan Documents, the Financials or any written
statement furnished by or on behalf of any Loan Party or any
Affiliate thereof pursuant to the terms of the Existing Credit
Agreement, this Agreement or any other Loan Document, which has
previously been delivered to Lender, contains any untrue statement of
a material fact or omits to state a material fact necessary to make
the statements contained herein or therein not misleading in light of
the circumstances under which they were made. With respect to any
business plan (including without limitation Parent's strategic plan)
furnished by or on behalf of the Loan Parties to Lender relating to
the financial condition, operations, business, properties or
prospects of any Loan Party or any Subsidiary thereof: (a) all facts
upon which such business plan is based are true and complete in all
material respects and no material fact was omitted therefrom, (b) all
material assumptions underlying such business plan are reasonable
under the circumstances and are disclosed therein, and (c) the
forecasts in such business plan are made with care and diligence and
are reasonably based on those facts and
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assumptions. With respect to any such business plans made available
to Lender after the Closing Date, the foregoing clauses (a) through
(c) shall be true and correct in all respects as of the date of such
business plan.
3.18 Hazardous Materials. Except for routine operations in the
ordinary course of business in compliance with applicable permits
issued by a Governmental Authority, the Subject Property is free of
any Hazardous Material and no Loan Party has caused or suffered to
occur any Release at, under, above or within any Subject Property.
There are no existing or potential Environmental Liabilities and
Costs of any Loan Party of which Borrower or Parent, after due
inquiry, have knowledge, which could have or result in a Material
Adverse Effect. No Loan Party is involved in operations which could
lead to the imposition of any material Environmental Liabilities and
Costs on it, or any owner of any premises which it occupies, or any
Lien securing the same under any Environmental Law.
3.19 Insurance Policies. Schedule 3.19 lists all insurance of
any nature maintained for current occurrences by each Loan Party, as
well as a summary of the terms of such insurance. Such insurance
complies with and shall at all times comply with the standards set
forth in Annex F.
3.20 Deposit and Disbursement Accounts. Schedule 3.20 lists all
banks and other financial institutions at which each Loan Party
maintains deposits and/or other accounts and/or post office lock
boxes, including the Disbursement Account, the Concentration Account
and the Lock Box Accounts, and such Schedule correctly identifies the
name, address and telephone number of each depository, the name in
which the account is held, a description of the purpose of the
account, and the complete account number.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1 Reports and Notices. Borrower and Parent covenant and agree
that from and after the Closing Date and until the Termination Date,
they shall deliver to Lender the Financials and notices at the times
and in the manner set forth in Annex E. Concurrently with the
delivery of such annual audited financial statements, Borrower shall
cause to be delivered to Lender a certificate of Borrower's
independent certified public accountants certifying that during the
course of performing their audit of the Loan Parties they did not
become aware of any Default under the Loan Documents or specifying
each Default of which they became aware.
4.2 Communication with Accountants. Borrower and Parent (each
for itself and each Subsidiary) authorize Lender to communicate
directly with them and their Subsidiaries' independent certified
public accountants and tax advisors and authorizes those accountants
and advisors to disclose to Lender any and all work papers and
financial statements and other supporting financial documents and
schedules, including copies of any management letter with respect to
the business, financial condition and other affairs of Parent,
Borrower and each Subsidiary thereof. So long as no Event of Default
has occurred and is continuing, Lender shall promptly notify Parent
in writing of any such communication; provided that Lender shall
incur no liability for failure to give such notice. At or before the
Closing Date and on each anniversary of the Closing Date, Borrower
and Parent shall, and shall cause each Subsidiary thereof to, deliver
a letter (the "Accountant's Letter") addressed to and acknowledged by
such accountants and tax advisors instructing them to make available
to Lender such information and records as Lender may reasonably
request and to otherwise comply with the provisions of this Section
4.
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5. AFFIRMATIVE COVENANTS
Borrower and Parent covenant and agree (each for itself and its
Subsidiaries) that, unless Lender shall otherwise consent in writing,
from and after the date hereof and until the Termination Date,
Borrower and Parent shall, and shall cause each Subsidiary thereof
to, comply with the following affirmative covenants:
5.1 Maintenance of Existence and Conduct of Business. Each Loan
Party shall: (a) do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence
and its rights and franchises; (b) continue to conduct its business
substantially as now conducted or as otherwise permitted hereunder;
(c) at all times maintain, preserve and protect all of its
Intellectual Property, and preserve all the remainder of its
property, in use or useful in the conduct of its business and keep
the same in good repair, working order and condition (taking into
consideration ordinary wear and tear) and from time to time make, or
cause to be made, all necessary or appropriate repairs, replacements
and improvements thereto consistent with industry practices, so that
the business carried on in connection therewith may be properly and
advantageously conducted at all times; (d) keep and maintain its
Equipment and Fixtures in good operating condition (reasonable wear
and tear excepted) sufficient for the continuation of such Person's
business conducted on a basis consistent with past practices and
shall provide or arrange for all maintenance and service and all
repairs necessary for such purpose; and (e) transact business only
under the names set forth in Schedule 3.2.
5.2 Payment of Charges and Claims. Each Loan Party shall pay
and discharge, or cause to be paid and discharged in accordance with
the terms thereof, (A) all Charges imposed upon it or any other Loan
Party or its or their income and profits, or any of its property
(real, personal or mixed), and (B) all lawful claims for labor,
materials, supplies and services or otherwise, which if unpaid might
by law become a Lien on its property; provided, that such Loan Party
shall not be required to pay any such Charge or claim which is being
contested in good faith by proper legal actions or proceedings, so
long as at the time of commencement of any such action or proceeding
and during the pendency thereof (i) adequate reserves with respect
thereto are established and are maintained in accordance with GAAP,
(ii) such contest operates to suspend collection of the contested
Charges or claims and is maintained and prosecuted continuously with
diligence, (iii) none of the Collateral would be subject to
forfeiture or loss or any Lien by reason of the institution or
prosecution of such contest, (iv) no Lien shall exist, be imposed or
be attempted to be imposed for such Charges or claims during such
action or proceeding unless the full amount of such Charge or claim
is covered by insurance satisfactory in all respects to Lender, (v)
such Loan Party shall promptly pay or discharge such contested
Charges and all additional charges, interest penalties and expenses,
if any, and shall deliver to Lender evidence acceptable to Lender of
such compliance, payment or discharge, if such contest is terminated
or discontinued adversely to such Loan Party, and (vi) Lender has not
advised Borrower in writing that Lender reasonably believes that
nonpayment or nondischarge thereof would result in a Material Adverse
Effect.
5.3 Books and Records. Each Loan Party shall keep adequate
records and books of account with respect to its business activities,
in which proper entries, reflecting all of its consolidated and
consolidating financial transactions, are made in accordance with
GAAP and on a basis consistent with the Financials.
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5.4 Litigation. Each Loan Party shall notify Lender in writing,
promptly upon learning thereof, of any litigation, Claim or other
action commenced or threatened against any Loan Party, and of the
institution against any Loan Party of any suit or administrative
proceeding which (a) may involve an amount in excess of $250,000
individually or in the aggregate or (b) could have or result in a
Material Adverse Effect if adversely determined.
5.5 Insurance.
(a) The Loan Parties shall, at their sole cost and expense,
maintain or cause to be maintained, the policies of insurance in such
amounts and as otherwise described in Annex F and with insurers
recognized as adequate by Lender. The Loan Parties shall notify
Lender promptly of any occurrence causing a material loss or decline
in value of any real or personal property and the estimated (or
actual, if available) amount of such loss or decline, except as
specified otherwise in Annex F. Borrower and Parent hereby direct
all present and future insurers under its "All Risk" policies of
insurance to pay all proceeds payable thereunder directly to Lender,
other than proceeds relating to the loss or damage to property which
secures Indebtedness permitted under clauses (c) of Section 6.3 which
is required by the terms of such Indebtedness to be paid to the
holder thereof ("excluded proceeds"). Borrower and Parent
irrevocably make, constitute and appoint Lender (and all officers,
employees or agents designated by Lender) as their true and lawful
agent and attorney in-fact for the purpose of, upon the occurrence
and during the continuance of a Default, making, settling and
adjusting claims under the "All Risk" policies of insurance,
endorsing the name of such Person on any check, draft, instrument or
other item of payment for the proceeds of such "All Risk" policies of
insurance (other than excluded proceeds), and for making all
determinations and decisions with respect to such "All Risk" policies
of insurance. In the event any Loan Party at any time or times
hereafter shall fail to obtain or maintain (or fail to cause to be
obtained or maintained) any of the policies of insurance required
above or to pay any premium in whole or in part relating thereto,
Lender, without waiving or releasing any Obligations or Default
hereunder, may at any time or times thereafter (but shall not be
obligated to) obtain and maintain such policies of insurance and pay
such premium and take any other action with respect thereto which
Lender deems advisable. All sums so disbursed, including reasonable
attorneys' fees, court costs and other charges related thereto, shall
be payable, on demand, by Borrower to Lender and shall be additional
Obligations hereunder secured by the Collateral, provided, that if
and to the extent Borrower fail to promptly pay any of such sums upon
Lender's demand therefor, Lender is authorized to, and at its option
may, make or cause to be made Revolving Credit Advances on behalf of
Borrower for payment thereof.
(b) Lender reserves the right at any time, upon review of
Borrower's risk profile, to reasonably require additional forms and
limits of insurance to adequately protect Lender's interests. Each
Loan Party shall, if so requested by Lender, deliver to Lender, as
often as Lender may reasonably request, a report of a reputable
insurance broker satisfactory to Lender with respect to its insurance
policies.
(c) Each Loan Party shall deliver to Lender endorsements to all
of its (i) "All Risk" and business interruption insurance naming
Lender as loss payee to the extent provided in Section 5.5(a), and
(ii) general liability and other liability policies naming Lender as
an additional insured.
5.6 Compliance with Laws. Each Loan Party shall comply with all
federal, state and local laws, permits and regulations applicable to
it, including those relating to licensing,
STM-62336.3
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environmental, ERISA and labor matters, except to the extent any
failure to so comply would not have a Material Adverse Effect.
5.7 Agreements. Each Loan Party shall perform, within all
required time periods (after giving effect to any applicable grace
periods), all of its obligations and enforce all of its rights under
each agreement, contract, instrument or other document to which it is
a party, where the failure to so perform and enforce could have or
result in a Material Adverse Effect. Each Loan Party shall perform
and comply with all obligations in respect of Accounts, Chattel
Paper, Instruments, Contracts, Licenses, and Documents and all other
agreements constituting or giving rise to Collateral. Borrower shall
not, without Lender's prior written consent, with respect to any of
the Accounts (a) grant any extension of the time of payment of any
thereof; (b) compromise or settle the same for less than the full
amount thereof; (c) release, in whole or in part, any Person liable
for the payment thereof; or (d) allow any credit or discount
whatsoever thereon other than trade discounts granted in the ordinary
course of business of Borrower, provided, that Borrower may, without
Lender's prior written consent, release, in whole or in part,
compromise, settle, or allow credits or discounts with respect to the
payment of any of the Accounts, each in an amount not to exceed (i)
$50,000 in the aggregate in any calendar month, and (ii) $150,000 in
the aggregate in any twelve month period, so long as such compromise,
settlement, credit or discount is reported on the next Borrowing Base
Certificate submitted by Borrower.
5.8 Supplemental Disclosure. On the request of Lender (in the
event that such information is not otherwise delivered by Borrower or
Parent to Lender pursuant to this Agreement), Borrower and Parent
will supplement (or cause to be supplemented) each Schedule hereto,
or representation herein or in any other Loan Document with respect
to any matter hereafter arising which, if existing or occurring at
the date of this Agreement, would have been required to be set forth
o r described in such Schedule or as an exception to such
representation or which is necessary to correct any information in
such Schedule or representation which has been rendered inaccurate
thereby; provided, that such supplement to such Schedule or
representation shall not be deemed an amendment thereof unless
expressly consented to in writing by Lender, and no such amendments,
except as the same may be consented to in a writing which expressly
includes a waiver, shall be or be deemed a waiver by Lender of any
Default disclosed therein. Each Loan Party shall, if so requested by
Lender, furnish to Lender as often as it reasonably requests,
statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral
as Lender may reasonably request, all in reasonable detail, and,
each, Loan Party shall advise Lender promptly, in reasonable detail,
of (a) any Lien, other than as permitted pursuant to Section 6.7,
attaching to or asserted against any of the Collateral, (b) any
material change in the composition of the Collateral, and (c) the
occurrence of any other event which would have a Material Adverse
Effect upon the Collateral and/or Lender's Lien thereon.
5.9 Environmental Matters. Each Loan Party shall (a) comply
with all Environmental Laws and permits applicable to it where the
failure to so comply could have or result in a Material Adverse
Effect, (b) notify Lender promptly after such Loan Party becomes
aware of any Release upon any Subject Property which could have or
result in a Material Adverse Effect, and (c) promptly forward to
Lender a copy of any order, notice, permit, application, or any
communication or report received by any Loan Party in connection with
any such Release or any other material matter relating to the
Environmental Laws that may affect any Subject Property or any Loan
Party. The provisions of this Section 5.9 shall apply whether or not
the Environmental Protection Agency, any other federal agency or any
state or local environmental agency
STM-62336.3
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has taken or threatened any action in connection with any Release or
the presence of any Hazardous Materials.
5.10 Subsidiaries. Each Loan Party shall take such action from
time to time as shall be necessary to ensure that each of its
Subsidiaries is a Wholly-owned Subsidiary except for ClinLab, Inc.
and AMSC Midwest, Inc. and any limited liability company Subsidiary
organized pursuant to the Company Documents. No Loan Party will
permit any of its Subsidiaries to enter into, after the date of this
Agreement, any indenture, agreement, instrument or other arrangement
that, directly or indirectly, prohibits or restrains, or has the
effect of prohibiting or restraining, or imposes materially adverse
conditions upon, the incurrence or payment of Indebtedness, the
granting of Liens, the declaration or payment of dividends or other
Restricted Payments, the making of loans, advances or Investments or
the sale, assignment, transfer or other disposition of any property
or assets. Upon Lender's request (exercised in its sole discretion),
Parent shall cause its Subsidiaries or any of them to (i) guarantee
the Obligations by executing and delivering a Subsidiary Guaranty
and/or (ii) pledge all of its assets to secure the Obligations by
executing and delivering a Subsidiary Security Agreement.
5.11 Application of Proceeds. Borrower shall use the proceeds of
the Revolving Credit Loan and the Term Loan as provided in Section
1.4.
5.12 Fiscal Year. Each Loan Party shall maintain as its Fiscal
Year the twelve month period ending on December 31 of each year.
6. NEGATIVE COVENANTS
Borrower and Parent covenant and agree (for itself and each
Subsidiary) that, without Lender's prior written consent, from and
after the date hereof and until the Termination Date, Borrower and
Parent shall, and shall cause each Subsidiary thereof to, comply with
the following negative covenants:
6.1 Mergers, Subsidiaries, Etc. No Loan Party shall directly or
indirectly, by operation of law or otherwise, merge with, consolidate
with, acquire all or substantially all of the assets or capital stock
of, or otherwise combine with, any Person, except the merger or
consolidation of a Wholly-owned Subsidiary with another Wholly-owned
Subsidiary of Parent, so long as the Subsidiary surviving such merger
or consolidation is a Wholly-owned Subsidiary. Without limiting the
foregoing prohibitions, prior to forming, acquiring or otherwise
holding any Subsidiary after the date hereof, each Loan Party shall
(a) provide not less than thirty (30) days prior written notice to
Lender, (b) take all actions requested by Lender to protect and
preserve the Collateral, and (c) obtain Lender's prior written
consent.
6.2 Investments. No Loan Party shall, directly or indirectly,
make or maintain any Investment except: (a) as otherwise permitted
by Section 6.3 or 6.4; (b) Investments outstanding on the date hereof
and listed in Schedule 6.2; (c) trade credit for the purchase of
inventory or goods sold to any Person (other than a Subsidiary or
Affiliate of such Loan Party) in the ordinary course of business on
terms not exceeding 120 days; and (d) Investments in Cash Equivalents
at any time during which no Revolving Credit Advances are outstanding
which are subject to a first priority perfected Lien of Lender.
STM-62336.3
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6.3 Indebtedness. No Loan Party shall create, incur, assume or
permit to exist any Indebtedness, except: (a) the Obligations; (b)
Deferred Taxes; (c) Capital Lease Obligations and Indebtedness
secured by purchase money Liens on Equipment permitted under clause
(d) of Section 6.7 (including such types of Liens described on
Schedule 6.7) in a maximum aggregate amount outstanding not to exceed
$500,000 outstanding at any time; (d) Indebtedness existing on the
Closing Date and set forth in Schedule 6.3, and (e) the Acquisition
Notes.
6.4 Affiliate Transactions. Except as otherwise expressly
permitted hereunder, no Loan Party shall enter into any lending,
b o r r owing or other commercial transaction with any of its
Subsidiaries or Affiliates, including payment of any management,
consulting, advisory or similar fee provided that such Loan Parties
may make: (i) intercompany advances by any Loan Party ("Lender Loan
Party") to another Loan Party not in excess of $100,000 (net of any
intercompany advances made to such Lender Loan Party by such Loan
Party) in the aggregate outstanding at any time for all Loan Parties;
(ii) intercompany advances by Borrower to AMSC not in the aggregate
at any time in excess of $1,200,000 (net of any intercompany advances
made by AMSC to Borrower); (iii) intercompany advances by any Loan
Party to Borrower; and (iv) redemption of Parent's common stock from
Philip Kurtz in repayment of the loan referred to in Schedule 6.4.
Set forth in Schedule 6.4 is a list of all such lending, borrowing or
other commercial transactions existing or outstanding as of the
Closing Date.
6.5 Capital Structure and Business. No Loan Party shall (a)
make any changes in its business objectives, purposes, or operations
which could in any way adversely affect the repayment of the
Obligations or have or result in a Material Adverse Effect; (b) amend
i t s certificate of incorporation, charter, by-laws or other
organizational documents; or (c) engage in any business other than
the business currently engaged in by such Loan Party and related
businesses.
6.6 Guaranteed Indebtedness. No Loan Party shall incur any
Guaranteed Indebtedness except: (a) by endorsement of instruments or
items of payment for deposit to the general account of such Loan
Party; (b) for Guaranteed Indebtedness incurred for the benefit of
such Loan Party if the primary obligation is permitted by this
Agreement for such Loan Party to incur (and such Guaranteed
Indebtedness shall be treated as a primary obligation for all
purposes hereof); (c) for performance bonds or indemnities entered
into in the ordinary course of business consistent with past
practices; and (d) the indemnities set forth in Section 12.2 of the
Stock Purchase Agreement.
6.7 Liens. No Loan Party shall create or permit to exist any
Lien on any of its properties or assets except for: (a) presently
existing or hereafter created Liens in favor of Lender to secure the
Obligations; (b) Permitted Encumbrances; (c) Liens in favor of the
holders of the Acquisition Notes on the stock of AMSC owned by Parent
pursuant to documentation satisfactory to Lender; and (d) purchase
money Liens or purchase money security interests upon or in Equipment
acquired by such Loan Party in the ordinary course of business to
secure the purchase price of such Equipment or to secure Capital
Lease Obligations or Indebtedness permitted under clause (c) of
Section 6.3 incurred solely for the purpose of financing the
acquisition of such Equipment; provided that no Loan Party shall
create or permit any Lien to exist on any of the Collateral (other
than Liens described in clauses (a) and (b) above).
6.8 Sale of Assets. No Loan Party shall sell, transfer, convey,
assign or otherwise dispose of any of its assets or properties,
including any Collateral; provided, that the foregoing shall not
prohibit (a) the sale of Inventory in the ordinary course of
business; and (b) the sale or
STM-62336.3
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disposition of any assets which have become obsolete or surplus to
the business of such Loan Party in any Fiscal Year having a fair
market value of not greater than $35,000 in the aggregate for all of
the Loan Parties.
6.9 ERISA. No Loan Party or any ERISA Affiliate shall acquire
any new ERISA Affiliate that maintains or has an obligation to
contribute to a Pension Plan that has either an "accumulated funding
deficiency," as defined in Section 302 of ERISA, or any "unfunded
vested benefits," as defined in Section 4006(a)(3)(E)(iii) of ERISA
in the case of any Pension Plan other than a Multiemployer Plan and
in Section 4211 of ERISA in the case of a Multiemployer Plan.
Additionally, neither Borrower nor any ERISA Affiliate shall: (a)
permit or suffer any condition set forth in Section 3.13 to cease to
be met and satisfied at any time, other than permitting an ERISA
Affiliate acquired after the Closing Date to sponsor a Title IV Plan,
a Plan subject to IRC Section 412 or ERISA Section 302, or a Retiree
Welfare Plan.; (b) terminate any Title IV Plan where such termination
could reasonably be anticipated to result in liability to Borrower;
(c) permit any accumulated funding deficiency, as defined in Section
302(a)(2) of ERISA, to be incurred with respect to any Pension Plan;
(d) fail to make any contributions or fail to pay any amounts due and
owing as required by the terms of any Plan before such contributions
or amounts become delinquent; (e) make a complete or partial
withdrawal (within the meaning of Section 4201 of ERISA) from any
Multiemployer Plan; (f) fail to provide Lender with copies of any
Plan documents or governmental reports or filings, if reasonably
requested by Lender; (g) fail to make any contribution or pay any
amount due as required by IRC Section 412 or Section 302 of ERISA;
(h) allow any ERISA Event or event described in Section 4062(e) of
ERISA to occur with respect to any Title IV Plan; or (i) with respect
to all Retiree Welfare Plans, allow the present value of future
anticipated expenses to exceed $50,000 or fail to provide copies of
such projections to Lender.
6.10 Financial Covenants. No Loan Party shall breach or fail to
comply with any of the financial covenants set forth in Annex G, each
of which shall be calculated in accordance with GAAP consistently
applied (and based upon the financial statements delivered
hereunder).
6.11 Hazardous Materials. Except as set forth in Schedule 3.18,
no Loan Party shall, or permit any of its Subsidiaries or any other
Person within its control: (a) to cause or permit a Release of
Hazardous Material on, under, in or about any Subject Property which
could have or result in a Material Adverse Effect; (b) to use, store,
generate, treat or dispose of Hazardous Materials, except in
compliance in all material respects with the Environmental Laws; or
(c) to transport any Hazardous Materials to or from any Subject
Property, except in compliance in all material respects with the
Environmental Laws.
6.12 Sale-Leasebacks. No Loan Party shall engage in any sale-
leaseback or similar transaction involving any of its property or
assets.
6.13 Cancellation of Indebtedness. No Loan Party shall cancel
a n y claim or Indebtedness owing to it, except for adequate
consideration and in the ordinary course of its business.
6.14 R e stricted Payments. No Loan Party shall make any
Restricted Payment to any Person other than to Parent, except
Restricted Payments permitted under Section 6.4.
6.15 Bank Accounts. No Loan Party shall maintain any deposit,
operating or other bank accounts except for those accounts identified
in Schedule 3.20 without the prior written
STM-62336.3
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consent of Lender which shall not be unreasonably withheld so long as
the maintenance of such account does not in Lender's reasonable
judgment negatively affect the cash management system described in
Annex B or the preservation of the Collateral and the requirements of
Annex B with respect to such account are satisfied.
6.16 No Speculative Investments. No Loan Party shall engage in
any speculative investment or any investment involving commodity
options or futures contracts.
6.17 Margin Regulations. No Loan Party shall use the proceeds of
any Revolving Credit Advance to purchase or carry any Margin Stock or
any equity security of a class which is registered pursuant to
Section 12 of the Securities Exchange Act of 1934.
6.18 Limitation on Negative Pledge Clauses. No Loan Party shall
directly or indirectly, enter into any agreement with any Person,
other than the agreements with Lender pursuant to a Loan Document
which prohibits or limits the ability of any Loan Party to create,
incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired.
6.19 Amendments to FFMC Documents. No Loan Party without the
prior written consent of Lender shall amend (or permit to be amended)
the Stock Purchase Agreement, the Earn Out Agreement to increase the
monetary obligations of Borrower (as successor in interest to HCCI
thereunder) or otherwise adversely affect the interests of Lender, or
any other HCCI Acquisition Document in effect after the Closing Date.
7. TERM
7.1 Duration. The financing arrangement contemplated hereby
shall be in effect until the Commitment Termination Date. On the
Commitment Termination Date, the Revolving Credit Commitment and the
Term Loan Commitment shall terminate and the Revolving Credit Loan,
the Term Loan and all other Obligations shall immediately become due
and payable in full, in cash.
7.2 Survival of Obligations. Except as otherwise expressly
provided for in the Loan Documents, no termination or cancellation
(regardless of cause or procedure) of any financing arrangement under
this Agreement shall in any way affect or impair the Obligations,
duties, indemnities, and liabilities of any Loan Party, or the rights
of Lender relating to any Obligations, due or not due, liquidated,
contingent or unliquidated or any transaction or event occurring
prior to such termination, or any transaction or event, the
performance of which is not required until after the Commitment
Termination Date. Except as otherwise expressly provided herein or
in any other Loan Document, all undertakings, agreements, covenants,
warranties and representations of or binding upon any Loan Party, and
all rights of Lender, all as contained in the Loan Documents shall
not terminate or expire, but rather shall survive such termination or
cancellation and shall continue in full force and effect until such
time as all of the Obligations have been indefeasibly paid in full in
accordance with the terms of the agreements creating such
Obligations.
STM-62336.3
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8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
8.1 Events of Default. The occurrence of any one or more of the
following events (regardless of the reason therefor) shall constitute
an "Event of Default" hereunder:
(a) Any Loan Party shall fail to make any payment in respect of
any Obligations hereunder or under any of the other Loan Documents
when due and payable or declared due and payable, including any
payment of principal of, or interest on, the Revolving Credit Loan or
the Term Loan.
(b) Any Loan Party shall fail or neglect to perform, keep or
observe any of the provisions of Section 1.8, Section 4.1, or Section
6, including any of the provisions set forth in Annex B, Annex F, or
Annex G.
(c) Any Loan Party shall fail or neglect to perform, keep or
observe any term or provision of this Agreement (other than any such
term or provision referred to in paragraph (a) or (b) above) or of
any of the other Loan Documents, and the same shall remain unremedied
for a period ending on the first to occur of thirty (30) days after
Borrower shall receive written notice of any such failure from Lender
or thirty (30) days after any Loan Party shall become aware thereof.
(d) A default shall occur under any other agreement, document or
instrument to which any Loan Party is a party or by which any Loan
Party or its property is bound, and such default (i) involves the
failure to make any payment (whether of principal, interest or
otherwise) due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) in respect of any Indebtedness of
such Loan Party in an aggregate amount exceeding $100,000, except for
payments lawfully withheld by such Loan Party as a setoff in
connection with a good faith dispute between such Loan Party and the
holder of such Indebtedness, or (ii) causes (or permits any holder of
such Indebtedness or a trustee to cause) such Indebtedness, or a
portion thereof in an aggregate amount exceeding $100,000, to become
due prior to its stated maturity or prior to its regularly scheduled
dates of payment.
(e) Any representation or warranty herein or in any Loan
Document or in any written statement pursuant thereto or hereto, any
report, financial statement or certificate made or delivered to
Lender by any Loan Party shall be untrue or incorrect in any material
respect as of the date when made or deemed made (including those made
or deemed made pursuant to Section 2.2).
(f) Any of the assets of any Loan Party shall be attached,
seized, levied upon or subjected to a writ or distress warrant, or
come within the possession of any receiver, trustee, custodian or
assignee for the benefit of creditors of such Loan Party and shall
remain unstayed or undismissed for thirty (30) consecutive days; or
any Person other than a Loan Party shall apply for the appointment of
a receiver, trustee or custodian for any Loan Party's assets and
shall remain unstayed or undismissed for thirty (30) consecutive
days; or any Loan Party shall have concealed, removed or permitted to
be concealed or removed, any part of its property, with intent to
hinder, delay or defraud its creditors or any of them or made or
suffered a transfer of any of its property or the incurring of an
obligation which may be fraudulent under any bankruptcy, fraudulent
conveyance or other similar law.
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(g) A case or proceeding shall have been commenced against any
Loan Party in a court having competent jurisdiction seeking a decree
or order (i) under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other applicable federal,
state or foreign bankruptcy or other similar law, (ii) appointing a
custodian, receiver, liquidator, assignee, trustee or sequestrator
(or similar official) of any Loan Party or of any substantial part of
its properties, or (iii) ordering the winding up or liquidation of
the affairs of any Loan Party and such case or proceeding shall
remain undismissed or unstayed for sixty (60) consecutive days or
such court shall enter a decree or order granting the relief sought
in such case or proceeding.
(h) Any Loan Party (i) shall file a petition seeking relief
under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable federal, state or foreign
b a nkruptcy or other similar law, (ii) shall consent to the
institution of proceedings thereunder or to the filing of any such
petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee or sequestrator
(or similar official) of any Loan Party or of any substantial part of
any Loan Party's properties, (iii) shall fail generally to pay its
debts as such debts become due, or (iv) shall take any corporate
action in furtherance of any such action.
(i) Final judgment or judgments (after the expiration of all
times to appeal therefrom) for the payment of money in excess of
$50,000 in the aggregate shall be rendered against any Loan Party,
unless the same shall be (i) fully covered by insurance in accordance
with Section 5.5, or (ii) vacated, stayed, bonded, paid or discharged
within a period of fifteen (15) days from the date of such judgment.
(j) There shall occur any Material Adverse Effect which shall
not have been cured (or waived by Lender) within thirty (30) days of
notice thereof from Lender to Borrower.
(k) Any provision of any Loan Document shall for any reason
cease to be valid, binding and enforceable in accordance with its
terms or any Loan Party or other party thereto shall so state in
writing; or any Lien created under any Collateral Document shall
cease to be a valid and perfected Lien having the first priority in
any of the Collateral purported to be covered thereby.
(l) There shall occur a Change of Control.
(m) An event or condition specified in Section 6.9 hereof shall
occur or exist with respect to any Plan or Multiemployer Plan and, as
a result of such event or condition, together with all other such
events or conditions, Borrower, any Subsidiary thereof or any ERISA
Affiliate shall incur or in the opinion of Lender shall be reasonably
likely to incur a liability to a Plan, a Multiemployer Plan or PBGC
(or any combination of the foregoing) in excess of $50,000 in the
aggregate.
8.2 Remedies. If any Event of Default shall have occurred and
be continuing, the rate of interest applicable to the Revolving
Credit Loan and the Term Loan may, at Lender's sole discretion, be
increased, effective as of the date of the occurrence of the Default
giving rise to such Event of Default, to the Default Rate as provided
in Section 1.5(c). If any Event of Default shall have occurred and
be continuing, Lender may, without notice, take any one or more of
the following actions: (a) terminate the Revolving Credit
Commitment, whereupon Lender's obligation to make further Revolving
Credit Advances shall terminate; (b) declare all or any portion of
the Obligations to be forthwith due and payable, whereupon such
Obligations shall
STM-62336.3
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become and be due and payable; or (c) exercise any rights and
remedies provided to Lender under the Loan Documents and/or at law or
equity, including all remedies provided under the Code; provided,
that upon the occurrence of an Event of Default specified in Section
8.1 (f), (g) or (h) the rate of interest applicable to all
Obligations shall be increased automatically to the Default Rate as
provided in Section 1.5(c), and the Revolving Credit Commitment shall
immediately terminate and the Obligations shall become immediately
due and payable, in each case, without declaration, notice or demand
by Lender to any Person.
8.3 Waivers. Except as otherwise provided for in this Agreement
and applicable law, to the full extent permitted by applicable law,
Borrower waives (a) presentment, demand and protest and notice of
presentment, dishonor, notice of intent to accelerate, notice of
a c celeration, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all Loan
Documents, notes, commercial paper, accounts, contract rights,
documents, instruments, chattel paper and guaranties at any time held
by Lender on which Borrower may in any way be liable, and Borrower
hereby ratifies and confirms whatever Lender may do in this regard,
(b) all rights to notice and a hearing prior to Lender's taking
possession or control of, or to Lender's replevy, attachment or levy
upon, the Collateral or any bond or security which might be required
by any court prior to Lender exercising any of its remedies, and (c)
the benefit of any right of redemption and all valuation, appraisal
and exemption laws. Borrower and Parent acknowledge that they have
been advised by counsel of their choice with respect to this
Agreement, the other Loan Documents and the transactions contemplated
by this Agreement and the other Loan Documents.
9. SUCCESSORS AND ASSIGNS
9.1 Successors and Assigns. This Agreement and the other Loan
Documents shall be binding on and shall inure to the benefit of
Borrower, Parent, Lender, and their respective successors and
assigns, except as otherwise provided herein or therein. Neither
Borrower nor Parent may assign, delegate, transfer, hypothecate or
otherwise convey their rights, benefits, obligations or duties
hereunder or under any of the Loan Documents without the prior
express written consent of Lender. Any such purported assignment,
transfer, hypothecation or other conveyance by Borrower or Parent
without such prior express written consent shall be void. The terms
and provisions of this Agreement and the other Loan Documents are for
the purpose of defining the relative rights and obligations of
Borrower and Parent, on the one hand, and Lender, on the other hand,
with respect to the transactions contemplated hereby and there shall
be no third party beneficiaries of any of the terms and provisions of
this Agreement or any of the other Loan Documents.
9.2 A s s ignments and Participations. Lender may assign,
negotiate, pledge or otherwise hypothecate all or any portion of this
Agreement, or grant participations herein, in the Revolving Credit
Loan, the Term Loan, or in any of its rights or security hereunder
and under the other Loan Documents or any part thereof, including,
without limitation, any instruments securing the Borrower's
obligations hereunder. Borrower shall assist Lender in selling
assignments or participations under this Section 9.2 in whatever
manner reasonably necessary in order to enable or effect any such
assignment or participation, including the execution and delivery of
any and all agreements, notes and other documents and instruments as
shall be requested and the preparation and delivery of informational
materials, appraisals or other documents for, and the participation
of relevant management in meetings with, potential assignees or
participants.
STM-62336.3
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10. MISCELLANEOUS
10.1 Complete Agreement; Modification of Agreement. This
Agreement and the other Loan Documents constitute the complete
agreement between the parties with respect to the subject matter
hereof and thereof and supersede all prior agreements, commitments,
understandings or inducements (oral or written, expressed or
implied). Neither this Agreement nor any other Loan Document nor any
terms hereof or thereof may be changed, waived, discharged or
terminated unless such change, waiver, discharge or termination is in
writing signed by Borrower and Lender.
10.2 Fees and Expenses.
(a) Borrower shall pay on demand all out-of-pocket costs and
expenses (including reasonable fees of counsel) of Lender in
connection with the preparation, negotiation, approval, execution,
delivery, administration, modification, amendment, waiver and
enforcement (whether through negotiations, legal proceedings or
otherwise) of the Loan Documents, and commitments relating thereto,
and the other documents to be delivered hereunder or thereunder and
the transactions contemplated hereby and thereby and the fulfillment
or attempted fulfillment of conditions precedent hereunder,
including: (i) any amendment, modification or waiver of, or consent
with respect to, any of the Loan Documents or advice in connection
with the administration of the advances made pursuant hereto or its
rights hereunder or thereunder; (ii) any litigation, contest,
dispute, suit, proceeding or action (whether instituted by Lender,
Borrower, Parent or any other Person) in any way relating to the
Collateral, any of the Loan Documents or any other agreements to be
executed or delivered in connection therewith or herewith, whether as
party, witness, or otherwise, including any litigation, contest,
dispute, suit, case, proceeding or action, and any appeal or review
thereof, in connection with a case commenced in good faith by or
against Borrower, Parent or any other Person that may be obligated to
Lender by virtue of the Loan Documents, including any litigation,
contest, dispute, suit, case, proceeding or action (and any appeal or
review) in connection with a case under title 11 of the United States
Code, as now constituted or hereafter amended, or any other
applicable Federal, state or foreign bankruptcy or similar insolvency
law; (iii) any attempt to enforce any rights of Lender against
Borrower, Parent or any other Person that may be obligated to Lender
by virtue of any of the Loan Documents; or (iv) any effort to (A)
monitor the Revolving Credit Loan, the Term Loan and the Loan
Documents, (B) evaluate, observe, assess Borrower or its affairs, or
(C) verify, protect, evaluate, assess, appraise, collect, sell,
liquidate or otherwise dispose of the Collateral.
(b) Borrower shall pay on demand all reasonable costs and
expenses (including reasonable fees of counsel) of Lender in
connection with any Default and any enforcement or collection
proceedings resulting therefrom or any amendment, modification or
waiver of, or consent with respect to, any of the Loan Documents in
connection with any Default.
(c) Without limiting the generality of clauses (a) and (b)
above, Borrower's obligation to reimburse Lender for costs and
expenses shall include the reasonable fees and expenses of counsel
(and local, foreign or special counsel, advisors, consultants and
auditors retained by such counsel), as well as the fees and expenses
o f accountants, environmental advisors, appraisers, investment
bankers, management and other consultants and paralegals; court costs
and expenses; photocopying and duplicating expenses; court reporter
fees, costs and expenses; long distance telephone charges; air
express charges; telegram charges; secretarial overtime charges;
expenses for travel, lodging and food; and all other out-of-pocket
costs and
STM-62336.3
-27-
expenses of every type and nature paid or incurred in connection with
the performance of such legal or other advisory services.
10.3 No Waiver. No failure on the part of Lender, at any time or
times, to require strict performance by any Loan Party, of any
provision of this Agreement and any of the other Loan Documents shall
waive, affect or diminish any right of Lender thereafter to demand
strict compliance and performance therewith. Any suspension or
waiver of a Default shall not suspend, waive or affect any other
Default whether the same is prior or subsequent thereto and whether
of the same or of a different type. None of the undertakings,
agreements, warranties, covenants and representations of any Loan
Party contained in this Agreement or any of the other Loan Documents
and no Default by any Loan Party shall be deemed to have been
suspended or waived by Lender, unless such waiver or suspension is by
an instrument in writing signed by an officer of or other authorized
e m ployee of Lender and directed to Borrower specifying such
suspension or waiver.
10.4 Remedies. The rights and remedies of Lender under this
Agreement shall be cumulative and nonexclusive of any other rights
and remedies which Lender may have under any other agreement,
including the Loan Documents, by operation of law or otherwise.
Recourse to the Collateral shall not be required.
10.5 Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or
the remaining provisions of this Agreement.
10.6 Conflict of Terms. Except as otherwise provided in this
Agreement or any of the other Loan Documents by specific reference to
the applicable provisions of this Agreement, if any provision
contained in this Agreement is in conflict with, or inconsistent
with, any provision in any of the other Loan Documents, the
provisions contained in this Agreement shall govern and control.
10.7 Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, Lender is hereby authorized at
any time and from time to time, to the fullest extent permitted by
law, to setoff and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other
indebtedness at any time owing by Lender to or for the credit or the
account of Borrower against any and all of the Obligations now or
hereafter existing irrespective of whether or not Lender shall have
made any demand under this Agreement or any other Loan Document and
although such Obligations may be unmatured. Lender agrees promptly
to notify Borrower after any such setoff and application made by
Lender; provided, that the failure to give such notice shall not
affect the validity of such setoff and application. The rights of
Lender under this Section are in addition to the other rights and
remedies (including other rights of setoff) which Lender may have.
10.8 Authorized Signature. Until Lender shall be notified by
Borrower to the contrary, the signature upon any document or
instrument delivered pursuant hereto and believed by Lender or any of
Lender's officers, agents, or employees to be that of an officer or
duly authorized representative of a Borrower listed in Schedule 10.8
shall bind Borrower and be deemed to be the act of Borrower affixed
pursuant to and in accordance with resolutions duly adopted by
Borrower's Board of Directors, and Lender shall be entitled to assume
the authority
STM-62336.3
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of each signature and authority of the Person whose signature it is
or appears to be unless the Person acting in reliance on such
signature shall have actual knowledge of the fact that such signature
is false or the Person whose signature or purported signature is
presented is without authority.
10.9 Notices. Except as otherwise provided herein, whenever it
is provided herein that any notice, demand, request, consent,
approval, declaration or other communication shall or may be given to
or served upon either of the parties by the other party, or whenever
either of the parties desires to give or serve upon the other party
any communication with respect to this Agreement, each such notice,
demand, request, consent, approval, declaration or other
communication shall be in writing and shall be deemed to have been
validly served, given or delivered (a) upon the earlier of actual
receipt and three (3) days after deposit in the United States Mail,
registered or certified mail, return receipt requested, with proper
postage prepaid, (b) upon transmission, when sent by telecopy or
other similar facsimile transmission (with such telecopy or facsimile
promptly confirmed by delivery of a copy by personal delivery or
United States Mail as otherwise provided in this Section 10.9, (c)
one Business Day after deposit with a reputable overnight courier
with all charges prepaid, or (d) when delivered, if hand-delivered by
messenger, all of which shall be addressed to the party to be
notified and sent to the address or facsimile number indicated below
or to such other address (or facsimile number) as may be substituted
by notice given as herein provided. The giving of any notice
required hereunder may be waived in writing by the party entitled to
receive such notice. Failure or delay in delivering copies of any
notice, demand, request, consent, approval, declaration or other
communication to any Person (other than a Borrower or Lender)
designated below to receive copies shall in no way adversely affect
the effectiveness of such notice, demand, request, consent, approval,
declaration or other communication.
(a) If to Lender at:
General Electric Capital Corporation
201 High Ridge Road
Stamford, Connecticut 06927
Attention: Daniel R. Pengue
Telecopier No.: (203) 316-7823
With copies to:
General Electric Capital Corporation
201 High Ridge Road
Stamford, Connecticut 06927
Attention: Legal Counsel
Telecopy No.: (203) 316-7889
With a copy to:
Paul, Hastings, Janofsky & Walker
1055 Washington Boulevard
Stamford, Connecticut 06901
Attention: Mario J. Ippolito, Esq.
Telecopy No.: (203) 359-3031
STM-62336.3
-29-
(b) If to Borrower or Parent, at:
c/o C.I.S. Technologies, Inc.
One Warren Place
6100 South Yale, Suite 1900
Tulsa, Oklahoma 74136-1903
Attention: Richard A. Evans
Telecopy No.: (918) 481-4281
With a copy to:
c/o C.I.S. Technologies, Inc.
One Warren Place
6100 South Yale, Suite 1900
Tulsa, Oklahoma 74136-1903
Attention: Thomas G. Noulles, Esq.
Telecopy No.: (918) 481-4281
10.10 Section Titles. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive
meaning or content of any kind whatsoever and are not a part of this
Agreement.
10.11 Counterparts. This Agreement may be executed in any number
of separate counterparts, each of which shall, collectively and
separately, constitute one agreement.
10.12 Time of the Essence. Time is of the essence of this
Agreement and each of the other Loan Documents.
10.13 Publicity. Neither Borrower nor Parent will, or will permit
any of its Subsidiaries to, disclose the name of Lender in any press
release or in any prospectus, proxy statement or other materials
filed with any governmental entity without Lender's prior written
consent which shall not be unreasonably withheld. Borrower and
Parent consent to Lender publishing a tombstone or similar
advertising material relating to the financing transaction
contemplated by this Agreement.
10.14 GOVERNING LAW; CONSENT TO JURISDICTION. EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS
AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE,
AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. BORROWER
AND PARENT HEREBY CONSENT AND AGREE THAT THE STATE OR FEDERAL COURTS
LOCATED IN NEW YORK, NEW YORK, SHALL HAVE EXCLUSIVE JURISDICTION TO
HEAR AND DETERMINE ANY CLAIMS OR DISPUTES PERTAINING TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING
OUT OF OR RELATED TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS; PROVIDED, THAT LENDER, PARENT AND BORROWER ACKNOWLEDGE
THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
STM-62336.3
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HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK; AND FURTHER
PROVIDED, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE
TO PRECLUDE LENDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN
ANY OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF LENDER. EACH OF BORROWER
AND PARENT EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND
EACH OF BORROWER AND PARENT HEREBY WAIVES ANY OBJECTION WHICH
BORROWER AND PARENT MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS
DEEMED APPROPRIATE BY SUCH COURT. BORROWER AND PARENT HEREBY WAIVES
PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED
IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL ADDRESSED TO BORROWER AND PARENT AT THE ADDRESS SET FORTH IN
SECTION 10.9 OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE
DEEMED COMPLETED UPON THE EARLIER OF BORROWER'S AND PARENT'S ACTUAL
RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS,
PROPER POSTAGE PREPAID.
10.15 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND
ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE
PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN
ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM
AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY
DISPUTE, WHETHER IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO, THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY.
10.16 Dating. Although this Agreement is dated as of the date
first written above for convenience, the actual dates of execution
hereof by the parties hereto are respectively the dates set forth
under the signatures hereto, and this Agreement shall be effective on
the latest of such dates.
10.17 Acknowledgement. Each of the parties hereto (including AMSC
by its acknowledgement and agreement to this Agreement in the space
provided below) (i) acknowledges and consents to each of the
amendments to the Existing Credit Agreement effected by this
Agreement, (ii) acknowledges and consents that each Collateral
Document, to which it is a party is, and shall continue to be in full
force and effect after the effectiveness of this Agreement, that all
references therein to the Credit Agreement shall mean this Agreement
and each such Collateral Document is hereby ratified and confirmed in
all respects, and (iii) in the case of Parent and AMSC, hereby
confirms and agrees that its obligations under the Parent
STM-62336.3
-31-
Guaranty or its Subsidiary Guaranty, as the case may be, shall
continue without any diminution thereof and shall remain in full
force and effect on and after the effectiveness of this Agreement and
that each reference to the Credit Agreement in each such Guarantee
shall mean this Agreement.
STM-62336.3
-32-
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
Borrower:
C.I.S., INC.
By: /s/ Richard A. Evans
Name: Richard A. Evans
Title: Treasurer
Date: February __, 1996
Parent:
C.I.S. TECHNOLOGIES, INC.
By: /s/ Richard A. Evans
Name: Richard A. Evans
Title: Treasurer
Date: February __, 1996
Lender:
GENERAL ELECTRIC CAPITAL
CORPORATION
By: /s/ Dan Pengue
Name: Daniel R. Pengue
Title: Authorized Signatory
Date: February __, 1996
Acknowledged and Agreed to:
AMSC, Inc.
By: /s/Richard A. Evans
Name: Richard A. Evans
Title: Vice President
Date: February __, 1996
STM-62336.3
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TABLE OF CONTENTS
Section Page
1. AMOUNT AND TERMS OF CREDIT . . . . . . . . . . . . . . . . 2
1.1 Revolving Credit Advances . . . . . . . . . . . . . . 2
1.2 Term Loan . . . . . . . . . . . . . . . . . . . . . . 3
1.3 Repayment; Termination of Commitment . . . . . . . . 4
1.4 Use of Proceeds . . . . . . . . . . . . . . . . . . . 4
1.5 Interest . . . . . . . . . . . . . . . . . . . . . . 5
1.6 Eligible Accounts . . . . . . . . . . . . . . . . . . 6
1.7 Fees . . . . . . . . . . . . . . . . . . . . . . . . 6
1.8 Cash Management System . . . . . . . . . . . . . . . 6
1.9 Receipt of Payments . . . . . . . . . . . . . . . . . 6
1.10 Application and Allocation of Payments . . . . . . . 6
1.11 Accounting . . . . . . . . . . . . . . . . . . . . . 7
1.12 Indemnity . . . . . . . . . . . . . . . . . . . . . . 7
1.13 Access . . . . . . . . . . . . . . . . . . . . . . . 8
1.14 Taxes . . . . . . . . . . . . . . . . . . . . . . . . 8
2. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . 9
2.1 Conditions to the . . . . . . . . . . . . . . . . . 9
2.2 Further Conditions to Each Loan . . . . . . . . . . . 10
3. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . 11
3.1 Corporate Existence; Compliance with Law . . . . . . 11
3.2 Executive Offices; Collateral Locations; Corporate or
Other Names . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.3 Corporate Power; Authorization; Enforceable Obligations 11
3.4 Financial Statements . . . . . . . . . . . . . . . . 12
3.5 Material Adverse Change . . . . . . . . . . . . . . . 12
3.6 Ownership of Property; Liens . . . . . . . . . . . . 12
3.7 Restrictions; No Default . . . . . . . . . . . . . . 12
3.8 Labor Matters . . . . . . . . . . . . . . . . . . . . 12
3.9 Ventures, Subsidiaries and Affiliates; Outstanding Stock
and Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 13
3.10 Government Regulation . . . . . . . . . . . . . . . . 13
3.11 Margin Regulations . . . . . . . . . . . . . . . . . 13
3.12 Taxes . . . . . . . . . . . . . . . . . . . . . . . . 13
3.13 ERISA . . . . . . . . . . . . . . . . . . . . . . . . 14
3.14 No Litigation . . . . . . . . . . . . . . . . . . . . 15
3.15 Brokers . . . . . . . . . . . . . . . . . . . . . . . 15
3.16 Intellectual Property . . . . . . . . . . . . . . . . 15
3.17 Full Disclosure . . . . . . . . . . . . . . . . . . . 15
3.18 Hazardous Materials . . . . . . . . . . . . . . . . . 16
3.19 Insurance Policies . . . . . . . . . . . . . . . . . 16
3.20 Deposit and Disbursement Accounts . . . . . . . . . . 16
4. FINANCIAL STATEMENTS AND INFORMATION . . . . . . . . . . . 16
4.1 Reports and Notices . . . . . . . . . . . . . . . . . 16
4.2 Communication with Accountants . . . . . . . . . . . 16
5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . 17
5.1 Maintenance of Existence and Conduct of Business . . 17
5.2 Payment of Charges and Claims . . . . . . . . . . . . 17
5.3 Books and Records . . . . . . . . . . . . . . . . . . 17
5.4 Litigation . . . . . . . . . . . . . . . . . . . . . 18
5.5 Insurance . . . . . . . . . . . . . . . . . . . . . . 18
5.6 Compliance with Laws . . . . . . . . . . . . . . . . 18
5.7 Agreements . . . . . . . . . . . . . . . . . . . . . 19
5.8 Supplemental Disclosure . . . . . . . . . . . . . . . 19
5.9 Environmental Matters . . . . . . . . . . . . . . . . 19
5.10 Subsidiaries . . . . . . . . . . . . . . . . . . . . 20
5.11 Application of Proceeds . . . . . . . . . . . . . . . 20
5.12 Fiscal Year . . . . . . . . . . . . . . . . . . . . . 20
6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . 20
6.1 Mergers, Subsidiaries, Etc. . . . . . . . . . . . . . 20
6.2 Investments . . . . . . . . . . . . . . . . . . . . . 20
STM-62336.3
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TABLE OF CONTENTS cont'd
Section Page
6.3 Indebtedness . . . . . . . . . . . . . . . . . . . . 21
6.4 Affiliate Transactions . . . . . . . . . . . . . . . 21
6.5 Capital Structure and Business . . . . . . . . . . . 21
6.6 Guaranteed Indebtedness . . . . . . . . . . . . . . . 21
6.7 Liens . . . . . . . . . . . . . . . . . . . . . . . . 21
6.8 Sale of Assets . . . . . . . . . . . . . . . . . . . 21
6.9 ERISA . . . . . . . . . . . . . . . . . . . . . . . . 22
6.10 Financial Covenants . . . . . . . . . . . . . . . . . 22
6.11 Hazardous Materials . . . . . . . . . . . . . . . . . 22
6.12 Sale-Leasebacks . . . . . . . . . . . . . . . . . . . 22
6.13 Cancellation of Indebtedness . . . . . . . . . . . . 22
6.14 Restricted Payments . . . . . . . . . . . . . . . . . 22
6.15 Bank Accounts . . . . . . . . . . . . . . . . . . . . 22
6.16 No Speculative Investments . . . . . . . . . . . . . 23
6.17 Margin Regulations . . . . . . . . . . . . . . . . . 23
6.18 Limitation on Negative Pledge Clauses . . . . . . . . 23
6.19 Amendments to FFMC Documents . . . . . . . . . . . . 23
7. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.1 Duration . . . . . . . . . . . . . . . . . . . . . . 23
7.2 Survival of Obligations . . . . . . . . . . . . . . . 23
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES . . . . . . . . . . 24
8.1 Events of Default . . . . . . . . . . . . . . . . . . 24
8.2 Remedies . . . . . . . . . . . . . . . . . . . . . . 25
8.3 Waivers . . . . . . . . . . . . . . . . . . . . . . . 26
9. SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . 26
9.1 Successors and Assigns . . . . . . . . . . . . . . . 26
9.2 Assignments and Participations . . . . . . . . . . . 26
10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 27
10.1 Complete Agreement; Modification of Agreement . . . . 27
10.2 Fees and Expenses . . . . . . . . . . . . . . . . . . 27
10.3 No Waiver . . . . . . . . . . . . . . . . . . . . . . 28
10.4 Remedies . . . . . . . . . . . . . . . . . . . . . . 28
10.5 Severability . . . . . . . . . . . . . . . . . . . . 28
10.6 Conflict of Terms . . . . . . . . . . . . . . . . . . 28
10.7 Right of Set-off . . . . . . . . . . . . . . . . . . 28
10.8 Authorized Signature . . . . . . . . . . . . . . . . 28
10.9 Notices . . . . . . . . . . . . . . . . . . . . . . . 29
10.10 Section Titles . . . . . . . . . . . . . . . . . . . 30
10.11 Counterparts . . . . . . . . . . . . . . . . . . . . 30
10.12 Time of the Essence . . . . . . . . . . . . . . . . . 30
10.13 Publicity . . . . . . . . . . . . . . . . . . . . . . 30
10.14 GOVERNING LAW; CONSENT TO JURISDICTION . . . . . . . 30
10.15 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . 31
10.16 Dating . . . . . . . . . . . . . . . . . . . . . . . 31
10.17 Acknowledgement . . . . . . . . . . . . . . . . . . . 31
STM-62336.3
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INDEX OF ANNEXES, SCHEDULES AND EXHIBITS
Annex A - Definitions; Rules of Construction
Annex B - Cash Management System
Annex C - Schedule of Documents
Annex D - Schedule of Certain Fees
Annex E - Financials and Notices
Annex F - Insurance Requirements
Annex G - Financial Covenants
Schedule 3.2 - Executive Offices; Trade Names
Schedule 3.4 - Financials
Schedule 3.5 - Dividends
Schedule 3.6 - Real Estate and Leases
Schedule 3.8 - Labor Matters
Schedule 3.9 - Ventures, Subsidiaries and Affiliates;
Outstanding Stock
Schedule 3.12 - Tax Matters
Schedule 3.13 - ERISA Plans
Schedule 3.14 - Litigation
Schedule 3.16 - Patents, Trademarks, Copyrights and
Licenses
Schedule 3.19 - Insurance Policies
Schedule 3.20 - Bank Accounts
Schedule 6.2 - Investments
Schedule 6.3 - Indebtedness
Schedule 6.4 - Loans to and Transactions with
Employees
Schedule 6.7 - Liens
Schedule 10.8 - Authorized Signatories
Exhibit A - Form of Notice of Revolving Credit Advance
Exhibit B - Form of Borrowing Base Certificate
Exhibit C - Form of Revolving Credit Note
Exhibit D - Form of Term Note
Exhibit E - Parent Guaranty
Exhibit F - Security Agreement
Exhibit G - Form of Subsidiary Guaranty
Exhibit H - Form of Subsidiary Security Agreement
Exhibit I - Form of Pledge Agreement
STM-62336.3
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