Exhibit 10.3
FIRST AMENDMENT TO CREDIT AGREEMENT
This FIRST AMENDMENT TO CREDIT AGREEMENT (this "First Amendment") is
entered into as of February 4, 1999, by and between APPLIED CELLULAR TECHNOLOGY,
INC., a Missouri corporation (together with its successors and assigns, the
"Borrower") and (b) STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
company (together with its successors and assigns, the "Bank").
All capitalized terms not defined herein but defined in that certain
Credit Agreement, dated as of August 25, 1998, by and between the Borrower and
the Bank (as the same may be amended, modified, substituted, extended or
restated, from time to time, the "Credit Agreement") shall have the meanings
given to such terms in the Credit Agreement.
Preliminary Statements:
A. Pursuant to the terms and conditions of the Credit Agreement and the
other Credit Documents, the Bank has established a certain Revolving Credit
Facility (the "Revolving Credit Facility") in favor of the Borrower in the
original principal amount of up to Twenty Million and 00/100 Dollars
($20,000,000.00); and
B. On or about October 7, 1998, the Borrower created Applied Cellular
Technology Financial Corp., a New Hampshire corporation, which is a new
wholly-owned Subsidiary of the Borrower (the "New Subsidiary"); and
C. Section 5.18 of the Credit Agreement requires that, within thirty
(30) days after the creation of any new Subsidiary, the Borrower cause such new
Subsidiary to become a Guarantor of the Obligations by executing and delivering
certain agreements, documents and instruments which are more particularly
described therein; and
D. The Borrower now requests that (i) the Bank increase the aggregate
principal amount available under the Revolving Credit Facility from Twenty
Million and 00/100 Dollars ($20,000,000.00) to Twenty Three Million and 00/100
Dollars ($23,000,000.00); and (ii) extend the date by which the New Subsidiary
must become a Guarantor to March 31, 1999; and
E. The Bank is not willing to (i) so increase the aggregate principal
amount available under the Revolving Credit Facility or (ii) extend the date by
which the New Subsidiary must become a Guarantor, unless and until the Borrower
has entered into and agreed to all of the terms and conditions of this First
Amendment;
NOW, THEREFORE, in consideration of the mutual agreements and covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower and the Bank hereby
agree as follows:
1. Amendments to Credit Agreement.
1.1 Amendment to Section 1.01. The definition of "Credit
Documents" contained in Section 1.01 of the Credit Amendment is hereby
amended, restated and superseded in its entirety as follows:
"'Credit Documents' shall mean this Agreement, the
Note, the Guaranty Agreement, the Security Documents and any
and all other agreements, guaranties, instruments, documents,
certificates, financing statements, powers of attorney,
consents and filings, whether heretofore, now, or hereafter
executed by or on behalf of the Borrower, any Guarantor or any
other Person and delivered to the Bank in connection with the
Credit, all as may be amended, modified, supplemented,
restated or extended, from time to time."
1.2 Amendment to Section 2.01(a). The reference contained in
Section 2.01(a) of the Loan Agreement to "$20,000,000" is deleted and
replaced with the following: "Twenty- Three Million and 00/100 Dollars
($23,000,000.00)".
1.3 Amendment to Section 2.01(b). The reference contained in
Section 2.01(b) of the Loan Agreement to "$20,000,000" is deleted and
replaced with the following: "Twenty- Three Million and 00/100 Dollars
($23,000,000.00)".
2. First Allonge to Revolving Credit Note. The Borrower shall execute
and deliver contemporaneously herewith to the Bank a certain First Allonge to
Revolving Credit Note (the "First Allonge to Revolving Credit Note") by and
between the Borrower and the Bank which amends the Revolving Credit Note to
reflect the increase in the aggregate principal amount available under the
Revolving Credit Facility from Twenty Million and 00/100 Dollars
($20,000,000.00) to Twenty Three Million and 00/100 Dollars ($23,000,000.00).
The First Allonge to Revolving Credit Note shall be substantially in the form
attached hereto as Exhibit A and incorporated herein by reference.
3. Reaffirmation of Guaranty Agreement and Security Documents. The
Borrower shall cause the Guarantors to execute and deliver contemporaneously
herewith to the Bank a certain Reaffirmation of Guaranty Agreement and Security
Documents (the "Reaffirmation of Guaranty Agreement and Security Documents") by
and between the Borrower and the Guarantors, pursuant to which, among other
things, each of the Guarantors reaffirms all of its obligations and liability
under the Guaranty Agreement and each of the Security Documents to which each
such Guarantor is a party. The Reaffirmation of Guaranty Agreement and Security
Documents shall be substantially in the form attached hereto as Exhibit B and
incorporated herein by reference.
4. New Subsidiary - Extension. The Bank hereby extends the date by
which the New Subsidiary must become a Guarantor to March 31, 1999, so long as
by such date the Borrower shall have complied with all of the requirements of
Section 5.18 of the Credit Agreement with respect to such New Subsidiary.
5 Ratification of Credit Documents. Subject to the amendments expressly
set forth in Section 1 above and in the First Allonge to Revolving Credit Note,
the Borrower hereby ratifies and reaffirms all of the terms and provisions of
the Credit Agreement and all of the other Credit Documents to which it is a
party or by which it or its property is bound, and hereby expressly acknowledges
and confirms that the terms and provisions of each thereof, as amended hereby,
shall and do remain in full force and effect, without change.
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6. Representations and Warranties. The Borrower hereby acknowledges and
confirms that all of its representations and warranties contained in the Credit
Agreement and in all of the other Credit Documents are and remain true, correct
and complete as of the date hereof as if made as of the date hereof (except as
the same may expressly relate to an earlier date, and except as the same may
relate or apply to the New Subsidiary). The Borrower represents and warrants to
the Bank that if, effective as of the date hereof, the New Subsidiary was to be
party to the Guaranty Agreement and the other Credit Documents to which all of
the other Guarantors are parties, there would be no breach by the New Subsidiary
of any of the representations and warranties contained therein which would have
a material and adverse effect on the Borrower and the Guarantors (including the
New Subsidiary), when taken as a whole, and there would be no events,
circumstances or conditions (financial or otherwise) relating to the New
Subsidiary, which would materially and adversely impair the ability of the New
Subsidiary to perform or observe all of its respective obligations thereunder,
in accordance with the terms thereof.
7. No Events of Default. The Borrower hereby represents and warrants to
the Bank that no Event of Default or Default has occurred and is now continuing
under the Credit Agreement or under any of the other Credit Documents, and there
does not now exist any circumstance or set of facts, which with the passage of
time or the giving of notice or both would constitute or result in an Event of
Default or a default under the Credit Agreement or under any of the other Credit
Documents.
8. Conditions Precedent. The obligations of the Bank under this First
Amendment are subject to the satisfaction of each of the following conditions
precedent, all of which shall be in form, scope and substance satisfactory to
the Bank and its counsel:
(a) Credit Modification Documents. The Bank shall have
received (i) this First Amendment, executed and delivered by a duly
authorized officer of the Borrower, with a counterpart for the Bank,
(ii) the First Allonge to Revolving Credit Note, executed and delivered
by a duly authorized officer of the Borrower, with a counterpart for
the Bank, and (iii) the Reaffirmation of Guaranty Agreement and
Security Documents, executed and delivered by a duly authorized officer
of each Guarantor.
(b) Corporate Proceedings of the Borrower. The Bank shall have
received a copy of the resolutions, in form and substance satisfactory
to the Bank, of the Board of Directors of the Borrower authorizing the
execution, delivery and performance of this First Amendment and the
First Allonge to Revolving Credit Note, all as certified by the
Secretary or an Assistant Secretary of the Borrower as of the date
hereof, which certificate shall be in form and substance reasonably
satisfactory to the Bank and shall state that the resolutions thereby
certified have not been amended, modified, revoked or rescinded.
(c) Incumbency Certificate for Borrower. The Bank shall have
received a certificate, dated as of the date hereof, executed by the
Secretary or an Assistant Secretary of the Borrower, certifying (i) as
to the incumbency and signature of the officers of the Borrower
executing this First Amendment and the First Allonge to Revolving
Credit Note, and (ii) since August 25, 1998, there have been no
amendments, modifications or other changes to the Certificate of
Incorporation and By-Laws for the Borrower, and said Certificate of
Incorporation and By-Laws have not rescinded and are in full force and
effect as of the date hereof.
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(d) Corporate Proceedings of Guarantors. The Bank shall have
received a copy of the resolutions, in form and substance reasonably
satisfactory to the Bank, of the Board of Directors of each of the
Guarantors authorizing the execution, delivery and performance of the
Reaffirmation of Guaranty Agreement and Security Documents, certified
by the Secretary or an Assistant Secretary of each such Guarantor as of
the date hereof, which certificate shall be in form and substance
reasonably satisfactory to the Bank and shall state that the
resolutions thereby certified have not been amended, modified, revoked
or rescinded.
(e) Incumbency Certificates for Guarantors. The Bank shall
have received a certificate, dated as of the date hereof, executed by
the Secretary or an Assistant Secretary of each of the Guarantors,
certifying (i) as to the incumbency and signature of the officers of
such Guarantor executing the Reaffirmation of Guaranty Agreement and
Security Documents, and (ii) since August 25, 1998, there have been no
amendments, modifications or other changes to the Certificate (or
Articles) of Incorporation (or Organization) and By-Laws for such
Guarantor, and said Certificate (or Articles) of Incorporation (or
Organization) and By-Laws have not rescinded and are in full force and
effect as of the date hereof.
(f) Certificates of Legal Existence and Good Standing. The
Bank shall have received certificates of legal existence and corporate
good standing for the Borrower and each Guarantor, all of recent date
issued by the appropriate governmental authorities.
(g) Legal Opinion. The Bank shall have received executed legal
opinions of the law firms of Riemer & Braunstein and/or Merra, Kanakis,
Creme & Mellor, P.C., counsel to the Borrower and the Guarantors,
covering such matters related to the transactions contemplated by this
First Amendment as the Bank may reasonably request. Such legal opinion
shall be in a form and substance reasonably acceptable to the Bank and
its counsel.
(h) Reimbursement of Costs. The Borrower shall have paid all
legal fees, costs and expenses incurred by the Bank in connection with
this First Amendment and the transactions contemplated herein.
9. Miscellaneous
9.1 No Other Amendments. Except for the amendments expressly
set forth in Section 1 of this First Amendment and in the First Allonge
to Revolving Credit Note, nothing herein contained shall be construed
to modify, amend or otherwise alter any of the terms or provisions of
the Credit Agreement or any of the other Credit Documents; and nothing
herein contained shall constitute a waiver of or bar to any rights or
remedies available to the Bank, or a waiver of any Event of Default
under the Credit Documents on any occasion; and nothing herein shall
constitute an agreement by the Bank or obligate the Bank to take or
refrain from taking any action, and nothing herein shall constitute an
agreement by the Bank to give notice to or obtain acknowledgements from
any of the parties, on any other occasion, whether similar to or
dissimilar from this occasion.
9.2 Execution; Counterparts. This First Amendment may be executed
in any number of counterparts, each of which shall be deemed to be an
original as against any party whose signature appears hereon, and
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all of which shall together constitute one and the same instrument.
This First Amendment shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties reflected hereon as the signatories.
9.3 Successors and Assigns. This First Amendment shall be
binding upon and inure to the benefit of the parties hereto, and their
respective representatives, successors and assigns.
9.4 Governing Law. This First Amendment and all questions
relating to its validity, interpretation, performance and enforcement
shall be governed by and construed in accordance with the laws of The
Commonwealth of Massachusetts, notwithstanding any conflict-of-law
provisions to the contrary.
IN WITNESS WHEREOF, the undersigned have executed this First Amendment
under seal as of the date first set forth above.
WITNESS: APPLIED CELLULAR TECHNOLOGY,
INC.
/s/ Paul C. Creme /s/ Jerome C. Artigliere
__________________________________ By:____________________________________
Name: Jerome C. Artigliere, Vice President
WITNESS: STATE STREET BANK AND TRUST COMPANY
/s/ /s/ R. Scott Haskell
___________________________________ By:____________________________________
Name: R. Scott Haskell, Vice President
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