Common use of Conditions to Initial Advance Clause in Contracts

Conditions to Initial Advance. Notwithstanding any other provision of this Agreement and without affecting in any manner the rights of the Agent or any Lender hereunder, the Agent and the Lenders shall not be obligated to make the initial Advance or issue the initial Letter of Credit or to take or perform any other action hereunder, until the following conditions have been fulfilled to the satisfaction of the Agent (and to the extent hereinbelow specified, of the Lenders): 5.1.1 All legal matters in connection with the Loan Documents and the transactions herein and therein contemplated and all documents and proceedings shall be satisfactory in form and substance to the Agent. 5.1.2 The Agent shall be satisfied, in its sole discretion, as of the Closing Date, that (i) there shall have occurred no material increase in liabilities, liquidated, or contingent, of any Borrower, or material decrease in the assets of any Borrower since the date of the Borrowers' Financial Statements, as described in Section 4.3, (ii) there shall have occurred no Material Adverse Change; (iii) the results of each of the Borrowers' operations for the period commencing as of the date of such Financial Statements and ending on the Closing Date are not materially different from the projected results of each such Borrower's operations for such period as set forth in the 1997 Annual Business Plan and/or the 1997 Economic Model, and (iv) there has been no material deterioration in the accounts payable or accrued expenses of any Borrower from that reflected in the Borrowers' Financial Statements. 5.1.3 On or prior to the Closing Date, the Agent and the Lenders shall have received, duly executed, this Agreement and the other Loan Documents described on Schedule 5.1.3, all in form and substance satisfactory to the Agent and the Lenders, together with all other documents required hereunder or otherwise reasonably required by the Agent to be executed and delivered or otherwise provided to the Agent. 5.1.4 The Borrowers shall have delivered to the Agent the Mortgages and UCC-1 Financing Statements (local and state) and such other instruments as necessary to insure Agent a perfected first security interest in the Mortgaged Properties and other Collateral encumbered by the Mortgages and Security Documents, as security for the Loans, as described on Schedule 4.

Conditions to Initial Advance. Notwithstanding any other provision The obligation of this Agreement and without affecting in any manner the rights of the Agent or any Lender hereunder, the Agent and the Lenders shall not be obligated to make lend the initial Advance or issue shall be subject to the initial Letter of Credit or to take or perform any other action hereunder, until the following conditions have been fulfilled fulfillment (to the satisfaction of the Agent (and to the extent hereinbelow specified, Agent) of the Lenders):following conditions precedent: 5.1.1 All legal matters (a) Each Borrower shall have executed and delivered to Agent the Notes. (b) Each Borrower shall have executed and delivered to Agent the Pledge Agreement as required by Section 2.14 hereof. (c) [INTENTIONALLY OMITTED] (d) Borrowers shall, in connection with the Loan Documents Swing Line, have executed and delivered to Agent a Working Cash Line of Credit Agreement, a Working Cash Trust Agreement and a Working Cash Line of Credit, Investment Sweep Agreement (the transactions herein and therein contemplated and all documents and proceedings shall be satisfactory in form and substance "Working Cash Agreements"). (e) Counsel to the Agent. 5.1.2 The Agent shall be satisfied, in its sole discretion, as of the Closing Date, that (i) there Borrowers shall have occurred no material increase in liabilitiesdelivered to Agent its opinion, liquidated, or contingent, of any Borrower, or material decrease in the assets of any Borrower since the date of the Borrowers' Financial Statements, as described in Section 4.3, (ii) there shall have occurred no Material Adverse Change; (iii) the results of each of the Borrowers' operations for the period commencing as of the date of such Financial Statements and ending on the Closing Date are not materially different from the projected results of each such Borrower's operations for such period as set forth in the 1997 Annual Business Plan and/or the 1997 Economic Model, and (iv) there has been no material deterioration in the accounts payable or accrued expenses of any Borrower from that reflected in the Borrowers' Financial Statements. 5.1.3 On or prior to the Closing Date, the Agent and the Lenders shall have received, duly executed, this Agreement and the other Loan Documents described on Schedule 5.1.3, all in form and substance satisfactory to the Agent and the Lenders, together with all other documents required hereunder or otherwise reasonably required by the Agent to be executed and delivered or otherwise provided to the Agent. 5.1.4 (f) Agent shall have received copies of the following: (i) All of the consents, approvals and waivers referred to on Exhibit 3.2 hereto, except only those which, as stated on Exhibit 3.2, shall not be delivered and each such consent, waiver and approval so delivered shall be in form and substance satisfactory to Lenders; (ii) Copies of all corporate action (including, without limitation, directors' resolutions and stockholders' consents) taken by each Borrower to authorize the execution, delivery and performance of any agreement, instruments and documents to which it is a party pursuant hereto or in connection herewith, and an incumbency certificate with respect to each such corporation in each case, certified by its respective secretary; (iii) Such other documents, including UCC-1 Financing Statement and UCC-3 Amendment Statements (or other document necessary to grant or perfect a lien on personal property or real estate under the applicable law of a particular jurisdiction) as any Lender may require; (A) The Borrowers shall have complied and shall then be in compliance with all of the terms, covenants and conditions of this Agreement; (B) There shall exist no Event of Default or Default; and (C) The representations and warranties contained in Article 3 hereof shall be true in all material respects; (h) Agent shall have received a Certificate (a "Compliance Certificate") of the president, a vice president, the treasurer or the corporate controller of each Borrower dated the date of the Closing certifying that the conditions set forth in Subsection 4.2(g) hereof are satisfied on such date; (i) The Borrowers shall have delivered to Agent, initialed by the Agent Borrowers for identification, copies of the Mortgages and UCC-1 Financing Financial Statements (local and stateprior receipt of which Agent acknowledges); and (j) and such other instruments as necessary All legal matters incident to insure Agent a perfected first security interest in the Mortgaged Properties and other Collateral encumbered by the Mortgages and Security Documents, as security for the Loans, as described on Schedule 4transactions contemplated hereby shall be satisfactory to counsel to Agent.

Conditions to Initial Advance. Notwithstanding any other provision The obligation of this Agreement and without affecting in any manner the rights of the Agent or any Lender hereunder, the Agent and the Lenders shall not be obligated to make lend the initial Advance or issue shall be subject to the initial Letter of Credit or to take or perform any other action hereunder, until the following conditions have been fulfilled fulfillment to the satisfaction of the Agent (but, as between the Lenders and the Agent, subject to the extent hereinbelow specified, Section 8.15 hereof) of the Lenders):following conditions precedent: 5.1.1 All legal matters (a) Each Borrower shall have executed and delivered to Agent the Notes. (b) Each Borrower shall have executed and delivered to Agent the Pledge Agreement as required by Section 2.14 hereof. (c) [INTENTIONALLY OMITTED] (d) Borrowers shall, in connection with the Loan Documents Swing Line, have executed and delivered to Agent a Working Cash Line of Credit, Investment Swap Rider and a Working Cash Trust Agreement (the transactions herein and therein contemplated and all documents and proceedings shall be satisfactory in form and substance "Working Cash Agreements"). (e) Counsel to the Agent. 5.1.2 The Agent shall be satisfied, in its sole discretion, as of the Closing Date, that (i) there Borrowers shall have occurred no material increase in liabilitiesdelivered to Agent its opinion, liquidated, or contingent, of any Borrower, or material decrease in the assets of any Borrower since the date of the Borrowers' Financial Statements, as described in Section 4.3, (ii) there shall have occurred no Material Adverse Change; (iii) the results of each of the Borrowers' operations for the period commencing as of the date of such Financial Statements and ending on the Closing Date are not materially different from the projected results of each such Borrower's operations for such period as set forth in the 1997 Annual Business Plan and/or the 1997 Economic Model, and (iv) there has been no material deterioration in the accounts payable or accrued expenses of any Borrower from that reflected in the Borrowers' Financial Statements. 5.1.3 On or prior to the Closing Date, the Agent and the Lenders shall have received, duly executed, this Agreement and the other Loan Documents described on Schedule 5.1.3, all in form and substance satisfactory to the Agent and the Lenders, together with all other documents required hereunder or otherwise reasonably required by the Agent to be executed and delivered or otherwise provided to the Agent. 5.1.4 (f) Agent shall have received copies of the following: (i) All of the consents, approvals and waivers referred to on Exhibit 3.2 hereto, except only those which, as stated on Exhibit 3.2, shall not be delivered and each such consent, waiver and approval so delivered shall be in form and substance satisfactory to Lenders; (ii) Copies of all corporate action (including, without limitation, directors' resolutions and stockholders' consents) taken by each Borrower to authorize the execution, delivery and performance of any agreement, instruments and documents to which it is a party pursuant hereto or in connection herewith, and an incumbency certificate with respect to each such corporation in each case certified by its respective secretary; (iii) Such other documents, including UCC-1 Financing Statements and UCC-3 Amendment Statements (or other document necessary to grant or perfect a lien on personal property or real estate under the applicable law of a particular jurisdiction) as any Lender may require; (i) The Borrowers shall have complied and shall then be in compliance with all of the terms, covenants and conditions of this Agreement; (ii) There shall exist no Event of Default or Default; and (iii) The representations and warranties contained in Article 3 hereof shall be true in all material respects; (h) Agent shall have received a Certificate (a "Compliance Certificate") of the president, a vice president, the treasurer or the corporate controller of each Borrower dated the date of the Closing certifying that the conditions set forth in Subsection 4.2(g) hereof are satisfied on such date; (i) The Borrowers shall have delivered to Agent, initialed by the Agent Borrowers for identification, copies of the Mortgages and UCC-1 Financing Financial Statements (local and stateprior receipt of which Agent acknowledges); and (j) and such other instruments as necessary All legal matters incident to insure Agent a perfected first security interest in the Mortgaged Properties and other Collateral encumbered by the Mortgages and Security Documents, as security for the Loans, as described on Schedule 4transactions contemplated hereby shall be satisfactory to counsel to Agent.

Conditions to Initial Advance. Notwithstanding any other provision The obligation of this Agreement and without affecting in any manner Lender to make Advances under the rights of the Agent or any Lender hereunderAdvance Note, the Agent $10,000,000.00 Multiple Advance Term Promissory Note and the Lenders shall not be obligated to make the initial Advance or issue the initial Letter Revolving Line of Credit or to take or perform any other action hereunder, until the following conditions have been fulfilled Promissory Note is subject to the satisfaction of the Agent (and to the extent hereinbelow specified, of the Lenders): 5.1.1 All legal matters in connection with the Loan Documents and the transactions herein and therein contemplated and all documents and proceedings shall be satisfactory in form and substance to the Agent. 5.1.2 The Agent shall be satisfied, in its sole discretion, as of the Closing Date, that (i) there shall have occurred no material increase in liabilities, liquidated, or contingent, of any Borrower, or material decrease in the assets of any Borrower since the date of the Borrowers' Financial Statements, as described in Section 4.3, (ii) there shall have occurred no Material Adverse Change; (iii) the results fulfillment of each of the Borrowers' operations for following conditions precedent which shall have occurred on or before the period commencing as date hereof, or simultaneously with the closing of the date transactions contemplated by this Agreement, unless compliance therewith shall have been waived in writing by Lender: (a) There shall have been duly executed, where appropriate, and delivered by the Borrower to Lender (and/or any other requisite party thereto) the following: (1) this Agreement; (2) the Note; (3) Stock Pledge Agreement covering the capital stock of such Financial Statements Screw Compression Systems, Inc., being in substantially the form attached hereto as Exhibit H; (4) the Security Agreement in substantially the form attached hereto as Exhibit I; (5) a certificate of account status (good standing) and ending on the Closing Date are not materially different from the projected results a certificate of each such Borrower's operations existence for such period as set forth Borrower in the 1997 Annual Business Plan and/or jurisdiction under the 1997 Economic Modellaws of which Borrower is organized and in each jurisdiction wherein Borrower’s operations, transaction of business or ownership of property make qualification as a foreign corporation necessary; (6) an Officer’s Certificate in substantially the form attached hereto as Exhibit J, which shall contain the names and signatures of the officers of the Borrower authorized to execute Loan Papers and which shall certify to the truth, correctness and completeness of the following exhibits attached thereto: (A) a copy of resolutions duly adopted by the Board of Directors of the Borrower and in full force and effect at the time this Agreement is entered into, covering the matters described in subparagraph (d) below of this Section 3.1, (B) a copy of the charter documents of Borrower and all amendments thereto, certified by the appropriate official of Borrower’s state of organization, and (ivC) there has been no material deterioration in a copy of the accounts payable bylaws of Borrower, and certifying as to such other matters as Lender may reasonably require; and (7) such other documents or accrued expenses of any Borrower from that reflected in the Borrowers' Financial Statementsinstruments as Lender may reasonably require. 5.1.3 On or prior to the Closing Date, the Agent and the Lenders (b) There shall have received, duly been executed, this Agreement where appropriate, and delivered by the Guarantor (and/or any other Loan Documents described on Schedule 5.1.3requisite party thereto) the following, all of which shall be in form and substance satisfactory to Lender and its counsel: (1) Guaranty Agreement in substantially the Agent form attached hereto as Exhibit K, (2) Security Agreement in substantially the form attached hereto as Exhibit L, (3) Real Estate Mortgage on the Oklahoma property in substantially the form attached hereto as Exhibit E, and First Amendment to Real Estate Mortgage in substantially the form attached hereto as Exhibit E-1; (4) a certificate of account status (good standing) and a certificate of existence for each Subsidiary in the jurisdiction under the laws of which each Subsidiary is organized and in each jurisdiction wherein its operations, transaction of business or ownership of property made qualification as a foreign entity necessary; (5) an Officer’s Certificate of the Guarantor in substantially the form attached hereto as Exhibit M which shall contain the names anct signatures of the officers of the Guarantor authorized to execute Loan Papers and which shall certify to the truth, correctness and completeness of the following exhibits attached thereto: (A) a copy of resolutions duly adopted by the Board of Directors of the Guarantor and in full force and effect at the time this Agreement is entered into, covering the matters described in subparagraph (e) below of this Section 3.1, (B) a copy of the charter or other organizational documents of the Guarantor and all amendments thereto, certified by the appropriate official of the Guarantor’s state of organization, and (C) a copy of the bylaws of the Guarantor, and certifying as to such other matters as Lender may reasonably require; and (6) such other documents or instruments as Lender may reasonably require. (c) All requirements of notice to perfect each Bank Lien shall have been accomplished or arrangements made therefor to the satisfaction of Lender and its counsel; (d) The Borrower shall have approved the execution, delivery and performance of the Loan Papers to which it is a party by resolutions satisfactory to Lender and its counsel, authorizing (1) the execution, delivery and performance of this Agreement, the Notes and the Lendersother Loan Papers to which the Borrower is a party, together with all other documents required (ii) the borrowings contemplated hereunder or otherwise reasonably required and (iii) the granting by it of the Agent to be executed pledge and delivered or otherwise provided security interests pursuant to the Agent. 5.1.4 The Borrowers Loan Papers to which the Borrower is a party and appropriate certificates as to such actions, showing the parties authorized to execute the Loan Papers and all items required herein, shall have been delivered to the Agent Lender; (e) The board of directors of the Mortgages Guarantor shall have approved the execution, delivery and UCC-1 Financing Statements performance of the Loan Papers to which it is a party by resolutions satisfactory to Lender and its counsel, authorizing (local i) the execution, delivery and stateperformance of the Loan Papers to which it is a party, (ii) acknowledging the benefits and consideration to such Guarantor from the borrowings contemplated hereunder and (iii) authorizing the granting by it of the pledge and security interests pursuant to the Loan Papers to which it is a party and appropriate certificates as to such actions, showing the parties authorized to execute such Loan papers and all items required herein, shall have been delivered to Lender; (f) There shall exist no Event of Default hereunder, nor shall any events or circumstances have occurred, and not theretofore been cured, which with notice or lapse of time or both, would constitute an Event of Default hereunder; (g) The representations and warranties of the Borrower contained in Article IV shall be true and correct in all material respects; (h) No suit, action or other instruments as necessary proceeding by a third party or a Governmental Authority shall be pending or threatened which relates to insure Agent a perfected first security interest in this Agreement or the Mortgaged Properties and other Collateral encumbered by the Mortgages and Security Documents, as security for the Loans, as described on Schedule 4.transactions contemplated hereby; and

Conditions to Initial Advance. Notwithstanding any other provision The obligation of this Agreement and without affecting in any manner the rights of the Agent or any Lender hereunder, the Agent and the Lenders shall not be obligated to make lend the initial Advance or issue shall be subject to the initial Letter of Credit or to take or perform any other action hereunder, until the following conditions have been fulfilled fulfillment to the satisfaction of the Agent (but, as between the Lenders and the Agent, subject to the extent hereinbelow specified, Section 8.15 hereof) of the Lenders):following conditions precedent: 5.1.1 All legal matters (a) Each Borrower shall have executed and delivered to Agent the Notes. (b) Each Borrower shall have executed and delivered to Agent the Pledge Agreement as required by Section 2.14 hereof. (c) Borrowers shall, in connection with the Loan Documents Swing Line, have executed and delivered to Agent a Working Cash Line of Credit, Investment Swap Rider (the transactions herein and therein contemplated and all documents and proceedings shall be satisfactory in form and substance "Working Cash Agreements"). (d) Counsel to the Agent. 5.1.2 The Agent shall be satisfied, in its sole discretion, as of the Closing Date, that (i) there Borrowers shall have occurred no material increase in liabilitiesdelivered to Agent its opinion, liquidated, or contingent, of any Borrower, or material decrease in the assets of any Borrower since the date of the Borrowers' Financial Statements, as described in Section 4.3, (ii) there shall have occurred no Material Adverse Change; (iii) the results of each of the Borrowers' operations for the period commencing as of the date of such Financial Statements and ending on the Closing Date are not materially different from the projected results of each such Borrower's operations for such period as set forth in the 1997 Annual Business Plan and/or the 1997 Economic Model, and (iv) there has been no material deterioration in the accounts payable or accrued expenses of any Borrower from that reflected in the Borrowers' Financial Statements. 5.1.3 On or prior to the Closing Date, the Agent and the Lenders shall have received, duly executed, this Agreement and the other Loan Documents described on Schedule 5.1.3, all in form and substance satisfactory to the Agent and the Lenders, together with all other documents required hereunder or otherwise reasonably required by the Agent to be executed and delivered or otherwise provided to the Agent. 5.1.4 (e) Agent shall have received copies of the following: (i) All of the consents, approvals and waivers referred to on Exhibit 3.2 hereto, except only those which, as stated on Exhibit 3.2, shall not be delivered and each such consent, waiver and approval so delivered shall be in form and substance satisfactory to Lenders; (ii) Copies of all corporate action (including, without limitation, directors' resolutions and stockholders' consents) taken by each Borrower to authorize the (iii) Such other documents, including UCC-1 Financing Statements and UCC-3 Amendment Statements (or other document necessary to grant or perfect a lien on personal property or real estate under the applicable law of a particular jurisdiction) as any Lender may require; (i) The Borrowers shall have complied and shall then be in compliance with all of the terms, covenants and conditions of this Agreement; (ii) There shall exist no Event of Default or Default; and (iii) The representations and warranties contained in Article 3 hereof shall be true in all material respects; (g) Agent shall have received a Certificate (a "Compliance Certificate") of the president, a vice president, the treasurer or the corporate controller of each Borrower dated the date of the Closing certifying that the conditions set forth in Subsection 4.2(f) hereof are satisfied on such date; (h) The Borrowers shall have delivered to Agent, initialed by the Agent Borrowers for identification, copies of the Mortgages and UCC-1 Financing Financial Statements (local prior receipt of which Agent acknowledges); and (i) Agent shall have received an initial Borrowing Base Certificate and stateinitial Liquidity Reports (including account statements) and such other instruments as necessary per Section 5.10 hereof; and (j) All legal matters incident to insure Agent a perfected first security interest in the Mortgaged Properties and other Collateral encumbered by the Mortgages and Security Documents, as security for the Loans, as described on Schedule 4transactions contemplated hereby shall be satisfactory to counsel to Agent.

Conditions to Initial Advance. Notwithstanding any other provision of this Agreement Funding the Term Loans and without affecting in any manner the rights of the Agent or any Lender hereunder, the Agent and the Lenders Closing (a) each Credit Party shall not be obligated have delivered to make the initial Advance or issue the initial Letter of Credit or to take or perform any other action hereunder, until the following conditions have been fulfilled to the satisfaction of the Agent (and to the extent hereinbelow specified, of the Lenders): 5.1.1 All legal matters in connection with i) the Loan Documents to which it is a party, each duly executed by an Authorized Officer of such Credit Party and the other parties thereto and (ii) a Borrowing Certificate for the Initial Advance, executed by an Authorized Officer of each Borrower; (b) all in form and substance satisfactory to Agent, Agent shall have received (i) a report of Uniform Commercial Code financing statement, tax and judgment lien and similar searches performed with respect to Credit Parties in each jurisdiction determined by Agent and such report shall show no Liens on the Collateral (other than Permitted Liens and Liens to be terminated at Closing), (ii) each document (including, without limitation, any Uniform Commercial Code financing statement or similar statements in other jurisdictions and Control Agreements) required by any Loan Document or under law or requested by Agent to be filed, registered or recorded to create, in favor of Agent, for the benefit of Lenders, a first priority (other than with respect to property or assets covered by Priority Permitted Liens) and perfected security interest upon the Collateral, and (iii) evidence of each such filing, registration or recordation and of the payment by Credit Parties of any necessary fee, tax or expense relating thereto; (c) Agent shall have received (i) the Charter and Good Standing Documents, all in form and substance acceptable to Agent, (ii) a certificate of the corporate secretary or assistant secretary of each Credit Party dated the Closing Date, as to the incumbency and signature of the Persons executing the Loan Documents on behalf of such Credit Party, all in form and substance acceptable to Agent, (iii) the written legal opinions of counsel or special counsel for the Credit Parties, all in form and substance acceptable to Agent and its counsel, and (iv) a certificate executed by an Authorized Officer of each Credit Party, which shall constitute a representation and warranty by such Credit Party as of the Closing Date, the Borrowing Date for the Initial Advance and the date of funding of the Term Loans that the conditions contained in this Agreement have been satisfied (provided that such certification need not extend to Agent’s satisfaction with any condition); (d) Agent shall have received a certificate of the chief financial officer (or, in the absence of a chief financial officer, the chief executive officer) of each Credit Party in form and substance acceptable to Agent (each, a “Solvency Certificate”), certifying (i) the solvency of such Credit Party after giving effect to the transactions herein and therein the Indebtedness contemplated by the Loan Documents, and all documents (ii) as to such Credit Party’s financial resources and proceedings anticipated ability to meet its obligations and liabilities as they become due, to the effect that as of the Closing Date and the Borrowing Date for the Initial Advance and the date of funding of the Term Loans, and after giving effect to such transactions and Indebtedness and the issuance of any Letters of Credit on the Borrowing Date for the Initial Advance: (A) the assets and business of such Credit Party, at a Fair Valuation, exceed the total liabilities (including contingent, subordinated, unmatured and unliquidated liabilities) of such Credit Party, and (B) no unreasonably small capital base with which to engage in its anticipated business exists with respect to such Credit Party; (e) Agent shall have completed examinations, the results of which shall be satisfactory in form and substance to Agent, of the Collateral, the financial statements and the books, records, business, obligations, financial condition and operational state of each Credit Party, and each Credit Party shall have demonstrated to Agent. 5.1.2 The Agent shall be satisfied, ’s satisfaction in its sole discretion, as of the Closing Date, Permitted Discretion that (i) there shall have occurred no its operations comply, in all respects deemed material increase by Agent in liabilitiesits Permitted Discretion, liquidatedwith applicable federal, or contingentstate, of any Borrowerprovincial, or material decrease in the assets of any Borrower since the date of the Borrowers' Financial Statementsforeign and local laws, as described in Section 4.3statutes and regulations, and (ii) there its operations are not the subject of any governmental investigation, evaluation or any remedial action which could result in any expenditure or liability deemed material by Agent, in its Permitted Discretion; (f) Agent shall have occurred no Material Adverse Change; received (iii) or shall be satisfied that it will receive simultaneously with the results of each funding of the Borrowers' operations for the period commencing Term Loans or Initial Advance, as of the date of such Financial Statements applicable) all fees, charges and ending expenses due and payable to Agent and Lenders on the Closing Date are not materially different from the projected results of each such Borrower's operations for such period as set forth in the 1997 Annual Business Plan and/or the 1997 Economic Model, and (iv) there has been no material deterioration in the accounts payable or accrued expenses of any Borrower from that reflected in the Borrowers' Financial Statements. 5.1.3 On or prior to the Closing Date, Date pursuant to the Agent and the Lenders shall have received, duly executed, this Agreement and the other Loan Documents described on Schedule 5.1.3, Documents; (g) all in form and substance satisfactory to the Agent in its Permitted Discretion, Agent shall have received such consents, approvals and agreements from such third parties as Agent and its counsel shall determine in their Permitted Discretion are necessary or desirable with respect to (i) the Loan Documents and/or the transactions contemplated thereby, (ii) claims against any Credit Party and/or the Collateral, or (iii) agreements, documents or instruments to which a Credit Party is a party or by which any of its properties or assets are bound or subject, including, without limitation, Landlord Waivers and Consents with respect to each property leased by any Credit Party; (h) each Credit Party shall be in compliance with Sections 6.4 and 7.7, and Agent shall have received original certificates of all such required insurance policies and confirmation that they are in effect and that the premiums due and owing with respect thereto have been paid in full and naming only Agent, for the benefit of itself and Lenders, together as beneficiary or loss payee and additional insured, as appropriate; (i) all corporate and other proceedings, documents, instruments and other legal matters in connection with all other documents required hereunder or otherwise reasonably required the transactions contemplated by the Agent Loan Documents (including, but not limited to, those relating to corporate and capital structures of the Credit Parties) shall be satisfactory to Agent; (j) no material default shall exist under any Material Contract that could reasonably be expected to be, have or result in a Material Adverse Effect; (k) no Credit Party or principal or key management personnel of any Credit Party shall have been indicted or, to the knowledge of any Credit Party, under active investigation by a U.S. Attorney for a felony crime; (l) the Credit Parties shall have caused to be executed and delivered or otherwise provided to the Agent. 5.1.4 The Borrowers shall have delivered to Agent fully executed Control Agreements and Lockbox Agreements under which, among other things, the Agent financial institutions at which Credit Parties’ Deposit Accounts are maintained acknowledge Agent’s, for its benefit and the Mortgages and UCC-1 Financing Statements (local and state) and such other instruments as necessary to insure Agent a benefit of Lenders, first priority perfected first security interest in such Deposit Accounts; (m) Agent shall have received copies of all Permits required for each Credit Party to conduct the Mortgaged Properties business in which it is currently engaged or is contemplated pursuant to the Loan Documents the absence of which would reasonably be expected to be, have or result in a Material Adverse Effect; (n) Agent shall have completed its due diligence examinations of the Credit Parties, including, without limitation, (i) an examination of the terms and conditions of all obligations owed by the Credit Parties and their Subsidiaries deemed material by Agent, the results of which shall be satisfactory in form and substance to Agent and (ii) customer reference checks and calls, credit checks, and background checks with respect to the relevant key management and principals of each Credit Party; (o) all in form and substance satisfactory to Agent, Agent shall have received evidence (i) of repayment in full and termination of all liabilities and obligations (other than any indemnity obligations under the Loan Documents that are not then due and payable or for which any events or claims that would give rise thereto are not, to the knowledge of any Credit Party, then pending) of the Credit Parties to the Prior Lenders and all related documents, agreements and instruments and of all Liens and Uniform Commercial Code financing statements covering or relating to any assets or properties of the Credit Parties, (ii) of release and termination of, or Agent’s authority to release and terminate, any and all Liens and/or Uniform Commercial Code financing statements in, on, against or with respect to any of the Collateral (other than Permitted Liens), and (iii) that any and all existing lockbox arrangements are terminated; (p) there shall not have occurred any Material Adverse Change or Material Adverse Effect from that which was reflected on the financial statements, dated March 31, 2004, provided to Agent or any liabilities or obligations of any nature with respect to any Credit Party which would reasonably be expected to have a Material Adverse Effect; (q) Agent shall have received final internal unaudited financial statements of the Credit Parties and their Subsidiaries on a consolidated basis for and as of August 31, 2004; (r) Agent shall have received (i) copies of all other intercompany agreements, management agreements, documents relating to Indebtedness for Borrowed Money, Capital Leases, occupancy leases and other Collateral encumbered material contracts, and (ii) such other documents or materials as Agent shall deem necessary or appropriate, in form and substance satisfactory to Agent; (s) Agent shall have received executed Subordination Agreements from such parties as Agent deems necessary or desirable in its Permitted Discretion, and all of the documents relating to any Subordinated Debt shall be in form and substance satisfactory to Agent in its Permitted Discretion; (t) The Certificate of Incorporation of Parent shall have been amended to create a new class of Series C Preferred Stock and all of the holders of Series B Preferred Stock of Parent shall have exchanged their shares of Series B Preferred Stock for shares of Series C Peferred Stock, all in a manner acceptable to Agent in its sole discretion; (u) Agent shall have received copies of all registered intellectual property and a list of all material licenses, consents, authorizations and permits required for each Credit Party to conduct the business in which it is currently engaged and/or is contemplated under the Loan Documents; (v) after giving effect to the Initial Advance, the funding of the Term Loans and the issuance of any Letters of Credit on the Closing Date, the Excess Availability shall be not less than $2,500,000; (w) Agent shall have received satisfactory evidence (in its Permitted Discretion) that all taxes and assessments due and owing by the Mortgages and Security Documents, as security any Credit Party have been paid in full; and (x) each outstanding letter of credit issued for the Loans, as described on Schedule 4account of any Borrower or any Subsidiary of any Borrower by any third party (including without limitation by any Prior Lender) shall either be (i) cancelled or (ii) cash collateralized in an amount equal to 105% of the stated face amount thereof pursuant to a cash collateral agreement in form and substance satisfactory to Agent in its Permitted Discretion.